How to Destroy a Tech Startup in 3 Easy Steps

Category: Genre Fiction
Author: Lawrence Krubner, Natalie Sidner
This Year Hacker News 4
This Month Hacker News 2


by lkrubner   2022-11-13
My worst prediction ever was at the end of my book, when I struck a positive note about voice interfaces. The startup I was at in 2015 had the pitch "Let your sales people talk directly to Salesforce" and we pushed the limits of what we could do with NLP. That particular startup had spectacularly bad management and so it flamed out in a series of screaming, raging fights, which I documented here:

But at the end of the book I struck an upbeat note, about how the technology was advancing quickly and within 3 or 4 years someone would achieve something much greater than our own limited successes.

But I was wrong. 7 years later I'm surprised at how little progress there has been. I don't see any startup that's done much better than what we did in 2015. Voice interfaces remain limited in accuracy and use.

by lkrubner   2022-05-31
I apologize if this counts as a shameless plug, but entrepreneurs who are self-destructive has been my main theme for several years now. I wrote a fairly popular book about one particular case, which I think illustrates the overall problem. "How To Destroy A Tech Startup In Three Easy Steps" is a detailed look at how a particular entrepreneur, with a great idea, managed to sabotage themselves:

by lkrubner   2022-04-09
About this:

"I could have left Airbnb before things got so bad. But despite all that I observed and experienced, I truly loved my job."

If I love a job, I hesitate to quit just because some of the management is terrible. As a point of reference, many people on Hacker News have read my book "How To Destroy A Tech Startup In Three Easy Steps":

If you go read the reviews on that book, one of the most common sentiments is "Lawrence should have left that job much earlier than he did." And yet, I really loved the work and I had a lot of fun, in many ways. Maybe I didn't emphasize how much fun we had along the way, but I think, getting to work on great tech while being well paid is a relatively rare gift to an engineer, so I don't think many of us really want to walk away from a job too soon. I do understand why an engineer might stick with a place like AirBnB, even if the burden is heavy.

by lkrubner   2022-02-10
My ex-business partner inherited $2 million, then burned through all of it on various startup ideas, and when he was almost bankrupt, he dealt with the stress by smoking more and more marijuana. He also promoted himself as a visionary, someone who could put into words how the future would answer the bright hopes of humanity. As part of his effort to sell himself as a visionary, he got himself invited to give a talk to the local TEDx chapter. You can see him here:

by lkrubner   2021-12-03
I strongly agree. When I wrote "How To Destroy A Tech Startup In Three Easy Steps" I hired Natalie Sidner as my editor and she re-wrote the book to such an extent that I also offered her a writing credit:

by lkrubner   2021-11-19
The one strategy that the article doesn't cover, but which I see often, is where the top leadership says "We need to keep headcount down, but we need to get more software development done, so how can we do it without any extra people? Oh, I know, we will outsource this to an outside agency."

And yet, the outside agency costs more than actually adding to the headcount, so it is not cost effective. However, it is seen as temporary, so it this strategy is favored. There is the odd fear that headcount is permanent -- a fear that is mildly true in Europe, but definitely not true, at all, in the USA. Yet in the USA I still see managers who are eager to outsource.

The outsourcing tends to become permanent. The idea that it is somehow less permanent than headcount is a pure fiction.

But to the main topic, I appreciate this essay for emphasizing that "People are not fungible." I've tried to emphasize this in my own writing. I think, in general, writing about startups would be healthier and more realistic if we had more case studies that emphasized the role of specific individuals, for good or for bad.

In my own book, How To Destroy A Tech Startup, I tried to emphasize this:


Emotions matter. We might hope that those in leadership positions possess strength and resilience, but vanity and fragile egos have sabotaged many of the businesses that I've worked with. Defeat is always a possibility, and not everyone finds healthy ways to deal with the stress.

More than once, I’ve seen startups self-destruct.

I'm making a point about the importance of the individual in a small startup. In a large company, an eccentric individual does not do much damage. Even when such a person is in a leadership position, the company will have a bureaucracy that can ensure some stability. But when a company consists of two, or only a few people, and one of them reacts neurotically to challenges, that company is doomed.

I’ll relate one of my previous experiences to illustrate this point. From 2002 to 2008 I spent most of my time working with an entrepreneur who had inherited a few million dollars when he was 25. He managed to burn through much of his legacy in just the time we were colleagues. He admired musicians and considered the music industry glamorous, so he built a sound studio. It never made money. The bands that stopped by were broke. Those few who came up with a hit song mostly signed with a major label which, typically, had its own recording studio.

