Ask HN: Advice for moving on from a failed startup?

[throwaway9838]

Hello HN,

I am in a bit of dilemma. I started a enterprise software startup with a bunch of friends in college, we got a bit of funding and I dropped out. We did couple hundred k in revenue and raised a bit more but eventually we couldn't make it work. For past 2 years feels like I have been in a zombie startup and want to move on.

For people who have been in the same boat, what did you end up doing? As for getting ready to be in the job market again, what kind of positions did you end up applying for?

I am thinking either:

1) Join a seed/series a startup as a developer and grow with them. Pros of this are this is what I know how to do best and love working in small teams

2) Join a more established bigger co. Pros are a more stable position but not sure it will be an environment i will be able to do well in

[filereaper]

Join a more established or successful startup in the same space.

Understand what separates the successful startup from the failed one you're in, was it the product, sales pipeline, marketing, org structure?

Essentially perform a diff between the two companies and root cause what you'd improve on and other structural things you'd change the next time around.

I'm sure you've acquired experience in the vertical that your startup was in, recoup of the time and energy investments made there.

Lastly all the best, this happens to many early employees and founders.

[vernon99]

I don’t think you can do a diff as there so many factors that you can miss without having a complete bird-eye view of the business or the org.

But nevertheless, this is a great advice in that it still would give you a good example of a functional business/org and increase your chances of success significantly.

I think better to go for an earliest stage but established startup, like series A-B, where they just validated their product-market-distribution fit and are on track to scale, but you still can get a sense of how it feels to have this early PMD fit.

On the other hand, you still will miss on the 0-1 stage and if you want to learn how to do that too, may be worth joining a very experienced serial founder at a 0 stage. They usually have enough resources to iterate till they find one.

Edit: typos.

[_benj]

It really depends on what you want to do next.

I found myself in a similar stop about a year ago and I came to the realization that I wanted out of the startup frenzy, and thus I started looking for companies that where 1. established/biggish/profitable, 2. that seem to have an idea of what they actually wanted/needed from a developer, that is, I wouldn't be thrown to solve product or design stuff, and 3. that seemed to have a sensible leadership that was aware that things took time and "crunch time" was not the norm (read, boring, predictable work).

Through a series of coincidences I did find such a company and it's been a blast! I still have energy to work on side projects (after being bitten by the entrepreneurial bug is hard to go back), but now I'm not constantly sweating about a limited runway (if something doesn't happen in X time we run out of money... that really keeps you up at night!)

Bus I guess the bottom line is, figure out what you'd want to do first and then find something that aligns with that.

As an entrepreneur you often have quite a bit of marketable skills, leadership, product, customer support, software engineering, devops... usually you can find companies that want exactly that, a tech handy man, and how the job market is right now, those skills are in high demand! (heck, my company is hiring! email on profile)

Good luck on you next chapter!

[aynulhabib]

This is a badge of honor that doesn't feel like one in the moment. I was in the same boat for 3 years before re-entering the job force, I felt isolated and demotivated in the 3rd year, when it was clear it was not working. Join a rocketship! Surround yourself with constructive minds. Try again in a few years, if you want. Life goes on.

Consider MainStreet! We are hiring like crazy :) https://jobs.lever.co/mainstreet

You got this next step!

[jnguyen64]

Bit late on the reply, but I just featured your company on my website! Check it out here: https://nowhiteboard.org/ I'd also love feedback on if the interview process description needs to change at all for your company's listings

[throwaway9838]

Thanks for the advice, joining a rocketship is what resonates the most with me to be honest.

Happiest I have been was when I was sleeping 5 hours a night maximum, always on the road visiting different customers' offices to work closely with them. Had an offer about a year ago to leave my current position and build out the data science team of a rocketship but didn't want to leave my team on their own.

[jimhi]

MainStreet looks interesting. Does your interview process involve whiteboarding?

[gnicholas]

It’s probably important to know how close you were to finishing your degree, and if you have family or other support (financial aid?) to finish the degree.

It’s not the most important thing in the world, but if you were close it might make sense to pick up the necessary credits and get the diploma. In addition to having the degree (which can be useful if you’re applying to jobs where applicants are sorted by crude algorithms), you’ll also show that you are the type of person who sees something through.

But whether it’s a good idea or not depends on how far along you were when you dropped, the possible prestige/networking value of the degree, and your financial situation.

[pechay]

If OP wants to work abroad in the future - where I come from getting a skilled visa having a degree is an advantage. Not having a degree is not a problem either. But trying to get a visa having dropped out definitely counts against you.

[sverhagen]

...and then they go back to a startup job where no one cares about the degree. But sure, if it's a tiny effort, might as well...

[zebraflask]

That's a gritty question!

First things first, I would think about the parts that went well, that you actually liked, then look for a role that incorporates those same elements to the extent feasible. Really dig into that one and isolate what you'd want to duplicate in a new role.

Regardless of the size of the company. There are exceptional and awful roles at any company size.

I would also be prepared for interviewers to expect a calm and candid explanation for why the company didn't get to where it wanted to go. Obviously, no finger-pointing or hyperbole in it.

