dhouston

Having gone down both the ramen-profitable and the traditional-VC roads, here are some pitfalls that deserve mention with the former. The two are not mutually exclusive, and the angel/VC road has its own well-known brambles, but anyway:

- Your biggest fear should not be flaming out spectacularly, but rather creating a zombie that neither truly lives nor dies. The downside of ramen profitability is that (by definition) it's easier to waste years rather than months on an idea that won't ultimately succeed.

- In fact, you may lose your window of opportunity to someone who figures out how to use cash to get further faster.

- Outside investment forces you to get your head out of the day-to-day firefighting every month or so to 1) think big picture 2) set long term goals 3) be accountable for your progress. The key is "outside"; otherwise it's easy to meander along and procrastinate on hard questions.

- The upside of ramen profitability is a culture of frugality. The downside is it's easy to waste time on things you could be paying others to do. For example, paying an accountant to do your company taxes might blow away the entire year's earnings -- does that mean you should learn the tax code and do it yourself? What about negotiating a contract, or even taking out the trash? (These are real examples of things we did ourselves at the ramen-profitable company.) Delegating is harder if it means losing your hard-earned badge of profitability.

Joel has a good post on this topic (Amazon vs. Ben & Jerry's): http://www.joelonsoftware.com/articles/fog0000000056.html

Hopefully I won't feel stupid posting this, but I wished someone had done the same thing when I applied. (pg -- if you'd rather I not share this, feel free to delete)

Original Dropbox YC app: http://files.getdropbox.com/u/2/app.html

Had to remove some names and one sensitive thing but otherwise unedited

If they can get the trademark, they can maybe win a domain dispute via ICANN:

http://www.icann.org/en/dndr/udrp/policy.htm

if they can prove registration in bad faith and that the owner has no legitimate interest.

If the twitvid.com guys really did buy the domain and design the site after twitvid.io got started, maybe they could somehow prove that stealing their thunder was the only "legitimate interest" and that the domain was acquired in bad faith.

Sadly it sounds like an uphill battle -- and even in the best case it might be a Pyrrhic victory as trademarks take the better part of a year to issue (if not more) and the UDRP procedure probably isn't speedy either. And then they'll fight it, and you'll spend all your time in court instead of building your company.

as a starting point, "how to win friends and influence people" by dale carnegie (less weird than it sounds)

Probably what happens when no one's in charge and the legal, backwards compatibility, etc. teams have veto power over the UX people.

See also: (re: windows vista shutdown UI)

http://moishelettvin.blogspot.com/2006/11/windows-shutdown-c...

prepay is a good tactic for small customers -- getting the entire lifetime value up front in most cases.

but why are you bothering with customers spending <$1/mo? (we avoided pay-as-you-go for this reason)

Patent link: http://www.google.com/patents?id=K7MoAAAAEBAJ&dq=uniloc+...

didn't serial-code-based shareware registration schemes exist before the 1993 filing date? certainly shareware and the concept of "registering" did -- maybe the novel part of the patent is the idea of an identifier tied to your environment as a constituent part of the serial #?

shit happens. getting rejected is part of the entrepreneur's job description :) fortunately, YC lets you try again.

my first YC app (for my first company, an online SAT prep which I ran for a few years) was rejected, and their critiques were largely right.

i was accepted 2 years later with a different idea (dropbox).

that said, helpful as it may be, YC is neither a necessary nor sufficient condition for success. it's still up to you to MSPW.

for this, no -- tim wanted some help with his charity effort, so we put something together quickly.

otherwise, we use analytics, split testing and surveying all the time to drive business decisions, like what policies to set, what features to prioritize, content for landing pages/signup/referral flows etc. of course, we also listen to feedback and our own product intuition -- hard data is just one input.

sean ellis also helped us a lot -- see http://startup-marketing.com -- and i like dave mcclure's "aarrr" model (google it)

congrats sam!

well, they do charge more than the competition ;)

the fundamentals haven't changed; the gateway drugs are just different :)

php and rails tutorials, html, flash, even custom myspace profiles (for example) are the BASIC for today's kids. then you get your facebook apps, iphone apps, etc as you move up the food chain to more sophisticated languages.