I met him in 2002 when his focus was shifting to the Web. I had developed some software that allowed people to create weblogs., which offered something similar to what I'd built, had just raised $23 million in funding. Surely we could do the same?

Working with him was difficult. We might go like maniacs on some project for four months, and when we were on the brink of unveiling it to the public, he would grow bored with it, and move on to something else. The first time this happened, and I asked him his reasons, he improvised some arguments that sounded plausible. Perhaps he suggested there were already too many startups doing the same thing. But this pattern, where he walked away from a project just when we were ready to introduce it to the public, repeated itself. What led to this self-sabotage? As I met his whole family over the years I got to see the sad dynamics that ate at him. He had a desperate need to impress his father. A modest business success would not be enough, in fact, it would leave him embarrassed. Only the creation of something as big as Google would impress his father. But to grow that big, we would first need to be small, and that was the step he had no patience for.

                                                                                                            As the years went by, and he burned away all the money he'd inherited, the stress wrecked him. His self-image became increasingly grandiose. He told people that he was a visionary, someone who was able to tell what the future would look like. Late at night he would smoke marijuana and read articles on Slashdot and TechCrunch and then put together an amalgam of words that seemed full of the bright hopes of humanity, which he offered up as our marketing: "The Universe is fundamentally electromagnetic yet non-sentient, and we are sentient but only partly electromagnetic; the Internet is the ultimate harnessing of sentience to the fundamental forces of the Universe. Therefore our software will put you, our customer, in the driver's seat of real-time conscious human evolution." Later, when he wrote up our business plan, he put these two sentences in the Executive Summary. I’m not joking.
He had no ability for internal dialogue. Only by talking to others could he hear his own thoughts. At our peak in 2007, we had eight people on our team. Sometimes I would look around the room, when he was talking at everyone, and I would think, “If you add up what we pay all these people, we are spending $300 an hour so that he can have an audience.” When he felt fear about our chances of success, he would need to talk to everyone, and when he was euphoric about our chances of success, he would need to talk to everyone. Therapy would have been cheaper.

by lkrubner   2020-04-26
Agreed. In the world of business, there has been a glut of leaders who arrive at positions of leadership without any formal training in leadership, and so they rule with "instincts" which are sometimes no more than primitive impulses or ego. This limits how far any project can go.

Just for a moment, assume there is an abundance of people with interesting ideas that deserve to be pursued, but for some reason these people are being stifled. Why are they being stifled, and are there ways we can better support them, so they can move forward?

On this theme, and speaking of a specific startup where I worked, where some of us were deeply excited about the project, I was recently writing a response to some criticism I received in response to "How To Destroy A Startup In Three Easy Steps":

In response to the criticism I received, I wrote:


Leimgruber phrased it best, in his review on Amazon, so I quote him here, to answer everyone:

Personally, I find the book most interesting not for the absurdly lousy management characters, but for giving a glimpse into the mind of a person that accepts this kind of treatment as okay, shoulders unreasonable burdens, and seems repeatably drawn into difficult situations with the corresponding drama that inevitably ensues.

This begs the question for me (and likely much of this book's readership):

Why are many talented software developers drawn to solving impossible problems, drinking unhealthy amounts of coffee, neglecting their sleep and personal lives, and constantly trying to fix everthing and everyone around them while ignoring their own psychosocial needs?

To my mind, the interesting question runs in the other direction. Why is bad leadership so common? Why is it so universally accepted? To anyone who suggests that we should quit our jobs after some disagreements with management, I would ask why is it that we need to leave? Why doesn't the leadership leave? Shouldn't management resign, if they are unfit to get the mission done?

Some questions have large implications. Why are so many leaders so completely self-destructive? If Milton had simply been greedy, in a rational way, he would have allowed me to work on the technology that might have eventually generated a lot of money for him. But I find that business leaders are rarely rational. Impulses and ego seem to be the most common forms of decision making. Why is this accepted?

The second comment I'd like to respond to was written by "Antoni" on Goodreads:

I loved the first 80% of it, which is enough to give a positive opinion I guess. What I didn't like really is that the book is written from the perspective of startup employee, not the founder. So there's only part of the story. Only information that the writer assumes. He uses a lot of exaggerations as well that are fun to read and enjoyable but some dialogues are hard to believe to be true.

