Start-Ups - Should We Learn From Mistakes? 11
BabylonMink asks: "I have been involved in 2 start-ups from day 1. Both have, at one point, run into major financial problems (don't they all?) and one actually closed operations 4 months into the venture. The second just chopped staff by 60% and I ran while I could. I am now in a position to join another start-up. Admittedly, I have looked at their business plan with cautious, almost suspicious, eyes and my initial instinct is to ask them if they have missed the last 3 months of NASDAQ hell, VC cowardice and major corp. market domination. So, should one be weary of start-ups if recent experiences have been prematurely ended due to financial problems (especially in the current climate) or should one bite the bullet and throw your life into a start-up and plan to get out when I can if things look hairy?" Start-ups are a risk, but they can be profitable ones, and I think the best thing one can do when assesing whether to join one is to: "Use your head." Take a look at the company you are thinking about joining and if you feel good about the work you will be doing, and if the company looks healty, then a start-up is as good as any other company. Also, being prepared to leave a sinking company is a good thing to do for any job, whether it be a start-up, or a major corporation, so it would be better to have contingency plans in place when changing employment...just in case.
"I believe that this new start-up might be different as they are trying to develop and market a physical product and not jump on the e-commerce or software bandwagon. It has also been my experience that no matter what happens, the experience of being involved with a start-up is always positive and a major learning curve. I also enjoy the atmosphere more than a corp. conveyor belt."
LOL (Score:1)
No!
Does logic play into it at ALL? (Score:1)
I'll be watching for you on fuckedcompany.com.
Is this flamebait? Maybe. But it's just one man's frustration with the incredible greed and stupidity out there today. I find it entertaining to watch stupid people get what's coming to them, but frustrating when they pretend like they really want advice. Know what would put me in heaven? Seeing a failed dot-com CEO competing on Survivor III. I would be in idiot-watching heaven.
Not enought to go on . .. . (Score:2)
The question being asked seems to be "should I go with this startup job or not?" And you don't give us enough information to go on.
First, what level are you at? If you are going into your third start-up at the manager level or higher, you should seriously think twice. The reason I say that is because you are at the level where you are responsible for the success or failure of the business. Having been up to bat and struck out twice in a row you don't want a hat-trick on your resume! If you are at a managerial level (and 'tech lead' is a managerial level!) you need a long stint of steady work/pay on your resume.
Also you say that this new company is going to be making a physical product. Well, go investigate the market space where that physical product is going to be sold. How big is the market space? Who are the other players? Who will be your REAL competition (hint: it is probably NOT whatever the business plan says!)? Talk to a few potential customers and find out what would make them buy this physical product over someone elses product. Check and make sure that the product offers some competitive advantage to generate customers.
Next, ask to see the written business plan. Go over it with a fine-tooth comb. Pretend you are a banker (not a venture capitalist) and that the company is asking you for a loan. Would you give it? Why or why not? Talk to other VC folks if you can and ask if they've heard of the startup and what they think about its long-term prospects. Get "why" answers to every question.
Finally, look at the work you're going to be doing. If you really like it, and everything else looks good. Jump in. But don't expect to get rich. And if you do, expect to be poor again real soon. Most companies fail in the first 5 years or so. And many of those make paper millionaires in the first year or two (even before the dot-com world). But if the company doesn't have staying power, the money will fade rather quickly. I had options go from $6 a share to $28 a share and back down to $2 a share in a period of 2 years. And that kind of fluctuation isn't uncommon for newer companies.
You will, in all likelyhood, not get rick working for startups. You will work harder, and maybe have more fun, but you won't get rich. Wealth is actually more easily had with large companies that offer solid 401k plans and great benefits. But if you want a startup, do your homework. You should at least try to have a company that will be around for a couple of years. With a little homework that isn't that hard to find.
That was easy (Score:1)
Yes.
(Score: 5, Insightful)
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Re:Does logic play into it at ALL? (Score:1)
Business sense (Score:1)
The business model and the key players (Score:4)
Businesses exist to make money..
If the people starting the business don't know how they're going to get profitable quickly and maintain profitability, they shouldn't be starting the company. The days of instant 20-year old CEOs is over. Real-world business experience matters.
Even if you have the best online Widgetizer in the world, and millions of people use it, if your company doesn't have a solid method of deriving revenue from all those visits, the company won't succeed.
Look at the companies that are succeeding, and you'll see that the business model is what makes them different:
eBay is essentially a flea market. Like a flea market, they simply set up the marketplace and take make money from advertising. Note that this model only works if eBay generates a sufficient volume of business that is self-sustaining. Nobody really heard of eBay through advertising, at least at first. They were smart and used word of mouth to generate traffic. They didn't pull a Pets.com and blow all their money trying to generate traffic up front.
The reason they were able to do this successfully stems from the company leadership. They weren't going along with the lemmings. They had a clear vision. They knew what they wanted to do. They executed well and made using their site exciting for people. They kept operating costs down.
When checking out a start-up, remember that the technology is a secondary matter. Try to look at it as a total technology neophyte and just ask yourself "do these people have a solid method of making money, and are they smart enough and experienced enough to pull it off?"
Slashdot editing (Score:1)
Of course you should learn from mistakes. Now that you've seen two failed dotcoms, go ahead and join a third startup and use your experience to help make sure the same thing doesn't happen again.
You don't say what field you're working in, but it is computer programming you could do much worse than to work for a few months even at a failed startup: I've had recruiters tell me that they find that the best employees tend to be people who have worked at startup companies, because that forces them to have a certain amount of flexibility and ability to think on their feet.
Try explaining it to a kid (Score:1)
Time to get picky (Score:3)
The important thing for you right now is to build up your resume again. If you keep working for companies which fail after a few months, you won't have any long-tem job experience (in recent times), which looks bad to potential employers.
I'm sorry that I have to say it, but you have to look after yourself. Find a company where you can at least last a couple of years. Try to lay down some roots. Otherwise, you might have a tough time explaining in your next job interview why you haven't kept a job for more than a couple of months. You might not even get the chance to explain yourself, because some employers, seeing a long history of job-hopping, won't call you for an interview.
Absolutely - learn from mistakes. That's all fine and good, but your job right now should be to take care of your needs. You need to be marketable, or else you may not get these opportunities as much as you'd like to.
My burn rate is less than $10 per month (Score:1)
I can run my business till end of eternity. If you want to get involved with a dot-com, make sure that the burn rate is low. Otherwise you are history.
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