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Asks HN: Solo founders-How to respond when customers ask how big is your company

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Re: Asks HN: Solo founders-How to respond when customers ask how big is your company

#51

Earlier quoted context omitted.

> Lie like hell --- and try to turn small into a positive. Don't do that. Unless you don't care about your reputation. > But truthfully, you really do need at least 2 people as a bare minimum to sell a viable product. When did this become an immutable law? > Lots of customers will want some assurance that if you die in a car crash on the way home, there is someone left to continue on with. One can also figure out a b…

Place code in escrow Doesn't help most customers because they lack the expertise to use it. Most people looking to buy software are not in the software development business and don't want to be. subcontract some of the work What about the rest of the work? avoid writing software that only runs when a specific person is constantly tending to it. If it is a hosted solution, someone needs to tend to paying the bill. If…

The "bus factor" analogy is just that, an analogy. It shouldn't be solely taken literally, as in "what do we do if someone important becomes incapacitated".

The point of that analogy is to get people thinking about business continuity (https://en.wikipedia.org/wiki/Business_continuity_planning) and how to mitigate various types of risks. The keyword being mitigate. One cannot eliminate risk, and no sane customer expects their use of a client or software to carry 0 risk.

If a vendor tells a client that nothing can disrupt their ability to deliver their product, they are either lying, or have failed to understand the risks their company actually faces.

And the final point, "my partner can take of it". That addresses only one, frankly minor aspect of business continuity, which is "what happens if someone important becomes incapacitated". The number products that failed because someone important literally died (not just left the company) is probably extremely minute. There are way bigger risks a company should focus on mitigating first, including:

- software fails to meet regulatory compliance (if applicable)

- company fails to manage finances properly and has to close shop

- someone important leaving the company

Can some of these be mitigated by adding another partner? Depends on what they bring to the table.

Re: Asks HN: Solo founders-How to respond when customers ask how big is your company

#52
post #12

Don’t dissemble. You should ask about what their concern is (you getting hit by a bus, you losing interest, etc.) so that you can find a solution that will work for them and other similar customers. One of our licensees had a lawyer who asked us to put our source code in escrow, in case we got acquired or went under. It was a little embarrassing for her when I explained that they already had our source code, which wa…

Side note on escrow - we get asked this from time to time. We respond, we're happy to provide it on certain plans and quote them for it. No one has ever taken us on it. In b2b you never say no, always have an option for what they're asking and charge more for it.

> In b2b you never say no, always have an option for what they're asking and charge more for it.

This was a somewhat recent revelation for me, and it totally works.

"Well, we don't really want to work on this or agree with the approach, but pay us double our normal rate, and we'll do whatever you want."

Typically that will end the conversation, and in the rare case they do move forward, being paid handsomely is really nice

Re: Asks HN: Solo founders-How to respond when customers ask how big is your company

#53
post #49

Earlier quoted context omitted.

It's not predicated on that. It's predicated on risk. I've been a buyer of software and the last thing I want to worry about is a guy gets hit by a bus (figuratively) and then I am stuck.

The irony being that the number of employees a company has is a poor proxy for answering that concern. I think that at most large companies I've worked for (including my current one), there have been projects that had a key employee that would cause the project to screech to a halt if they got hit by a bus.

A project or a running product that I'm paying for?

For the purposes of discussion, I'll agree regardless. For every product I have ever bought, I'll gladly stick my head in the sand and assume the existing employees can take over in the event a person disappears. I can't do that if it's one person.

Re: Asks HN: Solo founders-How to respond when customers ask how big is your company

#54

Earlier quoted context omitted.

Place code in escrow Doesn't help most customers because they lack the expertise to use it. Most people looking to buy software are not in the software development business and don't want to be. subcontract some of the work What about the rest of the work? avoid writing software that only runs when a specific person is constantly tending to it. If it is a hosted solution, someone needs to tend to paying the bill. If…

The "bus factor" analogy is just that, an analogy. It shouldn't be solely taken literally, as in "what do we do if someone important becomes incapacitated". The point of that analogy is to get people thinking about business continuity ( https://en.wikipedia.org/wiki/Business_continuity_planning ) and how to mitigate various types of risks. The keyword being mitigate. One cannot eliminate risk, and no sane customer ex…

"My partner can take care of it" is the easy, all purpose answer for a small startup.

If they want to dig any deeper, you're probably screwed and don't really have a chance at a sale anyway.

About the same result as with, "I can not tell a lie. I run this business from my basement. I know nothing about business or sales or marketing cause I'm just a nerd and I've never done this before and I'm all you got". What the customer hears is, "I'm so fired if this doesn't work out".

