As a tiny little start up, dumping 40k on product development is (to me) a significant chunk of change. I do wonder if the author could've pulled in the MVP, tightened up the release cycles, before discovering that he was unable to "Make something people want".
My one question there would be was he certain he could figure out the statistics to get to what he wanted? I feel like you need to get a rough idea of that much at least before you start pitching. Obviously you don't need every bell and whistle, all the data pipelines and so on. But basic proof would still be good to make sure you can deliver something vaguely in tune with what you're promising. But dropping all that money on contractors before you've done any REAL market research is wild to me.
> was he certain he could figure out the statistics... I feel like you need to get a rough idea of that much at least before you start pitching.
I disagree. The latter is a huge investment. You're not burning any bridges by asking if something would be useful even if you don't know if you can do it yet.
Of course even this is a wrong framing. Ideally he'd actually have sold the idea, by which I mean have actually taken money for the idea, before building it.
Then, if he couldn't build it, he could give the money back.
I feel like I've done this exact story before... more than once.
The problem is you don't ever make something NOBODY wants. Then it would be so easy to walk away.
You make something a few people want, and a lot of people SAY they want, but they don't want it enough to pay you so much that your company can succeed rapidly, so you waste a lot of time and die slowly.
I've also spent a lot of time on a side project (gravametrics.com). I never spent $40k on it but I've instead done everything myself and it appears to be a non-starter.
I think you need something with a very concise value prop I'm working on that for my next thing right now. Something simple.
FYI don't use AWS for these sorts of projects use something cheaper.
I used Scaleway. They don't offer the hyperscale that AWS does but you don't need that for a side project. Just get started then if you suddenly have 100,000 users then switch to something like AWS. Also there are no hidden costs it's like $2 a month for a tiny little server to get you started.
For cost-effective startup/small scale infra, I love this method:
- get a dedicated or colocated server (can be cheaper than you think... e.g. mini PC colo with endoffice, joe's datacenter, etc.)
- install microk8s on ubuntu LTS
- write yaml files and deploy to microk8s
The main benefit of this is that infrastructure is very cost effective for early stage projects. Once the project needs something bigger, all of the infra is encoded in the k8s yaml files and can be deployed to a "real" k8s cluster.
Of course, the yaml needs to be carefully written and made as portable as possible so that it can be deployed to other clusters in the future.
Backup of state can be as simple as using HostPath volumes for state, and running syncthing as a deployment.
Run syncthing on other hosts (e.g. your home machine/laptop, some other cloud node, etc.) and state will be synced in realtime. Syncthing has options for keeping older versions of files/directories, so it's reasonably protected in the case the server gets hacked or deleted by accident.
This is not perfect, of course, but it's a very pragmatic and cost-effective approach. I've used/am using it and am very happy with the end result. I use cert manager, let'sencrypt, and wildcard DNS so that I can deploy new apps with their own TLS endpoints just by deploying a bit of yaml.
- Invest (a lot of) capital to develop the product, make data more readable, refine the UX etc
- Invest (a lot of) capital to market the service to doctors, offering it for free to them, with the angle of improving their patient outcome
- Invest (a lot of) capital to market the service to patient, offering it for free to them, with the angle of letting them check what their doctors are doing
Once everyone is using it and it becomes the de-facto source :
- Market that to drug companies, asking for (a metric ton of) capital to "better manage your product reputation". Magically, the "better managed drugs" suddenly are shown under a better light than the others.
What about the right congressman? Find whichever one's constituents are most likely to vote based on health related legislation, and try to suggest they get it adopted by a government agency. Through political ads people can see they immediately support the idea, visit the platform as-is, and that will influence their vote. Even if legislation doesn't ultimately get through that's still a lot of attention. Goes for any elected position whether it be federal, state, or even some smaller board of some kind. Pitching voter influence is a much stronger drive than simply suggesting people pay for something.
Mismatch of incentives I think. Insurance companies and drug companies may not be interested in evidence-based selection. I suspect they would prefer biased results i.e. insurance would want the cheapest and deug companies would want the most revenue generating. Neither may be the optimal choice for the patient.
Yeah, but if his tool showed – hypothetically – that in 75% of cases the generic (or just the cheaper medication) was just as good or better, that seems like it would have been a slam dunk?
Thank you for trying this, and even more for writing it up.
People talk about bad startups that do happen, but not nearly enough about good ones that don’t. We should be at least as outraged at the systems that quietly steal what could have been.
Can you apply that to all kinds of medication, is this is a lot of more work or can you plug it in or let a student do the data entry?
It will take a while to gain traction, but if you go to conferences, add more kinds of medications, establish a brand and gain reputation, this could be very successful. The contribution to modern medicine is invaluable.
How many big kinds of medications are there? For the Top20 most common cancers, IBS, Neuropathy, acne, MS, heart disease, hypertension, arthritis and you've got most of the big ones covered. You can also add beauty treatments such as hair loss, skin rejuvenation and you are already in the beauty sector with much lower barriers to entry.
Might be a couple of months of data entry but then you would have this invaluable neural net no?
I wouldn't work on this full-time, but sending out emails here and there, developing it further here and there could be quite fruitful with a very good time spent/impact ratio.
i feel like it's something that, on its own isn't worth much, but could be sold to a group like goodrx or webmd or something like that for a decent payout.
I swear there was a story like this 7-8 years ago on HN where a young fella had tried to barge his way into big pharma via data science. As I recall, he had his lunch eaten and his spirit beaten, just like this one.
I remember thinking about how sad it is that companies could succeed, or fail, off the basis of good, or bad, marketing.
There's a weird effect where data-driven decision making becomes essentially unstoppable given a big enough sized company, and it essentially condemns companies small enough when they believe that their decision making and technical prowess alone can earn them respectful competition against the "big boys."
And then they find out everything is corrupt, everything is about money, they don't have nearly enough money for the real players to even stop laughing at them for a moment, and they quit and cut their losses.
US healthcare is honestly a big fat joke right now. If we had gotten rid of this private payer situation a long time ago, many of the parasites would have just died off. It truly is a system of how much we can steal from the taxpayer/patient rather than actually providing healthcare.
This is a tragedy of the commons. With my years of dedicated scholars research I keep contemplating more and more how much the human condition is miserable because absurd non-allocation of financial and cognitive resources where it matters.
Humans beings will keep suffering, a direct product of their buggy/broken brains.
The main reason this didn't work is that the founder didn't identify a customer willing to spend money.
A lot of startups fail because they never identify a customer. Or even a problem. This one failed because before writing a line of code the founder did not take the next step and ensure that the prospective customer was willing to spend money on a solution.
This is why so many failing startups try to pivot to two-sided business models like advertising. That's one of the hardest businesses there is to start. And it's what the founder did here, too.
It sounds obvious stated as follows, but every startup failure I've read or heard about fails to get these ducks in a row:
- problem to be solved
- customer who has the problem
- customer willing to spend money to solve the problem
- enough customers willing to spend money on solving the problem to fuel a startup
Oddly enough, many of the startup success stories gloss over these fundamental components. The net result is that there's way too much emphasis on the idea and not nearly enough on the customer.
I've noticed this a lot - I think people are far too quick to take face-to-face positive feedback at, no pun intended, face value.
To me, it seems like a pretty elementary mistake, but I think that oftentimes people are more subconsciously desiring external validation than accurate assessments.