I would recommend it to people working in tech startups, to feel good about the environment that they work for rather than take some valuable lesson from the book since it's more about management tyranny, mobbing and lack of transparency rather than actual reasons why startup failed from a perspective of a person that had full picture (instead of an employee).

In response, please consider these four ideas:

1.) The failure of any venture is always a complex event, and no one can easily say why it failed. Consider when an airplane crashes, it often takes an army of investigators years to figure out why the accident occurred, even though the investigators are guided by the experience of all previous airplane failures. A startup with an entirely novel idea will be too unique for anyone to easily diagnose its failure. There are too many variables, and too many embedded assumptions.

2.) A good leader over-communicates in a crisis, and every day is a new crisis for a startup. Above all else, the leadership needs to "listen real loud." A startup is either a transparent learning organization or it is dead. Milton's crass hoarding of secrets was a self-inflicted injury. While there might be some other reasons why the startup failed, it is absolutely true that our lack of communication was the starting point of all the other problems that we faced. Since I was central to the technology effort, the startup could only succeed if I was well-informed about our real needs. Keeping me in the dark was a problem for the whole company. I'm confused how anyone could complain that this book is about "lack of transparency rather than the actual reasons why the startup failed." I've tried to be clear about this, but I'll repeat it here again: lack of transparency was one of the reasons why the startup failed. We can debate whether it was the most important factor, but it was obviously a significant factor.

3.) Antoni says they wished the book was told "from the perspective of a person that had the full picture (instead of an employee)." Possibly I failed to emphasize this enough, but no one at Celelot had the full picture. Just like the three blind men in the fable, we were each touching a different part of the elephant, and we were reaching different conclusions about its shape. I was holding onto the technology, so I believed one thing, while Milton was holding onto the sales leads, so he believed something else. This much is completely normal at all businesses, it is a problem with a standard solution: lots of honest communication. Sadly, honesty was lacking. A series of lies were told about the company's finances, so myself and Kwan were constantly guessing at the truth. At some points we felt we were working at a well-capitalized firm, other times we thought the whole place was about to run out of money. But neither Milton nor John knew much about the company, either. At no point did Milton sit down and have a good faith conversation with me about the status of the code at the company. At first I was elated with the level of autonomy I'd been granted, then later I realized that the leadership was operating with assumptions that were out of line with reality. A ship captain who has no idea of their location near the coast is a ship captain who is about to run aground, and likewise, Milton's ignorance of our progress meant the whole company was slipping toward hidden reefs. If Milton were to write a book about Celelot, he could fill in his side of things, but his side of things would not represent the total truth.

4.) We have suffered a glut of books that aim to build a cult of personality around certain entrepreneurs. This tendency has gone furthest with Steve Jobs. What is remarkable is that this trend should get going at a time when innovation from Silicon Valley is clearly decreasing. In his 2006 book, The HP Way, David Packard talks about the process by which he and Bill Hewlett grew Hewlett–Packard. In their rejection of standard corporate hierarchies and their hunger for input from everyone, they were clearly blazing a radically new path in both management style and technology. It is noteworthy that when they were at their most creative, in the 1940s and 1950s and 1960s, no one set out to create a cult of personality around them. In 1968, when Robert Noyce and Gordon Moore founded Intel, no one thought to write them up as heroic characters, but it was in that era that their technology was creating the most profound shifts in industry. At some point after 2000 the rate of innovation in Silicon Valley began to slow, and yet this was the era when the rhetoric about visionary geniuses and innovation began to take on the tone formerly reserved for artists and military conquerors. Real leadership is rare, so we should celebrate it whenever it appears, but we should remember it comes as often from the lower ranks as the upper ranks, so a series of books that only looks at the upper ranks must automatically leave us with a skewed picture of reality. My point is, we need more honesty about what is actually happening in these companies. We need less books written by or about founders, and more books written by those who are in the trenches, working everyday to build something new. Above all else, we need better documentation of the ways that management often sabotages the worker's efforts to invent the future.


A final point for Hacker News to consider: some of these distortions that we are seeing, regarding misalignment of leadership styles, and in particular misalignment between short-term goals and what the team is committed to building, is a political question that very much goes back to the question "Are Ideas Getting Harder to Find?"

