It's not clear from the article what kind of business model the Startup in question is planning to use. This is relevant, as the fact the 73% of random strangers said they would "use the service as described" doesn't give any indication that they'd be willing to pay for it.
Clearly, the author got his $27.50 worth; how much that's really worth, though, in the long term, remains to be seen.
The author suggested $2k/month gross revenues ~ $20k/year net, was a reasonable expectation for a niche app. So this presumes you have maybe 5 apps, developing a new one or redeveloping an existing one on a pretty regular basis. Or it presumes a side-gig. It doesn't really presume a startup company.
Really? The whole article had such a thick layer of sarcasm and derision about the whole start-up world it's hard to imagine any start-up paying for this.
Sure it is, for the differential in the information you can get by paying it and attending the "New Age Of Entrepreneurship Dawning" seminar vs reading, talking to people who actually run startups today, reading HN and so on.
Obviously there are people who think otherwise.
Doesn't change my views on the essential marginal value of Ries's offerings and "insights" vs Steve Blanks' originals. As to extracting lessons for startup experience, one can do that from any startup story without buying into the whole "lean startup" filter.
"Take Minimum Viable Product, for example. It is similar to 37Signals "do less", but it doesn't end there: you're eliminating parts of the product which don't provide value, but you're also strategically deferring parts which do provide value until you've got a handle on the big business risks. I think that is a pretty powerful idea. Hugely powerful."
Sure. Why do you need to pay 700$ to understand that idea? Sure you could pay. It is your money. I am just saying I wouldn't. And I don't believe in "I will tell you how to get rich" type seminars. If you have the money to spare Mr Ries has (had?) a $180,000 for 3 days of wisdom sharing deal too. (http://www.startuplessonslearned.com/2009/08/introducing-lea...). On that thread I defended his right to price his wares any way he wanted to. I still do. I am just saying I don't think it is worth that kind of money, which is a different thing.
As I said, Caveat Emptor. Listen to opinions. Then do what you will with your money and time.
The context is an "early-stage startup with just a couple founders."
It's unlikely that the number of requests of the type referenced in this article would be sufficiently large enough at that stage that it wouild "eliminate the value proposition."
The article references three different posts about how startups need to aim higher and try to change the world, then conflates it with "trying to do something really useful like making things that people actually want to pay for," before falling back to the comment on "or if it's free."
My point is that making something people will pay for is vastly different from what any of those articles he was referencing is talking about.
Honestly, the whole post kind of struck me as a retread dressed up to be linkbait. Which, ironically, is what he's complaining about in startups.
Agreed. The insidious thing about this article, though, is that the author is feeding into startup-wannabe culture by catering to the question that is the first out of the mouth of the most clueless "idea guys". It almost seems like a ploy for page views given that the rest of the article is fairly reasonable and I have no reason to doubt the author's credentials.
This article is full of nonsensical garbage (or, I've just had too much red wine tonight).
It mentions their VC funding, and specifically says "That’s $28.7 million that they will have to pay back." Venture Capital doesn't work that way. It's an investment not a loan. They don't have to pay anything back if the company does not succeed.
There is also the mention of businesses "only" needing a $5/month website. WTF is this guy talking about? You're not going to build a social news aggregation app like Digg on a $5/mo hosting plan.
The 'Wandering Aimlessly' paragraph also has some things that don't make sense. Many of the features Digg was adding were targeted towards commercial clients that wanted to get info on the stories they posted, or the stories other users submitted that linked to those corporate properties. IMO, this made sense as a strategy, as if successful Digg could have charged for access to this information because the users weren't going to pay for the service.
This guy has some interesting thoughts, but I'm not sure any of it is rooted in anything other than wild-ass speculation.
Isn't this a site dedicated to startups? Don't we often say that you should charge for your product, rather than give it away for free? Charging for it isn't a bad thing. If people don't want it, don't pay for it. The market will send the signal.
Many people waste enough time here (myself included) as is. Sometimes 24/7 access is more detrimental than a curated summary. The 24-hour news networks, for instance.
Any of your bullet points for the magazine could be equally considered to be benefits of the magazine over HN itself.
