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Ask HN: How much money have you lost on side projects/businesses?

25 points by aswin8728 ↗ HN
HN is often filled with success stories, which can give a false representation of the overall success that people are having. Instead of your biggest success, what is your biggest failure? How much did you lose? How did you rebound (if applicable)?

24 comments

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sharemywin
I bought a pizza shop. Invested 100k from credit cards in it to prove I was committed. I work full time as a developer so, I needed someone to run it. Got sales to over 40k a month in sales and still couldn't turn any kind of profit. Bought a second shop pretty sure I was robbed blind. Sold both never got paid for either shop. Not sure how to proceed now. Getting garnished so huge chunk of my pay is lost to paying back debt. Learned many valuable lessons. I consider it my ivy league of the real world education. I flipped a house paid 85k with a loan fixed it up sold it for 128k, still broke even took to long to fix up. Bought a rental property tenants destroyed couldn't get it re-rented. Owned a mortgage company market collapsed.
cpncrunch
Wow, that's brutal! Have you considered bankruptcy?
sharemywin
chapter 13 is brutal. no 401k contributions for 5 years.
seanmccann
How did you not get paid when you sold them?
sharemywin
loan that never get's paid. don't have the time to run them. so then you could take back equipment, but it's mostly worthless for resell especially in a hurry. easier to just take a loss on taxes against future income.
gamblor956
Have you ever considered forming a company through which to take on these investments and projects? The company can declare bankruptcy independently, which should limit the (future) impact to your credit score and finances. (Obviously, wouldn't do anything for your past ventures.)
ek750
While this is true in theory, from my experience of running businesses and from talking to accountants and bank employees, this doesn't work for most people. A corporation or llc can shield you, but unless the company has a proven revenue stream or assets, no bank or landlord will take on risk without asking you to assume personal liability as well.

Kind of like needing a cosigner when you get that first car.

sharemywin
your exactly right. only way to get money for a business like that is credit cards, second mortgage etc.
jesusmichael
wow man... You should stick to working and give your money to someone else to manage...
sharemywin
on a positive note. I saw the crap loans companies were approving before the downturn so I pulled out all of my money from the market and only lost 5% that year versus a lot that lost 30-40%. And put it back in the following year and had pretty good gains. so at least my experience paid off some.
flybrand
$40k in '09 on a food focused web app - split with my brother. $2k last year on an education web app my wife worked on (that was our share, there were 3 other participants).

The real killer is the time, not the $s out of pocket. My estimated hourly rate varies a lot based on what I'm doing - but it would lead to a significant increase if included.

palidanx
Just curious, what was the idea behind the food focused food app? (I also launched a failed food focused web app).
mjolk
How did you spend $40k on a webapp? Is this developer time that you had to pay out?
malux85
Not me, but a friend of mine works at Google and she has poured some £ 64,000k into building a live tv streaming service that didn't come to anything. The developer responsible eventually just went off radar and didn't even give SSH keys to the server, or and copies of the source code. I feel really sorry for her, and have been helping in any way I can...

When I heard the 64k figure I nearly had a heart attack! Jiminy Jillikers thats a lot of money.

_random_
It is possible to work at Google and own a side start-up at the same time? Is UK less prohibitive about such situations than US (intellectual property)?
josephschmoe
Why would someone make a startup and then not have access to the source code? That's easily the most important thing, especially if you're paying someone.
mattmanser
Non-techies have no concept of what you are talking about unless they've been burnt before. 64k's a big figure to get taught that lesson though.
karishmasibal
Ah those are really sad stories.. I hope you all are recovered from it.
krmmalik
Not me personally, but I know someone that spent £75k of personal funds on a video training website. didn't get a single sale out of it.
qhoc
I lost most money on stock trading actually. But it was back 2009-2011. I could have bought a new Lexus paid in cash with it. It has been haunting me for years since.

Then I started a cheap jewelry retail website. I did small and invested only $800 for inventory. The site ran on Magento and cheap PHP hosting like $7/mo. I got literally zero sales after 8 months. I went down San Fran Piers and saw they were selling same thing for cheap. Doh! I gave up the business and put away all inventory, which wasn't much. However, the time spent on taking photos and upload hundreds of $2 products was all wasted. It's plain stupid.

jmathai
Left my job to do (current) startup. Spent 14 months w/o salary before we got funding. The total sounds like a lot but if I had to do it again I would.

I'm a big proponent of being open about finances and the financial struggle of doing startups - especially when you have kids and one stay at home parent in my case.

  Loss of salary for 1 year, 2 months
  Does not include loss of 401k match or ESPP
  -$140,000

  Successful Kickstarter @ $25k
  +$20,000

  8 week contracting project @ 20hrs / week
  +$16,000

  Living expenses for 14 months (savings/stocks)
  -$70,000

  Post funding difference in salary from market rate
  -$50,000 (year 1)
  -$40,000 (year 2)
Total ≈ -$264,000

My wife randomly reminds me what started off as a 3 month experiment has turned into a 3 year "adventure". She's not adventurous though :).

S4M
Thank you for sharing. One thing I would question though: why do you count your living expenses as a loss, since you would have still spent that money if you had your job. In fact, I would say that you are most likely saving on living expense, since you must be trying to spend less since you are earning less.

Good luck with your startup!

jmathai
That's a good point. I guess I counted it because it visually drained my savings. It felt different to see my savings account dwindle than it did to simply spend $ from paychecks.

But I think you're right that it's money which would have been spent.

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