Now as always, there are a lot of people with interesting ideas. Are they getting the support they need to move forward with their ideas? Or are they being stifled?

by lkrubner   2020-04-24
I wrote an example of this in How To Destroy A Tech Startup In Three Easy Steps:

by lkrubner   2020-02-17
One possible answer is that much of management is driven by irrational forces, to a much greater degree than is predicted by economic theory. Perhaps ego and selfishness are much bigger motivators than generally understood. Such is my take in "How To Destroy A Tech Startup In Three Easy Steps":

by lkrubner   2019-07-12
From 2002 to 2008 I was the technical co-founder of a startup, and I had amazing fun. I worked 70 hours a week for 6 years, mostly because we were having so much fun.

In 2015 I was the lead engineer at a small startup that had a self-destructive and abusive top leadership. The technology was very exciting but the context was not.

What I learned from the two experiences is that startups can be intense fun if you are one of the owners, but if you are not an owner, startups can be absolutely miserable. More details are available in the book that I wrote:

by lkrubner   2019-06-24
This can lead to bias about whole categories of experience, for instance, starting a business. If you only hear the success stories then you start to think it is easy. You might intellectually be aware that 90% of all businesses fail, but that anecdote doesn’t carry as much emotional weight as hearing people’s joyful stories of success. That’s why I think it is important that we document some of the failures and we do it while the memories are still fresh and when we still have access to documents such as email and Slack messages that can offer the gritty details of what went wrong. That ideal if accuracy and specifics are very much what guided me when I wrote this:

by lkrubner   2019-06-07
What I learned is that these jobs are only really fun if you are the founder. Over 20 years, I was the technical co-founder at 3 different startups, and I had crazy fun at each of those jobs, even when we were working 70 hours a week. Because when you are a founder, you're really only under the pressure that you yourself set for yourself. Yes, I worked very hard, but I was working on my ideas, I was meeting cool people, I had absolute freedom to set my own hours. It was fun.

I then made the mistake of thinking that I would also have the same kind of fun as an employee. I became the tech lead at a startup, thinking I would have the kind of freedom that I previously had. This was a mistake. I was very excited about the technology that this startup was working on, but in the end I found, these jobs are much less fun, if you are not the founder, because there is a lot of pressure that comes from up above you, and when you come up with what you think is a great idea, you don't get to implement it. And there are additional frustrations: for instance, on this project I came to believe that it was crucial that we fire our initial data scientist, but the top leadership refused to fire him. This was a major roadblock that I would not have faced if I was the founder, as I would have had the authority to fire someone if I was the founder.

For anyone interested, I wrote in great detail about the experience here:

by lkrubner   2019-05-31
Far more startups die of suicide than homocide and that was true of the last startup that I worked at, which I’ve written about here:

by lkrubner   2019-05-24
I wrote of my experiences here, as a cautionary tale, and an antidote to the often over optimistic hype about startups:

by lkrubner   2018-12-24
About this:

"I mean, essentially it's a command line interface with a wonky input method, no?"

This is precisely the feedback we got from salespeople, when we were working on a Natural Language Programming interface for Salesforce. Initially, I got angry and denied the comparison. But after several people made the same comparison, I came to appreciate how true it was. Unless NLP is perfect, it is really just a Command Line Interface with an awkward input device. I talk about this a little towards the end of this story:

by lkrubner   2018-11-15
I've seen some young people who are very good managers, but I've also seen some absolute disasters. I've also seen some older folks who are absolute disasters. I shared a story about both kinds of manager in How To Destroy A Tech Startup In Three Easy Steps:

by lkrubner   2018-11-10
After many years trying a vast variety of project management software, I've come to the conclusion that what matters most is the project manager, rather than the software. Nowadays when I consult with clients I advise them: "First, find a really good project manager, and then use whatever software they want to use." If you have a great project manager, and they prefer to keep track of everything on crumpled up napkins, then the whole team should be given an ample supply of crumpled up napkins. Great project managers are rare, but if you have a great one, you should let them set the parameters of project management for your project.

When you have a bad project manager, good software will not save you. This is my personal story of how things can go wrong:


At 2 PM we had a meeting scheduled to go over all of the tasks in PivotalTracker. John had promised Milburn that we would execute our work according to a project-management philosophy that the tech industry called agile. Agile software development, among many other aspects, focuses on the delivery of small, incremental improvements to software. It encourages self-organizing teams, evolving and continuous progress, and rapid response to challenges faced. The Celolot team would work two-week sprints, checking in at the end of each period to see where everyone was at.

Unfortunately, vague definitions of “done” haunted our progress. John read through a long list of tasks that had been assigned to Sital.

“Find all possible variations of ‘Close Date,’” John read from the screen. “Is this done?”

“Yeah,” muttered Sital. “Sure.”

