HN Office Hours with Michael Seibel and Aaron Harris | Hacker News Reader

HN Office Hours with Michael Seibel and Aaron Harris

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Starting at 11 am PST today, Michael Seibel and I are going to do online office hours. If you'd like help with your startup, please post a top-level comment with a one or two sentence description of what you do and the first thing you'd like to talk about.

Update: We're just going to try to answer as many questions as we can. Let's get started!

Michael: hey folks really excited to meet as many people as possible and talk about startups!

Update: We've gotta run, but this was great. Thanks so much and enjoy the weekend.

View on HN

We're building a new kind of bank - Yes, an actual real bank. We're starting with a small acquisition and re-building the underlying tech from the ground up. The ultimate goal is creating a bank consumers would actually love to use.

Think of paying your bills via "push" vs "pull" so instead of simply paying someone on autopay and authorizing them to debit your account at their will we'd actually say something like "hey, PG&E wants you to pay $55.86, would you like us to send that over now" when you respond they'll get your money but not your actual account info.

Basically instead of using the typical system of handing out your actual account numbers we generate an account number that works for only that vendor and if that account number ever got stolen it wouldn't matter because its locked down on a unique vendor or amount basis.

The main pain point for us right now that we'd like to talk about is re-thinking savings and loans and what the largest consumer pain points are in modern (or lack thereof) banking.

I think there's a huge need for an actual new bank that is built on technology. It's one of those obvious big need problem.

One of the big problems founders usually run into when doing this, though, is dealing with the mass of regulatory requirements involved. How are you thinking about this? Which of the many different services offered by a bank will you target first? Is it going to be that payments piece you are describing?

One of the hardest parts of the regulatory requirements is the Capital on hand and getting a federal charter.

Because we've targeted a handful of very small institutions with those charters in place and the banks are in good standing it actually allows us to skirt some of the pain points of trying to charter one ourselves but also allows us to hit the ground running on the technology front.

We think the bill pay/secured payments could be the one to target first because we think there is value in just being a great traditional savings and loan bank. However, the main thing we're thinking through now is if this is a big enough segment to gain real traction with consumers or if we need more of a WOW product for mass adoption.

Yeah, the capital requirements are painful, as is the entire process behind getting a charter.

How are you figuring out what people actually want? What have you built and how have you started getting it into the hands of customers?

The way we've figured out so far is really learning from a failed past experience. We built a product in the past which was a kind of Yodlee or Plaid competitor (http://spout.co) and learned alot of what consumers cared about along the way while never hitting an actual nerve with clients who were willing to pay us money.

I think we started like most people would here, by partnering with existing banks. So we have a signed pilot with one major bank and are working on a partnership with another one. But knowing how slow they move we started looking at other avenues that could make a more immediate impact.

The pilots are around lost or stolen cards and being able to have your autopayments as proxy cards so when the number of the card on your Target or Home Depot account gets stolen the number of the card in your wallet doesn't have to change and vice versa.

What we're working on now is a way for people to identify bills in their email that we can then process and remind them when they're due and how much money they may have left in their accounts when paying them. This allows us a couple of opportunities.

1. To get consumer eyeballs on something and to see if people would like to pay bills via a simple Venmo-like product.

2. Building a base of potential users for an actual bank launch.

In that vein some of the underlying tech behind an actual bank itself becomes the most interesting part of the problem once a transaction is approved.

But until we get behind the kimono we really don't think theres a way to know how much we'll have to build or improve with the underlying tech and systems but we suspect what is built can be leveraged in several ways.

What we do expect is a complete questioning and re-thinking of how every single thing is done from how customers deposit money to how we issue new accounts and how underwriting is done on loans of all types.

That seems like a pretty good way to start getting relationships with customers. How is it going? What have you learned from seeing how they use your product?

Well since we started with the pilots I’ll go there first. They progressed very quickly at first. One meeting turned into three which turned into 5 more and then we actually got wireframes and mockups made. And then everything seems to go into super slow-mo.

When that happened with one bank we used the first relationship to leverage into a second one with another large bank, after going through a near identical process we realized that big banks all move much slower than we can (even the ones that claim they can move very quickly).

At that point we started pursuing relationships with smaller banks and those seem to be significantly faster albeit still very slow in comparison to a startup.

The most recent revelation with the bill pay stuff has literally been over the course of the last 7-10 days because we threw out what we thought was a hairbrain idea to buy a small bank to an investor we knew well.

He got excited and offered to fund the entire deal if we could find one that we thought could work well.

That kind of kicked ideas into hyperdrive about what we could build to attract users now instead of waiting, and the tool to identify bills within emails was thought up and began progress on just so us and some of our friends can try it.

It’s not a launched product yet, but its close to something we could stick in the chrome store as an extension and see the feedback we get.

I don't think you need to partner with a bank to start making progress here.

I was thinking about this recently - there is a need for a meta banking service - basically a p2p banking service much like Venmo -- but also allowing for vendors.

The actual funds can still be housed in a traditional bank - but you can still have an account or CC number which you would give a vendor.

Whenever the vendor attempts to charge your CC number the amount goes on escrow hold only in the meta-space until you the user will auth it to actually come out of your account.

It sits between the real bank and the vendor and you and gives one more control over their money.

Thats exactly the idea that got us to this point Sam.

To be honest we had no intent of sharing this much publicly before there was more to play with out there but we couldn't pass up getting some advice from Aaron and Michael as we've been going through this process and trying to figure out more pain points for the end users.

I want to have integrated books. why can't a bank just sell me the invoice, payroll etc. services so I don't have to import them. Rules for employee spending. employee X's debit card can only buy from these stores fort this amount. Employee Y has limit of $500 per day. and I should be able to go to my smart phone to change the rules.

We're planning on exactly that ... a dashboard for employee spending is a BIG part of how we see the future

Cn I contact you and give you all my personal pain points, I have actually been thinking about this for months -- but only internally. I'd like to vent and give you some context as to why.

Ill gladly sign an NDA - you actually dont need to tell me too much - but I'd like to just brain dump on you in the hopes that my issues will be addressed by someone.

I want to opt out of the traditional banking system 100%.

please email me ... no NDA needed - z@zbruhnke.com - would love to chat

I'm curious about your model versus something like Aspiration [1] that is partnering with Radius Bank? Do you need to own a bank to provide the service?

[1] https://www.aspiration.com/summit

The short answer to this is that by partnering with a bank (we have before and will continue some relationshops we've already started) you are limited by their underlying technology platform in the data you get, the data you pull out and anything you'd like to do with that information. Even how you'd like to show it to the customer.

Everything is vetted through their counsel and their management team and your hands are always tied by their wishes.

While you might be able to find a super innovative bank that allows you to have some creative freedom its really the difference in owning a home vs renting a home (even if you have a very lenient landlord).

When you own it decisions are yours to be made, good bad or ugly, when someone else does there is always someone to answer to and there is always a period of time that has to pass between thought and action.

That period of time in a small and nimble startup we believe is the difference in success and failure

This sounds great. What type of fees are you considering?

to be honest Cory the last thing we have thought about so far is fees.

In all likelihood we'll slash current fees and get down to the nuts and bolts of what makes our customers tick, we'll re-think our lending practices and try to find risk-averse loans that make sense for us and our customers and allow us to continue to be a stable bank while becoming something the average customer is proud to work with

Lets hope you can innovate on the "overdraft business model" and offer people to buy into a credit card as opposed to egregious graft on over drafts.

Further - you should have full transparency in charge ordering.

The method by which banks order charges to algorithmically produce the most overdrafts should be a capital crime.

I used to bank at a CU and they posted their monthly overdraft profits on the wall: ~$250,000 per month they charged their customers in overages. When 2008 hit, this number balloned to ~$500,000 PER MONTH that people were paying in overdraft because everyone was getting fucked so hard by the banks.

On paper I make a lot. I would literally pay a sizeable amount to have a true banking partner that actually had my best interests at mind and wasnt trying to rob me.

A friend of mine recently complained that she had dropped to $22.00 in her BofA account, which had a $25 min balance req. They then charged her a $35 fee for being under $25 - this caused her to go negative, and then for being negative they charged her an additional $35 PER DAY.

Are you creating a 'traditional' bank or considering a Credit Union model?

(Should have read further down :), looks like 'traditional' bank - please correct me if I'm wrong.)

we are buying an actual bank, its not a credit union we're just buying a small one in good health and with a charter already in place.

The idea is that we can expand from there, but this is not something we are trying to form and have a new charter issued, this is continuing on an existing bank that we hope to be able to use as a testing ground for our ideas with actual customers

I'm really curious because I've heard this idea of starting a startup by buying an existing bank a few times on HN - has anyone done this before?

yep - http://dealbook.nytimes.com/2014/12/13/small-bank-in-kansas-...

