There are a *lot* of software shops in the world that would far rather have one more technical dependency than they'd like to pay for one of their 20 engineers to become the company's SPOF expert on the joys of e.g. HTTP file uploads, CSV parsing bugs, PDF generation, etc.
On a serious note, it's interesting to observe that you can build a decent business charging $20 - $50 per month for something that any good developer can set up. This is one of those micro-saas sweet spots between "easy for me to build" and "tedious for others to build"— Jon Yongfook (@yongfook) September 5, 2019
A consulting shop delivering a $X00k engagement for an internal system, a SaaS company doing something custom for a large client or internally facing or deeply non-core to their business, etc.
I think subscription fatigue is far more reported by people who are embarrassed to charge money for software than it is experienced by for-profit businesses, who don't seem to have gotten pay-biweekly-for-services fatigue.
More from Patrick McKenzie
How to put this in regular finance terms...
Suppose hypothetically you have an account at a brokerage with some valuable asset in it. You take a margin loan against that asset to fund your normal spending, or pay a tax bill, or maybe buy something at another brokerage.
For reasons known only to the brokerage, they don't denominate your loan in dollars. They denominate it in shares of a money market fund, which are worth $1 +/- epsilon and basically never deviate from that.
And you think "Hmm, I have a large equity cushion against this loan."
One day, a computer system at the brokerage reports, sorta-kinda erroneously, that the value of the money market fund is actually $1.30 per share. The equity cushion is gone. Your valuable asset is sold, at timing you didn't choose, at wrong price, to pay an inflated phantom debt
And your recourse is... probably tweeting at patio11 saying he finds too much joy in this.
Which I don't; I just feel like this is why you don't trust a CPU built out of redstone to build reliable financial infrastructure on top of.
APIs add new things to the toolbox. For example: Treasury, which lets an app/platform store, move, and track a business’
I've been a small business owner and can talk at length about SMB banking, and will later, but let's put on the software developer hat right now.
Lots of software talks about money, keeps records about money, does calculations about money, but can't *touch* money.
This is extremely frustrating when you're building SaaS apps for businesses, because you have total control over your UX right until your app needs to touch money... at which point all data about it lives in a silo you can't access.
So you generally push work to the operator.
For example, suppose you’re writing a business-in-a-box system for electricians, including an invoicing feature.
You need to be able to read bank transactions to reconcile. You probably can't. The owner can. So you ask the owner to do mind-numbing work a computer does better.
It sure would be great if your business customers had bank accounts you could actually introspect and operate on their behalves! You could just get the list of incoming payments and match against the invoices.
There is some software to write but it is not rocket science.
For technical founders it is irrationally, obscenely hard to reverse years of programming (ba dum bum) that sales is a value-destroying activity. Sales is CLEARLY a value-creating activity, contingent on you have a value-creating product.
The world will not drop what they are doing to adopt your work. This is particularly true in B2B, where simply building a better mousetrap won't overcome the activation energy required to get people with additional non-mice problems to prioritize changing mousetraps today.
This is very non-obvious for founders because founders are not often people who *want* to be sold to. We often come from a background where trying out tools is a bit of a fun hobby. We like looking at all the options, making charts, and ripping out partially complete tests.
"This week I unsuccessfully trialed four software options for automating that thing that has been killing us. Our actual production process remains the same as last week. Don't worry; this was a great use of time." is not a thing you want to write in a progress report to manager.
“Coffee? What does that have to do with payments?” I’m glad you asked.
Convenience stores are low net margin businesses, which sell some high gross margin goods/services but a lot of low ones, and have high fixed costs and a low ticket size. The typical transaction is under 500 yen ($5) and many are about $1.
They need repeat custom.
A few years ago, all of the chains had a good idea for increasing frequency of use: make a minor capital investment in automatic coffee machines. Sell access to them for the price of a cup / ice; customers self-serve with the machine.
The price point is $1 to about $2.
Coffee quickly became one of the most frequently repurchased items at convenience stores, in no small part because it’s the one thing they can sell which is phameceutically habit forming but totally unregulated. (Just telling it like it is.)
But the coffee is not very defensible
The problem, such that it is, is that competing chains are everywhere and *all* of them serve Thoroughly Adequate Coffee at similar prices, so you’re back into the brutal economics of “Who is 3 meters closer to 40 customers at 1 office?”
Enter payment apps.
I love the aesthetics of this category and they’re under remarked upon.
I think people underestimate QSRs in terms of social utility, but Sukiya et al describe themselves as mission-oriented enterprises. I believe this is largely sincere, and goes back to the 60s and 70s, when the clientele was primarily manual laborers who had migrated to work.
Japan was not a rich nation at the time, and day laborers in particular were both unlikely to be able to cook for themselves and unlikely to have much of a food budget, and so the chains sprung up offering an honest-to-goodness cooked meal delivered in under a minute for cheap.
This heritage continued over the years, even after Japan became a much more wealthy nation, and these chains function as social support and dignity for folks in diminished circumstances.
They also are a wee bit of a cartel, and I appreciate the aesthetics of the cartel:
Back when I was first in Japan, in the mid 2000s, there was an increase in the price of beef.
And the heads of the three chains got together, and decided that the price of the basic beef bowl needed to increase, but given the economic circumstances how could they hold the line.
More from Startups
We have a culture problem, and it's starting to bite back.
Our launch-and-dump culture on @ProductHunt is harmful, and it's hurting our goals as a community.
Let's get started with a bit of backstory...
I was told today about an event that shed light on a recent change to the PH ranking algorithm
A maker on Ramadan Makers launched a product, reached a decent amount of upvotes. They never made it to the homepage.
Quite frankly, this is fine. We really don't expect ALL maker products to reach the homepage, considering PH should probably have a quality bar.
