3 ms·

> This piece just seems like investors giving out, what appears on the surface to be helpful advice, but really are just trying to streamline the pitch process,

by birken 10y ago

> This piece just seems like investors giving out, what appears on the surface to be helpful advice, but really are just trying to streamline the pitch process, so they can more quickly evaluate deals. I think it is pretty helpful for people applying to YC to understand what YC partners are looking for. I'm as cynical as they come but I can't really fault the post, it isn't telling you how to make a successful company, it is telling you how to (as you state) essentially streamline your pitch to YC. But to compliment your point: the startup I worked at, Thumbtack, was terrible at pitching for ~4 years and it significantly impacted our ability to raise money. During this time we were out-raised by many flashier competitors (Exec, Homejoy to name a couple) who I'm sure were much better at pitching. At the end of the day though it is the customers and not the investors that decide if your company is a success. I'd also add "persistence" to your list of qualities which I think make a successful company (I'd actually put it first -- or at least tied for first with being lucky).

tarr11 10y ago
Hm, it looks like thumbtack raised an enormous amount of capital compared to Homejoy, both before and after. What do you mean by "terrible at pitching"?
- birken 10y ago
  For "terrible at pitching", the official story [1] is trying to raise a Series A and getting rejected 42 times. I don't agree with everything in the official story, but the part about going to a bunch of meetings and being rejected over and over again for 6 months is accurate. I went to a handful of those meetings and I assure you it was very bad. My favorite one was a partner at NEA telling us that if we could only be more like Cherry [2] then we'd be fundable. And after finally raising the Series A, Exec [3] came along and despite being only a few months old raised a huge seed round at twice Thumbtack's valuation. My memory of the timeline was a little off for Homejoy, but there was a time after Homejoy raised ~$40 million dollars at ~2-3x Thumbtack's valuation that made it feel like we were underperforming where we should be in fundraising. Thumbtack did eventually raise more money shortly thereafter and then even more money in the future, but at the time you don't know any of this. 1: https://www.thumbtack.com/blog/building-thumbtack/ https://www.thumbtack.com/blog/building-thumbtack/ 2: https://www.crunchbase.com/organization/cherry/ https://www.crunchbase.com/organization/cherry/ 3: https://www.crunchbase.com/organization/exec https://www.crunchbase.com/organization/exec
  - nostrademons 10y ago
    I do wonder if the factors that made it so hard for Thumbtack to raise were also the factors that made it succeed in the end (i.e. the VCs were just wrong in their assessment of what the market needed, Thumbtack was right, and that's why Homejoy & Exec's VCs lost millions while Thumbtack is worth a billion). I've used Thumbtack as a customer for my wedding officiant & photographer. One of things that stands out for me about the local service-provider market is that you really do want to solicit multiple bids, you want to be able to read reviews from other customers, and you want a chance to get to know the providers before committing to them. Thumbtack makes all of these processes super easy. The conventional wisdom in the on-demand market c. 2012-2014 was that customers just wanted convenience, they wanted one-tap order and have someone show up, and sharing-economy workers were basically interchangeable commodities. All of these assumptions are true for Uber and false for basically every other on-demand market; it makes sense that a VC chasing the next Uber would get them wrong.
    - birken 10y ago
      I absolutely agree with you. It was an interesting experience because before you get in the room with these investors, investors that you've seen giving speeches and writing articles, you assume they are somehow these visionary people. Of course they'll ask all the right questions and understand things better than you do. But after the experience it was quite the realization that most of them had no idea what they were talking about (at least about our space). And if your vision of the world is different than theirs, there isn't that much you can do. Frankly we naively tried to appease them (for example we actually build a "Cherry"-like version of Thumbtack in a weekend to appease the NEA guy), but it doesn't work and they all reject you for so many different random reasons you couldn't even appease them all if you wanted to. You just really need to do your thing and hope you are right. They won't ignore traction though. Get enough traction and any VC will come around. To the point of the article, I think we were bad at pitching. We didn't have much traction when we raised the Series A but we had the obvious kernels of it. But we talked way too much about what we had done (which we thought was impressive), but VCs really want to hear much more about what you are going to do. And even when we did talk about the vision, it wasn't (and still isn't) anywhere near as sexy as Uber. Now while Thumbtack was a success for the founders, early investors, and early employees, it still has a tiny tiny fraction of the overall services market. While it is clear that companies that went out of business were "wrong", I'm not sure at what point Thumbtack's approach becomes "right".
balls187 10y ago
Fair point. Perhaps a more fair statement would have been: "good advice for pitching, but really, spend your time building your customer base."
- mpbm 10y ago
  yeah, I read it as an attempt to help founders get back to the stuff that matters by spending less time developing pitches.