We tried this at Daltic and I know Standard Treasury (YC) tried this as well.

Buying a small bank with a healthy federal charter is definitely the way to go over trying to start a new charter (FDIC hasn't given out a new charter in years and even if they do, de novo status is very cumbersome). The real challenge is getting around the Bank Holding Company Act with respect to raising capital. Basically, if any entity has a significant stake in a US bank (5-10% can trigger this) they are subject to BHCA which includes scrutiny from federal regulators (Plural!) over your books and a legal duty to bail the bank out. Our idea around this, consulting with a top financial attorney and consulting firm, was to get a consortium of wealthy individuals who would not exceed the limits individually and wouldn't be "acting in concert" with each other (which also triggers BHCA).

But even after this, any major shift in the bank's operations, including a re-architecture of technology is subject to regulatory oversight, similar to de novo status. Also, not to mention background checks from not only the FBI but also the CIA. Replacing management (which you probably want to do) is also a major change in bank operations. You also need a CEO who the regulators approve, and has previous CEO-level experience at another charter. We also had someone like this lined up.

We got pretty far in this process, but decided to put our efforts elsewhere. Seems ST did as well. Curious if you've found the same things, happy to chat further about what we learned (email in profile).

Edit: Of course, all the fun begins once you successfully acquire a charter. The real business in acquiring a bank is not to make money on loans. It turns out, despite the monopolistic access to cheap capital from depositors, non-bank lenders do a much better job at making high margin risk-adjusted loans (see https://foundationcapital.com/fcideasfintech). I believe the real opportunity for a tech-first bank is to be a whole sale and commercial bank, and tackle the $300B+ treasury services industry.

Already emailed you ... looking forward to a chat

What about the following scenario:

They buy this chartered bank.

They make a mechanism for certain types of users to create accounts -- lets say only those with a valid HN account with a karma and age of over X + Y

I create the account and get the account and routing number

I then use this to direct deposit some portion of my pay into this account.

I have no access to the account aside through their meta app.

I give full autonomy to their bank and app to the funds in that account -- and I only get reports on usage and spend through the app - and I gate keep all transactions with a yay/nay -- but I never have access to the account itself in the chartered bank.

Instead, I just must commit to depositing say $1K per month in the account.

In the app - I can then only sign up for transaction types or vendors that fit within that particular deposit level.

They don't raise money for the bank at all.

They raise money for the app only.

(needs tweaking -- but the seed of what I mean is there)

unfortunately there are regs about chartered banks doing non-banking activities ... we'll talk more over the weekend, but I can give you way more details

I assume you've read this and are familiar with what happened with Internet Archive CU:

https://blog.archive.org/2015/11/24/difficult-times-at-our-c...

Clearly buying a charter is the same model as starting a bar in SF these days; buy one as no new ones will be forthcoming!

This is why I want to opt out of the traditional banking system altogether.

Please provide a method for me to request my employer to pay me via bitcoin.

The whole system is corrupt.

Not very thoughtful 2c: success or failure of a bank is driven more by where you choose to invest your capital than trying to improve the consumer experience and secure deposits. Due to the way the system is set up, the consumer is almost irrelevant in the equation. So while their might be some margin to squeeze in improving the consumer experience, it's probably insignificant vs. say, picking the right bundle of mortgages to buy.

What about building a frontend as a service and selling it to other banks? That sounds like a better way to focus on a tech/product edge.

Hi Michael and Aaron,

I built Supertask (http://supertask.co/) to make web automation easier and more accessible. Supertask allows users to write shareable, composable automations that make testing webapps and repeating complicated workflows a breeze.

Automation scripts are written in a new intuitive language called Flytrap, and are interpreted by a library called Flytrap.js (https://docs.flytrap.io/). Each automation has its own secure url and can be referenced by other scripts, allowing for code re-use.

I'm curious as to your initial thoughts on the product and whether or not my pricing model aligns with what you might expect. Pricing is hard!

Additionally, at this point I wonder about the opportunity cost of putting effort into applying to/going through an accelerator (assuming I could even get into one) since the product is basically built, and the most important thing is gaining initial traction. I lean towards plowing ahead with trying to gain customers. But obviously, it's a daunting road especially as a solo founder with a 9-5.

I am in beta so no one is actually being charged right now.

Thanks for checking it out!

bill@supertask.co @supertaskco

Hi Bill - How many people are using supertask right now?

Just one: me. I've been in stealth mode and I basically "finished" building the website within the last week and have done no advertising (in fact this is the first time I've talked about it online). That leads to the obvious question of how to acquire more customers for a Saas product (which ties to my accelerator question). I'm hoping to gain some insight on the product's broad viability from this post and maybe a ShowHN. People who I talk to in person love the idea and are enthusiastic but none are really in a position to buy it. Thanks for the reply!

I think you should totally do a ShowHN and product hunt. The first test is to just get it in front of people and see what they do with it and what kind of feedback they have. This won't happen magically or automatically. Good luck!

for early users you might want to see if people are searching for something your service offers. post an ad and get some users. probably expensive but I would count that as something might not scale just to get initial users.

Yep, a good idea and I'm currently looking at ad rates for the product. Just initial users who can give me some product feedback is my main goal for now. Thanks!

Been looking for something like this!

Does it basically replace the need for Selenium.

Let me share this with my CI eng from my last co who was using a lot of selenium to test the webapp for QA.

Thanks!

Thanks! That's exactly what I'm shooting for. It is meant to be a substitute for Selenium while making it easier to create and share them! I appreciate the reply and would love to hear your coworkers's feedback, good or bad!

Hi Michael and Aaron,

I'm the co-founder of StayInTech.com (https://stayintech.com/), a career website for women in tech.

We built this website for skilled female engineers looking for a new job, but we seem to appeal to a wider audience than we initially planned. We have lots of male users, and also women who are just starting out in tech. Is that a problem, does it matter in the long run? Should we address our target audience more clearly?

Sounds like you have a great problem. One of the funny things about building products is that you often don't know who your users are going to be until you actually release. This is why we tell companies to launch as fast as possible, and not spend too much time thinking about what might happen before they have any information about how users interact with what they've built.

In your case, your company's goal is to help people get jobs (it seems). As long as you can do that, do it for every user that wants your help. You may have to adapt your messaging to fit the broader base, but that's a good (if hard) thing. If you find that widening your approach hurts your ability to get people jobs, then you'll probably have to change things up.

Thanks Aaron, yes our goal is to 1) help people get jobs and 2) help companies to increase diversity of their workforce.

Another issue is how to retain users. Once a user finds a new job, and is not looking for a new one for a while, how do we keep them coming back to the website? I guess with great career content? Do you have any other ideas on how to keep users coming back?

This is one of the really hard parts about companies focused on hiring - your frequency of use is super low, which makes repeated engagement tough. Content is one way to do it, but this is the kind of thing you'll need to experiment with quite a bit to get right.

One of the cool parts here is that I don't think anyone has really figured this out over the long run, which means there's a massive opportunity up for grabs.

Thanks again Aaron. Here are my last questions. :)

1) What are your biggest worries about companies focused on hiring? What type of problems do you foresee for us in the future?

2) What was your initial reaction when visiting our website? Was there something that annoyed or puzzled you?

This sounds similar to dating sites. A happy user is one who doesn't need you anymore!

The thing is, dating sites solve a known problem that a lot of people have, but by no means does it end there. Relationships are hard and take work, where are the apps that help build strong 1-1 connections?

Same thing for you. Increasing workplace diversity is awesome, but hiring is only a tiny part of that. I'm sure that many of your users face similar challenges being a minority in their work environment. How can you bring them together to solve those problems once they have their job?

Starting a new reply thread because we nested too far.

I think my biggest fear is the exact thing we just talked about: frequency. Creating long term customer engagement is super hard. I think it's also hard for recruiting cos to build distinct and valuable brands as opposed to becoming commoditized resume lead gen.

One question I had on hitting the site was "what is the main purpose here?" It has the feel of a content site, but your goal is to get people hired.

This was very useful, thanks! We will try to improve our message, figure out how to provide more value for our users and recruiters, and in the long run explore how to build a valuable brand.

Many thanks, Aaron!

I'm a co-founder of a website for Australian high school students. It's a forum-based community where students help each other, share resources, and make friends by bonding over the high school experience—especially for students in their final year as they study for our equivalent of the SAT.

For the past couple of years, we’ve averaged more than 350k users, 500k sessions, and 1.5mil page views per month (Google Analytics). Traffic peaks every year during the final exam period and after the final results are released, when the average session duration sometimes exceeds 8 minutes.

