Startups on Pavan Yara

Don't Just Roll the Dice - A usefully short guide to #softwarepricing

pavan.yara@gmail.com (Pavan Yara) — Thu, 16 Jan 2020 22:31:34 +0530

How do you price your software? Is it art, science or magic?

How much attention should you pay to your competitors?

This short handbook will provide you with the theory, practical advice and case studies you need to stop yourself from reaching for the dice.

Chapter 01: Some – but not too much – Economics
Chapter 02: Pricing Psychology: What is your product worth?
Chapter 03: Pricing Pitfalls
Chapter 04: Advanced Pricing
- Chapter 05: What your price says about you (and how to change it)

The Lesson to Unlearn

pavan.yara@gmail.com (Pavan Yara) — Wed, 01 Jan 2020 01:52:49 +0530

When I started advising startup founders at Y Combinator, especially young ones, I was puzzled by the way they always seemed to make things overcomplicated. How, they would ask, do you raise money? What’s the trick for making venture capitalists want to invest in you? The best way to make VCs want to invest in you, I would explain, is to actually be a good investment. Even if you could trick VCs into investing in a bad startup, you’d be tricking yourselves too. You’re investing time in the same company you’re asking them to invest money in. If it’s not a good investment, why are you even doing it?

Oh, they’d say, and then after a pause to digest this revelation, they’d ask: What makes a startup a good investment?

So I would explain that what makes a startup promising, not just in the eyes of investors but in fact, is growth. Ideally in revenue, but failing that in usage. What they needed to do was get lots of users.

How does one get lots of users? They had all kinds of ideas about that. They needed to do a big launch that would get them “exposure.” They needed influential people to talk about them. They even knew they needed to launch on a tuesday, because that’s when one gets the most attention.

No, I would explain, that is not how to get lots of users. The way you get lots of users is to make the product really great. Then people will not only use it but recommend it to their friends, so your growth will be exponential once you get it started.

At this point I’ve told the founders something you’d think would be completely obvious: that they should make a good company by making a good product. And yet their reaction would be something like the reaction many physicists must have had when they first heard about the theory of relativity: a mixture of astonishment at its apparent genius, combined with a suspicion that anything so weird couldn’t possibly be right. Ok, they would say, dutifully. And could you introduce us to such-and-such influential person? And remember, we want to launch on Tuesday.

It would sometimes take founders years to grasp these simple lessons. And not because they were lazy or stupid. They just seemed blind to what was right in front of them.

Paul Graham source

Magic Startup Moments

pavan.yara@gmail.com (Pavan Yara) — Tue, 24 Dec 2019 20:41:47 +0530

Elad Gil recently wrote about magic startup moments.

According to Elad Gil, startups are hard but there are a few moments in every startup life that feels magical and make the whole grind worth it for moments. Some of these magical startup moments include:

Your first customer payment.
Your first magic executive.
That special customer thank you.
The sale.
The reunion.

I would also add

first execution or first-gone-live moment
first time customer recognizes the value

What else is magical?

Programming principles for early stage startups

pavan.yara@gmail.com (Pavan Yara) — Thu, 17 Oct 2019 20:54:53 +0530

Expect to re-write your code and do not over architecture.
Use consistency and agree upon the rules.
Solve system problems, not the immediate problem.
Keep sprints short and features small.
Focus on good database design.
Avoid processes that add too much overhead.
Document your code using 2 styles - self documenting or inline documentation
Build microservices over large monethletic codebase

Source: https://medium.com/helium-mvc/programming-principles-for-early-stage-startups-1215ad14bcb8

First employee of Startup? You are probably getting Screwed

pavan.yara@gmail.com (Pavan Yara) — Tue, 17 Apr 2018 21:26:40 +0530

via patio11 top comment on the HN post with the article title as this post:

Imagine three twenty-something guys working on a startup that has more lines of code than dollars in the bank. They’re working out of an apartment and spend most evenings eating ramen noodles from the same MSG-laden box. They work approximately equal hours (too many). They suffer approximately equal stress (more than they ever expected). They bear approximately equal responsibility for not tanking the company through poor performance. They each accept dramatic pay-cuts relative to easier, better jobs which they could sleepwalk their way into. Next door, there are another three guys, eating ramen, etc etc.

Now, it seems to me like the three guys behind Door #1 are very similar to the three guys behind Door #2. However, in one case they’re all co-founders, and in one case they are two co-founders and a first employee. Those are very, very different statuses for the third guy. The third co-founder gets mentioned in press hits about the company. The third co-founder can call himself a co-founder, a status of value in an industry (and society) which is sometimes obsessed with status. The third co-founder cannot get excised from the cap table without that being mentioned as a subplot in the eventual movie.

The first employee will not usually get mentioned. The first employee gets no social status of particular esteem. The first employee will not have a seat at the table – literally or figuratively – when the eventual disposition of the first employee’s equity is decided. The first employee’s equity stake is approximately 1/6 to 1/40th (or less!) of what the third co-founder’s was. Well, theoretically. 0.5% is 1/40th of 20% in engineering math, not in investor math, because investors can change the laws of mathematics retroactively. 0.5% of millions of dollars is sometimes nothing at all. (This is one of the least obvious and most important things I have learned from HN.)

If you’re good enough to be a first employee, you’re probably epsilon away from being good enough to be a third co-founder. There may be good reasons to prefer being an employee… but think darn hard before you make that decision.