4 ms·

Finding Product Market Fit

99 points by gwintrob 11y ago

Alex3917 11y ago
The problem with this is that had they made the exact same post on Hacker News an hour earlier or later there's a good chance it would have gotten no more than two or three upvotes and never even made the front page. If that had happened, which in fact is probably the most likely outcome given repeated experiments, does that mean that it was a bad business idea? (For example, this is a great blog post but it's getting no upvotes, and so most likely no one is ever going to see this comment.) I think the first idea was probably just a bad idea and they could have figured that out on their own or by asking someone. The second idea, if they had gone and asked professors, they probably would have gotten mostly folks telling them it was a great idea. But in fact that was still a bad idea also. And the third idea was a legitimately good idea, but I think the validation they got was as much due to luck as anything else. So I like the idea in theory, but it's trickier than it sounds. A lot of people make the mistake of not doing any market valuation. But even if you put in the work to do this, there is still a very high value to building something that has a lot of optionality going forward.
- rdudekul 11y ago
  I disagree with the statement that it was pure luck that they got so many upvotes/stars based on timing. Many other posts of startups got more upvotes and failed. Segment is providing a very useful service of translating and routing analytics data to other services. There is a lot of value in the service (in terms of time/resources it saves). High value services, sooner or later get discovered and more importantly, people/companies start paying for such services. Great article though, some thing that each technical founder should read.
  - deleted 11y ago
    [deleted]
- jorgecurio 11y ago
  You know this is what I was thinking. HN is such an arbitary measure to gauge whether it's a vitamin or a painkiller. If one of their other idea suddenly got a ton of upvotes, they might have ended up with a different product. In my honest opinion, the product really doesn't matter when there's money being thrown around. Any of those previous 'bad' ideas he posted if enough money was raised for it, you bet your ass professors and students began demanding it. I'm just realizing this more and more that most of the shit we read are exactly that bullshit because the contextual experience is missing. It is only reading the comments and realizing that 'wow I'm not alone and maybe im not crazy' building shit and trying to get people to pay you for it can take a long time a good 24 months which is ironically the point at which I'm thinking of calling it quits a while ago. Unfortunately, segment.io is a vitamin not a painkiller. The problem that it solves is a 'nice to have' imho. For instance, at first it seemed like a great idea. One single point to send all your analytics to and then plugin bunch of other 3rd party SaaS. Sort of like Zapier. But unlike Zapier which is a great pain killer for non technical users, segment.io is sort of a vitamin at best at the problem it solves and the target but hey this is just my take on it.
nostrademons 11y ago
I had a startup about a year ago whose "product" was collecting the career wisdom of alums 5-10 years out and sharing it with undergrads so that they didn't have to make the same mistakes that everyone else did. All of the alums, professors, and mentors we talked to about loved the idea, and were more than willing to share their wisdom. We built it, we collected stories, we launched...and students derived basically zero value from it. The problem was that without actually being in the situation that lead to those mistakes, they were unable to contextualize the advice: it was all just random words, good in theory but not interesting or actionable. Some things can only be learned by experience. Ironically, though this meant the death of the startup, it actually served its intended purpose for me and my cofounder - the experience of actually doing the market research, building it, responding to feedback, and launching taught us a lot about what we wanted out of our careers, what we were good at, and what would be a blind alley. I suspect that finding product/market fit is similar. I know about 8-10 people who have successfully built a startup. In all cases but one, they spent at least a year, usually 18-24 months floundering around without any idea what they were doing. These were not uninformed people - they had all read Hacker News, Lean Startup, every blog post and Paul Graham article they could get their hands on, etc, and in most cases had worked for or even founded startups before. In my case, we actually did the 100+ or so customer interviews, we got great initial feedback, we put mocks of our preliminary product designs in front of prospective users and got "Oh yeah, we'd definitely use that, let us know as soon as it's done!", and still got no users once we built it. It just takes 18-24 months to develop the kind of deep knowledge necessary to build something innovative. That's working full-time and assuming you take all the shortcuts available to you. And that's time to the point where you have a viable idea - on top of that, it's usually 3-6 months to build out a prototype, and unless you've gotten very lucky with social connections, that's the beginning point of where you might viably get seed funded. Profitability is usually 2-3 years beyond that. Budget accordingly, and don't get discouraged when you're a year in and don't have a clue what you're doing.
- alexashka 11y ago
  Hey, great write-up. Do you have the collection of stories posted somewhere? It'd be interesting to have a look.
politician 11y ago
We love Segment, but what I'd like to know is how you guys managed to get a year's worth of funding for four people to mess around on obviously difficult to monetize ideas. What sorts of initial funding did you have? How does that work?
- deleted 11y ago
  [deleted]
- pkrein 11y ago
  We raised $600k coming out of YC S11 demo day for the classroom lecture tool. We kept costs low, and paid ourselves just enough to live on for ~2 years (plus servers, shared apartment doubled as office, etc.) We burned down to about $80k in cash (~3-4 months runway, not recommended) about 6 months after the launch of analytics.js, and then raised $2m (June 2013).
  - politician 11y ago
    That sounds like a pretty difficult time; I'm glad you guys made it through.

