I feel this story demonstrates one of the "emotional vulnerabilities" of Lean Startup/MVP movement. You're going to crank a product out and then you expose it -- whether it's deliberately marketing it, pitching it to investors, showing it to friends, etc. You expect to hear something back like, "great concept, bad implementation," and so you just gradually improve the implementation until people stop thinking it's bad.

But sometimes you'll hear, "terrible concept, so I don't even care about the implementation," and that can be very demoralizing. Really, it should be taken as, "your implementation is so bad that I don't get the concept," which requires the same iterations of "improve the implementation." But it's too easy to basically just hear, "you guys don't know what the hell you're talking about so why don't you stop wasting everyone's time, including your own."

As we so often quote to ourselves: "your startup idea idea is worthless by itself." But that's not entirely true. Startup ideas indeed have no value to anyone by themselves. But they must have worth to the startup founder, because without that burning desire to solve that particular problem, how can a startup founder have the mental fortitude to persevere when their first iterations get very negative feedback?

Ouch. It's one thing to have your idea panned, but to say "nobody gives a shit about your team"? That's harsh.

It's an unfortunate fact about any creative industry that a person with clout can completely put the brakes on an promising idea just because it doesn't fit neatly into their worldview. This reminds me of the story when Meat Loaf and Jim Steinman pitched Bat out of Hell to CBS. Clive Davis, the executive, says "Do you know how to write a song? Do you know anything about writing? If you're going to write for records, it goes like this: A, B, C, B, C, C. I don't know what you're doing. You're doing A, D, F, G, B, D, C. You don't know how to write a song. Have you ever listened to pop music?"

Hurtful. But even though this guy was a pretty successful A&R person, he wasn't clairvoyant, as the album was a huge hit. It's unfortunate that it demoralized their team instead of serving as bulletin board motivation material.

I always take predictions like "no one will be using SMS in 10 years" with a grain of salt. Time has shown that experts are basically clueless when it comes to predicting that far in the future.

10 years from now, no one knows what we'll be doing, or if the mobile phone will even be an existing paradigm. What you did know at the time is that you were able to convince 300 people that it was useful, today.

I think if you can build something that is valuable to people today, you give yourself the opportunity to figure out what will be valuable to people tomorrow.

Yes, it's true that you should "skate where the puck's going, not where it's been," but if you have an open slapshot, take it.

I think your only mistake after building something was showing it to "the experts" and trusting their decision.

Make something, get customers and succeed, don't get customers and keep trying, and you will eventually create something of value. At that point it'll be "the experts" calling you to give you money. Until then consider them useless.

... and it might still be a bad idea. the mere fact that sendhub has raised $2m does not mean that this is a good idea.

People told us we were crazy for months. During our YC interview PG told us it was one of worst ideas he'd heard. Thus, I believe founder conviction is one of the most important parts of building a company.

As an aside, SendHub isn't really focused on SMS marketing, there are lots of services out there for that - people use SendHub for both interactions within their business as well as communication with customers.

I often hear investors advise each other to have a contrarian point of view, not for the sake of being different, but for the sake of seeing the hidden gem that others think is a piece of coal. The same advice has been given to entrepreneurs too.

Some advisors are harsh. Judges at a contest, even harsher. It sucks when they deflate one's balloon, but there's nothing harsher than the market. Good investors know this, and this is why they rely on traction more than anything else - even their own judgment.

In other words: If this was an idea you were truly passionate about, screw the judges and validate the idea with customers. They're you're most important data point.

Thanks for sharing the story though. I've been in your shoes many times. It's been a hard lesson to learn.

I wouldn't kick yourself too much. The jury is still very much out on the Sendhub business model.

FWIW, I have a blog about it at http://gcrawshaw.posterous.com/ycombinator-vs-the-telcos

Stick around and you'll find that every idea you ever had and/or project that you abandoned winds up getting built by somebody else and funded to the tune of X-millions. That's a good thing... it means you have good ideas, or at least that somebody with money also thinks the idea was good. You can't look at this as missing out on anything, because A) You learned a ton and get to keep trying newer and better things. And B) Funding is not an accomplishment in itself, it's a means to an end. Time will tell if they become profitable or exit. If THAT happens, it's entirely appropriate to get licquored up and call everybody jerks. Also, "hello" from 6 rows up on the Chicago bus. :-)

I am tired of "jury culture". These days people's highest ambitions often seem to be to impress some jury (most obvious in those horrible talent shows on TV). Screw the juries!

Maybe the teams themselves are a difference as well. Not to sound like I'm putting you down (you got enough of that from the judges), but these days when everyone is talking about "investing in great teams, not ideas" and talent acquisitions are some of the most profitable exits for startups and their investors, it could be that BOTH of your ideas really do suck, but someone figured out that SendHub has a $2 million team working on it.

It sounds like to me that the main problem was the design or presentation of the product. "SMS newsletters" does indeed sound like a terrible idea.

"Nobody gives a shit about your team.". What a jerk!

Raising money does not equal commercial success.

These guys might be wasting years of their life now chasing unicorns.