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Their logic can be understood: make a good product, and the rest will catch up. But in real life marketing and hype really matters, and when everyone does these

by rsp1984 4y ago

Their logic can be understood: make a good product, and the rest will catch up. But in real life marketing and hype really matters, and when everyone does these things while you naively sit and code, they get an advantage in the market, and you get your cool product. I sometimes get the feeling, also by watching their public content on YT, that a lot of YC advice, especially w.r.t. what to prioritize, is from an era of startups about 10-15 years ago. Back then there were about 10x fewer SaaS startups (maybe that's a conservative estimate) and if you had a decent product that solved a problem for your customers and you were just plugging away at it, that was enough to get noticed and grow. Nowadays every worthwhile niche seems to have 10-15 companies in it in no time, all of them doing more or less the same thing. Even if your company differentiates in a very special and useful way, getting that across to your potential customers is a totally different game now. You basically need 1-2 full time staff doing nothing but content creation and social media outreach marketing. Also locking in (micro-) influencers in your niche is key. Once they start promoting your competitors it's game over. From the content that I see publicly on YT etc. it seems to me that YC thinks such things are basically a waste of time. And back in the late 2000s and early 2010s that was largely true. If you are targeting a narrow hyper-niche it is probably still true, however it's just not the reality for 99% of today's startups, even YC ones.

