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Octopart, The Little Startup That Hung In There

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Re: Octopart, The Little Startup That Hung In There

#21

Post by [deleted] »

nl wrote: post #19
nitrogen wrote: post #16

Earlier quoted context omitted.

Their search system is unequaled in any of the electronics parts sites I've used (Mouser, Digikey). That probably qualifies as a technical barrier.

I'm not an electronics expert, but I know a fair bit about search implementations. I'd be guessing the partname->vendor price matching thing is non-trivial (because I bet the vendors all use different names and product codes). But it's not that hard. The search itself is something that could be replicated fairly easily by someone who knew what they are doing.

[deleted]

Re: Octopart, The Little Startup That Hung In There

#22

Post by mb21 »

seriously not trying to be a downer, but doesn't this smack of starting a company just to start a company? they all took $0 in salary in 2008, I wonder if they are making live-able wages now in 2011. They took on their first employee and maybe had to again cut their salaries to afford it? YC worries me that it convinces everyone to start a company rather than go to school, work for another company as an employee or follow a different dream. We're being sold someone else's dream of "starting a company is the best thing in the world to do". The talent pool is being severely diluted just like too many expansion teams in a sports league. The end result? Less success for everyone. I admire their persistence, but I wonder if Octopart is in a market where they can build a company that can hire and pay the employees or maybe even generate a larger lump of cash. I may not get the new model yet, but I still think that revenue generation is the goal of a company. However, it's just roughly 3 years into their lifespan, so maybe they will eventually build a nice business. I definitely wish them luck if this is truly their dream.

Or maybe it's just the experience of building a company that is the reward. I don't know.

Re: Octopart, The Little Startup That Hung In There

#23

Post by jasonkester »

mb21 wrote: post #22

seriously not trying to be a downer, but doesn't this smack of starting a company just to start a company? they all took $0 in salary in 2008, I wonder if they are making live-able wages now in 2011. They took on their first employee and maybe had to again cut their salaries to afford it? YC worries me that it convinces everyone to start a company rather than go to school, work for another company as an employee or f…

Actually, this is exactly what it's like to bootstrap a company these days. You scrape along with no success and no money for a long time before it grows into something that can support you. Hitting the $1000/founder/month profit mark is a huge milestone since it means you can just barely squeak by without digging further into your personal savings. It means that if you can keep growing the business, you're going to win.

You'll notice that it's a completely different game than starting with big VC. And as you mentioned, it doesn't fit a lot of people's definition of a "business".

That's fine. Just remember that there is in fact another definition. Revenue Generation is still part of it, but it's not the end goal. Generating enough revenue to live comfortably on while minimizing the amount of time and effort you need to expend is the ultimate goal for a lot of us. In that context, a company that brings in $20k/month and runs on autopilot is the highest form of success. For a lot of people with different definitions, that would be classed as complete failure.

Anyway, enough talk. I'm off to Scotland for a week or so to get some fresh air while my business runs itself without me.

Re: Octopart, The Little Startup That Hung In There

#24

Post by sudonim »

nl wrote: post #19
nitrogen wrote: post #16

Earlier quoted context omitted.

Their search system is unequaled in any of the electronics parts sites I've used (Mouser, Digikey). That probably qualifies as a technical barrier.

I'm not an electronics expert, but I know a fair bit about search implementations. I'd be guessing the partname->vendor price matching thing is non-trivial (because I bet the vendors all use different names and product codes). But it's not that hard. The search itself is something that could be replicated fairly easily by someone who knew what they are doing.

The tech doesn't seem that complex, but successful businesses aren't about ideas, or technology. They are about applying technology to ideas and getting people to use it. The hard part to replicate of what octopart did is the 'putting all the pieces together' part.

Re: Octopart, The Little Startup That Hung In There

#25

Post by sachinag »

nl wrote: post #13

I'm kinda surprised this got YC funding. I meant it's a good idea, but ultimately it's an affiliate marketing play right? The main barrier to entry is getting good SEO (and I guess becoming known as a direct source) - there doesn't seem to be huge technical barriers. Affiliate plays can be highly profitable, but I never thought that they were all that attractive to investors.

It's obvious in retrospect, but YC saw that Sam and Andres were animals[1]. (IIRC, Sam and Andres were the founders and brought on Harish just a bit after/during YC.) Octopart just would. not. die.

Personally, I think the current fad of pivoting and pivoting is probably makes for happier/better founders (my God, the trough of sorrow - I've been there and I wish that upon no one), but the Octoparts had a vision and just stubbornly stuck to it. A thousand kudos to them; they're stronger than I.

[1] http://www.paulgraham.com/start.html

Re: Octopart, The Little Startup That Hung In There

#26

Post by mellis »

staunch wrote: post #10

There are only like 4 companies that sell these products. Why would those companies bother giving Octopart a referral fee? It's not like Octopart is going to remove their listing if they don't pay up, that would hurt them more than the companies. What am I missing?

