Hmmmm. It probably depends upon how much money were talking.
If the customer is throwing around a couple million dollars of NRE, it's probably worth bolting something on and pocketing the money. If the customer is only moving a couple hundred thousand, it's probably not.
This seems more like a software-only startup issue. We have hardware and have these hard-nosed discussions all the time--generally about volume.
Customer--"We want X and we want 100,000 units and we're going to put the NRE on this payment schedule."
Us--"No, you're going to put all that NRE up front and it's <2-5 million dollars depending upon change complexity>. And you're going to front the first 10,000 units which is <generally a nice chunk of a million>. After that, we can put you on the royalty schedule. We can't put ourselves in the position of losing the company because your volume never materialized."
Us--"No. It's the reality of hardware. We know our costs really well."
Side comment: it's always 100,000 units and 100,000 units is generally hardware death--big enough that you have all the volume problems but small enough that your profit sucks.
The equivalent definitely exists in a software-only startup with enough users. In practice it's rarely the case that it's _one_ user, but that there are cohorts of users that want a certain thing you don't provide. I still agree with your point, though, that if those cohorts aren't gonna give you enough money you shouldn't let your development process get sidetracked by their desires.
It's really easy for enterprise companies to get in the trap of making every customer a spacial snowflake, because they need to to get a half mil contract signed. And then the product becomes sorta shapeless, because each customer gets their own product... And you end up a consultancy instead of the platform/SaaS that you originally envisioned.
And then that project half dies because of replacement XY which is sooo much better /s. Now you are stuck on a legacy platform, and if you have great sales people who included this system in the contract worth $10M+ and no replacement exists, you cant get rid off it. So someone has to manage the legacy platform, where all docs where lost and no one has the domain knowledge as everyone has left. Now guess what happens when the company finds out you setup the servers, "Hey, you setup these servers, so you are now responsible for the platform, congratulations!"....
It definitely seems like a software thing because a hidden assumption in the article seems to be: if you build it for one person, you have to offer it to everyone. This makes sense for software where one customer alone will never pay for the investment of building the add-on.
I thought you just includ NRE in the price you offer to the customer so it can be amortized by volume. But yeah it makes sense if volume will not be realized and you do not want to make bets on your comapny with someones else customers.
I think the article covers that; they explicitly talk about sometimes choosing to serve the customer who wants something you aren't currently offering.
Been through this at medium sized companies struggling to sell. This kind of customer is alluring but poisonous. Company: We sell Product X! Toxic Customer: I don't want Product X, I want Product Y. If you're willing to bolt Product Y onto one of your menus I will pay you this stack of money for it! Company: $$$!
Bam! The company just went from being a product company to a custom engineering service. You will have to drag Product Y along with your product forever as a big lump of technical debt. After a few repeat iterations of the above, you will have a franken-product with random features hanging off of all ends, confusing to general users and impossible to maintain.
If you're a Product X company and one customer wants Product Y, stand your ground and tell them to go find Product Y somewhere else. If tons of customers want Product Y, maybe pivot and become a Product Y company and ditch Product X.
I think 49.9% of executives agree with that and 90%+ of product people/developers agree with that too. The problem is that it's rarely X and Y. It's almost always justifiable, though. Imagine X=1 and Y=100.
If you sell 1 and a customer asks for 100 it's easy to say no. If they ask for 50 or 25 it's still easy.
The problem is when they ask for 2. Or 1.5, and are willing to pay big bucks to get it. It's hard to know whether your line should be at 2 or 20 or 80, especially when you can make business arguments for all of them and they all come with buckets of money attached.
Oh, yes, it's a difficult call. The customer might even start in with this (stop me if you've heard THIS one before): "Hey, we'll pay all your NRE for you and you get to sell it to everyone else including our competitors as part of your product!!"
Do this, and your product people (if you have any) will all quit, and your engineering talent will start thinking "If we're just another custom engineering consulting company now, why don't I just go over to one of the big consulting firms and make actual money doing the same thing?
But there are cases (my common case) where something the customer wants is really a great idea and many other customers would benefit (and we would have eventually gotten there). So it's not always a bad thing :)
Well, no. There can't be thousands of "the big consulting firms".
But more than that, I'm pretty sure the point of the question was to get a list of such firms (I'd like one too!), not to be assured "they're out there, even if you'll never know who they are or how to find them".
Agreed. I was bought out by a company who charged high license fees but did not charge for customer development. So every customer wanted all these customisations to the point where most of the development was customer-initiated changes. Worse, is that due to this policy they had no idea whether an individual customer was profitable or not, since they had no idea the time/resources spent on that particular customer.
I advocated reducing the license fees but charging for customisations which would reduce this bespoke development considerably, but to no avail.
The big challenge is that this type of technical debt can be hard to see. But "We promised our VC 50% growth, and we're only at 35%, and this gets us to 60%" is very easy to see.
I think this is the main reason that, pretty much, only technical founders seem to succeed at finding good exits (I know there are exceptions), they're very aware of this issue.
I have worked with non-technical founders who just don't understand that concept of a mythical man-month and technical debt. Unless you've lived through it, it just sounds like engineers whining, not a valid business liability. All the non-technical founders I've worked with fall into the trap of catering to their board at all costs.
I had to do an international marketing plan for a local business in one of my marketing classes in school, and the local startup my group chose did exactly this. Their products were so spread out across so many different industries, there was no telling where their focus was.
They were also into consulting, so whatever product they thought up for one customer, they started advertising on their website as a finished product. The product we were focusing on exporting to another country had 1 customer...the one that commissioned the product. We actually didn't learn that until halfway into the project, but by that point, we were already leaning towards suggesting that they forget about exporting any product overseas and focus on getting more business in our area.
I went through this. It's only possible to stand your ground if you have sufficient capital reserves to wait for other customers. In our case we had burned up most of our funding through several pivots so when a prospective customer agreed to pay for Product Y there was no practical alternative but to say yes.
