10 Things I Learned from My Failed Startup

Goodbye ODataHQ

The day my business partner and I decided to shutdown our startup is still vivid in my memory. My business partner had just come back from my vacation and I had been spending the time working my butt off trying to build new features for ODataHQ. I had been feeling the strain of having very few users, and trying to stay motivated to continue to build out new features to try and match our competitors. We were a two man crew, but with my co-founder disconnected on vacation somewhere, I was feeling all alone. When he arrived back and him and I were back at the office together for the first time, we both started to talk. Not surprisingly, it was my idea to close our doors. We were right in the middle of a seed round of funding, and had verbal agreements for only half the money we needed and had exhausted all other possible sources of money. I had been receiving quite a few emails on a daily basis from our competitors with talks of all their new, wonderful features. The final one that pushed me over the edge was Azure, and their new App Service product. They finally managed to pull together all of their separate product offerings-that usually take some doing to get setup-into a cohesive single product. This product offered all of the functionality of our product (with some minor differences) in an approachable intuitive manner. It seemed that the major cloud providers had gone from being these huge enterprise level offerings, that always seemed unapproachable, to a lean, mean, get-the-job-done sort of off-the-shelf product. Which is exactly what we were trying to achieve. Having worked for Microsoft, knowing the type of resources they have, and now them squarely targeting our business structure and model, it seemed that we needed to come to terms with what we were up against.

So it was time to communicated these feelings with my business partner, who was fresh off of vacation. I started by explaining to him all of my findings and thoughts while he was gone. It wasn’t hard for him to agree with my position on the matter and within a couple hours of being back in the office with him, the decision was made to close our doors. We spent the rest of the day talking about how we would shutdown, which really wasn’t that difficult since we had acquired very few users, and even less active users. We executed immediately and shutdown the company and its product with the result being the splash page you see today at https://odatahq.com.

So here goes, the 10 things I learned from my failed startup.

1. Developing a Fully-Polished Product is Hard

Your idea usually starts small, and you begin building it. As you are building it, you are always thinking about how it will be used, and inevitably you end up expanding the scope and realizing all the other things that could be done with your product. The thing is, to satisfy the needs of those other things usually requires additional development. But you just know this additional functionality will make users want you. So you start building the new functionality and before you know it, you are stretched so thin. We got into this bad, we were trying to keep up with our competitors and match their functionality, but all we succeeded in was creating a bunch of half-baked, buggy features due to the constant lure of the next feature. My advice is to understand your limitations and remained focused on your original goal. Make it the best possible feature of its type and you’ll be better off (and then you can move on to the next one).

2. Don’t Measure Yourself Against your Competitors

Chances are, your competitor has put more time and resources into building their product. Face it, they are further along than you and are bound to have more features built, and have polished them much more than you have yours. If you measure your 2 against their 10, then you’re going to get discouraged and in trying to make up for the time or resource difference, your product will suffer.

3. It’s Hard to get Capital for an Idea Investors Don’t Understand

When seeking money, the investors are going to put their money where they see value, and they can only see value when they can understand what a product is, and how it differs from similar competitors. It’s also very likely that if your product is technical, demonstrating that value is going to be even harder. Tell the investor a story, make them feel the pain that your product is meant to alleviate. If you can successfully make them feel the pain of not having your product, and are successful demonstrating how your product reduces that pain, then it’s money in your pocket. This also goes back to not spreading yourself to thin. Pick one problem to solve in the beginning, and be the best person at solving that problem and the money will follow.

4. Don’t Pretend You’ve Made It Until You Have

I wholeheartedly believe that the “Fake It Till You Make It” mantra is flawed. We spent quite a bit of money out of pocket trying to win people over, because we were pretending that we had already made it. Those resources would have been better spent focusing on the problem we had to solve. We spent money on SSL certificates, when we could of got one for free, we took limo rides, and bought the best lawyer just for their name. None of these things helped us achieve our goal, but they did help empty our bank account. Put forth all your effort in your product and pinch pennies until you have a real user base, user feedback, and a clear finish line.

