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Ask HN: Are you a single founder ?

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Re: Ask HN: Are you a single founder ?

#51
post #6
post #4

1) Since late June 2006. 2) I have not applied to YC, and do not have plans to do so in the immediate future. (Never say never.) Nothing personal: I love what YC does, but to make the deal mutually beneficial, I'd have to take outside investment in my business, swing for the fences, and achieve an exit in the next few years. These do not match my personal vision for the next few years of my life. 3) My feelings on ou…

patio11, I agree with you that bootstrapping is the way to to - the "Italian restaurant" software company

That Italian restaurant example drives me nuts: the economics of a small trattoria are pretty much night and day from most software products.

Re: Ask HN: Are you a single founder ?

#52
post #51
post #6

Earlier quoted context omitted.

patio11, I agree with you that bootstrapping is the way to to - the "Italian restaurant" software company

That Italian restaurant example drives me nuts: the economics of a small trattoria are pretty much night and day from most software products.

Your missing the point of the analogy. The idea is focus on customer acquisition in a niche rather than trying to go big with VC funding/IPO. You could have just as easily replaced "Italian restaurant" with "local flower shop" or whatever.

Re: Ask HN: Are you a single founder ?

#53
1) Registered the domain in Aug 2008 to do market research and to decide whether I wanted to go ahead with it. That was followed by minor prototyping and learning about the industry. Started working on it full-time a year ago.

2) Never applied. I'm not in the USA anyway.

3) Nope. One of my first customers did want to invest, but I didn't need it.

4) http://www.simplepay.co.za (Online payroll software. Not really applicable if you're not South African. For now...)

Re: Ask HN: Are you a single founder ?

#55
post #52
post #51

Earlier quoted context omitted.

That Italian restaurant example drives me nuts: the economics of a small trattoria are pretty much night and day from most software products.

Your missing the point of the analogy. The idea is focus on customer acquisition in a niche rather than trying to go big with VC funding/IPO. You could have just as easily replaced "Italian restaurant" with "local flower shop" or whatever.

The niche a trattoria competes in is inherently limited by geography, whereas there's no reason a VC funded bingo card creator can't try and muscle in on patio11's turf. The only reason is probably that there is simply not enough money there to support that kind of investment/expected return.

So I guess if there's a fair point in it, it's to go after some niche that has an upper bound to its profitability as a defense against large competitors. In the US, at least, though, chain restaurants make the 'little restaurant' example once again a bit suspect because they end up competing in a niche that can, to some degree, be filled by a large corporation.

I think it's a flawed analogy, and that rather than trying to make it work, it would simply make more sense to discuss the economic factors and business decisions that make something like patio11's company successful.

Re: Ask HN: Are you a single founder ?

#57
1. since 2005 or so.

2. no. I think I applied at one point, but really it is good that I did not get accepted. I'm not really in a 'get big fast and sell it' business; if I were to sell, people would expect to pay about one years earnings. (I'm a little surprised anyone sells at those prices; even with the capital gains advantages of selling vs. paying yourself salary, that seems a little like killing the golden goose. I mean, duck is delicious, but golden eggs, man, golden eggs.)

3. no.

4. http://prgmr.com/xen

I think my case is interesting because I am in an industry that is generally thought to be capital intensive; I buy capital goods and rent them out. The thing is, it lends itself fairly well to a 'buy as you go' strategy, for my little plans, a server pays for itself in about a month an a half. (for the big plans, a server takes 4 or 5 months to pay for itself) Support costs scale fairly lineally with customers, so at first there is plenty of time for consulting, and as time goes on, I earn more and more of my income from the servers, until I can stop consulting (It's been maybe 8 months now that I've been full time)

Note, buy as you go means that you will be turning away customers, and this does hurt you in the eyes of customers. You need to be sensitive to this, but there are some people who will tolerate it. Make sure to /always/ prioritize existing customers over accepting new customers. Even a few bad words in public about you can be impressively damning. Treat everyone as if they were a high-profile blogger. (at this point, nearly all your customers might as well be, in terms of how much influence they have over other customers searching for your business name.)

This is actually kindof hard, because on an emotional level, it hurts when people say bad things about me in public; but responding in a hostile manner is about the worst thing a business owner can do. Offer a refund to every disgruntled customer (at least of the last month) The surprising part is that many people won't take the refund, offering it is often enough. Accepting personal responsibility and explaining what went wrong goes a long way. (even better is to explain how you are going to prevent that from happening in the future)

Key here is finding a market that sells something that is simple for you to maintain (I've been a computer janitor since I was 12. really, there is nothing I'm better at doing.) and then slogging it out until the thing is profitable enough to support you. I wouldn't really call myself disciplined. Stubborn, or maybe arrogant, but not disciplined. It's a slog; you deal with emergencies when they happen, then on good days you go and write code so that there is less work to do, but mostly it's this slog of buying equipment and renting it out until you can buy more equipment. For me, at least, it's a lot easier than showing up at the office every day at the same time.

I've taken a different tack on marketing compared to many in this industry; advertising, I am given to understand, is often as expensive as hardware. Me, I have focused on brand-building to the exclusion of 'user acquisition' advertising like affiliate programs and pay-per-click ads - I don't know if I made the right choice. writing the book was an incredibly expensive brand-building excersise, and I don't know if what I did was the most effective and cheapest way to attract customers, but at this point I can largely ignore the advertising; I've got more customers than I've got hardware to rent, so finally, it /might/ make sense to get VC, but at this point I'm ramen profitable and the number of servers I can buy every month is increasing, so I'm really reluctant to break and let someone else come in and tell me how to do my job. Besides, slow growth means that my mistakes happen in more manageable chunks. I can tell you right now that if I started out in 2005 with all the cash I ended up spending on the thing, I would have failed miserably, due to some early dumb mistakes.

Another key to being a single-founder is knowing people who are both good and willing to work for low wages. I've been super lucky to get some awesome people for wages I could afford to pay. I'm a little worried because I'm almost out of poor but competent friends at this point (most of them are still friends; just they now have the opportunity to work for more than I can afford to pay. If you are going to underpay people, you /must/ be understanding and even happy for them when they graduate to a job with 'real pay' - That is what you are paying them; a chance to have some real experience they can use to get a real job later. )

Re: Ask HN: Are you a single founder ?

#60
post #55
post #52

Earlier quoted context omitted.

Your missing the point of the analogy. The idea is focus on customer acquisition in a niche rather than trying to go big with VC funding/IPO. You could have just as easily replaced "Italian restaurant" with "local flower shop" or whatever.

The niche a trattoria competes in is inherently limited by geography, whereas there's no reason a VC funded bingo card creator can't try and muscle in on patio11's turf. The only reason is probably that there is simply not enough money there to support that kind of investment/expected return. So I guess if there's a fair point in it, it's to go after some niche that has an upper bound to its profitability as a defens…

but what could money improve there? advertising, and ? Corporations are usually not run by subject matter experts; my experience consulting for corporations has been that the decision is usually a compromise that ends up being... suboptimal. I mean, they usually get the job done, eventually, but they spend a lot more money on it than they need to, and they usually don't solve the problem in the most elegant way.

I guess that's the idea with mass-market software. the marginal cost being nearly zero means that the chance of hitting a few out of the park justifies a whole bunch of expensive flops.

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