Friday, January 2nd, 2009

Why your web startup will fail

Why your web startup will fail
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Somewhere in the back of your mind, there’s likely an idea for a startup that rears its head from time to time. Perhaps it’s an iPhone app that reads minds, a search engine that’s better than Google, or it could even be the best way to buy music online. I can’t tell you how to make it a success, but I can share a few obstacles that you should be mindful of before starting out.

For nearly a decade now, Eric Shelkie and I have run an interactive agency with a reasonable level of success. We’ve won some awards, generated some publicity, and managed to keep paying the rent along the way. Meanwhile, we thought it would be “fun” to start something a little more challenging, and it has been just that.

In May 2007 we started to work on MakeFive. It started from us wishing that the conversations on Facebook could be a little more involved, and has turned out to be our biggest investment to date. Every month we get a few new users (most months traffic doubles), and people email us noting that they love the site. In the meanwhile, it’s a tooth and nail struggle to keep building, improving, and trying to get the thing to profitability.

You won’t have an audience

In high-school we all got the feeling that everyone else was looking at what we were doing. This meant that we obsessed over our haircuts, brand of acid-wash jeans, and size of “OP” logo on our t-shirts. We just wanted to make sure that we didn’t stand out too much, in order to save ourselves from being social outcasts. That mind-set is really hard to shake, but believe me, it’s something that you absolutely must break in the interests of your startup.

No one is looking at you. No one is listening to you. (You don’t believe me, but I’m right.)

You may think you have a lot of friends. You may have a blog that a great many people read. You might even have “qualified” people who claim that they will buy or use your product. None of this matters. People are way to busy thinking about themselves to care about your new innovation. They may say that your idea “sounds great”; that you’ve done a wonderful job; or, simply “congratulations”; but frankly, they have more important things to do. Their kid is sick from school. Their boss is screaming about a late report. They have really bad hemorrhoids. Take your pick; the point is: you shouldn’t confuse politeness for interest.

Even if you create a portable fountain-of-youth, your startup’s biggest challenge will be to get anyone to pay attention. Really–it’s that hard.

You’re going to run out of cash

As you work on a project, milestones get really exciting: “Once we complete this next version, everyone will see why it’s so awesome!” This is an important aspect for any startup as it keeps you working. The tricky part is that it can distract you from the fact that you’re burning cash. Last fall we dropped all client work for about four months. We were convinced that the next version of MakeFive would “do it”, but it still hasn’t. We awoke one day in December and realized that we really needed to get some billable work through the shop or we’d be sunk.

Now, this is somewhat different if you’re a funded company. Those groups at least have something to sustain themselves while they work on their startup and spend money. The reality, however, is that funding largely seems like a crapshoot that’s “hibernating” until this recession-thing blows over. So, for most of us, we simply have to keep doing something to pay the bills, while working on this new, amazing thing. That being said, regardless of how you’re getting cash, you will probably spend more of it than you should.

If you can work from home, you probably should. I see money as time. Any that we save allows us more time for iterations, experiments, and tweaking, while we try to get the formula right.

You’ll get frustrated

Startup dreams are quickly replaced by startup work. And even if you like work, you may find startup work to be quite daunting. Spend a week emailing bloggers asking them to try out your new site/product/whatever and see how many get back to you. I call it, “making a mountain, one grain of sand at a time”. You just have to plug, and plug, and plug away to gain some traction. (Unless you start something like Twitter and it’s a wildfire hit; but again, those are “lottery-odds”.)

The real tests come at moments like we had about a week after our initial launch. Lots of people dropped by, told us they loved the site, and didn’t come back. So, there we were, left with one big question that lead to endless others: Why aren’t they coming back? Is something too confusing? Is our idea a bad one? Do we just wait and see if they come back later? Do we need to build another tool? Should we run a contest? Would weekly emails be a good idea, or just become an irritant? (And on, and on, and on.)

I can tell you why a brand doesn’t work. I can explain why your website is hard for people to navigate. I can help you craft a strategy to build your marketing efforts around. That being said, when we’re building something no one has ever quite done, it’s very difficult to determine what the problem is (or problems are). And although everyone will tell you what they think, most of this is subjective feedback that may not be any more telling than your own observations.

The way we got by this hump was to just look at our project as an enormous control panel, littered with thousands of knobs. Somewhere in there is the right combination of settings, but we just had to twiddle knobs until things started to react as we hoped. (It does start to work when you do this, but that endless number of variations and settings can seem pretty daunting.)

The emotional rollercoaster will beat you

When I first read other entrepreneurs talk about the “emotional rollercoaster” of a startup, I felt reassured: “Ah-ha! It’s not just me! We all go through this thing! Thank goodness!”

One day you’ll get a great review of what you’re doing, followed by a traffic spike, and a flurry of activity and you’ll think that you’ve finally done it. No more struggling. You’re on top of this thing and all of that work paid off. You’re (forgive me for saying it) “the king of the world”. The next day you’ll find yourself back to where you were two days before, just working away, with that excitement turning out to have been a fleeting moment.

The next day someone will tear your idea apart publicly in the most venomous way you can imagine. Or, money that you had expected won’t arrive. Or, a key staff member will leave your company. Or, your servers will crash. Or, your roof will start leaking. (I could go on forever.)

A startup is a Sisyphean task with momentary glimpses of promise. It’s a wild emotional rollercoaster ride. (I know, I already said this twice, but it deserves to be said again.) And if you have manic tendencies, as I believe that I may, you’ll feel these ups-and-downs even more acutely.

My only suggestion is to turn up the Metallica, get back to work, and try to take any praise/criticism with a grain of salt. Lots of people will tell you that you’re an idiot or a genius; it’s unlikely that either of these are accurate. This being said, stay open to useable feedback. We’ve had a few suggestions that have been really helpful. Keep your ears open for sensible observations while muting some of the hyperbole.

You’ll get excited about something else


In “start-up-land”, there always seems to be another thing that would be more fun, exciting, easy, profitable (again, take your pick) to do. There are possibilities for mobile apps, new tools, widgets, offshoots of your existing product, speaking opportunities, articles, book possibilities, and consulting gigs. You name it, there’s always plenty to do, and most things seem “less hard” than what you’re toiling away at.

The problem with ideas isn’t having them. Shit–I have plenty of ideas. The challenge is to be able to determine which ones are worth acting upon. While building out MakeFive, we’ve had numerous moments when we’ve thought of another thing we could do. The thing is–having an idea is quick, while executing upon it takes time. If you act on every idea you have, you’ll never get anything to market.

So, start a list and record them as they arise. We have a list of a couple of hundred start-up ideas that will continue to sit on the backburner until we have the time/resources to act upon them. In fact, I’ve done the same for ideasonideas, and have a list of a few hundred articles that I will someday (maybe) get to.

My feeling is that it’s important to keep traveling on the path you’re on until it makes no sense to do so any longer. In the meanwhile, keep adding ideas to that list, so that you have a backlog of possibilities should you choose to change course at some point in the future.

But it probably won’t be the competition

My friends get awfully tired of how I promise them to secrecy with every “amazing” startup idea that I have. In fact, my friend Hans often pre-empts my request for discretion with his own, knowing that I’ll almost inevitably ask for one each time we speak. (I don’t know if I’ll ever break myself of this habit.) The truth is that when you have an idea that you’re excited by, it’s hard to say it out loud, given the worry that someone else will get it to market faster than you do.

In my experience, however, competition rarely really has much to do with it. If your startup gets killed it will be one of the above things that does-you-in way before someone rips your idea and makes a fortune from it. I once noted to my wife that I was no longer worried about someone copying MakeFive as I once had been. (If someone did, they’d be faced with all of the headaches and struggles we were fighting through.)

Closing thoughts

With all of that said, I have to emphasize that little of this really matters. If you’re inclined to start a startup, nothing anyone says will stand in your way, nor, should it. If you have the bug to make something, it’s impossible to shake, and in my mind can be one of the best life experiences you can have.

Every month we get a some new users, a couple of excited emails, a few glimpses at just how neat our project could be. And more than that, we get to build something that we really love.

I wouldn’t trade that for anything.

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Comments & Trackbacks

  1. Eric Gates says:

    Other possibilities:

    1) You don't get lucky and become a fad

    2) Your startup doesn't address a serious issue

    3) Your startup doesn't have any meat behind it.

  2. Raymond says:

    thanks for the insight. another good article. my only objection is listening to Metallica - personally old school punk or Led Zeppelin is the best way to mute the hyperbole.

  3. Agreed--as long as the volume knob can be turned high enough you're pretty much okay.

  4. md says:

    We've been running into the same issues over at Fill/Stroke. We launched our blog EARLY. July of 08, after a year of working on it. We thought we were close to being done, but we still aren't.

    So the focus turned into how to make the blog a place people want to visit, in the interim between the production and published states of the magazine. We measure our success by hits and trackbacks in a way, but for me i always measure it by comments and interaction with the content we right.

