HN Theater @HNTheaterMonth

The first approach sounds solid but it's the kind of thinking that very easily leads you towards building a solution looking for a problem.

See Peter Reinhardts talk about product/market fit: https://www.youtube.com/watch?v=_6pl5GG8RQ4

For those interested in Segment, this is a talk of Peter Reinhardt about Product Market Fit and a bit of the history behind Segment.

https://www.youtube.com/watch?v=_6pl5GG8RQ4

I like this talk really much.

⬐ k__

Awesome journey. They pivoted to doing something completely different.

There's also the "open-core model"[^1]. From the Wikipedia description:

>The open-core model is a business model for the monetization of commercially produced open-source software. Coined by Andrew Lampitt in 2008,[1] the open-core model primarily involves offering a "core" or feature-limited version of a software product as free and open-source software, while offering "commercial" versions or add-ons as proprietary software.[2][3]

Here's GitLab's CEO[^2] talking about "Offering an on-prem / self-managed version of your software"[^3]

Here's a timestamped video titled "E05 Pioneering version control for data science with Pachyderm co-founder and CEO Joe Doliner"[^4], where Pachyderm's CEO[^5] addresses the business model.

Here's a timestamped video, titled "How to Find Product Market Fit", of Peter Reinhardt[^6], where he answers the question of "why would someone pay anything for an open source library that's 580 lines of code.."[^7]. There's a blog post detailing this, too[^8].

There are several degrees of what is open-source and what is not, and different ways to build a business around that.

[^1]: https://en.wikipedia.org/wiki/Open-core_model

[^2]: https://news.ycombinator.com/user?id=sytse

[^3]: https://www.youtube.com/watch?v=Lo0bejtOnQc

[^4]: https://youtu.be/YG8VFOZBb2A?t=1288

[^5]: https://news.ycombinator.com/user?id=jdoliner

[^6]: https://news.ycombinator.com/user?id=pkrein

[^7]: https://youtu.be/_6pl5GG8RQ4?t=1871

[^8]: https://segment.com/blog/show-hn-to-series-d/

You and your team should watch this 3 times right now: https://youtu.be/_6pl5GG8RQ4

It’s about finding product market fit after a few different products. It talks about how their new successful product (150 staff) is a small feature from one of their other products and how they scaled that!

Do it!

⬐ sah2ed

You can do better than this.

The OP mentioned 7 hours ago that they had already watched this video, last week.

https://news.ycombinator.com/item?id=16949765

Jason Lemkin recommends giving it 24 months to start a B2B SaaS. B2B SaaS is a long road despite the big splashes sometimes seen like Slack or Intercom.

https://www.saastr.com/if-youre-going-to-do-a-saas-start-up-...

Also watch the CEO of Segment talk about their journey to product market fit.

https://www.youtube.com/watch?v=_6pl5GG8RQ4

⬐ kofejnik

if it takes 24 months, how do you convince investors to fund those 24 months of searching, before you can show any meaningful numbers?

⬐ adventured

The same way it has always worked if you're going to exist on an investor's money: reputation and qualifications. A bit of luck helps as well.

Reputation of course involves things such as your past work experience, your past VC experience, past outcomes, who you've networked with that might refer you to an investor, and so on. This is largely about what you've done and how it forms the opinion of others.

Qualifications is what skills you possess, what you've accomplished, your education, your personal history, etc. This deeply ties into reputation. You can claim to be the greatest programmer ever, that's going to be incredibly difficult to verify for most venture capitalists, most basically won't bother attempting to verify it: they're going to judge you by reputation, partially in tandem with your claims.

⬐ tibbetts

You can and should show meaningful numbers while searching. And you should probably do some of your 24 months and numbers before you quit your day job and ask for money.

“We talked to 15 friendly CIOs at mid sized banks, and they all said that pen theft was a top three problem for them in 2018, they plan to budget up to $30k to solve it in 2019. We are pretty sure we can build RFID pen tracking systems for under $100 per pen, but we haven’t figured out how to price it for our market. I do know two bank branch managers who are willing to run beta tests.”

I mean, that’s still a dumb idea, but you can get started putting numbers around something without running down the whole 24 month clock. And usually most of the risk is in the product market fit, not in your tech team’s ability to create pen trackers.

Edit to add: now, if you integrate blockchain into your pen trackers, and have an ICO for pencoin, then this is totally fundable. Mid sized retail banks are definitely looking for a way to spend money on blockchain.

⬐ epberry

That lecture was exactly what I needed right now - thank you.

⬐ mlevental

>Also watch the CEO of Segment talk about their journey to product market fit.

this is exactly the lecture that crystallized for me the problems i'm facing (i watched it last sunday). we (full-timers) have no product market fit and we (advisors/investors) are simply plowing ahead (and have been for months) trying to figure out whether that's actually the case or whether we're simply failing as novice entrepreneurs (bad at sales, bad at messaging, etc.)

⬐ threeseed

Slack was developed internally for years at Tiny Speck before being released.

So they aren't like most startups who generally start their 24 month period with a lengthy period of product development.

⬐ elvirs

this is actually a very good argument to 'ship fast, fix later' proponents. I think 'ship half ass product asap' doesnt really work in SaaS because there isnt endless pipeline of prospective clients and word spread quickly in small circles. The product must be market ready and impressive to a certain degree to achieve positive resonance in its circle.

⬐ hhw3h

great point. So in fact Slack's superficially meteoric rise was prefixed by a long incubation period within Tiny Speck. So if you shift the timeline to when the precursor internal version of Slack was developed it supports the point of most B2B SaaS companies needing 24 months to prove real traction.

