HN Office Hours with Kevin and Sam
Unless you're one of the companies we're having office hours with, please don't comment otherwise on this thread until we're done at 1 pm PDT so that we can keep a clear flow in the conversations.
UPDATE: We're going to do office hours with ismail, trsohmers, ljd, ph0rque, and dzine.
UPDATE 2: Ok, have to sign off and go do office hours with YC companies. Thanks everyone!
[+] [-] ismail|10 years ago|reply
We have built a ride share matching system:
Our goal is to make use of unused seats in cars matching drivers and passengers. We do not put any cars on the road (i.e Uber), We match to drivers on their daily commute.
Our Biggest Problems:
1. We are quite successful at converting people who are posting to online classifieds etc. We have strategies to get these users. We grew week on week by as much as 50% but then we hit a negative growth week. In order to continue growing, we need to expand into other areas.
We also have an un-balanced market. Demand for rides is much higher than rides offered.
2. We have not figured out how we will make money yet. Our initial hypothesis was a transaction fee.
The passenger and driver will be traveling together on a regular basis. Once we match them, we run the risk of being dis-intermediated.
You could make an argument that a payment directly into the bank account is more convenient than cash, though i am not sure that is a strong enough incentive.
3. Our churn/attrition is very high, There is no need for the system once they start traveling together. We have churn built in to our model.
[+] [-] kevin|10 years ago|reply
Usually the incentive for drivers when I've seen other companies work on this problem is they get to drive in the carpool lane. Does that not work in your instance?
Why couldn't you have drivers be paid by passengers and you take a cut of that process?
I think a lot of people are selfish about their cars because they're valuing efficiency and control of their commute over everything else. Adding a passenger reduces those primary values. Can you think of other values that might overcome those? Money is one, but considering the lack of interest to meet that demand, it might not be enough.
If I were creating a ridesharing program that I wanted people to talk about organically, I'd want to design it in a way that commuting via my program was FAR better than commuting by myself. Off the top of my head, the best part of my commute is listening to a great podcast. If you could get exclusive content that only ridesharers can get access to if they ride together...that could be interesting.
Doesn't need to be entertainment. Could be learning a language together or business skills, etc.
Why did you think you had a negative growth week?
[+] [-] dpatru|10 years ago|reply
[+] [-] biot|10 years ago|reply
This may avoid disintermediation as the price should be more than fair for the rider that they wouldn't want to have to deal with forking over cash (from what I've read about South Africa, I suspect there's a risk of getting robbed which this prevents). And what happens if a rider is sick or has a day off and they need to pair up with another driver? Additionally, look at what AirBNB has done: offer supplemental insurance to cover unfortunate circumstances. Investigate what it would cost to provide some additional insurance to riders and/or drivers such that if they try to go outside the system, they're not covered. I'm not sure what kind of insurance coverage is mandatory for drivers, but if there's something many drivers routinely avoid (eg: they have collision only, but no liability) there's an opportunity to step in and provide something extra. And/or what some auto clubs have: drivers are covered for so many flat tire repairs, jump starts for dead batteries, etc. Leaving the system cuts both drivers and riders off from this coverage.
Also, look for ways to partner and offer additional benefits. There's probably some underdog gas/petrol chain which would love to be the exclusive provider and could kick back a small percentage of purchases. Ideally it's kicked back to your company via a reward card and is part of your payment to drivers. Rate drivers on vehicle cleanliness and reliability and now there's an incentive to have a clean, well-maintained vehicle... and you can partner with a chain of mechanics and auto detailers and give your members a 25% discount or whatever you can negotiate.
As you're dealing with many low income people, not sure what level of tech you're facing, but you could also provide mobile app notifications or SMS a few minutes before the driver arrives.
Finally, if the local government wants to make ride sharing a priority why not partner with them to subsidize the program on a per-rider basis? This may let you offer a cash incentive to riders for signup and/or get 100% of your fees through this subsidization, allowing you to pass through all of the monthly fees to the driver. With whatever other benefits you offer, there's really NO reason for them to leave the program.
