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Lessons of Y Combinator: Things I’d do differently after 2 startups

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Re: Lessons of Y Combinator: Things I’d do differently after 2 startups

#21

Post by run4yourlives »

nostrademons wrote: post #20
run4yourlives wrote: post #18

Earlier quoted context omitted.

Startups don't need "A crazy idea that most people think is stupid". In most cases, an idea that most people think is stupid is exactly that. Startups need to offer something of perceived value, that's pretty much it. In some cases, it's doing a typical task in a non-typical way, or doing something non-typical altogether (your crazy idea), or marginally improving your typical task in a very typical way. In the end, i…

Startups - like any market - are a parimutuel system. Your payout is determined not just by whether you're right or not, but by how many other people are also right. If you bet on social networks in 2004, you'd be right, but unless you're Mark Zuckerburg or Tom Anderson, you wouldn't have gotten rich off it. So really, you need "a crazy idea that most people think is stupid, but is less crazy for customers than for c…

Agreed, with one caveat: I don't define a successful startup as one that makes you wildly rich. (i.e. given Zuckerburg's "paper" value, I don't consider facebook as being successful... yet)

Re: Lessons of Y Combinator: Things I’d do differently after 2 startups

#22

Post by wumi »

webwright wrote: post #16
nostrademons wrote: post #15

Earlier quoted context omitted.

Surprisingly low or surprisingly high? If you think that's low, consider that 7% weekly growth is roughly 3300% annual growth, something that most companies would kill for. If that can be sustained for 3 years, the company will be roughly 25,000 times larger than when it started.

Yeah, we're pretty damn tickled with the growth (and stickiness-- abandonment seems unusually low for web software, from what I've read). FWIW, the 7% week/week was well before any of the press coverage around YC demo day (and associated splash). We've been 12-14% for the last two weeks. I expect it to settle back to the standard word of mouth level of 7%. Of course, I think we have some clever SEO/viral things in th…

congrats -- wasn't dissing the 7% was just surprised. 12-14% ain't bad :)

Re: Lessons of Y Combinator: Things I’d do differently after 2 startups

#23

Post by webwright »

run4yourlives wrote: post #18
webwright wrote: post #12

Earlier quoted context omitted.

I'm a huge fan of "necessary but not sufficient" qualities like this. A startup needs: 1) Boldness 2) A crazy idea that most people think is stupid. 3) Persistence All of these things seem to be absolutely required for success. But none of them is sufficient. Combine 'em with good "product/market fit" (a la Andreessen) and I think you win.

Startups don't need "A crazy idea that most people think is stupid". In most cases, an idea that most people think is stupid is exactly that. Startups need to offer something of perceived value, that's pretty much it. In some cases, it's doing a typical task in a non-typical way, or doing something non-typical altogether (your crazy idea), or marginally improving your typical task in a very typical way. In the end, i…

I disagree. If everyone knows that an area is an amazing opportunity, then it's probably not an amazing opportunity. Every single runaway success at some point had a whole host of people saying, "That's ridiculous-- it'll never work" on some level.

examples:

1) When google was on its way up, it was a well-understood fact that no one could make real money on search. Oops.

2) When Excite was getting funding, everyone told them that search was dumb. People would do 1 search and bookmark what they cared about (and would never search again).

3) The very idea of youtube (giving away tremendous piles of storage and bandwidth) didn't seem very smart to a lot of people. Plenty of online video startups had failed.

4) Blogger couldn't get more funding and had to lay off their entire team.

5) If I described twitter to you 3 years ago, would you have been blown away by the idea?

6) Salesforce.com was not exactly warmly embraced by the enterprise when they first launched.

7) Marc Andreessen said he was constantly stonewalled by businesses when selling them stuff at Netscape. "The Internet? Inside our network?! MADNESS!"

Hindsight make these ideas seem obvious-- but at the time, they were pretty ridiculous.

As you say, most ridiculous ideas ARE really ridiculous. Thus the "necessary but not sufficient" part.

Re: Lessons of Y Combinator: Things I’d do differently after 2 startups

#24

Post by run4yourlives »

webwright wrote: post #23
run4yourlives wrote: post #18

Earlier quoted context omitted.

