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>First off the deal that they struck was probably one they couldn't ignore If you can't provide the service you shouldn't sell it?

immibis 2y ago
You've never worked in a startup have you? Or any business for that matter. You have to promise something first, then build it.
- colesantiago 2y ago
  No joke, is this actually true? Do startups really do this? I thought the capability is built or nearly built or at least in testing already with reasonable or amazing results, THEN they go to market? Do startups go to other startups, fortune 500 companies and public companies to make false promises with or without due diligence and sign deals with the knowledge that the team and engineers know the product doesn't have the feature in place at all? In other words: Company A: "We can provide web scale live streaming service around the world to 10 billion humans across the planet, even the bots will be watching." Company B: "OK, sounds good, Yes, here is a $2B contract." Company A: "Now team I know we don't have the capability, but how do we build, test and ship this in under 6 months???"
  - ImPostingOnHN 2y ago
    Many do, as far as initial investment goes. It makes sense when you think about the capital intensive nature of most startups (including more than web startups here, e.g. lab tech commercialization). It also accurately describes a research grant. That's for startups that can't bootstrap (most of them). For ones which can, they may still choose to do this with customers, as you describe, because it means letting their work follow the money.
  - tky 2y ago
    “Aspirational sugar” is as common in startup culture as in Fortune 500 sales contracts, they’re just messaged and “de-risked” differently.
  - 999900000999 2y ago
    Startups absolutely sell things they haven't made yet and might not even be capable of doing. Next thing you know it's 9pm on a Sunday night and your desperately trying to ship a build for a client. Netflix isn't some scrappy company though. If I had to guess they threw money at the problem. A much better approach would of been to slowly scale over the course of a year. Maybe stream some college basketball games first, slowly picking more popular events to get some real prod experience. Instead this is like their 3rd or 4th live stream ever. Even a pre show a week before would of allowed for greater testing. I'm not a CTO of a billion dollar company though. I'm just an IC who's seen a few sites go down underload. To be fair no one knows how it's going to go before it happens. It would of been more surprising for them to pull this off without issues... It's a matter of managing those issues. I know if I had paid 30$ for a Netflix subscription to watch this specific event I'd assume I got ripped off.
  - whstl 2y ago
    If anything, startups are more transparent about it. In the enterprise sector this is rampant. Companies sell "platforms" and those missing features are supposed to be implemented by consultants after the sale. This means the buyer is the one footing the bill for the time spent, and suffering with the delays.
  - yorwba 2y ago
    You don't necessarily have to make false promises. You can be totally honest and upfront that the functionality doesn't exist yet and needs to be built first, but that you think you understand the problem space and can handle the engineering, provided you can secure the necessary funding, where, by the way, getting a contract and some nominal revenue now could greatly help make this a reality... And if the upside sounds convincing enough, a potential customer might happily sign up to cover part of your costs so they can be beta testers and observe and influence ongoing development. Of course it happens all the time that the problem space turns out to be more difficult than expected, in which case they might terminate the partnership early and then the whole thing collapses from lack of funding.
  - elzbardico 2y ago
    Wait until you figure out how fortune 500 corporate vendors usually engage in the game of RFP box checking.
- _proofs 2y ago
  i imagine this is why a lot of products, and startups, fail.
_fat_santa 2y ago
My speculation here is this was just classic SV cockiness. The team that closed this deal probably knew that they didn't have the capability but I'm sure the arguments for doing it anyways was something along the lines of: "we have the best engineers in the bay area, we can probably figure this out"
mbesto 2y ago
There are endless amounts of stories and situations in which selling something before it really exists has helped businesses. It's totally plausible that a team working on video streaming at the scale of Netflix could figure out live streaming. Pre-optimization is definitely a thing and it can massively hurt (i.e. startups go under) businesses. Let's stop pretending any businesses would say 'no' to extra revenue even before the engineering team had full assurance there was no latency drop.
- sfn42 2y ago
  In my language we have a saying that roughly translates to "Don't sell the hide until you've shot the bear". And sure, there have probably been lots of examples where a business made promises they weren't confident about and succeeded. But there are surely also lots of examples where they didn't succeed. So what's the moral of the story? I don't know, maybe if you take a gamble you should be prepared to lose that gamble. Sounds to me like Netflix fucked up. They sold something they couldn't provide. What are the consequences of that? I don't know, not do I particularly care. Not my problem.
RicoElectrico 2y ago
Execs never listen or even ask engineers about feasibility of projects they sign up to. Hope the exec in question will be let go.
- pilotneko 2y ago
  I mean, the ones that do ask don’t proceed to signing up. I think we are seeing a form of survival bias.
throw0101b 2y ago
>> First off the deal that they struck was probably one they couldn't ignore > If you can't provide the service you shouldn't sell it? Then how will the folks in Sales get their commission? Besides, not providing the service hasn't stopped Tesla from selling FSD, and their stock has been going gangbusters. /s

immibis 2y ago

You've never worked in a startup have you? Or any business for that matter. You have to promise something first, then build it.