It’s a thriving community. Can it be a thriving business? Some of the big obstacles to using traditional business models are:

(a) students don’t have much money;

(b) students really dislike ads; and

(c) advertisers apparently see better results from programmatic advertising platforms than from direct campaigns with us.

We’ve experimented with things like selling premium notes and resources; partnering with tutoring agencies; and running seminars, all of which appealed to students, but small margins meant that revenue was very modest.

What other ways might there be to tap into the value that is inherent in a community like this without detracting from the user experience? What else should we be thinking about?

What have your experiments looked like? How were you measuring them, and at what rate was your revenue growing? What's your current core metric, and what's been happening to it over the last few years?

One experiment involves offering a subscription service to online premium study notes. We measure number of subscribers, downloads, and revenue. Students who subscribe typically keep and use the subscription until they finish school: the biggest problem is the very low conversion rate in the first place. We know that students want study notes, because they download free notes from our site all the time, but very few are willing/able to pay. This is a recurring theme for us: we get enormous interest when offering something for free (whether notes or seminars), and get complaints as soon as a price tag is attached.

We reached the point a couple of years ago where we realised we had largely captured the maximum potential user base in our home state, which left two obvious strategies: growing revenue (in that state) and/or growing the user base (in other states). From that point our core metric has been revenue, with a view to further growth once we had nailed the model. Our primary revenue source has been advertising (from universities and colleges and others), as that seemed to give the greatest return for the fewest complaints. It grew very quickly from zero, but has stagnated in recent years as advertisers developed a preference for programmatic platforms. That shift has prompted the present search for a new business model. Meanwhile, the community itself continues to thrive.

Have you grown to other states?

We have at least a small user base in every state, and also a small user base amongst students who started with us and went on to be accepted into universities and colleges, but to date we haven't invested significant time or effort into growing either. We've been too focused on trying to work out what the business model will be at the end of the day. Would you recommend a different approach?

I think you either need to grow the user base significantly or figure out how to increase revenue. Based on what you said, it sounds like you need to do the first now, because you've tried all the revenue paths.

Thanks very much for your time and consideration, Aaron—this has been helpful.

James I think you are focusing on the wrong market. Your potential paying customers are not students, but their parents who have the money. One idea might be to allow parents to track what their little darlings are doing on the site. Another is to provide regular feedback (email, newsletter) to the parents about how their children are progressing.

Not sure how things are where OP is located, but some parents may not be able to afford something like this depending on their income.

If this works well integrated with school activity maybe it could be payable through that?

The OP is in Australia like me and while there are lot of parents that can’t afford to pay, there are lots of that could. The key here is to build your business around the customers that can pay, not those that happen to use it.

One other idea might to try and partner with companies that are trying to lock in young people. The obvious one is banks which are always trying to target this age demographics. You could offer, for example, premium notes to those students that had an account with the sponsoring bank.

Hi Michael, Aaron,

My name's Aron and I'm building Wanderlust (www.wanderlust.ly): a travel website that shows where you could go based on how much you can spend and what you're interested in.

Wanderlust provides users with a complete trip, including a destination, flight, and accommodation, as well as an overview of the best things to do and see during their stay in that particular destination - after which users may customize the options we recommend and book or, if they’re not sure yet, simply save the itinerary and flip to the next trip that matches the criteria they've entered.

Our main issue:

Low conversion rates (visitor/booking). Particularly due to the fact that we're higher up in the funnel (vs. traditional OTAs) and don't have a lot of credibility in the early stages.

Although I realize this is quite a broad question, any insight on how we might improve would be super helpful!

How are you driving traffic to the site and what are your conversion metrics? Have you done face to face user tests with at least 5 random people? Do people have to book right at that time or do you give them the ability to save/share a booking?

In terms of driving traffic, our SEO/SEA strategy so far has been considerably difficult to pull-of given our limited resources in light of the incredible budget of the traditional OTAs. FB/Twitter advertising has been somewhat better.

Additionally, SEO/SEA is something that we feel will be much more relevant for the parties in the market that cater to those users that already know where they would like to travel to and just need to find their flight and/or accommodation. We cater to those earlier in the cycle, wondering 'where can I go?'. This is the feeling we try to associate ourselves with, which is why brand advertising might prove more useful than direct response. Again, this is tricky with a small budget (<€1000)

Yes, we've tested with >5 random people. Users don't have to book immediately, but can create an account and save the itinerary for later.

Conversion metrics we're tracking: 'happy 1st visit' (i.e. views more than 5 trips), visit/search, search/save, search/book. account signup

What is your cost for acquiring a booking from Facebook and how much money do you make from that booking? For your user testing - what was one part of the product that at least 3 people found confusing? Do you make account sign up painful?

So far the FB CPC hovers around $0.70. We need >200 users per flight booking. A hotel booking has not been made through our platform yet. Not much data has been collected though, seeing as we've only been live for 2 weeks.

It might be important to note that, at this point, we're not so much interested in how much we make from the actual booking as much as we're interested in the conversion rate itself. We use the Expedia & SkyScanner APIs, which was more practical from a technical perspective to get to MVP as soon as possible. But the affiliate fees for flights are close to nothing ($2 if we're lucky) and we have different solutions in mind.

We only ask for the user to sign-up once she clicks the 'save itinerary' button, which we believed would be the most seamless. The most confusing part of the product so far has been the fact that we currently have two 'book now' buttons once the user tries to book her flight, something we're addressing.

Taking a look at the product here are a couple thoughts

1) You push me onto a landing page instead of right into the product - why?

2) The initial form you ask me to fill out is a bit intimidating - perhaps it can be broken up a bit

3) On the results page - its unclear at first what I'm supposed to click on - and you dont tell me anything about the flight or the hotel you've chosen for me

4) Results page loads slowly

5) No button to book trip

6) You are choosing a 1 star crappy hotel for me...

There is a lot of product refinement you can do to improve this experience / conversion rate

Appreciate the feedback. We've planned to push an update next week addressing most of your points (esp. #3,#5 & #6).

I agree, you're wasting potential leads by having that landing page. Just let them see and use the service right away.

Hello, I've ben looking for a travel site like this, for example if I have a family of 3, live in Toronto and have a budget of $3k - $4k, where can I go to a tropical beach for a few days (flexible days but need a few days to prepare)?

I just tried it and it didn't work too well for me:

- currency is in Euros - time was fixed to 4 days' vacation couldn't figure out how to change - no range for budget - I asked for "beach" and the results were: Baltimore, Beijing, Berlin, Bucharest, none of them with beaches

We've built a bug reporting tool that captures a screencast along with the network traffic, which leverages WebRTC and a browser extension, capturing bugs in real time. ( http://www.bugreplay.com ).

1) We have a good number of qualified leads that are interested in beta testing our product. Does it make more sense roll out our beta in small batches at a time, to get more feedback from a smaller number of vocal qualified leads, or to cast a wider net during the beta process? What were some of the best beta rollouts you've seen and why did they go as well as they did?

2) What's some of the most interesting uses of WebRTC you guys are seeing now, and are there any pitfalls you folks have seen with the technology that you would advise us to look out for?

Really cool app, I signed up for a demo. Some sort of continuous recording move would also be nice, where you could go back say 1 minute and document transient bugs.

Thanks! Some other people have requested that as well, we're brainstorming a number of ways to make that possible.

Hi Michael and Aaron,

I'm the co-founder and CEO of PsychSignal (https://psychsignal.com)

PsychSignal is a provider of real time 'Trader Mood' data, analytics and indices for financial institutions & investment professionals seeking an edge.

Essentially we've built the next generation squawkbox. When I was a trader back in the day we used to use one of those old school squawk-boxes connected to the S&P Futures pit in Chicago. A guy would call the market all day long and you'd get a great feel as to where the market was going just based on the mood of the announcer and the mood of the crowd you could hear in the back ground. Fast forward to today, no more pits, but traders are online and they are talking... a lot. Voila PsychSignal.

Besides fundraising which is a challenge for everyone on here I'm sure, our concern is strategy, specifically growth. We've relied on our instincts in much of the creation of PsychSignal and growth is something we have restrained purposefully. We are in it for the long haul. To us the fin-tech space is a special beast one where new technology adopts slowly and reputation is hard won over a long period of time. This really goes counter to everything you read on here so it's always a lingering doubt for us. Wondering your thoughts. Thanks for your time!

Hi - What's the metric that you're looking at for growth?

# of clients... and everything that would go into increasing that number, fundraising, head count, marketing.

Do you make money per client? Why are you artificially constraining that? Growth != loss of trust reputation if you have a good product that your users trust and want.