His assurance meant nothing to me. Sital would never lie, indeed I was often surprised by his childlike honesty, but he lacked an appreciation for the many ways that software could break.

“How many variations have been tested?” I asked.

“Two,” replied Sital.

“That’s not enough,” I said.

“That’s enough,” countered John. “‘Close Date’ and ‘Contract.’ That’s all we need.”

“What about ‘Close’?” I asked.

“Oh, yeah,” John thought aloud. “What about ‘Close’?”

“I’ll see,” Sital responded somewhat robotically.

John marked it as done.

“Wait,” I objected. “That is not done.”

John turned back to Sital. “Do you think you can finish today?”

“Absolutely,” Sital assured us.

“Then I’ll mark it as done,” said John, returning to his screen.

“But it’s not done till it’s done,” I argued.

John pondered this for a brief moment. “It’ll be done today,” he shrugged. He marked it as done.

In my view, John’s casual use of the word “done” to refer to items that were nowhere near done meant that this whole effort to track tasks was a useless ceremony. But John felt good about it. He could tell Milburn that we were following a two-week sprint, just like an authentic agile team.

It was true we had the accoutrements of an agile team. We used PivotalTracker. We broke down goals into fine-grained tasks. We reviewed the task list once a week, and we added more tasks every two weeks. But the whole thing was mockery of what the Agile Process was supposed to accomplish. If you have programmers who cannot finish assignments, then there is no point in pretending to be making progress.


related to here:

by lkrubner   2018-11-10
A huge problem with CRMs is the lack of staff engagement. A company will spend $30 million to customize their Salesforce workflow (or their SAP workflow, or any other workflow or CRM tool) but the staff will hate it and so the investment seems wasted. That’s why Natural Language Processing seems like it could be a win for this space. A salesperson should be able to write a quick text message on their phone, and that message should be parsed by an NLP script and then put into Salesforce. The promise of this idea, as well as the problems, I detailed here:

by lkrubner   2018-11-10
True, and someone who is a great salesperson probably has skills that are optimized for the context of sales. But another aspect of getting promoted is that a person is given oversight of new kinds of activities, where teams work with different cultures and different rules. I've seen some sales manager succeed by being bullies to their sales team. But I think it is a disaster when someone attempts to bully a tech team. So what works in one context fails in another context. I've tried to describe this previously:


Every industry has certain euphemisms for the least savory aspects of its business. In sales, there is the secretly ugly phrase, “goal-oriented.” That sounds pleasant, doesn’t it? If I point at a woman and I say, “That entrepreneur is goal-oriented,” then you probably think I am complimenting her. But if I point at her and say, “That entrepreneur is a lying, manipulative, soulless psychopath who brutally exploits labor from the eleven-year-olds she employs in her sweatshops in Indonesia,” then you probably think I am insulting her, unless you are a libertarian. And yet both statements mean about the same thing: that she is someone who is willing to do whatever is necessary to ensure the success of her business.

When I read about Milburn online, I’d seen testimonials from his colleagues in which he was often described as a goal-oriented salesperson. That probably meant that he was a master of manipulating other people’s emotions. He knew all the tricks: praise, shame, laughter, anger, promises, guilt, threats.

Whether his use of these tools was conscious or unconscious is, of course, unknowable. But it doesn’t matter much. A lifetime as a sales professional left him with an arsenal of psychological ploys that had become second nature to him.

...Milburn truly had a genius for the strategic use of anger. If he sensed the risk of losing control of the conversation, he would indulge in another outburst. If I were to ever switch over to the Dark Side, I would want to study with him. His techniques were fundamentally dishonest and manipulative, but that is probably what made him so good at sales. And his tactics were probably an effective way to drive a sales team, but I sincerely believed that such tactics were the wrong way to run a software development team. Especially when doing something cutting-edge original, like we were doing, I think open and honest communications were extremely important. (I have worked with many companies where the sales team was both friendly and successful. One does not need to use abusive tactics to have success in sales. Indeed, the sales manager who relies on abuse is typically more interested in aggrandizing their own success, rather than the success of the company they work for.)

by lkrubner   2018-11-10
For the most part, a person only gets invited to give a speech if they are one of the lucky few for whom things went well. If your situation is more ordinary, and you've failed, then you not invited to speak. Because of this, we (the public) end up with a distorted view of things. Success seems more common than it is, because we only hear from the successful. That is survivorship bias. It's also why I've argued we need more honest stories about projects that fail: