Comment by tomasien | Hacker News Reader

Comment by tomasien | Hacker News Reader

I've had two startups "fail" for unusually clear reasons:

Startup #1: too hard to believe it could be big. Widely loved consumer website we tried to fund with angel/VC money, and it was too implausible it could ever be a $1b+ company. We needed a non-VC strategy to fund that business but didn't realize that - ran out of gas.

Startup #2: found PMF, business-model fit, high-growth, and had an amazing team. Blown up by a nightmare original founder (I was part of re-founding an existing business) and poor corporate governance. The original founder blew up a Series A and re-cap after the team new team made the company actually work.

What I learned from both is how finicky startups are and why conventional wisdom exists. The more you try to re-invent things that aren't core to the business or fit a square peg into a round hole, the more chances to fail you create.

Don't try to get 1000 things right. Try to get 1 thing right and rely on the wisdom of others to get the other things "close enough" to right to attract talent, capital, time, and attention to the 1 thing you did get right.

Could you elaborate on this in some detail?

I'm in the position of believing I have "1 thing right." I worked in an industry (banking) with a serious software problem and one particular vertical that I'm confident I could build a good product for. I was in a position to evaluate all of the major vendors that would be my competitors, and I'm confident that I could get one particular thing very right. Ths problem is that I have pretty much no idea where to go from there. I've never started a company, I didn't even study business in school. In my career so far I've pretty much done two things: I got very good at that particular aspect of banking, and I taught myself to code and now do it professionally. But I'm so aware of the gap between my own knowledge and the skills required to run a business that I wouldn't really feel confident trying to go get investment money (and wouldn't know how to begin even if I thought I could use it responsibly). I guess what I'm trying to get at is: once you have the one thing, where do you go for help with the thousand?

Have you considered an accelerator: https://www.ycombinator.com

What is YCombinator's take for their 100k investment? Also, it seems like YCombinator sells businesses as a product, not product as a business. Like their marketing on the website is all geared to investing in a business, not investing in a product that leads to a business. That seems to be the 21st century trend. Can you explain this dichotomy in today's market? It seems kinda fake.

They get 7%.

I don't know what you're asking with the rest of your question.

I’m the CEO of alloy.co and know banking software about as well as anyone, I’d be happy to help assuming youre not trying to solve identity verification for the industry. tommy @ domain

The main thing is you have to start, get a team to follow you somehow, and get a reference client live and on the record using your software to solve a huge problem. Consider YC or techstars for your first $$$ investors. Some may tell you the negative of working w them but they’re deeply wrong

Take care that your current employer has no claim on your idea -- avoid any business formation steps that could be dated as prior to your exit.

Fine to do this but unlikely to matter and don’t let not being sure about this stop you for even a second

You generally don't get investment money day 1. If you are able to pull that, it's because you've had success being a founder before (or have rich friends/family). But as a first-time founder? I think you'd be wasting your time without having something real to show. Generally, that's an MVP with some degree of traction.

To get to that point, you have to do a lot of the things bigger companies have to do. Those things just tend to be less complex and you have fewer people to do them. Accounting, sales, engineering, marketing, etc., etc. all exist, to some degree, in a two-person company. At first, you learn to do them yourself. You'll probably suck at them. It's okay. They all have some degree of a feedback loop. If you're open, you'll figure it out. Eventually, with success, you'll hire other people to do them.

From there, you can get access to a great network by doing an incubator as someone else mentioned, or by just getting out there and talking to users (do this day 1). But you're worried about years 2-4 when you haven't even started year 1 yet.

If you want to discuss in more detail, I'm a founder with a product in banking that's been moderately successful. Email's in my profile. Feel free to reach out.

Pmf?

Product Market Fit

Product market fit

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