"Series A investors are now looking for real businesses with real potential."
When were they ever not saying that? We can say that "this time" it's different, but I don't remember "series A investors" ever saying "well, we're just looking for some BS project to flip in 6 month - we don't care if you're actually going to make money or not, but we don't want to tell you that to your face".
So if they're weren't saying it years ago, and aren't saying it now, how else do you judge what they're looking for? Do you look for what they're investing in? color.com, anyone? Yes, that's a below-the-belt blow, but no moreso than comparing every new startup to facebook/google in terms of potential revenue/marketshare/eyeballs/etc.
Yes, "build something that people want and make revenue from it". Yes, we get it. That's sane business sense. But we don't see enough of those smaller success stories in the press. Billion dollar valuations of projects that haven't even opened yet suck most of the air out of the room, and everyone else who gets to ramen-profitable (or before) seems they need to get heard by stating (what should be and is the) obvious, but they're largely preaching to the choir here.
I like pithy witticisms like this - reminds me of something business guru Peter Drucker said:
"Because the purpose of business is to create a customer, the business enterprise has two--and only two--basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs."
In the vein of the OP, I'm not going to tread lightly:
This post smacks of the founder "culture" post that isn't focussed on business. He provides a lot of powerful-sounding admonitions, none of which equate to "build a product people want, and sell it". Sorry, but this seems far more The Social Network than that-company-that-made-something-cool-and-got-money-for-it.
as the OP, I actually meant the exact opposite. "Just build something awesome" is a horrible directive. It should be "Just build something awesome that people will actually pay for with more than time and tweets."
If the general aphorism, "just build something awesome," is so bad, isn't a more-specific "just build something awesome (with unpredictable constraints)" actually worse?
I see the motivation, but picking one proxy metric to understand your business by seems like an overreaction. Unless it's not a proxy metric, that is; if you could predict discounted future profits, then "estimated present value of net future profits" would be a great metric (assuming those are accurate estimates). But if it's really a proxy metric, all proxies are wrong in more or less interesting ways, so you might want several angles from which to view what's going on.
If this comes as some kind of revelation to you, you need to take time off of whatever you do and learn about selling.
Go talk to a seasoned quota-carrying sales manager and show him your vanity metrics- he'll laugh at you and ask you how your pipeline looks and why haven't you closed XYZ Co. this week. Way too many founders are catering to investors vs. universal sustainable business practices these days. The vast majority will never, ever, ever raise beyond friends/family, you may as well cover your own ass with an executable sales strategy that can keep you in the game.
"Stop getting excited by the “maybes” and “lets have another meeting” responses you get to your product. IT MEANS YOUR PRODUCT SUCKS.Budgets, approvals, etc are all excuses as to why they don’t want to buy, but don’t want to say no.."
Unless you have a team of field sales guys getting these kinds of responses you could be making a colossal mistake.
Typically, a very small number of people are in the market, ready to buy what you are selling right away- especially with zero credibility in the marketplace or if you have a very new approach to solving their problems. If you're not taking those "no's" or "soft no's" and putting them into a nurturing or marketing funnel then you are missing future business for when they are ready to buy. This is the way of the B2B sales cycle hath been written by the B2B sales gods. Force feeding people your product at gun point and not taking no for an answer makes you look like a needy asshole that no one wants to buy from- now, or in the future.
FWIW I read a new book over the weekend on building sales teams and lead gen systems called Predictable Revenue by a guy that ran sales teams at Salesforce- very highly recommend.
P.S. Wish I had never heard the term grinfucking - creepy as hell...
I see so many consumer startups brag about vanity metrics. If you're a consumer startup doing something that's not mobile-focused, the # of unique visitors you're getting per month as viewed in Quantcast or Compete just tells the complete story. And even if you're mobile-focused too because Foursquare actually gets over a million uniques through their website. No excuses for you not to as well.
That is silly and reminiscent of the late 20th century were it was all about eyeballs. I would even argue that number of visitors is actually a vanity metric (by your term) because it assumes that all visitors are equal (they are not) and that the more visitors the better (also not true, if the new users are less likely to stick around and use your service and become payed members).
The core point lost in the delivery is startups need to build and sell. We learn how to deliver. Few are taught how to sell. (& certainly not in any top 10 MBA curriculum!)
“please don’t grinfuck me by saying how wonderful the talk was as you think in the back of your mind ‘wow – Feld is a real moron – he totally missed the point on the blah thing.’”
Man, I agree. We should have a lot more talk about selling here on HN. It is much more relevant than politics. Isn't the essence of a business- and all startups are young business-- the mechanism that generates revenue? And isn't selling a primary method of it? Sales so often seems focused on selling the product that is your stock, not the product that is your business's purpose.
He talks about finding that feeling that your product gives.
I've heard this called: "Made, Laid or Paid". How does your product do one of those three?
I also heard that Sequoia wants a 7 deadly sins slide- how your product enables one or more of those seven deadly sins.
Also, I think that revenue is important. I think too many startups maybe get easy money or seek investment as their goal, and thus vanity metrics hold sway... when the better choice is revenue or ramen profitability. When your profitable, you no longer have that clock ticking, you're a lot harder to bend over the barrel and you can be a lot more selective about from whom and under what terms you take investment.
Everywhere else in life, being in that position means that people want to do business with you more than they do when you need them.
I've spent too much time at too many startups where the CEO & CFO and usually one more key person were MIA for quarters, if not years at a time because they were always chasing money.
When were they ever not saying that? We can say that "this time" it's different, but I don't remember "series A investors" ever saying "well, we're just looking for some BS project to flip in 6 month - we don't care if you're actually going to make money or not, but we don't want to tell you that to your face".
So if they're weren't saying it years ago, and aren't saying it now, how else do you judge what they're looking for? Do you look for what they're investing in? color.com, anyone? Yes, that's a below-the-belt blow, but no moreso than comparing every new startup to facebook/google in terms of potential revenue/marketshare/eyeballs/etc.
Yes, "build something that people want and make revenue from it". Yes, we get it. That's sane business sense. But we don't see enough of those smaller success stories in the press. Billion dollar valuations of projects that haven't even opened yet suck most of the air out of the room, and everyone else who gets to ramen-profitable (or before) seems they need to get heard by stating (what should be and is the) obvious, but they're largely preaching to the choir here.