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Comment by zach | Hacker News Reader

Wow. My curiosity is piqued. I look at this list and wonder, what are we missing? I don't doubt Xobni is really onto something. But it's hard to get fascinated by an Outlook plugin. Clearly there's a lot more going on.

I also find it a little curious that there's a disconnect between the "put something in front of the public as soon as possible" meme and the long lead times that Loopt had first and now Xobni has before their product reveal. Is the better growth strategy to put something in front of investors first and see if you can hold off on the public launch?

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> But it's hard to get fascinated by an Outlook plugin. Clearly there's a lot more going on.

Gabor's posts here have indicated that they're doing stuff with NLP and machine-learning. There's a lot more you can do with that than what we'd think of as a simple Outlook plugin. Think of a smart personal assistant that understands each email, can file and classify them, trash the spam, send out canned responses to common queries, and flag your cell-phone or PDA for urgent messages from trusted folks. It could replace secretaries.

That, and investors are likely the people who have the most need for such a tool. So it'd naturally look better to investors than it would to the rest of us. That's the risk of putting all your ideas before a certain group of people.

> Is the better growth strategy to put something in front of investors first and see if you can hold off on the public launch?

I doubt it. Historically, that approach has had very few successes and many, many failures. Once in a while you may get an Amazon.com or an Akamai that takes tons of capital to get started but then has a wide moat and enormous profits. But more likely you'll end up with a Go or a Value America or any one of a number of dot-com flameouts. (Even that's misleading, as Amazon got users and went profitable before taking outside investment, then operated in the red for like 7 years while they built up infrastructure.)

Personally, I'd put Xobni at the top of the YCombinator deadpool, with Loopt in the top quarter, even though those seem to be some of PG & investor's favorites. But then, they're swinging for the fences. If they succeed, they'll also be among the most lucrative.

(Incidentally, I'd put Wufoo, VirtualMin, and DropBox at the bottom of the deadpool, i.e. most likely to succeed. You may all publicly pillory my predictions later...)

Care to elaborate more? I am 100% with you in case of VirtualMin, but it is interesting to hear why you're more skeptical of Xobni. I am personally very intrigued: a lot has been said about lack of innovation in "electronic mail" but these guys are doing something about it and what they're doing happened to impress a lot of people.

Unless you know something we dont' :)

I know nothing that anybody else doesn't. This is all pure speculation.

My skepticism about Xobni is:

1.) They're doing a lot of things that are commonly regarded as mistakes, i.e. launching too late, writing desktop software, making things complicated.

2.) A friend of mine did something very similar in 2003 - it was an Outlook plugin to categorize and organize your e-mail. He gave up on it because it seemed very difficult to get people to pay for an e-mail organizer unless it saves them the expense of having to hire someone to deal with e-mail, and it better be damn good if it's going to take over the job of a person. He perhaps didn't carry it through as far as he could've (he was coming off another failed startup and was running low on cash), but his observations seem valid.

3.) E-mail analytics seems to be an all-or-nothing product: either your software is reliable enough that you can just run it and trust it'll get the right answers, or it does more harm than good. If you have to double-check the program's results and/or approve every action, it'll cost you more time than it saves. I've heard that NLP has gotten much better recently, but I still had the impression that it's far from perfect. The Xobni founders and Gabor seem like sharp guys, but I kinda doubt that they're good enough to take what's basically bleeding-edge research and make it into something that business execs can just count on.

4.) They've taken a lot of money without users, revenues, or any proof that their market exists. As a result, they have, basically, one shot at this. If they blow it, they can't really flounder around until they find the right angle of attack; they're basically screwed.

I'm certainly willing to be proven wrong - really, I make these predictions so everyone can say "Don't you feel foolish now?" when I'm wrong. I learn better when it's humiliating. ;-)

But one thing I don't put much stock in is the "Well, lots of investors think it's good, so therefore it must be." Lots of investors is an idiot. (The subject/verb disagreement is intentional.) There've been cases - like Go, or the dot-com bubble - where everybody was certain that this was going to be the future, and it never ended up going anywhere.

Great post. Extra respect for 'I make these predictions so everyone can say "Don't you feel foolish now?" when I'm wrong. I learn better when it's humiliating. ;-)'

Regarding point #4...Maybe they've demoed their stuff to investors which is why they've gotten a lot of cash?

4) This is why you raise capital through equity rather than debt. The investors know there is risk, and that they can lose everything if the venture fails. If they do fail, the Xobni's founders images may be tainted, but they will not be screwed.

And these are big name investors who are SMART people. Dont think they take their investments lightly. I can guarantee you they thought about it carefully and deemed that there is potential with this company (probably more than what people on the outside see right now).

Equity investors still generally won't let the founders say "Okay, it turns out we were wrong, let's go back to square-one and find a new product idea." They certainly aren't going to say "no", but they probably won't put up more money either - and if you're burning money in accordance with the cash you have from investments, that effectively means death.

"Screwed" is with respect to this present venture. I have no doubt that the Xobni founders will be successful with something, I just would bet against it being with Xobni.

And investors are smart - individually. Groups of investors, however, are generally dumber than the individuals that make up the group, hence my use of the plural. There are also a few conflating factors that may affect their assessment of Xobni's prospects, namely that VCs are pretty close to an ideal market for Xobni's product (inflating their estimate of its usefulness to other markets) and that their risk tolerance is higher. 5% odds of success isn't too bad for a VC, but it's terrible for an entrepreneur.

> Gabor's posts here have indicated that they're doing stuff with NLP

NLP? Great, maybe it can make me get over my Luposlipophobia.

"It could replace secretaries."

Most of us don't have secretaries to replace. I worked in a place where I used to get 700 emails a day. Still no secretary.

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