Mentioned company founder here, we did not yet! I'm glad to see the ILP project is continuing to progress well though, we should definitely consider it again.
The path finding capability perhaps externalized from ripplenet to W3C ILP being worth it, it's not clear why the market doesn't realize there is such incentive and ILP is not yet widely implemented.
I worked with Retool when they were in the YC W17 batch. They were previously working on a p2p finance app for the UK, and I remember sitting in the conference room when they told me they were pivoting to Retool.
The Retool idea made immediate sense to me because at my prior startup we used django-admin to crank out internal pages and it was amazing. So it seemed clear to me that having something along those lines that was available in every programming environment would be useful, but it was harder for me to wrap my head around competing with free. This sort of reminds me of Algolia competing with Apache Solr - as it turns out can be a great business if you build a great product and really understand your customers. Also I did not appreciate the power of having a drag-and-drop interface, all of the integrations etc.
David and the whole Retool team have done a truly brilliant job executing since then, excellent work.
Thanks. (if I may) Since you emphasize that Retool built a 10x product and really understood their customers, what are some ways they did both of those? Did they hire the right product / UX people early-on? Had initimate understanding of the problem at-hand? Knew which features to leave out and which ones to build in face a barrage of feature requests? Kept in constant touch with their early adopters? Ran really good user interviews? Or...
I realize that this is likely to be less illuminating than you would hope, but the Retool founders were relentlessly focused on getting their first users, building quickly, and getting to profitability as if their lives depended on it. Witnessing them go from 0-10K MRR was to witness someone walking through walls.
To give a perspective on how much of an outlier this team is, my recollection is they got to ~1M ARR very quickly and with just the 2 cofounders and one employee. That is rare.
My colleague Jared put together some great advice for hard tech/bio founders and we talk about a number of the companies we have funded here: https://www.startupschool.org/videos/78 He talks specifically about what these companies do during the batch and fundraising milestones, etc
I don't have much to add to all of the other YC-related information out there - I think having a cofounder is generally a good thing, but not every company we fund does.
That's a fair point, and there are a number of situation dependent factors. I wrote this letter to myself because I know what I would do differently 12 years ago and I have the benefit of hindsight now. Obviously the crisis is different today, we didn't have a pandemic in 2008, there is definitely no one-size-fits-all advice, and every company needs to be figuring out the right thing to do right now. But keep in mind what ended up happening 12 years ago is that everyone lost their jobs. The letter is my thoughts about what could have prevented that outcome back then, at least partly.
Laying people off is always a large burden. Laying off multiple flights of people with latency and inducing stress (e.g. "will I be next?") is probably worse.
Alternatively:
If the business goes under, all employees will suffer. If some are laid off and the business continues to survive, those that make it will be spared.
So from a harm reduction point of view, laying nobody off is probably worse than laying some people off.
Even if you reduce pay, people may not be able to afford housing even though they're still working for you (e.g. in the bay area). And health benefits still cost the same even if you reduce other employee associated costs.
Things are not as simple as (I'm interpreting) you're implying they are. It's not black and white, and the decision needs to be made on a case by case basis.
Certainly not thinking things are simple, or that any of your points are innacurate. I’m sure it is very tough, and maybe even the right call for the goals at that moment in 2008. My criticism was that through this lens and with the audience the OP has, the lessons of an economic downturn being basically “lay off more people” is incredibly sad from a humanistic point of view.
Hi, I am the author of this post. As I said at the top my intent was not initially to publish it widely, but here we are. If anyone has questions about what I wrote I'm happy to answer them here.
Pick up the phone or send an email. State clearly that you need to cut the costs to a specific target. Ask if there is any specific path they can assist you with such as removing features or moving to an alternate plan. Say that you are doing this now with all vendors. Don’t threaten to leave, try to be collaborative and explain that you are doing this to be able to maintain the service in the short term and long term. If they push back hard ask what they want in order to make concessions. The truth is many of your vendors will be fielding these types of requests while at the same time seeing a ton of cancellations and customers going out of business. They may view it as better to cut your bill and thereby preserve the revenue they collect that watch your account go to $0.
For large dollar value contracts you usually have an account rep/point of contact you can get on the phone.
You can explain to your rep what you are dealing with, what your budget is, and make a concrete ask. I get the sense that the larger of a customer you are for someone, the more willing they are to work with you.
I second the concrete ask. Be specific about what you need and ask how to get there. Explaining why helps the rep feel empathy and also be creative. Ultimately they want to preserve revenue too.
Maybe I can offer an experience that made me 'see the light' (well, some light) accidentally on how sales (re)negotiations work. I'm going to be vague because this is going to make me seem petty.