    A lot of our posts are tumble-esque. Just quick snippits about design projects, a few images and one or two lines of opinion. These often will get a couple hundred hits. We've even had two of the tumble-posts get stumbled and have 1000 hit days (I know this is spare change for you, but its a big day @ f/s)

    What happens for me, is I try and write long, original content. We'll have tons of hits, but the second I post my 2 page article the hits disappear and I am left wondering if my writing sucks, if I somehow need to shorten/dumb down what I am writing.

    On top of that, we have no money coming in, the publishing costs are probably going to kill us, and we're all busy with work and school and regular life.

    I guess I'm saying all this because I completely understand how hard it must be for you, given you've got 100 times the attention, 100 times the traffic, 100 times the whiney users, yet you guys always seem to pull things out.

    I imagine your regular users are more dedicated to your sites/your plans than you realize, and as you grow you'll pick up more and more of those users and it might be a smaller community, but its more involved than the bigger places. Quality users.

  5. This had me laughing out loud. I have experienced almost every up and down in this post :)

  6. Mark Lee says:

    Been there done that. Yup. I can relate to all that and would echo your sage words Eric.

    My startup started on my 50th birthday in 2007. I would add another reason, if I may:

    Blogging will not compensate for an absence of effective marketing
    In this web 2.0 world you could be forgiven for thinking that blogging and tweeting will be sufficient in lieu of an effective marketing strategy. It won't - for similar reasons to those you've noted above. Potential clients/customers aren't interested in what you have to say. Those people who do read your writings are not within your target audience - and it will take some long time before they will engage sufficiently with you to find out what you really do. And only then is there is a possibility that they may tell their friends and family. You need to be patient. More patient than you have ever been about anything in your life.

    Good luck with your continued efforts and happy new year.

  7. Eric Pursh says:

    This should be required reading in every business school and start-up "class". Great article.

  8. Jay Philips says:

    Great blog. I have seen the roller coaster effect in my startup which sometimes gets intense but it's great to see it.

    Thanks,
    Jay

  9. We've certainly been through all of those, but we've been incredibly lucky too. Our "startup" ( http://hypersites.com ) is 7 years old now, and there is still a ton of work to do! ;-)

  10. Sam Feuer says:

    Very smart and feeling post Eric. All about determination and time mixed with late nights from home all targeting the goal of success at any cost.

  11. Gina says:

    Fabulous! You are so right on. I have the same feelings about my web start-up as I did about opening my first Health Food store 16 years ago. Total unknown, needing to educate the public, how can I support myself till, if ever, this flies? and so on. And ...I would not change it for the world, no matter who says it will or won't work (experts told me New Health could not last,with their long list of satistics- I closed my doors 12 profitable years later). It was simply in me and I had to do it! That seems to be something no one can take out of you...so hop on, fasten your seat belt and for God's sake enjoy the ride...it is after all all there is!
    ~Aloha

  12. Rodrigo says:

    Great post. This is right on. I love your comments about the emotional rollercoaster. I can relate... The roof of our building was blown away by hurricane Ike... then, last Tuesday, the roof of our temporary space started leaking!

  13. Robert Brown says:

    Anything worthwhile takes time and resources. Only you can determine if and or when you are successful.

    Don't create unrealistic expectations when you hear about people building something for 12K like Guy Kawasaki. He spent years building his reputation and contacts which have allowed him to launch his latest venture so easily.

    We hope your not doing this for a quick fix but for an unrelenting passion. Only your passion (and a supportive partner) can hold you steadfast in the face of mounting adversity.

    There are no silver bullets, no magic potions, no fairy godmothers. As Eric said, turn up the music and get back to work.

  14. rickey gold says:

    Terrific article. The "Last fall we dropped all client work for about four months..." resonated loud and clear for me. The excitement of new ideas, info and possibilities have been getting in the way of my client work as well. Good to hear someone else voice it. Now I can get on with the billable work which is what I should be doing anyway. Thanks for that "little did you know it" shove.

  15. Ken Jones says:

    Being a serial entrepreneur is tough. No doubt a 5 year cash flow plan should be the highest priority. Running out of capital is the #1 error made by us 'idea' folks. I'm in 'season/year' 3 and I'm not sure the boat will float much longer without help. I guess I better mend the cracks and look for a bigger bucket.

    Great Article

  16. Great post Eric. Found it via Guy Kawasaki on Twitter and ejoyed every bit of it.
    Currently on my second *try out* and remembering how it felt the first time. You´re right on when remarking that it doesn´t matter what people say... if one have the intention and passion to start a start-up, nothing else exists.

  17. tparsons says:

    Great article... And very true. The one thing I see as a problem when landing on MakeFive.com is that you don't tell the user right up front what it is. I had to look around a bit to figure it out.

    Instead the first thing I see is an ad to buy a Tee. Your message is vague and pushed off to the left of that.

  18. Nikki Layton says:

    Been there done that with a brick and mortar business. Worked it for 7 years and then thought of let's start a software company with the software we designed. Wow doing it all over again in a totally new field and you have nailed the pain points magnificently. check us out at http://www.myvolo.com

  19. J Sandifer says:

    Excellent Article! I work for a start-up and it is like ground hogs day every first of the month. We are in great shape, but it is always a challenge.

    J
    http://www.livebooks.com/

  20. I joke that my only competitors are ignorance and apathy. But, it really isn't a joke. BTW, apathy has more market share :-)

    We have been a "start up" for 10 years now on our soccer tournament product http://www.tourneycentral.com and you're right, nobody is looking and nobody is listening.. including soccer tournaments who would most benefit from a little organization.

    Great post. You said what I had been thinking for a long time. The only thing you may have missed above is that the cost of customer service will CRUSH you, especially if your product is free :-)

    Carry on......

  21. Good stuff Eric! We've just started on the start up route and everything you say rings so true.

    Your surname is definitely Finnish so hellos from the icy Finland ;-).

  22. It certainly is--thanks for the greetings from Finland! I'm tipping a virtual Lapin Kulta right now. ;-)

  23. Dave says:

    I don't mean to be so blunt, but it amazes how many allegedly smart people can be so stupid.

    If you want a successful product there are only two reasons for it to exist. A)It must solve an urgent problem that people are actively seeking solutions for or B) It's something people have an irrational passion for.

    Nutritional information for cancer survivors.. probably an urgent problem. House training a puppy? probably an urgent problem. A quick guide to TCP/IP? probably an urgent problem.

    Care and maintenance of saddles.. irrational passion (horseback riding). How to build a paraglider? Irrational passion. Convert your gas-guzzler to an electric vehicle? You guessed it...

    So you an idea for a startup? Big deal. Most mildly creative people could sit there all day and come up with ideas... and they are all totally irrelevant. Success comes from finding out what people want, what they need and what they desire and to give it to them, ten times better than they expected.

    MakeFive, I'm sorry to say, is an irrelevant product. Top five lists made by random strangers on random topics? Unless you're really really bored.. noone has time for that. Maybe top five lists on specific topics by experts.. maybe. Top five business books by the CEO of Toyota? Ok maybe interesting. Top five most promising scientific discoveries of 2008, by Ray Kurzweil? Ok, I'll read that. But top five things worst typefaces of all time by some random dude? Yeah, no thanks.

    This brings me to my last point. Before you embark on your fantastic startup, ponder this: Does your product have an overwhelmingly compelling reason to exist? Keyword "overwhelming". If you can't honestly answer that, don't do it. It doesn't have to be an obvious solution, but it does have to have very good reason to exist.

  24. That’s alright Dave, it’s good that you’re blunt. It is, however, a pity you didn’t post an email address or anything. Comments like yours always seem to me like the musings of a frustrated 18 year old masturbating in their parents’ basement, somewhere in London, Ontario.

    But, that aside, I understand your point. The thing is, it’s very difficult to know what is and isn’t solving a problem. No one wanted a mouse for their computer until we grew accustomed to using it. Email would have never passed a focus group until we understood how to use it. Twitter seemed like a waste of time until… well, you get my point. And television… Oh, that was even worse! Who the hell needed that pointless thing when radio was already around? Complete and utter nonsense. It didn’t solve any critical problems. It was just fun. And Dave, you and I know that no one really needs fun, right?

    MakeFive might be irrelevant. You’re certainly not the first to say it. That being said, I’m going to argue your point that it doesn’t solve a core problem. For me, that problem was one of discussion. I was playing with Facebook one day, and realized that it just didn’t facilitate great discussions. That’s ultimately what MakeFive is about: creating discussions. On top of that, it solves a lot of little problems: finding a new place to eat, getting ideas for new movies, learning about interesting new blogs.

    Anyway… thanks for sharing your opinion. Who knows? You might even be right. In the meanwhile, remember to hide the girly magazines and lube before your folks come downstairs to grab the arugula.

  25. Great post. Starting something up is a tough hard slog .. and the ideas are definitely the easy part.

    That's why a million people have ideas for every one who executes.

    Congrats for trying, and best wishes for 2009.

  26. Pingback: Six Reasons Your Web Startup Will Fail (But Don’t Let Them Stop You).

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  28. Markus says:

    Good article. Horrific font size choice.

    (Although I do realize that anything bigger would probably break your circa 2002 pixel-art layout).

  29. I know Markus--I’m so horribly passé.

    (Perhaps you could give me some designing lessons?)