Ideally you would avoid this situation, but if you find yourself here: a good mitigation strategy is feature flags. If it's been agreed to build feature Y for one customer, then enable that feature for only that one customer. It's not a panacea, and won't necessarily help with your tech debt, but it will help the product stay focused from a user perspective.
FWIW, every product I've worked on has gone through this.
I worked on a large codebase with this approach of 'feature for x'. It will not scale, IMHO.
Far better to agree with someone wanting feature N is that if you want it and it's a good fit for the majority of users, you pay for it - everyone gets it.
It is a hard problem to tackle, especially given the sums involved in delivering sometimes trivial-effort features.
I understand this for products that have product-market fit. But what about products that aren't generating any revenue yet? Wouldn't the fact that someone is willing to pay to develop it further for them indicate demand for the product? Also couldn't this be viewed as doing things that don't scale by building a product that one company loves? How do you draw the line between this, and creating technical debt?
* decide that you want to be an engineering consulting firm that charges only ramen, which will make your customer very happy
* become ramen-profitable on product Y without it taking all your time, build and market product X, then dump your customer and product Y (make sure you don't sign a contract saying that you have to keep supporting product Y)
* say no and find another way to become ramen-profitable
Then you have to make a decision then. Do you want to make revenue from the product, or make revenue via customisations?
Problem with the customisation approach is there is limited leverage.
The "Uber for babysitters" example is interesting, because Uber's current $50B+ business is exactly the "users they didn't want". They started out as a black car service, where rich people (and it was envisioned only as a service for rich people) could hail a limo, completely legally. And according to this video [1], the reason they moved down-market into "ridesharing for everyone" was because they were getting C&Ds and fines anyway, and so it didn't matter that they'd conceived it as a service for rich people, the only way the could survive was to make it big enough and useful enough to ordinary people that they could get the laws changed.
I totally agree with you that often times your first set of users aren't the users you end up serving at scale. There are so many examples of this that they are hard to count. What is great about your example is that Uber made a strategic decision to open up to a new user base. Pivoting and serving new users/usecases is totally okay. Where startups get in trouble is when they move from niche usecase to niche usecase blindly based on a customer request.
What I think the parent poster is saying is that in hindsight, you can easily say which customers you were right to pivot for and which your were wrong to pivot for, but going in from the front no one, and I mean NO ONE can actually, really tell which customers are weird customization cases and which customers are revenue-bridges that will lead you to better market fit.
There are always obvious cases in this mind of thing, but the larger point is that we could easily have been looking at an alternative history where Uber was on the scrap heap, and we would all stand here, wagging our beards, berating them for "moving from niche use-case to niche use-case" instead of doubling down and building something of long-term use and value, of executing on their vision. Instead, we're saying that Uber was an instance of a GOOD pivot, but at Uber, at the time it was happening, anyone could've made the argument, "Hey, aren't we just filling a really niche use-case here, of regular people who are willing to trust their lives to unlicensed strangers for a ride?"
Yeah, what scares my reasoning in such discussions is that anyone can be simply under survivorship bias of the other company. How does one extract the real truth from here?
Posting an article called "users you don't want" and then using a developmentally challenged teenager as the example of a user that you don't want is so spectacularly tone-deaf that I am left somewhat speechless.
I keep thinking this will be the year that the valley types wake up and realize this kind of mentality puts them in existential danger from mobs with pitchforks, but it keeps not happening.
The user(s) you might not want are the parents, not the disabled child. Proper care for the child represents their quite unique problem that they want you to solve so they can use your product. The child having special needs is what sets these patents/users apart from the parents/users you made the product for.
To me it screams "shrewd business person wants the easy money and wants to easily cherry pick their customers."
The thing is, you can say "We can't afford to offer babysitters that are qualified to take care of people with mental disabilities." Say it apologetically on your website or in a questionnaire for new users or something. Don't go bragging about how shrewd you are because you only target the easy, cheap customers.
Do you think the 'existential danger from mobs with pitchforks' is justified? If they don't believe the outrage is justified, then they may be aware of this, but still speak these things out loud.
If there are people half starving or barely able to survive, take care of their loved ones, or have any dignity, and you control so many resources as to be able to personally lift hundreds of thousands out of that misery, but don't, those people will eventually try to kill you.
We can sit here and academically discuss the degree of justification of that fact, but that seems to me somewhat tangential to the actual issue.
This is the exact reason that the Disability Discrimination Act, now the Equality Act, was introduced in the UK (no idea whether there's any equivalent elsewhere). It's illegal to for a business to discriminate their service based on a customer's disability.
They will probably say that we live under «the tyranny of the minority» and whine that business are made expansive by following regulations that ought to make their goods/service accessible to the disabled (like every business).
On the other hand imposing gluten free/peanuts free/convservative free healthy over priced diets seem fine to them.
New tech industry seems pretty living with a double standard about what is acceptable: imposing their price on real estate/food. Being not okay to respect accessibility. There are against the tyranny of minorities unless it is them.
It seems a tad Victorian (Eugenist, hygienist and Malthusianist) to me.
(schlink, schlink, (the noise of sharpening the pitchfork))
> Now, what happens if someone with an infant or developmentally challenged teenager signs up? Their needs present an entirely new set of problems, problems that could be solved by a startup but not necessarily by ours. Remember you don’t have to pivot your business because a customer needs something that you don’t offer.
If you open a restaurant, you bet that there are certain building codes you'll have to follow in order to accommodate e.g. people with disabilities.
Right now, as the article points out, it's not something that most tech companies have to worry about unless they choose to, but perhaps it should be.
As startups disrupt entire industries with little regard for the existing legislation, entire niche of users could find themselves marginalized. For instance, hotels have to build a number of accommodations for people with mobility problems. Airbnbs don't. What happens to that segment of the population when/if Airbnb completely kills off hotels in a particular geographic location?