99 points by gwintrob 11y ago

The problem with this is that had they made the exact same post on Hacker News an hour earlier or later there's a good chance it would have gotten no more than two or three upvotes and never even made the front page. If that had happened, which in fact is probably the most likely outcome given repeated experiments, does that mean that it was a bad business idea? (For example, this is a great blog post but it's getting no upvotes, and so most likely no one is ever going to see this comment.) I think the first idea was probably just a bad idea and they could have figured that out on their own or by asking someone. The second idea, if they had gone and asked professors, they probably would have gotten mostly folks telling them it was a great idea. But in fact that was still a bad idea also. And the third idea was a legitimately good idea, but I think the validation they got was as much due to luck as anything else. So I like the idea in theory, but it's trickier than it sounds. A lot of people make the mistake of not doing any market valuation. But even if you put in the work to do this, there is still a very high value to building something that has a lot of optionality going forward.

rdudekul 11y ago
I disagree with the statement that it was pure luck that they got so many upvotes/stars based on timing. Many other posts of startups got more upvotes and failed. Segment is providing a very useful service of translating and routing analytics data to other services. There is a lot of value in the service (in terms of time/resources it saves). High value services, sooner or later get discovered and more importantly, people/companies start paying for such services. Great article though, some thing that each technical founder should read.
- deleted 11y ago
  [deleted]
jorgecurio 11y ago
You know this is what I was thinking. HN is such an arbitary measure to gauge whether it's a vitamin or a painkiller. If one of their other idea suddenly got a ton of upvotes, they might have ended up with a different product. In my honest opinion, the product really doesn't matter when there's money being thrown around. Any of those previous 'bad' ideas he posted if enough money was raised for it, you bet your ass professors and students began demanding it. I'm just realizing this more and more that most of the shit we read are exactly that bullshit because the contextual experience is missing. It is only reading the comments and realizing that 'wow I'm not alone and maybe im not crazy' building shit and trying to get people to pay you for it can take a long time a good 24 months which is ironically the point at which I'm thinking of calling it quits a while ago. Unfortunately, segment.io is a vitamin not a painkiller. The problem that it solves is a 'nice to have' imho. For instance, at first it seemed like a great idea. One single point to send all your analytics to and then plugin bunch of other 3rd party SaaS. Sort of like Zapier. But unlike Zapier which is a great pain killer for non technical users, segment.io is sort of a vitamin at best at the problem it solves and the target but hey this is just my take on it.

nostrademons 11y ago

I had a startup about a year ago whose "product" was collecting the career wisdom of alums 5-10 years out and sharing it with undergrads so that they didn't have to make the same mistakes that everyone else did. All of the alums, professors, and mentors we talked to about loved the idea, and were more than willing to share their wisdom. We built it, we collected stories, we launched...and students derived basically zero value from it. The problem was that without actually being in the situation that lead to those mistakes, they were unable to contextualize the advice: it was all just random words, good in theory but not interesting or actionable. Some things can only be learned by experience. Ironically, though this meant the death of the startup, it actually served its intended purpose for me and my cofounder - the experience of actually doing the market research, building it, responding to feedback, and launching taught us a lot about what we wanted out of our careers, what we were good at, and what would be a blind alley. I suspect that finding product/market fit is similar. I know about 8-10 people who have successfully built a startup. In all cases but one, they spent at least a year, usually 18-24 months floundering around without any idea what they were doing. These were not uninformed people - they had all read Hacker News, Lean Startup, every blog post and Paul Graham article they could get their hands on, etc, and in most cases had worked for or even founded startups before. In my case, we actually did the 100+ or so customer interviews, we got great initial feedback, we put mocks of our preliminary product designs in front of prospective users and got "Oh yeah, we'd definitely use that, let us know as soon as it's done!", and still got no users once we built it. It just takes 18-24 months to develop the kind of deep knowledge necessary to build something innovative. That's working full-time and assuming you take all the shortcuts available to you. And that's time to the point where you have a viable idea - on top of that, it's usually 3-6 months to build out a prototype, and unless you've gotten very lucky with social connections, that's the beginning point of where you might viably get seed funded. Profitability is usually 2-3 years beyond that. Budget accordingly, and don't get discouraged when you're a year in and don't have a clue what you're doing.

alexashka 11y ago
Hey, great write-up. Do you have the collection of stories posted somewhere? It'd be interesting to have a look.

politician 11y ago

We love Segment, but what I'd like to know is how you guys managed to get a year's worth of funding for four people to mess around on obviously difficult to monetize ideas. What sorts of initial funding did you have? How does that work?

deleted 11y ago
[deleted]
pkrein 11y ago
We raised $600k coming out of YC S11 demo day for the classroom lecture tool. We kept costs low, and paid ourselves just enough to live on for ~2 years (plus servers, shared apartment doubled as office, etc.) We burned down to about $80k in cash (~3-4 months runway, not recommended) about 6 months after the launch of analytics.js, and then raised $2m (June 2013).
- politician 11y ago
  That sounds like a pretty difficult time; I'm glad you guys made it through.