  30. shae says:

    I get plenty of ideas for sites/products, my process of elimination goes like this:

    Will people use it ( how / where will i find them )
    Will it make money ( how where it will come from )


    MakeFive, looks great, the digg - top 5's are popular enough that it would seem its a great idea...its laid out well, easy to use, content is great.

    here's where i see the problem.....

    why would anyone want to make top 5 lists? enough so to return over and over?

    what's the incentive?

    Offer a way to integrate the lists into people's blog posts and twitter accounts, that might add value?

    Good luck!, thanks for this post.. I enjoyed it.

  31. Good suggestions Shae. So good in fact that we've already acted on most of them :-)

    Blogs: http://makefive.com/help/widget
    Facebook: http://www.facebook.com/applications/MakeFive/16756537785
    Twitter: (coming soon)

    As for the incentive, my best suggestion is that you ask one of these folks to tell you why:

    - http://makefive.com/people/webdesign
    - http://makefive.com/people/plantt
    - http://makefive.com/people/mdudlik

    They've all been using the site for a while now, so they can likely give you the best response. Or (better yet) sign up for an account and give it a spin. (Some things you just have to experience for yourself.)

    Glad you liked the post. :-)

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  35. We studied this question (why web/tech startups fail) and gathered statistics for a 10 year period. You can see the results here:

    http://www.hightechstrategies.com/10_reasons_technology_products_fail.html

    I think it's a fascinating topic.

  36. LOL you pegged it. Glad it's not just me. I was starting to wonder if I was bipolar what with the emotional rollercoaster I've been on since I started my site. At least I feel like I'm in good company now!

  37. Arif Gangji says:

    Thanks for sharing. It's true, startups are hard and not every startup will make millions, most will just die quietly. A lot can be said about timing, which is one thing nobody can really control.

    So, follow your heart and do your best...hopefully you won't end up on TLC as the 89 year old still chasing a dream while living in a shack :/

  38. John Kim says:

    This post was awesome. I have never had the words to describe what it is like to work at a start-up but this is a great start. A must read!

  39. Ty says:

    Thanks for sharing. I've passed it along to along to our company.

  40. Mike says:

    Eric,

    Really enjoyed the article and good on you for pushing forward against all those roadblacks.

    I'm very interested to hear when you and your partner made the final decision to invest your time and money into this project?

    Did you conduct viability tests? Have meetings with certain groups ... what I'm getting at is at what point did you 'feel or know' it was worthy of moving forward with your project? And how did you know this?

  41. You know Mike, it really happened quite quickly. We had the general idea and decided to run with it within a few days. I suppose that sounds rather irresponsible, but by the time we arrived at this idea, we had hundreds of others documented.

    It would have been great to run it through some viability tests or something of the sort. That being said, I don’t know how we would have effectively done so. It’s just so hard to ask the right questions at those times. (Even more difficult--to know who to ask.)

    We take a bit of a “Richard Branson” approach to the things we build. We look for things that we wish existed, or were better, and document those ideas. Every once in a while one of those ideas stands out, and we just liked this idea a lot. It’s not particularly scientific, but that gut read seems to drive a lot of these projects. Now we just have to see if our gut reads were right. ;-)

  42. "Ah-ha! It’s not just me! We all go through this thing! Thank goodness!"
    Loved this quote! Recently I was reading Guy Kawasaki's book "Reality Check" and every couple of pages I was ready to scream out "I knew I was not crazy"! How come the startup community likes to talk only about the huge successes and forgets about every day failures and actions needed to avoid them. The more entrepreneurs learn and are prepared to deal with the wild world of startups, the more successful ventures we will see.

    Just my humble 2 cents.

  43. Vijay says:

    Great article I could relate myself with each point. Its hard to be an entrepreneur but if you get a kick out of what you build then enjoy the rides.

  44. Eric,

    Thanks for the post. I mean this in a good way, it is refreshing to read about another entrepreneurs struggles. It makes you feel that you are not alone when you're in that frustrated state of mind. I've personally been working on a start-up for 2+ years and I'm in my third business model iteration (while working full-time) and now have another start-up I'm working on full-time to build other things....go figure.

    What I'd like to add to the discussion is that having other entrepreneurs around you to share and solve problems together is a big help. I live in a small city between Austin & San Antonio, TX and am part of and entrepreneurs organization called the Bootstrap Network, based in Austin ( learn more here :: http://www.bootstrapaustin.org/ ).

    The principles and resources available are great and it's a matter of taking advantage of but also giving back to the community. I personally find it helpful to have others evaluate what you are doing especially other experienced entrepreneurs that can shed new light on what you could be doing differently. However, there is also this personal growth path that you must take and it is very different for many people.

    So, my best advice to those involved in this discussion is stay determined and focused as Eric mentions but, also surround yourself with a support network that can offer you solutions and new ways to think about things.

    Eric, I'm gonna check out "Make Five" and if you wanna connect to share ideas, war stories, etc., you've got my email.

    Cheers & Happy New Year Everyone...let's make 2009 a great year.

    jc

  45. Sounds like a good group Jason--nice to have others to share experiences with like that. Thanks for dropping by and sharing those suggestions. :-)

  46. Great post Eric, I think you've managed to put into words the majority of challenges that face most web startups. But I'd hate it if this put anyone off finishing their great new idea.

    There's value in your post, but only as a warning sign for what to avoid. I would like to make a plea to all budding web superstars, to read everything in this post, digest it, and then with all that in mind continue working on the world changing start up project that you've sweated your guts out to get this far.

    So my message is: take the advice given here, but don't let it change your mind. The only thing preventing you from finishing your project is you, so stop procrastinating, close your feed reader and start getting stuff done.

  47. Twilight says:

    Nice post Eric. I can relate to the things you're saying. Hopefully, you'll make it to the 2nd Edition of Founders at Work book (if Jessica ever decides to do a followup version).

    Here's what's funny (for me). I'm working on startup idea and I'm trying to *not* get traffic. The site/app is up and all, but I don't think it's good enough yet. Perhaps it's paranoia. Perhaps it's perfectionism. Perhaps (as you said), the negative feedback (ie. "you're an idiot") will flow in and demoralize me.

    That said, while working on it, it's been one of the best times in my working life. The app may fail but the process was beautiful. I don't have any of the corporate BS to deal with -- going to prod doesn't take 3 days with 6 approvals and a blood donation. Changing the UI or adding a feature is simply done at will. If it bites, the marketplace will speak.

    It's almost as though it's therapeutic. It's almost as though the end is not the important thing. It's almost as though the journey in trying it is fulfilling in and of itself.

  48. John says:

    Thanks for the post. To quote our former Sec of Defense, it's a long hard slog. But, as you suggest, quite a learning experience.

  49. Nat says:

    I will keep this mind Eric and hopefully when this turbulent hit me, i can remember it.Good Post

    Nat
    http://www.halflet.com

  50. Zroach says:

    I think of it more like a stage coach ride... on a roller coaster. Wee!

  51. I think that pretty much nails it. :-)

  52. c says:

    I don't have a startup but like you said, ideas aren't the problem. Thanks for the great post. I'm gonna have a look at makefive although I have to say I'm not that into Facebook.

  53. This is a brilliant summation of that struggle, Eric really nails it. Wonderful read.

  54. Guk says:

    great blog post. I enjoyed reading all of it + comments.

    Another issue you should add is: No one does the work you expect them to do.

    It always ends up that you're the only that really cares about the company and the only one actually doing all the work.

  55. Eric - Great post. It is nice to hear other experiences...got no polemic except to maybe avoid too much metal...a little ska can be a healthy counter-balance to the bone-crushing stress

  56. Ask Your PC says:

    Starting an online business does take a while because of the search engine ranking and getting the word out. You need an intuitive design also.

  57. Jake Rutter says:

    Great Overview of Startup Life. I went through a similar exercise last year with a site called fanboom.com. Most days its down, because we had to drop the expensive fast host for a shitty cheap host. We slaved away for 9 months working on this sports news site, launched it and pushed, pushed, pushed for traffic. People would tell us how they loved it, but we had about 50 users and 500 members and it wasnt growing any larger.

    I have about 10-12 ideas, my friend and I launched another small site after fanboom died. It took us an hour to build and its been far more successful than fanboom. The site is called antipodr.com. But I feel your pain, its tough to make it happen. I have learned a lot from trying to do too much, because sometimes you put in so much work and get nothing back.

    Its all about balance in the end.

  58. Mikko Laanti says:

    Every one of Your reasons for failure are so true. I would like to add one item, though: the difficulties of managing complexities of a web startup, there are always several paths where You can head up. You never can be sure that You've selected the "best" way to implement something until You've tried them all (On second thought, this is pretty much same as Your "You'll get frustrated" item).

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  60. Manoj says:

    Really enjoyed reading your article.

    I am guessing that your source of revenue for Make5 is ads??

  61. Vasudev Ram says:

    Nice realistic post - thanks.

    - Vasudev

  62. Immediately we’re concentrating on building a service that users enjoy. Once that is refined, we’ll start to concentrate on revenue.

