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A two-person startup already uses twenty-eight other tools

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Re: A two-person startup already uses twenty-eight other tools

#81

Post by csomar »

matsemann wrote: post #24

Not exactly the same, but I have sometimes wondered how many startups are just burning other startups' money, and would collapse if VCs tightened the belt. For instance, startup X seems profitable but all revenue is from other startups not making money yet. Like a big ponzi scheme of sorts. Most products mentioned in the article are now mainstream, but for lots of them a few years back they were small and only used b…

It's a valley thing, and then maybe smaller services run by digital nomads. Most of the startups around the world are trying to solve real local problems by emulating successful ones in the USA or China.

Re: A two-person startup already uses twenty-eight other tools

#82

Post by mcintyre1994 »

matsemann wrote: post #24

Not exactly the same, but I have sometimes wondered how many startups are just burning other startups' money, and would collapse if VCs tightened the belt. For instance, startup X seems profitable but all revenue is from other startups not making money yet. Like a big ponzi scheme of sorts. Most products mentioned in the article are now mainstream, but for lots of them a few years back they were small and only used b…

I used to think this every time I downloaded a free mobile game. Probably 90%+ of ads in mobile games were for other free mobile games that presumably also have the same ad-supported model and the same sort of advertisers. It feels like there's a few games making heaps from IAPs and everyone else is just advertising in a pyramid toward them while also using IAPs in a way that makes their own game basically unplayable.

Re: A two-person startup already uses twenty-eight other tools

#83

Post by oarsinsync »

wolco wrote: post #17
Cau5tik wrote: post #6

Sublime Text isn't free. https://www.sublimehq.com/store/text

You can use Sublime Text 2 forever. https://www.sublimetext.com/2 Sublime Text 2 may be downloaded and evaluated for free, however a license must be purchased for continued use. There is currently no enforced time limit for the evaluation.

You can use use it forever without a license, but you shouldn't.

There are lots of honour based / social contracts that essentially function because enough of us abide by them. If enough people do not, they go away.

Or as the saying goes, "this is why we can't have nice things."

Re: A two-person startup already uses twenty-eight other tools

#84

Post by jmeister »

matsemann wrote: post #24

Not exactly the same, but I have sometimes wondered how many startups are just burning other startups' money, and would collapse if VCs tightened the belt. For instance, startup X seems profitable but all revenue is from other startups not making money yet. Like a big ponzi scheme of sorts. Most products mentioned in the article are now mainstream, but for lots of them a few years back they were small and only used b…

PG talks about noticing the same phenomenon - when at Yahoo during the dotcom bubble - in the beginning of this article:

http://www.paulgraham.com/bubble.html

Re: A two-person startup already uses twenty-eight other tools

#85

Post by PeterStuer »

luckylion wrote: post #67
mxschumacher wrote: post #61

Earlier quoted context omitted.

non-technical staff need access to tools like Notion, Slack and Hubspot, the bills add up quickly

They do, but it only matters if you're working in a region with very low wages or you have a lot of people that only work for a few hours. I see those tools mostly like a fast computer, good internet, drinks and snacks etc. They really aren't that expensive compared to the employee but they will help the employee be much more effective.

I see this argument get trotted out a lot. Compared to , adding service x,y and z percentage wise is just a small increment.

The problem that gets easily overlooked is that compared to the costs being made, the profit in many cases is also just a small percentage of the revenue, and the small % increment in costs can mean a large % decrement of profits. You should always compare incremental cost of revenue to the margin, not to the base cost.

Now if you are running a profitable SaaS business with 80% margins, a 4% increase in spend might not mean the end of the world even if it was wasted on spurious licenses or other frills, but if you are a healthy service business operating on 12% margins then that 4% increase will reduce your profits by a massive 33%.

This doesn't mean that you have to make do with the bare minimum and skimp on decent hardware or development environments, but it also means the marginal productivity/retention/quality increases must in the end be worth it in terms of increased aggregate profits, and not be justified as 'you already pay me 5K a month, so whats another 250 for ...

Re: A two-person startup already uses twenty-eight other tools

#86

Post by csomar »

watt wrote: post #31
DocG wrote: post #19

Company I work for has grown to 10 people and the pricing per member things are getting out of hand. We had to drop some services, bc if there is a service that costs 10 per user for just one feature, it's they add up real quick (looking at you slack for example). Some services have free tier or special pricing if it's only couple of members, but once you exhaust that, you are dropped to full pricing. I think there i…

No reason to look at Slack like that. It may be well worth the price. When company really starts using Slack it replaces the whole communication system of company, think at the level of replacing the complete Exchange/Outlook system, the whole intra-company email. It's pretty big deal. And that's why they can charge that level of subscription.

> When company really starts using Slack it replaces the whole communication system of company, think at the level of replacing the complete Exchange/Outlook system, the whole intra-company email.

That's exactly why I dislike Slack. You lose the whole history of your communication because Slack history is not very navigable.

Re: A two-person startup already uses twenty-eight other tools

#87

Post by girishso »

moksly wrote: post #41

I’d personally drop gsuite, trello and slack and get a office365 essentials plan. I know, because I did, and it’s so much easier to manage and it’s also cheaper. I’m not going to say the tools are better with Microsoft, because to me it’s really much of the same where I genuinely don’t really like any of the options. But because it’s not worse either, you kind of get used to it. I think if you got the full teams/one-…

MS Teams is very buggy/has less features, we're researching other tools atm.

Re: A two-person startup already uses twenty-eight other tools

#88

Post by tonyedgecombe »

Hnrobert42 wrote: post #33

I am the CIO of a mostly remote, cybersecurity startup (50 FTEs). I balance between not single-threading all choices through me and not letting things get too out of hand. That means no one is every really happy. E.g., we use Uberconference for videoconferencing. We thoroughly looked at a bunch of others and chose UC for its functionality, price, and simplicity (every conference gets a simple phone number, no stupid…

I wonder how much of this is a lack of communication from your CEO.

I've worked for companies that operated on very lean budgets. Everybody in the organisation knew what it was, it wasn't much fun but it was a clear policy.

There is no reason you can't do the same here, the objectives might be different but unless people up and down the organisation know what they are you can't expect anything other than anarchy.

Re: A two-person startup already uses twenty-eight other tools

#89

Post by oarsinsync »

> FounderPhone (free) - Send and receive texts and calls directly in Slack. Free since we built it ourselves :)

If the service you're providing is valuable, you should pay for it too. You don't need to actually funnel the money through your payment processors giving them a cut, just do it as an accounting exercise, showing the revenue on the books.

It also helps you quantify your pricing yourself. If you're not willing to pay $x/month for your service, why would your customers? What do you need to change to make it worth $x/month to you? Do you need to change $x to be $x-y (or $x+y? Are you under charging?)

Anyway, great list, great post, thanks for sharing, and best of luck with your product!

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