[HN Gopher] Rules to run a software startup with minimum hassle
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Rules to run a software startup with minimum hassle
Author : joisig
Score : 108 points
Date : 2020-02-15 11:51 UTC (11 hours ago)
(HTM) web link (www.joisig.com)
(TXT) w3m dump (www.joisig.com)
| fxtentacle wrote:
| Rule #13: I wholeheartedly agree. One of the nastiest turns in my
| early days of entrepreneurship was when my tax advisor stopped
| returning phone calls. Shortly afterwards, I was contacted by a
| government agency that he had not submitted paperwork on time,
| that they (the government) couldn't find him anymore, and that I
| was fully legally liable to clean up the whole mess and my
| company would have to pay a EUR2500 fine.
| fxtentacle wrote:
| Rule #22: My experience is the opposite. For our professional
| audio software [0] we met almost all of the initial customers at
| conferences. They tried out our software, enjoyed working with
| it, and then later purchased a few licenses for trying things out
| back at home. Some of them later purchased licenses for every
| seat in their company. I believe it would have been extremely
| difficult to sell audio software without giving people the
| ability to test-listen.
|
| [0] https://newaudiotechnology.com/products/
| acvny wrote:
| Very good rules. I went through the point about unsolicited
| offers. I didn't know how to say no.
| jurgenwerk wrote:
| The author argues it's better to have monthly subscription plans
| only and ditch the yearly plans, but I don't really get it. This
| goes against one of the most common cashflow optimizations known
| in the SaaS world - which is to push as many users to yearly
| plans as possible. I think long term subscription plans should be
| preferred as they produce lower churn, make the revenue more
| predictable and bring more money upfront.
| hbcondo714 wrote:
| > building on top of long-term stable, multi-vendor platforms
| like the web, or Linux.
|
| For rule #8, is the author recommending to build custom CMS /
| e-commerce features for a SaaS? If so, sounds like a lot more
| work.
| fxtentacle wrote:
| I think he's suggesting to avoid the vendor lock-in that would
| come from renting the official hosted WordPress. But I would
| guess that installing the open source WordPress on your own
| dedicated Linux server is just fine, because there's no way
| someone could force you to change something.
| joisig wrote:
| Good question (OP here). What I mean is that for example, if
| you build a Chrome Extension (which is the main way my
| company's product gets used, so I'm familiar with the
| pitfalls), you are now at the mercy of Google and how they
| choose to develop their marketplace for extensions, how they
| choose to enforce user security, and how they choose to change
| the platform over time. Single vendor platform, similar to the
| other app stores.
|
| I'm not suggesting you rely on nothing else such as 3rd party
| CMS or e-commerce features, but I am suggesting that for
| example if you build a Shopify plug-in, you are at the mercy of
| how Shopify chooses to develop their ecosystem, and there will
| be potentially existential crises along the way.
|
| As with all the other rules, it's one you can and should break
| when it makes sense for your business. There are many thriving
| startups on top of Shopify's ecosystem, Apple's ecosystem,
| Google Chrome's ecosystem, and so on and so forth - I'm just
| urging you to be aware of the hassle you are creating for
| yourself by choosing such a path, and to balance it wisely
| against the benefits.
| hbcondo714 wrote:
| Thank you for your reply and clarifying.
| aabhay wrote:
| Lovely piece, though there is a significant section missing about
| when in a business's lifetime these rules should start applying.
| Most of the business functions (like support calls) should not be
| automated and doors should be kept open, as long as the key
| decision maker has bandwidth.
|
| E.g. don't hire an accountant until you can't do it yourself.
| Feel free to answer random unsolicited messages until you have no
| more time for it etc.
|
| Running a business is not a matter of defining these principles
| up front, but letting efficient process emerge from need.
| hyzyla wrote:
| My favorite rule is "Investment to the marketing, don't spend". I
| think, if replace "marketing" to anything else, this rule can be
| applied to any aspect of the life.
| fxtentacle wrote:
| Rule #11 can be more challenging than you'd think. For my first
| start-up, we had to initially sign up with a smaller bank because
| the bigger ones did not want to deal with first-time CEOs. After
| a bit more than a year of waiting, we were then allowed to create
| an account at the big boring bank.
| halfmatthalfcat wrote:
| Interesting, I walked into a local Chase branch and opened a
| business checking + credit card no questions asked.
| ttul wrote:
| The title should be amended: "Rules to run a bootstrapped indie
| startup with minimum hassle", perhaps.
|
| For example, take rule 1: prefer recurring revenue. Recurring
| revenue is the new hotness, but one time enterprise software
| licenses provide cash up front as well as the ability to
| recognize all that sweet revenue in the year it was sold. If
| you're bootstrapping and properly accruing your revenue, having
| some perpetual licenses isn't a bad thing at all.
| mdonahoe wrote:
| "Rule #5: Don't do freemium"
|
| Isn't CrankWheel, the author's company, a freemium product?
|
| "Free forever for limited use. No credit card needed"
|
| What experience does the author have with SaaS products that have
| no free tier?
|
| I stopped reading here.
| joisig wrote:
| My company operates on a freemium model. It's a big hassle, as
| documented in the section about not doing freemium, but it's
| also something we decided was fundamental to our main
| distribution channel which is the Chrome Web Store (breaking
| another of the rules in the article - but maybe check the last
| section).
|
| I haven't run a non-freemium SaaS company, but I do see what
| benefits it would bring if we were able to operate on a typical
| 14 or 30-day trial model. The big ones that would bring are a
| much shorter sales pipeline and shorter feedback loop on ad
| spend.
| adz_6891 wrote:
| Thanks for the clarification here!
|
| Since you are using freemium at the moment do you have some
| way of quantifying the hassle that this decision has created?
| It would be interesting to know more about how you navigate
| this kind of tradeoff since this is really what matters when
| it comes to detemerning whether a decision like freemium vs
| no-freemium is actually a good decision
| joisig wrote:
| There's some operational cost (for running servers and
| such), but not that high.
|
| There's considerable customer support cost.
|
| The main thing that I feel makes life tough is that the
| pipeline from, say, doing some paid ads and seeing the
| results is several months long, and the feedback loop on
| changes that can affect conversion rates and monetization
| is similarly very long. We've learned to cope with it but
| it would be nice to have a one-month feedback loop or
| shorter.
| adz_6891 wrote:
| Thanks for sharing! Seeking a shorter feedback loop makes
| total sense.
| fxtentacle wrote:
| I was also surprised there. Lucky for us, the author is here on
| HackerNews, so let's hope we'll get a reply.
| [deleted]
| harel wrote:
| It's a shame because if you kept reading you'd have reached the
| disclaimer that he has broken (and still does) all of the above
| rules.
|
| I think this list is sound. In my world, rules that are not
| able to be break when needed are not worth having.
| codingdave wrote:
| Most of those rules are decent, but they all have exceptions. You
| almost need a final rule, to think about the reasons the other
| rules exist, and feel free to break a rule if appropriate for
| your own specific situation.
| bruckie wrote:
| It already has exactly that:
|
| _A confession, and a caveat_
|
| _I've broken almost every one of the rules above!_
|
| ...
|
| _The rules are not meant as absolute rules, but as food for
| thought: For you to think about the tradeoffs, of how and why
| there will be additional hassle and distraction from your core
| activities, if you decide to "break" one of the "rules"._
|
| (maybe that was missing from an earlier revision or something?)
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