The advice is not going to apply to the top of the top or even near the top. It's for the other parts of the bell curve.
If you're really good or make money for people (take Lady Gaga as an example) you can get away with anything. But most people or the people that that post is directed to aren't.
As a side note I always wondered why back in the day Bill Gates, when he was the richest man in the world (or near that) always wore a suit to business meetings. I mean you would think he would just do whatever he wanted to. But apparently he still had to answer to "someone" and felt it wasn't appropriate.
There was a time when there were Feudal Lords and now there aren't.
Similarly, we're moving away from a time of microserfs to hackers and coders who are free.
Love the downvotes - Guess people would rather take advice on how to be mediocre and miserable and do things you don't want to do than take control of their own destiny and find a company they love being at or start one themselves.
>Similarly, we're moving away from a time of microserfs to hackers and coders who are free.
No, we really aren't. Yes, it's easy to be independent if you have a marketable skillset, and it's a great time to launch a startup. That said, the vast majority of programmers are still employed by big organizations where these rules are very much in effect. They aren't directed at people who are working on their own; they're directed at the majority who are working in a corporate climate.
This is an awesome discussion, this post was surely not aimed at rockstars or CEO's. There are a contingent of people that are happy to work to for others, even if their policies are less than ideal. Some people enjoy the safety that comes with a regular paycheck.
Also for many people there are a lot of factors that go into picking a career, location, amount of time spent with family, benefits etc. That limits options for a large number of people.
So while it's nice to "control your own destiny" it's also important to consider that to some people destiny is more than a career path, and that being mediocre doesn't mean being miserable. There are tons of people that are perfectly happy being mediocre.
Not really a well thought out article. Here's why -
1) Why should anyone care about solving the problems that the writer of this article wants to see solved?
2) She fixates on the 3-8% that affiliate sites make without considering a few things:
a) Sites make that regardless of where the user actually buys. So if someone comes to your site and decides to buy a jacket you make money whether they buy it from Retailer A or Retailer B.
b) It's usually 10% for fashion sites and once you are driving larger volume you can cut deals for 15%.
c) If you become the decision engine (something Google and Bing are trying to do with their Flight Search and other initiatives in various verticals), then you can easily take over the entire business.
If people are coming to you and you help them decide what to buy - then you can start selling them that stuff.
3) The costs and barrier to entry is much lower if you are trying to fix the discoverability problem.
4) The real problem, and the most important thing, is the role of fashion. What fashion really does. That can be tackled completely in the online world through a website.
5) Fashion is a market that is going to make a lot of startups a lot of money.
Things that signal status (such as special electronic brands and designer bags and Grey Goose vodka) are never going to go out of style.
Instead of listening to this writer's advice, any company going into fashion should look at how backward thinking most people in the industry are, how little they understand technology, and how they are unwilling to admit the core purpose of fashion.
The easiest entry is discoverability and influence and that's also the most powerful element of the fashion ecosystem.
If you become the discovery engine and the decision engine then it's game over for everyone else.
All those VCs funding fashion startups are not idiots.
Yes, fashion is a huge industry in the US, and you can make a ton of money in the market.
By just being a middleman, you're looking at margins in the 10% region. Enough to build a business, but not a game-changer.
If you target production and supply-chain problems, which are far harder, then you can build a business with margins north of 40%. Not only that, but because you've solved some seriously hard problems, you've driven the cost of competition up for the existing players, while adding yet another entry barrier for other startups.
That's the point of the article -- that today's fashion-focused startups are all going after small game, with nobody shooting for buffalo.
I don't think the people going in to fashion start ups are going in to them to make large profits. It seems to me they are motivated by wanting creative control over some product or line of products and this is just another way to go about doing that.
For criticizing her article for not being "well thought-out", you sure didn't write a well thought-out reply. I don't see how your reply actually disproves anything she said; you've basically just said, "no, she's wrong... because she is wrong."
c) If you become the decision engine (something Google and Bing are trying to do with their Flight Search and other initiatives in various verticals), then you can easily take over the entire business.
If people are coming to you and you help them decide what to buy - then you can start selling them that stuff.
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If you become the decision engine for Fashion you can decide everything else.
I think perhaps it's not very clear until you consider what WalMart has done and what Amazon is doing.
And what Google is trying to do.
You start off as the starting point and then you start taking over more and more until you start producing the products you were originally only linking to.
Amazon and WalMart are not decision engines, and they never were. Maybe Amazon had a little of that on the side, but both are traditional retailers with all the traditionally hard problems the article mentioned that people don't want to solve.