We're learning. Move fast & break shit doesn't work on Wall St. We knew how to build the best financial sentiment NLP in the world, but we had no clue about the space we would eventually sell into. It's cautious, slow to act, skeptical, very sophisticated and secretive. We had to find a client who knew exactly what to do with our data without any handholding and was a bit forward thinking, even experimental in that they take chances on startups. We found that perfect client (actually they found us!) and they could see the value of what we built right away, probably better than we could. They loved us so much they eventually invested in us so we knew we were on the right track and they've been helping us ever since. Growing client #s required us to become experts in a number of different areas so we took our time getting them right.

Yes we make money per client. Large ARR contracts

Did they also sign a paying contract with you? That's the best of all :).

I agree with you that you can't just break things when you're working with financial firms. That doesn't mean you have to artificially constrain growth. It's probably a matter of degree, and I don't have a good enough sense of where you sit to have a more informed opinion.

How are you actually constraining yourself? Are you keeping out users who want in? Are you limiting the number of companies to whom you are trying to sell?

Yes they did ;-)

No we are not keeping out clients that want our data. But there are precious few clients that proactively seek data sets like our first client did with us. We are however (up until very recently) retraining outreach. We needed to encourage proper academic research which took time to acquire, create solid marketing collateral which took time to get right and even understand what clients wanted to see, we needed to harden our infrastructure, improve the technology, and we needed to understand what client concerns would be and how they could use our data. It's like having electricity, knowing it's valuable, but not knowing how to get your clients to use it to turn on a light bulb. If we screwed up at any stage it would burn our reputation. The sentiment space is similar to the blogging space. Literally almost anyone can hang out a shingle, use generic software and start a sentiment business. Just like blogging. It is, however, extremely hard to get right and our clients know this.

Hi Michael and Aaron,

I built Game:ref (www.gameref.io) last year. It's a hardware anti-cheat device meant to be used in local and online eSports competitions to make sure that sponsors aren't being swindled out of huge prize pots. Cheating is a multi-million dollar problem[2] and I thought I would do something to fix it.

Even though I was featured in PC Gamer, Polygon, Vice Magazine, Tom's Hardware, and a few others, I failed to get any traction. Since, I've gotten a comfortable and well-paying "real" job, but I still work on the project in my free time. I heard that funding hardware is notoriously difficult. Is this true? If so, is it worth it? What would be the best way to move forward, if any?

Thanks!

PS: If you're interested in the technical details of how it works, you can check out this[2] blog post.

[1] http://www.pcgamer.com/hacks-an-investigation-into-aimbot-de...

[2] http://dvt.name/2015/finishing-what-intel-started-building-t...

Hi - funding for hardware is certainly difficult, but there are quite a few investors who do it, and it is easier than it was even six months ago.

If I were you, I probably wouldn't determine whether or not I wanted to focus on the company based on the perceived ease/difficulty of raising money, but on whether or not I thought I were solving a big problem with big potential. I don't know enough about the market you are describing. If you 100% fixed it, how much money would you save esports sponsors?

Thanks for your reply!

The largest cheating scandal (that happened about a year ago), had $250k up for grabs[1]. With that said, the exact number is difficult to quantify, as if the cheater is successful, then no one is the wiser.

[1] http://www.ign.com/articles/2014/11/25/csgo-esports-communit...

Got it. You might need to think about the size of the market that you're targeting. When I think about what makes a company or product interesting as a startup, I try to think about markets that will expand over time because of what the company does - and not what the market looks like today.

That means that a market doesn't have to be large now, but it has to have the possibility of growing to be something significant. Do you think that solving this problem is going to be worth hundreds of millions or billions of dollars in ten years?

I think so. With amazon buying Twitch for 1B a few years ago, I think the competitive gaming industry (which Twitch primarily caters to) is well into it's rising phase.

A major gaming peripheral company reached out to me about Game:ref (they wanted to make sure the anti-cheat hardware is compatible with their mice) and a major game developer also reached out (asking about how the hardware would theoretically integrate with their games). Unfortunately, apart from courtesy calls, however, I haven't been able to really get to the next level.

Totally. Come up wit hthe marketing of "Powered by Game:Ref! -- Know your wins are legit!" type of thing to get them to sell and thereby secure more sponsors for the events as they know they wont be wasting money to cheating

Hi Michael, Aaron,

I'm co-founder of satsearch (https://satsearch.co): B2B search for the space industry. Searching for parts to design a satellite is a real pain, especially with the rapid growth of the small-satellite sector.

I've worked on designs for a few satellites and spent countless hours trying to Google specs: time that doesn't get spent on engineering. So to solve this problem, we're building parameteric-search.

The biggest problem people have faced when they've tried this before has been to keep the data updated. We're trying to incentivize suppliers to do it themselves by giving them insight into new markets & products they can target through search analytics.

The difficulty we're experiencing is that it's a low-volume, high-value market and suppliers seem to be worried that we're going to eat into their margins. At the same time, we've had multiple suppliers tell us that if being listed means they even sell one more part, it's worth it.

Any tips on how we can reduce the shot-term friction with suppliers?

Do you have a bigger problem with finding demand for parts, or with listed supply?

Supply listing is the bigger problem. Demand seems to be taking care of itself, right up to the big space agencies.

As a side question, we're also not sure whether to grow the suppliers as quickly as we can by offering free listings, or to charge suppliers from the get go.

If you have a lot of demand, you should be able to go to parts listers and say "Hey! I've got money for you! Come get money by listing." Ok...not quite that simple, but that's a great carrot to use.

If that's not enough to get them to list, you might need to find another strategy. Is there something else that the suppliers really need, and don't have, that you could give them which would also give you access to up to date parts information?

You can also fake the marketplace, to some extent. If someone comes looking for a part you don't have, make sure you still take the request, and then go fill it manually. If you do this enough, you should be able to earn the trust of the suppliers, and get them to be more active participants.

Yea that's essentially the path that we're trying to take. We are logging all the search queries for which we don't have product listings and aggregating that to show to suppliers.

We actually switched from the idea of charging users to charging suppliers because a bunch of suppliers told us directly that they'd pay us a 10-15% provision for every sale we bring them. I've asked the suppliers I've directly spoken with what they'd wish for if they could wave a magic wand and all of them basically said more sales.

I guess I'm maybe answering my own question, but to fake the marketplace, should we concentrate for a while on just being resellers for a couple of suppliers to earn the trust? We've tried to avoid that to convince users that we're neutral in the marketplace.

Sounds like you did answer it yourself, which is awesome. I actually like your approach of aggregating and sending it out to the suppliers. You could send it to all of them and tell them they have a limited time to respond, and then creating a ranking system based on who is best at meeting customer demands.

That way, you have a preferred list that gets more business by virtue of the fact that they're better. That's fair to all the suppliers, gives them something to work towards, and makes your customers happy.

That's interesting! Ok so I'm guessing this is the crux of the "do things that don't scale" mantra. Thanks!

Oktopart for space!

Sounds pretty cool.

Exactly :) Well not entirely exactly, since it turns out that we're quite different because we're in a low-volume, high-value market. So deals are not really done (yet) by purchasing straight off an e-commerce site.

What I'd love to do is make systems engineering, procurement and market analysis in the small-satellite sector a lot more transparent.

Dont forget to leverage what they released then... including:

http://apievangelist.com/2014/08/25/ocotoparts-open-source-g...

Yep GSheet plugin is in the pipeline :) Thanks!

Hi Michael, Aaron, I'm a co-founder of an educational games platform based in the Netherlands. At the moment, games on the market that are targeted at K-6 students are not that much fun, they are not thoroughly aligned to school curriculums (just to CCSS goals in the US), and they're not connected in terms of content + analytics.

We've built 4 games, generate content for math questions (and soon starting work on literacy), and have a dashboard for teachers/parents. Early pilot results are quite positive (most importantly, children want to play the games at home).

I've been thinking about the next step in 3-6 months: should we expand to a neighbouring country (e.g. France, UK) or start looking at the US. The latter seems to be the first choice for most startups originating from Europe, but our improvement over existing competitors is much more in non-English speaking countries than it would be in the US (as 90% of educational apps are English). Any thoughts on this?

Also: what is YC's view on EdTech startups? It seems there haven't been many in recent batches.

Hey!

Also working on math education. I am targeting middle schoolers, and my approach is to build a system based on symbolic math and AI to help the students. I have things that could be used in primary schools as well, maybe we could partner somehow?

Our team is building SaaS software for local governments (CRM + constituent service ticketing). We have users who love us in major cities across the country, all of whom are paying us.

When we start talking with VCs and angels, everyone sounds good on paper. Innovative, risk-taking, focused on building long term companies, visionaries, mission-driven, etc.