The web is already hell when it comes to accessibility concerns; and it seems like tech companies with a foot in the real world are just carrying this trend over. This is what people mean when they talk about the need for inclusiveness when designing tech products and companies; otherwise, you're just building a world where parents of developmentally challenged teenagers are even more excluded than they already were.
I agree with the core point of the article, but the example chosen to illustrate it couldn't be worse. Yes, it isn't your responsibility to solve everything for everyone, but that doesn't mean you can just choose to ignore the social contract altogether.
I thought it was a great example. Reading it made me feel guilty, and it made me want to make accommodations for these people in our theoretical babysitting-as-a-service app.
But that doesn't make it any more feasible, possible, or even safe. We're talking about special needs that will be difficult or impossible for a non-targeted service to adequately meet. It would be better for a different service to specialize in this, as our theoretical service is likely woefully ill-equipped to handle the vetting of caregivers for the developmentally disabled (among other problems outside the original problem domain). I'd even be tempted to argue that attempting to address these problems simply for the sake of soothing guilt and/or avoiding lawsuits would be immoral itself.
Whether or not there should be legislation to cover issues like this is another discussion. (Maybe there should be! If AirBnB manages to kill off hotels in a few spots it would make for some very interesting discussion.) But I don't think this theoretical babysitting app is a good candidate to be targeted by such legislation, and I think it's a little silly to damn this example... There's other help and services out there specifically for the developmentally disabled, and nobody expects every babysitter or daycare to be able to handle the developmentally disabled either. Calm down.
This is a good point. Same with Uber. Most Cab companies are required to provide access to wheelchair bound and disabled members of society at no extra charge. Not sure if Uber has the same requirement - and if and when it starts moving cab's out of business it will definitely prove to be a problem.
It doesn't. I've a friend (who might be popping on this thread here soon) who's been working with adapt.org on pressuring Uber on this issue.
In theory, ridesharing should be much better for PWD than trying to hail a cab and cheaper than government services like the MBTA's The Ride. However it very much does not look like it is the case right now.
A new "Access" option containing UberWAV appeared in my Uber app today in san francisco, with a popup telling me about it. So I guess it just rolled out to SF.
It looks like UberWAV in NYC provides app-based access to the existing fleet of wheelchair-accessible taxis: Uber will find a taxi and dispatch it to where you are, and you pay taxi fare. That technically works (assuming the dispatched taxi shows up), but I'm not really sure it should count, especially because Uber's obvious goal is competing with taxis and driving them out of business.
If the discussion is around "is a wheelchair user able to hail a car and get moved A->B?" Why shouldn't it count?
I suppose they it means that they aren't uprooting the medallion system in that corner of the economy, but that political goal shouldn't block providing access to wheelchair users. Plus, if we want WAVs to be able to operate medallionless, that can be more easily achieved through lobbying by activists who are upset about the higher costs. Uber can just funnel money to them.
> assuming the dispatched taxi shows up
I know there an issue with reliability of wheelchair repair appointments, but I'll admit myself ignorant of the current state of WAV hailing.
Note that London one has won repeated court cases for the exact same thing. Uber drivers keep refusing to take her and her dog; she takes them to court; she wins; she tries to get an Uber and the driver refuses to take the dog.
Why is agreeing to help someone that you don't have the time, money or expertise to help a good thing? Isn't it extremely misleading to tell someone you'll help them when you can't deliver? Isn't it more responsible to direct that person to someone who does have the expertise to help?
(edit: There's an assumption here that because one company can't help, that none can. Should we make this assumption?)
I agree with your concerns as a whole, but maybe not your analysis of the accommodation. If the startup is merely a platform for connecting babysitters and parents, babysitters could choose whom they want to babysit. A babysitter who was not qualified to deal with a developmentally challenged kid or infant should not have to, and probably shouldn't.
Hmmm. That idea is definitely appealing, but the "platform" argument has some serious negative side effects that I think the government should legitimately be able to regulate. What if babysitters of one race didn't want to sit babies of another race? Should they be forced to?
This isn't a hypothetical example—Airbnb has this exact problem.
> What if babysitters of one race didn't want to sit babies of another race? Should they be forced to?
I have a hard time seeing where you think this is a tricky question. Let's imagine a terrible person, so terrible that there are no moral issues with just making them do whatever we want.
We've got a racist white babysitter who hates black children. Fortunately, we know better than they do, so we're going to... shut black children up alone with them for long periods? What parents do you think want to hire babysitters who personally hate their children? Why would it be a good idea to facilitate that?
OK, maybe not babysitters in particular, but in general society seems to have decided that's the right thing to do. If you have a racist white chef, you force them to serve food to black people, even though they could poison it, spit in it, etc. If you have a racist white teacher, you force them to teach and discipline black schoolkids. If you have a racist white taxi driver, you shut black people alone with them in their car for long periods.
Now suppose the supermajority of babysitters are racist.
If they all leave the platform, it shuts down. Nobody gets a babysitter. If they all pretend not to be racist, you get black kids being looked after by closet racists.
It's not obvious to me that this is better than the situation where babysitters are allowed to be racist, and black people have more trouble finding a babysitter than white people. There are certainly arguments that it's better, but I don't think it's a slam-dunk either way.
Fortunately, we don't live in a world where the supermajority of babysitters are racist. But we do live in a world where the supermajority of babysitters are unable to accomodate developmentally-disabled teenagers.
We can shut down the babysitting service, or we can make the service pretend to acccomodate DD teenagers while failing to actually take care of them. I'm not convinced that "force babysitting services to actually successfully accomodate DD teenagers" is even an option.
If a platform can only sustain itself on the business of strong racists, maybe it should reconsider if it's doing good in the world.
>Fortunately, we don't live in a world where the supermajority of babysitters are racist. But we do live in a world where the supermajority of babysitters are unable to accomodate developmentally-disabled teenagers.
Being racist is discrimination, while not wanting to handle DD teenagers is because it's a totally different sort of job. I mean, a 10 year old with dyslexia is still getting a babysitter here. Because that's not a very different babysitting experience.