These comments ragging on the magazine don't make sense, coming from startup founders. I'd consider it an unwise venture if they gave it away for free.
RE: "I will pay for information if it will help me, but the examples I've given is basic information that's been written about for free so many hundreds of times"
I suspect your google-fu is stronger than most. Many people don't have the skills or time to do this. Should I spend 2 or 3 days searching and building a marketing strategy that works in 2012 by filtering through all the stuff written over the last 4 years and half of it is out of date or should I pay $99 dollars to get it in my inbox in PDF form. For many the $99 makes sense.
They are certainly not ripping off the startup community! If you even value your time as a startup founder at $100, it's cheaper just to by the dumb book.
Most startups doing subscriptions are doing b2b or b2h (business 2 hacker examples: github, seomoz, etc) business. Businesses and to a much lesser extent hacker don't care about the cost, but look at the value provided.
RE: "There seems to be no imagination in pricing, only to charge more and more. It's bad advice and I'll bet its mortally wounding a lot of young startups and impressionable kids..."
This is absolutely absurd! This is like saying "There seems to be no imagination in cars today, only to get better gas milage more and more". Of course, that's the point of a business is to charge so much your customers complain, but still pay you none the less. You're capturing the most value possible, while they still enjoy a net gain.
I'd argue even if this is bad advice for a majority of people, it's still good to get it out there that it is possible. Once we know it's possible, much like the 4 minute mile, we can achieve it. When it's locked away and only a choosen few know it is possible that is the real danger to impressionable kids.
> Most of the really successful ideas started without a "pricing" link
If you define "success" to mean "lots of traffic" and not "profitable and growing". Clearly this is the case, because half of the companies you listed aren't profitable.
There are -lots- of internet companies who charge and are very successful. I'm not talking 37 Signals and Fog Creek - literally drops in the bucket. I'm talking about Amazon, Salesforce, and Google AdWords. Oh and how does Craigslist make money? Charging users.
> not charging money has been a successful strategy for a good number of startups.
No offense, but you're blowing both the "successful" and "good number" part of this way out of proportion.
For the record, I read the article. I forwarded it to colleagues interested in the space, and the only thing worthy of it for me was my comment -- don't start one of these without a business model.
How did it apply to the article? Everything they did, didn't ultimately find a sustainable and repeatable business model. Instead theres all this perceived market validation of "oh look, investors say we're valuable", instead of market validation that's sustainable and repeatable.
I don't know anyone there and mean no one ill will, but without this, it certainly makes people wonder how making businesses lose money with deals for people who never come back is something you want to repeat, or how it can educate customers to become better customers (and pay full price).
I appreciate your judgement of me to be "pithy", but it's not. Snarks annoy me just as much. You can jump to the conclusions that you want but it's often fair to ask what someone meant instead of deciding what I meant in your positive and constructive open-mindedness.
This place for me is about learning to create a real business and not the lame bantering about distractions from this one requirement of any successful startup.
You didn't address the substance of the argument, therefore I can only conclude that you didn't read more than the first few paragraphs. The article is quite detailed, and plainly states that it's not a indictment of 37s the company, their products, or their business model. Instead, it explains why their business advice doesn't apply to most startups. It goes on to talk about pricing theory as it relates to one specific sector (software) and sectors within software (e.g. social startups vs a value-add, business startup). Pricing is not a solved problem, nor is it straightforward, and the article acknowledges this fact, and elaborates on it.
As you didn't address any of this, I can only conclude that your post is a knee-jerk defense of a company you like which relies on an ad hominem attack in an attempt to discredit the author, rather than making any useful arguments yourself.
That's very unfair. The author took the time to share his knowledge about legal issues surrounding startups and, as is customary when legal matters are discussed, he provided a disclaimer to avoid personal liability but that doesn't mean the article is inaccurate. You won't find anyone offering free legal services on a Medium post.
From my view, the argument behind the article is not very strong. His best data point is that he talked to an entrepreneur who didn't know what to do with $20 million.
The argument that technology start ups don't create value seems to be disproven by the current valuations of Google, Facebook, Twitter, etc.
Clearly, the author got his $27.50 worth; how much that's really worth, though, in the long term, remains to be seen.
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