So we start a dialogue and answer all of their questions (we don't do RFPs, we have a single decision maker as a buyer, our background is in payroll so we know compliance + security, our sales cycle is not measured in months, etc.)

Turns out, probably 60% are just afraid of government because it is an untested market or sounds scary.

Question(s):

How do we screen for _genuinely_ visionary or mission-driven VCs/angels?

Who would you recommend we talk to?

The fundraising process of often about creating leverage over investors. Companies need to think about raising VC rounds (and large angel rounds) as a reward for creating a growing product in a multi-billion dollar market. Also many companies screw up fundraising by running the process in serial vs in parallel.

Here is a mini guide for a 2 minute pitch - why don't you fill it out so I can see where you are (each answer should be 1-2 sentences at most): 1) what does your company do? 2) How big is the market? 3) Describe your month over month grow? 4) What do you understand about this market that others do not? 5) How do you make money? 6) Why is your team the best team to tackle this problem 7) How much are you raising?

Thank you, that's helpful.

1) Romulus (https://romulusapp.com) is a CRM and ticketing cloud service for local governments. Think SalesForce + ZenDesk for constituent services.

2) There are 90,000 local governments, each with 10-15 departments that interface directly with constituents and need our software as it is today. ARR per customer (department) is ~$9k.

3) 50-100% MoM growth for the past 6 months. Sales is focused on penetrating new cities, then we've had great success with referrals from existing customers.

4) Building a better product isn't the hard part, since "best government software" is a super low bar. Innovation is in the business model — avoid RFPs, find one decision maker, lower CAC with growth through referrals — which means our growth engine is exactly the same as startups in other sectors.

5) Per-user recurring subscription. Right now $40/user/month, lots of room for expansion there.

6) Founders were early engineers at Gusto, so we know how to bring delightful products to unsexy problems and build a mission-driven culture. We are passionate about solving this particular problem and have worked for over a year to de-risk the business before asking for investment.

7) $2,000,000 to get to $1m ARR, at which point we raise a Series A.

P.S.

I don't think of fundraising as a reward or a goal in and of itself. It is a means for us to achieve our potential. We hold ourselves to a high bar for product and impact. If potential investors recognize that, cool, but we're not in this to be on TechCrunch.

1) You need to be more clear about what the product does - Ticketing cloud service / CRM are jargon - how would you describe it to your mother and father?

2) When sizing the market you need to either go top down or bottom up? How much money is spent by governments on this type of software per year right now or if every target government in america was using your product how much revenue would you generate?

3) 50%-100% MoM is great - whats your Mrr and are their any particularly notable towns who are customers?

4) Your unique insight is really in how to sell software to a government without long lead times / large sales teams - can you be a bit more specific about your technique here

5) Great - how many potential users are there per typical customer

6) Cool

7) $1m ARR isnt actually that high of a bar anymore when it comes to raising series A - much easier if you hit $2-$4m ARR - also that should get you to break even which makes raising an A easier

PS: Did you guys apply to YC?

1) When someone calls into a local government department (elected official, public works, utilities, parks & rec), the staff needs a centralized system to track their issue, collaborate with everyone who can help solve it, and identify important issues across the municipality.

2) Bottoms up: $3bn in ARR as our pricing stands today, (90k gov * 15 depts/gov * 5 users/dept * $480ARR/user). Our customers keep saying our pricing is cheap so we need to revisit that — 2016 goal to expand ARPU 50%. That's without building anything else, but we have numerous higher-value expansion points in mind with one starting pilot phase.

3) Notable customers in Oakland, Chicago, and Miami. Last I checked we were at ~2k MRR but we just closed a few this week so I'll have to check. (Don't worry, we have a great accountant ;)) EDIT: Just added San Antonio

4) Penetrate toughest markets first (see #3) to build reputation before moving down. Target early-adopters in those markets then leverage those relationships to expand (localgov is a tightknit community.) 2/3 local government leaders hit retirement from 2014-2018, so a new wave of tech-savvy leadership is taking the reigns.

5) Right now we are seeing 7 on average, but we think 4-5 is more typical.

7) We'd hit profitability before $1m so $2-4 is reasonable. We're a small team and CAC is pretty small. Less about the number than proving a repeatable growth engine that can turn capital into many times that capital.

Bonus) Yes, when we didn't know what the hell we were doing :) That was about a year ago. I agree we shouldn't have gotten in.

1) That is a better description - although I feel like this only describes a small set of things that a government does - is this just for constituent services? Is that a small or big part of the day to day work of a local government?

2) cool

3) cool

4) very cool

5) cool

7) Good

RE: YC - you guys should apply - email me at michael@ycombinator.com - this is a space I'm very interested in (I'm a poli sci major) and I think you have a good shot at getting into the summer batch

1) Constituent services are at the heart of every local government and the data surrounding them are its vital signs.

From an operations (top-down) perspective, constituent services tell you which departments are living up to their civic mandate. Think CSAT and NPS in SaaS companies — two metrics that predict retention and growth, that measure how you're doing and customers' faith in your future.

If, bottoms-up, you want to drive democratic decision making with real data, look at the hundreds of millions of interactions constituents have with their local government. It's only by improving the day-to-day that governments get a high-level view of what structural changes need to be made.

The product focus of Romulus is on those day-to-day users right now, but it's really the level above — the chiefs of staff, elected officials, city managers — that love the potential.

YC) Will do. As a philosophy major, I'm glad to see more liberal arts around here.

Hi Aaron & Michael, There is a 20-year-backlog of life-saving therapies that are left sitting in university laboratories untested and 30 million Americans suffering from untreatable rare diseases who have no idea these potential cures exist.

My best friend and I are developing a medical research discovery platform. We allow people passionate about a condition to discover, promote, and eventually fund cutting-edge research.

We've been working to seed the platform & overcome the regulatory barriers that have previously prevented success in this space. How can we balance the slow bureaucratic requirements of university administrators to correctly implement our solution with the early rapid growth needed for our startup?

Why do you need to work with university administrators at all?

The majority of research conducted in the US is at academic centers. Scientists employed by these institutions have been given strict rules by administrators on how/whether they can solicit input or disclose IP generated at their workplaces.

See: https://en.wikipedia.org/wiki/Bayh%E2%80%93Dole_Act

It sounds like you are trying to build a kickstarter version of the NIH. The way to get this going is to offer real money to both the academics and the administrators - once you do this then they will come running to you with open arms.

Can I suggest that you spend the next month reading Derek Lowe’s blog “In the Pipeline” [1] (especially all the comments). You will learn why so much never makes it out of the lab.

1. http://blogs.sciencemag.org/pipeline/

Another excellent resource is the LifeSciVC blog:

https://lifescivc.com/

https://lifescivc.com/category/from-the-trenches/ (the posts here aren't included on the main page)

I've been interested in this space for a long time and would love to chat with you - my email address is in my profile.

Hi. My name is Stephen, and I built CleverTree - an on-demand medical marijuana delivery service based in Sacramento.

I'm curious about your thoughts on fundraising in the marijuana space. I haven't really tried (except applying to YC and 500 Startups last year), because it seems like most big Angels/VCs are still too risk-adverse to the industry. So far we've been running for a years and have built revenues up to around 45-50k a month. I feel like with any other bootstrapped startup this may attract investor interest, but because of the industry in this situation, it would still be very difficult. What are you thoughts of the investor climate with regards to marijuana?

I think there are angels that are willing to invest - https://getmeadow.com/ is a YC company and they were able to raise an angel round - I think its helpful to look like a typical tech startup with strong engineering on the product team and a launched product before you start to fundraise.

Ah yes, I should have mentioned, the main thing that differentiates us from Meadow is that we actually handle the marijuana product in-house as opposed to being purely a tech platform. If we were a pure tech play, then I think it wouldn't be an issue, but what is your perspective on an actual marijuana company like us in the tech space. (As far as engineering goes- I, with the help of an ex-PayPal engineer, built the on-demand platform from the ground up ourselves)

hmm - yes that is much much harder - why do you want to handle the product in house?

We started out wanting to do a similar model as Eaze/Meadow - but we found we weren't adding enough value to existing dispensaries/delivery services to warrant a decent fee/percentage (since they already had customer bases and we were starting from 0 with no outside funding like the other companies).

Then after running everything in-house for a while, I realized that it was actually a much better model to handle everything in-house because then we have complete control over product quality, customer experience, drivers, as well as being more profitable (we we profitable within our first two months). We've tried a few partnerships with outside delivery services and it never worked out because they were never able to replicate the very high standards of service that we require (coming from a background in hospitality management myself). I know there are all these companies purporting to be the "Uber for weed", but that's not really that accurate. If Uber were doing the same thing as these other startups in transportation, then the proper parallel would be Uber partnering with existing Taxi companies rather than independent drivers. Uber cuts out an established middle-man, but the other on-demand marijuana startups are partnering with established middle-men rather than cutting them out of the value chain.