by birken 10y ago

tarr11 10y ago

Hm, it looks like thumbtack raised an enormous amount of capital compared to Homejoy, both before and after. What do you mean by "terrible at pitching"?

birken 10y ago
For "terrible at pitching", the official story [1] is trying to raise a Series A and getting rejected 42 times. I don't agree with everything in the official story, but the part about going to a bunch of meetings and being rejected over and over again for 6 months is accurate. I went to a handful of those meetings and I assure you it was very bad. My favorite one was a partner at NEA telling us that if we could only be more like Cherry [2] then we'd be fundable. And after finally raising the Series A, Exec [3] came along and despite being only a few months old raised a huge seed round at twice Thumbtack's valuation. My memory of the timeline was a little off for Homejoy, but there was a time after Homejoy raised ~$40 million dollars at ~2-3x Thumbtack's valuation that made it feel like we were underperforming where we should be in fundraising. Thumbtack did eventually raise more money shortly thereafter and then even more money in the future, but at the time you don't know any of this. 1: https://www.thumbtack.com/blog/building-thumbtack/ https://www.thumbtack.com/blog/building-thumbtack/ 2: https://www.crunchbase.com/organization/cherry/ https://www.crunchbase.com/organization/cherry/ 3: https://www.crunchbase.com/organization/exec https://www.crunchbase.com/organization/exec
- nostrademons 10y ago
  I do wonder if the factors that made it so hard for Thumbtack to raise were also the factors that made it succeed in the end (i.e. the VCs were just wrong in their assessment of what the market needed, Thumbtack was right, and that's why Homejoy & Exec's VCs lost millions while Thumbtack is worth a billion). I've used Thumbtack as a customer for my wedding officiant & photographer. One of things that stands out for me about the local service-provider market is that you really do want to solicit multiple bids, you want to be able to read reviews from other customers, and you want a chance to get to know the providers before committing to them. Thumbtack makes all of these processes super easy. The conventional wisdom in the on-demand market c. 2012-2014 was that customers just wanted convenience, they wanted one-tap order and have someone show up, and sharing-economy workers were basically interchangeable commodities. All of these assumptions are true for Uber and false for basically every other on-demand market; it makes sense that a VC chasing the next Uber would get them wrong.
  - birken 10y ago
    I absolutely agree with you. It was an interesting experience because before you get in the room with these investors, investors that you've seen giving speeches and writing articles, you assume they are somehow these visionary people. Of course they'll ask all the right questions and understand things better than you do. But after the experience it was quite the realization that most of them had no idea what they were talking about (at least about our space). And if your vision of the world is different than theirs, there isn't that much you can do. Frankly we naively tried to appease them (for example we actually build a "Cherry"-like version of Thumbtack in a weekend to appease the NEA guy), but it doesn't work and they all reject you for so many different random reasons you couldn't even appease them all if you wanted to. You just really need to do your thing and hope you are right. They won't ignore traction though. Get enough traction and any VC will come around. To the point of the article, I think we were bad at pitching. We didn't have much traction when we raised the Series A but we had the obvious kernels of it. But we talked way too much about what we had done (which we thought was impressive), but VCs really want to hear much more about what you are going to do. And even when we did talk about the vision, it wasn't (and still isn't) anywhere near as sexy as Uber. Now while Thumbtack was a success for the founders, early investors, and early employees, it still has a tiny tiny fraction of the overall services market. While it is clear that companies that went out of business were "wrong", I'm not sure at what point Thumbtack's approach becomes "right".

balls187 10y ago

Fair point. Perhaps a more fair statement would have been: "good advice for pitching, but really, spend your time building your customer base."

mpbm 10y ago
yeah, I read it as an attempt to help founders get back to the stuff that matters by spending less time developing pitches.