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Ask HN: What can we learn from HashiCorp's failure?

7 points by lnkdinsuxs ↗ HN
As startup entrepreneurs, product market fit is our holy grail. Terraform, packer, vagrant and vault achieved tremendous success. Consul, Nomad and Waypoint weren't shabby either.

At my company, the pricing of the Hashicorp Enterprise licenses were insane and the cloud offerings didn't provide the features I needed. In retrospect, I'm lucky I didn't go all into the hashistack - the insane pricing just forced me use other products, but it makes me wonder:

Could Hashicorp have done a few things differently so the stock wouldn't have tanked right after IPO and kept going down until it got bought out?

5 comments

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xyzzy123
They could have IPO'd for less money ;) Then they wouldn't have needed to squeeze so hard.
lnkdinsuxs
> They could have IPO'd for less money ;) Then they wouldn't have needed to squeeze so hard.

In retrospect maybe, but 2020s was the time of scaling a company and you needed capital to do so.

Could it be that they fell victim to bad market timing and if the markets would have continued to be like 2019-2020, their shares would be at $160 and not $32?

xyzzy123
Maybe. But if you value yourself as a $15 billion company, based on your sector you will have a typical revenue multiplier. So if you know you have x paid customers and projected growth y, that pretty much tells you how much money you need to be making from each customer. [I am working backwards here, of course the story is told to the market the other way around].

It's fine to be unprofitable but you need to deliver at least revenue growth and that's got to be extracted from users of the product.

lnkdinsuxs
One possibility could be that they actually never achieved product market fit: They went viral with their free offering, but those were just users not customers.

1. When it came time to pay, they actually didn't have many customers.

2. The price-points at which they were selling licenses at meant customers would need to be among the Fortune 5000: their sales cycles are long, complicated and expensive