This chimes a lot with what I've seen, and indeed, what I do myself. I had a few friends plough hard-earned money into a really bad start-up idea (basically an inferior pay-walled Wikipedia), and instead of telling them what I really thought of it, I weaselled out saying something bland, non-committal and mildly supportive.
can't remember where I heard this but the advice was basically this: When pitching your idea, and generating excitement, ask for money (or a commitment) on the spot. There's a big difference between saying you'd pay for something, and paying for something.
The flip side is that sometimes it takes awhile to build the perception of value, hence free trials/freemium models. Get people hooked, then ask for $.
There are many ways to be successful (and even more ways to be unsuccessful).
I’m not sure I agree with you about your extra > and will pay for.
People want Reddit, people want FB and Insta. Do they pay for those? I’m not saying those are good or realistic models to follow but I think the scale of your product needs to be taken into account with your statement. ie landing millions of users can forgive the lack of a business plan _at that scale_ whereas a SAAS platform targeting B2B customers should probably require your statement to be true.
Advertisers want eyeballs, and will pay for it on the spot.
People aren't the customers of Reddit/Facebook, they're the product, that's why social media has such negative effect on mental health, the users aren't a concern beyond how many minutes they dump in for advertisers to pay for.
Reddit would be a fairly unique one - it would be hard for anyone to predict a single forum would take over for most other smaller forums. Then again forums in general were already very popular and I bet many made quite a bit from advertising.
>landing millions of users can forgive the lack of a business plan _at that scale_
yeah, if your business plan lands millions of users you better have more than $40k ready to fund it. Since most people don't have that at hand it's actually a really problematic plan, because you've got to be able to secure the funding for it right when it starts to hit, if you don't you're done, if you do you might have to do it by giving up too much control, if you won't then you're done.
Although you're technically correct [1], your objection is a bit tired – in particular because in this context, "customer" clearly meant "target audience for a product". Building something that attracts millions of daily visitors to a website is much harder than selling advertising space on that website.
>>People want Reddit, people want FB and Insta.
I think in OP's case his issue was that his content required funding to keep up to date and his user base couldn't support those costs with ads. With FB, Reddit etc. the end users generate the content.
That's true, but it's hard. Many people won't pay for what does not exist. Selling what does not exist is risky. Before it exists, you don't always know, and it's not always easy to produce an MVP people will pay for.
Then you'll just end up with samey expensive garbage. People don't know what they want until they're told what they want. It's important to create a society where ideas that have no current market can be developed. This is how the future is made. Not by making it aluminum and jacking up the price.
Sure, but in order to do that, you need to know how to teach people how to want; and then, you have to be able to do that. NB, those two things generally comprise two different skillsets.
You need a product that is powerful enough to give you the leverage to change deep-seated bits of human psychology.
Henry Ford knew how to do this. So did Jobs.
$0.02. I don't want to discourage anyone from building something and making money on it; just adding on to your comment.
Henry Ford and Steve Jobs can have the mindless market they've created. Adjacent to that, a system that detaches the need for marketing would unlock more human creativity. Why is google so valuable? Because the system is designed to optimize for Google-like local minimums, and not for creativity or the unknown future.
> People don't know what they want until they're told what they want.
That's not exactly true. This sentence only covers fro value generating products, not cost saving products.
It's easier to sell cost saving product, but the profit margins on those are much lower. As an example in the article - the product is a cost saving product, but the cost it saves is very small.(Finding the right headache medicine is once in a lifetime $1 investment for most, or even less)
When it comes to value generating products - that is where you need someone who can sell their own idea of value to the masses. That is where this sentence starts to make sense.
It is a value generating product, better medicine is more valuable. If a genie popped up and offered to make sure I always got the best medicine available in exchange for $100 I'd give him the money for the improved health.
It's just that I am not sure this random startup guy and his four doctor friends are such a genie.
This is not the "value" you're thinking of. Value of having perfect health is not the same as business value. Valuable medicine isn't the same as a trip to Seychelles - even though both may cost thousands of dollars.
You're also forgetting that medication is almost exclusively a cost issue. Unless you are taking performance enhancing products - other medication is a cost to getting to your "normal". (Even antidepressants exist to get you to a baseline mental state, not to give you extra - that's performance enhancing drugs)
You already give your doctor that $100 and they literally do the research... and other than getting a better doctor, you will not get any better tool.
But back to the reason for the product and it's very clear where the idea came from. Identifying what painkiller you prefer isn't a constant issue neither it is of great value to the vast majority.
the last 10 years of internet history show however that you can create something that one group wants, which creates value and a product that another group will pay for, they are not necessarily one in the same
In the startup world, founders have been taught that "success" means things other than making money, such as large "valuations" that are not tied to profit or even revenue.
Another founder "success" is VC or angel funding, or getting on some list ("top founders under 30!") or media coverage.
"Exit" is also a "success" even if the sale is underwater or not worth much.
> You could also say they didnt identify how to make money.
For a time, there was a school of thought that as long as you had incredible growth/usage for your app or service, making money wasn't important because someone would buy you.
I believe the answer rests in offering a solution to a problem that is worth more time than money to solve on one's own, or a new solution that creates more opportunities for a customer to grow their profitability.
I always feel discomfort when this gets parroted. It's clearly not true, unless you're willing to shift the definitions of "idea" and "execution" around after-the-fact.
Indeed the article comes to the conclusion that the idea is near-impossible to execute – due to realities within the business domain of healthcare. If the idea was "nothing", good execution could've fixed it.
Well, in this case, it was the "brilliant" idea they thought it was. At first, they thought end users would pay but never even stopped to think about what they would pay to be recommended Aleve over Advil, (probably $0.00). Secondly, they thought Drs (providers) would be key but then were somehow dumb founded that they wouldn't pay for this service because it doesn't really solve a problem they have in the current fee-for-service model. Now, there are companies that plug into EMRs that do medication reconciliation (MedRec) that help look for conflicting medicines and tracking patients current med and compliance, etc. There are lots of players and they need a way to differentiate. They mostly all have very similar offerings. THIS is who wants want the person was making. Additionally, they could probably get the pharma companies to give them the clinical data so that their more effective medicine shows up higher in the list when meds are suggested. So, yes, I think execution could have fixed this. But they were selling to the wrong person because they don't have any background in healthcare and didn't hire a consultant who did before they hired 5 contractors to make a website and database.
Yeah, not disagreeing. But the way I interpret the conclusion of this story, is that this wasn't a particularly startup friendly idea. I'm sure it's somewhat salvagable with the right strategy.
My greater point is that ideas set the boundaries for what's possible in execution, which in turn means ideas are critical. If they were unimportant a shit idea would have little impact on the outcome, which is clearly not true. They could still be "overrated" though, but then we should use that language.
That's fair. The place most people are coming from when they start a business is usually that their idea is "brilliant" or "world-changing". Some ideas are better than others and most aren't as good as people think they are. Yet, even if the idea is actually brilliant, it doesn't matter at all without execution. Even the brilliant ideas will eventually change quite a lot during the execution of product / market fit to find those first few customers who will actually pay you money. People would be best served by convincing the first customer to buy something that actually doesn't even work and is just a webflow of what could be. Ask them what they want changed and promise to do that and then and only then starting making what they have agreed to buy.
Yes, my original post was not verbose, but I think people are better served by hanging signs all over their start-up that say what I wrote. Ideas are fun, ideas are hopeful, ideas can be magic, ideas can fill your heart but success comes from out-working everyone else. I have several truly great company ideas but I've never started them because I know in my heart that I don't want to go do all the work required to make it success.
That's the fundamental problem of any startup. How can you identify a customer without any product to show them?
You can define the existence of a market. You can know that there exists some customer with money and a problem you can solve. But that's not the same as being able to say, "Hey, wait a couple of years while I implement this thing. I don't suppose you'd be interested in paying up front?"
Every successful startup has that moment of bravery where they commit their own money and hope that the customer still exists, and is actually willing to cough up money rather than continuing to do whatever they had been doing while they waited. Every failed startup had the same moment, only the customer turned out not to be willing to spend the money.
There are obvious cases where they should have known that no customer existed. But there are also a lot of cases where they simply weren't in the right place at the right time. I think it's a nice myth that the business majors tell themselves that they would always have known beforehand, but it seems more like survivorship bias to me.
You really need a very deep understanding of the pain points in the industry. If you're solving a problem that you yourself have, that gives you a higher probability that others in the industry has the exact same problem.
His enthusiasm overtook everything. He felt the pain, rushed/designed a solution and everything. But he never followed the money trail. I felt like this was a glaring omission.
Another consideration is you consider : your solution, the end-consumer , and stop there ... and if you forget there's a middle-man (the doctor in this case) thats a miss too.. Middle-persons always complicate the situation.
OK, how about a startup that built something that was better for a completely solved problem on the web?
They had no idea at all how they'd make money but there was a significant cost building and running the product.
Yet VC's had no problem funding this moonshot startup. Then another startup invented a solution that could allow them to monetize. Only problem was that it was very controversial and there were dozens of blog articles criticizing the idea. But they adopted it anyway and found incredible success.
That company if you haven't already recognized it was Google. Anytime you try and take your experience and generalize it across all startups you would be wrong.
Not an MBA or anything, but IMO startups glossing over their early business practices indicates luck rather than hiding good practices. That touches on another big, counterintuitive trap: listening to successful founder’s personal-myth-derived advice on generating success. Important skills attributed to founders— e.g. recognizing opportunity and talent, vision, etc.— are meaningless without simultaneously having the requisite resources and personal/professional circumstances to act. Chance changes our paths in complex, unknowable ways.
It’s probably not psychologically feasible or even useful for them to precisely examine the unearned factors in their or their company’s success, but so many citing ‘hard work’ as the primary factor proves they don’t try. Implying they committed as much, let some hundreds of times more cognitive, emotional, or physical effort, or even as many hours as an NYC line cook aspiring to be a chef, is laughable. Not discounting these folks’ value, but asserting those with less simply have less ambition or work ethic without providing reasonable points of comparison is justification, not reason.
If Google wasn't a result of massive amount of lucky circumstances, beyond the control of its founders - you'd be able to launch a successful competitor to Google right now and become a billionaire in a few years.
It's actually because Google had predetermined intrinsic value to human beings in filtering through the world wide web which demonstrates one cannot simply launch a competitor without offering substantially significant more value in achieving the same objective.
Even the most straightforward occurrences are contingent on many factors. If they wasn’t true, science would br pretty easy. Saying founders heavily discount the importance of luck is different from saying it was entirely random.
What matters is the succession of factors that are in founders or companies control. The objection is that most of Google's success is luck - uncontrollable good fortune. It's precisely the motivation towards gaining fortune that leads to conscientious decision-making in principling the action of one's mind to will the body into organizing itself with others in the future society - positively.
Sure, not just anybody could have founded Google, even if born to mathematics and computer science professors prioritizing their educations and offering enough of a safety net to start a company rather than toil to pay off student loans for their Stanford computer science graduate educations which facilitated a relationship with a professor willing to connect them with Andy Bechtolsheim right at the Internet’s precipice… but it sure did help.
What they did required hard work, intelligence, creativity and discipline to execute... But implying those are the only factors worth considering is garbage. Their circumstances guaranteed they’d be able to reap greater rewards than nearly anybody else for the same output even if google had failed. Just look at the Opportunity Atlas. Do you really think talent is that geographically focused? If you don’t consider their circumstances lucky or don’t think they made much difference, I’m not really sure what else to say.
I have a half-baked product in the making for 4 years but never had enough time (and skill) to fully make it, every time I asked potential customers all of them wanted it right away except I could not finish it. Tried to apply for HN to no avail. I just need some investment(500K should do it in one year) to hire one or two developers to help to ship the product really, but I don't know how, which is why I'm back to work full time these days.
Do it in your spare time without burning so much capital. As much as YC wants you to think otherwise, VC money isn't some magical gatekeeper to innovation. Just build.
I'm fairly technical myself, mostly I need someone good at frontend(vuejs), where I need help to design nice UI for the (embedded device) product. I spent my own time learning vuejs but, not as fast as I wanted so far, I am a low level developer coding in c/c++ basically. I have been thinking about hiring a (cheaper) overseas vuejs3 developer for a while using my own money, the reality is that, hiring is more challenging than learning vuejs, so I stuck with the latter, but, it's slow.
Hardware is an order of magnitude (or nine, twelve) more difficult than a software startup. Expensive rev'ing, long turn arounds, supply chain mayhem, overseas production, profits thinner than the paper they are printed on.
The hardware graveyard of kickstarter is chock full of dreamy eyed hardware guys for good reason.
Understood, my model is to buy existing solid hardware in volume based on orders received and load them with my own software(and UI) for certain vertical markets. Making hardware is a totally different market where cash burning is real and fast, small players simply can not afford.
somewhat implicit in "customer willing to spend money to solve the problem" is: are they willing to spend time to solve the problem right now (integrating your software into their application, migrating to your app, etc). Often times customers will have the problem you can solve, but it's far down on their list of priorities.
This is why MVP exists. However validation is often needed much earlier. I think a prototype that works visually only, then collecting pre-orders, is the way to go.
As the name implies, the Minimum Viable Product exists as a way to build the least amount necessary to start generating enough revenue to keep the business viable while you expand the scope of the product to realize your full vision. The MVP isn't for proving the market, but rather capturing a small segment of the market to fund expansion into the much larger market. The validation that there is a market should take place before creating the MVP, like you say.
Proving what needs to be proven is the role of the prototype. That can also be an important step on your journey, but the MVP is about building a product that is considered viable. Literally. If you don't yet know what is viable in the market, how could you even begin to build something that is viable? You don't yet know what viable means.
I've had this argument before, from the same side you're coming at it from, and I was wrong.
It's really not about building a viable product in that sense - the Dropbox demo video is the classic example of an MVP that isn't a "product" as such.
The Dropbox demo video was a prototype at best, and probably more accurately thought of as an advertisement. Definitely not a product, let alone a viable one. MVP meaning "something I did to make my business successful" isn't meaningful. The first version of Dropbox that landed into users hands and started to generate revenue could be accurately thought of as an MVP. It didn't do everything imaginable, but did just enough that customers wanted to pay for the service, allowing the business to grow into something more.
> A minimum viable product (MVP) is the most pared down version of a product that can still be released. Product demos, crowdfunding projects and landing pages are all common examples of MVPs.
> I know exactly what you mean, but this is not what Eric Rees means by the term.