The two situations don't make a good analogy because of that.
Installing a ramp at the entrance to a building or on the side of a cab is a one time fixed cost. I'm not saying I disagree but I am curious, are these examples of regulations requiring businesses take on significant ongoing costs in order to provide for groups that may otherwise be marginalized?
Examples that spring to mind:
* Businesses required to have someone on staff at all times who can communicate via sign language.
* Daycare companies required to have staff capable of caring for children with physical, sensory or mental disability.
I don't disagree with your overall point but it's important to point out that the example translates to the real world just fine. There's no requirement that a childcare facility be able to accommodate children with special needs. They must be accessible for the disabled (parking, ramps, etc.) but caring for someone with developmental disabilities requires different training, staffing and accommodations.
It is not just accessibility. It also happens with sizes of clothes. Companies aim for the easy 1-sigma chunk of the bell curve, and ignore a large chunk of statistical "outliers". Or take airline seat space for example, where companies simply assume that people are no taller than 5.5 feet.
Well, at least in the case of high-end fashion brands, companies intentionally only produce slim-fitting/smaller-sized clothing in order to maintain an image of exclusivity.
I'm not sure if you're arguing about data or personal comfort. Over half the adult human population is 5.5 feet or under if you recall that women exist and are half the people
I don't forget that women exist. My impression was that they averaged taller than that. But even if they don't, you seem to forget that, if women average 5'4", that still leaves many women at taller than 5'6".
I couldn't find a data source for average (better, median) population height and distribution for the US that combined both genders. Do you have a candidate handy?
https://en.wikipedia.org/wiki/Human_height has graphs with percentile breakdowns, purportedly based on US CDC data, with median female height at around 5'3" to 5'4". Wolframalpha spits back 5'5" as the median human height though it says "weighted for USA demographics".
> that still leaves many women at taller than 5'6".
I didn't forget that at all, I just don't see how relevant it is, unless you think airlines moving hundreds of millions of passengers per year should be optimizing seat sizes for the long tail of the human form.
What if it's not profitable to do that on its own? The "free market takes care of everything" argument is an idealistic position, not something based in reality.
If it's not profitable then why should Airbnb be the one to subsidize it? Why not the government? Or some charity? Or you?
We don't expect anyone who meets a homeless person to offer them a place on their couch. That would be unfair. And an additional incentive to avoid homeless people. We have (well, not everywhere but at least we aim for) a systemic solution. There are homeless shelters for example, sometimes run as charities, sometimes tax-supported (ie. everyone is required to chip in).
It's weird when we try to offload these problems on the first person who touches them.
Why should anyone have to support them at all? It comes down to they and their supporters convinced society we should care about them and we decided those profiting off the majority to be the ones bearing the cost of the minority.
Why do I have to bake a cake for a gay wedding if I do such for straight weddings? Because the people who want that requirement have won the level of support needed to have legal support.
Why would that argument not apply to "It's 1960, and I don't want to seat black customers at my fancy restaurant because it's statistically likely to be less profitable than seating white customers"?
I've never worked in the restaurant industry, but, I've heard from people who have that it's STILL extremely common for black customers to be considered undesirable. I.e. a server will get upset at a host(ess) if they get "too many" black customers assigned to their tables.
Why? Servers claim that black customers - on average - tip less.
I don't know how prevalent this belief on the part of servers is. And I don't know how much of a numerically accurate basis in reality it has.
But, as a thought experiment, imagine for a moment that there exists an identifiable group [black people, star trek fans, old people, dentists, ...] that are likely to lead a server to go home with less money at the end of the night.
There can be a really fine line between statistics/machine learning and "bias"/"racism".
Where it gets even more complicated is that there might be variables which are not expressed as "is the customer black" which ultimately predict/are highly correlated with the question "is the customer black" - but are also predictive of the question "is the customer profitable".
I don't think there's a line between machine learning and bias. In the example I gave (black Americans in the 1960s), I'm pretty confident that any working machine-learning algorithm would conclude that this population is economically disadvantaged and therefore a less-profitable target market. Such a conclusion would also reinforce structural racism.
And that's the way we treated this in the 1960s. The government didn't ask Woolworth whether they had legitimate economic reason to refuse to seat those black college students, or whether their objection was based on them being college students, or because they only ordered coffee and not a meal, or anything else. As long as the effect of your policy was that you were discriminating on race, it became illegal. It doesn't matter whether you had valid reasoning based on race and economic status being correlated, or you were a card-carrying Klansman. A good-faith policy that discriminated on race is still illegal.
It seemed to work pretty well, and I don't think many of us regret the loss of ability of restaurateurs to make these particular economic decisions. The fact that we can now offload these decisions to algorithms (which aren't likely to be "racist" in the conventional sense) instead of humans shouldn't change things.
> I don't think many of us regret the loss of ability of restaurateurs to make these particular economic decisions
It's probably worth pointing out that the restaurateurs didn't have the ability to make those decisions; that was the point of the Jim Crow legal regime. Left to themselves, they kept wanting to serve blacks.
Hm. At least for the Woolworth sit-in, my impression was that this was store policy, and I'm not finding any source saying that Woolworth was in violation of any law when they gave into the boycott and dropped their policy. But you're right that Jim Crow laws involved mandatory segregation, and that the sit-in was a protest against those laws. Good point, I'm not entirely sure what happened there!
Because black customers pay the same prices and do not require additional accommodations. It would apply if the restaurateur was required to maintain separate dining rooms for whites and blacks or additional water fountains.
Everyone pays the same prices for what they order, but they can choose to order more or less expensive foods, more or less expensive wines (or none at all), etc., and they can tip differently.
If you have more customers trying to make reservations than tables to seat them, it is economically rational to seat the customers most likely to buy your more expensive items. We decided (correctly, IMO) that it is more important for society to fight entrenched racism than to enable business owners to make that particular locally-rational economic decision.
