Absolutely yes to "Pass the Hacker News test". Seneca's letter Epistle XI is one of my favorites and teaches this exact lesson.<p>It closes with "Cherish some man of high character, and keep him ever before your eyes, living as if he were watching you, and ordering all your actions as if he beheld them." <a href="http://www.stoics.com/seneca_epistles_book_1.html#‘XI1" rel="nofollow">http://www.stoics.com/seneca_epistles_book_1.html#‘XI1</a><p>I've found it to be a great technique for making better decisions.
I was once on the other end of this -- witnessing a startup that failed "the wrong way". The unethical way.<p>I decided to use a startup to raise some money for a non-profit. Their business model was to help fund events / organizations with their platforms, and take a fixed 2-3% commission on the funds raised. I raised $500 using the platform. But I never received the check for the $500.<p>I knew the founder personally. I e-mailed him and week after week he said, "the check is coming, there has been some sort of accounting error". 2 months passed, and no check. Then 3 months.<p>So, I e-mailed one of his investors, a mutual friend. He said, "Oh no, I think they are in a very bad place and may not have any money. I have stopped using the service." I e-mailed the founder again. He replied that my money was gone, but that he had committed himself to pay it back.<p>He was looking for work, though, so he wasn't sure when. Then, the platform's domain name quietly stopped responding to web requests, and the whole platform went offline.<p>I'm now in this weird position where I'm debating pursuing legal action. I'm still in touch with the founder. He keeps saying that he will pay soon, but doesn't.<p>The money actually came from over 20 people who had donated to the cause. They are unaware the money never made it to the non-profit. The check I was trying to receive was meant to just be a direct donation to this cause. The founder's mismanagement actually led to $20-$40 being "stolen" from about 20 people. In a way, I acted as a middleman, by encouraging people to donate via this platform. And now, I feel very responsible to get this money back. Do I pursue legal action? I've debated it.<p>So, here's another piece of advice about how startups should die: "if it's not your money, it's not your money". In other words, if your platform deals with money (e.g. accepts donations, facilitates payments) it is <i>NOT</i> OK to use money you owe your customers to fund operations. That is called <i>theft</i>, plain and simple!
> <i>I remember sitting down with Paul Graham as our startup was failing. I remember how unbelievable difficult it was to get myself to that meeting. The last thing in the world I wanted to do was to tell him my startup was failing. It took him 30 seconds to process the failure and then he moved on. He was so unbelievably supportive and so excited for whatever it was I was going to do next.</i><p>And this, my friends, is the fundamental difference between SV and the rest of the world. From my knowledge and experience, something like this simply does not happen outside of America. I haven't decided whether this is universally a good or a bad thing, but one thing is for sure - (us) Americans are very tolerant of failure and that is a <i>good</i> thing for startups.
I wrote like 10 topic sentences for comments about shutting down a company and then just erased them, because what a horrible set of memories that topic brings out. I like reading about failure from Jason because he's had a win and is on his way to another, so he can talk about it with a pretty even mind. Personally, I've only got like 10% of a kind-of-win since shutting my first company down, and it still makes me absolutely ill.
I liked this article thank you. My theory on dying startups is that if its not working its better to go out with a bang (eg a crazy pivot or a high risk high reward gamble) rather than a bleed out.<p>FedEx was a good example of this, if I recall correctly the CEO took all the cash they had and went to Vegas with it. Usually wouldn't turn out well, but that time it did. If you need money, and have exhausted all your options you have to take a course of action that gives you a chance, no matter how slim, over the slow bleeding death which would be a long painful and hopeless experience.<p>Not compromising ethics like you mention is so important in life. Ethical decisions are harder in difficult circumstances (teetering over the cliff of failure) but those moments in life are when your ethics count for the most and mean the most, and as you mention they can also pay off in the long run (but this shouldn't really be a consideration from a purist ethical standpoint). The captain shouldn't go down with that ship.
"back in 2007, we were enabling college students to debate issues on their campus. And in the unfortunate theme of that era, we had lots of people using it but nothing resembling a business model."<p>Let's all be thankful things have moved on so much since that era!
Why is the founder taking on personal credit card debt to pay the bills of the company? Shouldn't the company just go bankrupt and then that's the end of it?
I am in the process of shutting down my first company and I would like to thank you for sharing your experience because every decision I make right now has huge ethical implications.
My first startup was a bit of a fad. A fast rise to millions of users, and then a slow peter out -- no matter what we tried. We also didn't know what we were doing, to be fair. Anyway, as we were on our last legs we got a couple offers for our email list of about 6 million users. My co-founder wanted to take them to get <i>some</i> money out of it, but it was an easy "no" for me. We were doing this on the side of day jobs, so failure probably didn't feel quite as catostrophic and we didn't feel as desperate. Still, probably a good thing he would have had no idea how to get at the database (designer).
Basically boils down to an 'honor code'. When you are going down imagine yourself as a great person and that history will remember every action you did. If you keep your respect and dignity people will respect you and you live to fight another day. If not no matter how successful you may or may not be, someone will someday say: "yeah its a great company but he fu*ked so so so over". You don't want to be that person. You want to be: "yeah he put 3 companies under but he always manages to pay his debt".
I'm not a fan of nascent bragging about killing your latest startup, leaving customers out in the cold without a good reason or advanced warning. Find a buyer or pivot, otherwise it's just flushing time, money and credibility down the drain.<p>For a first bootstrapped startup, a FNAC that doesn't require much overhead / support and can be built slowly for awhile is a starting point. It's not a proper startup, but it's something that puts founders and customers in less jeopardy.<p>(Startups proper are go big & fast or bust.)
Right after reading the pg essays, any startup founder should read everything Jason has written. Cuts right to the points that many are too uncomfortable to talk about.
Financial transparency FTW. I've worked for two companies that were extremely transparent. It's made me feel like a) the company knows I am a big kid and can take the good & the bad news, and b) views me as a partner in the work, not a cog in the machine. And if declining finances leads some people to leave, that's infinitely easier than having to let them go.
Just curious, but how much would a list of 1-million targeted emails go for? High five figures? Low six figures?<p>I'm trying to put myself in perspective of his struggle -- was he potentially buying another year of runway? Another month?
<i>Our entire team is made up of entrepreneurs that have at some point failed their own startup. There are hundreds of companies like us that are always looking to hire awesome entrepreneurs.</i>