> I was deciding whether this venture was worth committing to another year of 70+ hour weeks. I need a higher level of certainty than investors do because my time is more valuable to me than their money is to them.Investors place bets in a portfolio of companies, but I only have one life.
Both startup founders and investors alike seem to forget this (for obvious reasons) so it is good to put this on your toilet wall so you see it often.
Love this quote. As a cynical counterpoint to all the apparent glamour to being a CEO of a small startup, especially one that has taken investor money, I came up with this expansion:
CEO = Chief Enslaved Officer.
Enslaved to your investor obviously.
Enslaved to your customers.
And even enslaved to your employees. This one may need some elaboration — the CEO constantly needs to manage their motivation through ups and downs and ensure they are productive, and be responsive to them.
You're missing a lot with that analogy - which is that of everyone involved in the veature, the CEO has the most power.
They have the most knowledge of anyone and are the ultimate decision maker about the future of the venture. The CEO gets to make the choice: they can walk away any time, they can quit and they can shut things down.
If they don't want to walk away, they get the strongest voice in decisions about what paths to take. They have all the knowledge they need about the venture on which to base those choices. They have the full picture, access to all the financial knowledge, the conversations with the investors, the data from the customers - everything.
No one else in the venture has that. Even if others have the knowledge (in the case where the CEO operates with a rare level of extreme transparency) - they don't have the choices.
That is not enslavement.
With power, naturally, comes a lot of responsibility and that can feel heavy. Especially if you are ethical. But that is not enslavement.
I hope you're very careful about who you throw slavery metaphors around with.
Anyone with not-too-distant relatives that were _owned_ by wealthy old white dudes may find the equating of CEOs with slavery an "I have no time for this person" level offense.
This silly notion that there has only ever been a single form of slavery, and that there's no point in discussing any other than what occurred in America in a specific time period is so very harmful.
I understand why the topic at large is a sensitive one, and more for some than others. That doesn't mean I'll be overly concerned with someone who responds to such an analogy with some variation of "I have no time for you".
As someone who does have Black enslaved ancestors: Sure, we can discuss comparisons among transatlantic chattel slavery, the treatment of the helots, or the people trafficked south along the Volga.
The problem with a CEO calling themselves a slave is that it pretends that someone who has made an active choice to start a company is a victim. As this article shows, a CEO can choose to walk away from their company without fear of violence or starvation. If I meet a CEO who labels themselves enslaved, that tells me they are unwilling to recognize their responsibility for their own choices. That mindset makes them unfit to hold the power of the leadership position they aspire to.
It’s really not that deep. The acronym is just a tongue in cheek silly nothing. Being the CEO (or any kind of founder role) of an early stage can be a lot of effort and sacrifice without the “privileges” of power, influence, etc
Sure, if Zuckerberg jokingly called himself “chief enslaved officer” that’d be a little tone deaf given his power and privilege, but the founder of some pre-pmf startup working 10hr days 7 days a week jokingly commenting that is just a small way to soothe the pain. Obviously they aren’t a slave in any real sense (no one in America currently is), it’s a comment on the real sacrifices and effort and stress of the job.
And upon hearing it, I would decrease my trust that their words were shaped to portray reality clearly. It’d be much more clear to say, “man, I’ve been carrying a heavy weight of stress and loneliness.”
> no one in America currently is
Sadly, this is false. If I knew more about the current state of human trafficking, I’d provide some links.
You don't need to get into serfdom or other historical forms of slavery. As I mention in a sibling comment, there's multiple types of modern slavery that get discussed with varying degrees of frequency- labor slavery, sex slavery, and wage slavery.
Wage slavery obviously is nothing like the others, but in the context of applying to a CEO, and given the frequency that it comes up (especially with the recurring universal basic income discussions), I think it is a much closer analogy that jumping straight back to the time before the american civil war.
Indeed. The OP was able to quit relatively easily because he had not yet taken investor money. Imagine trying to quit after taking their money. That is where the element of "servitude" comes in, which admittedly sounds extreme but makes a point.
I don’t think the problem is discussing other kinds of slavery, because wage slavery is a thing that’s discussed, but there is a type of slavery that is very recent, still relevant because we’re still feeling the effects of it, and it does seem in bad taste to compare being a tech CEO to something people are still digging themselves out of the effects of.
