Most startups fail
Daniel Markham notes that most startups fail.
He also links to this rant by John Pratt , the guy who did Fundable:
I cannot tell you how painful it is to watch 5 assholes take your idea and run with it and not even give you credit. I hate all 5 of them for that. If I see them, I may punch each one of them in the face. If you have never started your own company and then had someone else steal the credit for what you worked hard to develop, you don’t understand.
I think it is unwise to write in this style about your own failed startup. If you’ve got a story to tell about betrayal, it is important that others on the Web corroborate your story. A good example here would be Phillip Greenspun. First of all, in telling his story, he uses a measured tone, and he seems to stick to the facts:
By March 2000 we had grown to 80 people. I was still CEO and beginning to feel nervous that, for every task in the company, I could not say exactly who was supposed to do what and by when. But we were profitable, with monthly service contract revenue coming in at a $20 million/year rate. We’d paid nearly $1 million in income tax on our profits for calendar year 1999. Not so bad considering that we built everything from a $10,000 investment.
We’d never sought venture capital but our revenue and profits were bringing some of the top East Coast firms to our door. Most of the time these guys were being forced by the frenzied times into investment in a company and figuring out how to get revenues later (and profits much much later). ArsDigita looked a lot better than than the typical “wing and a prayer” bunch of guys with a fancy spreadsheet. Despite 1000 percent annual growth, we had cash. Most of our revenue was recurring. Most of our customers were happy and loyal.
But what is really important is that the other folks that Greenspun worked with all seem to agree on what happened. Eve Andersson writes:
The marginalization of Philip Greenspun started taking place quickly as Allen Shaheen discovered that it was difficult to work with someone who wouldn’t let him get away with incompetence and dishonesty. Over the course of 2000, more and more responsibility was taken away from Philip and given to so-called professional managers who didn’t understand the Web or software development. Instead of firing Philip outright, he was banned from decision-making meetings and was put in charge of the less profitable parts of the company.
In March, 2001, Jin Choi, the company’s 2nd-largest shareholder was fired. Jin didn’t seem to mind so much because he has never had any tolerance for anyone he deems stupid.
Around the same time, the VCs pushed out Aurelius Prochazka. Aure had built up most of ArsDigita’s west coast operations. Most of the clients were there because of Aure. He had trained most of the developers. He had personally built some of the most important modules of the ACS. He could construct an enterprise-quality site himself that would normally take a team of 4 or 5 developers to create.
John Pratt should take note. One guy ranting on the Internet is a lunatic, but several people all agreeing with each other is a story.
January 5th, 2010 at 1:32 pm
[...] that others stole their idea, all it means is that that entrepreneur had terrible execution. It is important that we avoid becoming John Pratt: I cannot tell you how painful it is to watch 5 assholes take your idea and run with it and not [...]