⬐ Tagore

I've been thinking about striking out on my own, having both run a contract software business and worked for a startup recently.

I'm inclined to think that the best way to find fit is to make sure people are willing to _overpay_ you for services. For instance, I have a great deal of expertise when it comes to graphics, and I could probably insist on being overpaid in this realm.

If I could automate what I am overpaid for at scale I might have a business.

⬐ iovrthoughtthis

What does "over pay" here mean? More than what you perceive the value of the product or service to be?

I think the key here is shifting your mindset to see value as percieved by the customer.

Percieved value is actual value.

⬐ karmakaze

As an example the iPod solved an problem people had. As a counter-example the iPhone solved a problem people didn't know they had.

⬐ jpswade

What problem do you think iPod solved?

⬐ sidlls

Both of those devices were beneficiaries of Apple's marketing: they weren't first-of-a-kind by any reasonable measure.

⬐ aaronbrethorst

best in class user experience != marketing.

⬐ talltimtom

The iPhone solved known problems. It was a phone, It was a media player, It was an Internet browser. People knew the problems, the iPhone was just one of the early convenience focused products on the market.

⬐ karmakaze

Easy to say in retrospect, but solving many problems in one device was revolutionary. Earlier PDAs weren't actually that personal which was the tipping point.

⬐ ChangeUPBudgets

I believe every accelerator should show this video. Very helpful!

⬐ epiapp

Everyone should block Segment requests when browsing. If you have EasyPrivacy installed, then you're all set.

⬐ bigtones

It's also a GDPR nightmare.

⬐ None

None

⬐ rpedela

Can you elaborate?

⬐ varenc

Same reason people block google analytics, ad analytics pixels, facebook iframes, etc?

It helps keep more of your data out of the hands of 3rd parties. The website you're actually using will still usually work just fine.

(though as a developer, many of these, including segment, are quite useful...)

⬐ cyberferret

Seems a bit disingenuous to lump Segment in with ad pixels etc.? We don't use it, but I know of several other SaaS apps who use them to integrate their web app with support tools like Intercom etc. If you block Segment in these cases, sure the web app will work, but the in app chats etc. won't.

⬐ varenc

True, but segment provides many integrations and the user won't know where that data is getting sent or for what purpose. See the list of advertisers with integrations here: https://segment.com/catalog

⬐ None

None

⬐ lbj

Fantastic video, the best on the topic of pm fit if you ask me.

⬐ z3t4

he's probably very smart and works hard, but is humble about his success, which most people would attribute to the former.

⬐ robterrin

Really great video and lots to learn here. I think this may be the third time I've seen it, and I'm still getting more out of it.

The biggest thing that hits me this go round is that staying alive is key. PG may have said, you burned $500k and have nothing to show for it, but if they had quit then, they would never have made it through the Great Startup Filter(tm) https://en.wikipedia.org/wiki/Great_Filter. The lack of great businesses (90% failure rate) reveals that the hardest part of building a company is starting a company.

In earlier times when there was more low hanging fruit, the hardest part of starting a company was scaling it. You had to have government backing (e.g. East India Company) or sit in an important part of the supply chain (e.g. Standard Oil) or cover really high capital expenditure (e.g. FedEx). Now that it's easier than ever to start a company, the good ideas are mostly already picked, so finding one is harder.

In economics, this called the explore/exploit or multi-armed bandit problem. What is so interesting to me on this viewing is that Peter Reinhardt's unrelenting enthusiasm and self delusion were a feature, not a bug. There is no way they would have stayed in the game long enough to find product market fit without that. Even though the kernel of the idea existed early on, they needed to taste true desperation to humble themselves enough to do the simplest, stupidest thing that customers wanted.

⬐ _pdp_

Low hanging fruit is everywhere - essentially anything that has not been done yet. All ideas look "low hanging" in retrospect.

⬐ robterrin

Respectfully disagree with _pdp_ here. Many ideas are not low hanging in retrospect. The three pre-internet businesses I cite are obvious needs (trade, oil refining & transportation) and yet had requirements that made them untenable business ventures for people without the specific advantages required by those business models. Government support, a superior position in the supply chain or access to vast amounts of capital provided barriers to entry for potential competitors. Having demonstrated that the second claim is false, I will not address the first claim.

Something that has not been done before is not low hanging fruit. To be sure, it is difficult to know if there are fewer good businesses to be started today, but the economic evidence has been stacking up for 30 some years now. Here are some papers showing the slowdown in productivity and new starts:

- http://www.nber.org/papers/w21974

- https://www.brookings.edu/wp-content/uploads/2016/03/ByrneEt...

- https://www.nytimes.com/2017/09/20/business/economy/startup-...

Part of this is a sclerotic antitrust regulator that has been defanged by lobbyists. Part of it is the internet removing information asymmetries, leading to natural monopolies. Part of it is probably the cheap "bits" businesses crowding out "atoms" investments in VC. Another part is probably that we are simply running out of easy defensible businesses to create. This is ok! People will have to get more creative and humanity will progress more slowly, but from a higher base.

⬐ throwaway84742

Finding an “idea” is a mistake that most startups make. Ideas alone are worthless. The phrase you’re looking for is “finding a need”, preferably the kind you can address and charge a lot of money for solving. This is the hard part that most startups fail spectacularly at.

⬐ robterrin

throwaway84742, you are correct. That is why I said, "thing that customers wanted" and not "idea." Even having the kernel of the idea was insufficient.

⬐ bhattisatish

The slides are available at https://www.dropbox.com/s/el33hd9yfuxyjkj/Peter%20Reinhardt%...