We’re all on someone’s dollar and beholden to them so by the “chief enslaved officer” logic we’re all slaves which really cheapens and nearly erases a very real and very recent thing.
The purpose of an analogy is to short-circuit a long explanation by appealing to an already deeply understood concept. It's important to understand how the referenced concepts are understood and experienced by the audience if it's going to be an effective analogy. Comparisons to how the concept could technically be defined in a dry academic context are a bit irrelevant, since the whole point is to trigger a flash of intuition. Anyone who's reaction is "no, that's no the way you were supposed to experience that analogy" should probably not being using analogies to convey anything at all.
Using a trauma that you haven't experienced as a point of reference can also be seen as minimizing that trauma. Especially if you're going for a purposefully extreme juxtaposition like "being at the very top of a business with control over other people's labor and livelihoods is just like being a slave."
Because it's nothing like that at all to someone with deeper experience with the subject, and is as false to them as other shocking juxtapositions like "stubbing your toe is like having your entire family murdered in the holocaust (because they both hurt!)" or "needing to have a license to operate a car is like being gangraped (because you don't want either!)." Those kinds of analogies can be interpreted as purposefully trivializing and mocking that trauma, because there are quite a few people out there who really enjoy doing that sort of thing.
So when language is used like that, people who are hurt by the reference have to decide whether the speaker is simply ignorant of how it's going to land or if they are doing it on purpose. Some of them are going to chuck Hanlon's razor out the window and assume it's done on purpose as part of some sort of power game or sadism.
Since we're talking context here, I think it might be important to assess the various possible contexts:
- recent historical labor slavery (predominantly but not exclusively race based, US focus)
- modern labor slavery (less common in the US than other parts of the world)
- sex slavery (with a debate over when sex work counts)
- "wage slavery": being in a position where you must work to sustain yourself, without an expectation of receiving compensation based on the value you create
Wage slavery is not an uncommon phrase, and you see it bandied about on HN semi-regularly, especially whenever the topic of universal basic income comes up.
I would peg wage slavery as the closest context for analogy, though it's not perfect; in this case, the startup CEO is working predominantly for equity in the hopes that the equity will eventually be worth more than if they had taken a standard salary.
70h per week, I really can't imagine a world where I could accept this.
Sometimes I try to imagine how the alternative would be in a planned economy for software.
On one hand, it would be very slow and very inefficient.
But on the other hand, venture capitalism also has its flaws. Sometimes it sounds like there is an "excess efficiency" that leads to burnout and non-sense, where you constantly need to quote-unquote "innovate".
In my view there is a limit about innovation, you can't always "disrupt" over and over and over again.
If I get paid that much money, I'm going to work on my own terms, there is no way somebody will compromise my health like that.
I dislike this trope of a single person having nothing better to do than work. Single people have responsibilities too and have quality lives. They don't need to work themselves to death
And I dislike the trope of working being orthogonal to quality of life. Sitting in front of the computer working on my own thing is the ultimate enjoyment. That's what's giving me a quality life.
Yeah there's work (activity) and there's work (job)
I love working (activity) -- coding is a hobby I long ago made the mistake of monetising haha.
My stuff? I'll spend a weekend chasing a dead end without a second thought.
General sort of cog in the machine day to day work? You're paying me to be a bit bored a lot of the time. Not a complaint or anything, just the routine stuff that can't be automated yet.
Fun comes from learning new things, money comes from being paid for what you already learned.
Of course this is just me, if everyone was like me the world would suck. Absolutely no judgement if you get your fun outside of an IDE!
E: bit of context I'm currently single and have no dependents, I would imagine (hope) my priorities would change if that changed
Working for somebody else, where I have little stake in the company? I won't just put in the bare minimum to not get fired, but I also won't work absurd hours, especially on a salary.
My own stuff? I'm ready for the 40 (job) + 60 (my own projects) work week!
For reference, I'm very young and no where close to having a family.
> My own stuff? I'm ready for the 40 (job) + 60 (my own projects) work week!
