We know students are taking their own lives because of the debt they think they can never pay back[1]. Start-up founders are in a similar position, indebted to their investors[2] and under pressure to deliver a return. Do start-up incubators like YCombinator and 500 Startups provide advice and counselling to founders, especially younger entrepreneurs just out of college?<p>[1] <a href="http://www.huffingtonpost.com/c-cryn-johannsen/student-loan-debt-suicides_b_1638972.html" rel="nofollow">http://www.huffingtonpost.com/c-cryn-johannsen/student-loan-...</a><p>EDIT: Added to clarify<p>[2] A debt of gratitude, where there is a moral obligation to repay investors for their help and funds.
The article doesn't say what the 28 people on staff did. Even if the cost-per-employee was only $50k/year, that would be an annual bill of $1.5m. A staff of programmers would cost more than 3 times that.<p>It doesn't really explain away a recent $5m funding round, but there doesn't have to be much of a drop in revenues for monthly payments to 28 staff to start eating away at your bank account very quickly.
I have no idea where they spent their money - from the article it sounds like some of it may have gone towards misguided inventory purchases, but why would a company like this need its own technology infrastructure? It seems very well-suited for operating on someone else's sales platform (Shopify, or something similar). Let the third-party focus on uptime and scaling while you worry about marketing, promotion, and order-fulfillment of your site and its products.
Something seems off about this. I think we need to learn more details about what happened at the company rather than just accept some vague idea that there was a bad purchasing decision. Should a bad purchase really be able to sink a company? At an e-commerce company, shouldn't there be systems in place to make sure that this doesn't happen? I hope a another journalist digs into this.
Is everything on ecomom marked down to liquidate it? Because it looks like they are <i>heavily</i> subsidizing the prices on this stuff.<p>I see prices that are half or 2/3rds what amazon charges for the same thing. Plus they give free shipping as well for not-that-large orders.