    Our first step is to sell standard ads while we build traction. Later we’ll concentrate on higher-value brand placement opportunities & sponsored activities. The example that I like best is that of building contests around certain companies that would allow a level of engagement between users and brands.

    Other options we’re exploring include allowing companies to buy expanded listings for their services. Additionally, we’re looking at integrating the sale of products through affiliates, on relevant pages.

  63. M2Mz says:

    Sounds like motivation to some, and feels like kick in the balls for others.

    How do you feel?

  64. I'm not sure that I understand your question M2Mz. Can you rephrase?

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  66. jtchen says:

    Really enjoy the reading and I'm in sympathy with most scenarios.
    Maybe men naturally need comfort from that :)

    Though not a frustrated 18 year old, I agreed with some points from "Dave".

    In response to Eric's "what MakeFive is about: creating discussions", I'd like to share some thoughts.

    Asking recommendations and information sharing like top five can be a good and sensible way in physical communications while the context is people around you. This is about "creating relationship".

    But things dramatically changed when you are on Internet. You are seeking most relative communities or professionals for information and really don't care "Top five lists" made by random strangers on random topics.

    What's the difference between the "Top five novels" presented on Amazon and MakeFive? Maybe Amazon has more retail information and credibility.

    As general as topics covered by MakeFive, I'm afraid it's difficult to build communities around.

    Possible direction:
    Focus on building notable communities with valuable recommendations for mobile users. They are more tolerable on what you offered in their context: mobile.

    BTW, I'd like to invite "Dave" to give me some blunt feedbacks for my Oizea Type that trying to solve "overwhelming" text input on mobile.

  67. Detrus says:

    For me the design of MakeFive seems pretty annoying. Not just the part with the intrusive ads on the front page and everywhere else, but that I can't see what's different about the content on the front page. I'm not gonna read a description that this is a list making site, I want to see lists with vote up/down buttons next to them on the first page.

    I don't think the idea is completely ridiculous. I see plenty of top 10 list articles on digg and people love them. Having an option to summarize that list on your blog and throw it to a list sharing social network isn't bad.

    But again, at a quick glance I can't tell if that's possible, or that anyone is doing it. Functional design is a huge problem on makeFive.

    On your other startup, undrln, the design looks right. It doesn't look like the other digg clones out there, it's simple, I know what it does and I can access and use the content there instantly. I don't see why the same can't be true for makeFive.

    If I was to make a bet, I would bet on undrln gaining more users than makeFive for the attention it gets.

    As far as making a startup work, I think it's important to have a long term strategy for seeing one idea fail after another. It's important to build your service with reusable code libraries that can be used in your new attempts at a service.

    You're probably doing that with your CMS and undrln, together they can build a new type of news site with different groups of users getting different amounts of real estate on the front page.

  68. undrln's design was easy because there really isn't much to the site. When you play with MakeFive you'll see that there's just a lot more to it.

    On first glance things may seem unfamiliar, but I urge you to join up and play with it. I'm not saying that it's perfect, but with a little use I think you'll find the design to in fact be quite logical and intuitive.

    The challenges with a site like MakeFive are numerous. In part this is due to the amount of content and the number of ways to represent it. More than this, however, is the wide number of users and their needs.

    The things that you want to see are the complete opposite of what the next user wants. (And another will want something completely different.) This makes for a very different design process than something like a portfolio/brochure site, which feels like a cake-walk after working on MakeFive for the past year-and-a-half.

    Don't take my response as defensive. I do appreciate the feedback and take it to heart. At the same time, I must stress that MakeFive isn't designed specifically for the first-time visitor. It’s a complex project lead by continual user-feedback and assessment, followed by extensive iteration and refinement.

    Again, I encourage you to sign-up and create a few lists. See what you think after a week of using it and then comment again if you feel so inclined. Our core users seem note that they quite like the UI, and from usage patterns it appears that it’s working for most of them.

  69. Hear Hear!

    Been throught it - know how you feel! But you're right, it's a helluva lot of fun and I wouldn't trade it for the world either!

  70. I agree that as an entrepreneur, it is a roller coaster ride filled with emotions.

    I left corporate to start a food photo sharing site. Many times, the breeze of loneliness lurks.

    but I also learned, ITS Lonely at the TOP as Well

    my quote to share

    "If not me, who? If not now, when?"

    Alibaba is a great example.
    They kept their operations lean so that their burn out rate was low.

    With barrier of entry relatively low, execution becomes primary.

    leave behind nice office chairs and free lunches, focus on making a product remarkable

    remarkable = something worth talking about!

  71. Alex says:

    Eric,
    I'm curious about why you say that competition probably won't kill you. Can you elaborate? Any statistics?
    Thanks,
    Alex

  72. It's not a statistical fact, but rather a loose observation.

    I think we often tend to think that the "other guy" is who we're in the race against, when in fact we really should be concentrating on ourselves.

    Does that make sense?

  73. Jay Godse says:

    This post rings very true for the startups I have been involved in and observed. The reasons you stated bring great insight because I have not ever seen most of them articulated so clearly (with the notable exception of "Your're going to run out of cash").

    I have observed another glaring common factor in failed startups. Most startups I have seen do not have a well-articulated target market. I will quote from the wisdom of Geoffrey Moore, Crossing the Chasm, chapter 2, page 28:

    [a market is]
    - a set of actual or potential customers
    - for a given set of products or services
    - who have a common set of needs or wants, and
    - who reference each other when making a buying decision.

    Just ask the key business leader of most startups and you'll either get a blank stare or some hand-waving about how it's obvious that a certain vaguely defined group badly needs the product or service they provide. As you drill down on the criteria, you quickly find out that one or more of these criteria that define a market is not true.

    Most startups that are serious about business success have a set of actual or potential customers for a set of products or services (offered by the startup). Most of these startups, however don't have a well-articulated and quantitative idea of how their product or service fills these needs and wants, and how it impacts (hopefully positively) their customers.

    The last two criteria are hard to nail down because it means that the startup has to understand the operations of their market and how their product will impact their customers' costs and revenues. That is a level of market diligence that is beyond most startups, usually through some combination of arrogance and ignorance. (I have been guilty of both, and will probably repeat it).

    There have been successful startups that didn't have their market defined, but they were successful because they were able to "discover" the market in time to succeed.

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  75. Mike says:

    I love it, I am going to go check out makefive right now.

    Great article and brilliant marketing.

  76. Thanks Mike--I hope you enjoy it! :-)

  77. Marcello says:

    Great post, I think your struggles capture the essence of trying to create the next big thing. The one troubling aspect of many sites is that the thought of building revenue comes second to getting lots of users and traffic. You end up in a chicken and egg scenario where you quickly run out of cash before you can get enough traffic or even finish building the site.

    You compare your site to Twitter, but I am still wondering how Twitter will ever make money. They are growing, but are not close to mainstream. I would not mind paying $5/month or $25/year (like flickr) to use the service. Therefore they make money and they stick around.

    I applaud your efforts and that of all web entrepreneurs, but if we learn anything from failed startups of old is that you really need a path to generating revenue otherwise your business will never really survive.

  78. Agreed--the revenue model is critical, and it's certainly something we think about a great deal.

    I should also note that any references to Twitter are more in reference to their amazing adoption rates. (That's something I certainly admire.) Other than that, I don't compare MakeFive to Twitter in any way.

  79. Ryan says:

    Great blog post. Really a must read for anyone aspiring web entrepreneur. I've found from personal experience all that is stated above to be true.

  80. shae says:

    ok, i took you up on it Erik ( im #3 on your weekly list currently )

    I think the site is cool, but I don't see why I would use it daily, I really like the fact that others can vote on your lists; that is a feature that I was not aware of initially.

    My only suggestion after using the site ( remember, grain of salt here.. )

    would be to implement a faster way to view/vote on lists.. possibility without having to drill down?

    thanks for inviting me to check it out, i liked it.

  81. Glad you tried it Shae!

    You might not visit it daily. That being said, it might be something you find yourself turning to the next time you have a moment to kill at work. (Strange as it sounds, that seems to be the way that a lot of people start to get hooked on it.)

    We are working on better ways to sort through lists. Although the drill-down is important in certain respects, we're expliring a layout that will allow visitors to choose how they want to see the list (i.e. brief, extended, or visual). I think this will likely do what you're after. :-)

    Cheers!

  82. That emotional roller coaster and the temptation of jumping on the next project sure sounds familiar.

  83. I did not start my business to FAIL. I won't. Neither lack of funding, the economy or anyone's belief in my business will halt its inevitable success. I have made the rounds. The rejections took 99.99% of its toll.

    When no one believed in me - I became more determined.

    Either you know it or you don't. If you are not certain (as apposed to being confident), you must not flirt with a business.

    Experiments are done in science labs. Awards and recognition are given after success is achieved.

    I look forward to neither.