Startups don't need "A crazy idea that most people think is stupid". In most cases, an idea that most people think is stupid is exactly that. Startups need to offer something of perceived value, that's pretty much it. In some cases, it's doing a typical task in a non-typical way, or doing something non-typical altogether (your crazy idea), or marginally improving your typical task in a very typical way. In the end, i…

I disagree. If everyone knows that an area is an amazing opportunity, then it's probably not an amazing opportunity. Every single runaway success at some point had a whole host of people saying, "That's ridiculous-- it'll never work" on some level. examples: 1) When google was on its way up, it was a well-understood fact that no one could make real money on search. Oops. 2) When Excite was getting funding, everyone t…

My point wasn't that seemingly ridiculous ideas never succeed, it was that they are not a requirement for startup success.

Re: Lessons of Y Combinator: Things I’d do differently after 2 startups

#25

Post by uuilly »

It's unfortunate, but a polished presentation making a strong case for a large market share is more likely to get you angel funding than a working product with relatively few users. I say this after seeing a bunch of angel forums / VC workshops in the bay area. Many of the "ideal" presentations had no product, no engineers but a "strong management team," a large market, and a path to bigness. You are unlikely to get funded without a grand slam story.

Re: Lessons of Y Combinator: Things I’d do differently after 2 startups

#26

Post by run4yourlives »

webwright wrote: post #17
misterbwong wrote: post #10

3. We focused entirely on product/market fit. I'm curious. In what way did you focus on product market fit? What signs did you look for to point you towards it? Seems to be a very important aspect of success (besides boldness).

This might be a too-fancy way of saying "we focused on what people wanted" (to put it in PG-speak rather than Andreessen-speak). We started with a permission marketing campaign (before we wrote a line of code)-- showing a few screenshots and allowing people to sign up to hear about the launch. That helped us understand how much people wanted it (measured by traffic and conversion of traffic to sign ups). We were imme…

Well done, and thanks for sharing that here.

Re: Lessons of Y Combinator: Things I’d do differently after 2 startups

#28

Post by misterbwong »

webwright wrote: post #17
misterbwong wrote: post #10

3. We focused entirely on product/market fit. I'm curious. In what way did you focus on product market fit? What signs did you look for to point you towards it? Seems to be a very important aspect of success (besides boldness).

This might be a too-fancy way of saying "we focused on what people wanted" (to put it in PG-speak rather than Andreessen-speak). We started with a permission marketing campaign (before we wrote a line of code)-- showing a few screenshots and allowing people to sign up to hear about the launch. That helped us understand how much people wanted it (measured by traffic and conversion of traffic to sign ups). We were imme…

Thanks for the reply. Definitely something to keep in mind.

Re: Lessons of Y Combinator: Things I’d do differently after 2 startups

#29

Post by tptacek »

RscueTime seems like one of the more credible YC startups, with an actual value proposition and a pretty killer initial user experience.

After all the YC help, weekly dinners, and demo day, this article says they're still looking for seed funding. Not an A-round; just seed money.

Re: Lessons of Y Combinator: Things I’d do differently after 2 startups

#30

Post by skmurphy »

webwright wrote: post #16
nostrademons wrote: post #15

Earlier quoted context omitted.

Surprisingly low or surprisingly high? If you think that's low, consider that 7% weekly growth is roughly 3300% annual growth, something that most companies would kill for. If that can be sustained for 3 years, the company will be roughly 25,000 times larger than when it started.

Yeah, we're pretty damn tickled with the growth (and stickiness-- abandonment seems unusually low for web software, from what I've read). FWIW, the 7% week/week was well before any of the press coverage around YC demo day (and associated splash). We've been 12-14% for the last two weeks. I expect it to settle back to the standard word of mouth level of 7%. Of course, I think we have some clever SEO/viral things in th…

With respect, it's a compelling app but it's easy to give something away. The real question is how to wrap a revenue model around your offering. If you base advertising on my on-line behavior it may be viewed as too invasive. Another key attraction is that it doesn't interrupt me when I am in flow, so you are probably limited to presenting ads during the analytics so that I am not interrupted when I am actually working. You've done a good job of addressing privacy concerns so far, but a local app would be even more secure: why not offer a version that competes with http://www.timesprite.com/ the attraction for me is that their revenue model is clear and I can rely on them being around for a while. And I would be glad to pay $40/yr for rescuetime as is if I knew that would allow you to persist in your current privacy model. Your situation is unstable until you get to at least cash flow positive. It's a great app, but I would worry a lot more about adding some kind of paying customers instead of more free users.
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