colesantiago 2y ago
No joke, is this actually true? Do startups really do this? I thought the capability is built or nearly built or at least in testing already with reasonable or amazing results, THEN they go to market? Do startups go to other startups, fortune 500 companies and public companies to make false promises with or without due diligence and sign deals with the knowledge that the team and engineers know the product doesn't have the feature in place at all? In other words: Company A: "We can provide web scale live streaming service around the world to 10 billion humans across the planet, even the bots will be watching." Company B: "OK, sounds good, Yes, here is a $2B contract." Company A: "Now team I know we don't have the capability, but how do we build, test and ship this in under 6 months???"
- ImPostingOnHN 2y ago
  Many do, as far as initial investment goes. It makes sense when you think about the capital intensive nature of most startups (including more than web startups here, e.g. lab tech commercialization). It also accurately describes a research grant. That's for startups that can't bootstrap (most of them). For ones which can, they may still choose to do this with customers, as you describe, because it means letting their work follow the money.
- tky 2y ago
  “Aspirational sugar” is as common in startup culture as in Fortune 500 sales contracts, they’re just messaged and “de-risked” differently.
- 999900000999 2y ago
  Startups absolutely sell things they haven't made yet and might not even be capable of doing. Next thing you know it's 9pm on a Sunday night and your desperately trying to ship a build for a client. Netflix isn't some scrappy company though. If I had to guess they threw money at the problem. A much better approach would of been to slowly scale over the course of a year. Maybe stream some college basketball games first, slowly picking more popular events to get some real prod experience. Instead this is like their 3rd or 4th live stream ever. Even a pre show a week before would of allowed for greater testing. I'm not a CTO of a billion dollar company though. I'm just an IC who's seen a few sites go down underload. To be fair no one knows how it's going to go before it happens. It would of been more surprising for them to pull this off without issues... It's a matter of managing those issues. I know if I had paid 30$ for a Netflix subscription to watch this specific event I'd assume I got ripped off.
- whstl 2y ago
  If anything, startups are more transparent about it. In the enterprise sector this is rampant. Companies sell "platforms" and those missing features are supposed to be implemented by consultants after the sale. This means the buyer is the one footing the bill for the time spent, and suffering with the delays.
- yorwba 2y ago
  You don't necessarily have to make false promises. You can be totally honest and upfront that the functionality doesn't exist yet and needs to be built first, but that you think you understand the problem space and can handle the engineering, provided you can secure the necessary funding, where, by the way, getting a contract and some nominal revenue now could greatly help make this a reality... And if the upside sounds convincing enough, a potential customer might happily sign up to cover part of your costs so they can be beta testers and observe and influence ongoing development. Of course it happens all the time that the problem space turns out to be more difficult than expected, in which case they might terminate the partnership early and then the whole thing collapses from lack of funding.
- elzbardico 2y ago
  Wait until you figure out how fortune 500 corporate vendors usually engage in the game of RFP box checking.
_proofs 2y ago
i imagine this is why a lot of products, and startups, fail.

_fat_santa 2y ago

My speculation here is this was just classic SV cockiness. The team that closed this deal probably knew that they didn't have the capability but I'm sure the arguments for doing it anyways was something along the lines of: "we have the best engineers in the bay area, we can probably figure this out"

mbesto 2y ago

There are endless amounts of stories and situations in which selling something before it really exists has helped businesses. It's totally plausible that a team working on video streaming at the scale of Netflix could figure out live streaming. Pre-optimization is definitely a thing and it can massively hurt (i.e. startups go under) businesses. Let's stop pretending any businesses would say 'no' to extra revenue even before the engineering team had full assurance there was no latency drop.

sfn42 2y ago
In my language we have a saying that roughly translates to "Don't sell the hide until you've shot the bear". And sure, there have probably been lots of examples where a business made promises they weren't confident about and succeeded. But there are surely also lots of examples where they didn't succeed. So what's the moral of the story? I don't know, maybe if you take a gamble you should be prepared to lose that gamble. Sounds to me like Netflix fucked up. They sold something they couldn't provide. What are the consequences of that? I don't know, not do I particularly care. Not my problem.

RicoElectrico 2y ago

Execs never listen or even ask engineers about feasibility of projects they sign up to. Hope the exec in question will be let go.

pilotneko 2y ago
I mean, the ones that do ask don’t proceed to signing up. I think we are seeing a form of survival bias.

throw0101b 2y ago

>> First off the deal that they struck was probably one they couldn't ignore > If you can't provide the service you shouldn't sell it? Then how will the folks in Sales get their commission? Besides, not providing the service hasn't stopped Tesla from selling FSD, and their stock has been going gangbusters. /s