In fact, Amazon is a poster-child example of what you stand to gain if you are willing to tackle more than just being a frontend.
Amazon started off selling books. What do you think their margin for each was?
Then they took over a large part of the market. Then they moved into selling other things like electronics.
Then they made the Kindle and controlled the device people read on and the starting point and the buying point.
Now they are getting into publishing and self-publishing.
They are taking over everything starting with taking over the online selling point for books.
That's what a fashion startup earning only 10% can do.
Use the 10% (which is mostly profit) to power an engine that slows takes over all of fashion.
Move into parallel areas like shoes and accessories.
Then starts making their own stuff.
I appreciate your trying to defend the poster of the original short-sighted article.
However, if you look at building a real business that has the power and control to completely take over an entire industry then starting online is much better than starting in the backend.
If you want to provide services to publishers who publish books (which is what back end would be for books) - well and good.
But there's nothing transformative about it.
The real transformation is to replace Publishers.
that's why the poster of the original article is so wrong.
She thinks she's thinking big by talking about tackling the back end instead of doing online sites.
However, the real prize is to replace the entire pipeline and then, if the company so chooses, to replace labels and the entire fashion industry.
Starting Point: Where people start their search (to buy something or find something).
Decision Engine: Where people make a decision.
Buying Point: Where people actually buy.
What are all the reviews at Amazon for?
Amazon is both a decision engine and a buying engine. They are trying to wean off starting engines like Google and that is why they first tried A9 and now are trying devices in customers' hands.
If you step out of your attempt to defend the poster of the first article you'll realize that her article (not her, just the article) is very short-sighted.
The Internet is destroying entire industries - yet she thinks fashion internet startups should instead compete in the real world.
That makes no sense. We should all play to our strenghts. While she's trying to do backend stuff and help existing Fashion companies, some 'only 3 to 8%' earning Internet startup is going to disrupt the entire industry.
A hacker, in my opinion, is not meant to figure out how to solve the problems the existing industry power players created or want solved.
A hacker, again in my opinion, should solve the most elegant things and solve things for actual people.
You are missing a very key point here: consumers do not decide what they wear, the fashion / PR machine decides that for them.
Think about this: while a girl may discover a cool, new designer on Pintrest and buy a dress from that designer, trust me, she will still scratch out some girl's eyeballs to get the new Louis Vuttion bag. And why? Branding. And hundreds of millions of dollars in marketing to create an image, an illusion, and an object that conveys status. LVMH is the most powerful and profitable luxury conglomerate in the world for a reason (it is about 3x more profitable than Amazon with 20% less revenue).
Brands either die or thrive based on their ability to do two things: create a desirable brand and manage inventory. The entire function of branding and marketing is not going to be replaced by Svpply. Or Pintrest. Or whoever.
Lastly, it's comical you keep mentioning Amazon. One of the biggest reasons for their success is their ability to manage a supply chain better than almost anyone else.
I've found that almost nobody in Silicon Valley gets this, especially engineers (speaking as one). They treat the "product problem" as a technology problem (more data, better recommendations), but it's really a psychology problem (how do you make people fall in love?).
Mapping the social web onto the latter problem is actually more straightforward, IMO, than trying to, say, mine my Facebook account to make more "personalized" apparel recommendations.
You may want to give her more credit. She did a fashion startup for a few years.
About the 3-8% affiliate fees, that's not a viable business model. You would have to deliver north of 15M dollars to get 1M dollars. Assuming the average ticket is $150, you need 100,000 conversion. The average internet conversion rate is 3%. So you need 3M uniques. That is not very easy to get. Even if you are buying it.
She did a fashion startup for a few years and she never figured out that nearly every luxury company gives 10% to 15% commissions?
If she really thinks it's 3 to 8% then she's blissfuly ignorant.
She doesn't get the fundamental concept of capturing the starting point. If a site becomes the destination for fashion i.e. where people go to search for the next thing they buy.
Then that site can very easily expand into selling that very thing.
At some point we say - Instead of getting 15% from this luxury watch maker, we ask for 25%.
Then we say - Let's make stuff ourselves and see if we can get more than 25%.
What Google is doing and what Facebook is trying to do is very similar. Expand and take over all the profits. But first you need to be the starting point or decision point for something (search, social interactions, dating, buying clothes).
Back in the real world, it is actually happening the other way around. Retailers and brands (which have all the power and money) are becoming the content creators and poaching talent from the publishing industry. Quote below from a Business of Fashion article earlier this year.