Frank Robinson coined the Minimum Viable Product. This is what he had to say about it:
"The MVP is the right-sized product for your company and your customer. It is big enough to cause adoption, satisfaction and sales, but not so big as to be bloated and risky."
Steve Blank is credited with popularizing the term. Here he emphasizes that the MVP is about reaching sustainability for the company. What he calls an 'MVP tree', which produces potential MVP candidates, may be closer to what we're discussing here.
"An MVP tree is a way of methodically breaking your mission into smaller components and formulating MVP candidates that may get your company sustainable and scalable."
Ries, whoever he is, was free to make up his own definition, just as I can define the sky to be the hot molten lava deep inside the earth, but his definition does not match the usage of its originator nor is it in alignment with how (most) everyone else uses the term.
> Ries, whoever he is, was free to make up his own definition, just as I can define the sky to be the hot molten lava deep inside the earth, but his definition does not match the usage of its originator nor is it in alignment with how (most) everyone else uses the term.
It would be very at odds with the current use of the term MVP to define what dropbox did as not an MVP.
This isn't becoming hugely productive, so I'll leave it where I started - I've had this argument before from your side, and the dropbox video is an MVP. It is not a niche view.
My understanding of Flexport’s journey is the same as this. Ryan had insight into the fact that shipping stuff across the globe is difficult from his previous businesses. He created a landing page offering to import shipments into the U.S., first shipment free, and had a couple major signups. He had someone build him a prototype and he continued to validate his idea while he waited for an import license. Flexport did all 4 MVP steps listed above, but they also identified and established a moat early on.
Over the last 20 years I've consulted with maybe 30 entrepreneurs, and what I find is that some of them get too caught up in the dream of some day being rich and famous. The ones who are successful are the ones who remain pragmatic and stay focused on what they need to do today. The irony is that, even for the dreamers, all their dreams can come true: they might some day be rich and famous and yet, perhaps paradoxically, the best way to make that happen is to not think about it, and instead stay focused on what you can do for your real customers, right now, today. (At the risk of too much self-promotion, I recently wrote a book, "One on one meetings are underrated; Group meetings waste time" and I devote a long chapter to 2 stories of pragmatic success contrasted with 2 stories of failure due to dreaming.)
Strongly agree! Often ppl don’t even make it to your second criterion.
I was helping a friend’s son start a consumer service business (automating a manual process for postoperative and elder care with a conversation backed by GPT-3). Seemed like a great idea to me. I asked my M.D. mother if she’d use it. Definitely would, and would pay for it if it worked.
If it worked? Uuuh… I asked my mum a different question: if your doctor told you to use this would you? “Definitely not”.
The kid has a dozen people using the MVP. He knew them all of course, or they were the parents of his friends. So I suggested he let me know when he had n people whom he didn’t know using this for more than 30 days.
First n was 50 people, then 25, finally I said just anyone. So far, nope.
To be fair, those "ducks-in-a-row" questions are NOT easy to answer and it's easy for someone to fool themselves with a BS answer. Moreover, there are plenty of ridiculous ideas that someone would never think anybody would "pay for" that make tons of money in spite of themselves.
In the end it's all about taking calculated risks. Should the OP have learned more about the market he was trying to operate in AT SOME POINT before quitting his day job, hiring five "contractors" and writing 200000 lines of code in 9 months? Sure. Was it a worthwhile experience that gave him more wisdom? Hard to say. To be honest I am surprised he only blew 40K, it could have been a lot worse.
Right, even VCs don't know the answers. But the difference between a VC and a founder is that a VC invests in 100 companies not knowing which will succeed, but a founder only is investing in one.
And since VCs make practically all of their returns from that one hypergrowth 1000x company, they can push founders to swing for the fences even though that also makes startups more likely to fail.
For many founders, a 5x return would still be a life altering result, but to most VCs that doesn't really move the needle. It's nicer than 0x of course, but no more than that.
Yes... All things considered, he got away pretty cheap. I know guys who spent most of their life savings and millions of investor money, working on an incredible opportunity that didn't pan out.
This is right, but it's also clear why this happens: a lot of the best known success stories from a decade or two ago were "if you build it they will come and you will one day figure out how to make money from that". Google, Facebook, Instagram. It takes awhile for the conventional wisdom borne of a mythology like that to shift. Heck, we're probably in the process of shifting it too far; we may well be lamenting a decade from now that nobody is doing anything besides B2B because it's too hard to find customers who want to pay for things outside that space.
The barrier to entry for advertising was pretty small when Google entered it. They worked hard on pricing models, ads relevance, ads quality, and making it unobtrusive to users (in the beginning). That's what allowed them to gain traction. The barrier to entry in advertising is much higher now, but if you have a standout product (like TikTok) then it's possible to gain enough eyeballs to get you through the initial period with advertising.
Feels like a failure of business model imagination or just not enough runway to try something different to me. OP didn't even take three swings at bat.
It's not the sexiest market if you're looking to win a Nobel prize (lol) but insurance companies seems like a potential customer with a large financial incentive...
Yea I agree. You can even be solving a problem in a super amazing way but if there are no customers willing to spend the money for it then you are just making a home project for yourself.
I also see a lot of people fail because they solve a problem that THEY themselves are having but that does not actually happen to a large enough set of people that it translates again to something businesses or individuals will pay for.
Realistically I think the best way to do a startup is being willing to pivot hard and fast and early if necessary or to completely drop a project and move on to something else. If it is a passion project you are doing for yourself that is one thing - if you actually want to start a real business you cannot get caught in the time-already-sunk mentality.
The important thing is that the founder (and probably many of us would think similarly) is that even now after it failed they still think there are other reasons it failed and that there was a great idea that failed due to ... technicalities. But as you mention and seems to be widely believed is that this is a bad idea in general, or at the very least not as good as the OP thinks.
It’s bonkers. I have the opposite problem. I have a live customer (which is an accident, I was sort of doing him a favour), but now I have a waiting list for new paying clients and not enough spare time. I can’t quit my job yet. I’ll get there!
I mean I guess it wasn't really that "fantastic" of an idea, but that aside it feels like OP was lacking imagination in terms of the addressable market. He tried the two markets with the most obvious business model -- consumers and doctors.
But if consumers weren't going to work because the advertising revenue wasn't lucrative enough, and doctors weren't willing to pay for the solution, then it's time to get creative.
What about insurance companies? Insurance companies have a vested interest in picking the right drug because they are on the hook if the outcome isn't good. Or what about the pharmaceutical companies themselves? Would they pay for the data for use in their own marketing campaigns much like "4 out of 5 dentists agree"?
TLDR; OP went all in on two obvious markets but didn't think out of the box in terms of who might be willing to pay for his product.
before spending $40k and his own time he should have made a mockup of the software invested just a few hundred bucks in interviews with his intended customers, would have found out quite soon that it had no product-market fit
You can do user testing, you can call up people in the industries and ask them, you can do a Kickstarter and spend a little on advertising it to see if it gets any traction, but mostly the reaching out to people in the target market and compensating them for a user interview
I built a very niche monitoring product for sysadmins. Actually I built it for myself three years ago, but I want to explore if others would pay for it.
If you are in the space, or anyone else who reads this I'd be grateful to receive some feedback on a 10 minute video call.
Sad. Funny. All too familiar. Assuming too much about people's motives
is a sure way to fall on your face. In the end _you_ cared about it
more than even the doctors and patients who you assumed put health
first. But well done for trying all the same.
