4 ms·

Lessons That Might Have Saved Our Business Had We Learned Them Earlier

42 points by jacobwg 13y ago

xianshou 13y ago
Summary - (1) make money fast, (2) say no to new features unless necessary, (3) dominate small core markets, then expand, (4) really listen to feedback, (5) really listen to your team, (6) trust your users. Every time I see one of these letters, it saddens me to think how strongly the current SV model pushes growth before value. You might say it's best for VCs but not for founders, but does even the VC see the upside they might have gotten with more patience? What these stories seem to say...Groupon isn't a deviation; it's the most successful incarnation of a broken and widely promoted growth model whose typical end state is this.
- zaidf 13y ago
  Groupon's created a ton of actual value with their product. Groupon's issues have less to do with value delivered and more to do with competition and their stock being over-valued.
  - comrade_ogilvy 13y ago
    Agreed. Inside of that (formerly) $16 billion company is a really wonderful $2 billion company fighting to get out.
  - GVIrish 13y ago
    The principle problem with Groupon wasn't the competition or the stock being overvalued. Groupon's main problem is that their acquisition costs were so high that they couldn't make money. Competition only became a drag on them when users began to get fatigued with daily deals. But even if users didn't get tired of daily deals, their business model simply wasn't on the path to profitability.
    - zaidf 13y ago
      CPA is closely tied to competition.
- wasd 13y ago
  Its the same story but when you're knee deep, its easy to forget the fundamentals.
prawn 13y ago
For anyone like me who would mostly hit the link to check, this is a recruitment service rather than the app-based social network by the guy with the day and night iPhones.
CanSpice 13y ago
One other lesson that they haven't learned yet: when you announce you're closing the business on your blog, you should probably put some kind of notice that you're closing the business on that business's front page. There's absolutely nothing at http://path.to/ http://path.to/ that even suggests that they're going to be shutting the doors. If I was to sign up today, and they're shutting down in three days (rather, not accepting any more job postings) I'd be annoyed.
cobbzilla 13y ago
TLDR: we made nearly every rookie mistake in the book. “A ‘build it and they will come’ mentality has taken over the startup space." I don't want to sound patronizing (but I will anyway). "Has taken" is the wrong verb tense. It's been that way for over a decade, particularly for early stage startups with technical founders. Find yourself some better advisors next time around, if you failed on rookie mistakes, you'll have little hope of solving the "level 2" problems without some seasoned counsel.
- jacques_chester 13y ago
  Back in the late 90s people used to walk around saying "GBQ": Get Big Quick. Changing the name of the concept to "traction" doesn't change that cashflow matters.
csears 13y ago
Do you chalk it up to a failure of execution? Or was the core concept not viable? I've always thought some kind of OkCupid approach to matching job seekers and employers would be very useful. GroupTalent seems to be doing something similar, but mostly focused on developers.
- Matt_Mickiewicz 13y ago
  There's definitely believe there's room in the market to displace contingent recruiters, create efficiency, drive down costs, and create a much more pleasant experience for both sides of the transaction. One key with job seekers: there's a narrow window of opportunity to make matches. If you have quality talent, but you lack intent to switch jobs, nothing happens. Likewise, if you have a huge pool of talent - and only some of it is good - you create too much work for the employers to filter/sort, and they are better off just using LinkedIn/Entelo/TalentBin to play spray & pray game - also known as guess & check - at a lower cost.

42 points by jacobwg 13y ago

Summary - (1) make money fast, (2) say no to new features unless necessary, (3) dominate small core markets, then expand, (4) really listen to feedback, (5) really listen to your team, (6) trust your users. Every time I see one of these letters, it saddens me to think how strongly the current SV model pushes growth before value. You might say it's best for VCs but not for founders, but does even the VC see the upside they might have gotten with more patience? What these stories seem to say...Groupon isn't a deviation; it's the most successful incarnation of a broken and widely promoted growth model whose typical end state is this.

zaidf 13y ago
Groupon's created a ton of actual value with their product. Groupon's issues have less to do with value delivered and more to do with competition and their stock being over-valued.
- comrade_ogilvy 13y ago
  Agreed. Inside of that (formerly) $16 billion company is a really wonderful $2 billion company fighting to get out.
- GVIrish 13y ago
  The principle problem with Groupon wasn't the competition or the stock being overvalued. Groupon's main problem is that their acquisition costs were so high that they couldn't make money. Competition only became a drag on them when users began to get fatigued with daily deals. But even if users didn't get tired of daily deals, their business model simply wasn't on the path to profitability.
  - zaidf 13y ago
    CPA is closely tied to competition.
wasd 13y ago
Its the same story but when you're knee deep, its easy to forget the fundamentals.

prawn 13y ago

For anyone like me who would mostly hit the link to check, this is a recruitment service rather than the app-based social network by the guy with the day and night iPhones.

CanSpice 13y ago

One other lesson that they haven't learned yet: when you announce you're closing the business on your blog, you should probably put some kind of notice that you're closing the business on that business's front page. There's absolutely nothing at http://path.to/ http://path.to/ that even suggests that they're going to be shutting the doors. If I was to sign up today, and they're shutting down in three days (rather, not accepting any more job postings) I'd be annoyed.

cobbzilla 13y ago

TLDR: we made nearly every rookie mistake in the book. “A ‘build it and they will come’ mentality has taken over the startup space." I don't want to sound patronizing (but I will anyway). "Has taken" is the wrong verb tense. It's been that way for over a decade, particularly for early stage startups with technical founders. Find yourself some better advisors next time around, if you failed on rookie mistakes, you'll have little hope of solving the "level 2" problems without some seasoned counsel.

jacques_chester 13y ago
Back in the late 90s people used to walk around saying "GBQ": Get Big Quick. Changing the name of the concept to "traction" doesn't change that cashflow matters.

csears 13y ago

Do you chalk it up to a failure of execution? Or was the core concept not viable? I've always thought some kind of OkCupid approach to matching job seekers and employers would be very useful. GroupTalent seems to be doing something similar, but mostly focused on developers.

Matt_Mickiewicz 13y ago
There's definitely believe there's room in the market to displace contingent recruiters, create efficiency, drive down costs, and create a much more pleasant experience for both sides of the transaction. One key with job seekers: there's a narrow window of opportunity to make matches. If you have quality talent, but you lack intent to switch jobs, nothing happens. Likewise, if you have a huge pool of talent - and only some of it is good - you create too much work for the employers to filter/sort, and they are better off just using LinkedIn/Entelo/TalentBin to play spray & pray game - also known as guess & check - at a lower cost.