Since you said you're very young I assume you're still at school/university and haven't had a tech job yet.
This doesn't work. Time is not the biggest factor, energy and focus are. You can only put in 40hrs and be extremely drained.
It's very unlikely you're going to be able to perform well at work and then be productive for another 60hrs on personal projects, especially not at your first job when you're learning a very large amount of new stuff.
Even just 60hrs of personal projects is probably way too much time relative to energy and focus (Your energy and focus will likely be drained before the 60hr mark).
I think this is where the Elon Musk is so detached from reality. Because he can do exactly what he wants all day, and he loves what he is doing what he does all day is not work. Certainly in the sense that say, assembling parts of a weird electric car for 12 hours a day whilst being trapped in the factory for 24 hours is work.
I see it in smaller business. I once got a phone call from my then boss, a sort of VC, who was clearly drunk, who could not make my meeting because he was doing BD. They worked collosal hours on this, in the corporate entertainment suites of the local sporting venues, in the city bars etc. Even lunch was a work activity for them.
I think the word work has a specific meaning. It's work is a phrase. Nobody is saying you should not enjoy your work but work is associated with drudgery and tedium in the common usage
I think it’s not that single people have nothing better to do. It’s that you would need to be single and have basically no life to do this kind of 70h work week (or be prepared to end up single, cuz you sure won’t be tending to your relationships/responsibilities )
As a consciously single I disagree along the lines of this argument (not with the argument itself). You’re seeing lost relationships as something destructive, and sure it is, but also disregard what others do as something that you can get rid of without any harm (“no life anyway”). I like my life, who’s anyone to judge what is important in it or not. Our world-wide society has this trope. “Hey, these people have kids(!), and these are in relationships, etc etc. And you are single nolifer, your rights and opportunities can wait”. As if a kid or a partner were some kind of a universal voucher.
I’m not judging people who are single w/o kids. just saying if you’re in a relationship or have kids that is a commitment and time needs to be spent on there.
I don’t think you should overwork yourself cuz you don’t have kids. Do what you want with your life.
You’re right on projection, and I shouldn’t have written “you” and “disregard” in the same sentence. I meant some part of normal-life folks, addressing them via that line. My mistake, sorry all for confusion.
It depends on what point in your life you are. I was at one point single and fully committed to work. I worked sometimes even 12 hours per day, every day, pulling in weekends too and I had a payoff for that. I’m single now too, but I’m not doing that. I’m focusing on dating. Different people, at different times have different priorities. It’s not any one individual thing that’s bad, it’s elevating one above the rest.
How is that a trope? Everybody here who has kids used to not have kids, and all would agree that before they had kids they had significantly more time to dedicate to non-kid-raising activities.
Nobody is saying single people have "nothing better to do". Just that they very often have more flexibility with what they can reasonably choose to do.
I’m not trying to speak for everyone. I’m saying that I personally can absolutely see myself doing it in these situations. Not trying to imply anything about anyone else.
Careful there -- relaxing or enjoying something mundane is not wasting time.
We have been conditioned to call things like this a waste of time but it doesnt mean it is. Not for everyone. Capitalism would have us believe we must constantly be delivering value that is defined by external standards but that is a dangerous game.
4000 Weeks is a pretty good book with more on this topic.
This isn’t really relevant to the current discussion about how much extra time is spent on “work” beyond normal working hours. Working ~40 hours a week and choosing to spend most of your other conscious hours consuming media is a different situation from spending most/all of your hours on the latter.
Not sure I see your point. "Choosing to spend most of your other conscious hours consuming media" is certainly choosing to waste a significant part of one's lifetime. Doing it all the time is wasting most of it, and likely being broke (with exception of rare edge cases). The question we touched in this particular branch: whether extra work constitutes a better alternative to more gaming/media in the absence of other obligations/fields of activity (such as family)
Please see your comment I was replying to for context on this thread. Addiction is what I was referring to, which is a different issue than whether one is wasting time to any degree. I have no real issue with folks debating on the latter.