AirBnB is a rent extractor? That's a tendentious claim; the reason all the 'sharing economy' stuff works is that it's improving capital utilization and damaging cartels. I'd expect that real rent extractors are hotel owners in big cities with limited hotel zoning, who lobby for anti-AirBnB regulation to keep competition low and prices high. Or the politician/business alliances who build the local convention center by forcing a $N/night tax on local hotels.
The reason all that "sharing economy" stuff works is that you can afford to have worse capital utilization if you ignore existing regulations. For example, there's a big difference between what people can afford to pay for hotel stays and what they can afford to pay to live somewhere which means that dedicated AirBNB apartments can stay empty a large chunk of the time if you ignore zoning regulations intended to block this. Similarly, Uber cars can operate at much lower hours and mileage because there aren't the same restrictions on the number cluttering the streets or the same vetting of new staff.
> there's a big difference between what people can afford to pay for hotel stays and what they can afford to pay to live somewhere
... which means that the capital associated with "people living somewhere" is poorly allocated, and would be more profitable utilized as a nice hotel space. Capital utilization isn't just about the raw duty cycle of someone using that capital. You don't markedly improve your organization's capital utilization by running SETI@Home on idle computers, because SETI@Home is a worthless waste of cycles of little or no benefit to you or society at large.
> Uber cars can operate at much lower hours and mileage
Uber's more of the damage-cartels case, admittedly.
Only if you assume that the best utilization of scarce resources is the most profitable one. Filling the same number of people's needs about as well at about the same price using several times the real estate, meaning that other people can't find anywhere to live, is less efficient for any definition of efficiency other than "what capitalism decides". People actually having homes is not the equivalent of running SETI@Home on idle computers, nor does it become a worthless waste of little or no benefit to you or society at large just because it's more profitable to keep those units empty and use them as hotels for a few months of the year.
> Only if you assume that the best utilization of scarce resources is the most profitable one
Well, the best utilization is the one with the highest utility. In an efficient market that's the same as the most profitable, by definition. The usual caveats apply: no two individuals can ever agree how to measure utility, a free market won't be efficient unless there are no barriers to entry (city zoning may be a barrier to entry), transaction costs are low (the cost of moving from one apartment to another in the rental market is high), and property rights exist and are enforced (including both the obvious property rights and the ones that would apply to all the externalities like neighborhood character but don't exist and won't be enforced for a variety of good reasons)
So yes, caveats. Obviously. There's a moral character to some of these things. One can argue that people living in houses in a big city is morally superior to people vacationing in those houses. (Is that a thing you'd like to argue? Please do explain why, if it is.)
But to the point before: is AirBnB a rent extractor? Pointing out that caveat apply to the measuring of capital utilization in the abstract is not a strong argument in and of itself. Do they apply here? If they apply, would you care to quantify the impact in dollar figures for a typical city? (I recognize this can be hard for moral injuries, but it's not always clear when the injury ceases to be financial and becomes moral.) And even if these caveats apply, how do they apply to making the case that AirBnB actually extracts economic rents? The main thing it seems to be doing is lowering transaction costs associated with doing a short-term rental, and they do have competitors (HomeAway, Wimdu, Tansler, FlipKey, just plain Craigslist, etc, not to mention that the homeowners face competition from substitutes in the form of hotels) so it's not quite obvious that they're the ones collecting on this economic rent.
The core of the article is saying that you can't satisfy everyone, and the point of the replier was to point out that, if the need is that great, and there are such large amounts of people with the same issue, the free market will produce an alternative.
What if the need is great, but there isn't a lot of extra money to be made? Should the minority with disabilities be forced to pay extra to convince someone to provide them with otherwise identical functionality?
Many accommodations, if not federally mandated, simply wouldn't happen. For example, handicapped parking spots. People who use those spots are technically capable of using other parking locations as well, and the current handicapped parking spots are usually located in prime areas.
Maybe the government can offer a tax return bonus to cover it. And pump more money into fully general cures for all disabilities. I'm not against making disabled peoples' lives better, but focusing entirely on the supplier side is a mistake.
> And pump more money into fully general cures for all disabilities
I find this a disingenuous interpretation of how certain disabilities work and how "curable" they may be. Certain degenerative conditions are hardly understood, or the treatment requires time and reasonable accommodations from society such as the need for ramps and wheelchair accessibility. I do not know a way for non-supply-side costs to factor in "being able to use a wheelchair and still function in society".
What is the cure for having amputated legs while being poor?
The cure for a lack of legs is typically prosthetics with extensive therapy. Incredibly expensive and labor intensive.
The cure for amputated legs while being poor is a wheelchair; not as easily managed without additional space when parked, and if there are no ramps up to your building, your business is effectively inaccessible.
But ramps cost extra money. So do wheelchair accessible curbs. You need more space in the isles, specialized bathroom stalls, special door handles, support for someone closer to the floor at your counters... Lots of things we take for granted today, but which didn't exist for many years before the ADA.
Yeah, and sometimes businesses have been able to collect credits from the government for compliance with such-and-such. When they're forced to bleed money though (in this instance all that extra space adds up by itself, plus the opportunity costs -- imagine the pushback if airplane seats had to be way bigger and roomier!), and not all bled money can be passed on to the consumers, and even if it's done in the name of some good cause, the fact that it's still forced bleeding is what I don't really like, and would appreciate less of.
I'm kind of big on cyborg technology and other futurist ideas (like brain emulations). Varying degrees are expensive and not even available right now, but a large part of that is a serious lack of funding which in turn cuts business opportunities. (I would bet if society focused more efforts and money on general human augmentation instead of just helping the disabled, the disabled would come along for the ride since the non-disabled market is so much greater. As I touched on in another comment, the second-order effects often provide more value for these niche markets than targeting the niche markets directly.) While we transition to better tech that even the poor can afford we can still consider forced money bleeding, but I'd like to consider demand side solutions too.
The original point was, however, that we do need to serve certain groups even if the number of such people is small and according to the free market it's clearly not worthwhile to produce an alternative.