  84. Jens Roland says:

    Excellent post, Eric. It resonates perfectly with my own thoughts on the subject (which I suppose makes me biased, but aren't we all?). I particularly like your final point - the fact that it won't be the competition that kills your startup. As an emerging tech specialist, I have met plenty of 'idea people' who wanted my input on their Next Big Thing, and they tend to be ridiculously paranoid about revealing their ideas out of fear that someone will steal them. The reality is, ideas are a dime a dozen, and nobody cares about yours enough to steal it. And even if they did, it's always cheaper and easier to just flat out hire you to build the damn thing - even if you don't own the patent. I can tell you right now -- in five years, every NDA I've ever signed in order to discuss somebody's great idea has been a total waste of time. In fact, in my experience, ideas follow a predictable pattern: the more secret it is, the dumber the idea. What's more, it makes perfect sense when you think about it: 'Secret' NDA-protected ideas by paranoid inventors never get the rigorous scrutiny of anyone other than the inventors themselves (who are biased, often to the point of blinding naivety) and their immediate family (who are supportive by definition, often to an equally useless degree). On the other hand, ideas that have been sanity-checked for a few months by being shared with random strangers at conferences and discussed at dinner parties with friends-of-friends tend to be infinitely more mature once the inventor approaches someone like me for advice. My logic could be flawed, but my advice to secretive idea people is to lose the secrecy, because it's holding you back more than you know.

  85. Nice read - enjoyed it.

  86. Slavi says:

    Hi,

    Thanks for sharing your experience.

    I would run a contest called "How to improve Make Five ?"
    Then let users vote for the new features.
    After that implement the top 5 ;)

    Additionally, you can create a Wordpress Plugin or Widget that can integrate with any blog and the voting can be done within that particular blog i.e. custom "Make Five" widget.

    Good Luck && Keep Trying,
    Slavi

  87. Rob says:

    Eric,
    Great words. MakeFive is actually very interesting to me as I had a similar idea which I have started/stopped several times because I questioned the adoption. My friends and I constantly are making lists and comparing them so it seemed like a perfect idea. Of course, not everyone has the same tastes.

    Good Luck.

  88. Nicolas says:

    Great post
    Hard sometime to understand deeply for a non english born reader.

    ;-)

  89. Karen says:

    Great article and love the discussion in the comments.

    Several people mention that MakeFive isn't immediately user friendly. And although you mention that once you explore it, it's really quite intuitive, I wonder if that's the best model for building traffic. It seems like the goal would be to have some hook at the beginning to draw in your audience and then plenty more to explore to keep them there and coming back.

    I will admit that I don't know what would be the secret to making that work. And I don't want to presume that you haven't thought of it, but it seemed lacking in the conversation.

    btw, found my way here from twitter (which I am so glad is free!)

    also seems like the entrepreneurs that are attracted to this article are not necessarily your target audience. They keep asking who has the time for that. I can imagine only too many people with mind-numbing amounts of time to kill.

  90. giovanni says:

    Great post. Honest and sincere. These things are not often heard from the Silycon Valley people. Maybe it's your european surname doing the trick? ;)

    Being an online entrepreneur wannabe, I wish I could provide some useful feedback about MakeFive, but I think I can't. It's difficult to say if an idea really has the potential to succeed or not. As a social experiment I'd say MakeFive does have the potential.

    But who knows? As you cleverly point out, one can find 100 people saying you're a genius, and 100 hundred saying you're an idiot, but what matters are the numbers you get from the market.

  91. Umesh says:

    Nicely done Eric, its like you spoke your (and most of ours) heart out!

    Putting on the music loud and get on with the execution is what's required, you never know what will succeed or fail unless you try, and try to complete what you set out to do....fully!
    More than anything else (if not success), it will give you experience to start fresh next time :)

    Not worrying much about competition is also an important point, Google were not the first in search, YouTube was not the first in video sharing, Gmail was not first mail engine and you are not the only one pursuing an idea. Let others do what they are doing, important thing is what and how you do your thing.

    Good luck with MakeFive!

  92. Thao Ly says:

    Just for writing such a great article I signed up for MakeFive and voted on some topics. I think it's beautifully designed.

  93. Glad you liked it--thanks for joining up!

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  95. Sameer says:

    Excellent article Eric. I couldnt agree more with your point "You’re going to run out of cash", since I have experienced this with my first startup. which eventually failed. But this time around (my second venture) I am determined not to make the earlier mistakes. And your last line "I wouldn’t trade that for anything" is what even I have been following with my new venture.
    Brilliant article.

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  97. Thanks Eric for the post, I can relate with the experiences and rollercoaster ride.

    May I ask, did you get a lot of links and coverage to Make Five? Is the number of users on the main page correct? Seems low for a site running a year.

    Perhaps you should remove the registration requirement? Let visitors vote directly from the front page, that would give the people posting the links more feedback and lower the barrier to entry. I would vote straight away as a visitor but wouldn't go through the hassle of joining, at least not up front. Yes there would be downsides and it would take work, but surely the positives outweigh it - what do you think?

  98. We launched early in our process and rather quietly. This was good as it allowed us to understand what users liked, and adapt the site to those needs.

    We've started to work on increasing usage more in recent months, but I think we're still really concentrating on making the site work as it should.

    We'd love to remove the registration component; however, if we did so, it would be tough to hold on to a visitor's votes, which is quite an important part of the site. As such, we've limited sign-up to only a few fields. Some won't go to the trouble, but I suppose we just have to accept some loss in interests of the service as a whole.

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  100. Pavan K says:

    Nothing that we can disagree with here but more practical advice on how to counter these things would be great, next article?

  101. Pavan K says:

    I should clarify, but it would be great to see your perception on the most effective ways to build an audience. Accepted an idea must solve a set a problems, so much so to ensure sustainability and scalability. However - not having a clear strategy for even the best ideas would be dangerous. How would you map out a startups first few months of gaining initial momentum, or exit velocity from validation stages of 'customer development'.

  102. I'll certainly share some of the things that seem to be working for us, but I think it's important to remember that we're still in the trenches.

    We may have a couple of hunches of what works, but not any clear answers to most of the questions you present. Hopefully that's a different story in five years time. ;-)

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  105. rachel says:

    Good read. These are the main reasons why I could not start whatever I wanted to start at. I have so many startup ideas but when my partners and I come to think of the things you mentioned, great ideas becomes nothing. We still do not lose hope of having that great great idea that really get started atleast and then eventually finished and succeed.

  106. andrew korf says:

    Thank you for the heart felt honesty with the post - more sincere well written non-silicon valley posts like this one are welcome in my book. That said - I think the "address a serious issue" question from above is valid on when it comes to makefive? The execution is fantastic - but the value proposition is a little confusing.

    At any rate - thanks again for the heart felt post.

  107. Thanks Andrew!

    The measure of “solving an urgent problem” is a valid one, but I argue that urgent problems are subjective. I, for example, don’t understand texting and would much rather use phone or email to stay in touch. That, however, doesn’t lessen the relevance of texting for those younger than I.

    MakeFive is similar. It won’t work for all; that being said, we have a handful of users who are on it every day, sharing their picks on a variety of topics and debating their choices. The fact that a really diverse group of people are sharing their views in a forum like this seems interesting to me.

    So, I maintain that the core thing that MakeFive does is afford a place for discussion. Yes, there are many of those already, be they letters to the editor, comments on blogs, or topic-specific forums. This, however, is something a little different. It affords numerous kinds of discussions and a rapid way to assimilate the content and interact with it. Will it work? I don’t know. That being said, Eric Shelkie (my business partner) and I, feel it’s promising--enough so to bank everything we have on it.

    If nothing else, when you next find yourself a little bored at work, I think you might remember MakeFive. You’ll think, “Maybe I’ll check it out; what have I got to lose?”, and you’ll drop by for a few moments. All of a sudden you’ll find a topic that interests you, and wonder why everyone has missed adding something that you’re convinced should be in the top five. (Soon enough, an hour will have passed.)

    That’s how we’re hooking people. It’s slow and takes time, but I always laugh when someone emails me noting, “You know, I don’t understand why, but that thing sure does seem to suck me in!” :-)

  108. Jose says:

    Hi, just came here from a news site. In this medium is difficult to express emotions but I'm telling you this with respect:

    I don't like people telling me my business is not going to work because they failed. Tell me is not going to be easy, but please, don't tell me because you failed everybody is going to fail.

    I have family members that got it, they made something and it worked. People that have success in life try things a lot. They fail a lot but they continue doing new things until it works. Look at IKEA founder, he tried things, it didn't work so well, he worked on new things and he found something people wanted (not something he wanted to do).

    To say that others are going to fail is an excuse for you to lazy stop working(is not going to work anyway). Modern psychology (look any good book on Neuro linguistic programming) will tell you are giving orders to your unconscious mind to fail.

    I visited your makefive site. Sorry, I don't feel like I need that site.
    The first time I knew about google(when it was a little startup, I knew about it from searchlores.org or fravia) I instantly felt in love with it, so no, you don't need marketing if your idea works.

    Have a good day

  109. Jose, I appreciate you taking the time to share your thoughts, but I fear that you've jumped the gun. From your response, it appears that you read the headline and jumped to commenting.

    Try READING the post. I think you'll find that the point of it is, in fact, quite similar to what you're trying to get across.

  110. Brian Shin says:

    Eric,

    This is a great post. Depending on how you define success and or failure, probably 99.9% of startups fail. I'm working now on my sixth startup (called Visible Measures) and it's always been a battle for one reason or another. I've been fortunate to be a part of startups that have managed to find success (financial success broadly defined at least w/ ipos and acquisitions), but I know now how rare it really is for a startup to do well.