However, I think the single biggest reason to go in-house is that services like Eaze/Meadow can never compete with us on price. I consider our prices to be somewhat high right now, since our cash flow is still so fragile, yet we are still undercutting Eaze by around 20% on most products even as they have over $11 million in funding.

Interesting - I would still apply - you dont have to worry about the fact that we have funded Meadow. The major barrier is the questionable legal picture currently. Have you been able to get a bank account etc? Where are you currently operating?

Yes, we do currently have a bank account, though it is purely for the technology side - currently we are cash-only as far as orders/deliveries go. (We launched using Stripe, but they shut us down after about $30k or so flowed through our Stripe account - however, they were very sympathetic and wanted to work with us, but their hands were tied by their banking partners).

Currently we are in Sacramento only. We tried to launch briefly in San Francisco last year with a delivery service partner, but that fell through and we withdrew to focus on building/learning more in Sacramento before trying to scale out again - however, we were able to make over $16,000 in San Francisco in our first and only month with very little marketing.

The legal landscape is definitely still not where we'd like it to be, but in starting this company, I'm essentially placing a bet that the legal landscape will change in our favor in the very near future and that I'm getting in at exactly the right time (not so early where the business is unfeasible, but not too late where risk drops so low that too many big players get in the space...I was actually surprised that Eaze and Meadow popped up at the exact same time as I did). I think that the momentum that we see across the country is definitely promising.

The most interesting thing is that, delivery in Sacramento itself is technically illegal - however, it isn't enforced. I appeared on the top-3 news outlets last year stating exactly what I was going to do here, so if the City wanted to stop me, I definitely wasn't hiding from them. Since then, I've spoken with the city council, and am working with the vice-mayor of the city to work in a new law for delivery here in Sacramento.

We are building Stripe for life insurance http://back9ins.com:5000#

FYI we have applied twice to YC. We have early demand from customers and know it's a big opportunity. Our engineering team is only 2 people and we want to raise money to grow that and execute the plan with enterprise level websites. How do we take the next steps?

I'm not sure I understand what you're building. Is it a white label life insurance api to allow financial institutions to sell life insurance?

It allows any website with traffic (ideal targets are banks and financial institutions) to sell life insurance on their website using our JavaScript web app. A BOFA user cannot currently buy life insurance on Bofa.com, but can by going into the bank. A bank could offer life insurance online via our white labeled modal and take their users from getting a quote to e signing the policy. We handle the entire process with the user on the BOFA website.

Ok - so you could approach this in a few different ways. Here are two:

One way is to try to sell big enterprise contracts to big banks. This is really hard for startups to do, unless you have a product you know they really want, have deep connections or experience selling to banks, and have all the compliance and security requirements in place.

Another way to try this is to sell to smaller sites. They're more likely to adopt quickly, but you'll need to make sure that you maintain quality, are generating enough traffic and conversions to be worthwhile after the rev share, and don't devolve into something that appears scammy.

Do you know who actually wants what you are building? How have you figured that out?

Answering for @reiderrider, the bulk of life insurance is still sold face-to-face and purchased from an agent or agency local to the consumer.

Not only could big banks + financial institutions plug in our js to sell life insurance online (from quoting -> application -> signature & medical exam), but also smaller agents/agencies that do business locally could accept online apps. Currently, agents meet in person and/or have plenty of phone calls with a client to figure out what coverage they need and then they sell the policy.

With our product, agents can direct their clients to their website which will walk the consumer through the process.

The Stripe analogy makes sense because Stripe & PayPal make it so easy for companies to accept payments online via their HTML button/JS script, which is what we are trying to do here. They also (both cos) provide great dashboards to the consumer (an insurance agent/agency for us) to track their data (which is in the pipeline for us).

Agreed. Smaller websites and every insurance agent that we've talked to say that they would love to have this and asking weekly if it is ready. We have not asked any large websites but their motivation is that it is extremely profitable with little financial resources required to implement (although it's a major decision to partner with a third party). Smaller customers will be good beta customers and we are happy to start there. We'll have great developer docs, beautiful UX, and vet the sites that can use it for quality. What are your suggestions to help us grow/afford our engineering team?

Hi YC partners,

Founder of https://credhot.com here. We're a link shortener that uses interstitial advertising to make money. We rev-share with people who share content using our shortener, so they get paid based on their traffic.

People know about us in the Bitcoin community because we pay our users in Bitcoin. Bitcoin has benefits when it comes to microtransactions, so it's not just a marketing strategy. We think that sharing content via our service can help bring Bitcoin to the masses. ChangeTip is already doing this via the tipping model; we want to drive adoption with advertising.

First talking point: From your perspective, does paying users in Bitcoin help or hurt the viability of the idea?

I think it's hard to say without knowing more. On the one hand, paying in btc probably restricts the number of people willing to use your product by virtue of there being not that many people who have btc accounts. On the other hand, it might make you more popular with a small group of people.

Most great products start with a core of really happy users, and then expand over time. Do you have users that love you and use your product every day? Many times a day?

We've had around 2.8k signups so far (launched in October). We have about 200 users active per day. I just checked and 89 of them have been active in all previous 5 days. We have a few outspoken believers in the concept (< 10). We just solicited feedback from our base and got only 20 responses, so probably could do better there.

Got it - is it growing? How quickly?

Just generated this graph:

http://imgur.com/iqnaGem

We had 38 signups yesterday, grew ~44% in the last 30 days.

EDIT, mathfail: grew 79% in the last 30 days.

Cool. Is your transaction volume growing at the same rate?

Here's a graph of the transaction volume:

http://imgur.com/ScNqb4I

The big spike in the beginning was before we implemented fraud checks (eg, users directing botnets at the shortlinks).

Since then, the transaction volume has been growing at a similar rate, at 70% growth in the past 30 days (compared to 79% user growth).

Portuspine is a wearable device solution to provide posture coaching to people who wants to prevent backpain, primarily people with desk job.

We provide them haptic feedback whenever they are sitting in a wrong posture, we encourage activities and better sleep so as to holistically improve ones wellness.

The user can visualize how posture affect their daily activities and sleep. The wearable device can be worn by the user 24/7 on their wrist and when they sit in front of the workstation, can be click-removed and clipped on to the chest area when it starts to monitor posture.

http://portuspine.com

Hi - I'd love something to fix my posture, so this seems cool. Feel free to ask a question.

We’re building the first in its kind ads/promotion barter platform: http://appstore.com/postforpostforinstagram it allows you to find peers in social networks and exchange shoutouts, e.g. promote each other on Instagram, so that both participants of the deal get additional followers for free, and grow together.

It is known as #sfs #s4s #shareforshare, over 150m associated hashtags accross major apps. It is especially popular among professional and millenial influencers in the low/mid segments (e.g. 1K-100K IG followers). Due to sfs’ viral nature, our influencer base turned out to grow a lot faster than traditional influencer/brand marketplaces – this could make us a lot bigger and better place to buy/sell influencer ads than all these 120+ identical marketplaces in the list: https://angel.co/influencer-marketing-2

The influencer ads are like the hottest advertising trend of the upcoming years :) We see we’re up to something great here and start thinking how we get the biggest piece of the pie in the long term. In order to sustain this product strategy competition-wise we’ve even submitted Patent App for the concept 'Advertising Barter in Social Networks'.

…though what’d be a lot more interesting, I just realized an hour ago: rather than compete with all of them, try to create interface layer – build API for them, etc. I would like to discuss this – would be great to hear your recommendations/roadmap thoughts mb, other than ‘getting big enough first’

Cool - feel free to ask your question :).

Well, frankly that was the question hah. Ok, I realize it’s too industry-specific.

Let me ask you more practical question then:

It is time for us to fundraise – our team of 3 is running out of cash to finance full-time involvement. This investment round should include marketing expenses as well.

We can measure our viral growth, but our core monetization is to be commissions on the influencer ads sales. It is quite deferred – more like the 2nd product phase – the shoutouts for shoutouts will be accompanied by shoutouts for cash over time. So at this point I can't really make any judgement re marketing spend vs. ARPU / MRPU etc. – the nature of our influencers is pretty different from the other companies in the industry because, as I said, we cover lower segments of influencers. ...and it is awesome, because it's the hardest market segment to cover, it's the major part of the market and at the same time it has the highest level of credibility / engagement for advertising effect …but we have no time / resources to test it.

Moreover, we haven't tried any paid methods yet – so, we'll have to start trying different ones before we figure out what works best for our case.

Any ideas re how we justify our marketing budget for the investor?

