I read posts on Hacker News about “Why my start-up failed” and found them interesting because its a raw start-up story not the fairy tales that magazines like to write about. So here is my shot at it.
Last summer, I started developing a social music site, Contrastream. The problem: finding good indie music was difficult and a good reason why the 5 big labels control everything. The solution: a Digg-inspired site where you submit albums you want to share and vote up the ones you think are worth listening too, each album gets its own page with a YouTube music video, comments, etc.
7 Reasons Why it Never Took Off
- Design Perfection, I’ve heard its common for founders to spend too much time doing what they like or what they are good at. For me it was spending too much time perfecting the design. Not only how it looks but all the aspects of user experience. This would of been a good thing if I was a designer on a team but there was a lot more I should of been doing. Adding content, SEO, getting press, writing blog posts, and getting to know the early community to name a few.
- Underestimated the “Cold Start” problem, I read this article by Bokado Social Design which talks about a big issue you face with a social site, especially when it relies on user generated content. The value you provide to your users centers around the content on the site, so to build a user-base you need a lot of content created by the first users to kick off the community. In my case it was having interesting new indie albums always on the site. But user content usually follows the 80/20/1 rule, 80% browse, 20% interact (comment), and 1% contribute (add albums). So even though I had 10,000 people visiting in the early months, I still ended up adding 75% of the content. It was very demanding and time consuming especially being a solo founder.
- Market Size vs Business Model, the market I was targeting with the site, indie fans who knew a lot about music outside of the usual review sites, was small. I had planned to monetize the site with ads and in the process I realized that you need a LOT of people using your site everyday to make money off of ads, or a certain type of people who can’t tell the difference from adsense and site links. The people I was targeting were also notorious for not clicking on ads (similar to the tech community).
- Bad launch, the launch of the site wasn’t planned very well at all. I decided to use the “genius” marketing ploy of having a private beta to create scarcity. I saw a bunch of other sites doing it and figured it was a good strategy. I was wrong. Private betas are good for sites that have either complex technology or something thats hard to scale, and those two are about the only times you should do that.After the site appeared to be ready to go live, I decided to email Techcrunch about it. At the time I didn’t understand the importance these types of blogs put on exclusives. I figured they would take a day or two and send some questions. But about an hour or two after I emailed them, Techcrunch posted about Contrastream.
Not only was I unprepared to have thousands of people come to my site right away, it turns out I didn’t get the chance to fully pitch my site to TC. Michael Arrington called the number I had posted in the whois and privacy policy which was my co-founders cell phone. I had used his because my phone was broken at the time. He called at about 11pm and my friend was sleeping, he also had no idea who Michael Arrington, an internet celebrity to most tech founders, was. In his half-asleep state he didn’t know what the call was about. I didn’t find out about the call until my friend had woken up a couple hours later and decided to tell me about it… so we were off to a good start.
- Competition, we had a lot of high quality competitors. We were offering information on great albums and community voting. But other sites like Last.fm and Hype Machine were offering the actual music. That was a competitive advantange thats hard to beat and we lacked a significant userbase to convince enough people.
- Motivation, having to consistently find new content was probably the biggest hit to my motivation for the site. As much as I loved indie music it was draining to constantly find new albums to post up. It turned something I liked doing into a chore mainly because at the same time I was busy marketing the site, redesigning it, and attending classes. (I was in college for business for 18 hours of the week).
- Co-founder, I had started the site with a friend, he was smart and knew a lot about business but in the end could not contribute much to the site. One reason why was that hes not technical, so he couldn’t help much with the development of the site and knowing who Michael Arrington was might of helped. The other reason was that he wasn’t really into indie music so providing content and reaching out to the users was a barrier.
- Bonus: Derivative Idea, I tried to avoid just listing the common start-up mistakes written by Paul Graham, but this one was pretty accurate. The idea itself for Contrastream wasn’t to innovative or original. It was inspired by Digg.com which had applied the same model to news and articles on the web. I still believe applying this model to music is interesting and useful, but there were so many other me-too digg sites. It was simple software to develop and it could be applied to almost anything. Plus there were open source PHP versions of it available on the web.
4 Important Things I learned in the Process
- Ruby on Rails + Mac, I had used PHP+MySQL professionally in my last year of high school but had become rusty over the years. I decided to learn Ruby on Rails to develop Contrastream and I’m completely convince it was the right decision. This is a language that lets you build applications quickly and stay agile. Like most rails developers I also bought a Mac which is another thing I’m completely convinced about, OSX has some of the best designed software.
- How to Get Press, I learned the importance of having something interesting to say, how to leverage a product launch to get press, and the other basics like press releases and messages.
- Practical “Getting Real”, I’ve read this book twice and had the opportunity to apply almost everything with Contrastream. Great way to learn something.
- Niche Social Networks are not Businesses, they are communities. They have to be built like a community. That means spending a lot of time building relationships, knowing everything about the niche, and finding users. You can monetize a niche social network but its really important that you don’t approach it like a business.
Bottom line, I learned more from starting this site then I would ever have from college business classes or reading blogs. As a music site it has hasn’t exactly “failed” at the moment, it still pulls in around 3000 people a month mainly from search engines. I now consider it a hobby site and I’m looking forward to applying what I learned with my next start-up, Integrate.
This summer I began to work on my start-up 
I always thought have your name as your domain was self-indulgent but it made it easy to find when you searched it on Google. Also, it was easy to tell people what it was and remember.
I finally set-up a wordpress blog which I’ve been meaning to do for a while. I am not aiming to reach a huge amount of people; this is just mainly to have a platform in place if I ever need to communicate something publically. Especially when I go full-time creating my next start up.