“Capitalism would have us believe that…” if you were lazy in a hunter gatherer tribe they’d just no give you food, otherwise punish, or exile you. Some things are more fundamental than capitalism
In the US 70 hr work weeks at startups and even certain industry's are not abnormal. Are those people usually making good decisions, thinking clearly, and not being jerks? Nope, but it's what a lot of people willingly do. I've seen people pull 80 hr weeks
> On my own company, when single, and living in my one room apartment? Absolutely.
Speak for yourself. I have hobbies, a workout routine, friends to meet up with, family members to visit, and beauty sleep to catch. If you're working 70h a week you're sacrificing most if not all of those things.
He already said he was single. You can have a workout routine and plenty of sleep even when working 70h weeks. Just skip the Netflix and other people, for a time.
I'm single too... I don't see the relevance, though. You don't just have to like working. You have to actively decide against doing much of anything else. If you are working ten hours a day with no weekend, or 14 hours a day with one, you're going to be exhausted for the rest of that time.
You can fit working out in there (~30-60 min a day, plus travel time if you don't have your own equipment) if you're willing to burn the candle at both ends like that. At that point you will have committed the overwhelming majority of your time, and if you try to add anything else to your life, any kind of unexpected outing or emergency, or even just waking up one day and not feeling up for it, will have to come directly out of the time you've budgeted for your work and health.
I forgot that some people still commute. I assumed that you have an office in your residence and a gym in the garden. You will have committed most of your time, yes. Still at least in my experience it let me do more in a quarter than in a year of taking it easy. You can retire after a few years, which should still be early enough to enjoy life.
I have never done a 70h week. probably 50h the top. I think it would be impossible for me. I mean I could be physically in an office for that long… but that is not the same thing.
For how long? Not that I think it's healthy or anyone should do this, but for most of the past two decades, American military services regularly deployed units of thousands at a time for 15 months overseas, during which they worked up to 20 hour days with 2 hours of sleep, 7 days a week for the entire 15 months. And they did this with zero chance or expectation that they might get rich, also knowing there was quite a good chance they'd end up permanently disabled.
For better or worse, devotion to a cause is a proven motivator of human action.
As for alternatives in the business world, we'd need some economic system that wasn't analogous to warfare in which one firm outcompetes all others to take most of the winnings. If you want a lesson from the US losing in Afghanistan, and arguably losing in Iraq, in spite of being able to drive its labor force to such extreme exertion, consider that a massive advantage of the insurgency was their ability to mobilize a part-time gig-based workforce that mostly worked from home. But which lesson does business learn from that? Allow work from home? Or getting part-time contractors with no benefits to kill themselves and sacrifice children for you?
>70h per week, I really can't imagine a world where I could accept this.
I can think of several. The grandiose ones: your kid has cancer, the kind that might be fixable, but there is no treatment, and you have to design one. You have a viable theory for nuclear fusion or carbon sequestration and need to get funding for and then perform the experiment. There is a verified meteor/comet strike and there's some hope of saving people underground, but it needs to be built and stocked.
In reality, you don't need grandiosity. This life is 'acceptable' to a lot of people, especially small business owners, the store owner/operator, or car mechanic, who effectively lives at their store. For others there is "paying your dues", doctors doing a residency, grad students doing slave labor on something only tangentially related to their degree. For others, like farmers, they work like this for some part of the year, every year.
Because there are 0 successful examples for it. And as someone born in USSR let me say if you like to experiment with planned economy you better choose a country nobody will regret leaving in dust afterwards
That's not a good reasoning, there were 0 successful examples of democracy for millenia, until stable Western democracies emerged.
Anyways, more concretely: huge vertically integrated megacorporations behave much like centrally planned economies, and they seek to be doing just finem
Your first argument could be somewhat interesting point for debates if the latest planned economy attempt were some hundreds years ago. The second one is no argument at all: planned economy is a radical departure from the feedback loop of the current economy within which all corporations operate.
Computing and software was researched and invented in a planned manner (NASA etc).
Maybe you can't "expand" and "generalize" software in a planned economy, if you want everything to be made with software. The article talks about about 80 competitors, so it can easily be said something should be planned.
Because they wouldn't be. A planned economy just takes the power of business owners and adds it to the pile of power politicians have. These algorithms would just 'happen' to suggest things favorable to those in charge.
