This sounds like all the parents who've had one baby that slept well and spend the rest of their lives telling other parents what worked for them. Very difficult to draw anything meaningful from a sample size of one. Sometimes a company just works despite all your best efforts to sabotage it, and sometimes even then best founders can't make something work. Right idea, wrong time.
Maybe I was being too subtle. I mean it sounds like offering completely random advice that has no statistically significant correlation with success, and therefore is just as likely to be wrong as right.
To be fair, all startup advice is completely random advice. Really, there's no guaranteed rulebook for success, so everything should be taken with a grain of salt.
It read to me more like general advice that one should carefully examine any industry "best practice" in the light of your company's specific needs and circumstances.
So for example "we just used Heroku" might stick in the craw of developers who think AWS Lambda based microservices are the future, but for a small startup with limited resources and time Heroku is probably a safe bet.
Yes; in other words: don't do cargo cult. Do what needs to be done, not what you think needs to be done because you have read about it somewhere.
But of course this is much easier to say than to put in practice; "what needs to be done" is very hard to know, while random generic advice is always top of mind.
Their advice is to not cargo cult. Not to ignore all advice.
What that would mean is that even for the advice that they give, not to cargo cult, you need to examine whether that’s actually good advice or not.
It may turn out that your product is a component library, in which case, being in the spaces the cargo cult tells you to be it may actually make sense for you to follow, because that’s where the largest market would be.
Agree, it’s especially difficult avoid cargo cults if you are surrounded by people who insist that it’s necessary to do certain magical incarnations in order to be successful.
Their competitor also raised $138 million [1] along a similar time frame. In fact both companies look like almost exact copies of each other. Maybe they should have done some of these things.
You say this as if the goal of building a business (and measure of success) was to raise money?
From what I can see, Front has 360+ employees and generates $64M in revenue, which works out to $177K revenue per headcount. Missive generates $2M with a headcount of 4, which comes out to $500k revenue per employee.
Imo, generating almost 3x more revenue per headcount, and not having to deal with the headaches of managing a 360+ employee team (while maintaining complete ownership of your company) is the type of success that more founders should aspire to.
You can’t pull their revenue from one of those estimate sites and pretend it is any bit reliable. It’s like those celebrity net worth sites, a total guess.
You can't get to product-market fit without time and effort, but the amount you put in can be scaled up as you get a positive response. If you're iterative, you can adapt your GTM and funds invested based on feedback.
>Were we successful because or despite of all of these did-nots?
I think that's a legitimate thing to ask, as the proverb goes:
>Many people will seek credit for success, but few will accept responsibility for failure.
The issue is that a valuable blogpost would go through each of those things they listed; and consider whether it was a good thing to avoid or not. It's fine to say "Don't stress about it" when you succeed, but there are plenty of start ups that fail because they don't have a business plan or they didn't successfully manage their network. What would be valuable is to share the insights you learnt on your journey rather than to flippantly celebrate your success. Anything succesful innevitably involves skipping things that turned out in retrospect not to be important - but the useful advice is how to figure out what was important ahead of time.
Maybe I'm being overly pessimistic, maybe "you can still have a viable business even if you screw up lots" is something someone needs to hear. It's certainly true - you can actually succeed if you get the core elements right even if you get a whole load of things wrong.
OP is not claiming those things are ineffective, they can be[1], he is rather trying to say they are not absolutely essential, you can succeed without them too .
[1] he cannot really comment on their effectiveness as he didn't use them anyway.
Yeah, given their level of success without marketing expenditure (ie, its likely to be a good product) you have to wonder if they would have been able to multiply that success with some marketing effort.
On the other hand, putting (apparently) 100% of their effort into product is maybe the reason it worked.
I personally think a great product is table stakes for success, but I’m repeatedly shown to be wrong ¯\_(ツ)_/¯
I think there's a lot of things that I have ignored in my career and come back to and then said "Oh, yeah, that was a massive net negative, I should've just done it right in the first place". Those are really valuable insights. Where can you skip the "best" method, and where is it really going to screw you.
For reference $2mm arr is $40k revenue per person per month. A hypothetical 75% margin means $30k margin per person per month.
Very impressive growth and 100% something you and a couple people could live off of. It is not a moonshot tech company/etc though, so if you’re looking to build something big - these are not lessons you should follow.