baxtr 4y ago
Super interesting. Do you have an example in mind where a startup excels through marketing in a crowded niche with the mentioned 10-15 startups?
- lossolo 4y ago
  In the crypto space currently, there are projects that excel in terms of technological merits, making them far superior to their competition. However, the competition often has better marketing and generates more hype and win the market.
  - ccortes 4y ago
    Technological merits are not the product.
  - toomim 4y ago
    I don't think that's true for crypto companies with actual customers (like coinbase) but rather the ones that are surviving on hype/investment alone, which all crash sooner or later, and aren't really companies. Just fluff.
- satvikpendem 4y ago
  Laravel, Vercel, come to mind.
BoorishBears 4y ago
This logic just implies YC is more relevant than ever. If there's 10-15 players in the space and you're the one with YC connections... Meanwhile if there are barely any players in your niche you have time to get things wrong and iterate in isolation, no need for the all-or-nothing style of growth
- ethbr0 4y ago
  I think parent's (and OP's) point was that YC was more valuable for investing and strategy, but less valuable for finding customers. And since customers are the most difficult part now (because 10-15 players), it adjusts the relative value of something that doesn't help you acquire customers. IOW, the differences between a "build it and they will come" historic era and a "make me care about you" modern one.
  - BoorishBears 4y ago
    I don't agree, the parent's point is directly attacking strategy: > a lot of YC advice, especially w.r.t. what to prioritize, is from an era of startups about 10-15 years ago. I'm saying any misalignment in strategy matters less than implied. I spend a lot of time with current and past YC founders these days, and the recurring thought has always been "if you know already know business they're not going to teach you that much". > it adjusts the relative value of something that doesn't help you acquire customers. Money is how you acquire customers. From outlasting competitors to advertising to improving your product, it's money that turns into customers. So YC being valuable for investing is tantamount to being valuable for gaining customers.
  - dang 4y ago
    YC has never taught "build it and they will come" – they give plenty of advice and encouragement to find customers and will add, er, kinetic energy if you're not actively on that. That's a huge focus. This, however, not so much: > "You basically need 1-2 full time staff doing nothing but content creation and social media outreach marketing" If that's the way you're thinking, YC's going to try to change your mind, and if you don't want to change your mind about that, YC's probably not a good fit. (I'm not speaking for YC here! just from my own experience as a founder, observer, HN mod)
hdivider 4y ago
I think we are definitely in a new era. My view: entrepreneurs should take on a little more technology risk. Not just market risk. License IP from federal labs and government agencies -- there is SO much advanced tech sitting on shelves. Do government contracting to fund R&D. Go beyond just software, especially the SaaS kind, because ultimately, software can only make so much difference in society. Investors don't like government and anything sciencey, especially when there's a hardware component, so I don't believe most hotshot founders will go for it. But hopefully enough will take on more technology risk. The biggest problems out there right now require a mix of traditional software, ML, hardware and research. All put together in the right way.
- testmasterflex 4y ago
  Can you give any example of such “advanced technology”?
  - wanderingmind 4y ago
    For example, there is significant IP around additive manufacturing beyond plastics that are sitting as a squatting duck with national labs and universities that can be leveraged
  - hdivider 4y ago
    Consider all these: https://technology.nasa.gov/patents https://technology.nasa.gov/patents And the NSF's equivalent, the many national labs, defense labs, and research-intensive universities (eg UC Irvine is keen to for entrepreneurs to pick up IP; as are lots of others). There's so much out there, and it's just waiting for entrepreneurs to commercialize it. Many things won't have direct commercial application, but much of it does. Typically the entity doing the licensing doesn't just give you the IP, but a full teaching program and network to help you get further.
- jschveibinz 4y ago
  You are describing a moat, and it is indeed important. I’ll step up on the soapbox for a moment… A moat can be unique technology, an exclusive licensing agreement, an exclusive IP (patent or otherwise), very unique experience or insight, an exclusive geographic location, a very unique business model, a very unique skill and/or reputation, etc. Follow the leader seems like a plan, but it’s probably not a good plan unless you have tons of money to spend on marketing and sales. In my previous home city, someone opened a bake shop with coffee that was targeted at the growing Korean population. It was unique: Korean pastries, Korean friendly faces, great coffee, etc. They probably invested $100k in opening this shop. It became very popular. Then, in about nine months, five more copycat shops opened up within a mile or two of this store. Result: business went way down for all of them. They all lost revenue, and they all invested a lot of money. Software is prone to this kind of copycat behavior. The thinking goes like one of these two sequences: 1. People like software—>I write software—->People like [note apps, for example]—>I can write a note app in a week—->I’ll start a SaaS business 2. I write software—->I think [fill in the blank] is cool—>I will write an app for [that] in a week—->I’ll start a SaaS business Writing software is not a differentiator. It’s not a shortcut to big bucks. It’s not a solution in itself. It’s just a tool. Anything you can write in a week (or 3 months) can be done by 100,000 other people—-in a week (or 3 months). You have to start with a problem, defined by a large group of people, that you have the experience and expertise to solve in a unique and valuable way. Software may be part of that solution, but it’s just a fraction of the whole pie. You need to think about the whole solution—-and the moat. It may take 5 to 10 years to develop your moat. Be patient and be observant. Good luck.
mcguire 4y ago
Your comment put me in mind of something I saw in 1999 or so; where a local newscast in Austin profiled a local start-up and included: "We can't discuss what we do because someone else could take the idea and beat us to it." That was the beginning of the dot-com bust.
- JohnFen 4y ago
  Yep. I've heard that sentiment more times than I can count over the decades -- and in every single case, without exception, those ventures failed pretty hard. I think its because the sentiment expresses a fundamental misunderstanding of how business works and what makes it successful. The idea is not the most important ingredient in a business, the execution is. For the most part, it doesn't matter if someone else takes your idea and beats you to it as long as your offering is better at solving the customer's problem. And that's a matter of execution.
satvikpendem 4y ago
I'm not sure where anyone said marketing doesn't matter, even YC will say that "build it and they will come" is false. But, talking to customers face to face or in person is much more valuable that marketing, because you experience first hand what the customer wants in a way that is not very doable with just marketing.
twelvechairs 4y ago
> every worthwhile niche seems to have 10-15 companies in it in no time B2B in established industries can be much more open, though often requires a level of domain knowledge to enter.
ramraj07 4y ago
Maybe that’s your clue that your idea is bad then? YC likely has decided it’s not in their interest to badmouth your idea, but if you are making the 20th data pipeline company in the same batch, maybe the smart thing to do is take a step back and ask yourself “is this really what I want to spend 5 years in?” From what I hear in the YC YouTube videos, it’s clear that the partners quickly form an image of how much brutal feedback you can take and measure their responses accordingly. My suspicion is that they are unable to gauge who’s good at that brutal feedback until you’re well into the program and they would rather have 100 grifters for that one golden founder who can truly take feedback. I suspect that one founder gets a very different treatment from everyone else. Clearly OP was not that 1 in hundred. If you approach YC with this mindset, you can make a decision before you even join whether this is worth it for you - are you ready to easily take brutal feedback and adjust or are you like OP going to double down on marketing or whatever you think is the key to succeeding? In the latter case just don’t bother I guess!
- rsp1984 4y ago
  W.r.t bad ideas, I'll just leave you with this PG quote [1] Err on the side of doing things where you'll face competitors. Inexperienced founders usually give competitors more credit than they deserve. Whether you succeed depends far more on you than on your competitors. So better a good idea with competitors than a bad one without. [1] http://paulgraham.com/startupideas.html http://paulgraham.com/startupideas.html