I know because I've been there. First rule of business ---Survival is always job #1 and sometimes it involves some compromise; particularly early on. Those who don't understand this probably shouldn't quit their day job.

Re: Asks HN: Solo founders-How to respond when customers ask how big is your company

#55
post #47

I'm guessing most of the people here who are saying "be truthful" have never started a company. Sometimes you just gotta fudge the numbers a bit and do what needs to be done to get your company off the ground. I've been in your shoes and I recommend saying something like "we are a team of 5".

“We are a small company and don’t discuss employee counts as a matter of policy.”

That's a great answer

Re: Asks HN: Solo founders-How to respond when customers ask how big is your company

#56

Earlier quoted context omitted.

The "bus factor" analogy is just that, an analogy. It shouldn't be solely taken literally, as in "what do we do if someone important becomes incapacitated". The point of that analogy is to get people thinking about business continuity ( https://en.wikipedia.org/wiki/Business_continuity_planning ) and how to mitigate various types of risks. The keyword being mitigate. One cannot eliminate risk, and no sane customer ex…

"My partner can take care of it" is the easy, all purpose answer for a small startup. If they want to dig any deeper, you're probably screwed and don't really have a chance at a sale anyway. About the same result as with, "I can not tell a lie. I run this business from my basement. I know nothing about business or sales or marketing cause I'm just a nerd and I've never done this before and I'm all you got". What the…

> If they want to dig any deeper, you're probably screwed and don't really have a chance at a sale anyway.

Once again, is this true across the board? How about questions around data security, authentication, data storage and backups, privacy...those should have solid technical answers, not "my partners and I know what we're doing". I'd run for the hills if I couldn't get a solid answer for any of those things for important enterprise software.

> About the same result as with, "I can not tell a lie. I run this business from my basement. I know nothing about business or sales or marketing cause I'm just a nerd and I've never done this before and I'm all you got". What the customer hears is, "I'm so fired if this doesn't work out".

Would you agree there's some middle ground between "I cannot tell a lie" and "I will do anything to make sure the company survives, including lying to customers"?

Re: Asks HN: Solo founders-How to respond when customers ask how big is your company

#57

Earlier quoted context omitted.

Never try to justify your pricing. The moment you go down that rabbit hole, there is no coming back. You will give 1 reason and they will continue to challenge it. Best way is to just say "It is company policy and I am afraid we cannot work around that. I am happy to discuss alternatives" and go from there.

I find that being a solopreneur (or just as CEO of a small startup), it's hard to invoke "company policy". You can say your board won't go for XYZ, but if your customer knows you own most of the company, that wouldn't fly either. Tips?

Good point. You could replace company policy with "I do offer Escrow option with a customized/enterprise plan at $x/Year with a minimum contract to compensate for the additional overhead, cost and risks that comes with setting it all up"

Then, stick to it and don't try to justify it too much.

Re: Asks HN: Solo founders-How to respond when customers ask how big is your company

#58

I'm guessing most of the people here who are saying "be truthful" have never started a company. Sometimes you just gotta fudge the numbers a bit and do what needs to be done to get your company off the ground. I've been in your shoes and I recommend saying something like "we are a team of 5".

"I'd love to meet the team!"

Right. There’s a practical justification for being honest, which is that if you’re dishonest, you can find yourself in a situation of having to continue the lie, or coming clean and damaging or losing that relationship, or even your reputation.

I have started two businesses that have generated positive cash flow (and sat on a board for one that didn’t), and honesty is the only right answer.

You gain trust in thimbles and lose it in buckets.

Re: Asks HN: Solo founders-How to respond when customers ask how big is your company

#60

Earlier quoted context omitted.

"My partner can take care of it" is the easy, all purpose answer for a small startup. If they want to dig any deeper, you're probably screwed and don't really have a chance at a sale anyway. About the same result as with, "I can not tell a lie. I run this business from my basement. I know nothing about business or sales or marketing cause I'm just a nerd and I've never done this before and I'm all you got". What the…

> If they want to dig any deeper, you're probably screwed and don't really have a chance at a sale anyway. Once again, is this true across the board? How about questions around data security, authentication, data storage and backups, privacy...those should have solid technical answers, not "my partners and I know what we're doing". I'd run for the hills if I couldn't get a solid answer for any of those things for imp…

Would you agree there's some middle ground between "I cannot tell a lie" and "I will do anything to make sure the company survives, including lying to customers"?

Sure. But there isn't much middle ground between success and failure.

Until your small startup is succeeding, you're just a failure in progress. And statistically, failure has the better odds --- probably due to a lot of half hearted attempts aimed at the middle ground.

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