I think the takeaway from the blog post is wrong and comments focusing on building a faster MVP miss the point.
Not everything is a startup. This is a research project - and should be approached that way. There should be donors, a foundation, free access to all participants, reputation-building by writing (& publishing in reputable journals / conferences) studies about its efficacy, a board of doctors actually reviewing & cross-checking recommendations, a doctor-to-doctor helpline, etc.
As the author found out - it's not something people want to buy, but the public. So I think if you approach it from that direction - it might just work.
Sure, and a faster and less bloaty MVP made in a couple of weeks and subsequently presented in front of customers as soon as possible- would've let the blog author know that their idea was very flawed, so that they could either abandon the idea and/or pivot to a different idea.
This was a startup that would have required a 2 year run way to get into the B2B sales of a tricky market.
There was clearly value on the table, working out how to make money form it would have been 80% of the effort, but I suggest there's something there.
He should have given it away for free.
There's a 1000% chance that if all of a sudden, doctors all over the place start using a tool because they think it's useful, and recommend it to their friends, that it would find a way to be successful.
Are there really any significant acquisitions happening just for some database? I don't think this happens unless the data is absolutely massive and very unique.
Yes, and Doctors are the most valuable segment in the world, a bit more than bankers. Because while bankers have $ to spend on consumer stuff, it's a bit hard to target them with financial services. But Doctors are gateway to the entirety of Healthare.
There are companies that specialize in how Drug Sales teams are organized - who to target, what regions. That's 'very valuable'.
Literally just ads for drugs. That's it. If Pfizer had a tool that was used by 10% of Doctors, and literally just slipped in some sponsorship, it'd be worth a fortune.
No doubt everyone involved would be wary of a 'drug recommendation engine owned by a drug company' ... but that could be mitigated. And frankly, some 'bad actors' wouldn't care.
There are ample opportunities.
If I were a VC someone came to me and said 'I have a tool that Doctors really like and 2% are already using it on a weekly basis, and we are growing and this could be 10% or more in the future' ...
... I would just write them a check.
So long as the CEO was not insane, and they looked legit.
It'd be worth a fortune.
That said, it's hard to tell if it's that kind of tool.
That said, my 'spidey sense' says there are big opportunities there because Doctors and Pharmacist are overwhelmed, but it's probably a hard problem, and there must be other participants.
That's exactly what I was thinking! He couldn't make it viable as a business but it could still be remodeled as a non-profit and make the difference in the world.
Yeah. Tons of people use Web MD, but its also free. I'm pretty sure I would use glacier MD if given the choice, but if you asked me to pay for it I likely would not.
There is a similar enough service called labdoor. They review protein powders and tell you which one is best. As far as I know it's free and still in business.
The business plan the author came up with here is just bad.
It looks like labdoor makes money through affiliates or letting companies list on the site.
Glacier could have done similar.
It would also work if it included delivery.
If you're sick at home with the flu or a migrain and can get an uber eats style delivery that's already a great product. Couple it with the "science" or "maths" choosing the right product for you and it could have lift off.
I'd love to read a similar article that discussed a wide range of possible business plans.
As it is I'm not sure the author had multiple (or even one??) business plans
yea it's like asking doctors to pay for drug efficacy testing and research. he would have more luck with drug reps and big pharma as clients though with obvious conflicts of interests.
The interesting lesson here is that this could have been avoided, including the building by just going and collecting cash upfront irregardless of who customer was supposed to be.
It would depend on tests. Antidepressants work in different ways. If your body is not producing enough serotonin, you'd want drug class x. Or Dopamine a completely different class of drugs.
As developers we often confuse "startup idea" with "solution to a problem". A fantastic startup idea includes a way to monetize the idea. Without a way to monetize the idea, it's a feature.
Sometimes it is simple - make a piece of software so valuable, businesses or consumer are willing to pay money for it. Sometimes you have to be more creative. For example, Brex makes software for managing business credit cards. It's handy, but I'm not sure I would pay for it. But the Brex model takes a cut of credit card processing fees, so they can give their product away for free.
In this case you could target consumers and give it away for free, then when someone wants a prescription for a medicine they found on your site, you can "recommend" local doctors. Doctors will pay a lot for the patient leads.
We worked at a startup that leveraged autonomous blockchains to transfer money from naïve investors to slightly less naïve twenty-somethings. There are worse gigs.
This reads like a parody to me. This whole thing is real, though, right?
This was a fun read, but I think it came to the wrong conclusion. The real issue imo was "I had practically only weeks of runway". You just don't have time to make it happen.
As a fellow start up founder, I see most of my job being just buying time for the business. Buying time to make, to talk, and to think.
It wasn't like the tool had no value to Susan, maybe with a booth at her go-to annual expo, mentioning a few past lawsuits the tool could avoid, and an affinity partnership with her industry association, the tool would have become a fact of life for her.
It's a lot of work, I'm not denying that. Yet, this is the sort of thing YC's idealized startup stories often fail to say. If "instant Product Market Fit" is so good, then how come practically every new high flying SV startup is using loads of VC money to "bend the market to the product"?
Exciting Startups have to venture far, it's not about "we let you buy your potatoes online" anymore. Chances are you won't get deals by talking to people once. I wouldn't say that means your idea is bad.
I agree with your comment about the wrong conclusion. Google didn't have a monetization plan, it launched in 1998 and didn't do adwords(ads) until 2000. It's always better to have positive cashflow, however, enough capital lets you have more runway. At the end of the day you do need someone who will pay.
Not that I dislike attorneys but they could have been a client. If you can show that a doctor didn't prescribe the best drug for their malpractice lawsuit it could bring in some money.
It's not 1998 anymore is the thing. It's obviously better to have positive cash flow but unless you come up with something that is that huge of a hit, in a market where people both understand your product, but also there aren't entrenched competitors to squash you, there's a lot of hard work to get to a place where your product is worth something your customers. Which is expensive, in both time and money. Both of which OP didn't have enough of.
You're right that doing a startup is expensive especially when you look at opportunity costs. Google was going up against Microsoft that was killing off competitors to the point it was on the Simpsons. There are many factors and one of them can be luck. I respect anyone who does a start up because it's easy to be a naysayer. I wouldn't have invested in GlacierMD but I wouldn't have invested in SnapChat because I still don't get it.
One thing I did notice is that he was the sole founder. This is the number one mistake according to Paul Graham: http://www.paulgraham.com/startupmistakes.html oddly enough I'm interviewing for a position that is using the same inputs as the OP but with slightly different outputs and we have a corporate buyer lined up.
This is why I don't like health related business models. In a similar scenario, who's stopping Susan from sueing over a "bad" outcome from the platform recommendation. When people's health is on the line, shit can get ugly really fast.
Getting back to the product at hand - there was no value, as much as a minor cost saving.
A semi-reliable recommendation on the medication that Susan could prescribe doesn't save nearly enough money. You should realise that medicines aren't 100% reliable and people acquire tolerances to many medications over a longer run.
Basically this product suffered from the get go - because the person who started it wasn't an SME.
there was a huge huge problem with his startup, and it wasn't the economic model but the fact he was providing medical advice without any medical expertise. I don't know if it's allowed in the US, but it's at least ethically troublesome.
And I guess the doctors had no reason to use a service made by a guy without expertise, the data coming from some outsourced workers without any third party validation (no putting the face of few doctors isn't a validation).
