The Exchanges

Q Next up, Crystal at Siteful. Along our journey, we've done surveys, interviews, and had many conversations with users. Once the MVP is live and we invite users to use and test our tool, what are the top methods you recommend for capturing and measuring feedback?

A I often think that startups try to scale this effort way too fast. Um, the things that I've seen work really well are you call the users, yourself, personally. You invite the users to your office. You host a dinner for your users. Um, you put your initial users in a WhatsApp group that you can all talk with together, but like things that absolutely don't scale. Um, another famous one was Airbnb where customer service was one of the co-founders Joe's cell phone number. Like, this is the perfect area where like you want there to be so much information flow from the customers to you that like you have to do things that don't scale. You shouldn't be thinking about, Oh, how do I get my, like, ideal intercom setup and my Zendesk setup? In the other days, you do not need that stuff.

AI assessment note: “call the users, yourself, personally. You invite the users to your office.”

Q And so what do you guys suspect are like the, the main issues right now that if addressed, MBA students would be more successful disproportionately?

A I, it's, it's interesting cause I'd, I'd love Jeff to, to talk through like the causes. This is what I see as kind of the, the red flags. So the first one is a lack of a technical co-founder, um, and the general willingness to outsource the tech part of a tech business. Um, the second one is commitment. It's, you know, can you get your entire team committed to working on this startup first and foremost? As opposed to, we will do this startup if we receive funding, if we get into YC, if a variety of other criteria are met. Um, and then I think the last one is, um, what we, what I like to call traction, which is just basically this idea of how long you've been working on this and what have you done? And that speaks to Jeff's point around MVP versus research. I think research isn't, is extremely important, but I think that being able to do research with a live product Is far more valuable than being able to do research with a general survey. And so I think like those three things like time and time and time again, and don't get me wrong, those are the central problems that most YC applicants have. But once again, like I would imagine that like within this population, these should not be the things taking these folks down.

AI assessment note: “The first one is a lack of a technical co-founder... second one is commitment”

Q Right off the, I mean, like, I can't visualize the pain, though I'm sure there is pain. Um, we are currently starting with a few clients and are basically tailoring our service to them. Cool. How do we avoid the trap of making our service too specific, and how do we balance between the requirements of a few clients with the need to build a platform that is more universal?

A So, I kind of think that, like, when I see a startup like this, I really have this basic question, which is, are you going into this space with knowledge of the space? Like, were you a previous property manager? If so, you should have a lot of insights on the types of problems that are general, that can be applied across the industry, and so you should have a lot of insights on what your initial product should be. Step A. Step B. If you're coming into this with little personal experience, you think there's an opportunity here, but you kind of don't know what it is. I don't know any, I, this is your problem. And like, I don't know a clever way of avoiding it. Um, Just learning the business means you're gonna be building a lot of features that probably are not generally applicable, and that's the cost of learning about this business. So in my mind, like, if you already know about the business, use your gut. If someone asks you to build something that, like, your experience tells you is not general, great. Don't do it. Um, if not, consider the first five customers as you just getting an education on the industry, and it might be a very expensive one. That's fine.

AI assessment note: “if you already know about the business, use your gut... If not, consider the first five customers”

Q Um, how do you launch an MVP of user generated, a user generated content platform? Um, if I make an MVP with minimal content, users will probably leave since there's not too much to consume.

A So, The classic answer to this is, one, does your platform have a lot of replay value? Is there any reason why I should come back daily or weekly? I think that, um, that's a really important question to ask because even if you get a lot of people, if there's no reason for them to come back, it doesn't really matter. I think, two, is there a smaller community that if that community was using the product, they would find it useful, even if others weren't? You know, the classic, I guess now old example of this was Facebook at Harvard, like as long as the Harvard kids were using it, or even a class, even just one of the grades in Harvard was using the product, it was useful. And so therefore they didn't need to have millions of users day one. Um, literally users on the order of like a couple thousand was very useful. So, um, the way that I'd be thinking about this question is one, how frequent do I get value out of it? If it's not that frequent, is there any value I'm creating? Two, is there a smaller population of people who can find this useful even if all your friends aren't using it?

