[mmcconnell1618]

Built a e-commerce platform company in 2002. Packaged software sales model with designers and web hosting companies as the sales channel. Reasonably successful for more than 10 years but I call it a "vampire start up." I had enough income to eat and hire a few people but never hit the right growth numbers. Also, small business is just as demanding as Enterprise customers for features and support but doesn't have the budget to pay for it.

I tried a pivot to a SaaS model but missed my window of opportunity as Shopify and a few others started out as SaaS only and had more traction. Also, Magento commerce popped out of nowhere as a really good free, open source cart that made it difficult to continue to sell higher priced stand alone licenses.

Two actual points of failure: 1) had to start letting employees go because not enough income and 2) had to fire myself because not enough income.

In the end, I was able to license the technology to a few companies in a royalty deal and sell some other parts. Not a complete failure and I learned tons from the experience.

Business lessons learned:

* My sales/revenue strategy was weak, i was depending on my channel to sell but they were only getting me a one time license purchase while they got the recurring hosting revenue. * Selling to small and medium sized businesses is almost as much work as selling into Enterprises and the pay off is much smaller. I'd recommend targeting enterprises or consumes rather than mid-market. Consumer has scale, Enterprises have cash. * The better mousetrap doesn't always win. I had much better quality software than some competitors but they had momentum and staff that was already familiar with their product. If you're going to be the "better" option, be 10x better. * Timing is critical. Some opportunities are about being in the right place at the right time. A few years too early or too late can sink an idea. Be prepared to scale as fast as possible when you see things working.

[mindvirus]

My econ prof always said that moderate success is the worst outcome for entrepreneurs - failure means you can do something else and learn, and massive success means you are rich, but moderate success can trap you for years.

[jlbnjmn]

I think the same applies to careers, at least for me.

The worst outcome is a moderately good job. A bad job you can quit, a great job you can retire from, but a moderately good job is slow speed entropy with a gradually narrowing window of opportunity.

[robocat]

I view many multi-million dollar businesses as economic failures, because too often:

(a) owners ignore their opportunity costs (especially prevalent for software engineers that can get a huge salary in a safe job)

(b) owners ignore that they need to get extreme returns to cover the large risks that they take of business failure. The standard pass-mark is a 30-times return after 10 years. If one “invests” $y00_000 savings, and one forgoes $x00_000/yr salary by quitting work, one needs to get back say a minimum of ten million. (10_000_000 divided by 30 is $330k, which is a surprisingly easy amount to have “spent”, especially due to what one could earn in a boring 9-5 job).

Edit: I am ignoring other personal benefits or costs, and only considering a startup from a purely economic POV.

[jlbnjmn]

Wow, thanks for sharing your experiences.

Anecdotally, I've experienced the small business/enterprise dilemma from the inside. Working for some companies perpetually struggling to make payroll and others looking for useful ways to spend more of the money flowing in.

It seems like instead of ignoring small businesses, one could group view the owners as consumer, with similar scale and prove considerations.

I like the idea of 10x better mousetraps. It's not no, it's just a high bar.

[codegeek]

Thanks for sharing your experience. I can totally relate to the "small business is just as demanding as Enterprise customers for features and support but doesn't have the budget to pay for it" bit.

Curious, what are you doing these days considering the lessons learned from the e-commerce platform venture ?

[mmcconnell1618]

Currently getting a health paycheck from FAANG, less stress and operating some passive income side businesses. Good work life balance at the moment but will consider changing things up in the future if the balance goes the wrong direction.