It is entirely possible to provide analysis without crossing the line into giving advice: Eg. "Drug A works for more patients in your demographic¹, Drug B has fewer and milder side effects²."
335 comments
[ 3.3 ms ] story [ 262 ms ] threadHell, he could have made some fake graphs over a few weekends. Then he could have done exactly the same market research.
I disagree. The latter is a huge investment. You're not burning any bridges by asking if something would be useful even if you don't know if you can do it yet.
Of course even this is a wrong framing. Ideally he'd actually have sold the idea, by which I mean have actually taken money for the idea, before building it.
Then, if he couldn't build it, he could give the money back.
The problem is you don't ever make something NOBODY wants. Then it would be so easy to walk away.
You make something a few people want, and a lot of people SAY they want, but they don't want it enough to pay you so much that your company can succeed rapidly, so you waste a lot of time and die slowly.
https://news.ycombinator.com/item?id=25825917
I think you need something with a very concise value prop I'm working on that for my next thing right now. Something simple.
FYI don't use AWS for these sorts of projects use something cheaper.
I used Scaleway. They don't offer the hyperscale that AWS does but you don't need that for a side project. Just get started then if you suddenly have 100,000 users then switch to something like AWS. Also there are no hidden costs it's like $2 a month for a tiny little server to get you started.
You'll find that's enough.
For cost-effective startup/small scale infra, I love this method:
- get a dedicated or colocated server (can be cheaper than you think... e.g. mini PC colo with endoffice, joe's datacenter, etc.) - install microk8s on ubuntu LTS - write yaml files and deploy to microk8s
The main benefit of this is that infrastructure is very cost effective for early stage projects. Once the project needs something bigger, all of the infra is encoded in the k8s yaml files and can be deployed to a "real" k8s cluster.
Of course, the yaml needs to be carefully written and made as portable as possible so that it can be deployed to other clusters in the future.
Backup of state can be as simple as using HostPath volumes for state, and running syncthing as a deployment.
Run syncthing on other hosts (e.g. your home machine/laptop, some other cloud node, etc.) and state will be synced in realtime. Syncthing has options for keeping older versions of files/directories, so it's reasonably protected in the case the server gets hacked or deleted by accident.
This is not perfect, of course, but it's a very pragmatic and cost-effective approach. I've used/am using it and am very happy with the end result. I use cert manager, let'sencrypt, and wildcard DNS so that I can deploy new apps with their own TLS endpoints just by deploying a bit of yaml.
https://news.ycombinator.com/item?id=25825917 https://news.ycombinator.com/item?id=21947551
- Invest (a lot of) capital to develop the product, make data more readable, refine the UX etc
- Invest (a lot of) capital to market the service to doctors, offering it for free to them, with the angle of improving their patient outcome
- Invest (a lot of) capital to market the service to patient, offering it for free to them, with the angle of letting them check what their doctors are doing
Once everyone is using it and it becomes the de-facto source :
- Market that to drug companies, asking for (a metric ton of) capital to "better manage your product reputation". Magically, the "better managed drugs" suddenly are shown under a better light than the others.
Profitable ? Yes. Basically extorsion ? Also yes.
At this point the strategy fails. Patient outcome is not the metrics to be focusing on with this group.
People talk about bad startups that do happen, but not nearly enough about good ones that don’t. We should be at least as outraged at the systems that quietly steal what could have been.
Can you apply that to all kinds of medication, is this is a lot of more work or can you plug it in or let a student do the data entry?
It will take a while to gain traction, but if you go to conferences, add more kinds of medications, establish a brand and gain reputation, this could be very successful. The contribution to modern medicine is invaluable.
How many big kinds of medications are there? For the Top20 most common cancers, IBS, Neuropathy, acne, MS, heart disease, hypertension, arthritis and you've got most of the big ones covered. You can also add beauty treatments such as hair loss, skin rejuvenation and you are already in the beauty sector with much lower barriers to entry.
Might be a couple of months of data entry but then you would have this invaluable neural net no?
I wouldn't work on this full-time, but sending out emails here and there, developing it further here and there could be quite fruitful with a very good time spent/impact ratio.
I remember thinking about how sad it is that companies could succeed, or fail, off the basis of good, or bad, marketing.
There's a weird effect where data-driven decision making becomes essentially unstoppable given a big enough sized company, and it essentially condemns companies small enough when they believe that their decision making and technical prowess alone can earn them respectful competition against the "big boys."
And then they find out everything is corrupt, everything is about money, they don't have nearly enough money for the real players to even stop laughing at them for a moment, and they quit and cut their losses.
A lot of startups fail because they never identify a customer. Or even a problem. This one failed because before writing a line of code the founder did not take the next step and ensure that the prospective customer was willing to spend money on a solution.
This is why so many failing startups try to pivot to two-sided business models like advertising. That's one of the hardest businesses there is to start. And it's what the founder did here, too.
It sounds obvious stated as follows, but every startup failure I've read or heard about fails to get these ducks in a row:
- problem to be solved
- customer who has the problem
- customer willing to spend money to solve the problem
- enough customers willing to spend money on solving the problem to fuel a startup
Oddly enough, many of the startup success stories gloss over these fundamental components. The net result is that there's way too much emphasis on the idea and not nearly enough on the customer.
Build something people want and will pay for.
Not just say they want.
Not just say they'll pay for.
Make something that they see and will immediately take out their cash/cc/paypal/venmo and pay for on the spot.
To me, it seems like a pretty elementary mistake, but I think that oftentimes people are more subconsciously desiring external validation than accurate assessments.
The flip side is that sometimes it takes awhile to build the perception of value, hence free trials/freemium models. Get people hooked, then ask for $.
There are many ways to be successful (and even more ways to be unsuccessful).
This is big - lots of people (on HN and other places) say that they'd pay "$x for y" but aren't actually willing to.
I feel like I saw a post that had some pretty good evidence of the disconnect between those two things but I can't find it.
Nobody thinks they're particularly susceptible to it, but everyone still somehow knows that Chipotle exists and serves burritos...
People want Reddit, people want FB and Insta. Do they pay for those? I’m not saying those are good or realistic models to follow but I think the scale of your product needs to be taken into account with your statement. ie landing millions of users can forgive the lack of a business plan _at that scale_ whereas a SAAS platform targeting B2B customers should probably require your statement to be true.
People aren't the customers of Reddit/Facebook, they're the product, that's why social media has such negative effect on mental health, the users aren't a concern beyond how many minutes they dump in for advertisers to pay for.
yeah, if your business plan lands millions of users you better have more than $40k ready to fund it. Since most people don't have that at hand it's actually a really problematic plan, because you've got to be able to secure the funding for it right when it starts to hit, if you don't you're done, if you do you might have to do it by giving up too much control, if you won't then you're done.
The advertisers are.
[1] the best kind of "correct"
You need a product that is powerful enough to give you the leverage to change deep-seated bits of human psychology.
Henry Ford knew how to do this. So did Jobs.
$0.02. I don't want to discourage anyone from building something and making money on it; just adding on to your comment.
That's not exactly true. This sentence only covers fro value generating products, not cost saving products.
It's easier to sell cost saving product, but the profit margins on those are much lower. As an example in the article - the product is a cost saving product, but the cost it saves is very small.(Finding the right headache medicine is once in a lifetime $1 investment for most, or even less)
When it comes to value generating products - that is where you need someone who can sell their own idea of value to the masses. That is where this sentence starts to make sense.