[grantlmiller]

Honestly it depends. I've helped a two companies I've angel invested in wind down, it isn't fun and a lot of other investors walk away. As a founder you have a good amount of your reputation wrapped up in this company, so how you exit is how you'll be remembered. If you're the CEO, you should probably to stay on to wind it down, make sure you leave some cash to close out bills (lawyers etc). If you have revenue and a decent team you might be able to "soft land" it to a bigger co for about the amount of $ that you raised (in new co stock for investors) and retention packages for the team.

If you're not the CEO, you have less responsibility to stay (but might reduce the value in a soft landing), very situation specific. From your quick description of what you might do and what you've liked doing, you'll be a great resource to any team... but if you're technical and like spending time with customers you'll be VERY valuable to a technical company (on either the business or engineering side honestly).

If you are looking, would love for you to consider Replicated. We're 100% remote, deeply technical, recently raised a Series C and have lots of openings for technical folks: https://www.replicated.com/careers (and since our customers are other enterprise software companies, your experience is likely valuable). Feel free to email me directly: grant at replicated (same invite for other HN folks if this sounds interesting).

[__MatrixMan__]

My last job was a failed startup. I felt like the view from its wreckage was a unique vantage point. From there I could see where we went wrong and I knew who was doing it right (because we were eyeballing the competition).

I was still interested in the space, so I just applied at one of the competitors that was excelling where we were failing. I put "if you can't beat 'em, join 'em" in my cover letter.

That was six months ago. So far, I'm happy with that way of moving on from a failure.

[NetToolKit]

Hi there,

Not the personal advice that you're looking for, but would you, your partners, and your investors be interested in selling the zombie startup? We serve enterprise customers, and think that a "couple hundred k in revenue" is quite impressive, especially for just two years with very little professional experience.

If you have current customers, they might appreciate knowing that there is continuity, and might be more open to you if you were to ever reach out to them again.

Thanks. [email in profile]

[jeffheard]

Neither is a bad option, but there's plenty of room in between. Series B, C, are often still pretty collegial, and you'll still get the opportunity to know the founders. The market's really gung-ho right now, and wherever you go you should interview them as much as they interview you. Pick something that feels good and will let you breathe. It could be really tempting to be ambitious right now and the main advice I would give you is "don't."

Don't try to make up for lost time. Don't try to prove anything. Don't make the next thing anything more than what it is: a job. Once you've rested and recuperated, and you can look back on your time at your startup and not "cringe" or feel angry, then decide whether you want to lean into the job you're at or move on and be ambitious somewhere else.

I've been a co-founder at something that felt like a "zombie startup." I walked away, gave up my entire stake in it back to the other co-founders, and washed my hands of it. It's doing fine now, and I'm fine with that. I saved myself the three or more years of pain, heartache, and panic attacks, and hopefully I gave them the breathing room they needed to get the thing off the ground. I will never see a dime of profit from it, even if it becomes a unicorn, and I'm completely fine with that.

The thing I think a lot of co-founders feel after a startup fails is a sense of "purposelessness," Burnout that manifests itself as a feeling that you're not "smart" anymore, not "creative" anymore. A blank space in your day fills itself with wondering if you could have made it work if you'd just done that one thing differently. You can't "power through" those feelings. You have to let yourself live with them until they pass over you. You have to let yourself heal, and healing takes time. Whatever job you take now should let you focus on that. It needs to be something that lets you spend some mental energy working through the regret, frustration, and ultimately the fear of facing your part in the failure of the startup.

Do the job instead of "be" the job. At least for a while. Take the time and get past all the things that will stop you from really learning from your experience. Then at the end of that, if you still feel the burn to start something again, you'll be able to put your whole self into it.

[gautamb0]

This post resonated very strongly with me. 18 months is what it took me- everything that you listed to a t.

[markdjacobsen]

I know your questions are practical, and you have not disclosed your emotional state, but I also know firsthand that shutting down a startup can be traumatic. Even as you address the practical issues, take care of yourself and do the inner work to process everything you have experienced.

I wrote a book titled "Eating Glass" specifically about the emotional journey through a failure like this [0] and put numerous chapters online for free [1]. My primary goal with the book is to help others, so I'd be happy to send you a free digital copy if that's of interest.

Good luck to you... you now possess valuable knowledge and wisdom to help you in your next venture and in life.

[0] https://www.amazon.com/Eating-Glass-Journey-Through-Failure-... [1] https://markdjacobsen.com/eating-glass/

[pbiggar]

I regularly talk to founders who are going through the process of leaving their startup, and something that always gets tricky is what happens with your vested equity. Friendships are lost over this question.

I did a bunch of research and the most common thing that happens is this:

- the departing founder reduces their ownership to 5% or less (giving the shares back to the company, even if you've vested them)

- the departing founder receives at most $25000 (depending on financial circumstances of the company).

This is typical for companies that want to stay on the startup (rocketship track). This may not be the case for your company, but either way I'd try to ensure the company is structured for the success of those who are staying there.