Funny to me that these are seen as novel concepts, and all over the comments are people going on about how this is so true for founders.
What about the workers actually building the product, making far less, and probably putting in more time. Why is the issue of their valuable time compared to money almost never discussed.
We all only have one life and ot should be able to be enjoyed. Why do we always forget the pursuit of happiness, except as it applies to the upper class.
I'm surprised (and delighted) to see this back on Hacker News. I'm happy that people find value in the article, and the process writing it forced me to put my thoughts together and helped get me through an emotionally difficult time.
To address a few questions from the comments.
1) A common opinion is that I gave up too quickly, that I was just burned out, or taking the money would have let me figure things out later. This was simply not the case. An experienced mountaineer knows if a mountain is climbable with the team, gear, and weather he has. This one was not.
2) I would have been 100% fine with the team and investors going ahead without me, but AFAIK, neither side ever discussed it.
3) We were absolutely not viewing contract information, and would not have been able to do so even if we wanted to. We anonymously logged when functions were called without storing user or input data of any kind.
4) Six years later, I'm doing well. The Disrupting Japan podcast is going strong. I took a senior role in corporate VC for a while, and ended up at Google.
I was overwhelmed by the attention and positive response I got from this article. The asymmetry of value of money and time was one of my main learnings, and I'm glad to see it resonates with so many other founders.
The comparison you made between money, and time is one which I think perfectly explains the situation you faced. I can imagine it must be incredibly difficult to spend so many hours working on something you're not sure is going to work out. Time is, I think, valuable to us all. Some of us often feel we don't get enough of it, and I think sometimes we overlook how important free time is when making decisions in life. Sounds like you're doing well now; you learnt an important lesson through this experience. Hope it all goes well in the future!
Good for you, you did the right thing. Maybe you would have shoe horned some fix, but honestly, screw it. Imagine waking up at 5am and forcing yourself to work on a company that you knew wasn't going to make it.
Both are valid, one does not cancel the other out.
I’ve been part of a fun project backed by good people and then had new tech eat our lunch. We still spent long hours trying to find value somewhere. That was less fun but OK, not a waste.
I have been part of a slow traction project when the first great dot-com crash happened and too many contracts got cancelled. That was the worst time of my professional life but not a waste.
I have spent time on very promising tech in a field ripe for either a good living providing something needed in service deserts, or an exit. The founder found every excuse not to launch, to keep versioning pre-launch. That neverlaunch project was a waste of a year that I’ll never get back.
Learning when to bail is a true skill. Not to quit just because it is messy or inconvenient, but when it is actually harmful.
It was a good read, thanks for writing it. Also, assuming this is correct:
> Almost no SMB views contract management as an urgent problem.
And I think it probably is, then IMO you made the right decision. I don’t know the space very well, but my gut feel would be SMBs don’t have real CLM needs like Enterprises do, they mostly just need something like DocuSign. Taking the money and pivoting might have worked, but I agree, it’s a massive risk in terms of your time and your team’s jobs.
DocuSign actually offers an integrated CLM product, built on top of a smaller company they acquired a while back. With everything also integrated with Salesforce, etc., it makes automation pretty easy.
Ah interesting, didn’t know that. Certainly their main use case that drove their growth, though, has been a simple “get signatures on a document over the internet” product.
Also, if the CLM product targets a Salesforce integration, sounds like it’s more of an Enterprise than SMB product? While their core e-signature product targets both SMBs and Enterprise.
If this original post (and thank you again for it) pops up on the HN homepage from time to time, it may be worth it if you have the time and bandwidth.
Since you were done pursuing the idea and were just shutting things down, did you ever consider open sourcing whatever you had? Curious about the thought process you went through around that.
I think the reason these companies fail to begin with is that they are too high level and generalized. Even a specific subset of CLM like managing real estate transactions is an exceedingly complex business ___domain with hundreds of entrants. Trying to go after the entire market with a single product is just naive IMO.
Great article. I’m curious what ideas people sent you after publishing for solving the gratification problem. What was the strongest, even if you still don’t think it would have worked?
I know it is childish, but I always enjoy this difference between US and British English.
