Mistakes That Killed Goldee

Tomas Baran
10 min readJan 15, 2021


Disclaimer: As I will be pointing to specific problems, it may sound like blaming other people or circumstances. It is not my intention. I acknowledge that all mistakes in Goldee were my responsibility. The founders are responsible for all the startup errors, whether they are direct or indirect.

Now on to my slip-ups:

A1. Single Founder

Drew Houston from Dropbox (originally a single founder, later found a co-founder)

Being a single founder in a startup is ridiculously difficult. I’m pretty sure that everyone who has been a single founder will only agree with me. Before I dig deeper, I want to highlight that it is possible to create a great company as a single founder: Amazon, Alibaba, or Ford prove this. However, most significant companies have multiple co-founders (Google, Facebook, Tesla, Apple, Twitter, Oracle, Paypal, Airbnb, .). Even though not impossible to overcome, it was still Goldee’s biggest mistake.

I experienced how brutally tough it is to be a single founder when Goldee was falling. I had no one from the team to rely on, to talk to, no one who would help me out with the company issues. The company was falling, and no one wanted to get his/her’ hands dirty’, why should they? It was not their startup, so it was not their problem.

Carrying all the company’s troubles on one’s shoulders is too heavy a load for one person. Many situations will cross your startup journey to question yourself many times whether you should go on. I know a few founders who told me that if they didn’t have the co-founder by their side, they would have given up already. The emotional pressure is just way too high.

If you don’t have big troubles, then you are probably not risking enough. And if you are not attempting enough, then it didn’t make sense to create a startup. The difference between a startup and a corporation is that in a startup, you are entering an unknown world — nothing is proven; therefore, significant risks are necessary. If you are afraid of big risks, don’t start a startup. Startups are all about risks, and not small risks but big ones.

In the beginning, the founder does all the jobs, which include coming up with ideas, business development, design, coding, marketing, customer support, problem-solving, cleaning the toilets. In a nutshell, one person will have two significant parts under his wing — the creative and the technical. Often a person is either technical or creative. Right co-founders complement each other’s strengths and weaknesses.

Besides, how would you know you are on the right track when you have no one to talk to, no one who would argue with you? The best ideas come from discussions and arguments. People will argue against you if they are equally invested. Co-founders are. That’s what you need.

Not having a co-founder can bring other issues to the table, as I elaborate below.

A2. Wrong Choice of CTO

Steve Wozniak, Steve Jobs

We had to change CTOs three times, as, over time, they proved to be inadequate. One of them was a good manager and had the high technical knowledge, so from that perspective, he was an excellent CTO, but there were some character flaws, which turned out to be even more fatal for us than lack of competence.

CTO plays a crucial role. Usually, he’s the second most important person in a startup. While the CEO finds the customers, the CTO provides the product for them. I say the second because finding customers is usually the most challenging part of a startup. CTOs are technically strong, and they are very analytical, which means they comprehend their power. You must click with your CTO personally because if one day he decides to steal all your product, technically, he can. Hire a technically and managerially strong CTO, however even more importantly, make sure he is a good guy, a humble person — someone you can trust because all of your product is in his hands.

You are putting yourself in danger if you don’t have a CTO co-founder. I have a theory on a healthy marriage (see diagram below), which is also applicable for co-founders’ relationship: Sharing the same values/beliefs is of paramount importance (which will later define your culture). The second most important match is in temperament/talent; let’s call it skill set. You want to have opposite skill sets so that you complement each other. I don’t think having common hobbies in a startup is too important because you already share a huge one — your startup.

A3. Incompetent Developers

An incapable CTO will choose incompetent developers. Inexperienced developers will create a lousy product. You won’t win if your product is not top-notch, at least in some aspect. Unfortunately, I cannot say Goldee had only the best developers. We had a mix. I believe that the best startups have only the most qualified developers from the beginning, not only when they get big.

What’s the sign of an inexperienced developer? Slow development, code that only (s)he can read, platforms that (s)he choses are improper.

A4. Wrong Platform

Our tech team analyzed the speed, memory, and all the other technical requirements for our product. They chose RTOS (real-time operating system) as a platform, CPU, memory, antennas, display . . . The development was slow, but we were gradually moving towards our goal. We built a few prototypes that had some minor bugs, as all prototypes do. Since only a few loose ends were left, we started the crowdfunding campaign, confident that we are close to the finish line. After the successful campaign, we felt substantial pressure from the public to ship our product ASAP. A considerable problem occurred: one of the bugs in the prototype turned out to be unsolvable. The bug created fuzziness on the controller’s screen, and our tech team thought they would solve it by optimizing the code. However, it turned out that this bug was due to having a slow CPU. Someone from the team proposed picking a faster CPU, but the CTO’s answer was: “We can’t. We picked the fastest processor that was designed for our architecture that was built on RTOS.” As it turned out, the only way to resolve this bug was by changing the platform. That meant starting from scratch. Before the campaign, we only needed to fix the bugs and finish the development. After the campaign, we had to start developing on a new platform.

Eventually, we chose Linux as our platform, and it was great. However, that one wrong decision caused us several months of delay. Startups’ most outstanding attribute is speed, and mistakes like this can mean the death of your startup.