[+] [-] ismail|10 years ago|reply
[+] [-] ismail|10 years ago|reply
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[+] [-] trsohmers|10 years ago|reply
May be a bit out of your area, but I'm curious about your thoughts. Even though we are in "Silicon" Valley, there has been very little when it comes to new semiconductors investments. I'm the co founder and CEO of REX Computing (http://rexcomputing.com), a new semiconductor startup working on a super energy efficient processor architecture. We've actually raised seed funding, and I'm interested in what you think about the semiconductor space in general (and its future in the valley), plus ideas on how we can thrive as a very low level hardware company in a primarily software world.
Thanks!
Edit: One other thing I should note is that we are also big on software! We're utilizing a lot of open source projects to help build up our compiler and other software tools. Obviously hardware without software to run on it is pretty useless.
[+] [-] sama|10 years ago|reply
I think extreme energy efficiency is a great thing to go after for a new semiconductor company. It fits the "surf someone else's wave" principle well. Big companies are of course trying to do this to, but focused startups beat big companies all the time.
Don't worry about being a low-level hardware company. It's a feature for you, not a bug, that there aren't many startups doing that. You can look a lot like a software company that produces a piece of hardware.
When will your first chip be ready? Who is going to manufacture it?
Who will be your first customers, and how much better will your chip be than whatever they are using now?
How much money will you need to get that first chip to market?
[+] [-] kevin|10 years ago|reply
The biggest problem for hard technical problems is the storytelling. I went through your site and I couldn't find the sentences I would need to make someone else excited about what you're making in a conversational way. It should feel like you're making something science fiction a reality through your technology alone. That storytelling is what you'll need to convince/inspire customers, investors and future employees.
[+] [-] akhilcacharya|10 years ago|reply
[+] [-] ljd|10 years ago|reply
Pitch: We're replacing congress with voting software. We are running 70 candidates in the 2016 Congressional elections on our platform, if any of them get voted into office we'll take all bills before congress and put them on our site where each voter in that district gets one authenticated vote.
Question: In your experience, what's the most effective way for B2C company to educate users that you even exist?
I know that signups and conversions are an art, but more than all of that, just telling people that you have something new that they may not be searching for but could still dramatically improve their life. We will take any demographic that will have us, so we aren't picky on that front.
We have 100% week-over-week growth during election cycles, and 10-20% when it's not, so we know the message is received, we just want to get more people in the top of the funnel.
[+] [-] ph0rque|10 years ago|reply
The potential market for automated micro-farming (backyard farming) is huge, but it will take a long time to to reach its potential. My question is, at what point would AutoMicroFarm (http://automicrofarm.com/) become attractive to investors (both YC and others)? Would 10% weekly growth for a year be key, or something else?
Two and a half years ago, we AutoMicroFarm founders had an interview with you, and you decided not to invest, saying it was difficult to see how AutoMicroFarm would generate the kind of growth startup investors are looking for. However, YC invests with infinite time horizon and is not afraid of risky-looking companies (http://blog.samaltman.com/new-rfs-breakthrough-technologies).
So what would YC or other investors like to see before investing?
Thanks!
[+] [-] sama|10 years ago|reply
However, for a company like this, I think the most important consideration is how you plan to build a monopoly. There are lots of companies proposing to build automated food growing units for families with very similar plans; what stops this from being a race to zero-margin pricing? Why will a customer buy your product in 5 years and not one of the many clones?
People refer to this in lots of different ways--Warren Buffet as the relatively benign sounding "moat" and Peter Thiel directly calls it a "monopoly". Whatever you want to call it, how do you plan to do it?
When will you have the first unit in customers' back yards?
How are you going to price it? If it pays for itself in 5 to 6 years, have you thought about going out with a leasing program? I think people almost never do enough on the financial innovation side.
[+] [-] dzine|10 years ago|reply
We are building a platform that allows anyone with a mobile phone to earn a living by performing discrete tasks.
Our platform aims to break down complex jobs into easily actionable items, that can be performed easily by anyone, anywhere.