As Sam says, one of the best parts of Octopart is that it has so many distributors, especially the ones you've never heard of. So when Digikey and Mouser are sold out of what you need, you can find it somewhere else.

Re: Octopart, The Little Startup That Hung In There

#27

Post by mb21 »

jasonkester wrote: post #23
mb21 wrote: post #22

seriously not trying to be a downer, but doesn't this smack of starting a company just to start a company? they all took $0 in salary in 2008, I wonder if they are making live-able wages now in 2011. They took on their first employee and maybe had to again cut their salaries to afford it? YC worries me that it convinces everyone to start a company rather than go to school, work for another company as an employee or f…

Actually, this is exactly what it's like to bootstrap a company these days. You scrape along with no success and no money for a long time before it grows into something that can support you. Hitting the $1000/founder/month profit mark is a huge milestone since it means you can just barely squeak by without digging further into your personal savings. It means that if you can keep growing the business, you're going to…

Thanks for the comments - this was my first HN post. I hope you didn't see it as being pessimistic - As someone who has started companies in the past and wants to do it again, I am trying to understand this new movement.

I love the thought of building a self-running business. Is that realistic? Is that realistic statistically? $12,000 profit per month after taxes is not livable in the US, and probably not Canada. Continuing to grow past $1000/month doesn't mean you are going to win; it could mean you win for a little bit and then lose all at once when something goes wrong, or someone else decides your idea is good and scoops it up. Maybe, maybe not. Again, I don't know. I do know that you can live frugally and without a cushion for only so long if your dream involves a family.

Pulling out of a phd program may be the right choice, but you are giving up on a tangible asset before you cross the finish line. Education isn't the be-all end all, but it still means something to a lot of people and that's a nice back up if your company doesn't work out.

I noticed you live in Thailand now which was apparently your dream. That lowers your costs significantly. Congratulations on that and the success you've had!

For me, living in a first world country changes the calculus. I'm not promoting the "big vc" route and I don't think YC invests in companies so the founders can make $20k/month and take vacations when they want. Your final point I'll assume wasn't trying to rub my face into the fact that you have this freedom that perhaps I don't have.

Again, congratulations on your success, and I think I'm going to try out your web meeting product.

cheers.

Re: Octopart, The Little Startup That Hung In There

#28

Post by amac »

waratuman wrote: post #3

This is my favorite YC startup. I remember in college trying to design and build my computer. It was just awesome to have all the parts, data sheets, and price in one spot. Sure beets an excel sheet, keeping track of data sheets, and going everywhere to find every last part! Glad to hear they hung in there and are doing well!

Mine too. Worked in the Oil industry as a buyer during college and Octopart was pretty useful at finding things I had in my RFQ's.

Re: Octopart, The Little Startup That Hung In There

#29

Post by 3pt14159 »

mb21 wrote: post #27
jasonkester wrote: post #23

Earlier quoted context omitted.

Actually, this is exactly what it's like to bootstrap a company these days. You scrape along with no success and no money for a long time before it grows into something that can support you. Hitting the $1000/founder/month profit mark is a huge milestone since it means you can just barely squeak by without digging further into your personal savings. It means that if you can keep growing the business, you're going to…

Thanks for the comments - this was my first HN post. I hope you didn't see it as being pessimistic - As someone who has started companies in the past and wants to do it again, I am trying to understand this new movement. I love the thought of building a self-running business. Is that realistic? Is that realistic statistically? $12,000 profit per month after taxes is not livable in the US, and probably not Canada. Con…

Guys, don't downvote self professed newbies without explaining why you are doing so.

Re: Octopart, The Little Startup That Hung In There

#30

Post by ekidd »

mb21 wrote: post #27
jasonkester wrote: post #23

Earlier quoted context omitted.

Actually, this is exactly what it's like to bootstrap a company these days. You scrape along with no success and no money for a long time before it grows into something that can support you. Hitting the $1000/founder/month profit mark is a huge milestone since it means you can just barely squeak by without digging further into your personal savings. It means that if you can keep growing the business, you're going to…

Thanks for the comments - this was my first HN post. I hope you didn't see it as being pessimistic - As someone who has started companies in the past and wants to do it again, I am trying to understand this new movement. I love the thought of building a self-running business. Is that realistic? Is that realistic statistically? $12,000 profit per month after taxes is not livable in the US, and probably not Canada. Con…

$12,000/month after taxes is $144,000/year for a single founder company. U.S. median family income was $45,018/year before taxes in 2003. Even for programmers working in Silicon Valley, $144,000/year after taxes is pretty decent.

For comparison purposes, if you sold your company for $3.6 million, invested the money at 4% above inflation, and lived off the real interest, you'd earn $144,000/year.

Now, that's clearly not as nice as an $8.5 billion acquisition by Microsoft, but it's still pretty sweet. If nothing else, you can comfortably feed your family while working on a new startup. :-)

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