It's just that I am not sure this random startup guy and his four doctor friends are such a genie.
You're also forgetting that medication is almost exclusively a cost issue. Unless you are taking performance enhancing products - other medication is a cost to getting to your "normal". (Even antidepressants exist to get you to a baseline mental state, not to give you extra - that's performance enhancing drugs)
You already give your doctor that $100 and they literally do the research... and other than getting a better doctor, you will not get any better tool.
But back to the reason for the product and it's very clear where the idea came from. Identifying what painkiller you prefer isn't a constant issue neither it is of great value to the vast majority.
We have. It's the free market.
The big question is how do you get people to give you money for your services/product. Classically people answer this with emphasis on the idea.
In the startup world, founders have been taught that "success" means things other than making money, such as large "valuations" that are not tied to profit or even revenue.
Another founder "success" is VC or angel funding, or getting on some list ("top founders under 30!") or media coverage.
"Exit" is also a "success" even if the sale is underwater or not worth much.
> You could also say they didnt identify how to make money.
For a time, there was a school of thought that as long as you had incredible growth/usage for your app or service, making money wasn't important because someone would buy you.
I always feel discomfort when this gets parroted. It's clearly not true, unless you're willing to shift the definitions of "idea" and "execution" around after-the-fact.
Indeed the article comes to the conclusion that the idea is near-impossible to execute – due to realities within the business domain of healthcare. If the idea was "nothing", good execution could've fixed it.
My greater point is that ideas set the boundaries for what's possible in execution, which in turn means ideas are critical. If they were unimportant a shit idea would have little impact on the outcome, which is clearly not true. They could still be "overrated" though, but then we should use that language.
Yes, my original post was not verbose, but I think people are better served by hanging signs all over their start-up that say what I wrote. Ideas are fun, ideas are hopeful, ideas can be magic, ideas can fill your heart but success comes from out-working everyone else. I have several truly great company ideas but I've never started them because I know in my heart that I don't want to go do all the work required to make it success.
I really need to publish and share that thing…
You can define the existence of a market. You can know that there exists some customer with money and a problem you can solve. But that's not the same as being able to say, "Hey, wait a couple of years while I implement this thing. I don't suppose you'd be interested in paying up front?"
Every successful startup has that moment of bravery where they commit their own money and hope that the customer still exists, and is actually willing to cough up money rather than continuing to do whatever they had been doing while they waited. Every failed startup had the same moment, only the customer turned out not to be willing to spend the money.
There are obvious cases where they should have known that no customer existed. But there are also a lot of cases where they simply weren't in the right place at the right time. I think it's a nice myth that the business majors tell themselves that they would always have known beforehand, but it seems more like survivorship bias to me.
It needs to be the first one to be big.
Another consideration is you consider : your solution, the end-consumer , and stop there ... and if you forget there's a middle-man (the doctor in this case) thats a miss too.. Middle-persons always complicate the situation.
They had no idea at all how they'd make money but there was a significant cost building and running the product.
Yet VC's had no problem funding this moonshot startup. Then another startup invented a solution that could allow them to monetize. Only problem was that it was very controversial and there were dozens of blog articles criticizing the idea. But they adopted it anyway and found incredible success.
That company if you haven't already recognized it was Google. Anytime you try and take your experience and generalize it across all startups you would be wrong.
That seems to cover Google just fine.
Yahoo and AltaVista weren't great and Google Search was far superior.
Making things work better is way easier, than creating a completely new market.
It’s probably not psychologically feasible or even useful for them to precisely examine the unearned factors in their or their company’s success, but so many citing ‘hard work’ as the primary factor proves they don’t try. Implying they committed as much, let some hundreds of times more cognitive, emotional, or physical effort, or even as many hours as an NYC line cook aspiring to be a chef, is laughable. Not discounting these folks’ value, but asserting those with less simply have less ambition or work ethic without providing reasonable points of comparison is justification, not reason.
Location, timing, access and mistakes on the side of market players - are all a matter of luck.
Google could not have started in 1998 in Russia. Microsoft would not have been Microsoft, without landing the MSDOS from IBM. So on and so forth.
What, in your estimation, can be controlled then?
Sure, not just anybody could have founded Google, even if born to mathematics and computer science professors prioritizing their educations and offering enough of a safety net to start a company rather than toil to pay off student loans for their Stanford computer science graduate educations which facilitated a relationship with a professor willing to connect them with Andy Bechtolsheim right at the Internet’s precipice… but it sure did help.
What they did required hard work, intelligence, creativity and discipline to execute... But implying those are the only factors worth considering is garbage. Their circumstances guaranteed they’d be able to reap greater rewards than nearly anybody else for the same output even if google had failed. Just look at the Opportunity Atlas. Do you really think talent is that geographically focused? If you don’t consider their circumstances lucky or don’t think they made much difference, I’m not really sure what else to say.
Do it in your spare time without burning so much capital. As much as YC wants you to think otherwise, VC money isn't some magical gatekeeper to innovation. Just build.
Hardware is an order of magnitude (or nine, twelve) more difficult than a software startup. Expensive rev'ing, long turn arounds, supply chain mayhem, overseas production, profits thinner than the paper they are printed on.
The hardware graveyard of kickstarter is chock full of dreamy eyed hardware guys for good reason.
But since you don't: what kind of help are you looking for? Web development?
It's really not about building a viable product in that sense - the Dropbox demo video is the classic example of an MVP that isn't a "product" as such.
> This is completely different to an MVP as defined in The Lean Startup. It's absolutely about proving whatever needs proving.
Here's a relevant article.
https://techcrunch.com/2011/10/19/dropbox-minimal-viable-pro...
And
> A minimum viable product (MVP) is the most pared down version of a product that can still be released. Product demos, crowdfunding projects and landing pages are all common examples of MVPs.
https://www.techopedia.com/definition/27809/minimum-viable-p...
Frank Robinson coined the Minimum Viable Product. This is what he had to say about it:
"The MVP is the right-sized product for your company and your customer. It is big enough to cause adoption, satisfaction and sales, but not so big as to be bloated and risky."
Steve Blank is credited with popularizing the term. Here he emphasizes that the MVP is about reaching sustainability for the company. What he calls an 'MVP tree', which produces potential MVP candidates, may be closer to what we're discussing here.
"An MVP tree is a way of methodically breaking your mission into smaller components and formulating MVP candidates that may get your company sustainable and scalable."
Ries, whoever he is, was free to make up his own definition, just as I can define the sky to be the hot molten lava deep inside the earth, but his definition does not match the usage of its originator nor is it in alignment with how (most) everyone else uses the term.
The author of the book that the other poster was talking about.
> Steve Blank is credited with popularizing the term
As is Ries.
> Here he emphasizes that the MVP is about reaching sustainability for the company.
Hmm. Here's a post from him that's absolutely not about sustainability but about validating core assumptions (and not building a product): https://steveblank.com/2013/07/22/an-mvp-is-not-a-cheaper-pr...
> Ries, whoever he is, was free to make up his own definition, just as I can define the sky to be the hot molten lava deep inside the earth, but his definition does not match the usage of its originator nor is it in alignment with how (most) everyone else uses the term.
It would be very at odds with the current use of the term MVP to define what dropbox did as not an MVP.