AI assessment note: “is there a smaller community that if that community was using the product, they would find it useful”

Q company is a website for shopping from home-based and small businesses around us. After evaluating what I do, I've realized that I have a small, I have, I have users in traction, but we do not have product market fit. Now the question is, should I continue working on this, especially since margins are thin, or should I quit this and begin again in search for market, product market fit?

A You know, I think this is always the hardest question to answer because I see problems on both sides. There's a set of founders who, if they don't succeed immediately, their mental model is that their company is a failure. But then there's also a set of founders who even after learning two years worth of horrible facts, they still like will not acknowledge that it's not working. Um, I think the best strategy for this, um, the one that's easiest to execute is to time bound it. So what I would say is like, Hey, we're going to try everything as hard as possible to make this work for this period of time, probably no less than six months. And if we haven't figured it out then, then we're gonna be opening ourselves up to, um, pivoting. I find it's easier to time-bound it, because, like, you can, it's easier to be intellectually honest with yourself about, like, have I worked on this really hard for six months versus three? Versus, have I tried all of my ideas? Like, that's a really...

AI assessment note: “I think the best strategy for this, um, the one that's easiest to execute is to time bound it.”

Q Um, should we launch our MVP, uh, for free, or is it better to charge people?

A Let's be clear, you have a service where you're actually, like, There is real cost, meaning, like, your service is helping someone exercise. There is cost to sending someone to that place. There's cost to recruiting them. There's cost to their time. In any situation where you actually have real cost, you should be charging from day one. Um, in a pure software play where you don't have any costs, maybe consider something that's freemium, but, like, you don't want to anchor, like, the number one thing with these, like, marketplaces that are actually moving humans around is that If you're into a situation where you're providing a dollar worth of value and you're only getting 75% cents back, you're gonna get a lot of demand. But you're gonna lose a lot of money, and when you actually equalize the, the demand and the price, you'll lose a lot of customers.

AI assessment note: “In any situation where you actually have real cost, you should be charging from day one.”

Q Um, so you mentioned that you should, uh, try to charge your early user. But if you, if even your final product, you're planning to make it a free app and monetize with some premium content, uh, what should you do?

A So the question is, put it more generally, um, should you be going free if your final idea for your product is to be free? What I would say is this. If your users are users who you never plan to charge, then it's totally fine for you to be free, but if you do plan to charge them in some way, it's really helpful to charge them as soon as possible, because you want to know whether or not they're willing to pay, and certainly if their business depends on it, It's especially helpful to charge them. So that's the measure that I would use, and there are all kinds of little tweaks and, and so on and so forth, but at a high level, do you ever plan to charge them? I charge them. If you never plan to charge them, you plan to monetize based on ads, which is really usually the way that you never plan to charge them, is you can monetize with ads. If you're not going to monetize with ads, you probably should start charging them. Alright, next question.

AI assessment note: “if you do plan to charge them in some way, it's really helpful”

Q platform to help people learn software development. Okay. We've already launched our MVP. It's basically a publication text plus YouTube. We get about a thousand users on our channel monthly. Shall we focus on building new features and innovations, or should we go after currently Implementable revenue sources like subscription. Oh, okay. So should we start charging for things that we're already offering or should we build new free features?

A This is a tricky one because it really goes to like what your current situation is, AKA do you need money, right? What, how big of a startup are you looking to build? If you're looking to build a lifestyle business, then like I would definitely charge right now. Um, and kind of what your vision of what the product should be. Um, and so, like, this one's hard to answer just straight away. If you're thinking, oh, I don't need this to be a venture-scale business and I want it to be something I can do with all my time, so it needs to be able to make money so I can quit my job, then charge. Great. If you're thinking, like, oh, I'm looking to build a free product for teaching people to learn software development because I want to monetize it in this other way, Then I'm not so sure. Um, and then in terms of building new features, like, that's a question for your users. Like, what, what do your users want? What are they, how are they frustrated with your product today?