I had a colleague once who was an 'office rival', you know the type of person you can't stand and are always one-upping (told you this was going to be petty, but in my defense, he started it). So one day we were moving offices and we needed something for the new office. (Sane companies would have had one person doing this but let's say we were a caricature of 'scrappy startup where everybody wears every hat'). There was one item that is basically like a 'staple' for office furnishing - let's say it was perfectly standardized desks. Or plants to put in the hallways, something even more mundane than desks.
Anyway this other guy had me beat on price from every supplier (everyone in the office was basically one-upping everyone else on how cheap they could get things, to the point where I spend days making my own cat5 cables). But I got the same quotes (within a few percent) from at least 5 suppliers, using just the standard 'what's your best price' beginner negotiation playbook. After that I thought screw this, I'll just lay it out. (let's say this general price was I got around 12k, and the 'other guy' got it for 11k).
So I went to a 6th supplier, let them do their sales spiel in their showroom, and said (pretty much as blunt as I put it here) "Listen, you probably have a great product but I don't care, I'm buying on price. Everyone else like supplier X, Y and Z have given me these and these prices" (I showed him the offers I got). "There is another guy at my office who got prices around 11k. I want to beat this other guy, and you want to sell. The only way you will sell to me is if you can come in with a price below 10k. Let's not do a sales dance here. Can you do this?".
The guy got a bit of a deer-in-the-headlights look, went "to the office to discuss with his boss" (like a car salesman but this time for real I guess) and then came back with a price a hair under 10k.
I got my petty win, then a few months later the company almost went under and the guy who gave me the deep discount called me daily for a month when he was going to be paid until a miracle happened and he got his money, but that's another story.
Anyway, what I took away from this (this was before I had had any sales training or really thought about sales) was that usually, the key to a (hard) discount is to convince the other party that it's better for them to take a smaller profit than no profit at all. And also, that it's better to make it seem that you are not the decision maker or that there is some sort of external price anchor. Not saying this is always the best global strategy; personally I value lasting relationships with good personal rapport over squeezing out every last penny, but in crisis mode it's sometimes just necessary.
I was going to quote Burroughs' characterization of Hauser and O'Brien from Naked Lunch. So anyway, here's what he said about them:
> O'Brien was the con man, and Hauser the tough guy. A vaudeville team. Hauser had a way of hitting you before he said anything just to break the ice. Then O'Brien [is friendly and encourages cooperation].
Hello HN, I am the author of this - it's part of a series of short posts about startups I that worked directly with at YC. This is the first one I have posted one to HN.
Let me know if you have any questions. Also I would love to hear if you are working on something ambitious like the Culture Biosciences founders are!
Is Culture currently profitable? If not, how do you plan to be? When biotech companies fail, a lot of institutional knowledge tend to be lost so it is a great tragedy when one does.
The Y2K overshadowed the bubble for biotech companies, but similarly a lot of companies were hyped up but in the end achieved nothing. Not on the Theranos Level of failure but basically flops. A lot of basic research lead to dead ends, so funding and finances are pretty important.
Given what you do, do you think open-source projects ran "on premise" (i.e. with your cloud provider of choice) paying a licence to use has a future beyond the enterprise scale?
Hey Dom, we worked together directly when you were in YC, and I deeply disagree with your assessment that having progress helps a startup succeed in YC.
The worst case scenario is a newly accepted YC startup with a little bit of traction... just enough traction that they aren't willing to change ideas/markets and not enough traction for them to actually know they have product market fit. It's the uncanny valley of product-market fit. These companies with a little bit of progress can spend months or years of their life chasing what they later realize was a mirage.
When a new YC company enters the batch with very little or no traction (and can move incredibly fast) they will longterm outperform companies accepted with small traction most of the time. Based on the hundreds of companies I have personally funded at YC, speed is the single most predictive variable of if a startup will succeed - not traction at time of accept.
Hey Dalton, thanks for the answer, that's fair. I totally agree that in the long-term, moving and failing fast is a net positive for both founders and YC. I wonder how different the YC three-months experience is between founders who have product-market fit vs the ones who don't? It seems like there's a "cadence" to the program highly focused on growth culminating to demo day?
Hi Dalton OP here, appreciate your input here, Thank you.
Moving fast is something we are working at hard at. From a technical and creative perspective.
Correct me if I am wrong. When you say moving fast, do you mean being nimble and quick at pretty much everything, with the goal to find product-market fit?
imagine we are talking about CPU clock rate - the rate at which founders are able to make progress - which means everything from how many customers they can talk to in a day, how fast they learn from running a test, how fast they can build a prototype, how quickly they internalize feedback from customers, etc.
Ok, got it thanks! And, from your experience: what are biggest underlying drivers for speed? Founders’ chemistry? Founders’ willingness to work long hours? Market they’re operating in (some markets are faster than others I suppose)?