For now, I am thinking to: (1) take something like industry-average number for marketing spend – probably $7-14k per month (not sure how it'll work out but at least I have public reference to this number) and start trying out Instagram ads; (2) get at least your respectful opinion and refer to it in talks, i.e. it is normal for such a first-in-its-kind venture like us not to know this stuff for sure – Aaron told me :))

Thanks so much for this. We built Upfit (https://upfit.co), an on-demand fitness streaming app for at home workouts, ran by video creators. We launched on Android & iOS with Upfit and are currently tackling other industries with the same platform. Think about it like a social Netflix for X. We would love to chat!

- Pim from Whitespell (Pim at Whitespell dot com)

Sounds cool, Pim - how can we help?

Hey! I just tweeted you. I had a meeting with a really big potential customer and had to run. Hope you understand. Anyways, if you're interested, check your tweets from @PimDeWitte :-)

I tried signing up on the web using my email and password (I don't trust Facebook) and it did not work. So I refreshed the page, by which time I'd forgotten my username. It would help if you have other social logins.

Why require the user to signup in the first place? I was reminded of a talk by Neil Patel, "It's like asking, Will you marry me as soon as you see someone". (https://www.youtube.com/watch?v=FRnsuzcfHr0)

Why not embed a video similar to this 10 minute video: https://www.youtube.com/watch?v=7w6M4bOXJ_s, ask the user follow along, record their own video using their phone / Webcam, share it with friends and use this data to improve your marketing, all without signing up.

As a potential customer, I miss the following features on YouTube and I would pay for and recommend Upfit if you address:

1. Is this exercise safe considering my medical conditions?

2. Is my technique correct / improving? (Feedback from experts)

Hey!

Thanks so much for the feedback. We'll be sure to take it in and I'll personally let you know when the bugs are fixed. We'll also definitely think about your suggestions.

All the best, Pim

Hey Michel and Aaron,

http://www.twlng.com is buffer for content, i.e. post, schedule, manage Tweets with > 140 characters.

We've seen little traction despite being featured here on HN and ProductHunt, what steps would you advise following to get more users, considering we have 0 cash and are bootstrapping this as a side project?

Hi Michael and Aaron,

I am cofounder of AllThingsMine.com We have built the App and Site for a single place where you can store all the information about the things that you own/wish to own. It is a single point of access to specifications/warranties/manuals/recalls/reviews/videos of a product. You can also connect to friends to discuss about the products. We have tried to make it as easy as possible to add your product and are also working to make it easy to add from email/online receipts. We bring in news feed from various sources pertaining to products that you have in your lists. Curated list of popular and top products in different categories

We welcome feedback as to what other things users would like to see to be able to maintain their items with minimal effort. Our biggest hurdle is how do we increase adoption.

Thank you

Hi Michael + Aaron,

We're building a smarter way to share product updates (https://productmap.co).

So far we've received a great amount of interest (waitlist) and have users already integrated that are coming back over and over.

The next steps would be to build out some of the feature requests as it's fairly early right now. One of those requests is having custom domains and users are happy to pay $10-$20/mo for it.

The vision for ProductMap is much larger though -- to tackle the fragmented way companies handle communication and feedback with their customers.

Do you think charging for custom domains would be self-limiting in nature? It's a fairly trivial thing to offer for free.

Thank you in advance! (and meeting with Yuri when he's in Toronto this weekend.)

Why do you believe charging for domains would be self limiting?

Users won't be able to use the product for what it's intended value is (better feedback and communication) if they're turned away so early.

Better put, a custom domain isn't part of the value we add, it's just a gateway to realize the value. Should we be charging for something that's not really tied to the value we provide?

Why would custom domains turn users away?

Ex. A user wants to try it out but paying for a custom domain scares them. They stick to a free subdomain, but never really promote it since it conflicts with their own branding.

Admittedly you're making a good point here that users _would_ get more value this way through increased branding.

I think giving your customers what they want is the central theme behind most of our advice

Absolutely, but would charging them for a (technically) trivial feature be self-limiting to our growth?

Another question: Would be worthwhile to apply to YC with a product of this nature?

This was super helpful. Thank you for taking the time Michael.

Addressing your first point, Heroku charges $20/mo for HTTPS support and plenty of people pay for it: https://elements.heroku.com/addons/ssl

You're right, that's a good example. Thanks!

Hi Aeron & Michael, we are building pastrynow.com: an easy kit that helps people to instantly start baking Michelin-worthy french pastries. No special utensil, no additional ingredient and no previous experience in cooking required.

After many iterations we recently built a kit our users really love. We just started to have users talking to their friends about our latest kit! https://squareup.com/market/pastrynow/tarte-aux-framboises.

Questions: 1) Would you like to try? 2) Our user base is quite small: how do we know if it is a communication or value proposition problem?

What have you done to increase your user base? How have you measured your experiments? What do your users say when you talk to them?

1) Initially, we sold "pastries for catering" to very small size start ups in our area. With the money we generated from the sales, we built the first prototypes that we used to deliver the pastries we promised.

And when we delivered to these small companies, we explained to the employees (who really liked the pastries they had) how they can do it at home. We closed our first (3) sales like that.

2) Then, we spent a lot of time wandering around Costco and Safeway's "baking" department with baked samples to pitch everyone we see passing by (when they eat the samples, we tell them they can do exactly the same at home). It wasn't effective because we haven't closed anyone though everyone said "it's a great idea, I'll definitely try".

3) Same for the neighbors: we literally went to all our neighbors with the same strategy. But still no sales (though they eaten all the samples). We also put some flyers in the mailboxes of people who weren't at home and somebody sent us an email to tell us it is forbidden and he'd sue us... and even even signed "welcome to america"

4) Then we started hustling our colleagues, friends, family. We sent direct emails, called them or even visited them. This way, we closed almost all our sales (15).

5) We also started reaching out bloggers. Now, we are super-limited because we can't deliver out of the bay area (I'm literally driving myself and delivering each kit by hand). So we pitched the top 66 bloggers in the Bay Area who are talking about baking. 16 replied, 10 of them showed some interests, we delivered to 5 bloggers and one of them published an article (we never asked for it): dessertfirstgirl.com/2016/01/pastrynow-raspberry-tart.html This didn't drive any sales yet.

Finally, we have also given about 20 kits "for free". We typically don't like to do that. And none of the "free user" have ever ordered. We spend a lot of time with every user to discuss and the number one "issue" they find is: "it's too expensive".

And that's a huge problem because literally none of them complains about the kit. They all say "it's incredible, I don't bake at all and the outcome is exactly like the picture" BUT, still, the price seems to be a blocker.

That's why we can't decide if our unique value proposition is too low or if we haven't successfully communicated our value to our users.

We have decided to change our landing page. We thought maybe there is a disconnect between how people perceive us (kids, toys) and what we'd like to be (high end)

I'd be very interested in your product, except your website completely fails at convincing me. The way it's presented, I pay you $85 for a framboise tart, and I have to bake it myself on top. I might as well buynit already made, for cheaper, and at least I won't mess it up.

If you really have a product that helps me repeatedly and reliably make such tarts, then show it.

I went to your website before reading this, because I like things like Blue Apron, and I like desert, and I had the exact same reaction as all of your other customers: it's just too expensive.

I feel like I would be your target market: in theory, I enjoy cooking and baking, but I never do much.

Have you considered repackaging your product as a "mail order pastry course"? I feel like I would be more likely to pay more if this is framed as "learn a new skill" than "here's a kit that makes delicious pastries".

I'm building a platform for scientists to run and share their experiments (anything computable) including their whole research environment. Since experiments usually require specialized expensive hardware (like GPUs), I'm thinking about ways to make this affordable to individuals and academia. I'm planning a few modalities for experiments to run: 1) on their localhost (targeted towards individuals) 2) on the cloud (targeted towards academia) 3) on their own servers (enterprise version).

Technically, I know this is right sequence for each modality to be built. But businesswise, is it the best way to be launched?

Also, What are your thoughts on this space/market?

I'm not one of your target users but...When you start a company, the optimal launch order is usually the one that gets you actual users. You can figure out the rest later.

Our current focus is mass market, ad-based apps for Android, mostly based around a spreadsheet-like framework. The company is called Unwrapped Apps ( http://www.unwrappedapps.com ) and our latest Android app was launched yesterday ( https://play.google.com/store/apps/details?id=com.unwrappeda... ).

The main thing we'd like to talk about is our prioritization and focus - are we spending our time the best way we can?

Feel free to ask your question :)

Over the past six months we've been writing an Android framework with two uses. One use is to spin apps off of the framework. The other use for the framework would be for the ultimate goal of publishing a spreadsheet app for Android from it.

