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I've worked for ten startups during my career. Even before the last couple, I had learned to recognize the "one big customer will bring us to the promised land
by notacoward 10y ago
I've worked for ten startups during my career. Even before the last couple, I had learned to recognize the "one big customer will bring us to the promised land" pattern as one of the surest indicators of failure. Those customers always end up sucking all the resources away from a more generally appealing product direction, and they never come through financially, so your development ends up months or years behind where it should have been with nothing to show for it.
Some big companies deliberately take advantage of startups to do free work, with never any intent to buy the product itself. If you see this happening at your company, my advice is to start planning your next move.
- jboggan 10y agoMy favorite brush with this phenomenon: Startup I worked for is approached by a large multinational corporation for a demo project, something that if integrated with their logistics could bring us a ton of money and raise our exposure. The initial outlay from the multinational was only $50k but the size of the promised follow-on contract would really validate our out-sized Series A round that had been raised years before. About half of the engineers were pulled off of their normal work of gradually improving the product and the API to build this crash project. It was a really hard slog but the team pulled through and delivered something great, but it took around two months and the end product was very specifically tailored to that client and not generally useful for the rest of our customers. Our team presented the final product, thinking we were about to kick the door down and be showered with a fat contract . . . as I understood it the rep from the multinational ended up not having any purchasing authority, he was an ambitious ladder-climber trying out a long shot with a little leftover budget he had. He had commissioned the whole project unsolicited from his managers and when he tried to skip up the chain with his genius plan he was shot down pretty hard and we never heard from him again. Meanwhile the normal work for the rest of our tiny but paying customers was stacking up and we had half the team demoralized and fatigued. Alas.
- acchow 10y agoEven large startups. Starbucks cost Square some $80+ million.
- notacoward 10y agoResponding to myself based on comments elsewhere. I've worked in enterprise storage, supercomputing, etc. In some of those markets it is indeed essential to have at least one big fish as a prospect, but that should as much as possible remain a sales-side phenomenon. Impact on engineering should be minimal. When it affects engineering too much, as another commenter said, you're no longer a product company. You've become a consultancy. If that fits with your business or exit plans, great. Enjoy your reward to the fullest. However, most of the time, you'd be betraying and failing people who wanted to join a product-oriented company and make a bigger difference.
- jacobush 10y agoBeen there, great indicator.