In British English when someone is annoyed they may be described as 'pissed off'. Describing someone as being 'pissed' means they are drunk! These US articles paint such vivid surrealism in my mind. In this case I love the idea of all of the investors being permanently inebriated.
There is a lovely part of the 'special relationship' where the US doesnt care what the UK thinks of them, and therefore the UK has great fun at their expense. I suppose that is a win win situation? The US projects an image of being the leader of so many things, and the rest of the world jokes about how arrogant this is.
I am sorry it didn't make it, but, as the author points out:
> Human nature sucks.
Yup. I have to design for human nature, and it can be immensely frustrating. I can tell you that this scar <pulls up shirt> was from when I neglected to plan for users misinterpreting an icon button, and this scar <rolls up sleeve> was from when I thought that a verbose help screen would help users understand a somewhat abstract concept, but this scar <drops pants> was from when I assumed that users would cut me slack, because I'm such a nice guy, and was doing this from the goodness of my heart.
This is the main reason that I'm glad he pulled the plug:
There are a lot of projects that want to serve an under-served space, but lack a novel idea about how to do it. In many ways, even companies like Theranos fell into this trap. They knew it would be great to have the device they promised, but the company wasn't founded around any sort of novel idea about how to accomplish it, just a wish.
However, if you do something full time the inspiration to implement your wish can appear. Waiting to be blessed by inspiration probably won't lead to a solution.
Why does he think he needs to work 70+ hour work weeks? He mentioned he couldn't sleep knowing user adoption was low. I think the biggest problem here is that he felt pressured to over work himself to solve a highly visible problem.
This affects many engineers including myself. In many cases over working is not necessary and there are diminishing returns, possibly even less overall net returns if you burn out or become too sleep deprived and stressed to function efficiently the following days. In this case he quit, which is an example of this.
As engineers we have to learn how to manage expectations and disconnect from work. As engineering leaders we need to foster a culture of maintaining good work life balance. As founder and CEO, he's in the best possible position to do this. Especially in this case where there is no external deadline.
The thing is - in startups, there always is an external deadline (assuming you're not cash flow positive or profitable) - it is tied directly to your runway and when you'd run out of cash. That is the ultimate deadline for pretty much all startups.
The very early stages of a startup (and even later stages) usually require this much effort because you honestly don't have enough money to last you the "right" amount of time you need - and therefore you need to put in more time.
As you said - this isn't sustainable long-term - but, especially in the early stages, you may not have a "long-term" in that venture if you're not able to put these hours in.
Not to say it's impossible to find a great work-life balance for an early stage startup - but it's highly unlikely.
OT I was looking for attribution for a little more context but the only clue comes from the footer:
“This article was first published in Medium and appeared in VentureBeat & Business Insider”
I get the syndication and the other outlets using this content at the time it was written (2016). There’s just something very dishonest about the slapping the words on a page with some stock images 6 years later though.
I don’t really have a point - maybe it would be better to link to the original medium (I know) post though?
The author (Tim Romero) also runs disruptingjapan. So it's more like he's just replicating content he originally wrote for another publication to his personal/professional site...
It seems that far more people will click on a Medium or LinkedIn link rather than a personal blog. Then it was picked up by Venture Beat, Business Insider and a dozen other publications and it was off to the races.
I received my 15 minutes of internet fame and over 1,000 emails about the article.
The article buries the startup’s more fundamental flaw
> Almost no SMB views contract management as an urgent problem.
If you are a solving a problem your target market doesn’t care about, you’re not going to get adoption. This isn’t a product problem or a top-down vs bottom-up problem.
Their whole thesis was that SMBs need contract management. That thesis appears to have been mistaken. So it’s certainly a flaw. Sure, you could fix it by creating a new thesis about a different market, building a product that addresses that market, and setting up the right GTM for it. But that’s a whole other business, and they explain well enough why it’s not one they want to do.
I think the thesis was, that SMBs could benefit from contract management in the long term, but (and not initially understood) it was not an urgent problem in the short term. To get buy-in for a long term initiative, they'd need consultative sales at the executive/owner level of the businesss, but that would mean competing with established "enterprise" companies, who already are not selling to SMBs because software sold that way is too expensive for the SMB market.
By “thesis” I meant the thesis of the business, not of the article.
