the creator of Basecamp criticized the “lessons” of the founder of Flow, who “burned” $ 10 million – Personal experience on vc.ru


David Heinemeyer Hansson believes that with his approach to business, Andrew Wilkinson would have lost to Asana anyway. And for success, you need to adhere to completely different principles.

David Heinemeyer Hansson

On March 31, the founder of the project management service Flow, Andrew Wilkinson, spoke about a failed attempt to bypass Asana, which cost him $ 10 million.

Talking about his experience, he mentioned Basecamp – a service and its development model inspired the entrepreneur to create Flow.

The next day, Basecamp co-founder David Heinemeyer Hansson responded to Wilkinson at length and criticized his conclusions from his own failures.

David Heinemeyer Hansson

Basecamp creator

Andrew Wilkinson’s story of losing $ 10 million to build a project management application perfectly illustrates the dangers of trying to analyze your own failures.

It’s so easy to fall in love with one of those endless alternate universes where you just did things differently and it worked out. Like “if only we raised venture capital, we would have done it.” Sorry, but no, you probably couldn’t have done it.

But before we discuss the recklessness of the main message – that if only Flow had raised venture capital, it would have conquered Asana and the world – let’s focus on the source of inspiration that Wilkinson claims to have followed – at Basecamp.

Only Wilkinson was inspired not by Basecamp, but by our own funding model, but he did not follow any of the principles of this model:

  1. Don’t spend more than you earn. If you are profitable, you are free. Even if the project does end someday, you will earn money for every year you work, you will not turn your bank account into a black hole and you will not regret it.
  2. Growth is not a goal. Wilkinson seems obsessed with Asana and market conquest. If for you success is a victory over a competitor or the conquest of a randomly chosen market, then you yourself are forcing yourself to play by their rules.
  3. It is better to do one thing and work, than all at once and at random (Half, not half-assed). Flow was sprayed, thinking that the “market” had set some kind of mandatory bar: for example, if they didn’t release an Android app right now, they would lose. This resulted in a poor quality product full of bugs. They did this instead of focusing on a smaller, higher quality and more varied product.
  4. Insufficient competition. Wilkinson’s story of remorse is riddled with military metaphors – you need impressive weaponry in an imaginary war with Asana. This is a single player Cold War game. Of course, you will lose if you try to copy everything your competitors do without having half their money.
  5. Measure not by costs, but by knowledge. Wilkinson and Flow had little to add when they started pursuing the competition. Instead of being unique and interesting and building their audience, they became the worst copy of a better-funded competitor and started losing customers.

Wilkinson’s main regret seems to be that he spent his millions chasing the dream of becoming a billionaire with a to-do app. Such dreams are very far from our history and from the propaganda of entrepreneurship.

If you run your company like it was funded by venture capitalists, but invest your own, then yes, you will regret that you simply did not take other people’s money.

But investment is not a guarantee of success! The vast majority of startups fail. Especially those who dream of becoming “unicorns”. Even if they take other people’s money. The romantic dream that Flow could beat Asana if he had more money, more people, more advertising, more clients, more than anything else is just … a dream.

Wilkinson also ignores the fact that there are about a million other similar apps out there. Todoist launched at the same time as Flow – and it is doing well, although the project also did not attract venture capital investments. And Basecamp, of course, is also to some extent a task manager.

Since we’re dreaming up variants of the past, why not imagine a universe where Wilkinson didn’t stare blindly at a venture capital competitor, but instead followed some of the above principles.

He would continue to develop another product and concentrate on small companies while Asana chased corporations. And above all, Flow lived within its means, while earning $ 1-3 million a year. This could be great business!

But, as Wilkinson says, that was not his goal. Running a $ 1-3 million a year company that could hire 10 people and make a million dollar profit over the years wouldn’t make him a billionaire. If success needed both components – profit and billionaire status – then, of course, he would fail. But most people would be happy with such setbacks!

This is where we finish analyzing the failure of Flow. If you recognize yourself in this aspiration to become a billionaire, in this unicorn-or-bankruptcy mindset, then you should probably take the path of attracting venture capital. You will almost certainly fail, but at least you will be wasting other people’s money.

If you are attracted to the idea of ​​running a company of 10-20 people, which will bring you “millions of dollars” for the entire time you work, then Wilkinson’s lessons are the exact opposite of what you should learn.



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