and to preserve your "orangeness", you might as well fire off smartass comments as they occur to you even if they don't contribute to the conversation. it's the HN equivalent of rewarding thats-what-she-said jokes, and it'll just be a different kind of karma whoring.

slashdot got this particular issue right (at least in the early 2000s, before their digg-envy took hold) by not awarding karma for anything modded up "Funny". while these "funny" comments -- usually brief and snarky or perverted -- would still appear +5, there was otherwise no long-term incentive. unfortunately there's no analogous control mechanism here (and copping slashdot's mod system altogether seems too heavyweight.)

there was also a karma cap (+50?) above which your comments would start out at 2 points instead of 1; otherwise there's little point in accumulating more karma than that.

their moderation faq is worth a read (skip about a third of the way down to "will you delete my comment?"): http://slashdot.org/faq/com-mod.shtml

also, some winding threads are really interesting (and vacuous ones are easy to skip) -- i don't know if it's worth the tradeoff to cull them.

(yes, i'm replying to the top-modded post so my comment goes above the fold.)

congrats pg and jessica! start teaching him python :)

nice job mark & jason -- clever & well executed.

that said, it's the marketing equivalent of a lottery ticket; stunts can be huge (for example, our critical mass at dropbox came from one carefully-crafted digg post) but only if they're aligned with the target audience (which probably isn't the case with hilary swank & family social networking)

they're not quite the same. if you raise an absurd amount of cash -- say $50mm on $500mm pre -- your bar for even a 2x return is over a billion dollars, eliminating virtually all your possible exits. especially in this environment.

congrats again peter :)

almost certainly wasn't voluntary... note the part about DAG claiming the financing should be renegotiated after the business model and projections "changed" suddenly after the financing closed.

jonathan -- thanks for the writeups & best of luck at google. you'll find some good future cofounder material there. swing by dropbox HQ sometime :)

This worked for us (Dropbox) too. Google's another example of this progression, though they also partnered with companies that already had big mainstream audiences.

Also, make it easy for existing users to invite new ones. Better still, design your product to be viral/users bring in other users as a natural consequence of using the product (e.g. PayPal, etc.) This sounds obvious but often isn't done well.

we're hiring a couple badass engineers at dropbox (python/c++; client/desktop app dev experience preferred).

we're backed by yc and sequoia... shoot me an email at drew AT getdropbox.com

ugh. there's plenty of time to start companies, but those 4 years of "not needing to worry about food or paying rent" are unique.

so the guy's a noob, big deal -- we've all been there.

he'll get a rude awakening soon enough, but i would imagine HN ought to encourage starting somewhere rather than not trying at all?

</preach> :)

while this smacks of other "rackets" like SSL certificates (especially when they used to cost hundreds of dollars and verification was dubious at best), this isn't that outlandish of a practice -- think MSDN subscriptions, apple developer network subscriptions, etc.

generating cash probably isn't the motive here -- rather it's putting a $375 hurdle in front of an app developer so that they only have to deal with reasonably serious verification requests.

(put another way, when you raise $500mm, and have a $15bn valuation, $10mm yearly revenue -- and that's assuming half of all app developers convert, which is extremely unlikely given that most have probably moved on -- is a drop in the bucket.)

if the $375 is really a pain for devs, they could probably come up with some non-cash hurdle (i.e. something that is just annoying/takes time, like an essay or a petition or something equally inane that's a pain to do but trivial to verify) for the cash-strapped

sweet. goodbye fogbugz :)

cute, but almost certainly won't work through proxies.

congrats scott & jeremy! great writeup.

facebook, youtube

the best way to get a good VC to take you seriously is through a trusted referral, and then to have something promising to show -- a great prototype or great traction.

blasting emails is a waste of your time and theirs (hi, i'd like you to give me $15mm, but can't take the time to email you personally or find a trusted intro) and it smacks of desperation.

sure they do. esp when you take into account inventing and bringing to market all the sustaining innovations (making hard drives smaller, better screens, software, etc. -- plus the operational overhead of coordinating all these millions of people's effort) needed for your iPod, laptop, etc. the number of man hours is staggering.