The way we do currently is a social contract (enforced in law) that mandates exactly the point that you should serve everyone and are required to make accommodations for e.g disabled people.
The quoted statement above is blatant discrimination and incriminates the company who wrote it. I'm surprised the company's lawyers allowed it. Much of the legal system in the US says that you cannot ignore the needs of minority groups just because it's not profitable.
If a company decided to start a sharing economy-based babysitting service, but doesn't have the requisite resources (or training/certification among workers) to look after special needs children, it's okay for them to not cater to those individuals.
It's not as though they have the ability and are denying service - they are choosing not to develop a product or service with accessibility features. I can entertain a normative argument that it's ethically wrong to allow companies to operate in this way, but this is not legally considered discrimination.
I do think that a certain critical mass requires this to be reconsidered, because private companies without as much regulation could displace people who enjoyed accessibility features under older, more established and regulated companies. That said, there are many products and services on the market today which simply cannot be used by handicapped individuals, and for many companies making these products it would be strictly impossible for them to profitably offer a more accessible version.
EDIT: Initially I said taxi cabs are not required to be wheelchair accessible and made an Uber/Lyft comparison. After looking into it, it seems I'm wrong - NYC taxi cabs, at least, offer wheelchair accessibility, you just need to call for it through dispatch as not every vehicle is properly equipped.
Not just in NYC, this is an almost universal element of taxi regulation. The city will either require that taxi companies operate a certain number of ramp taxis as a condition of their medallions (thus implicitly subsidizing them off other taxi rides) or directly subsidize operators of ramp taxis.
The State of California recently required all of the ride-sharing companies to produce reports on how they "planned" to accommodate disabled riders, but so far as I know, nothing has come out of it.
> It's not as though they have the ability and are denying service - they are choosing not to develop a product or service with accessibility features. I can entertain a normative argument that it's ethically wrong to allow companies to operate in this way, but this is not legally considered discrimination.
The same reasoning would apply to "It's not as though we have an elevator and are denying service - we are choosing to only install a staircase."
The author gave this (notional) example to simply point out that such users present a very different use case for the original company and are likely to be a huge distraction. And undeflected distractions are bad for a startup.
If it were a real example and you needed a legal way out (what country / jurisdiction?), maybe referring those cases to another service that is specifically set up to serve their needs would be sufficient.
> Now, what happens if someone with an infant or developmentally challenged teenager signs up? Their needs present an entirely new set of problems, problems that could be solved by a startup but not necessarily by ours. Remember you don’t have to pivot your business because a customer needs something that you don’t offer.
Meanwhile on Tumblr:
"Startup says they don't want developmentally disabled people as customers."
> Startup says they don't want developmentally disabled people as customers
That's not exactly incorrect, is it? The title of the article is "Users You Don't Want" and the author gives a developmentally disabled person as an example.
>In the case of Justin.tv, pivoting to serve video gamers was the right move. Our video game broadcasters always represented a small but consistent group of users. It tooks us 4-5 years to realize how important they were.
This stuck out at me as an avid Twitch user/follower (and sometimes a streamer). I think they need to re-realize this.
The pivot result (extra effort and focus in Twitch) is being re-pivoted with the introduction of more general-content streams, like Creative, Music, and Social Eating:
Does it really matter what the content of the stream is, as long as it is bringing in viewers? They've built the Twitch brand around games, but it is also the largest streaming site of any kind.
I, personally, want it to matter because Twitch's mantra and goals are still focused around being 'for gamers.' As a user, I feel like the "purity" of the space has been diluted. I am not alone in this.
From a business perspective, I guess anything goes as long as it gets eyeballs on ads, people buying bits (Twitch fun bucks), and more channel subscribers but simultaneously balancing the friction that new features have with the established userbase.
>but it is also the largest streaming site of any kind.
Youtube Gaming, Afreeca, and many others still exist; hopefully Twitch doesn't rest on what they have in regards to streaming. Twitch is also no longer just a streaming site; it's a software and wiki/database company now with the acquisition of Curse. Curse definitely brings in it's own conversation of "Users You Don't Want."
We definitely experienced this starting Open Listings. We thought that to begin with we would only be serving the 2/3 of transactions made by experienced buyers, but it turns out that over half of the buyers we attract are first timers. In retrospect, this makes sense: our savings is appealing to young families, and first timers don't have attachments to the status quo of getting driven around by a realtor in a Cadillac. Rather than saying no, we embraced these clients and have retooled our product to be more educational and broadly accessible. It's working so far in terms of ramping up revenue, staying default alive, and we're stoked to make homebuying more affordable to people who really need it the most. Our finding is that first time buyers don't actually need more service but they do need slightly more education and reassurance, which we try to accomplish mostly through UI and documentation.
Hey folks - slightly different piece today - trying to get away from investor/fundraising posts as of late. Would love your thoughts/comments/questions. I'll check in a couple times over the course of the day.
This really hit home as I was involved in another startup in the video streaming space. The founder was chasing every shiny use case and before long we had followed many rabbit trails and not moved on core product.
And you're 100% right: this resulted in us becoming glorified consultants.
I'd add that staying focused on the product is hardest for those from a sales background, who are accustomed to following opportunities. In all fairness, having an engineering background, I'm prone to the opposite problem: not recognizing fast enough when it's time to pivot...
Sorry for the boring feedback, but the post feels like it needs a bit more proofreading. Some of the syntax is a little confusing and I noticed a couple of definite typos:
> So what should to you?
Should be:
> So what should you do?
And:
> Does this user represent an even better opportunity for you to grow your business.
Should be:
> Does this user represent an even better opportunity for you to grow your business?
I feel like this point could have been made without referring to infants and developmentally disabled teenagers as "hijacker users."
I hate to moralize, but this essay helped me realize that there is, in fact, a baseline level of humanity we hold one another to in this community. And it is pretty inhumane to reduce the weakest members of society to mere obstacles to your business success. Choose another example and you will make your point more effectively.