The first vertical we are applying this to is reservations. The Loft Club (https://useloft.com) is a service that makes reservations for you at amazing restaurants every month on your preferred day, saving you the decisions and the hassle. Through our platform, we centralize restaurant recommendations and assignments, before farming out the logistics of making and manging them to our agents.
Our question is: Should we work on building out the generic platform and expand quickly into other verticals, or focus on building out The Loft Club and owning this space first? We've customers paying us for The Loft Club with the mild publicity it has received thus far.
Thanks!
Zhuang and Derrick
[+] [-] sama|10 years ago|reply
I think that 98% of the time, the right answer is to start out and remain focused on one vertical until you take it over. Most startups expand far too early and then fade out everywhere (this is often the fault of bad advice from investors). Facebook started in an extremely small vertical (Harvard undergrads), then expanded to a still-small vertical (US colleges), and then at some point took over the Internet.
Why did you pick this vertical to start with? It seems there are a lot of services helping people get restaurant reservations. The idea of breaking down tasks into small action items and farming them out to people seems good, but this doesn't seem like the most pressing need. What else did you consider as a first vertical?
How many users do you have, how much do they pay you (and how much do you pay the agents per task), and how fast are you growing?
[+] [-] mwilkison|10 years ago|reply
ZeroDB is an end-to-end encrypted database that lets you operate on data while it's encrypted.
Demo video: https://vimeo.com/128047786
Question: We want to sell to large enterprises (financial services, healthcare, saas providers, etc.). The common advice is to start with SMBs/startups and get traction that way before going upmarket to enterprises. How can we balance that with the fact that what SMBs are asking us for is very different from what enterprises have told us they'd like in a fully-baked product?
[+] [-] sama|10 years ago|reply
This is great time to be selling security software, especially at the data level.
I've never totally bought the "start with startups" approach for enterprise security software. I'd suggest finding a CSO at a large enterprise that loves what you're doing, and tell him/her that if you can get a signed LOI for a pilot, you're happy to build whatever they'd like. This will likely be enough to raise some seed money to build it. Then go make that customer as happy as you can.
[+] [-] kevin|10 years ago|reply
[+] [-] Smirnoff|10 years ago|reply
We are about to finish building a table reservation system (think OpenTable or SeatMe but on steroids). Although it's a "Me Too" product, we will offer features that our competitors can't or won't, e.g. bigger API control for restaurants, various hooks to extend the service such as food delivery, pre-paid reservations, and ticketing for tables to name a few. Essentially, we will offer an iPhone/iPad app for restaurants to manage their reservations/orders, while their guests can use an iPhone-app/Android-app/Search-Engine/Restaurant's-Website to make those reservations.
I have a question about a launch/pricing strategy:
- Is it sane to do a freemium model for our product? For example, restaurants would be able download our Manager app in App Store for free but it would have limited offline features. If restaurants want to accept online orders, then they must get that feature via in-app purchase. If restaurant wants to incorporate discount cards, then it's a different in-app purchase. This logic applies to all different features.
- Or should we go through a regular sales process, i.e. sign up restaurants one-by-one, charge them via check/credit-card/etc and escape Apple's 30% cut?
Thanks in advance and I hope it will be helpful for other startups that are in a similar position.
[+] [-] kevin|10 years ago|reply
Now, as a startup, I wouldn't start by competing head to head with OpenTable's salesforce going after their customers. That sounds expensive. Also, getting people to switch providers is always way more difficult. Plus, I think people value OT not because of their features but because of the network effect they bring. Don't get me wrong, you'll definitely still be going one-by-one and converting users, but I don't think you should start with those using your competition.
Instead start with new restaurants or those not using anything. To them, you'll feel like a miracle.
The reason you want to maximize distribution of software and engagement (having something that even the free plan is worth talking to people about) is because going freemium is not unlike investing in startups or building up a portfolio.
You invest in your customers in mass (with free features not money) and you hope a small grouping of them will make back that investment many fold.
Like investing, freemium works best as a long term strategy. So when you look at your upgrade triggers, be sure not to cripple that free plan so much that you're optimizing for conversion rate for users as SOON as possible. Convert them when they've grown to be successful. So they can say you were a key part of their success.