Some founders ask for a lot more money or they want to keep ownership of the company - both cause a lot of trouble for the company and may lead to the company dissolving (in which they get nothing). They also destroy friendships and relationships, which are valuable in the long term in tech.

[iancmceachern]

Spend some time to focus on yourself, your family, hobbies, self. Make sure you have a good foundation outside of your career and are working to live. If you take the time and allow yourself the time and space to do so the career stuff will just fall in place and the right choice will become obvious.

[Jugurtha]

The CTO and co-founder of the company left without notice 18 months after company creation/me joining. He burned out.

He's doing great from what I've seen and has recovered a couple of months after quitting. He went back to a company he worked at before co-founding the consulting company.

Not sure if this is relevant because there was no product when he was here, only consulting and projects that went nowhere and clients that he found difficult to work with. Now we have a product and work with great clients with projects going somewhere. More revenue per year with a third of the team. Almost zero churn for three and a half years.

Taking over and handling the aftermarth so the company does not die has been quite an education.

[franciscop]

Have you considered going back to finish college? You didn't mention when you dropped out but if you were almost finished, you enjoyed it and you are in a position where it's possible financially you might want to consider finishing it. While definitely not a requirement for tech, I considered not finishing my degree (I was receiving job offers for my "programming hobby" from everywhere and knew would not use my degree) but luckily I finished it; thanks to that I am able to live and work in Tokyo. I would not be able to do that had I had no official degree.

[nixgeek]

Does Japan not consider something like three years professional experience to be equivalent to one year of further education study? “Equivalent experience”?

[ramtatatam]

A few years ago I was helping to build a startup, when I joined it was only founder and myself. In the peak I had 12 people to work on product. Unfortunately this particular startup was a failure, we only had potential customers and all of them - of course - huge but never cached in. There was no real direction, founder was picking up whatever catchy phrase was thrown in the meetings he attended. I never figured out how was the company surviving from month to month. I left and never looked back, they are still afloat. Funny thing we are still friends with founder.

At the point I was leaving I was in similar position as you are, with one distinction - I am not a dropout, so I suppose my choices were easier.

Straight after I left I thought that maybe I should look for a leadership role since I was leading the team, implemented scrum and generally kept everything together from technical perspective. But then I realized the environment I could strive was not what I would potentially join - I hired all 12 of team members, I was in privileged position. When joining established team it's not easy to assume tech lead role, at least I feel it's not easy from inter-personal point of view.

So I went for dev role in pre-round-A stage. And I don't regret, this startup is very well managed, they have very good idea of doing business and I learned a lot about the topic. I'm only dev here but most of the times when I had opportunity to listen to what CEO said about business plans, or sales lead about structured way how he approaches the market - I found it enlightening (even though I have gone through lean startup, mum's test and similar books packed with advice).

It's always good thing to step back and reflect on what you really want.

[dahart]

Advice definitely depends on more factors that you’ve shared. (I’m not asking you to share more, just stating the situation.) It depends on how your co-founders feel, it depends on your collective financial situation, on your equity agreements, outstanding contracts, it depends on what will happen to your customers, etc.

I started a company with a friend and when we ran out of money, energy to continue started petering out, even though our metrics were trending the right direction - surely, but slowly, too slowly. We were very lucky to get a buyer right before we were about to close the doors, someone who we knew, who cared, and who was able to get some funding and carry the torch and keep it growing. That took a lot of the worry out of having to stop working on it.

As for the next step - I think I found the best of both of your options in a small team inside a large company. It has helped refill the coffers a little after spending more than I should have trying to get a startup off the ground, and it has been exciting and fast paced in a startup kind of way.

It depends on your appetite for startup environments, but a couple of things I like about bigco right now are that I don’t have to do payroll or taxes or advertising or worry at all about where money is coming from. I get to go deep on technical subjects and spend time inventing rather than productizing.

After having done a startup, I would like to do another some day, but I have learned many lessons, and personally I want to wait for the right idea, the right funding, the right team, and not just jump into any ol’ startup at all.

[hadlock]

Lots of early stage startups are looking for founders. You've already learned all the $Expensive lessons, your experience is honestly valuable, it's difficult (not rare) to find so it's very valuable, especially at this stage. Good luck. If you really felt the need to post this, you need to expand your network, consider picking up a mentor or two to help guide you.

[surfsvammel]

How does one pick up a mentor?:) I would love to have some kind of mentor, but I have no idea of even where to start looking.

[lido]

Mine failed too (cofounders dropped the ball), so I joined a seed startup (Lido) and both me and the company have grown really fast.

Having worked at larger Cos (Square, Two Sigma), company stability is way over valued. The SWE job market is so good that if one company fails, 10 more will be pining for you next day.

[jarym]

I’ve been in this boat but it was a bit worse than what you’ve described.

Your next step will be extremely individual. I took some time to evaluate all my options and go with what I felt would give me the most joy.

Maybe my comment isn’t the most useful but I wish you so much success and happiness. Good luck!

[chrismcb]

First thing I would do is take some time off. Even if it is just a week or two.

As far as a job goes, either one is fine. Working for a larger established company will teach you some stuff you probably haven't picked up. I would argue this is what you should do next.