AI assessment note: “If you're looking to build a lifestyle business, then like I would definitely charge”

Q In consideration of getting an MVP up as soon as possible, what are the pros and cons of using white label services?

A So this is like a, this really brings up kind of a classic thing. So I would say, I would say a couple things to this point. One, if you're just trying to test any demand at all, and a white label service can, like, let you do that, great. But I'd argue that, like, if you want to test any demand at all for this type of product, probably, like, a Google Sheets spreadsheet could do it too. And so if you're just looking to test is there any demand, Like, go as simple as possible. If you have seen demand, and you're thinking to yourself, okay, I want to make this a company, if you want to make it a software company that can scale, that can raise money, it's a lot easier if you're building your own software. What's next?

AI assessment note: “if you want to make it a software company that can scale... building your own software”

Q Uh, here we go. Oscar says, we're blue, a platform where housewives resell products from suppliers using WhatsApp. It's like Michaud for LATAM. I get that. Should we give incentives to our housewives to trust us like Uber did at the beginning? Incentives.

A So, um, interestingly enough, This is a common thing that happens where a startup thinks they know what happened at the beginning of a company, and sometimes they don't. So in the extreme beginning of Uber, what was so interesting was that it launched in San Francisco, and it launched as Uber Black, which is a really expensive product, actually. It wasn't well subsidized. And the real value is that it was impossible to get a taxi in San Francisco. Absolutely impossible. So they didn't have to incentivize people to use the first version very much because, like, the alternative was, like, you couldn't move around the city at all. Now, as they expanded to new markets, and they figured out how marketing worked, and they figured out that, like, they could accelerate penetrating into a new city if they gave away rewards, that was all stuff they did later.

AI assessment note: “So they didn't have to incentivize people to use the first version very much”

Q to scale as an executive While that company scales, you know, let's look at Sheryl Sandberg as an example. Would Sheryl, if she had never gotten an MBA and never taken the two years out, would she have scaled as an executive and as a leader at Google and then later at Facebook? Or was she enabled or enhanced because of her two years At, you know, the MBA program.

A See, I think I find that tricky, because I think that if you were to grab the average person on the street in the valley, um, and or the average angel investor in the valley, um, They would say that that MBA might have been much more of a filtering and kind of rewarding process than it was an educational process. Um, and I don't know many people in the Valley who would say that you learn more getting an MBA than you learn two years in the grind at an early stage startup. Um, So it's tricky. It's tricky. Cause like, there are a lot of MBAs that have been successful, but there are also a lot of non MBAs that have been extremely successful.

AI assessment note: “that MBA might have been much more of a filtering and kind of rewarding process”

Q apartment, right? We were, you know, cracking beers left and right. Like what a, what a rush. And yet, you know, the next day we didn't feel that way. It was just more, more revenue. And so, yeah, if you, if you take away all those fun little moments, um, where do you find the motivation to go further and to push harder? It's got to come from somewhere else.

A Yeah, that one's also fun because you know the lows are gonna suck, right? So it's actually, it hits you on both sides. Like, you know that there are gonna be moments you hate your life as a second time founder. But you also know, like, the first amazing hire would just feel like, yeah, that's one of the first hundred people I have to hire great, and then thousand people. You know, it's like none of these moments kind of stick as much anymore in your head, and that can be demoralizing. Um, I think one of the other tricky, um, advantages of first-time founders is that, like, Because they're going to have harder times typically raising money or hiring employees, they tend to have to innovate more. Like they, they tend to have to, they're constrained into building something good. Whereas like the lack of constraints so often lead people astray.

AI assessment note: “none of these moments kind of stick as much anymore in your head”