Judge and prepare to be judged | Hacker News Reader

Judge and prepare to be judged

daniellemorrill.com

15 pointsrdl15 comments

This is ultimately an obvious truth -- if you are selling a product for a small profit per customer, you need a large number of customers to make enough profit to cover fixed costs. You need a scaleable, low cost way to reach those customers. The lower the profit per customer, the lower your customer acquisition cost needs to be.

You can build a business entirely through offline word of mouth if you are selling >$100k items and there are limited potential customers. Specialty professional products/services, especially in security, tend to work this way. Blackwater got publicity, and you saw what happened to them; most defense contractors (both systems and operations) tend to operate in relative silence.

But, even in the case where you can do this, say selling to the government, there are other good reasons for publicity besides being discoverable for your customers. Palantir has a baller PR effort, even though most of their sales (for one of their two products) are to the government -- Palantir's reputation makes it easier to justify the decision to buy, and it helps with recruiting (both raising awareness by candidates, and helping to justify to "dragon parents" when a graduate goes to Palantir instead of Google or Facebook.

(an ex-Palantir guy on Facebook pointed out that this Suster post: http://www.bothsidesofthetable.com/2009/09/16/most-startups-... is relevant...)

So, is every post from this site going to be submitted to HN? I already have an RSS reader.

I don't. So, yes.

So, is every post from this site going to be submitted to HN?

Hopefully. :)

Good intro, I can't get my browser to load the rest of the article though. Disappointing, I usually like her posts.

It ends rather abruptly with "Let’s give them something to talk about.", but that's intentional. This is sort of a teaser post for their new pivot I think.

"Be the change you want to see in the world" - if you want support, then be supportive of others, positive / helpful criticism or otherwise.

Again with the Alexa-worshipping.

Twilio's rank is really low for a company with that much name recognition/revenue/employees/valuation etc and is actually great evidence that Alexa is a terrible indicator of B2B success. And Zendesk's number is skewed because they use their domain to setup customer service portals for their users. 99% of that traffic is going there to submit a ticket to some other company and could care less about Zendesk or their product offerings.

I don't think it matters that Alexa works. What does matter is finding publicly accessible leading indicators of startup success.

Maybe those are watching the browsing behavior of experts in a field. Maybe it's watching for twitter references. Maybe it's sitting outside a company's office watching foot traffic. Maybe it's looking for who sponsors conferences. I don't really care what the indicators are; what I care about is that someone cares about finding them, and is diligent and intelligent enough to find them.

>>I don't think it matters that Alexa works.

It matters when it's used to handwave dismiss a valid argument and followed by "so don’t even try that line on me".

This argument doesn't make sense. Should Tumblr not get credit for subdomained blogs, or Wordpress.com? This seems tantamount to not giving Facebook or Pinterest credit for logged in sessions. How is this traffic any less an indicator of usage?

I think you're referring to Zendesk. Insofar as Alexa's rankings are accurate (they aren't, but that's another matter) then Zendesk.com is indeed the 650th highest trafficked site on the internet and they are clearly getting a lot of usage. That's great for Zendesk, but it says very little about how they compare to other B2B companies. Just as a low Alexa rank (above a certain minimum threshold - say 500,000) tells you very little about how a given B2B company is doing.

Example:

Website A: CRM software for real estate agents that charges $2,000 per month. Alexa rank 120,000.

Website B: in the same business but gives their software away free, lets users host blogs on their site and advertises with popups served from the domain (a huge Alexa boost to lots of porn sites, ad networks and others) and as a result has an Alexa rank of 9,000.

If you were to do a post on the real estate CRM industry you'd probably dump on company A and praise company B - even though we know essentially nothing about either business. Website A could be doing millions per month in revenue and have 50+ employees and B could be one guy working nights and weekends and making $2,000 per month.

tl;dr apples-to-apples comparisons between B2B companies based on homepage traffic stats = fail.

More examples:

http://www.csc.com/ Alexa 30,000 - Market Cap $7.1 Billion

https://www.saic.com/ Alexa 43,000 - Market Cap $5 Billion

And just a random one I've used that I knew would have a high Alexa given how their service works:

http://unbounce.com/ Alexa 6,000 - Total employees 20, total funding $850k (per crunchbase)

If you were to rank these three companies, unbounce would be on top and you'd be telling the CEO's of two companies worth a combined $12 Billion+ to stop whining and be more like unbounce.

It. is. not. ranked. by. web. traffic.

Web traffic is one of several signals used to produce the ranking.

Then maybe you shouldn't say things like this?

"Think your B2B startup shouldn’t be expected to ever have meaningful web traffic? Twilio is #13,158 in global web traffic and Zendesk is #650, so don’t even try that line on me."

P.S. I remain a big fan of what you're doing here - was just trying to help.

Looking forward to the next post.

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