    If you consider just the odds to get venture funding (yes many startups are bootstrapped, but I'll use VC as an illustration of the odds) you can see how hard it is to succeed.

    Top down analysis (gross estimates): a well reputed vc may see several hundred business ideas (from short email pitches to full business presentations) a month. This may add up to a few thousand business plans a year. A mid-size vc may end up funding 15-20 deals per year. A firm I know well said estimated that they had looked at over 20,000 pitches and funded 40 deals since 2000. Those are some tough odds.

    If you look at it from a more of a bottom's up analysis, you can see why it can be so tough to raise funding (and hence give yourself some time to figure out some of the challenges associated with a startup like truly understanding the customer needs etc). One way to look at it would be to consider the stages in getting funded:

    1) Initial introduction to a partner or someone at the firm (ideally a partner or principal) hopefully from someone the firm knows already - already you may run into a roadblock here if you don't know someone at the firm or someone who knows the firm. A trusted introduction will get a lot more attention from a busy vc than a cold email.

    2) At that initial meeting (or phone call which is harder) your goal is to get to the next meeting. Your chances of success or failure here might be 50/50 let's say.

    3) At the second meeting, if you're able to get it, will likely have at least 1-3 more people in the room who will help the first person vet the deal. If you do a good job then they'll likely want you to speak with a few of their friends in the industry who might have specific domain expertise to further evaluation the "big idea". Let's say again 50/50 chance of getting to the next stage.

    4) Now you'll be talking to people who are probably experts in their fields (and hopefully your field of interest) who really don't have any motivation to say good things about you. It is important to note that because VC's see so many deals, they must utilize a very strong filter for deals and look for reasons to say "no", and these experts are also aimed in that direction. While an expert may be excited about a field you are pursuing, it is much safer for them to point out the faults than it is for them to say why something is great. It's not that they want you to fail, it's just that the system is not set up for you to easily make it to the next level. A lot of deals get stuck in this stage, but let's say you make it past with odds again of 50/50.

    5) At this point, you may be brought into another meeting with several partners or you may make it into a full partner presentation. In either case, the odds are again stacked against you because you will be in a room full of people who have years of experience poking holes in plans and finding reasons to "say no". I'm just trying to be honest here. This one is a tough one to make it through - let's say again 50/50 chances of passing.

    If you've made it this far, you're a member of a rare club. The odds of making it this far are basically .5 * .5 * .5 * .5 *.5 = about 3% chance.

    Whether you look at the top down analysis above (about .2% chance of getting funded) and this more bottoms up analysis ballparking 3%, you can see that it's a long road to get funded.

    On top of the tough odds of getting funded, if approximately 2/3 of venture funded startups don't really "make it" - then those are so tough odds for success.

    Now while those are some mathematical realities, the fact is that great entrepreneurs and would-be entrepreneurs continue to come up with ideas and continue to start companies and to me that is what makes startups so great. Some people are too driven to be stopped and some ideas are too great to not be pursued and that is the beauty of this whole thing in my opinion.

    Sincerely,

    Brian

  111. Georges says:

    Good post! 100% shared. But...
    When starting up a new business, you should clearly define deadlines and targets. Otherwise you will be locked like a gambler spending more and more while trying to recover from what is spent (time+money).
    If you don't meet the target, just stop!
    Yeah! Easy to say... but it's so hard to admit that we have failed, insn't it? But take the good things that you've learned and go on - start another one!
    What doesn't kill me makes me strong, right?

  112. That's not a bad notion, but it's rarely that simple. Read "The Dip" by Seth Godin. I think he addresses that point nicely, but looking at it from both potentialities.

  113. Mark MacLeod says:

    Eric,

    Great post. While I agree with much of it, for shits and giggles, here's my rebuttal:

    http://startupcfo.ca/2009/01/why-your-startup-will-succeed.html

    Mark

  114. I like it. :-)

  115. Here has started a really interesting conversation.

    I tried to read all the recent comments but there are hundreds since yesterday, so I couldn´t check if somebody has already talk about this great guy, Paul Graham, from Y Combinator.

    Here´s the link to his essays:

    http://www.paulgraham.com/articles.html

    Really great stuff for entrepreneurs, maybe some of you haven´t hear of him. And since many wantrepreneurs will keep feeding and reading this post, I though it woud be relevant.

    Finally, Eric, amazing effort to respond to almost every comment. My respect to you and your team.

  116. Few more specific suggestions:

    1/ lose the T shirt graphic thingy. No-one will understand what it means and it will only confuse (as it did me, I thought it was a t-shirt design site... yes you have a few words of text on the right, but no-one bothers to read these days)

    2/ For a site that focuses on Top 5 lists, I see no Top 5 lists on the main page...better to put a graphic or an actual live top 5 list (perhaps the most active one at that moment) so people can see what it's all about at first glance

    3/ after registering, perhaps make it clear what i should do next. I see a small font list of 4 activities hidden on the right (i didn't see it until i looked at the page carefully a second time), actually 3 of the 4 are irrelevant for the new user. I wouldnt edit my profile or msg a friend or invite others until I had enjoyed the site first. So perhaps guide a newly registered user straight into their first topic - immediate action and feedback.

    4/ I was confused. Is a topic a top 5 list? or are they different concepts... if the same, maybe rename so new users know what they are

    5/ Re: We'd love to remove the registration component; however, if we did so, it would be tough to hold on to a visitor's votes..

    Can't you use cookie/session info to store their notes? And they can always register after a few visits if they are having fun. Being faced with only two choices of Join Us or Login is pretty daunting for the typical websurfer with attention span of 4 seconds...

    Btw, we face with that same challenge on our site to lower barrier to entry (more so as we require a plugin install).

    So we are always thinking about what we can do to offset. We implemented a guest mode which helped, and next will move on to take out the email/activation requirement in registering - and also do a "get started" guided tour -> register flow.

    When we launched beta we only had under 10% of new site visitors into registered users who installed the plugin which caused us to ask ourselves hard questions about how to improve the main page / visitor flow. Now we have that up to 15-20% but still plenty of room for improvement..

    ps - really enjoyable post. i can identify with the challenges, our office was flooded by typhoon and we lost a laptop that was sitting on the floor... now all our machines sit up on wooden blocks :)

  117. Thanks Simon--those are good suggestions. :-)

  118. Gilbert says:

    Eric,

    You’re post resonated with me like many people here. I am especially connected with putting your ideation thinking into perspective. I’ve found it frustrating having so many ideas over the years and having to figure out which are viable and which are not.

    We are currently working on angel funding for our business concept and actually think the list concept and getting people involved with ranking, sharing, etc.. could be a good community part of our app and site.

    Look forward to more clarity from you...

  119. Thanks Fernando!

    Paul's writing and observations are great. I've read many of his essays and always learn something as a result of them.

  120. Totally agree, particularly the rollercoaster. Our very first meeting with anyone from outside the company was with a very supportive Executive VP at MTV Networks in Times Square. Crazy right? We thought we had arrived, and we were sort of like "Gee, that wasn't so hard. AudioFuse rocks!". Well, 9 months later we know that getting a meeting with just about anyone isn't that hard. It's executing on a plan and generating revenue that matters and that IS very hard.

  121. Ko says:

    I really enjoyed experiencing Take 5 but I don't think I'll be back there.

    Again, I'm probably older than the users who enjoy posting. Start-ups operate in a strange world, I don't always "get" it at first but 'kids' seem to...The problem with this is that advertisers will not want to advertise to a crowd who is not known to make enough money to buy their products. Vicious circle.

    I think Take 5 lack staying power. If the list was related to self-help stuff (check out dumblittleman.com) or if it was set locally (praized.com) then I think it would stand a better chance.

    Eric, you apologize for sounding defensive but you are resistant to criticism (I understand though, you're putting your heart and soul in your start-up and who wouldn't be ?) but perhaps on that list of why start-up fail , being defensive could be one of the reason they fail. I don't mean this in a nasty way...

    This said, don't give up on the idea, it can work.

  122. Thanks for the comment Ko--I appreciate that. :-)

    It's a shame that some of my responses come off as defensive. They certainly aren't intended to be.

    We're do appreciate the feedback we receive, and fo act upon lots of it. At the same time, many of the suggestions we receive are ones we have already explored. As such, I try to explain why certain decisions have been made.

  123. Maggie Hohle says:

    Once again, you've hit the nail on the head. I'm from a family of entrepreneurs, and my dad put it very well at one point in my life, when I was excited about writing a piece on a young Japanese thatcher who had a great idea; he was going to rethatch a Japanese farmhouse with British methods. My dad said, "if he doesn't actually carry that dream out, he's just another young man with a dream." The world is full of good ideas. Bringing them to fruition is the challenge. I ended up getting our Japanese farmhouse rethatched with the British methods. Boy did that feel good!

  124. FN says:

    Saying that running out of cash is a cause of a startup failure is like saying lack of oxygen to the brain is a cause of death. It's the definition.

