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Comment by balls187 | Hacker News Reader

> If you’re creating a new product or space (like Slack)

Weird example. Slack didn't create a new space. They created a new product that entered a supersaturated space. Pretty much any VC would balk at a company creating yet another chat application.

> You don’t need to mention your GPA or that you once worked at Google.

You don't need to, but it helps.

...

Here is all you really need: build a good [great] product, get [paying] customers, get a little lucky. Other than the guy who got nixed from YCs HN Crowd selected funding program, it's pretty rare to have those three components and not get funding.

My cynical side reads this piece as an investor giving out, what appears on the surface helpful advice, but in actuality mostly benefits the investor by making their jobs easier by streamline the pitch process, so they can more quickly evaluate deals.

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You're thinking like a developer. You see Slack as a realtime chat protocol and think there's already a million solutions.

You need to think about it in a business context. Pre-slack virtually no businesses used realtime group chat.

Developers sometimes used IRC, HipChat, etc. and some corporates used Lync/Skype For Business/Yammer but these were terrible solutions for the majority of businesses.

Slack didn't succeed by taking marketshare from IRC, it succeeded by bring real-time group chat to people who never had it. That was a new market with real questions as to whether there was any demand for real-time chat among the wider business world.

> You need to think about it in a business context. Pre-slack virtually no businesses used realtime group chat.

Um, BBM?

Are you seriously comparing Black Berry Messenger to Slack? I had to Google BBM, and laughed when I saw that because people in businesses did not use Black Berry, or BBM, in any capacity even close to Slack.

I agree with most points on your original post though.

Straw man. I wasn't comparing slack's feature set to BBM, just refuting the point that before Slack, barely any businesses used group messaging.

> Pre-slack virtually no businesses used realtime group chat.

BBM, Real time group messaging, used by businesses. It was popular long before group messaging was popular.

Yes blackberry is now a joke, but there was a time when many businesses provided employees BB for communication, and it's users loved BBM.

...

That comment also missed the point: Slack didn't enter a new market (the claim from the referenced article), it entered a market that already was saturated, and by having a better product, is winning in that market.

Hipchat, Campfire, Lync, et al, are all competing for the same customers that Slack competes for.

Whether slack is better for businesses, or whether it was a direct competitor to BBM, completely misses the point.

Most Canadian companies, as well as most of the US government before 2005, used BBM the way most people use slack today. it was the killer app of enterprise.

What were you using in 2005 to communicate internally in your company?

But, the Chinese companies have always used all kinds of IMs with group chat facilities to communicate. Many companies even developed their own IMs since as early as the 2000's.

> This piece just seems like investors giving out, what appears on the surface to be helpful advice, but really are just trying to streamline the pitch process, so they can more quickly evaluate deals.

I think it is pretty helpful for people applying to YC to understand what YC partners are looking for. I'm as cynical as they come but I can't really fault the post, it isn't telling you how to make a successful company, it is telling you how to (as you state) essentially streamline your pitch to YC.

But to compliment your point: the startup I worked at, Thumbtack, was terrible at pitching for ~4 years and it significantly impacted our ability to raise money. During this time we were out-raised by many flashier competitors (Exec, Homejoy to name a couple) who I'm sure were much better at pitching. At the end of the day though it is the customers and not the investors that decide if your company is a success. I'd also add "persistence" to your list of qualities which I think make a successful company (I'd actually put it first -- or at least tied for first with being lucky).

Hm, it looks like thumbtack raised an enormous amount of capital compared to Homejoy, both before and after.

What do you mean by "terrible at pitching"?

For "terrible at pitching", the official story [1] is trying to raise a Series A and getting rejected 42 times. I don't agree with everything in the official story, but the part about going to a bunch of meetings and being rejected over and over again for 6 months is accurate. I went to a handful of those meetings and I assure you it was very bad. My favorite one was a partner at NEA telling us that if we could only be more like Cherry [2] then we'd be fundable.

And after finally raising the Series A, Exec [3] came along and despite being only a few months old raised a huge seed round at twice Thumbtack's valuation.

My memory of the timeline was a little off for Homejoy, but there was a time after Homejoy raised ~$40 million dollars at ~2-3x Thumbtack's valuation that made it feel like we were underperforming where we should be in fundraising. Thumbtack did eventually raise more money shortly thereafter and then even more money in the future, but at the time you don't know any of this.

1: https://www.thumbtack.com/blog/building-thumbtack/

2: https://www.crunchbase.com/organization/cherry/

3: https://www.crunchbase.com/organization/exec

I do wonder if the factors that made it so hard for Thumbtack to raise were also the factors that made it succeed in the end (i.e. the VCs were just wrong in their assessment of what the market needed, Thumbtack was right, and that's why Homejoy & Exec's VCs lost millions while Thumbtack is worth a billion).

