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I found it very interesting when he spoke about founders who've learned to mimic an attribute investors find important. He notes that ignoring a single investor
by scobar 12y ago
I found it very interesting when he spoke about founders who've learned to mimic an attribute investors find important. He notes that ignoring a single investor's feedback is fine, but ignoring the world in general is usually disaster.
I imagine the rise of this sort of mimicry leads investors who previously would consider investing in an idea and seemingly great founders to more strongly favor traction. I wonder if the YC partners keep track of the change in the percentage of startups accepted with an idea alone or complete a prototype just before an interview.
I'm also curious about the percentage of successful (or surviving) YC startups that were accepted with no traction versus those accepted with a product that had a quickly growing number of users. This value may be misleading, though, because the sample size isn't enormous, and there are so many other variables that affect the survival of a startup.
- AndrewKemendo 12y ago>I imagine the rise of this sort of mimicry leads investors who previously would consider investing in an idea and seemingly great founders to more strongly favor traction. Not sure if you came to that conclusion inductively or deductively based on experience, but it is basically 100% the case. Every potential investor we have spoken with doesn't really seem to care about anything but traction.
- scobar 12y agoI've just recently begun learning about the startup world, so I have almost no experience. Unfortunately, this result will restrict those who don't already know and cannot afford the time to learn how to build a prototype. Thankfully, the effort required to get a software prototype built has been dropping significantly.
- AndrewKemendo 12y agoPrototypes /= traction so that almost won't help either. I had a prototype two years ago. Nobody cared. We had an MVP a year ago, nobody cared. Now we are out there actively selling and even then investors are saying: We want to see that you will have 1MM in revenue in the next 12 months before we decide. A rule of thumb in fundraising is this: "When you don't need money you will be able to get it."
- danieltillett 12y agoThis is so true. Plan on never getting any money out of VCs and spend your time making a great product that your users will pay money for.
- scobar 12y agoI agree that a prototype /= traction, but it is a necessary step to get traction. I understand that marketing/sales are necessary to expose the product to target users, but a prototype allows founders to reiterate based on feedback to build what people want. I agree with your rule of thumb too. One analogy that best described it IMO goes something like, "Investors are there to throw gas on the fire, not ignite it."
- AndrewKemendo 12y agoI understand that marketing/sales are necessary to expose the product to target users, but a prototype allows founders to reiterate based on feedback to build what people want. This is certainly true as it will help validate your idea/market, and it is a step toward traction. A common mistake though is to assess positive feedback to a prototype as traction. Your quote is also apt. Here is another from me, right now: "Nothing matters except sales"
- raminassemi 12y agoYes, and you can use sales to reiterate based on feedback to built what people want to some extend too: http://blog.close.io/lean-sales-how-to-validate-your-saas-idea-with-the-power-of-hustle http://blog.close.io/lean-sales-how-to-validate-your-saas-id... :)