I think MailChimp thinks about this really well if you haven't read their ideas already: http://blog.mailchimp.com/going-freemium-one-year-later/
Good luck!
[+] [-] marcuslongmuir|10 years ago|reply
We’re MinoHubs (https://www.minohubs.com) and we build commercial and community tools for software projects. The barrier to building a successful software project is high - apart from writing the code, you need to build a community and potentially set up some commercialisation (backing, licenses, support etc.) which isn’t an easy task.
We provide customizable hubs that give projects:
Commercial tools
- Paid support - ability to offer on-demand consultation to businesses and developers.
- Licensing - ability to sell one time and recurring licenses to businesses and developers (coming soon).
- Backing - monthly contributions. In return, backers get more visibility in Discussions.
Community tools
- Powerful discussions with voting.
- Announcements - emails and notifications to project followers.
From Kevin’s initial feedback (https://news.ycombinator.com/item?id=9746206) we understand that we need to be better at:
1. Leading the user through things to do after creating a hub.
2. Showcasing the benefit of using MinoHubs.
We’re working on those right now.
Our challenge is that, as Kevin also pointed out, we have a lot of features, but we’re also trying to appeal to an audience that would use different combinations of features; open source software, commercial software or projects that want to just use community features.
How do we reconcile that users want a wide variety of functionality with the issue that this might present too many features for us to convey concisely?
[+] [-] declan|10 years ago|reply
Coincidentally we started sending out beta invitations last night to the first group of people on our list before a planned public launch next month. Our recommendation engine is built on Google App Engine, which should (we hope) allow us to scale. My office-hour question for Sam and Kevin would be: What advice do you have for us at this stage?
[+] [-] kevin|10 years ago|reply
For example, I wanted to try it out. Couldn't. 1 user lost. You will struggle your entire startup's life trying to get as many people to use you as possible. It's not like you don't have bugs after you launch. If you're a decent startup, you will be agile and you will change and fix things as they come in.
Since this is a news recommendation engine, no one is going to die or lose a ton of money if your app isn't perfect out of the gate. So make it easy for people to try it out, recommend it to others, and get as much feedback as possible so you can make it better.
If you're worried about growing too fast...well, you should consider that winning the startup lottery. Chances are that's not going to happen and you should be so lucky.
Good luck launching!
[+] [-] Lukeas14|10 years ago|reply
What we do:
We're building a community of vehicle data (http://shadenut.com). Mechanics and DIYers will be able to look up any piece of information they need to work on their car directly from their phone while still under the hood (ex. torque specs, TSBs, fluid types/capacities, etc). As a developer I've seen the positive effect that StackOverflow has had on our industry as a knowledge base and am trying to do the same for the automotive industry. The data will be crowdsourced and 100% free to use.
Our Problem:
Our biggest problem is that the product is not really usable unless it contains EVERY piece of technical data about a model, after which it becomes tremendously useful. The most common feedback we get from technicians is that they'd love to use it and contribute once it's a complete database (as long as it's accurate) but wouldn't switch from the paid competitors until then. The data is all available but there's simply too much of it for a small team to manually import. Our current strategy is to start with a select few models and incentive technicians to make their own entries.
However, I'd love to hear how Kevin and Sam would solve this or from others in the HN community who have faced similar problems.
[+] [-] Kluny|10 years ago|reply
[+] [-] highCs|10 years ago|reply
I have a solid engine, nothing launched yet.
My question is: why would you not fund this project right now? What could I do to improve my odds of getting funding?
[+] [-] kevin|10 years ago|reply
[+] [-] deepGem|10 years ago|reply
Help needed - We think that either the government or certain enterprises will pay for this data (since they already are spending money on such technology). What is the best way to validate these channels?
[+] [-] 32faction|10 years ago|reply
Pitch: We're ATLAS, we plan to launch extremely small cubesat payloads (x<100kg) into low earth orbit on demand.
1) How much calculations/numbers crunched would we need to convince angels to invest? Rockets of this size aren't something we can bootstrap without a little financial support.
