21–30 of 38 posts
I spent a long time thinking about business like this after a decade and a half of hard knocks in SaaS and marketplaces where I simply hadn't been thinking clearly at all. That's how we came up with Best Parents (www.bestparents.com) in 2020. It's the first marketplace for high-end, in person, short courses and travel experiences for teenagers worldwide. My wife has expertise in the education sales industry from Turk…
It's striking how much modern software development can match this theoretical ideal business, even though SaaS hadn't really taken off when he wrote this. Really excellent read. Very amusing to see his analysis of Apple and Microsoft, which seemed basically accurate until the iPhone came out.
I spent a long time thinking about business like this after a decade and a half of hard knocks in SaaS and marketplaces where I simply hadn't been thinking clearly at all. That's how we came up with Best Parents (www.bestparents.com) in 2020. It's the first marketplace for high-end, in person, short courses and travel experiences for teenagers worldwide. My wife has expertise in the education sales industry from Turk…
I spent a long time thinking about business like this after a decade and a half of hard knocks in SaaS and marketplaces where I simply hadn't been thinking clearly at all. That's how we came up with Best Parents (www.bestparents.com) in 2020. It's the first marketplace for high-end, in person, short courses and travel experiences for teenagers worldwide. My wife has expertise in the education sales industry from Turk…
Based on the above why are you even pursuing VC?
Now we're more looking into nondilutive funding and our lines of credit are burgeoning so it's possible VC won't be needed altogether. Not ready to close the door yet though, especially to the most selective programs and institutions both now and down the line. If we got into YC we would definitely accept, or even some other selective program like NFX FAST we would definitely consider very seriously.
I spent a long time thinking about business like this after a decade and a half of hard knocks in SaaS and marketplaces where I simply hadn't been thinking clearly at all. That's how we came up with Best Parents (www.bestparents.com) in 2020. It's the first marketplace for high-end, in person, short courses and travel experiences for teenagers worldwide. My wife has expertise in the education sales industry from Turk…
Curious what businesses you sell to / makes this b2b? On surface this business looks b2c (selling to parents)
What I meant was that when going out for fundraising in Silicon Valley your financial model is often compared to that of a B2B SaaS as they are both asset-light web software companies. Having studied those, I now realize why investors are so gung ho on B2B SaaS. The relative predictability of success, high profit margins, stickiness and network effects are quite simply hard to beat.
The principle is excellent, but the concept of protecting your product with patents is entirely invalid since about 2001 when China was admitted into the WTO. I have personal knowledge of several, and I can't count the number of times I've read about businesses ruined or seriously damaged by China pumping out knockoffs, sometimes literally faster than the original product gets to market.
The concepts of quality and respecting intellectual property are literally foreign concepts to the Chinese.
It is quite simple: if your idea can be easily copied, the Chinese will do it very quickly. Your "valuable" set of patents is merely a ticket to a series of lawsuits, which China will ignore, and the business, even if you get a judgement years in the future, will simply dissolve and re-organize.
So, any idea that is protected by IP laws but merely injection-molded in plastic is, in a very real sense equivalent to public domain (regardless of your patent status). If you have a more complex (e.g., machined or chemically complex) product, do NOT have it manufactured in China, as you'll soon find copies sold out the back door and competitors setup selling your design even if you can stop the leaks.
To have the moat described in #3, you need some 'secret sauce', and you need to keep it secret.
Earlier quoted context omitted.
Based on the above why are you even pursuing VC?
At the time, we didn't know where else to get $500K-$1.5M. Turns out $220K and some pain and hustling was enough. Thank God the fundamentals are really sound and upside is really there. Now we're more looking into nondilutive funding and our lines of credit are burgeoning so it's possible VC won't be needed altogether. Not ready to close the door yet though, especially to the most selective programs and institutions…
It's striking how much modern software development can match this theoretical ideal business, even though SaaS hadn't really taken off when he wrote this. Really excellent read. Very amusing to see his analysis of Apple and Microsoft, which seemed basically accurate until the iPhone came out.
True, it only misses to meet number 3 (it's easily copied and just getting cheaper to build software as technology advances). I think the document also misses to mention saturation of the market, which software is also very saturated and this makes it hard for new businesses to get going...
Otherwise, if your business relies on scraping other peoples data and then presenting a nice UI around that, it could just as easily be replicated by others (no moat, as we're saying nowadays).
Of course, much like the niche chemical salesman, maybe the ideal scraping business would be to find such a niche that is small enough that other people wouldn't find it worthwhile to replicate your SaaS.
Read "The Perfect Store" (2003), which is about eBay. No inventory. No shipping. No credit risk. Just a cut of each sale.
By this metric, dropshipping is the best business ever then, and not just a zero-value-added activity for bropreneurs who are good at Instagram marketing.
Read "The Perfect Store" (2003), which is about eBay. No inventory. No shipping. No credit risk. Just a cut of each sale.
By this metric, dropshipping is the best business ever then, and not just a zero-value-added activity for bropreneurs who are good at Instagram marketing.