Oh, I think they're making their point quite effectively, given that this is how "disruptive" companies like Uber and AirBNB actually operate. You're right that perhaps a more euphemistic example might've been better PR though.
Most startups never make it past their first year, but for those that do I think this is the biggest problem they encounter. Especially if there's a sales team, the temptation to say yes to prospective customers is enormous.
A lot of founders get tripped up by needing to show hockey stick growth as soon as they can, because they're usually top performers that are used to knocking expectations set on them out of the park. Saying yes to lots of people is an easy way to show the hockey stick in the first year, but it'll turn into linear growth pretty quickly. Congratulations you now own a consulting company, and your product team is groaning under the weight of enormous technical debt.
Your company is probably going to die now, because you're top engineers probably hate your product and vision.
I don't blame people though, because there really isn't a full proof way to avoid this. Sure, anchor customers can help, but how do you know when you really have anchor customers and when you're just saying "yes" to lots of ideas? In the end, IMO, it's totally subjective (building a great product). You just have to have a sense for it and be willing to fail quickly.
In my experience the best founders actually don't take as much signaling, at least explicitly, from their customers as you would expect. They have a maniacal vision, and they are following it. Their customer help give form to the sculpture, but the basic outline is set. If real hockey stick growth follows, so be it.
This is great advice, but when a customer is asking for something already on your roadmap, or fits with your product vision, then it can provide an opportunity where a feature can close new business and add equity to the business overall.
At Cronitor, we call this technique the JIT Startup[0]. There are dozens of instances where we've delayed writing code for something until it's actually requested, from boilerplate like PDF invoices to product features like being able to tag something in the UI. We always planned to build them, but working on these things (tertiary to your product) before anybody has even asked for it is a low-leverage use of you time.
Define your right target audiences is always a difficult challenge for startups. Totally agree with "Remember that being good at customer service doesn’t mean serving every potential customer."!
I think what is missing here for me (and in a lot of these types of posts) is a discussion of volume.
Now, what happens if someone with an infant or developmentally challenged teenager signs up? Their needs present an entirely new set of problems, problems that could be solved by a startup but not necessarily by ours. Remember you don’t have to pivot your business because a customer needs something that you don’t offer.
Is he literally saying that someone would be tempted to pivot a product based on a single instance? Or is that loose language for some, say 1% of the user base.
So a variation of the 80/20 rule? 20% of your users/customers cause 80% of the headaches/effort that aren't productive? This does hash out some 'stock characters' like I was "taught to identify" at a certain blue and yellow colored big box, because we were supposed to target them to "meet their needs" - gamer, Mom, audiophile, etc.
I have a few qualms regarding the avenue Justin.tv took as used for an example, in that yes I'm sure 90% of the user-licenses allow for game broadcasting - claimed publicly[1] - but IP is a slippery issue and willful infringement is potentially quite costly. I'm a former gamer so I also have first-hand experience with, ahem, demands that gamers can sometimes put forward which may or may not be grounded in the reality of IP law. In other words, I'm pretty sure they got lucky with right-place-right-time-right-market which takes some sheen off the innovation, execution, etc type narrative.
The benefits of accessibility are largely PR-related: nobody wants to be the company that makes blind peoples' lives more difficult. There may be ADA-compliance issues as well when you get big enough.
That said, accessibility is something you do when you're a big company. When you're a startup, work on making it useful to the easy customers, and then only once you have something that lots of screen-reader people want to use is it worth investing time in making it usable.
Even if you can't directly monetize the golden rule, a lot of accessibility work is super-simple thanks to the toolmakers giving it forethought. You can get to 80% of it in an iOS app by just making sure you've got descriptive text for each UI element in the storyboard. The few blind customers we've gotten as a result (some of whom helped enable it) have been extremely enthusiastic, which made my day.
Accessibility like scalability is far easer to bake in at the start than patch on at the end. However, punting until you start to gain traction is not a terrible idea.
I'm not sure about the US but in the UK what you're suggesting would I think be illegal. You shouldn't make things accessible just when you're a large company, that's a really disappointing approach.
This is just another reason why the US has a healthier startup culture. There are a lot of things that take effort to do that US companies can get away with not doing until forced to by law or the market, or when the opportunity costs diminish that they do it out of the goodness of the individuals' involved hearts.
Probably. My argument for healthier would mostly be on the second-order effects of having a better economy that can generate new sources of wealth. With a step back, until momentum and inertia are all that remain of the US' current dominance in startups that grow into world-changing companies providing value to all (including disabled people who benefit from accessibility), I'm default-skeptical of tinkering with the ecosystem with a top-down legal approach, especially when the approach is something like importing laws from countries without such dominance. In a way this is just "well we've kicked ass this far even though we do [morally reprehensible thing]", which by itself isn't a great argument, but paired with noticing that social systems are complex it's enough to give me a lot of pause. Even something that seems bonehead simple like saying "no more doing [morally reprehensible thing]" can have unwanted second order effects that end up with the consequence of a state worse than the previous one that included [morally reprehensible thing]. Full analysis is required by the people most capable of seeing all the effects, one of the worst outcomes is some group kicking up a stir to get some mandate passed on good intentions without thorough analysis.
Nobody is going to sue the company they've never heard of. If they have heard of you, you're in a good position to start worrying about things like accessibility/scalability/security.
Scalability is something it seems reasonable to leave until you're more sure you actually need it. There's also no legal requirement around scaling, and you're not affecting a specific group of people.
Accessibility is a legal requirement in the UK, and while you're right it's unlikely to come back to bite you as a small company, that's also a pretty crappy attitude to take. I don't like the practice of deliberately breaking the law anyway, but deliberately breaking the law requiring equal access to people with disabilities is awful.
While you have a point I'd say the vast, vast majority of accessibility related things that you can do with mobile apps and web sites are so simple to do it's practically incompetence to not do that and that'll get you 80% of the way there, maybe even more depending on what you're building.
