If you spike, we don't care and we don't charge you extra. We only care if you're consistently significantly over the limit month over month.
589 karma · joined December 23, 2008
That's true. I was hoping to stir thought in the reader rather than provide an answer.
If I had to wrap it up, I think it would be that we have to strive anyway even if it's "futile" in some sense of the word. Because of course it isn't. We do what we do, and that's enough. Perhaps there doesn't need to be a reason, a goal, or an end.
Suppose there's two businesses, each making exactly $10,000/mo in revenue. One charges $10/mo to 1000 active customers, the other charges $1000/mo to 10 active customers. Which business is "better?"
Clearly there will be two sides, neither of which are "crazy."
If the total market size for both is limited, then business B is better because you're extracting more money from the limited potential number of customers.
If the total market size is large, business A has proven it can get orders of magnitudes more customers, which is MUCH more important going forward. If you can get 1000, you can get 2000, etc., and indeed probably ever cheaper to acquire those customers. Company B still has the very risky, difficult job of solving customer acquisition.
If tech support per customer is high, obviously company B is better.
It is a general rule that over time you can find ways to increase prices (i.e. just do it, have tiers, addons, etc) and decrease cost of acquiring customers. That again makes Company A more interesting because they can start doing that whereas B has just embarked.
Again, in the end one isn't automatically better, but your perspective that "it's crazy" I believe is certainly not true.
Companies where people aren't paying AT ALL I agree are often in fact valueless. But when they do take out their wallet, that's not nothing.
Like in the Matrix, you don't truly know someone until you fight them.
To counter-point, for some businesses, the cost to acquire a customer even with the efficiencies you describe is still too much. For example a consumer product that's $99 per year with 50% gross margin needs acquisition costs lower than even your plan will provide.
In that case -- which is common in high-tech startups -- cold-calling can still be an effective way to start, because the learning you get is more valuable than revenue at the start.
Still, more companies could succeed with your strategy than who are willing to try, and you're right they're missing out.
(See nbashaw's comment)
It's yet another potential source of both great profitability (when you do something THEY think is hard in just 10 hours) or loss (as what you described).
Almost everything here is double-edged...
I very much agree with your points, especially that "billable hours" is not the point, that expediency or rarity of talent can easily be more important.
A fuller, more accurate treatment of the concept has to include that. Perhaps it's still useful for folks to (sometimes!) think about optimizing the person/hour, since that is of course an important part of the equation, and optimizing it does help.
"Clients by and large are fine with it." --Only big companies are fine with it. If you're a web designer for local business, they would not be fine with it.
Obviously if you have a profitable company you are, in some sense, "efficient." The point is that going "above and beyond" takes more time and money than not -- which is probably inefficient, especially at first -- and the question is: Is that tradeoff worth it?
Still, I waited 4 weeks before making this post, so that's a decent amount of time.
Also, I was nevertheless hoping for a "bump" that would help launch the company, and I believe most people also believe that would happen, so it's useful to debunk the notion that a "bump" is to be expected.
We're NOT limiting plugins that can be installed. We're just building a list that we'll SUPPORT.
It is unfair in the sense of "unfair advantage." Of course I'll exploit it -- I'd be stupid not to -- but it's unfair.
This is exactly why increasingly it's hard to do a startup without teaming up with someone with a reputation. Maybe this just proves that.
But I didn't say I'm standing the same shoes. I said I'm going to see if I can do another startup.
Taking the largest, most vibrant blogging (and now general website and for some CMS) platform on Earth and trying to not only make it awesome but contribute new features and plugins back to the world isn't big enough for you?
Finally, you should know that for me "doing something bigger" isn't a motivation. I don't have a need to "change the world" or somesuch thing. I want to do something valuable, something understandable, something fun and interesting, and yes of course also make money.
He never said to outsource customer development. You made that up.
In one of the actual examples, he had the VA simply form a list of 100 potential people he could reach out to for market research. Then he did the research himself. This is exactly the opposite of what you think he said.
The other example was doing simple data-entry with a back-end ordering system because it was easier (at first) than automating it.
That's exactly what Rob does with VA's -- applies a relatively small cost to save him a ton of time, much more so than alternatives like trying to automate it with code.
Probably if you said "all of these" that's too good to be true, but surely 1-4 is normal if it's really the case.
First, without using an nginx + fastcgi/Apache/whatever front-end it's not true that just running W3TC scales your site. I was doing that for my own blog and whenever I hit the top of HackerNews my site would go down anyway because Apache is still a beast and you need the proxy to move bytes.
Second, getting a sensible configuration of W3TC including e.g. memcached instead of the file cache is not trivial.
Third, it's not true that a "commodity VPS" server will match our speed. We found that hard drive speed and processors (e.g. Intel Xeon not AMD crap you get at some hosting providers, Amazon AWS included) together made a 2x difference in page-load speed in our tests of various VPS providers.
Fourth, none of that helps you with security. You still have to be on top of which plugins are secure, which patches are faulty, file permissions. Among the obvious security measures, we also have HARDWARE security devices (e.g. DoS and obvious hacking signatures) in front of our servers -- something you'd have to pay a lot for at MT (if you can do it at all).
Fifth, we have awesome WordPress-specific tech support from true experts, something that I'm sure you'll admit you don't get at MT or VPS providers like Rackspace and Amazon.
However I DO AGREE WITH YOU that anyone who is technical and wants to do the tests and research absolutely can produce a system reasonably close to ours. However wouldn't YOU agree that most WordPress users either aren't that technical or -- like me -- simply don't want to deal with it?
That's where we come in.
You're right of course that you cannot support 100% of all custom code ever written for WordPress. But it's a bit heavy-handed to conclude that therefore it cannot be done, don't you think?
Think of this like an Einstein thought-experiment -- it's not how you should run your life every day, but it's maybe a nice foil for thinking about such things.
The point isn't that you have no competition, but that you have enough raw material to be competitive yourself.
The point isn't that you're guaranteeing success, but that since most pitches (that I see) don't include ANY of the advantages you just listed, those that DO have those advantages look a lot better at the outset.
Of course anyone can succeed, and many should try. But that's not how investors think; they think in terms of reducing risk, and things like past success and traction are ways of reducing risk.
Furthermore, wouldn't you also agree those two companies also have a tremendous quantity of innovation, and never take the gas off innovation, to an extend probably not feasible or necessary with other companies?
I would agree with you that if you have the design talent of Apple, plus the output of Apple, plus the marketing success of Apple, that this is of course a wonderful advantage.
But that's rare... maybe other paths to success are more practical for many founders out there.