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From your past experience, do you have anything constructive to tell this new team on how they can attempt to build a business without knowing the future that w

From your past experience, do you have anything constructive to tell this new team on how they can attempt to build a business without knowing the future that would make you more comfortable using it? I ask because I see a lot of these dismissive comments on HN which end with "open source it" - and that doesn't seem like a super constructive piece of advice to a new startup team. FWIW, at my current company, an analytics company, about five years ago, we made it clear that no matter what data we collected, if you leave the service or we shut down, we will get you all that data to take with you in a very reasonable format. It's always risky to invest in a new service, but sometimes risks bring great rewards, and I think it's helpful if you're giving input, to try to make it constructive.

edoceo 7y ago
I think the point is: monitize now to reduce risk
- codezero 7y ago
  People are often a lot more upset when they pay money and there is no exit plan. Shut downs can be abrupt and chaotic, suggesting they monetize immediately doesn't seem helpful either. If that's the suggestion, I'd ask: how much would you pay and how long do you expect notification in advance of a shut down? Do you expect a refund? Full or partial? Do you expect portability? If so, what kind.
  - edoceo 7y ago
    $1/trigger/mo. 30 days. No refund if services were delivered, if I pre-paid then pro-rated refund. No expectation of portability.
michaelbuckbee 7y ago
I would feel much better paying them money for this than hoping it's free forever.
andyburke 7y ago
Build a cost model. Set prices that would make them profitable based on that model. Offer the service at that price. See if people are willing to pay for it. Verify that costs and profitability match the model. If the model turns out to be inaccurate: A) Change the architecture to reduce costs to the point where it becomes profitable at an attractive price point for customers, or B) Move on to the next idea. It's not that complex, and more startups should be more realistic about profitability.
- codezero 7y ago
  I feel like there's too much focus on the price here, and the thing I am concerned with is that the original comment was about how services shut down and they didn't want to invest in the unknown. Paying for that seems doubly risky to me. That said, I get your point that if you can create a model that gives you a good sense of future profitability, you are in a better position not to die as a company.
  - sbarre 7y ago
    I think the concerns are related. The likelihood of a company shutting down is greatly affected by its profitability.
  - michannne 7y ago
    I think it's helpful to consider. You'll definitely need the cash to ramp up infrastructure
manigandham 7y ago
Start charging immediately, and put up a real pricing page with SLAs. Find out as soon as possible if people will actually value this enough to pay for it. This provides a signaling of value, creates a real business relationship, and directly contributes to the lifespan of the vendor.
- codezero 7y ago
  Not to diminish your point but that’s really hard to get right. Most early stage startups have absolutely no idea what their product is worth.
  - bfung 7y ago
    It doesn't have to be right from the get go. Hard is why it should get done. A free model doesn't really tell their business if there's actually demand and if people actually value it when supply is "infinite" when in reality it isn't. Guess a high price with some research for similar things and lower it iteratively. Def. see what sticks.
  - manigandham 7y ago
    But that is my point. You won't know until you do it. It's a constant experiment, you just have to start somewhere.
  - pas 7y ago
    They could go the AWS route, start high and decrease prices. Also they could combine this with discounts, such as if someone preallocates capacity for X month, they get f(X) % discount. They should build a core customer base. Solicit feedback about what niche feature they would happily pay for. For example here's a GitLab issue that I think people would (might?) use: https://gitlab.com/gitlab-org/gitlab/issues/15536 https://gitlab.com/gitlab-org/gitlab/issues/15536 (provide a "lock service" or a queue with max concurrency gate and launch pipelines / jobs)
  - theli0nheart 7y ago
    If everyone avoided doing hard things, our world would be a lot worse off.

edoceo 7y ago

I think the point is: monitize now to reduce risk

codezero 7y ago
People are often a lot more upset when they pay money and there is no exit plan. Shut downs can be abrupt and chaotic, suggesting they monetize immediately doesn't seem helpful either. If that's the suggestion, I'd ask: how much would you pay and how long do you expect notification in advance of a shut down? Do you expect a refund? Full or partial? Do you expect portability? If so, what kind.
- edoceo 7y ago
  $1/trigger/mo. 30 days. No refund if services were delivered, if I pre-paid then pro-rated refund. No expectation of portability.

michaelbuckbee 7y ago

I would feel much better paying them money for this than hoping it's free forever.

andyburke 7y ago

Build a cost model. Set prices that would make them profitable based on that model. Offer the service at that price. See if people are willing to pay for it. Verify that costs and profitability match the model. If the model turns out to be inaccurate: A) Change the architecture to reduce costs to the point where it becomes profitable at an attractive price point for customers, or B) Move on to the next idea. It's not that complex, and more startups should be more realistic about profitability.

codezero 7y ago
I feel like there's too much focus on the price here, and the thing I am concerned with is that the original comment was about how services shut down and they didn't want to invest in the unknown. Paying for that seems doubly risky to me. That said, I get your point that if you can create a model that gives you a good sense of future profitability, you are in a better position not to die as a company.
- sbarre 7y ago
  I think the concerns are related. The likelihood of a company shutting down is greatly affected by its profitability.
- michannne 7y ago
  I think it's helpful to consider. You'll definitely need the cash to ramp up infrastructure

manigandham 7y ago

Start charging immediately, and put up a real pricing page with SLAs. Find out as soon as possible if people will actually value this enough to pay for it. This provides a signaling of value, creates a real business relationship, and directly contributes to the lifespan of the vendor.

codezero 7y ago
Not to diminish your point but that’s really hard to get right. Most early stage startups have absolutely no idea what their product is worth.
- bfung 7y ago
  It doesn't have to be right from the get go. Hard is why it should get done. A free model doesn't really tell their business if there's actually demand and if people actually value it when supply is "infinite" when in reality it isn't. Guess a high price with some research for similar things and lower it iteratively. Def. see what sticks.
- manigandham 7y ago
  But that is my point. You won't know until you do it. It's a constant experiment, you just have to start somewhere.
- pas 7y ago
  They could go the AWS route, start high and decrease prices. Also they could combine this with discounts, such as if someone preallocates capacity for X month, they get f(X) % discount. They should build a core customer base. Solicit feedback about what niche feature they would happily pay for. For example here's a GitLab issue that I think people would (might?) use: https://gitlab.com/gitlab-org/gitlab/issues/15536 https://gitlab.com/gitlab-org/gitlab/issues/15536 (provide a "lock service" or a queue with max concurrency gate and launch pipelines / jobs)
- theli0nheart 7y ago
  If everyone avoided doing hard things, our world would be a lot worse off.