This isn't becoming hugely productive, so I'll leave it where I started - I've had this argument before from your side, and the dropbox video is an MVP. It is not a niche view.
I was helping a friend’s son start a consumer service business (automating a manual process for postoperative and elder care with a conversation backed by GPT-3). Seemed like a great idea to me. I asked my M.D. mother if she’d use it. Definitely would, and would pay for it if it worked.
If it worked? Uuuh… I asked my mum a different question: if your doctor told you to use this would you? “Definitely not”.
The kid has a dozen people using the MVP. He knew them all of course, or they were the parents of his friends. So I suggested he let me know when he had n people whom he didn’t know using this for more than 30 days.
First n was 50 people, then 25, finally I said just anyone. So far, nope.
Idea: valuable (to humanity). But not yet “V”
In the end it's all about taking calculated risks. Should the OP have learned more about the market he was trying to operate in AT SOME POINT before quitting his day job, hiring five "contractors" and writing 200000 lines of code in 9 months? Sure. Was it a worthwhile experience that gave him more wisdom? Hard to say. To be honest I am surprised he only blew 40K, it could have been a lot worse.
For many founders, a 5x return would still be a life altering result, but to most VCs that doesn't really move the needle. It's nicer than 0x of course, but no more than that.
It's not the sexiest market if you're looking to win a Nobel prize (lol) but insurance companies seems like a potential customer with a large financial incentive...
I also see a lot of people fail because they solve a problem that THEY themselves are having but that does not actually happen to a large enough set of people that it translates again to something businesses or individuals will pay for.
Realistically I think the best way to do a startup is being willing to pivot hard and fast and early if necessary or to completely drop a project and move on to something else. If it is a passion project you are doing for yourself that is one thing - if you actually want to start a real business you cannot get caught in the time-already-sunk mentality.
https://news.ycombinator.com/item?id=25827610
https://news.ycombinator.com/item?id=25829290
>With all the negative pushback this is getting, it’s making me think he was onto something.
Or maybe the idea is bad. I see this line of thought all the time sometimes implied by the misattributed Gandhi quote.
But if consumers weren't going to work because the advertising revenue wasn't lucrative enough, and doctors weren't willing to pay for the solution, then it's time to get creative.
What about insurance companies? Insurance companies have a vested interest in picking the right drug because they are on the hook if the outcome isn't good. Or what about the pharmaceutical companies themselves? Would they pay for the data for use in their own marketing campaigns much like "4 out of 5 dentists agree"?
TLDR; OP went all in on two obvious markets but didn't think out of the box in terms of who might be willing to pay for his product.
Or do you mean he should have invested into a designer to create mockups?
I built a very niche monitoring product for sysadmins. Actually I built it for myself three years ago, but I want to explore if others would pay for it.
If you are in the space, or anyone else who reads this I'd be grateful to receive some feedback on a 10 minute video call.
Not everything is a startup. This is a research project - and should be approached that way. There should be donors, a foundation, free access to all participants, reputation-building by writing (& publishing in reputable journals / conferences) studies about its efficacy, a board of doctors actually reviewing & cross-checking recommendations, a doctor-to-doctor helpline, etc.
As the author found out - it's not something people want to buy, but the public. So I think if you approach it from that direction - it might just work.
There was clearly value on the table, working out how to make money form it would have been 80% of the effort, but I suggest there's something there.
He should have given it away for free.
There's a 1000% chance that if all of a sudden, doctors all over the place start using a tool because they think it's useful, and recommend it to their friends, that it would find a way to be successful.
A drug company would buy that just for the data.
There are companies that specialize in how Drug Sales teams are organized - who to target, what regions. That's 'very valuable'.
Literally just ads for drugs. That's it. If Pfizer had a tool that was used by 10% of Doctors, and literally just slipped in some sponsorship, it'd be worth a fortune.
No doubt everyone involved would be wary of a 'drug recommendation engine owned by a drug company' ... but that could be mitigated. And frankly, some 'bad actors' wouldn't care.
There are ample opportunities.
If I were a VC someone came to me and said 'I have a tool that Doctors really like and 2% are already using it on a weekly basis, and we are growing and this could be 10% or more in the future' ...
... I would just write them a check.
So long as the CEO was not insane, and they looked legit.
It'd be worth a fortune.
That said, it's hard to tell if it's that kind of tool.
That said, my 'spidey sense' says there are big opportunities there because Doctors and Pharmacist are overwhelmed, but it's probably a hard problem, and there must be other participants.
[1] That's how the author described his own dayjob, pretty much.
There is a similar enough service called labdoor. They review protein powders and tell you which one is best. As far as I know it's free and still in business.
The business plan the author came up with here is just bad.
Glacier could have done similar.
It would also work if it included delivery.
If you're sick at home with the flu or a migrain and can get an uber eats style delivery that's already a great product. Couple it with the "science" or "maths" choosing the right product for you and it could have lift off.
I'd love to read a similar article that discussed a wide range of possible business plans.
As it is I'm not sure the author had multiple (or even one??) business plans
Exactly. This is what taxes are for.
Did anyone catch what the name of the drug for depression treatment was?
Sometimes it is simple - make a piece of software so valuable, businesses or consumer are willing to pay money for it. Sometimes you have to be more creative. For example, Brex makes software for managing business credit cards. It's handy, but I'm not sure I would pay for it. But the Brex model takes a cut of credit card processing fees, so they can give their product away for free.
In this case you could target consumers and give it away for free, then when someone wants a prescription for a medicine they found on your site, you can "recommend" local doctors. Doctors will pay a lot for the patient leads.
This could be avoided by pretending the solution exists and asking people how they feel about paying for it.
That said this can be a great not for profit idea.
This reads like a parody to me. This whole thing is real, though, right?
As a fellow start up founder, I see most of my job being just buying time for the business. Buying time to make, to talk, and to think.
It wasn't like the tool had no value to Susan, maybe with a booth at her go-to annual expo, mentioning a few past lawsuits the tool could avoid, and an affinity partnership with her industry association, the tool would have become a fact of life for her.
It's a lot of work, I'm not denying that. Yet, this is the sort of thing YC's idealized startup stories often fail to say. If "instant Product Market Fit" is so good, then how come practically every new high flying SV startup is using loads of VC money to "bend the market to the product"?
Exciting Startups have to venture far, it's not about "we let you buy your potatoes online" anymore. Chances are you won't get deals by talking to people once. I wouldn't say that means your idea is bad.
Not that I dislike attorneys but they could have been a client. If you can show that a doctor didn't prescribe the best drug for their malpractice lawsuit it could bring in some money.
One thing I did notice is that he was the sole founder. This is the number one mistake according to Paul Graham: http://www.paulgraham.com/startupmistakes.html oddly enough I'm interviewing for a position that is using the same inputs as the OP but with slightly different outputs and we have a corporate buyer lined up.
Graduate students wouldn't have demanded that raise only a few weeks in.
(Just kidding. Or am I?)
A semi-reliable recommendation on the medication that Susan could prescribe doesn't save nearly enough money. You should realise that medicines aren't 100% reliable and people acquire tolerances to many medications over a longer run.
Basically this product suffered from the get go - because the person who started it wasn't an SME.
This might be a very useful filter.
And I guess the doctors had no reason to use a service made by a guy without expertise, the data coming from some outsourced workers without any third party validation (no putting the face of few doctors isn't a validation).