Accessibility benefits everyone. Everyone wants easier to read, easier to understand, websites. How does a harder to use, harder to understand website help a business?
That's not really the comparison for a startup, though. It's "Would you rather have an easy-to-use, easy-to-understand website that does nothing useful, or an easy-to-use, easy-to-understand website that's full of security holes, or a hard-to-use, hard-to-understand website that basically does what it's supposed to?" It's pointless to make a website that nobody wants to use highly usable.
There's an opportunity cost for everything. The most fundamental opportunity that you don't want to miss is building something that lots of people want; if you don't accomplish that (and it turns out to be really hard), it doesn't really matter how well you've built the thing that nobody wants.
"Would you rather have an easy-to-use, easy-to-understand website that does nothing useful, or an easy-to-use, easy-to-understand website that's full of security holes, or a hard-to-use, hard-to-understand website that basically does what it's supposed to?"
There are more options, but they all involve giving up something somewhere. Perhaps you have a secure, easy-to-use, useful site, but charge more money for it. Perhaps it means that people can't use it today but can in a year. Perhaps it means that you've hired gullible underpaid engineers on promises of future wealth and then work them to the bone, but then do you want to be the person who's underpaying your employees?
The point (of both my comment and the original article) is that there are trade-offs, and you get to choose which trade-off you're going to accept, but anything you do is likely to piss off someone, so choose who you piss off wisely. Do you want your top priority to be accessibility? It can be, and that could be a wise choice if you identify a task that really really sucks for disabled people. But if you're looking at that before you've even got the fundamentals of building a useful product down, you risk building something that does something nobody really wants to do but does it really well.
Facebook for example would risk an 'accessible' website gaining a network effect and displacing them. So, it's not always a good idea to ignore small groups of users. Also, for organic growth you might end up with 1% more users at the end, but get there much faster as your compounding faster. Ie at 30% per month over 2 years (1.31 ^ 24 months) = 542.8 but at 31% per month that's (1.31 ^ 12) = 652.4
To be clear - I'm not arguing that you should ignore any user. I'm simply saying you don't have to comply with every user request and you don't HAVE to let a user request change the focus on your startup.
To be clear there has only been a single case where a website was found to be financially liable for lack of accessibility (in CA). Jurisdiction certainly covers most startups, but it's a single state. For the other ~88% of Americans there is no relevant case law on the subject.
If you run a website in North Carolina with $15k MRR accessibility is likely a waste of your time unless you're in a niche that is in some way related.
A version of this problem I've seen is that often customers (particularly enterprise customers) want you to make solutions specific to their exact needs rather than the broad needs of their whole category. Even if they want the same problem addressed that you do they will want you to make the product suit their needs EXACTLY. That won't scale and backs you into being a services company instead of a product company. Strategies we've used to fight this are to listen to feedback from all users and only build what everyone agrees is needed, and also offer an API so we don't have to flat out say no. Instead with an API we can say, you're welcome to do whatever you'd like... Finally, when we do have to say something like "no" instead we just put a astronomical price tag on it and let the customer decide no for themselves. ...or maybe they'll say ok and then we'll know our thinking might be flawed if some feature is worth a hefty premium. Hope that's helpful to others!
> In the case of Justin.tv, pivoting to serve video gamers was the right move. Our video game broadcasters always represented a small but consistent group of users. It tooks us 4-5 years to realize how important they were. Serving them didn’t change the costs of the business too much: our major costs were salaries and bandwidth and we didn’t care what video was being streamed as long as people were watching and chatting. Also it opened up monetization avenues that were very interesting: online video advertisers would prefer to advertise against video gameplay than general UGC content.
As for me, it often comes down to a question of who needs who. If a client provides more value than you could possibly anticipate in the foreseeable future and as long as it isn't too depleting(and only you can determine this and only for a limited period), then you should oblige. It's easy to say, say no, but when times are tough you should trust yourself when coming to a conclusion on such an issue since there aren't any unbendable rules after all.
... Only one of the cases he listed, the developmentally-challenged kid, would result in a lawsuit if he didn't accommodate.
That's one where you throw money at the problem. You hire a custom operator to handle ADA-requests (and similar) and you pay the price difference for someone who does manage this. Legal compliance issues, you often turn into a mega-expensive non-engineering one-offs.
Or you get slapped with a DoJ investigation, and lose the business.
I think this article only makes sense in the context of the bad example given. An actual good idea for a startup wouldn't have such an obvious "hijacker" subset of consumers that just destroy your business.
o the US govt will have a laundry list of features so
specialized that you really end up working just for them
o companies that are big enough they want everything
running on their internal infrastructure
o health care providers with hippa requirements
o nation states (including the US) that want to impose
monitoring or censorship requirements for you to serve
their populations
o customers who want their children to use your service
or software and have you be responsible for censorship,
controlling harassers, etc
o any minority community, say classic music lovers want
you to accommodate additional metadata that doesn't
show up in a service targeting popular music
basically any time you have a feature request you need to think about the ongoing cost vs reward. if you let sales drive this process you can easily end up chasing your tail just to land them their commissions.
i don't think its that unusual. you have to say no sometimes.
If the customer is throwing around a couple million dollars of NRE, it's probably worth bolting something on and pocketing the money. If the customer is only moving a couple hundred thousand, it's probably not.
This seems more like a software-only startup issue. We have hardware and have these hard-nosed discussions all the time--generally about volume.
Customer--"We want X and we want 100,000 units and we're going to put the NRE on this payment schedule."
Us--"No, you're going to put all that NRE up front and it's <2-5 million dollars depending upon change complexity>. And you're going to front the first 10,000 units which is <generally a nice chunk of a million>. After that, we can put you on the royalty schedule. We can't put ourselves in the position of losing the company because your volume never materialized."
Customer--"<choke> <splutter> That's preposterous."
Us--"No. It's the reality of hardware. We know our costs really well."
Side comment: it's always 100,000 units and 100,000 units is generally hardware death--big enough that you have all the volume problems but small enough that your profit sucks.