Building a startup is slightly harsher than an island full of cannibals.
710 karma · joined January 13, 2012
Previously co-Founder of data analytics firm, Edge Solutions.
https://twitter.com/nwenzel
They're not on a path to acqui-hire, they're not trying to pivot away from something you rely on, they have fantastic support (but more importantly a product that's so clear and easy to use you don't really need support).
We (SimpleLegal) are ZenPayroll customers and love it. They are the exact reason your company should seek out startups as vendors.
Though, I think you summarize it pretty well. Straightforward and honest answers to address objections.
Though, IBM is selling off what were core assets because they don't deliver the growth and margins that Wall St require. It's either a great move to move towards the future, or a sign that they aren't able to serve customer's needs. Kudos to their leadership for seeing it no matter which one it turns out to be. I'd love to hear Clayton Christensen's thoughts on IBM's recent moves.
Customers are investors. They invest their time, people, and budget into your product. That's true whether you're the newest NoSQL database to hit the market or Oracle.
When you sell to a customer, you're making them a promise.
We're talking to several universities now to find the best way to serve them. Sometimes we run into structural road blocks. One school requires a printed hard copy form be sent between departments for processing. But we're still trying to find a way to make it work. Mostly because I'm hellbent on moving companies, schools, and governments from paper to digital.
But, if I'm a company looking for vendors, I evaluate "good" vs "bad" in the context of sustainability of the org. If they don't have a path to profitability and sustainability as a company, they're bad. If they do, they still may fail. But big companies fail too. I know no one gets fired for buying Oracle, but what are you missing if you ignore Postgres?
1. Startups have a high(er) chance of pivoting out of something you don't want. They aren't stuck selling you the same bloated database (or whatever).
2. Don't buy from startups that don't have a path to monetization and growth. If the path leads to no where. That's not a company, that's a resume bullet point.
3. Don't buy from a startup just because they're a startup. If they suck at service, they're not worth your time and money.
4. Yes, startups should fit to customer expectations. But if a big company's or govt's buying model prevents them from buying a superior product, then maybe something is wrong with the buying model. Govt buying decisions led to a $300M webapp. Marc Benioff offered to build and host it for free for 5 years.
http://www.washingtonpost.com/national/health-science/health... "A White House official said the administration could not have accepted the offer, because it ran afoul of federal contracting rules."
Sure, AirBnB certainly appears to have hit the scaling part. But I bet they're still trying to find new models and new markets. Hilton, Marriott, Starwood and others dominate the corporate travel market. Dropbox appears to be moving towards photo sharing on the consumer side and config/settings sharing on the tech side.
Startup, not startup. Probably irrelevant. I know that there's value in having companies who think like a startup as vendors. Procurement departments aren't structured to be allowed to think that way and I think that's bad for the companies they serve.
[0] http://steveblank.com/2010/01/25/whats-a-startup-first-princ...
[1] https://casetext.com/case/jacobellis-v-state-of-ohio/paragra...
Buying from startups is not without risk. But buying from large vendors also carries risk. A diverse set of suppliers is a good thing.
Now if you could just help me get them from point A to point B, that would be even better.
I think the startup-specific part is being willing to identify mistakes.
Don't get divorced because divorce is expensive... not such good advice. Choose the right partner and don't settle so that you don't get divorced... good advice.
Great point. Simple and head-smack obvious when you read it. Hits right at the core.
Immediately after reading, I generalized to "cheap up-front, expensive back-end costs."
I had a chance to meet the founder. They're targeted to the younger crowd. Recent grads moving from dorm life to city life with nothing in between.
I think I you can get some of the benefits of "group living" from having roommates. I was fortunate enough to land in two great roommate situations in my early and mid 20s. I suppose a startup jumping into a fragmented market makes sense.
Looks like pg needs to update his tweet: https://twitter.com/paulg/status/411213292330164224
Not only do law firms have trouble collecting 100% of billed, they aren't able to bill 100% of their standard rates. [0]
The same partner that made the talking/billing comment believes that part of the problem is the amount of time between receiving the service and paying for the service.
Our legal billing API should help fix that problem, too.
[0] See page 6 (pdf) http://ar.thomsonreuters.com/_files/pdf/2013ReportLegalIndus...
Hopefully being able to forecast legal expense is part of that learning process. In this case, the client was able to separate the one-time from the ongoing legal spend.
Reviewing your bill is great way to make better decisions in the future. The point in the post about investor-driven costs is a good example of something they can do differently the next time around. Hopefully it's also something that startup founders reading the post can be proactive about.
The post was not meant to be anti-lawyer in any way. I know much of the commentary around law firms turns out that way. But it's certainly not my intent.
Flat fee billing is the better business model. It's not always possible, but it takes the stress out of watching the clock.
Check out what Spark Capital is doing to help alleviate this problem: http://bijansabet.com/post/48787521538/picking-up-our-own-ta...
But yes, time-based billing sets up an inherent conflict of interest. Flat fee is great when it makes sense. Our company advisor setup a flat fee matter at his prior company to cover any phone calls or emails. No more watching the clock.
We're headed in that direction and consulting services as well.
Really all time-based billing suffers from an inherent conflict of interest. The supplier controls the inventory. They control the amount, price, and quality of inventory consumed while the buyer has little if any data.
For your own situation, when you ask your CPA for a budget follow up with a request for a fixed fee proposal. If the two numbers differ significantly, ask for an explanation of why costs might exceed budget. That at least gives you a starting point. You could ask for time sheets, but if it's a one-person show, there may not be any time sheets. Fixed fee is the answer.
We're talking to a few law firms now. Small/mid-size firms believe their structure is a competitive advantage over Big Law firms. Our dashboard is a good way for their customers to see that advantage.
We just added integration to Xero. Quickbooks and Netsuite will follow, so we'll be well positioned to help small/mid sized law firm.
Re: standardization. It's industry and matter specific. Patents and IP work is very different from litigation and insurance work. But, within each vertical we have opportunity for price discovery which is really exciting to me. Fixed fee legal work is growing in popularity because attorneys and their clients are tired of watching the clock.
I like your analogy of a a legal bill to a log file. Though, hopefully SimpleLegal isn't "like" an analytics dashboard. Hopefully it is an analytics dashboard. Or at least a giant spotlight pointed at one of the largest P&L line items where companies currently have almost no data.