Fuckup Nights reveal the honest side of entrepreneurship

Fuckup Nights Vancouver

How do you move on when your startup has blown through $1 million, with nothing to show for it? How do you pull the plug on financing a startup when it’s about to enter its 20th (or so) capitalization round? Entrepreneurs, investors, and alumni of Vancouver’s tech scene gathered on Monday night to hear lessons learned at Fuckup Nights (FUN) at the Imperial, held in collaboration with the Vancouver Economic Commission, the Vancouver Entrepreneurs Forum and BoldLove Communications.

The evening featured plenty of lessons learned from tech ventures that didn’t quite succeed as planned. Some advice highlights from the event:

Ride the wave (and get off it gracefully when you can)

Even a confident lead investor can only do so much to stem the bleeding before it is terminal.

“We weren’t worried about not getting an IPO,” said NXT Level You CEO Michelle Martin, looking back on her early days as an entrepreneur. “We were making money… the product was great. We launched well and had an angel interested.” But when that angel walked away, Martin realized fundraising was going to be a lot more challenging than she anticipated. The experience had her re-evaluating her paradigm.

“I thought, life is like a journey… but where is this going?” she asked. She changed her mind, seeing the entrepreneurial journey more akin to riding a wave. The comparison suggested that entrepreneurs have got to keep in perfect balance and figure out how to exit gracefully – because that time will come.

Don’t believe your own buzz

This lesson is particularly the case when you know the real story of what’s going on behind the scenes with your startup, according to Hussein Hallak, general manager at Vancouver’s Launch Academy, when he brought up his first venture. “I was in Forbes and the BBC,” he said, talking about his efforts to bridge the gap between Arab artists and the international art scene. “In the end, the venture went deeply into the red and he went into a ‘founder depression’. This happened even as some of the biggest media outlets in the world hailed him as a success.

Looking back on the experience, he said that what the media says doesn’t matter. What matters is what you make of your life as you move onward.

Figure out if there’s a customer before you invest in a startup

Ready, fire, aim, is not a viable business strategy, GrowthWorks VP Joe Timlin noted, looking back on an early investment opportunity that went sour.

His company helped fund a company focused on natural language processing. “We had no idea if there was a market,” he said. That was fair enough before they did their due diligence, but the hurdle still essentially remained even after funding started flowing. To this day, he still isn’t sure if there’s a market – but that company is no longer around. “That dog was never going to hunt,” he said with a shrug.

“Throwing good money after bad” doesn’t mean much

There is almost always some good thing you can point to that will justify continued funding for a company that has already shown traction. That’s part of what makes it hard to call it quits on a VC investment.

Relentless Pursuit Partners managing partner and co-founder Brenda Irwin talked about her experience of leading 15 rounds of investment for a company that was in her portfolio early on. It was a forestry company with a revolutionary production system – and it had the potential to change an industry.

Unfortunately, Mother Nature got involved when it came time to show what the company could do with some pilot projects. “Mites wiped out all our crops from 2007 to 2008,” Irwin lamented. “What can be measured is what gets valued.” And that run of bad luck had consequences.

Even when it looked like the company was bringing on additional funding from Wall Street, the end was already closer than many (Irwin in particular) wanted to admit. Investors cut bait. The company that had more than 200 employees at one time had to close its doors. Even a confident lead investor can only do so much to stem the bleeding before it is terminal.

Jonathon Narvey

Jonathon Narvey

Jonathon Narvey is a content marketing strategist and BetaKit Senior Editor. Living and working in the heart of downtown Vancouver, he's watched this city's tech hub grow and start to compete on a world-class level. He has learned most of what he knows about tech startups and entrepreneurial spirit by interviewing some of the most innovative thought leaders here and abroad. He's always up for learning something new about the startups, leaders and technologies that are changing our world.