baxtr 4y ago

Super interesting. Do you have an example in mind where a startup excels through marketing in a crowded niche with the mentioned 10-15 startups?

lossolo 4y ago
In the crypto space currently, there are projects that excel in terms of technological merits, making them far superior to their competition. However, the competition often has better marketing and generates more hype and win the market.
- ccortes 4y ago
  Technological merits are not the product.
- toomim 4y ago
  I don't think that's true for crypto companies with actual customers (like coinbase) but rather the ones that are surviving on hype/investment alone, which all crash sooner or later, and aren't really companies. Just fluff.
satvikpendem 4y ago
Laravel, Vercel, come to mind.

BoorishBears 4y ago

This logic just implies YC is more relevant than ever. If there's 10-15 players in the space and you're the one with YC connections... Meanwhile if there are barely any players in your niche you have time to get things wrong and iterate in isolation, no need for the all-or-nothing style of growth

ethbr0 4y ago
I think parent's (and OP's) point was that YC was more valuable for investing and strategy, but less valuable for finding customers. And since customers are the most difficult part now (because 10-15 players), it adjusts the relative value of something that doesn't help you acquire customers. IOW, the differences between a "build it and they will come" historic era and a "make me care about you" modern one.
- BoorishBears 4y ago
  I don't agree, the parent's point is directly attacking strategy: > a lot of YC advice, especially w.r.t. what to prioritize, is from an era of startups about 10-15 years ago. I'm saying any misalignment in strategy matters less than implied. I spend a lot of time with current and past YC founders these days, and the recurring thought has always been "if you know already know business they're not going to teach you that much". > it adjusts the relative value of something that doesn't help you acquire customers. Money is how you acquire customers. From outlasting competitors to advertising to improving your product, it's money that turns into customers. So YC being valuable for investing is tantamount to being valuable for gaining customers.
- dang 4y ago
  YC has never taught "build it and they will come" – they give plenty of advice and encouragement to find customers and will add, er, kinetic energy if you're not actively on that. That's a huge focus. This, however, not so much: > "You basically need 1-2 full time staff doing nothing but content creation and social media outreach marketing" If that's the way you're thinking, YC's going to try to change your mind, and if you don't want to change your mind about that, YC's probably not a good fit. (I'm not speaking for YC here! just from my own experience as a founder, observer, HN mod)

hdivider 4y ago

I think we are definitely in a new era. My view: entrepreneurs should take on a little more technology risk. Not just market risk. License IP from federal labs and government agencies -- there is SO much advanced tech sitting on shelves. Do government contracting to fund R&D. Go beyond just software, especially the SaaS kind, because ultimately, software can only make so much difference in society. Investors don't like government and anything sciencey, especially when there's a hardware component, so I don't believe most hotshot founders will go for it. But hopefully enough will take on more technology risk. The biggest problems out there right now require a mix of traditional software, ML, hardware and research. All put together in the right way.

