I didn’t understand the “We didn’t sell anything #3″. You didn’t know sell what to who or something?

:S

Although, we are generating money, we are not profitable yet. We are paying our expenses evenly each month. And, we are still breathing.

We have switched to an agile delivery process which I think will make us more profitable by delivering more.

We are becoming a profitable company, after two years without seeing money :) All goes in goes out. But, because we are started with a prototype-like application which lacks most of the features, and because we are the first movers, and because we were doing sales at the day first; we are still breathing and will be.

What Atlassian does really well is sell you one part of their enterprise software as a product and then upsell you to the other products so you end up with their entire solution.

I agree with not waiting till you have a “complete” and “perfect” product till you sell it. The beauty of software is constant improvement.

Setting expectations early and often can mitigate a lot of customer complaints.

Thanks for this insight, something along that line would be my ratio the next time too.

In our current company sales people outweigh IT people by a factor of 5.

Thanks for your code.

Perhaps we should be starting companies to support those people!

Anyway, here’s my startup postmortem.

How? You sell your company.

Any number of cash-rich technology consulting companies would pay for your software, especially if it was a feature-rich solution they could bill for consulting services later.

Did you try this route?

Good Luck

;-)

Sorry to hear the startup didn’t work, sounds like it was a really great product.

Thanks for a good read.

Regards,
Sean

You’re dead right about selling. And I wanted to add — there is in that a deeper piece of wisdom it’s taken me many years to fully grasp….

Businesses are logical entities first and foremost. A lemonade stand is a business even when the kid who runs it is off at the playground. The lemonade stand ceases to be a viable business for the kid when he gets a little older and realizes he can make more money doing other things; or he’s one of the Nantucket Nectars guys that never gave it up and made millions…

The point is, businesses really fail when the logic that brought them into existence no longer holds — and that’s what the dotcom meltdown was really about. Too many of us all had ‘billionaire-in-a-year’ dreams, and when the bubble badly busted, far too few of us had the personal fortitude to look at our businesses and say, “Even if I take away the possibility of gazillions, if it takes struggle and difficulty and sidejobs and long, long years where the only reward is the chance to do the work itself — I will still carry on.”

I know a few small companies that made it through and even prospered after the bust because they were just grateful for the chance to serve, and even in a down market, people are powerfully attracted to that, and will pay. Turns out, selling people isn’t the painful, distasteful work a lot of techies think it is — when people feel you really want to serve them because it’s who you are, not because they’ll help make you rich, selling them isn’t nearly so hard.

But the rest of us gave the tech boom a bad name by doing it for the money we might get, not for the difference we might make for someone else. Really, that’s the selfishness, arrogance, immaturity that needed to be rooted out — and it was the exact thing at the heart of why customers weren’t foremost on my mind.

A great piece of advice I learned too late, only by experience: before you write a business plan, write a life plan, and get some real long-term success implementing that. And only start a business if it fits into your vision for your life whether it succeeds or it fails, because you just need to serve people in that particular way to continue on your journey. The logic behind the business has to be an organic extension of the logic of the lives of the people who start it, and that both have to based in real life, and have heart and integrity … It can sound kinda hokey, but it’s the key to the attitude of the guys we love and got into the business to be like — Steve Jobs, Sergey Brin, etal.

After a number of fits and starts the last 7 years, I’m finally trying again. Docspire.com will be launching soon — look out for it! And wish me luck…

totally agree, but Stephan, i am also still thinking about it :)

Greetings

Maiko

thanks for the tremendous insight. I too came in from the reddit post and am also part of an online startup that can make great use for tips like this. Although we aren’t funded yet, there’s nothing saying that the above points can’t apply for a group in their boot-strapping phase.

We too are stuck in a state of feature-creep and refinement while development on the sales front is definitely lacking.

We’re building an online video conferencing system based on flash that can be embedded into your site like a youtube video (www.projecho.com) but are having a hard time defining who our target audience should be. Reading this post made me realize that we should start selling everyone and then target those that look most likely to for over the cash instead of spending time trying to tailor our pitch for a specific market.

Time to start selling – tonight! Thanks again, and I will definitely be keeping my eyes on your blog going forward.

Cheers,
Beau

You didn’t have a product yet, and worse, you didn’t have a product that, even completed, necessarily did anything anybody at the time understood.

You keep saying you didn’t “sell”. Great! So you’re not some capitalist sociopath who wasn’t confident that his organization yet had a viable product yet was willing to “take orders” from customers nonetheless. That’s called being ethical, so deal with it. Part of the reason we in the United States are suffering so much now is because too many people learned enough about business to sputter out the buzzwords and even round up play money from VCs, but not enough to curb greed and avoid marketing products outside the bounds of development or conceptual viability.

A better approach would have been to market your product to your VCs as strictly a research and development project to pilot a few ideas you thought might have a future. Maybe you’d take longer finding VCs, but at least you wouldn’t have had to pretend having a product when in fact none existed yet. At least you wouldn’t be left complaining years later about your “failure” for not succumbing to blind greed and a desire for relevance.

You didn’t yet have a product, you curbed its presentation as a result, and you know what, you should be damn proud of that. Next time, just plan it that way at the outset.

John

A few corrections –
noone is two words – no one
In a few places you use “lead” rather than “led”, although you’ve got “led” used properly in there too. :)

With an open source / consulting model we could have made it through the dot com boom and the crash, I’m quite sure.

Selling enterprise software needs more time and more money – which doesn’t work if you haven’t enough VC money.

So it could have been right when our money would have lasted for 3 years. It was wrong for a model with the money lasting less than that.

I mean, you managed to receive some fundings, that is already an achievement imho (ok, perhaps not in 1999 ;)). So when is a business model proven wrong?

We had similar problems: 1) No customers because of no sales team because of no immediately deliverable product; 2) A tech team whose allegiance was torn between the brilliant but whacko founder and the business-savvy CEO who put most of the money into the company (we never did achieve VC funding); 3) Lack of decent indoor GPS receptivity (which only came available a couple of years ago, long after the place folded); 4) A legacy ownership group (pro-founder) that seemed more interested in suing potential patent infringers (OnStar was one such target) instead of backing a viable marketing plan; 5) Frequent internal debate as to whether we were offering a product or a service, how it would be priced, what was the roll-out profile, who were our customers, and what markets were the best to go after first.

By the time we figured out most of these answers, the company was out of money and our tech team had scattered to the winds, finding gainful employment elsewhere.

Cheers,
Mike

But I’ve seen companies use wikis for a long time. In some they don’t catch on, you’re right. And some use bad wikis (like MediaWiki) which are not very usable for company work.

I always considered JIRA to be Atlassian’s main product, and that’s something for which a market has long existed. Maybe I’m wrong about commercial wiki software, though. But in my own experience deploying free wikis for a couple of former employers, they would invariably be forgotten and unused after a few months.

Nine years later, what percentage of companies use wikis, blogs, or “skill management” software to any large degree? My non-empirical estimate is that very few do. Far too many startups in those days were peddling solutions to problems that no one knew they had.

@Mitch: Very good post!

@Aaron: Exactly. Unless you’re facebook ;-)

Great article.

I had a similar experience of a failed start-up: http://softwareindustrialization.com/BridgewerxProductSuccessBusinessFailure.aspx

The one critical juncture in our company was not continuing with our successful consulting services, we gave that up to become a products company and the moment we did, was doomed for failure.

Again, excellent advice from someone that has been there. Cheers!