We just published our first app based off the framework yesterday (linked in parent post). The framework work we have done so far was put into yesterday's app (a browsable, searchable spreadsheet-like front end to the Android device's call log, text messages, calendar etc.)

Our next step will be to implement in the framework the feature to save and share a document. The spreadsheet ultimately can use that, but it can also be used in the nearer term for spinning off an app to save an Android phone's text message history.

We also plan to have an app using this framework which can handle Microsoft Access databases. The features needed to do that will help in the ultimate goal of a spreadsheet.

The main prioritization conflict for us is how much work to do on these cast-off apps, versus how much to do on our ultimate long-term goal of a spreadsheet. Especially work which can't be rolled back into the longer term goal.

So the question is if the game plan of writing a framework with an ultimate goal of a spreadsheet, casting off apps from the framework on the way to that ultimate goal - does that sound like a decent game plan?

We are not up and running yet. But we are building a subscription management tool that helps SaaS businesses manage , view their user's subscription.

We are going to solve a lot of problems that come with subscription like taxes, usage rules, customer portal, price a/b testing , dunning management etc... we are going to support multiple payment gateways like braintree and stripe.

We are working on this product because we struggled to find a subscription management tool for the right quality and price in our last subscription product I hope that you choose us because we really need the help XD.

This sounds like a cool idea - when do you plan on launching your v1?

Thanks, we really appreciate your feedback. We are planning to launch our Beta within February.

We mainly have two questions.

1) Once we launch how do you sell your product to get the first 50 users. Our best guess is to use ads channels like google ads.

2) How do you approach figuring out problems that users have. The way we are approaching this problem right now is by building features that we wanted previously.

We would also appreciate it if you have any additional advise.

You got a user here, definitely need something like this.

We are really excited that this is something that you are looking for You can sign up for updates here: https://docs.google.com/forms/d/1sdb0lFy7bIh2qHQAizGP4y3F-jw...

We will send you an email when we launch.

I would attempt to hand recruit my first 50 customer - find startups who you think could use the service - also I might prefer email marketing over ads. Best way to figure out the problems users have is to ask them :)

Hey Michael, Aaron!

We're working on a streaming platform that lets viewers interact with the games streamers are playing in realtime, think TwitchPlaysPokemon but built for any game, a visual control set and sub-second stream delay.

It's a bit of a foreign concept for a lot of folks that don't know about collaborative gameplay, and I'm curious what direction we should go about our landing page. Show streams? Talk about the interactive portion of the platform? A mix of both (what we're doing right now)

https://beam.pro/

I went to your site and I am watching this stream: https://beam.pro/Noplix - how do I participate in the game play?

That stream doesn't have interactive controls enabled, try heading to one of the streams labeled as interactive from the home page.

You might need to log in to get interacting, you can use: User: testaccount2 Pass: DummyPassword

Seems to me like you should be featuring interactive streams on the frontpage - its hard to showcase your value prop if its hidden

@YC Thanks for hosting this.. Great founder learning ! Team @anuncio_rocks

you're welcome :)

Building a product search engine (https://percht.com) Percht has a few goals:

1) give you the lowest price for any product online 2) develop an assistant that’ll buy you whatever at x price automatically 3) build an unbiased gameified community around shopping

What do you think are the biggest issues with the approach many other shopping search engines have taken that have prevented them from beating entrenched monopolies like amzn and goog which dont have complete results or 100% consumer alignment.

Personally, I prefer to go to Amazon over shopping comparison sites for a couple reasons: I already have an amazon account so I don't have to create an account and put type in my cc info and I know amazon can ship quickly. I wonder if you can build a shopping comparison site that holds my cc and shipping info so that I can literally check out on the shopping comparison page...

agreed. thats' the goal with #2 the shopping assistant. web crawlers are currently all GET, it's about time we start POSTing data

why not dollar shave club for everything? yes you can buy onetime purchases but I need personal shopper that reorders. Here's everything I buy find me the best prices at the time of purchase and how often I want them. oops, I have too many of this hold off a week. And you have $5 maybe $10 per month to do it.

Hey Michael and Aaron,

I'm currently working on Workmand. An on-demand labor service for businesses. Our biggest struggle is acquiring users. What strategy(s) would you recommend to get the traffic to use our product.

Also what's the best way to learn from your first early customers to know what features to build and focus on, so that users love your product. Since those are our two biggest focus for now.

Hi Michael and Aaron,

For first time entrepreneurs creating an early stage startup, it can be very expensive to incorporate and do all the IP and necessary legal things to form the corporation. I made the mistake of incorporating in Texas and just recently formed in Delaware. I looked at Clerky, but their service seems costly as well.

Do you know of anyone who does low cost legal advice for early stage startups?

Clerky is probably the best bet here - looks like they will do it for $400 all in

Hi Michel and Aaron,

2 friends and I started an infrastructure inspection automation software company. We have 1 big customer.

2 out of 3 of us see big potential in expanding the software and customer base. The 3rd has very little drive and wants to milk our 1 big customer for every penny. We but heads every time we discuss anything.

When we started the company we split the equity 1/3 each(big regrets).

Suggestions on how to move forward?

How is the board organized and is there a vesting schedule?

There is nothing more than a handshake. No vesting schedule. 1 LLC.

We have been close friends for 20 years.

Sounds like it is time for the three of you to have an honest conversation about what you each want and whether or not you should be working together on a startup.

Hopefully like you've been friends long enough to get through the pain to the right answer and keep your friendship.

Hey Michael and Aaron, thank you for doing this. A few questions I'd love to hear your answer.

What advice would you give to yourself at 21 for launching and building your own startup?

Well being in college or working your day job, what's the most important thing(s) to work on to get your company bootstrapped to take on Full time?

What's your best advice for those applying to the Fellowship program.

Thanks!

Team team team - make sure you are working with 1-3 smart and passionate people who you are friends with. The more technical team often the better. Next step - build the simplest and easiest MVP possible and launch.

We built DataFire (DataFire.io), a cloud-based framework for working with APIs. Similar to zapier but geared toward developers (and as a consequence 10x more powerful).

We've gotten a lot of engagement and positive feedback from existing users, but after the initial launch haven't seen as much growth as we'd like. What can we do to attract new users?

I didn't see any costs on the site? Also, I think you need to blog various solutions for startup problems. Then post the articles on here and other places developers hang out. "For instance how to hack together a marketplace with nothing but a little javascript and $X/mo." To me your in the MVP business. but than again that's what I'm looking for.

That's a great idea. So far we've had mixed success posting solutions to specific problems (e.g. sync your github issues to a spreadsheet), but each solution only appeals to some small subset of people, and doesn't convey the enormity of the set of problems DataFire can solve. A higher level post that uses DataFire to solve multiple problems aimed at a single goal would do more to stimulate people's imaginations.

Hi Michael and Aaron. Just a curious general entrepreneur question. If you had to name one uncommonly known success factor beyond the standard-fare hard work, baseline intelligence, persistence etc., that you immediately look for in other successful entrepreneurs, what would that be?

Can they clearly communicate what they are working on in 2 sentences in a way that any parent would understand? Do they believe the measurement and testing?

Hi Micheal and Aaron

Our startup is called Streamly and is a live video platform for artists to share their live shows with fans round the world. We're in the early stages with a few users.

My question is based around traction channels for my startup. And another question if you have time based around co founders

Feel free to ask your questions :)

As an engineer looking to launch an app with a wide target audience, should I focus on marketing to individual niches and gain traction, or explain how my tool can actually help everyone?

Can you be more specific? What is your idea?

A web app to manage human relationships. Reminders to ping people over varying periods of time, emphasizing note-taking to help stir up conversation topics.

I see myself using this in my personal life, with former business colleagues, as well as when job interviewing.

I literally only just saw this, and I'd definitely have had a question.

Any chance these can be announced a bit further in advance in future?

Michael, we are disrupting the real estate rental market with http://www.gromia.com, a platform that replaces realtors. We have good traction and first revenues in Europe and would consider to test in SF. We aim to be the Airbnb (I know you scouted them in 2009) for mid-long term residential rentals. Would you consider us for an acceleration at YC?

Thanks for the note - can you tell me more about the business? How much traction - which cities in Europe do you support? What is the ideal usecase for your product?

@YC Thanks for hosting this. Great learning for founders and startup teams. Team @anuncio_rocks

Hi Michael and Aaron, We started as a digital health company powered by data science. Gradually, what we have discovered is that a lot of our competitors in digital health want to use our data science engagement platform. Now, we have two questions: (a) should we continue doing the weight loss or pivot fully towards a data science engagement platform company ? (b) If we should switch to data science engagement platform, should we focus on health or should we go towards all consumer apps?

Thanks, Ashu

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