Spending money on advertising, hiring 1 salesperson, etc would drive a lot more revenue and enable them to scale. That is likely not their goal. I very much preferred working for companies who were highly profitable and didn’t try to outgrow themselves, compared to the opposite.
Accelerating growth is definitely on our radar. We took a different road up to this point, but I expect our future to be more similar to a regular tech business now that we're set on solid ground.
Thanks for sharing and congratulations on the milestone! You are going to grow like crazy when you throw marketing and sales behind new customer on-boarding. If you find that you are growth limited by cash-flow, you are also in a great position to set your own terms for valuation.
Congrats on making it!, and making it without doing things you didn't like to do! That is truly rate.
You were successful because you have very good product market fit period.
I think of all those did-nots as makeup, some are born with great genes don't need makeup or just basic excercise to look great to be in Hollywood or a model, for some they are good enough that they can make it with loads of makeup and lot of hard work to be in shape, and sadly for many there is no hope to be a model no matter what they do.
Product market fit is like that, you can succeed without it but that requires a really strong fit, most products don't have that strong fit, so the crutches are essential for their success.
The more interesting question for you is with some of those did-nots would have grown to say 20M ARR in the 7 years ?
Maximizing ARR likely is not your goal, you want to create your business and be happy doing only things you like. however when recommending your path to others you need to consider that hypothetical.
I just thought this was such a great list. Some of them were head scratchers for me (untyped languages? OMG NO) but that seems to be the point.
Can you tell us some of the things you DID do? I’m assuming you were focussed on building a great product? What did you do to get your first sale? What made you decide to pull the trigger and build in the first place?
For me that's the most surprising. Personally type-checking has such an immediate ROI on productivity. Even if adopting it incrementally. It's certainly not required to build a business but it's not something I'd skip.
I love type checking but I do think the point at which type checking becomes a necessary business decision is very far in the future. Companies such as Stripe, GitHub, Facebook, etc. are examples of this. And with some typed languages, e.g. Rust, Swift, OCaml, there's an additional factor of a weaker ecosystem. Yes, even Rust's ecosystem is worse than say, JavaScript's for some areas such as desktop applications.
I worked on Facebook Web Infra while we were adopting Flow. And typing was a huge productivity and safety boost. Sure, you can build without out. There's no denying that. But now we're in 2022 and we have mature type checkers for JS so it's not something I would skip on today.
I would love to know if there's studies out there that demonstrates any relationship between programming languages and business metrics.
The closest I found was a blog post [0] that implies that Ruby and Python were the most prominent languages among the most valuable startups from YC. Those are distinctly not languages that lend themselves to type-checking.
Why did they have to go and throw this one in? This is entirely subjective. I guarantee that a full audit into their expenses would find at least some waste. Placing such a general comment as the last item in a list of mostly specifics gives it extra importance and seems to imply that the items above it are a waste of money. It gives the whole article a "we know better" vibe that is trying present itself with a "here is what we did" vibe.
I could tell too, it sounded weird. The cadence of the 'speaker' was way off. Better than Alexa, but it really does not sound human. As the cost of a human to do this is minimal, and it's literally front and center on your home page which you use to acquire all your customers, you should have spent the $500 to do it right.
In that case, I think it's a little similar to how I could have gone to college but didn't. I ended up in a good place (as you did too) but maybe had either of us taken a more traditional route, perhaps we could have saved ourselves some time.
Is there anything you'd say to your younger self about these things you didn't do that could have sped things along?
Was there a moment when you felt a market fit step change? What was that like? You've told us what you didn't do (great, btw!), but perhaps you could distil a couple of things you did do around that time that made the biggest difference.
Reminds me what great poet and scholar Eminem once said: “Will Smith don’t have to cuss in his raps to sell records. Well I do. So fck him. And fck you too”
So…what did you do to get to $2mm ARR? Because there’s no way you just put up a site and people started signing up for your product. It doesn’t work like that.
...why? This quote matches my gutfeeling: "you're doing ads because you failed at marketing. You're doing marketing because you failed at product".
Don't get me wrong, I'm not saying that survivorship bias isn't at play here, or that all or none of the things listed in the article are required to get anywhere. I'd just like to hear a coherent argument why a good product doesn't carry itself to a decent valuation.
> you're doing ads because you failed at marketing. You're doing marketing because you failed at product
Define marketing. Is having a website at all marketing? What if I have a private link to sign up for my product, but I have to email people for them to use it. Is that marketing? How can one exist online as a business without doing marketing? If you've ever made a single SEO optimization to a website are you not doing marketing?