The article said just what you said; my point is that another way to explain those dynamics is that you can’t sell software to SMBs if they don’t urgently need it. That’s because that logic about top-down sales is true regardless of what you’re selling. And that’s why the foreknowledge that SMBs don’t urgently need to solve a contract management problem is a huge red flag, ideally before you’ve written a line of code.
I've been in a similar situation but we realised we couldn't rely on marketing and that we need sales just before running out of money, incapable of raising another round.
I would have definitely took the 500k.
Needing sales doesn't mean the business is to throw away, it just means you need way more money than you were thinking.
Probably 500k wasn't enough to execute the scale the founder imagined, but it could have been a good intermediate step to raise more money later on.
The problem with this article, is that it gives the feeling that creating a company is a sequence of logical steps. But that's not the case at all. OP stopped the company because he didnt want to invest his time in working on this problem, and thats a fair decision. But this has nothing do with unfixable flaw or "people sucks" or something like that. Those things are part of any business.
I think you missed the main thrust of the article. They were trying to land in the mid market segment and expand from there into the large market where it’s more expensive to acquire sales. However, after doing a bunch of research actively interviewing their user base, the author couldn’t figure out a way to get these users to use the product enough for that land and expand strategy to work (it wasn’t sticky enough to actually start generating sales). In essence, from the author’s perspective, there was no path forward for success with the current business stategy.
You are of course free to disagree and you may be right that there was a path there or they could have pivoted to do something totally different. What the author was trying to convey and maybe you missed is that they weren’t interested in spending another year exploring trying to find a totally different viable business strategy.
But the whole matter could have been avoided if you were solving a problem you actually cared about. Then there would have been no doubt if you should or should not invest another year of your time.
If I'm solving a problem I personally care about, then I will also be personally willing to put in vastly more effort into learning and getting up to speed with the solution than the vast majority of my target customers will.
As the OP said, you need something that will give relatively quick return on investment of effort. If it's going to require a larger up-front investment, then you have to really, really care about the improvement it's providing in order to put in that effort.
I have innumerable half-baked solutions to various problems I care about, and by "half-baked" I mean they only work in specific situations and require massaging the inputs into a form that the solutions will accept. And that's fine for me; after all, I cared enough to implement the fancy solution in the first place. But I don't expect anyone else to use it unless I clean it up and package it nicely.
In the article, the author said that none of the team has quit their day jobs yet. And this appeared to be their first significant fundraise.
Their strategy critically depended on staying in the SMB market, not the enterprise market. And it was apparent that their product wasn't solving a major, urgent customer problem.
The last thing you want to do is to pour your life into a startup that solves a non-problem. If you're not solving an urgent problem, you won't be able to reliably close sales.
That’s what struck me too. What about the others involved who might be relying on it? But maybe the author was the team and without them it was dead in the water anyway?
It sucks for them, because effort invested on the side implies that it must have been quite loaded emotionally, but right before turning the others full time seems like the least bad time for giving up.
"I was deciding whether this venture was worth committing to another year of 70+ hour weeks. I need a higher level of certainty than investors do because my time is more valuable to me than their money is to them.Investors place bets in a portfolio of companies, but I only have one life."
You do the real hard work, they provide numbers in a computer database (and often kick you out once this hard work is done).
Found it interesting that the author describes CLM as a vertical the requires strict access control then describes how they are viewing those secure contracts. Sounds like lack of production controls was the true fatal flaw!
I’m assuming they had a better way of analysis than actually reading contracts since most vendor procurement processes I’ve seen require attestation of data privacy..
I’m assuming the users of the CLM that he was observing were the admins who would initiate contract flows in the product. If NDAs existed between SaaS and clients, as would be typical, there’s no issue. Access controls would keep other employees in client org from seeing contracts, but not.. say, infosec team members.
This is the root problem! If you are a first time CTO which contract service do you want to use? Generally, you bet on sure wins. Some startup is not a sure win (it might not be there in 2 months). When companies go under - paperwork is flying everywhere (unsecured). You want your contracts flying around?
>>Pressing them directly on why they were not using ContractBeast to create all their contracts resulted in a lot of feature requests.
