Ask HN: What has been your biggest mistake?
I'm keen to learn from failure, and what better way than to learn from the mistakes of others. :)
What are some of the biggest mistakes you've made.. and what have you learnt?
What are some of the biggest mistakes you've made.. and what have you learnt?
101 comments
[ 2.8 ms ] story [ 164 ms ] threadHere are my top 3:
1. Wasting money on a legal entity. If you're not making money, you cannot be sued. Wait until you make money or have someone willing to give you money before you waste money on protecting yourself.
2. Bad business partners. Judge your partners not by how much you like them but if they'll complement your skillz, add value to the team, and are dedicated to the project.
3. Not saying no. It's a personal problem, I'm a really nice guy, it's hard for me to say no sometimes, but it's necessary. It's not personal, it's business.
Of course if youre doing something legally grey like youtube or file sharing, then perhaps you should incorporate. But without any assets in the company, the corporate liability will most likely be pierced in court.
As for a LLC. Its nice but you should really do a ccorp if youre serious about business, and changing from a LLC to a ccorp is a pain in the butt. Or so I hear.
To go further, I challenge you to show me a single case of a company being sued that wasnt doing something legally grey and not making any money.
It is difficult to have a corporate veil pierced on the basis of assets held alone, and there are specific conditions in place in every state that must be met in order to pierce the corporate veil. Which you've actually argued for yourself in your claim that a C Corp is the entity that you want to use in order to protect yourself from liability, because that is the basis of most of the corporate law in the US.
I just think you're advocating gambling with your personal assets when you could just as easily spend $1000 to $1500 to have a professional set up your corporation and have some level of protection. Additionally, you could throw in a few hundred bucks and insure the new corporation against liabilities. The last time I purchased a policy, it cost me something like $300 a year to carry a $2,000,000 liability policy.
I bet most people starting a startup have spent more than that on the laptop they use.
[Edit: Maybe there is a lawyer who reads YC who can clarify all this stuff for us]
I totally agree that you should grab some sort of limited liability protection. I am not a lawyer, so most of this stuff is hear-say or just random observations from my, to be honest, limited knowledge of the legal system.
I do know however that setting up a LLC or C-corp WITHOUT any tangible assets, as most string-budget startups are, IS piercable.
http://wyomcases.courts.state.wy.us/applications/oscn/delive...
That's the specific case that's often cited for precedent in LLC piercing.
HOWEVER
-- THIS IS THE BIG HOWEVER --
If you have any sort of funding, I'd say over $20,000, you should grab some sort of limited liability coverage ONCE you get traction.
But since we're all just guessing about the actual legality of this stuff, why don't we have someone that is an actual lawyer come and put an end to this debate.
At the end of the day. It's financial decision. Think of ALL the startups ever created for the web, the amount of money/time to understand to create the limited liability shelter, and how many of these examples of these shoe-string startups (those without funding or serious traction) actually get successfully sued for damages.
The odds are, very very very very very small. And ok, while my personal advice might not be for everyone. I am currently almost broke, so for me, it makes no difference if they come after my personal assets because I can just file ch. 7, as opposed to the amount of capital and money and upkeep that comes with any form of limited liability.
If you think I'm wrong, digg me down, but note how no one has (1) shown a counter example or (2) has given advice from the standpoint of a seasoned lawyer.
I was merely pointing out that the advice you were dispensing was risky and negligent. That is still the case; I'm afraid the burden of proof is on you, as you're the one making spurious claims.
"Cannot" is a world of difference from "not likely to".
Is this legal advice?
There are scores of other reasons you might be sued beyond a disgruntled paying customer. To say that you shouldn't spend the couple hundred bucks it takes to set up an LLC is just ignorant.
2. Not knowing the difference between profitability and traction when I was looking at startups to work for. I spent 2 years at a relatively low-growth startup because I thought that its profits meant it was successful, when I could've learned much more at a higher-growth yet unprofitable startup.