What I'm trying to say is that your quote doesn't make any sense. Not only does it fail at understanding what marketing is, it's also just patently false. Great products, amazing products, fail every single day.
Ads are a subset of marketing, so I don't really understand how that quote works but a good product carrying itself to a decent valuation probably has some correlation with how good the network effects of that product's user base are and how likely those users are to spread the word. At the end of the day you need eyeballs on your product, and organic growth is usually going to be the slower path(albeit not the worst path for some).
*If you have investor pressure to show growth(usually in terms of user base), you're going to opt for the faster progression.
It's refreshing to read that. There is this whole lot of widely accepted, undeniable truths among entrepreneurs, investors and many others in the ecosystem, and it's really good to meet successful companies which dared to do what they thought they had to, no matter all the buzz around. I wonder how many companies fail for getting too distracted with this truckload of bullcrap. Maybe that's not the main reason, but I believe it's a contributing factor in many failures.
To me this sort of seems like an optimisation problem. As a business you're after some monetary metric, and cash flow and ideally enough to pay your staff (haha, been there working for free or very little).
But you don't know up front what is required for YOUR business to achieve that metric and what you need to optimise for. That doesn't mean that you won't optimise for something later on, but you can take a page out of of Donald Knuths book here and say premature optimisation is not just the root of evil, but possibly spending time and resources on something that that you don't know is really directly achieving that business metric (at least at the current stage of the business) and in this context it's wasteful (and given resource scarcity in a startup, could lead to failure).
That's not to say they won't optimise or do these things later, it's just to reach this point in the business they did not do these things. They could and may have to later on.
> We did not focus 100% of our work hours on only one business.
> We did not pivot.
Does this mean you didn't focus on 1 customer or you didn't focus on one product? Because if you built multiple products and focused on the most successful, I would argue that you did pivot.
Very impressive. I'm a big fan of companies like this. It looks like you have built a good product, did the right things, didn't fall into the traps, and now have a nice size stable business. Congrats on your success!
Looks like they wrote a fairly vanilla Rails app and completely avoided micro-services, container orchestration, big clouds, static typing and a lot of the stuff most devs on HN (or even IH) write about: https://builtwith.com/missiveapp.com
Maybe hitting 2M ARR is small for many here, but I'd be thrilled with building a SaaS to that level with just three founders and a single employee!
Maybe in a couple of years when they have more revenue and a bigger team, they'll start moving towards a heavier dev process.
Having the right business idea at the right time is 1000x more important than your tech stack, programming language, architecture, or anything else HN normally cares about.
I really like this post. As a startup founder, it's easy to get distracted by advices from armchair startup experts.
To use a tree/forest analogy, you'll often get suggestions like "why don't you use some fertilizer?" or "why don't use plant maple trees instead of oak?". In reality, your time is better spent focusing on planting more trees ...when you finally catch a break from fighting three different forest fires.
I would argue that you did waste (potential) money by not optimizing your marketing funnels. Regardless, this list was a great reminder that the core of what we should focus on is putting your product in front of customers and making it better, not micro-optimizing.
> We did not apply for the government salary subsidies.
This one is stupid. The startup R&D tax credit is essentially free money that you are giving up for no reason. Your accountant is probably being negligent for not automatically getting it for you.
It’s like all of these things tho. Like not spending on marketing or not using typed languages or literally all the other things. That’s the point. They were successful without spending the not insignificant effort required to get grants and rebates, despite advice such as yours.
Getting a product to market and getting sustainable revenue is the really, really hard part. Most of the stuff on their list is just work to be done - different kinds of technical debt, as it were. Leaving that work - even the low hanging fruit - until after the business is established is very disciplined.
Now that they’ve established a firm product and financial foundation, you could almost see this as a to-do list. They can do these other things confidently, and measure the impact of them.
Money is never free, it flows from one pocket to another. Money represents an amount of intrinsic value which is at its most reductive and following all supply chains all the way down, it is simply representative of a given amount of energy. Energy cannot be created or destroyed.
Even if you were to bring up the example of when more money is printed, it decreases the amount of value that all the other money is worth, and is therefore not free.
With that basis, one may say that there are certainly some reasons why someone would not want to accept or support money that effectively dilutes value for all others.
