Lessons of Y Combinator: Things I’d do differently after 2 startups • Hacker News Board

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

#31

Post by skmurphy » Fri, Apr 04, 2008, 6:25 AM UTC

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…

If you are giving a product or service away I don’t think you can assert that you have “product/market fit.” You have a very compelling application, but until you figure out who is going to pay you for it, and how much it’s worth to them, I don’t think you can put a check in the box next to “product/market fit” since you don’t pass this test from the same Marc Andreessen post you reference ( http://blog.pmarca.com/2007/06/the-pmarca-gu-2.html ):

And you can always feel product/market fit when it’s happening. The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account.

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

#32

Post by webwright » Fri, Apr 04, 2008, 6:32 PM UTC

skmurphy wrote: post #31

webwright wrote: post #17

Earlier quoted context omitted.

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…

If you are giving a product or service away I don’t think you can assert that you have “product/market fit.” You have a very compelling application, but until you figure out who is going to pay you for it, and how much it’s worth to them, I don’t think you can put a check in the box next to “product/market fit” since you don’t pass this test from the same Marc Andreessen post you reference ( http://blog.pmarca.com/20…

Well, revenue is a beautiful thing, certainly. You can define product/market fit however you like-- but by that definition, most consumer apps don't have it. A customer can "buy" a product with money or their time/attention. I'd say both YouTube and Facebook have found a great product/market fit. And Gmail. Andreessen found a great product/market fit with the Netscape browser, but monetization of it really only came in the form of a few bizdev deals (which didn't cover costs, I don't think). Money, in many of these iconic companies, was NOT piling up.

Regarding my company, we focused initially on a non-paying market (individual lifehackers), as that was easiest to build for and launch a rough beta for. They "pay" in blog posts, tweets, word of mouth-- they've driven every single business lead we've gotten. Now we've got a new market (teams) that we have to find a "fit" for. Wish us luck!

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

#33

Post by webwright » Fri, Apr 04, 2008, 6:54 PM UTC

skmurphy wrote: post #30

webwright wrote: post #16

Earlier quoted context omitted.

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 worki…

Heh-- if it's easy to give something away, why is it that so many free web apps/sites don't have growth? Or happy users?

It's damn hard to give something away online, as it turns out.

But I do agree-- while free accounts will always exist at RescueTime, our future is NOT as an ad-supported biz. :-)