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Part II: The failure points from $5M to $100M in ARR

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Re: Part II: The failure points from $5M to $100M in ARR

#71

Post by HatchedLake721 »

fakedang wrote: post #55
xenadu02 wrote: post #53

As employee #36 I lived through some of these things first hand and definitely agree with them (I think we were over 200 people when I left). It was painful going through the enterprise focus transition along with a nonsensical reorg imposed by the aforementioned Big Tech VP. One day we had focused platform-specific teams working on satisfying customers, the next we were moved to cross-functional feature teams and fo…

As an outsider to the tech industry, it seems to me that the Product Manager/Product Owner role seems to be not only the most BS role, but also the most damaging role? Considering that I saw a post a few weeks back, I saw a similar post (I think on HN itself) where PMs were being fired en masse, I wonder if there is any real utility with the product team, or if it's just a holdover from Google doing its thing back in…

Of course there is.

If not for the PM, who will speak with the customers, gather, analyze and understand their needs and problems?

There should be a person that drives the product in the right direction based on customer conversations.

In the early stages founder is the product owner.

But as the company grows, the role of the founder/CEO changes. You now build the people, and people build the business.

Engineers or CEOs building features no one asked for is IMHO one of the major reasons lots of tech startups fail.

Awesome idea, cool product, but no one asked for that feature you were building for 2 months. (guilty here myself)

Re: Part II: The failure points from $5M to $100M in ARR

#72

Post by LambdaComplex »

HatchedLake721 wrote: post #71
fakedang wrote: post #55

Earlier quoted context omitted.

As an outsider to the tech industry, it seems to me that the Product Manager/Product Owner role seems to be not only the most BS role, but also the most damaging role? Considering that I saw a post a few weeks back, I saw a similar post (I think on HN itself) where PMs were being fired en masse, I wonder if there is any real utility with the product team, or if it's just a holdover from Google doing its thing back in…

Of course there is. If not for the PM, who will speak with the customers, gather, analyze and understand their needs and problems? There should be a person that drives the product in the right direction based on customer conversations. In the early stages founder is the product owner. But as the company grows, the role of the founder/CEO changes. You now build the people, and people build the business. Engineers or C…

> If not for the PM, who will speak with the customers, gather, analyze and understand their needs and problems?

The engineers? i.e. the people who will actually be fixing those problems?

> Engineers or CEOs building features no one asked for is IMHO one of the major reasons lots of tech startups fail.

So why put another layer (the PM) in between the engineers and the customers? Sounds like an unnecessary game of telephone to me.

Re: Part II: The failure points from $5M to $100M in ARR

#73

Post by toss1 »

methyl wrote: post #51
toss1 wrote: post #41

Earlier quoted context omitted.

Yup, this is the one thing that struck me wrong in the essay. After spending multiple paragraphs about how they found that they had to dig much deeper into the background of every exec, getting 10+ references from reports, peers, and their managers, and developing specific lists of red flags . . .they end the section with: "Takeaway: Always trust your gut on people. " Yes, for sure, if you 'gut' tells you something i…

I think it’s trusting your gut when it says „no”, not that you can trust only your gut when it comes to hiring. Wasn’t clear but that’s how I understand it and agree.

Indeed likely!

But in an article for publication it seems best to say something like "Trust your gut when it says "No", and get lots of data when you don't have strong gut feelings", rather than just that general trope...

Re: Part II: The failure points from $5M to $100M in ARR

#74

Post by fullstackchris »

LambdaComplex wrote: post #72
HatchedLake721 wrote: post #71

Earlier quoted context omitted.

Of course there is. If not for the PM, who will speak with the customers, gather, analyze and understand their needs and problems? There should be a person that drives the product in the right direction based on customer conversations. In the early stages founder is the product owner. But as the company grows, the role of the founder/CEO changes. You now build the people, and people build the business. Engineers or C…

> If not for the PM, who will speak with the customers, gather, analyze and understand their needs and problems? The engineers? i.e. the people who will actually be fixing those problems? > Engineers or CEOs building features no one asked for is IMHO one of the major reasons lots of tech startups fail. So why put another layer (the PM) in between the engineers and the customers? Sounds like an unnecessary game of tel…

Yes, I continually dislike why engineers are so discounted in terms of parsing customer problems... we build the damn things, we also happen to know how to use the mobile apps, web apps, and desktop apps we build. I'm likely heavily biased and bitter at this point, but I've yet to work with a good "product manager" - and I still don't know what a good one would look like or do.

Re: Part II: The failure points from $5M to $100M in ARR

#75

Post by [deleted] »

LambdaComplex wrote: post #72
HatchedLake721 wrote: post #71

Earlier quoted context omitted.