B1. Bad Location

San Francisco

Goldee was born in my parents’ old flat in Slovakia, Europe. After a year and a half of development there, we moved to offices in the same city, Kosice. I was deliberating for a long time, whether it was the best location for our startup or whether we should instead move to Silicon Valley.

It would help if you thought about the following when you consider a new location for your startup:

  • your employees
  • your customers
  • your investors
  • your partners
  • manufacturing (if you have one)
  • the know-how of the market
  • expense of living

You should choose a place that will provide you the easiest way to survive because by pursuing your dream with a startup, you are against the short odds of a 10% success rate. Eventually, we chose Slovakia mainly because of the lower living expenses, the ability to manufacture there, and because we already had employees in place.

B2. No Matching Investors

A16Z (Andreessen Horowitz)

This comes with your decision about location. Usually, you can’t have

investors from the US without having your startup somewhere nearby. I believed that we would be able to finish our product in Slovakia, so I was pursuing only the Slovak VC market for investment. After I learned about it all in person, I realized there were no appropriate investors for us. But that realization came after six months of detailed exploration of the Slovak VC market. Of course, I quickly started getting to know VCs in other European markets, but it was too late: we were running out of money. Our runway was too short.

Technically, we ended our venture due to a lack of funds, but as you are reading this article, you may realize that it resulted from an interplay of several bad decisions.

Maybe if I were not the only founder and would have had a technical co-founder, we would not have issues with the CTOs, the programmers, and the platform, which would mean I could have been more focused on other things, such as fundraising. One mistake leads to another one — and that’s how the domino effect kicks in.

C. Big Team

Reason number one that causes startups to fail is running out of money, so the question is -what is burning most of the money? People. Therefore, the fewer people in your startup, the better. Our angel investor told me that we had many people (10–15 internally). I always argued that we needed that many specialists; otherwise, our development would be slow — we needed the designers, front-end coders, back-end coders, hardware developers, marketers. Now I see that a startup needs versatile people that are good at multiple things.

At Goldee, I was proud to have a truly great designer — he was terrific at designing. But since he specialized in the design, he was not concerned with converting his designs into code. I was happy the coding restrictions did not limit him, and that way, he was free to create whatever he felt was best. In contrast, now, I believe it would have been better if the same guy who designed the product and its website could also code and market it, build some campaigns, experiment, and start the whole process again. If you have one person with five skills, you don’t need the four extra colleagues. (S)he may not achieve as much as five people combined, but what matters in a startup is the output per person.

What is even more important than the cost of people is the increase in problems and dissatisfactions. The relationship between the number of team members and the number of issues is exponential. We are humans, and we are complicated. If you have one guy in a team, (s)he may have five problems a day. Add another person to the same room, and you’ll realize that they’ll have 25 issues per day, not 10. The last thing you want in a startup is problems because you already have enough of them by default. If your team has ten issues a day, you and your co-founder(s) can solve most of them. Once your team has a hundred problems a day, you and your co-founders will not solve all of the issues.

Consequently, your teammates will have unresolved problems, which may not seem like a big deal initially, but the long-term effects are grave. If someone’s unresolved issues keep increasing, and no one is there to listen and help, your team member will feel unimportant, dissatisfied, and frustrated. These are dangerous signs that affect the entire morale of the team.

Yes, it is challenging to find people that are capable in many areas. But if you don’t have the A++ talents, how can you expect to succeed? Your goal should be having the least amount of people, which’s achieved if your team members are talented in many areas. It will be fun and also challenging for all of you. Your startup will have a generous spirit. As your company grows, you’ll seek more and more specialists, but not in the beginning when you don’t even know whether your product makes sense, when above all, you need to survive and find the product/market fit.

Just an afterthought about the crazy-high living expenses in San Francisco: At least it forces you to hire only a small team in the beginning because you can’t afford many people. That compels you to learn a new habit in your startup — being lean, which is great for your startup culture. If you know how to work with what you have instead of increasing your budget, you’ll have a significant advantage over your competitors even when your company gets big.

The biggest problem is people, not situations. Fewer people in your startup means fewer problems, and that means more time for you to focus on the most important thing — your users. Without them, your team doesn’t even have a reason to exist.

Tomas Baran

But don’t forget that you can become the worst enemy of your own company. How? By giving up. By losing all the energy and focus for the company. And also by letting your ego grow — this also happened to me. My ego was increasing with every Goldee’s success, even though I didn’t realize it right away. Fortunately, my close ones noticed, and since then, I have been working on fighting my ego every time there is an opportunity for improvement (weekly, sometimes even daily). I made many mistakes. Goldee made many mistakes. I am glad that I had a chance to learn from them. I don’t think making mistakes is a tragedy. The tragedy in a startup is not giving yourself a chance to make a mistake:

“Our doubts are traitors and make us lose the good we oft might win, by fearing to attempt.”

- William Shakespeare, Measure for Measure

I wish you strength when you make mistakes.

Let me know about your tough lessons. Drop a comment below. I will be happy to read it.

Originally published at http://tomasbaran.com on May 18, 2016.