  125. Thank you for the words of (encouragement?).

    You nailed it. I was just telling my brother that new ideas pop-up and you have to put them aside and focus on your prime idea.

    I am glad to hear that other people face the same challenges. I am in good company!

    http://www.governmentuncovered.com

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  130. mike says:

    you should add a paypal to this blog. Looks like people would pay for your advice.

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  132. TheNetStudio says:

    Wow. What a great posting.

    I find that it is hard sometimes to know if one is a genius or a madman, a visionary or a fool.

    And even on the outside chance that one is the former - will anyone ever get it? Or will anyone get it soon enough to keep the site up and worth running...

    I have had a lot of good ideas... Others have had the same ideas, and I have seen them make a success from that idea. But I didn't take the plunge until I had an idea that I just could not let go of. And I discovered that it takes WAY more than a good idea to make a great web app.

    It's all in the execution.

    I hold on to my little web app with the delusion that even if nobody understands, it's still worth doing. And that maybe it will change the world - Probably not, but I have to see it through either way. It's almost irrelevant whether it becomes successful or not. The real value to me is in proving that it could be done.

    But then again, there is always the possibility that I am indeed the latter.

    Good luck with MakeFive - I wish you the best of success!

  133. Sharpy says:

    Hi Eric,

    Firstly, congrats on the response to your comments. It is great to see that there are more than just a few of us taking this ride on the emotional roller coaster, there seems to be a small nation of us.

    I totally agree that building a Web start-up is one of the hardest things an Entre will ever do, however, what I will comment on is:

    1) Getting an audience is not that hard, we are hoping to launch in late Jan and we know (and have known for the past five years) that 73% of our market want this so bad that anxiety about it has increased 15-20% in the past decade. 3 million of our 560 million market (those that have access to the net) will know about our launch via their cell phone that same day.

    2) I'm not going to run out of cash, we are extremely well prepared and we will not grow faster than our income (5 revenue streams) will allow.

    3) Going to get frustrated, hell no, I am already frustrated, I have being trying to get this of the ground since the week before 9/11 and 1 divorce.

    4) Get excited about something else, no, this is my passion, I do have three other ideas to change the world for the better, but not until this one pops and pops very large, only then can I move on to the next idea.

    To all budding Entrepreneurs, several things have been drilled into me (which is why I am confident of launching in late Jan) and they are:

    a) have an absolutely WOW idea, not just another app for the iPhone. Meaning - does more than 50% of the Market want it and can you get them coming back on a bi-weekly basis.
    b) have a kick butt 1 page Exec Summary
    c) Have a financial plan 3-5 years out
    d) Have 20 page Business Plan that makes sense and is relative to what you intend on doing.
    e) Actually launch it or a mock-up of it and let Investors see the dogs eating the dog meat (as they put it).

    Look, if you have a dream, if you are passionate about, you can 'feel' it, and there's a real market, then action it and don't look down or behind, just keep pushing. It never happens as fast as you would like it to, but if you 'believe', then it will happen.

    My only comment on Make5 is that I went there but the home page didn't talk to 'me' and invite 'me' in. My only advice is that websites are for your audience/market, not the company/product. Whose your market?

    Again, thanks for the initial post, I love this sort of discussion - awesome!!

    Sharpy

  134. Sanjay says:

    Couldn't agree with you more on what you have written. I have been around the block a couple of times and each time after mixed results, I am still reasonably happy having done whatever I have managed (after all I am doing it because I like it).

    This time, it is going to be different. We have built a product, building a company around it and I have decided that I will be sorely disappointed if the company does not succeed. I am not willing to settle for inane platitudes (especially not from myself). No more "the journey was nice too" for me.

  135. Ross says:

    Love the article. It's a shame that most people don't realise these issues on a lot of startup forums I visit.

    Most people build a half hearted site, whack ads on it (before they even have any traffic), and post it on a forum and a couple free internet directories.

    After 3 months they come back to the forum and start asking everyone why they only made $0.10.

  136. your comments are great. I am currently in the early stage of developing an idea for a web startup. You hit on a lot of key points that I have experienced already. Your article has encouraged me to continue to.

    http://twitter.com/gameswitch

    Thanks
    Mike

  137. A lot of words-to-live-by in this article. Inspiring...

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  139. flummox says:

    Thanks for that fine, plain-English job of describing the emotions, motivations, experiences milestones for entrepreneurs and visionaries . It's reassuring to know that the scenery is fairly universal on the road to building something unique from mere synaptic firings.

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  141. Thanks for a great post, it certainly is easy to lose motivation after working really hard on something and then to realise that you are not going to get the response you expected.

    http://www.whatUrunning.com

  142. nshepherd says:

    A very refreshing and delightful essay on what is really a worn and often dull topic. I thought Dave's comments (10:56 AM post) were right on target- albeit as you said "blunt". If you ever revise and republish your essay I think it would be useful to add Dave's two points and also add your examples (which were great ones) of why it can be difficult to predict uptake when there is no precedent of an attempted solution, AND it is definitely hard to predict "irrational passions". Bottom line, in my opinion Dave added legitimate, value add content.

    Regarding MakeFive, I like the concept of one general "starting" place to see opinions of users for there are too many contests scattered around. It clearly needs to somehow become "THE" validated and best place to refer to for opinions. (How to do that quickly is the hard part of the marketing.) That said, I found that by adding a new entry into a category that all of a sudden that entry appeared in the top five list even though there were no votes for it yet. How can that happen? That certainly doesn't add to the "validity" of the top five listing mechanism.

  143. Thank you! I’m glad to hear that you liked the article, and I agree those two points are certainly worth addressing in future writing. Additionally, I know that I was rather antagonistic with Dave, that being said, it was kind of fun. ;-)

    As for the question regarding the validation of topics, you’ll see that addressed over the next couple of weeks. Currently the home page highlights any topic that has recently been active. This is a bit of a throwback to when we first started and there weren’t any topics on the site. Now that there are more users, we can put in a proper fix for this, in which topics are “made popular” by a moderator, a few times day.

    It’s all coming… :-)

  144. --Chad says:

    Thanks for reassuring me I am not the only one out here struggling. When you look around the web it seems as though everybody has great ideas that are skyrocketing; but when you look at the whole picture most are just starving artists.

  145. Lispy says:

    Amazing. This is exactly how I feel. ;) We've all been there... Keep it up!

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  147. Thanks guys--it's really nice to hear that the post is resonating with others, and that many of us are struggling through the same challenges!

  148. Grant says:

    Excellent perspective. I'm going through a lot of this stuff myself right now with my own projects.

  149. Rex Chung says:

    I'm surprised no one mentions partnerships at all.
    I've learnt that small self funded startups like this really need to 'partner' with established websites. Also you need to be open and let other people mashup your data.

    You should consider making an open API for analysing your data. Partner with some publishers and run articles about top5 of xxxx in 2008 etc. Then you might give the impression that you're THE place for top5 lists.

    There might be some usability issues with your site. Digg.com is much more direct and inviting to click/vote.

    Anyway thats just my 5c.

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  152. Glenn Abel says:

    While I agree you never should get too high or low, it's important to suck up some confidence and motivation from compliments. Ones you care about don't come that often -- enjoy them.

  153. Eric I think I woke up my kids by laughing so hard at your comment to Dave way up there on the comments - "Comments like yours always seem to me like the musings of a frustrated 18 year old masturbating in their parents’ basement, somewhere in London, Ontario." When I was reading his comment that is what was going through my mind - O.K. tough guy who are you and what have you ever tried to do? All the armchair entrepreneurs don't understand that you have zero street cred if you have not gone down this road yourself. Once you have figured out how to run a consulting shop you kinda get the idea and it then gets boring. You can pay the bills, play the game but it is always the same game. Starting something from nothing and watching it grow is magical.

    I loved your post - it was so brutally honest and the 'OP' t-shirt reference was not lost on me - it was always a safer choice than the "Frankie says Relax" t-shirt.

    Here's to 2009!

    Cheers - Eric

  154. Agreed! I'm open to any criticism. My only request is that people stand by their comments, which seems fair: say whatever you'd like as long as you're put your name behind it.

    As for your other note, I'm glad that I'm not alone on the "OP" t-shirt. That was the weirdest thing at my high school--probably a 1,000 kilometers from a “surfable” beach; nevertheless, we were all wearing those surf graphics. Weird 80s fashion really deserves a topic on MakeFive. ;-)

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  159. Dan Rockwell says:

    You won’t have an audience

    You did a poor job sniffing this one our early on. You got high on projections, startup vc zinger talk and forgot about actually pays for the doormat at the front of your biz.

    You have an audience but they wont pay

    See before statement, know thy customer.

    You are the audience

    If you're the audience then call it a hobby.

    You’re going to run out of cash

    Don't plan on using cash in the first place. Too many startup would be articles focus on getting cash and less on how do startups without cash or little cash or how to spend wisely and try and do something without cash. Sure cash is needed but not to blow endlessly over projected what ifs. Plan on running out of cash, being trapped in an elevator, having a flat tire, or your cell phone dying on ya.. have a plan B.

