[appreneur]

Failed, job, startup -success...gave up company because of co- founder,started again.. startup- success...amazing journey first 3 years...next 4 years hell with business partner.

I have failed in the year 2011 after 7 long years at my bootstrapped company. My business partner didn't want me around, I was pretty emotional after so many years, I felt it's time to accept fate n move forward.

Broke up with my gf, I quit my company(gave my 67% to partner if he split debt). So I pretty much walked out with million dollars debt and nothing on hand, life was tough.

I started again,my small business was ok, my burn rate was low,I was ramen profitable ...burning $2000 per month but all customers money, hired employees fired lazy ones.

I just couldn't cope with debt sold my house, my car, my dads house , my aunts house, fortunately n unfortunately I am from india, here people threaten with dire consequences and people give all their life earnings for loved ones. So all the assests cleared about 500k usd dollars.

I earned 200k usd doing consulting, mobile apps, web apps, sentiment analysis ,paid 60k usd salaries. Now I have another 200,000 usd to clear on track to clear it but ....something beautiful happened , I married my gf after 3 years of break, my ex-business partner wants to do business with me again since he saw how I came out of rat hole,...

.I just have one thing to say "don't give up and hang in there with logic and common sense"

I feel I will succeed financially in 2015 , Our product is coming beautifully...then perhaps I can write a book...till then I have midnight oil to burn..

[swombat]

How did you end up with $1m of personal debt? That seems like an epic disaster, worth telling the tale to allow others to avoid making that sort of mistake.

For my part, in 2 failed businesses I never went more than £10k or so into personal debt.

[appreneur]

In india when you borrow for business ,it's usually personal friends, family and distant cousins.

I never borrowed but from my family , but since my business partner borrowed hell lot from friends, cousins, to keep it going , we were essentially paying 24%-36% interest on the debt, almost all the profit was going to just pay interest.

And since we were Not making operational profit , we did turn over of 5million usd , paid interest of 2 million and operationally we were in a debt trap. It was classic case of denial of risk and peril. just thought that I will come up with blockbuster product and wipe it all,it never happened in 7 years the problems multiplied. Debtors were hounding on the door for their principal, even though we paid them huge interest,it's like bank run, once they sense things are wrong , everybody wants their money back on that day. Got into new personal guarantee agreements ,made huge sacrifices and finally here I am.

[jsudhams]

Any reason why you went for 24% to 36% loan with friends rather than bank loan? with the turn around like that you could have also taken small business aid loan which are 12% at worst.

Also why would you pay US$ salary in India(assume)? There are lot of well funded small startup's that would staff augment you for US20$ an hour for decent programmer and you could have used remote college student for the programming after initial training.

Haven't done startup as thinking of doing in in our environment gives me jitters as I am not a very social person and gets really pissed of with govt officials. May the that was only way you had at the time.

[appreneur]

I wrote numbers in dollars for wider audience understanding, I paid salaries in rupees. As you might understand, a business loan from bank depends on collateral security you can offer , I could only give 200k collateral hence the business bank loan got limited there.

One of the most important lessons , I got early on is ,you need developers and staff full time on rolls,right next to you if your business model is dynamic and also you are not sure of staff quality. If you go to skillpages, there will be thousand resumes claiming they know Python , once you hire them you will know the quality, outsourcing works to that kind student quality is like sure shot disaster.

Also I just was not lucky enough to find quality talent to outsource.

About india being good for entrepreneurs , yes and no, depends on what you are working, but just to give up on startup idea altogether is not recommended ,choose carefully plan well and most of all EXECUTE WELL.

[wushupork]

Congrats on coming out of failure. I would love to learn more about what worked and what didn't work. What sort of pitfalls you had, lessons learned, etc

[appreneur]

The most important lesson ,

1.Never ever give personal gaurantee for more than your net worth! So that failure stops with you, otherwise your entire family gets affected.

2.Focus on one thing , become incredibly good at it.

3.Focus on customers and trust yourself on giving value , customer insight is better than customer need.

4.Be alert about interest on debt ,business debt ( high interest) essentially will kill every possible way of being rich, instead it will drag you down the road of no return.its 100 times better to get VC fundin or investor money than business debt.VC will stop you before it's too late. LESSON ....take business debt only from banks if it's low interest, then investor money. Ideal is do business with customer money if you are in software. Get pre- sales before you make, it's tough but it works.

5.Indecision killed most of the profit for us,we were two people protecting each other back and it doesn't help, when you are in such impossible situation and indecisive,we should have closed the business 2 years earlier. It would have saved us a lot money and time.

6. Always have 3 extra advisers on board if you are just two co-founders....to get a perspective otherwise emotions run high and it will be huge drain on the company.

[raminassemi]

Great lessons! Regarding making pre-sales, this post is pretty helpful: http://blog.close.io/how-to-charge-money-for-things-that-don...

[seunosewa]

Why did you break up with your girlfriend initially and what motivated both of you to come back together?

[appreneur]

Honestly it's her belief in me which bought us back together, I just gave up unable to handle stress from so many dimensions, financial, personal and friends turning soar.

Not able to give time to her , I felt I might destroy myself or her permanently if I hanged around the relationship, it was becoming extremely stressful to handle her and my debt. So I requested her to let me go and allow me to focus on clearing the debt.

Also I guess the break helped her see me in different light when she was away from me. I just melted to my gf waiting for me 3 long years. I said yes got married in 3 months.

I am incredibly thankful for my parents to keep supporting me with all their might and it's beautiful....that I was born to such family where they go to any extent when rubber meets the road.