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Before You Grow

blog.ycombinator.com

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Re: Before You Grow

#161

Post by danieltillett »

seanhunter wrote: post #154
danieltillett wrote: post #51

What do you do if you make a B2B product that gives your customers such a big competitive advantage in the market that they won't talk about your product, actively hide that they use it, and refuse to let you tell others that they use it?

Have you considered changing your pricing model so you get paid some % of their "success" however defined? Edit: to explain my thinking - the idea here is it may actually be that if you're getting paid alongside them that you don't need to grow to other customers. You can get all the revenue you need from getting this one customer to dominate their market.

This is is actually what is currently happening in my market. My customers are increasing their volume each month while those that aren't using it are going down. The only problem is the market is quite fragmented so this approach only works if I have a customer in each market. I am working on solving this problem :)

Edit. I should add that I have offered a discount in return for being able to publicise their use. Unfortunately, everyone has declined the offer.

Re: Before You Grow

#162

Post by duncanawoods »

blizkreeg wrote: post #64

Do people have thoughts or pointers for building something users love when your product depends on there being enough users using the product? Dating apps, platforms and such. When a single user gets no utility from your product if there aren't enough already using it, what does one do? You kind of have to spend some money marketing to get the initial word out. This is something I've been struggling with. We've been…

1) New every time - I don't think there can ever by a free and repeatable way to do it because its so valuable that any method that gets discovered quickly gets saturated or gated to extract a % of the value

2) Bootstrap - grow from a small X that generates value for individuals/small-groups and slowly mutate into a Y that delivers value primarily from the network as your user-base grows.

3) High cost blanket advertising or PR - get an inrush of like minded people at the same time. I can't actually think of a success story that achieved this, plenty of failures though.

4) Better than 3) is to use capital to buy users and user activity such that the value stays in the network e.g. paypal giving away free $$ to every sign-up that they then paid to a paypal merchant.

Re: Before You Grow

#163

Post by kriro »

"""Startups are defined by growth, but growth isn’t step one in building a great company."""

I'd argue it is. Building something people love is all about growth. If they love it, they'll talk about and champion it. In fact measuring generic word of mouth growth is a decent way of figuring out if people love the product (my working hypothesis is that engagement is great but if they go beyond that...we're golden).

I'd say ignore all kinds of growth except word of mouth growth. I don't care about user acquisition schemes...as soon as the word of mouth growth flattens the alarm bells must go off and all other measures are probably just life extending measures.

I'd also say ignore "growth hacking" especially of the "I'll trick people to like my product" variety. Genuine product improvement is the best growth hacking there is.

Re: Before You Grow

#164

Post by AznHisoka »

danaseverson wrote: post #148
AznHisoka wrote: post #141

Earlier quoted context omitted.

atrributing verbatim feedback to NPS is misleading though. getting feedback is just talking to customers, surveys and methods that have existed for years. saying its part of the NPS methodology is giving it credit for something it did not invent.

You're right, feedback isn't exclusive to NPS, but you're missing the point. It's the type of feedback that is the critical difference here. Yes, you can ask any customer any question and get a response, but does that question/response elicit the same intelligent and predictive value of the NPS questions? Will randomly surveying your customers generate the same response rate as an NPS survey? NPS is a proven methodol…

"NPS is a proven methodology"

That's a blank statement that tries to be authoritative and sounds nice, but where's the proof?

Re: Before You Grow

#165

Post by rsp1984 »

duncanawoods wrote: post #158
rsp1984 wrote: post #119

Earlier quoted context omitted.

I'm not affiliated with YC in any sense but trying to clarify some things: " fix the plane while it's flying ". This is typically advice for startups that have found product-market-fit (i.e. have a product people love) but there are a million other things broken. In that case the advice is often to fix these things "while flying", i.e. while simultaneously growing sales and the company in general. " organizes a demo…

>> Seed and Series-A are two entirely different games. Are you actually in a position to offer advice? What you say seems outdated - seeds grew to multi-million figures such that "seed is the new series A" was a thing back in 2013 - firms now offer "pre-seed" funding and "second-seeds" seem increasingly common. The assumption today seems to be that if you have no connections, you must self-fund / bootstrap / FFF your…

Are you actually in a position to offer advice?

Are you in a position to question that I am?

I've raised a seed round for my company 3 years ago and we are now going for Series A. I feel experienced enough to share some of my thoughts. Feel free to ignore it if you disagree.

Re: Before You Grow

#166

Post by beat »

morgante wrote: post #160
beat wrote: post #84

Earlier quoted context omitted.

VCs are optimizing for something other than love. They're optimizing for potential scale. You can build a product that customers love, but with a low ceiling for the market (like, say, building a really awesome surfboard). VCs want to see billion dollar market potential. So they may invest in something without real proof of customer love, or even customer need, just because the market potential is great.

That might be true at the seed stage, but no competent VC is going to keep funding you if you've launched and aren't able to demonstrate that some people love your product. Of course, product/market fit is not a sufficient condition for success. You also need the market to be big enough.

On the other hand, the OP's assertion that money just flows to people who "look right" (my words, but true) without real regard for the product itself, applies largely to seed money only. A proper Series A round (or more) should require a strong product and customer feedback. So I think my point still holds. Seed VC is looking at market opportunity and founders who "look right", not a killer product that customers love, because the product may not exist or have a significant customer base yet.

Re: Before You Grow

#167

Post by [deleted] »

morgante wrote: post #160
beat wrote: post #84

Earlier quoted context omitted.

VCs are optimizing for something other than love. They're optimizing for potential scale. You can build a product that customers love, but with a low ceiling for the market (like, say, building a really awesome surfboard). VCs want to see billion dollar market potential. So they may invest in something without real proof of customer love, or even customer need, just because the market potential is great.

That might be true at the seed stage, but no competent VC is going to keep funding you if you've launched and aren't able to demonstrate that some people love your product. Of course, product/market fit is not a sufficient condition for success. You also need the market to be big enough.

[deleted]

Re: Before You Grow

#168

Post by blazespin »

danieltillett wrote: post #138
blazespin wrote: post #61

Earlier quoted context omitted.

Find ways to make your b2b product market itself by how it integrates (publishes content that is available on the web, REST APIs you can integrate with, etc). As your users derive and extract value from the product they will naturally advertise it for you.

This is the problem - my customers extract the value and want to keep all the value to themselves.

Yes, but by extracting value they are forced to integrate with the ecosystem at large. In this way, the ecosystem becomes aware of your product.

Re: Before You Grow

#169

Post by mck- »

jayjay71 wrote: post #153
mck- wrote: post #151

Earlier quoted context omitted.

There is indeed a different YC program for early-stage startups working on product. It's called the YC Fellowship. https://blog.ycombinator.com/yc-fellowship/

The YC Fellowship got axed. From what I understand, they're replacing it with an online course (similar to their startup videos/lectures) and it does not include any funding.

Oh that's sad - do you have link to an announcement? I wonder why..

Re: Before You Grow

#170

Post by danieltillett »

blazespin wrote: post #168
danieltillett wrote: post #138

Earlier quoted context omitted.

This is the problem - my customers extract the value and want to keep all the value to themselves.

Yes, but by extracting value they are forced to integrate with the ecosystem at large. In this way, the ecosystem becomes aware of your product.

I am not sure what you are suggesting here. Could you be more specific?
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