I've used Thumbtack as a customer for my wedding officiant & photographer. One of things that stands out for me about the local service-provider market is that you really do want to solicit multiple bids, you want to be able to read reviews from other customers, and you want a chance to get to know the providers before committing to them. Thumbtack makes all of these processes super easy. The conventional wisdom in the on-demand market c. 2012-2014 was that customers just wanted convenience, they wanted one-tap order and have someone show up, and sharing-economy workers were basically interchangeable commodities. All of these assumptions are true for Uber and false for basically every other on-demand market; it makes sense that a VC chasing the next Uber would get them wrong.

I absolutely agree with you. It was an interesting experience because before you get in the room with these investors, investors that you've seen giving speeches and writing articles, you assume they are somehow these visionary people. Of course they'll ask all the right questions and understand things better than you do.

But after the experience it was quite the realization that most of them had no idea what they were talking about (at least about our space). And if your vision of the world is different than theirs, there isn't that much you can do. Frankly we naively tried to appease them (for example we actually build a "Cherry"-like version of Thumbtack in a weekend to appease the NEA guy), but it doesn't work and they all reject you for so many different random reasons you couldn't even appease them all if you wanted to. You just really need to do your thing and hope you are right.

They won't ignore traction though. Get enough traction and any VC will come around. To the point of the article, I think we were bad at pitching. We didn't have much traction when we raised the Series A but we had the obvious kernels of it. But we talked way too much about what we had done (which we thought was impressive), but VCs really want to hear much more about what you are going to do. And even when we did talk about the vision, it wasn't (and still isn't) anywhere near as sexy as Uber.

Now while Thumbtack was a success for the founders, early investors, and early employees, it still has a tiny tiny fraction of the overall services market. While it is clear that companies that went out of business were "wrong", I'm not sure at what point Thumbtack's approach becomes "right".

Fair point.

Perhaps a more fair statement would have been: "good advice for pitching, but really, spend your time building your customer base."

yeah, I read it as an attempt to help founders get back to the stuff that matters by spending less time developing pitches.

Streamlining the pitch process benefits everyone, because both investors and startups seeking funding have a lot of pitch sessions to wade through. Fund-raising is a long matching process, and the more you can make it like speed dating for the first pass, the better.

GPA and Google on your resume is good for VCs who want to cover their butt, but it probably isn't a compelling argument for the VCs you want on your side.

By GPA, the author likely meant "name of prestigious university."

Before dimissing a VC for choosing to use or not use it, I wonder what the data shows regarding whether pedigree is a good proxy for selecting founding teams for funding?

The data may show a correlation, but it would show the same correlation to everyone, which means that the advantage of investing in Ivy Leaguers/4.0 GPA students is priced out.

Anecdotally, I've seen a lot of excellent academics and skilled corporate bureaucrats from top companies have trouble adjusting to the chaos of startup life, and the demands of the product development cycle, even after they raise a great deal of money. Pedigree and entrepreneurial skills are in some ways orthogonal.

In any case, GPA/Ivy League/resume trophies are a weak substitute for a product that works and appeals to people, which is the main point.

Interestingly, Google themselves decided GPA doesn't matter much.

"Google doesn't even ask for GPA or test scores from candidates anymore, unless someone's a year or two out of school, because they don't correlate at all with success at the company. Even for new grads, the correlation is slight, the company has found."

http://www.businessinsider.com/how-google-hires-people-2013-...

Assuming you actually want funding, then streamlining the pitch process actually helps both parties. It's the entrepreneur's time too, and when expectations are clear from the beginning, the entrepreneur can decide whether those expectations fit with their current thinking and choose not to waste time fundraising if not.

Whether or not you want to take funding is an entirely separate question, but one answered more easily if you know what they're looking for.

> They created a new product that entered a supersaturated space.

If Slack entered a supersaturated market, you should be expected them to either (a) gain almost no users, (b) solely gain users at the expense of competitors.

Neither is even remotely true.

"> You don’t need to mention your GPA or that you once worked at Google. You don't need to, but it helps."

I'm curious, do you have anecdotal evidence for this? Would it help if you were the potential investor? Have you seen scenarios where founders got funding after mentioning they worked at Google, but wouldn't have gotten funding otherwise?

"Here is all you really need: build a good [great] product, get [paying] customers, get a little lucky."

As a developer with no experience founding a business, it seems being able to succinctly answer those 7 questions, for myself, co-founders, and even early customers, could be very useful in building a great product and getting paying customers.

Totally agree with your comment. Literally my first thought when I read the slack reference

But the investor should optimize the process for themselves, they're in control. The startup needs THEIR money in order live.

Were the investor in control, they would be funding their own ideas, not someone else's.

The company nixed from the crowd selected funding fellowship was offered the investment but directed it to charity instead.

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