testmasterflex 4y ago
Can you give any example of such “advanced technology”?
- wanderingmind 4y ago
  For example, there is significant IP around additive manufacturing beyond plastics that are sitting as a squatting duck with national labs and universities that can be leveraged
- hdivider 4y ago
  Consider all these: https://technology.nasa.gov/patents https://technology.nasa.gov/patents And the NSF's equivalent, the many national labs, defense labs, and research-intensive universities (eg UC Irvine is keen to for entrepreneurs to pick up IP; as are lots of others). There's so much out there, and it's just waiting for entrepreneurs to commercialize it. Many things won't have direct commercial application, but much of it does. Typically the entity doing the licensing doesn't just give you the IP, but a full teaching program and network to help you get further.
jschveibinz 4y ago
You are describing a moat, and it is indeed important. I’ll step up on the soapbox for a moment… A moat can be unique technology, an exclusive licensing agreement, an exclusive IP (patent or otherwise), very unique experience or insight, an exclusive geographic location, a very unique business model, a very unique skill and/or reputation, etc. Follow the leader seems like a plan, but it’s probably not a good plan unless you have tons of money to spend on marketing and sales. In my previous home city, someone opened a bake shop with coffee that was targeted at the growing Korean population. It was unique: Korean pastries, Korean friendly faces, great coffee, etc. They probably invested $100k in opening this shop. It became very popular. Then, in about nine months, five more copycat shops opened up within a mile or two of this store. Result: business went way down for all of them. They all lost revenue, and they all invested a lot of money. Software is prone to this kind of copycat behavior. The thinking goes like one of these two sequences: 1. People like software—>I write software—->People like [note apps, for example]—>I can write a note app in a week—->I’ll start a SaaS business 2. I write software—->I think [fill in the blank] is cool—>I will write an app for [that] in a week—->I’ll start a SaaS business Writing software is not a differentiator. It’s not a shortcut to big bucks. It’s not a solution in itself. It’s just a tool. Anything you can write in a week (or 3 months) can be done by 100,000 other people—-in a week (or 3 months). You have to start with a problem, defined by a large group of people, that you have the experience and expertise to solve in a unique and valuable way. Software may be part of that solution, but it’s just a fraction of the whole pie. You need to think about the whole solution—-and the moat. It may take 5 to 10 years to develop your moat. Be patient and be observant. Good luck.

mcguire 4y ago

Your comment put me in mind of something I saw in 1999 or so; where a local newscast in Austin profiled a local start-up and included: "We can't discuss what we do because someone else could take the idea and beat us to it." That was the beginning of the dot-com bust.

JohnFen 4y ago
Yep. I've heard that sentiment more times than I can count over the decades -- and in every single case, without exception, those ventures failed pretty hard. I think its because the sentiment expresses a fundamental misunderstanding of how business works and what makes it successful. The idea is not the most important ingredient in a business, the execution is. For the most part, it doesn't matter if someone else takes your idea and beats you to it as long as your offering is better at solving the customer's problem. And that's a matter of execution.

satvikpendem 4y ago

I'm not sure where anyone said marketing doesn't matter, even YC will say that "build it and they will come" is false. But, talking to customers face to face or in person is much more valuable that marketing, because you experience first hand what the customer wants in a way that is not very doable with just marketing.

twelvechairs 4y ago

> every worthwhile niche seems to have 10-15 companies in it in no time B2B in established industries can be much more open, though often requires a level of domain knowledge to enter.

ramraj07 4y ago

Maybe that’s your clue that your idea is bad then? YC likely has decided it’s not in their interest to badmouth your idea, but if you are making the 20th data pipeline company in the same batch, maybe the smart thing to do is take a step back and ask yourself “is this really what I want to spend 5 years in?” From what I hear in the YC YouTube videos, it’s clear that the partners quickly form an image of how much brutal feedback you can take and measure their responses accordingly. My suspicion is that they are unable to gauge who’s good at that brutal feedback until you’re well into the program and they would rather have 100 grifters for that one golden founder who can truly take feedback. I suspect that one founder gets a very different treatment from everyone else. Clearly OP was not that 1 in hundred. If you approach YC with this mindset, you can make a decision before you even join whether this is worth it for you - are you ready to easily take brutal feedback and adjust or are you like OP going to double down on marketing or whatever you think is the key to succeeding? In the latter case just don’t bother I guess!

rsp1984 4y ago
W.r.t bad ideas, I'll just leave you with this PG quote [1] Err on the side of doing things where you'll face competitors. Inexperienced founders usually give competitors more credit than they deserve. Whether you succeed depends far more on you than on your competitors. So better a good idea with competitors than a bad one without. [1] http://paulgraham.com/startupideas.html http://paulgraham.com/startupideas.html