More Background:
Right now, the only way to get a cubesat into orbit is by ridesharing on bigger rockets as a secondary payload. The problem with this is they're not assured to reach a preferred orbit and are at the mercy of the scheduling of the primary payloads. NASA currently has a backlog of ~50 cubesats that need to get into orbit, as well as the many upcoming launches (including SpX this Sunday). We are currently working on the RFP for the Venture Class Launch Service however we may not have the resources to fully complete it by the deadline (13 July). We plan to market this service to Universities as well as hobbyists and government space agencies.
[+] [-] sama|10 years ago|reply
The most convincing thing to investors will be an order book--ie, go convince people in that backlog to say they will pay you a certain amount for future launches if you can build a reliable rocket. If you have that plus credible initial technical development you can probably raise some money.
[+] [-] unknown|10 years ago|reply
[deleted]
[+] [-] unknown|10 years ago|reply
[deleted]
[+] [-] goldMIT|10 years ago|reply
[+] [-] r0naa|10 years ago|reply
Focus on delivering a polished products that can deliver, I will try your product only once and if your product's quality convince me that there is an opportuntity to improve my speaking skills I will literally throw money at you.
[+] [-] S4M|10 years ago|reply
[+] [-] ismail|10 years ago|reply
[+] [-] matrix|10 years ago|reply
Today, this market niche is fragmented with high search costs for consumers. My marketplace will make it much easier for consumers to find and buy the products this this niche. Once off the ground, the marketplace will be a key source of customers for the merchants.
Consumers like the product, but the merchants are difficult to get on board. I find that the prevailing view is that the status quo is 'good enough'; merchants are conservative, and very few are early adopters.
Things I'm doing to address this:
1) Price for growth -- pricing based on a small flat fee that the merchant pays per transaction to align with value delivered, with first X transactions free (obviously I would prefer to charge a % of revenue, but that's a very, very hard sell with these particular merchants).
2) Provide the merchants with tools that help them run their business (i.e. give them reasons independent of the marketplace to use the app)
3) In-person visits to merchants. These are valuable for many reasons, and are only partially a sales call. These visits will always be something I do, but it doesn't scale enough to create a marketplace.
What strategies and tactics do you suggest to get merchants into the marketplace, to build up the supply-side?
[+] [-] mw67|10 years ago|reply
it's positive that customers like the product, is it an app or website? if you have enough users you can convince merchants that you'll bring them more business by showing them the numbers you currently have
[+] [-] ereyes01|10 years ago|reply
My strategy thus far has been to find startups that need help doing their devops and help them automate their deployment using Tasqr. Finding customers this way has been slow, but I've gotten to learn quite a bit about how the product fits within a continuous integration workflow. I am starting to feel a little financial pressure to change my approach and scale my outreach, though my existing users really like my "do things that don't scale approach" unsurprisingly :-)
What are some signs that it's the right time to scale and chase bigger chunks of the market?
[+] [-] acallwood|10 years ago|reply
ACe here from Painless1099 (www.painless1099.com). We automate tax withholding/filing for anyone earning 1099 income (think: freelancers and Uber drivers.)
We're thinking through growth specifically right now and are chewing on whether to go the B2B route or the B2C route. Different implications for both regarding scale and revenue obviously. We'd be stoked on a bit of help figuring out which to tackle first and how to make headway!
[+] [-] sharemywin|10 years ago|reply
[+] [-] graceofs|10 years ago|reply
We built ObjectiveFS, it's like Dropbox, but for servers. We have users running our shared file system in production, and are getting great feedback.
Our current challenges are user growth and upcoming competition from Amazon EFS.
We would like your feedback on what we can do on our website (http://objectivefs.com) or additional things we can do to get more people to start our free trial and to address the Amazon EFS competition.
Thanks!
[+] [-] mburst|10 years ago|reply
About a year ago I created an eSports app that lets fans of the game DotA follow and watch their favorite teams live and on the go. It's been super fun seeing my side project grow and have users in the community volunteer to help with designs and language translations.
The biggest tournament of the year (http://www.dota2.com/international/announcement/) is coming in a few months and I would love to talk about different ways to capitalize on this.