3. Letting ideas sit too long. I had the idea for http://www.whatshallidonow.net/ about a week before I started implementing it, but was busy with job apps. In the meantime, http://nowdothis.com/ launched, and now they have all the momentum.
4. Spending too much time on super-ambitious projects and ignoring the low-hanging fruit.
whatshallidonow changes the order. it has a "made progress" button. it would be nice if it had a button "skip - I don't want to do this one right now!". (tho you can achieve that effect by reloading, ctrl-r).
finally, the dothisnow guy gave a shoutout to our guy nostrademons here (and also to yetanothersimilarsite) http://nowdothis.tumblr.com/post/44066616/synchronicity
now they have all the momentum.
"Your greatest competitor is non-usage."
That quote is not just encouraging, it's also literally true (unless your market is >50% saturated). Plus, no two products are ever identical (whatshallidonow is a slightly different idea), and no two users are either: some like yours. However, I agree there are benefits to being first, #1, etc (and it's more exciting).
Wow, momentum for what? A textbox that echoes. Woot. They've got the echoing textbox racket nailed down.
Shit, I'll just bookmark this comment link and use ynews as a to-do list.
Nowdothis:
1. Buy gun.
2. Shoot self for not releasing my todo list app soon enough.
So work on a small task you can complete rather than trying to tackle a giant problem you'll never finish.
Most people quit playing a given sport seriously because they have to choose between that and making money.
I swam for 4 years in college and I only know 1 person who had a career ending shoulder injury, and that one because it was misdiagnosed for a year.
OTOH everyone I know who played football at any level has at least a minor nagging injury.
I suppose it is reflected in 'old timer beer leagues'. There are a few 50 year old guys on my team right now, and they can play fine they are just slower. Sames holds for baseball.
Even though football isn't that popular here - most of the guys I know that did play with hopes of making it big in the US college system ended up injured.
I read somewhere that a lot of baseball players will just call a cab if they have to walk more than a block or two because their ankles are so shot. Not sure if this is true or not though.
1. working as employee #6 at a startup in boston instead of google in 2001.
2. working as employee #6 at a startup in SF instead of youtube in 2005.
whoops!
'Oh you currently have 5 employees? That is too bad...' :)
In regards to YouTube, I was actually doing work for a YouTube competitor at the time. They sold their tech early to another YouTube competitor, but since I was a contract employee, not a founder, I didn't make any money off of the sale.
At least you had the courage to work at various startups, even if they failed, which is more than most.
"When Filo asked Lent if he would like to join Yahoo! as employee No. 1, in order to keep the founders on their toes with his skepticism, he laughed. 'You couldn’t pay me enough money to work for a company called Yahoo!' he recalls saying at the time."
"In early 1996, Lent explains, “We all said, ’There will never be another Yahoo!’”"
For me, the biggest value came from meeting other like minded people and being exposed to brand new concepts.
There's also value in learning how to finish things. I can understand that people drop out (for many reasons) and that's fine, but I think it's important to learn how to finish things off.
Although, knowing when to bail is probably also just as important. :)
I instead joined this one startup of sorts, worked literally 15+ hour days including Saturdays. Unfortunately it hit a rough patch and they could only afford one programmer and I wasn't it. So the other guy now is making around 15k a month now. They hired me back but I make about a 3rd of that. The system generates about 50k a month in free cash flow and I built all of the fundamentals of the system.
In terms of career/work etc, i really do not think one needs to worry much or brood over past decisions, we all got plenty of time (hopefully) to work everything out as we want it to.
This quote sums up a lot of things nicely:
2) Not moving to San Francisco sooner.
* Competence
* Knowledge
* Experience
In that order. In fact, I only really respect the first one, but I've found that the other two can be very strong indicators of the first, and it's generally a bad bet to assume that someone who's clearly more experienced and/or knowledgeable than you on a topic is not also more competent (at least in some way).