My Startup Failed. Fuck.
In this postmortem from 2013, @nemrow candidly breaks down the dissolution of their startup, examining the fatal assumptions, misallocated resources, and market dynamics that led to its shutdown.
Core Principles for Independent Builders:
Early signals were often rationalized away instead of prompting an immediate pivot in distribution or pricing.
The psychological toll of running out of capital compounds operational friction in a solo or small team setup.
Key Antidote: Validate paying willingness before committing months to building sophisticated product features.
Community Debate Themes:
Community discussions on HN centered on identifying product-market fit early, avoiding vanity metrics, and the emotional recovery process after shutting down.
CATEGORY Postmortems & Failures →
HISTORICAL ERA Web 2.0 Genesis (2007–2013)
COMMUNITY SCORE ★ 287 points
TOTAL DISCUSSIONS 178 comments
Ouch. One thing that leaped out at me was your mention that the first beta was a disaster because it didn't comply with Amazon's payment-processor requirements, so you burned a lot of capital making good on your promises. This sort of thing is why I keep saying more startups need a legal person on board early on - and with a surplus of underemployed JDs around, now is a great time to work that into your team plan.
Lawyers are not just there to object to things and make life difficult for dreamers, they're there to spot major potential pitfalls like this and steer around them. Far too many entrepreneurially-minded people see contractual and statutory constraints as some sort of obstacle course designed solely to prevent competition or enterprise, and react to said constraints by simply wishing them away. I was impressed that your reaction to this problem was to pay everyone as promised and retool your application to be compliant with Amazon's requirements, rather than simply blaming them for your problems. A hard lesson to learn, but one which will put you ahead of the pack in future.
I'm sure it's painful, but thanks for sharing. I agree with cup, that reading about failures can be more valuable than reading about successes.
If anything, your story adds more fuel to the fire for the approach that @sgblank advocates[1][2]. Get out of the building, talk to customers, validate customer needs, etc. We've been doing this, but - to be honest - we haven't done as good a job as we could. Hopefully we will soon start another big round of Customer Development interviews, much more targeted this time, building on the feedback we got the first go-round, and moving more into what Steve calls the "Problem Presentation" phase.
It's a tough slog, but I continue to remain convinced of just how important it is.
[1]: http://steveblank.com/category/customer-development-manifesto/
[2]: http://steveblank.com/category/customer-development/
I wish you had read The Lean Startup by Eric Ries. It stresses the fact of build a Mean Viable Product very early on and testing hypothesis like "will artists pay for this service" in a real life scenario with an ok product. Aardvark did this in a really cool way (check Aardvark out).
Also, there is a notion amongst us entrepreneurs to persevere amongst all odds. This might be dangerous at times. There might be a massive market for your product yet you have approached it in the wrong way. The thing is, if you have no data, it is very difficult to know what REALLY went wrong. For example: Drew Houston from Dropbox early on stated that selling Dropbox through adwords was costing them something like 300 dollars per acquisition, once they introduced their double-sided referral scheme Dropbox started selling like mad. It was what Eric Ries calls a Pivot.
Sorry to hear it didn't work out. I might just share two thoughts that occurred to me:
1. The site's tagline is "Sell your $h!t with Social Sales!" which I would think is kind of off-putting in the context of a vendor relationship
2. Your sales model appears to be in contrast to how supply and demand work. Your model is that as more buyers sign up, the per-unit price goes down. I understand your theory is this causes people to share it with their friends. But, people who are buying indie music not only don't want to screw the artist -- they're also not going to bother talking their friends into something just to save a nickel.
3. I think this would have made more sense for the artist if the price went up (slightly, like from $4 to $5) as sales went up, with the early people locking in their price.
Man, I feel your pain. I have developed the most awesome products the world has never seen 4 times now. We had a "build it and they will come" attitude too :(
We decided to ask ourselves one question: How to we validate an idea before wasting months on an idea that only we seem to think is cool?
So we are creating WillThisFly? to ask that very question... it's a site that allows you to try out your ideas and projects, get feedback and refine them before committing resources to it.
Shameless plug: http://willthisfly.net (Just launched last night)
Only thing on there at the moment is WTF? itself.
All I can say is, it has happened to probably everyone at one stage in their startup career... don't give up, refine your ideas, create MVP's and keep trying...