However, looking at the homepage just showed a different picture: products from bigger companies with only 12 upvotes, featured.
This is a problem: it is probably now a little harder for indie or products from creators to get featured on the homepage, which sadly is a huge problem for most rising and new makers on the scene right now.
But there's a bigger problem, and it's a culture one.
Makers nowadays have a very harmful culture when it comes to launching on Product Hunt.
This is the usual product lifecycle nowadays:
1. Launch on PH, Twitter
2. Gain attention and "internet points"
This causes issues.
Listened to Jeremy Thiessen explaining how and why, on the Sales for Founders podcast
1/ When you build a landing page, you’re putting all your assumptions out there. In the early stages of a business you need facts. To do that, you’re better off talking to a prospect. Instead of making wrong assumptions, in a place where you can’t control the conversation. 🤷♂️
Later, when you’ve got facts, build the landing page
2/ Figure out who you’re serving and where they are. Then start calling. Need to have one person who wants this “thing” other than you 📱
3/ When cold calling get to the point. Don’t sell. Ask good, authentic questions. Show that you want to help 🎯
I joined wework in 2011 as the ~17th employee when we had 4 buildings. I was 23, naive, and didn’t know what equity or options were—I certainly didn’t know how much it could impact my financial future. When I, and the first hundred or so joined the team, /2
equity options weren’t a part of the deal and I thought nothing of it. As the company grew and we brought in more funding, the executive team decided it was time to allocate equity to its employees. It was mid-2013, about 4 years after the company started. /3
We had ~120 employees and I had been there for ~2 years. I don’t know much about what went on behind the scenes to determine who would get equity and how much, or quite frankly, why they did it at all. /4
In the process, they did a couple of things: First, the way in which they chose to allocate equity, to whom, how much, etc. was… interesting. I’ll get into that more soon. Second, for the people who were given equity options, wework made the choice *not* to backdate. /5
I've lost millions, hired hundreds, raised millions and sold companies before the age of 30
Read this to become better:
Venture capital & PR are like drugs
Drugs can kill you or save your life
If you’re lucky: your startup will be copied. Don’t be mad
The best startup revenge is overwhelming product/market fit
Okinawa is an Island in Japan with the highest life expectancy. It's called "the land of immortals"
The secret: almost everybody gardens
Entrepreneurship is a marathon not a sprint. Be sustainable
Find your gardening.
A wonderful online course is so valuable its like you’re stealing from the teacher
A bad online course is a teacher stealing from you
Tip: scout out for wonderful online courses
A few dollar investment will completely change a life
9-5s aren\u2019t the problem— Hustle Smarter \U0001f4b8 (@Hustle_Smarterr) September 26, 2020
Letting them be your only income stream is
The biggest asset you\u2019ll ever have is yourself— Hustle Smarter \U0001f4b8 (@Hustle_Smarterr) September 26, 2020
Invest in it wisely
18-25?— Hustle Smarter \U0001f4b8 (@Hustle_Smarterr) September 27, 2020
Now is the time to take risks and improve
Don\u2019t waste this time
What would you say to someone who feels \u201clost\u201d?— Hustle Smarter \U0001f4b8 (@Hustle_Smarterr) October 7, 2020
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2/ Nov. 3rd, so for them to deny that now is absolutely absurd. Plus, we have an affidavit from an expert cyber-warfare [individual] who even shows the diagram of all the attacks coming in. We know that the VPN ... the Dominion people left those open and unencrypted on the night
3/ of the election, so that anybody could get in. We know that the packets of information went to Serbia [note: over 100 Dominion employees scrubbed there LinkedIn profiles of any affiliation with the company after the election, many of whom were in Serbia], Liechtenstein,
4/ Spain, Venezuela, Hunan, China & Hong Kong. There was traffic all over into our election system that is supposed to be self-contained, not accessible by the internet at all. We have witnesses who document that it was connected to the internet. We have a study out of
5/ [the Dominion voting system in Antrim] MI, they know that it was connected to the internet. They erased their audit files & their adjudication files, where they dumped over 68% of their ballots into a bin that they call "adjudication" [that would've been thousands + thousands
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1/ Myerson 1999. "Nash equilibrium & history of economic theory." JEL. Written with characteristic Myersonian elegance. "how a few short papers by a young mathematician achieved one of the great watershed breakthroughs in the history of social
2/ Blackwell & DeGroot 1986. “A conversation with David Blackwell.” Stat Science. After his PhD at 21, "There were 105 black colleges at that time & I wrote 105 letters of application." Beautiful discussion on a gamut of ideas & his intellectual life.
3/ Geanakoplos 1992. “Common Knowledge.” JEP. Zuper piece, lucidly written. Lots of interesting puzzles, great for teaching. When Moriarty says "All I have to say has already crossed your mind," Holmes retorts "then possibly my answer has crossed yours."
4/ Morris 1995. "The common prior assumption in economic theory.” E&P. This beauty was Stephen's first chap of PhD thesis! Does rationality imply CP? Does relaxing CP make theorizing uninteresting? Is failure of CP a failure of information processing?
1. Even in smaller conflicts, U(C)AVs are making achieving air superiority, or at least denying it to the opponent, a lot more important than it used to be.
2. Effective distribution of real-time data from U(C)AVs (and loitering munitions, which can be launched to perform recon when other assets are not available) can significantly increase the effectiveness of even relatively old artillery systems.
3. While airpower is getting incredibly deadly and can quickly inflict massive material damage, you still need units on the ground with a strong will to fight despite taking casualties (and political will to accept that in serious modern wars, significant losses are inevitable).
4. Soldiers need to be aware that on a modern battlefield there are not really any "safe areas" and TTPs (tactics techniques procedures) need to be changed to reflect this.