Of course there is. If not for the PM, who will speak with the customers, gather, analyze and understand their needs and problems? There should be a person that drives the product in the right direction based on customer conversations. In the early stages founder is the product owner. But as the company grows, the role of the founder/CEO changes. You now build the people, and people build the business. Engineers or C…

> If not for the PM, who will speak with the customers, gather, analyze and understand their needs and problems? The engineers? i.e. the people who will actually be fixing those problems? > Engineers or CEOs building features no one asked for is IMHO one of the major reasons lots of tech startups fail. So why put another layer (the PM) in between the engineers and the customers? Sounds like an unnecessary game of tel…

[deleted]

Re: Part II: The failure points from $5M to $100M in ARR

#76

Post by JumpCrisscross »

dilyevsky wrote: post #17
lbriner wrote: post #7

A common theme seems to be founders who want to keep all the cool stuff about being a small business while they scale to the ARR of a corporate. It can't happen. 1000 people don't all care about some new feature shipped by someone over in the payments team so don't subject them to it. Most of us have been there in the painfull all-hands meeting falling asleep because the more people you have, the less they will care…

I could see it happening in b2c just not your regular b2b saas

> could see it happening in b2c just not your regular b2b saas

PlanGrid is B2B SaaS.

Re: Part II: The failure points from $5M to $100M in ARR

#77

Post by raincom »

This while A/B/C are just code words for the right pedigree. Say, Mr. X worked for a no-name company, got a degree from some state college. Such a person can't recruit candidates whose pedigree is Ivy league credentials, and top tier companies. You can see this often in terms of successful exits for many start ups: people with right pedigree (that is, right network) can bring more multiples for their startups, than others do.

Re: Part II: The failure points from $5M to $100M in ARR

#78

Post by jrockway »

kolbe wrote: post #35
Ataraxic wrote: post #23

Earlier quoted context omitted.

I wonder if you have more context or numbers. What companies are you thinking of. I remember companies like WeWork and Coinbase dropping in valuation but what more traditional Saas companies have run into this sort of hurdle? I'd argue that ARR is still a good measure just not the growth at all costs, w/e it takes to get toe 100M ARR/Unicorn status anymore. After all, sales is sales and if you don't have repeatable s…

There are many shenanigans that startups can play to juice ARR to render it meaningless. The idea isn't terrible, but that's why I invoked Goodhart's Law. > After all, sales is sales and if you don't have repeatable sales you probably don't have much of anything. That's right, but you're missing the key that it's a necessary, but not sufficient requirement. When the pool of investments is 90% with ARR are honest and…

What are some of the shenanigans to juice ARR?

I can think of a few; 1) make 2 year contracts cost the same as 1 year contracts (so you're lowering the price by 50% but get the number you want for your report today); 2) give incentives equal to the value of the contract (our software costs $30k but we'll give you $30k of AWS credits).

Anything else to watch out for?

Re: Part II: The failure points from $5M to $100M in ARR

#79

Post by JumpCrisscross »

sokoloff wrote: post #11
oragnediscussy wrote: post #6

Earlier quoted context omitted.

The point is that B players have a very hard time ever recruiting A players and actually almost always hire people that are worse than themselves (i.e. c players). This is very true and should be something founders watch out for very carefully as they scale.

"Yes and..." I think a lot of times this is intentional . A player wants to hire A players so the A player can more effectively beat their rivals in the marketplace. B player wants to hire C players so the B player can more effectively beat their rivals in the company.

> B player wants to hire C players so the B player can more effectively beat their rivals in the company

I’m sure this is the case at some companies. But in my experience, it’s because the B player is as bad at hiring as they are at their job. This repels A players, who can smell bullshit, leaving a pool of Bs and Cs and guess of which there are more.

Re: Part II: The failure points from $5M to $100M in ARR

#80

Post by candybar »

metadat wrote: post #70
candybar wrote: post #67

On the whole, this is a fairly good write-up but this is just not right: > Being at a startup is hard in a way that is almost indescribable to anyone who hasn’t experienced it. Being at a startup as an employee isn't necessarily hard. You hear this type of "startup is so hard" because running companies well is hard and successful startups will often grow faster than their founders are able to grow their own ability t…

Most non-startup jobs tend to be well-defined and come with a pre-existing business strategy and existing resources, such as a project codebase and existing at least semi-working solution to which one can inspect and add to. Contrast this with startup companies, where it's often required to explore and build completely new things from the thin air of the ether. I'm not saying other jobs don't also have elements of th…

A lot of startups jobs are well-defined and have a pre-existing business strategy. In fact, in my experience, startups can even be much less fluid in this sense than big companies, because startups are funded for a much narrower mission based on a very specific vision, whereas big company often has a huge scope within which there's tons of ambiguity as to what to pursue.

A lot of these types of statements generally are made by founders whose relative role at the startup (C-level) is much senior than their past or would-be role at larger companies (entry-level or close). Or early employees who got to be much more senior within a startup than they had been at a larger company. This just isn't an accurate statement for the rank & file or when you compare people at similar levels across companies.

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