    You’ll get frustrated

    Damn right you will- who wouldn't? You're human after all and you hate meetings with no agendas. Get some focus. Find out why you're getting frustrated. Do some homework on the whys, embrace some change cause its coming. You're probably used to "you" and now there's this whole "us" wtf, that sucks. Figure out how to move the "us" forward while maintaining some "you" sanity. Won't be easy, you can't control everything, if you could- see hobby.

    The emotional rollercoaster will beat you

    Well this means you blew a fuse over frustration and your last five meetings had no real agenda and no action items and generally everyone is unaccountable for what they do. You're now officially part of a user group much less than a startup. Your a collective of interested parties- cash is being lost by the pitcher of beer. Odds of getting off the rollercoaster are unlikely, realizing your on it is nice and all but not so enjoyable. Learn to be an asshole.

    You’ll get excited about something else

    Odds are just after biz plan got started on "the" idea you started yet another hobby. Your a hobbyist, and idea manifesto generating machine, you're big on ideas less on action- not bad really, if we could just get paid for our ah ha's more. Try and hone your excitement energy into your first "the" and continue to make it groovy... still too hard? Stuck by the rubbernecking of "oh shiny" well it will continue. The good thing here is that new=energy and startup=needs energy. Figure out how to channel that back to the biz. Go back to where you get frustrated and fix it. Be an asshole for a week, an angry investor, a frustrated customer, inject some doubt into your big baby and get back to making it better.

  160. Andy says:

    Excellent post. We are a new startup and I am a first time enterprenuer... have gone through almost all of these experiences...

    Must read for all "would be" entreprenuers.

  161. Shra1 says:

    Great Advice when the New Year is brewing with promise and new hope (Don't want to think about the impending slow down or recession!).

    The last piece of advice "we get to build something that we really love. I wouldn’t trade that for anything." strikes the point that everyone venturing out (I'm beginning to do so this year) on their startups, will and are expected to face the roller-coaster ride that's worth goint through once in a life-time.

    Great Advice for all Entrepreneurs!

    thx,

    ~Shra1

  162. A Start-up addresses the consumer or the business market.
    In the consumer market the most obvious revenue is advertising. Thus you need to generate a lot of traffic to get noticed. That takes time.

    In the business market people need to have the problem your solution addresses and they need want to pay for it. The more leads you can generate the more chance of finding someone who will actually pay for your solution. That's why we developed LEADSExplorer (www.LEADSExplorer.com)

    In both cases a lot of people will find your solution or service interesting, but when it comes to actually use it or even worse pay for, then the doubt of use arises and the value for money.

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  164. Patti Church says:

    Eric;

    I have just launched into the start up world over the last month. After spending years in management and consulting, sitting on the periphery, we found the right opportunity to jump in.

    I appreciate your honest input in insights. Although it's been a very short time for us, I see that the ride is going to be a bumpy one with big highs and and lows.

    Appreciate your words. They were like a nice pat on the back this morning. Thanks!

  165. Glad to hear Patti--good luck with your new venture! (In spite of the challenges, it sure is a lot of fun!)

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  167. Matt says:

    Echoing many but this rings SO true to my own experiences with http://www.Hordit.com.

    Especially #1. So many people told me the idea was solid when I first solicited opinions and almost none of those people actually use the site.

    Luckily, many others have found it useful. Still a ways to go to be successful though.

    Great post and great comments. I found it very reassuring and uplifting.

    Matt

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  169. Yasser says:

    Great article, im running a startup myself, check out http;//www.jobstaxi.com

  170. This is a really good article, as an addition i wrote about once you do decide to start up a 2.0 website http://angel.grablev.com/index.php/two/archive/51/

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  172. Derek A says:

    Great post. I'm not sure if I'm inspired or more depressed. But honesty is always the best medicine.

    Good luck guys.

  173. Hopefully you're not depressed about it. Well, at very least, it wasn't my intention to make you feel so.

    I get depressed when I hear about companies like Facebook, YouTube and MySpace being handed these enormous sums to work with. I then look at where we're at and wonder what we're doing wrong.

    The fact of the matter is that the media loves to tell us these fantasy tales: startup becomes overnight success and owners buy really big boats. ;-)

    My suggestion is that there's a lot of fun and growth to be had in a startup; however, instant riches likely isn't one of them. The nice part is that there are lots of us out there, just working away on things, trying to make something special.

    To me, that's comforting and inspiring!

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  175. Ryan Burrell says:

    Nice to see some realism in this wonderful place full of wannabes and "cool kids" called the Web.

  176. J says:

    This article is spot on. I am running a start-up in NYC and we just hit our 2nd Birthday. It can only be described as an "emotional rollercoaster." We are currently on a huge high with tons of momentum, but realize that it could all go away in a moment's notice. It's happened many times before. I would recommend that all entrepreneurs record a journal of their experiences. I wish I did.

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  179. Oli Stark says:

    Great article!

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  181. "Lots of people dropped by, told us they loved the site, and didn’t come back."

    The problem with makeFive is that there is not much to come back to. It's the type of thing people might enjoy using once, but there's not much reason to come back. Not much "re-play" value.

  182. Actually, that's something that was more of an issue during the first couple of months.

    The first version of the site had low return visits, but the repeat visits are increasing every month.

    Lots of that has to do with how much more content is viewable now, compared to when we first started. The other part relates to how clumsy our initial interface was for those who wanted to add content.

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  184. Emad Ibrahim says:

    This is spot on and I am feeling it right now. I can relate to every bit of it.

    I got reviewed on mashable and it was such a high and a traffic spike but nothing changed. The highs are addictive though.

    Right now, I am struggling with getting audience. I know/think/hope/believe that it is a good idea but people are not subscribing as fast as I want. Maybe I need to build a widget. Oh wait, I have another idea.... gotta go.

  185. Shawn Petriw says:

    This is exactly the post I needed to read today. Thanks garthfrizell@twitter

  186. Walt Hucks says:

    Good article, Eric. You inspired me to write:

    "If you do not wake up in the morning with a passion for your business, its products and services, and your part in delivering those things to your customers, maybe you should go back to the soul-draining corporation you used to work for. If you are not excited, not keyed-up, about your business and your part in making it work, you should know that there is no shame in returning to the world of employment." http://blogs.webconnectconsulting.com/nukeblogs/ombblog.php?itemid=398

    Thanks for this.

  187. Glad you liked it Walt--really nice to see added discussion on the topic! :-)

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  191. Derek Organ says:

    I really can relate to this article, having gone through similar things myself.

    As Paul Arden put it;

    "It's not how good you are, it's how good you want to be."

    Like most things in life, it's all about passion.

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  193. Just commenting to say "thanks...just what I needed to hear!" My startup is 4 months in and we just got past an identity crisis with help of your post.

    Best of luck with everything,
    Mike R.

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  195. Paul Spence says:

    This article is a great reality check and I have circulated it to everyone in our company. Especially relevant to a business like ours which is low margin and needs high volumes to succeed.

  196. I agree to almost any aspects of your article.

    I wanna stress out the enormous importance of discipline and hard work. A great many times I had those "King of the World" moments already mentioned. I always thought that there is a point when I can settle back - how naive!

    Nowadays I focus on rules and principles. Getting through the days every day no matter what is one of them. A traffic spike? Forget about the number, take care about the servers, write a thank you note and go on - business as usual, until the next spike.

    As an entrepreneur you have to fool yourself the hard way. You always work for long-term goals, not instant gratification, and when the earlier goals are met you seldom take the time to celebrate those moments because you are already working on new l-t goals.

    Entrepreneurs need to measure their success. It's often said but work-life balance is essential.

  197. Great and useful post, as you said, the best way to a person or a startup to be succesful is to do what they really love. Even if you fail, you will learn many things. Maybe this background knowledge you learned from the fail will be the base to the next great idea!

    Pay close attention to user suggestions, even the impolite ones can be useful.

  198. E Hodgson says:

    Kind of got to this post rather late... but had to comment as I actually felt like you were writing about my life... brilliant - and put a smile on my exhausted, tear wracked face. Great advice/observations. Thanks.

  199. Manuel says:

    Great post. But even if it can be a rough time, I don't want to miss the excitement of a starting a new company.

  200. Abe says:

    I needed that! Thanks.

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  206. i totally agree with you. The only thing i can say is you have to be patient and stick it out. If you work hard enough, eventually it will pay off

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  211. For me, the hardest part is to stick with an idea when I get a new one that seems cooler and more profitable.

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  221. Jeet Singh says:

    This is an excellent post Eric though old. But I do agree with Dave's comment in one way that there must be some benefit we are providing to the people to be successful.

    So in my opinion:
    success = sizeof(benefit) * num_of_people;

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  223. Fran Martin says:

    I think you are being too pesimistic, there are always awesome opportunities to start a company, and if you are driven, you will succeed for sure.

    You can check the startup we created some months ago, and it's being profitable already. Hard work is always the key

    http://improffice.com/emailtransfer

  224. The point of the post wasn't to infer that all start-ups fail, but, instead, that they are not as easy to run as many hope. It's important to keep expectations in check, at the outset of any such undertaking.

  225. jogo sueca says:

    I needed that! Thanks.

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