>> Now, talking with customers about features is tricky. Often you receive solid and useful ideas. Occasionally a customer will provide an insight that will change the way you look at your product. But most of the time, customers don’t really want the features they are asking for. At least not very badly.
This a thoughtful, well-rounded and obviously experienced view, but ultimately it shades toward being very pessimistic about the competence of the end-user.
>>When users are unhappy but can’t explain exactly why, they often express that dissatisfaction as a series of tangential, trivial feature requests.
Clearly, the writer had the self-reflection to realize that the product wasn't working, and for that should be applauded. On the other hand, maybe there's something a little intentionally self-blinding about the above statement. Assuming that people are just putting out meaningless feature requests because they'll never use the software anyway is, to say the least, taking things from a very negative starting point of view. Maybe something larger was actually missed in the "tangential, trivial feature requests" which if compiled would have pointed to a fixable underlying problem if one were take them seriously as a constellation of indicators pointing to a root issue.
This is speculative:
>>These aren’t necessarily bad ideas, but they had nothing to do with why they were not using ContractBeast more extensively.
This is indicative of burnout, where you stop seeing the value (for other reasons which are harder to quantify):
>>In any event, I was overwhelmingly getting these kinds of tangential, trivial feature requests.
And this is resignation:
>>It didn’t provide a significant immediate benefit. I was fighting human nature and losing.
If I'd been sitting around that office, I might have suggested adding a human consultant to the loop for every new client from onboarding to full use -- not a virtual pop-up box, but someone they could call on the phone. And not to sell anything but to suggest uses and help implement the changes to the customer's business ops that they would then come to rely on. Mid-sized businesses don't make drastic changes overnight but that's also a guarantee of lock-in if you can convince them to rely on your product. So you'd give each one a sort of a "guardian beast angel" if you like, who was available at all hours. The sole purpose of the employee would be to track a few dozen customers and their user experience, really understand how this worked in their business models, and find ways to improve their use of the software while filtering back some feature requests and bugs. And thus get the customers to realize the full benefits of the software, without any attempt to sell them anything. This kind of thing would be a loss leader, it would be money out of pocket, but it would be far more cost effective than any kind of advertising, and it would establish trust and good word of mouth in addition to providing a customer base that was now dependent on you. Also, it wouldn't have involved actually writing any new features if you felt that the software was already sufficient to the tasks most users would require, if they knew how to use it properly. It would also give you runway to roll out new features on your own timetable without constantly trying to please an audience, since the customer-facing "beasts" would provide workarounds for niche use cases and reassure them personally that improvements were in the pipeline.
Nice idea that of these people dedicated to evaluating customer's ideas/suggestions.
As a (hopefully competent enough) end-user, I can confirm how for some reasons the process of accepting (or refusing if it is the case) feedback or suggestions is often alien to many developers/programmers.
I don't know if this is due to them being too busy with other (possibly more important) things, if there is some sort of arrogance involved (i.e. the way the program is written is already perfect) or if there is some other reason, but surely to try and convince some software makers (I am talking about specific, "narrow", business software) that "feature x" is not needed or implemented in such a way that makes working with the program much slower or possibly making it more prone to errors is often a lost battle.
The “employees” had other day jobs. Why is it less selfish to spend other people’s time and money on a company that you can’t see any way for it to succeed than cutting everyone’s losses as soon as possible?
In this case it seems like he didn't have any full-time employees, so there isn't the employee issue.
But I'm curious as to how this might effect investors generally. I assume it could make them look bad, and cause issues with the fund LPs?
I.e. you announced an investment, did a capital call and then suddenly the money gets returned. LPs might get annoyed that money is now sitting in the fund accounts collecting interest? or I guess it just makes the fund look bad generally?
I think what you mean to say is, it's an extremely terrifying situation for an investor.
By the end of the article, I wonder whether there weren't actually fixable problems. I was left wondering whether I would have made the same decision. However, it's essential we all have the freedom and agency to choose how to live our lives
This is the choice the author made, and it's blatantly obvious that the decision needs to be respected.
Both startup founders and investors alike seem to forget this (for obvious reasons) so it is good to put this on your toilet wall so you see it often.