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Ask HN: What are some black arts used by founders?

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Re: Ask HN: What are some black arts used by founders?

#11

Post by muzani »

notabanker wrote: post #6
muzani wrote: post #4

Set aside a marketing budget, and then basically sell the $10 item at $9, justifying that the $1 difference is marketing. Have a marketplace. Buy $100 of goods from users selling stuff. The $100 is a marketing expense. Add $100 to GMV. Have 5k users on Android, 3k on iPhone, 8k on web. Add them up to show the product has 16k users. Raise money from an angel who owns a conglomerate. The angel forces all his businesses…

Now I'm glad I started this Ask HN as your response is eye opening. You should write a blogpost about it.

That's interesting. I thought this was something everyone has experienced, to the point that it's possibly a Dilbert strip somewhere.

Re: Ask HN: What are some black arts used by founders?

#12

Post by avalore »

notabanker wrote: post #7
arduinomancer wrote: post #3

“AI” startups that are actually just linear regression/random forest as a service

"AI" also gets used for cosmetic reasons. I knew a startup that got acquired. They had a .ai domain with no AI product whatsoever.

Sold a small SaaS product 2 years ago, which was marketed as an "AI" product.

Extract from the "model":

                $yearsBetween = $comparisonItems->created_at->diffInYears(Carbon::now());
                if ($yearsBetween
Those multipliers were just from a bit of human-playing-around-with-the-data.

The thing is, customers were happy with the result and, as far as I know, still are. Internally it was always called the random number generator.

Re: Ask HN: What are some black arts used by founders?

#13

Post by jstx1 »

avalore wrote: post #12
notabanker wrote: post #7

Earlier quoted context omitted.

"AI" also gets used for cosmetic reasons. I knew a startup that got acquired. They had a .ai domain with no AI product whatsoever.

Sold a small SaaS product 2 years ago, which was marketed as an "AI" product. Extract from the "model": $yearsBetween = $comparisonItems->created_at->diffInYears(Carbon::now()); if ($yearsBetween Those multipliers were just from a bit of human-playing-around-with-the-data. The thing is, customers were happy with the result and, as far as I know, still are. Internally it was always called the random number generator.

How was morale internally? Did the whole thing feel disingenuous? Were people cynical about it?

Re: Ask HN: What are some black arts used by founders?

#14

Post by ecf »

muzani wrote: post #4

Set aside a marketing budget, and then basically sell the $10 item at $9, justifying that the $1 difference is marketing. Have a marketplace. Buy $100 of goods from users selling stuff. The $100 is a marketing expense. Add $100 to GMV. Have 5k users on Android, 3k on iPhone, 8k on web. Add them up to show the product has 16k users. Raise money from an angel who owns a conglomerate. The angel forces all his businesses…

> Raise money from an angel who owns a conglomerate. The angel forces all his businesses and people working in these businesses to adopt the app that others wouldn't otherwise trust.

In other words, the YC model.

Re: Ask HN: What are some black arts used by founders?

#15

Post by louisharwood »

jstx1 wrote: post #13
avalore wrote: post #12

Earlier quoted context omitted.

Sold a small SaaS product 2 years ago, which was marketed as an "AI" product. Extract from the "model": $yearsBetween = $comparisonItems->created_at->diffInYears(Carbon::now()); if ($yearsBetween Those multipliers were just from a bit of human-playing-around-with-the-data. The thing is, customers were happy with the result and, as far as I know, still are. Internally it was always called the random number generator.

How was morale internally? Did the whole thing feel disingenuous? Were people cynical about it?

Only a small team of three but I can’t say it ever felt like a bad thing. If anything, proud that we didn’t need to train a model to get a decent result and could concentrate on the rest of the product experience instead.

If customers weren’t happy or the results they were getting were wildly out (they weren’t) then might’ve been different.

In our minds the customers are buying a product to produce a result. If that’s from an ai model or a bunch of ifs it shouldn’t matter.

Re: Ask HN: What are some black arts used by founders?

#16

Post by computator »

muzani wrote: post #4

Set aside a marketing budget, and then basically sell the $10 item at $9, justifying that the $1 difference is marketing. Have a marketplace. Buy $100 of goods from users selling stuff. The $100 is a marketing expense. Add $100 to GMV. Have 5k users on Android, 3k on iPhone, 8k on web. Add them up to show the product has 16k users. Raise money from an angel who owns a conglomerate. The angel forces all his businesses…

> Have 5k users on Android, 3k on iPhone, 8k on web. Add them up to show the product has 16k users.

If it's a traditional desktop program like Word or Excel, I think it's perfectly fine to add up users from different platforms (which often even require a separate purchase). If it's something like Skype or Netflix, I can see how there might be some overlap -- the same person might use it from their iPhone one day and from the web on a different day. Is that what you mean?

Re: Ask HN: What are some black arts used by founders?

#17

Post by muzani »

computator wrote: post #16
muzani wrote: post #4

Set aside a marketing budget, and then basically sell the $10 item at $9, justifying that the $1 difference is marketing. Have a marketplace. Buy $100 of goods from users selling stuff. The $100 is a marketing expense. Add $100 to GMV. Have 5k users on Android, 3k on iPhone, 8k on web. Add them up to show the product has 16k users. Raise money from an angel who owns a conglomerate. The angel forces all his businesses…

> Have 5k users on Android, 3k on iPhone, 8k on web. Add them up to show the product has 16k users. If it's a traditional desktop program like Word or Excel, I think it's perfectly fine to add up users from different platforms (which often even require a separate purchase). If it's something like Skype or Netflix, I can see how there might be some overlap -- the same person might use it from their iPhone one day and…

As with all the other examples, there's some legit situations and some less honest situations.

The word hustle describes this activity well: https://www.merriam-webster.com/dictionary/hustle

Re: Ask HN: What are some black arts used by founders?

#18

Post by notabanker »

muzani wrote: post #10
notabanker wrote: post #9

Earlier quoted context omitted.

Unprofitability is rampant among public software companies: https://survivingtomorrow.org/why-do-so-many-famous-companie... Wonder if you have an opinion -- has unprofitability always been this pervasive or is this how businesses are generally run?

Tech companies are focused around asset growth, which is more easily converted to profit. The profit margins are usually huge, so profiting is rarely ever the problem. Revenue usually is. They have a lot of cash and it's easy to cut costs too. From the linked article, it says, "In 2018, 81% of U.S. companies were unprofitable in the year leading up to their public offerings." This is the most unfair way of judging it…

Thanks a lot for sharing your wisdom. A counterintuitive yet better way to understand how modern business works.
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