I always find post-mortems like these a bit strange. These founders are all able to develop some pretty convincing reasons why they failed (albeit in hindsight), yet show no signs of acting on it. I understand the feeling of burnout, I have a handful of abandoned projects myself. I've never been able to look back and say that is precisely why I didn't succeed though. Lessons learned is one thing, identifying the one factor that held you back is a bit of a stretch IMO.
Interesting side note: The first failed company, Verifiable, links to the sixth failed company, swivel, as an alternative. Apparently charting is a tough space.
While I agree with you I find the same to be true of successful companies. When you ask a successful founder why (s)he succeeded you'l most often get an answer aided by hindsight.
It appears to me that nobody truly knows what makes or breaks a company. There are some prerequistes (hard work, focus on customers, etc.) that you have to have, but these aren't enough.
My guess is that it's like the weather and financial markets: Chaos (as in chaos theory) reigns, and it's just not possible to know who the winnere or losers are.
Not exactly. I can't find the citation just this second, but there was an article floating about showing that successful founders tend to be much more successful on subsequent projects than the baseline.
I don't think it's chaos or luck. I've argued it before, but there are traits that make successful founders successful. The one that always stands out to me is an absolute laser focus on analytics. These founders are 'obsessively analytical' which allows them to make decisions much faster than others.
Starting a company is a race. Your trying to reach profitability (or at least viability) before your current funding dries up. For boot-strapped companies that can be a matter of weeks. For VC companies that can be years. In each of the cases in the article they lost that race.
So starting a company is largely about managing that runway. Some people get lucky and just get it right. For the rest of us tracking everything and truly being obsessed with that data allows you to see patterns, opportunities, and problems much faster. I suppose that you could say that data-obsession allows you to achieve hindsight much faster.
I have one failed startup (out of three goes). In that one I failed to keep an eye on my data. In particular, I didn't realize just how slowly our development was progressing relative to the amount of runway we had. In the end we released a product that never found a market fit and simply didn't have an opportunity to pivot. We ran out of money, and with it the business went belly-up.
My most recent venture is about 3.5 years old. In that time we've had one massive pivot (think entirely new business that utilized about 20% of the code we developed). We managed that by keeping close tabs on our development schedule and releasing as early as possible. It became clear that our initial idea would work, but the cost of acquiring customers was far too high. We felt like we couldn't optimize that cost down to something reasonable in the time-frame that we had left. We did, however, find a new business model along the way and we've aggressively pursued that all the way to profitability.
Now we're looking at different data. Conversion rates, traffic, and ad-spend rule my world now. We track everything we can think of. We've found patterns for our business that have allowed us to optimize our spend while increasing traffic. We've moved our conversion rates significantly. We still have a long ways to go, but at this point we have a nice war-chest in the bank and are at the point that we can aggressively scale. Along the way we've pivoted, just less drastically. The product has changed significantly as we've come to understand our market. We're pursuing a couple of opportunities that we never even thought about during initial development.
I feel really good about our business. I think we're going to make it. We've done that not through chaos or luck, but measurement and optimization.
You make an excellent point, and to some degree I agree with you. Particularly it's obvious that there are some traits that are needed, or at least up your chances significantly. You point out focus as a vital ingredient.
But there's a flaw to the argument. You can spend all of your time measuring success factors and acting on the data. But there are limits both to how much you data you can make sense of, how much effort you can allow yourself to spend gathering that data, and how you interpret that data.
finding a cofounder, for example, is a critical component of success, but how will you pick a good cofounder based on data? Can you even do that? Notwithstanding that the hardest part about finding a cofounder is actually locating potential candidates to pick from.
In chaos theory you can actually predict the weather if you have data that's exact enough. But you don't. There's just noway you can measure everything exact enough. I think the same applies here.
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I always find post-mortems like these a bit strange. These founders are all able to develop some pretty convincing reasons why they failed (albeit in hindsight), yet show no signs of acting on it. I understand the feeling of burnout, I have a handful of abandoned projects myself. I've never been able to look back and say that is precisely why I didn't succeed though. Lessons learned is one thing, identifying the one factor that held you back is a bit of a stretch IMO.
Interesting side note: The first failed company, Verifiable, links to the sixth failed company, swivel, as an alternative. Apparently charting is a tough space.
While I agree with you I find the same to be true of successful companies. When you ask a successful founder why (s)he succeeded you'l most often get an answer aided by hindsight.
It appears to me that nobody truly knows what makes or breaks a company. There are some prerequistes (hard work, focus on customers, etc.) that you have to have, but these aren't enough.
My guess is that it's like the weather and financial markets: Chaos (as in chaos theory) reigns, and it's just not possible to know who the winnere or losers are.
Once you understand hindsight bias, it seems so blindingly obvious. - @haruki_zaemon
Not exactly. I can't find the citation just this second, but there was an article floating about showing that successful founders tend to be much more successful on subsequent projects than the baseline.
I don't think it's chaos or luck. I've argued it before, but there are traits that make successful founders successful. The one that always stands out to me is an absolute laser focus on analytics. These founders are 'obsessively analytical' which allows them to make decisions much faster than others.
Starting a company is a race. Your trying to reach profitability (or at least viability) before your current funding dries up. For boot-strapped companies that can be a matter of weeks. For VC companies that can be years. In each of the cases in the article they lost that race.
So starting a company is largely about managing that runway. Some people get lucky and just get it right. For the rest of us tracking everything and truly being obsessed with that data allows you to see patterns, opportunities, and problems much faster. I suppose that you could say that data-obsession allows you to achieve hindsight much faster.
I have one failed startup (out of three goes). In that one I failed to keep an eye on my data. In particular, I didn't realize just how slowly our development was progressing relative to the amount of runway we had. In the end we released a product that never found a market fit and simply didn't have an opportunity to pivot. We ran out of money, and with it the business went belly-up.
My most recent venture is about 3.5 years old. In that time we've had one massive pivot (think entirely new business that utilized about 20% of the code we developed). We managed that by keeping close tabs on our development schedule and releasing as early as possible. It became clear that our initial idea would work, but the cost of acquiring customers was far too high. We felt like we couldn't optimize that cost down to something reasonable in the time-frame that we had left. We did, however, find a new business model along the way and we've aggressively pursued that all the way to profitability.
Now we're looking at different data. Conversion rates, traffic, and ad-spend rule my world now. We track everything we can think of. We've found patterns for our business that have allowed us to optimize our spend while increasing traffic. We've moved our conversion rates significantly. We still have a long ways to go, but at this point we have a nice war-chest in the bank and are at the point that we can aggressively scale. Along the way we've pivoted, just less drastically. The product has changed significantly as we've come to understand our market. We're pursuing a couple of opportunities that we never even thought about during initial development.
I feel really good about our business. I think we're going to make it. We've done that not through chaos or luck, but measurement and optimization.
You make an excellent point, and to some degree I agree with you. Particularly it's obvious that there are some traits that are needed, or at least up your chances significantly. You point out focus as a vital ingredient.
But there's a flaw to the argument. You can spend all of your time measuring success factors and acting on the data. But there are limits both to how much you data you can make sense of, how much effort you can allow yourself to spend gathering that data, and how you interpret that data.
finding a cofounder, for example, is a critical component of success, but how will you pick a good cofounder based on data? Can you even do that? Notwithstanding that the hardest part about finding a cofounder is actually locating potential candidates to pick from.
In chaos theory you can actually predict the weather if you have data that's exact enough. But you don't. There's just noway you can measure everything exact enough. I think the same applies here.