5. First-Time User Experience is Paramount

After working so much on your product, it’s easy to develop tunnel vision and to be unable to see from the outside in. You know your product so well that things seem easy for you and so you often mistakenly believe that things are easy for the first-time user. If you have no users, and no user feedback, find (beg, see next section) people to try your product, and to tell you what doesn’t make sense. Most of the time you’ll find that people have no clue where to even start, even if this person is very skilled and knowledgeable with using similar products. Your product is bound to have different terminology that will need to be explained. Your product will need a clear entry point for how to get started. You must hold the users hand until it’s safe to let them go it alone. This is especially true for highly technical products. You don’t realize how confusing your product can be to the first-time user, because you designed it. The first-time user experience is one area where you can’t skimp, or you’ll see massive bounce rates.

6. Getting People to Try Your Product is Nearly Impossible

Now this obviously depends on the product, but it was very true for ODataHQ. Even our closest friends wouldn’t try the product, because they didn’t have an immediate need for it. People consider their time precious, and getting them to sit down to use your product, and then on top of that document their first-time experience is hard. Had we spent more time on the first-time user experience and also not spread ourselves so thin on features, then getting them to try it may have been easier. But also, people are flaky, the best way to get user feedback when you have no users is probably to schedule a training day, where you can invite all your friends to the same place and time, and have them use your product in front of you. This is something we didn’t do, but should have. Unfortunately, we had spread ourselves to thin (are you seeing a pattern yet).

7. Constantly Re-evaluate Your Worth

Knowing when to pivot is critical, do it too soon and you may miss an opportunity, do it too late, and you’ve wasted resources. You need someone in your business constantly monitoring the business to determine if the time you are spending on any one thing is going to pay off. I’d like to stress again how important it is to get a feature finished and polished before moving on. Because you’re a small team and your time is limited (especially if you have a day job like we did), you can’t afford to have half-baked features out in the wild. It may seem important to be able to claim that feature, but if it’s half-baked, it’s probably not worth anything to anyone anyways.

8. Being a Good Developer Doesn’t Make you a Good Businessman

Focus on your strengths, if you are a developer, be a developer and be the best one you can be. Beyond that, let someone else manage your weak areas. Although this can be difficult when you have no money to pay for someone to manage the business. But this goes back to number 7, you need to have someone working on the business, and not in the business. Do whatever you have to to find this person. Try to get them to work on equity or commission, or find another business partner who cares as much about your goal as you do. We as developers are used to problem solving, and starting a business is just another problem that we think we can solve. But if and when I take the plunge again, you better believe that I will be finding someone to manage the business.

9. Local Trade-Shows are a Good Way to Get Noticed

If you are developing an Internet company, you may think that having a booth at a local trade-show to be pointless, but you’d be wrong. Local investors, and other business people are there to network, and even though you’re an Internet company, your growth starts locally. Mainly because the support you need is going to come from people who are in your area. Use those people, remember their names, call them up from time to time, do favors for other businesses, and you’ll find that acquiring the resources and help of another local company to be much easier. Plus it allows you to show off your product and to get more information about how a first-time user experiences your product.

10. Know When to Quit

I’m not saying to give up at the first sign of trouble, as we went through many periods of ups and downs. But knowing when you can no longer possibly compete is important. When you’re an entrepreneur, settling for anything less than having your own business just isn’t in the cards. So the longer you work on problem that others have solved better than you, the more time you’re wasting that could be spent on your next venture.


Surround yourself with positive people, focus on making the product great, and solve the problem first. Let the money figure itself out. Be better than everyone else at solving that problem and make it very clear why your product is better than the rest. I could write 50 more sections about what I’ve learned, but I hope I picked a broad sampling of the complete education I received that may help prevent someone from learning the hard way as I did.

You only fail when you quit trying

What’s next for me: Subroute.io – Online C# IDE for Webhooks and Microservices. You can expect a more complete article on this new venture, but in summary, we are taking some of the coolest tech we built for ODataHQ and polishing it to the best of our ability, and then making it free for everyone to use.

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