"What began as a trickle is now starting to look more like a mass exodus. Jeremy Langmead, formerly of Esquire, is now at Mr. Porter. Andrea Linett, formerly of Lucky magazine, is now at eBay. Dennis Freedman, formerly of W, is now at Barneys. Fiona McIntosh, formerly of Grazia, is now at My Wardrobe. And the list goes on. It seems that there are almost weekly reports announcing that yet another magazine veteran has fled a traditional publishing company to take up a position at a brand or retailer. Recently, it was British Vogue that was in the headlines, when creative director Robin Derrick and fashion director Kate Phelan both announced within days of each other that they were leaving the magazine. Phelan is set to become creative director of Topshop, while Derrick’s plans have yet to be revealed.
By now, it’s a well-known fact that times are tough for traditional, ad-supported editorial outlets. For example, from 2007 through 2009, Condé Nast — publisher of Vogue, Vanity Fair and others — saw about $500 million in revenue disappear, a decline from which it has yet to recover. In fact, Condé Nast CEO Chuck Townshend recently admitted to the Wall Street Journal, “My eyes are wide open. I don’t consider [the traditional ad-revenue model] to be a perennially sustainable stream of revenue.”
I think you killed your reply. Still read it. You may have a point. In the case of Google you can see this happening, and Jason Calacanis pointed earlier this week that "Google is now buying content companies and just giving you the answer". So you are right. However I think when you are dealing with physical products the dynamics are truly different.
One of the reasons why stuff is so much more expensive in Europe than US. The prices are higher, so cash margins per sale still high even if percentage margins might be lower.
Now Europe is obviously a place where there is a lot of scope for these businesses.
You have a point there. That someone could possibly anticipate what Doodles are going to be used and SEO map their site to that.
It still isn't the kind of thing I personally am hoping to get at Hacker News.
It seems to me that more and more people are interested in shortcuts to success and praying to the Tech Religions than actually doing something themselves or sharing stuff that is really worthwhile.
Please Note: This might seem critical but I'm just pointing out three problems i.e. lack of effort, lack of measuring effort and other statistics, lack of empathy with customers.
My argument would be that without at least 2 of these 3 the OP will keep running into problems and keep blaming extrinsic meaningless things.
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Credit to the person (aaron?) for writing this. However, the lack of measured numbers is terrifying. And the disconnect with the customer perspective is just hard to fathom.
1) How much time did you spend on this? Over what period of time?
2) How much traffic did you get? How many people bought coupons? How many people went to other sites from your sites?
3) What amount of money did you spend? On what areas?
What amount of money did you make? From what sources?
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You say that you didn't listen to your customers. My point would be that you didn't realize that you were making something FOR THEM and not for you.
You should consider thinking from your customers' perspective.
They really don't care about some of the things that you think are successes i.e. using hosted services and learning Ruby and the site being BEAUTIFUL because you think a site being beautiful is important to you personally.
Unless Indianapolis is 99% users of HackerNews.
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You say that you were shocked that small business owners don't track things - yet you write this post without giving any figures. Which makes a great post meaningless because we don't know what 'You had no skin in the game' means.
Did you spend 40 hours a week after doing your day job? Did you do that for 3 full years?
Did you put in $100K of your own savings?
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Finally, you went into a space where you had very few competitive advantages - not the first mover, not the best product, not the most money, not the most resources, no brand recognition.
If you had tried a niche within coupons or a new area you might well have seen much better results.
Also, you don't mention anywhere how much total time and effort you spent on this which makes it difficult to know whether your lessons are worthwhile or not.
If you spent 10 hours a week for 6 months - then obviously all your 'learning' is probably useless.
If you spent 40 hours a week for 2 years - then it's very valuable stuff.
All fair questions (even if your conclusions about the value of my learning are a bit bogus ;) -- the value in learning does not always depend directly on the cost paid to learn.)
I have (almost) all the numbers. I can tell you what I spent, to the dollar. I can tell you about the traffic to the site, what they did, what was successful and what wasn't. I can't tell you how much time I spent on it because it varied so drastically over the past year. It ranged from 10 hours a week to 0 hours a week. It just depended on how busy things were at work and with the fam.
(EDIT: my wife tells me it was more than 10 hours a week. ;) )
The point of the post wasn't to give detailed numbers, but just to generally convey what I took away from it. Whether or not you know my numbers doesn't change what I learned. And just because I didn't mention it in the post doesn't mean I don't have it, that is a large assumption. I'm not sure how it makes the post meaningless. Perhaps you can't tell if you can trust it or not because you can't measure it? But even if there were numbers, that doesn't tell you whether you can trust it any more or less, so perhaps that's not it.
I wrote the retrospective post about the things I care about, not the things my customers cared about. You're absolutely right that almost all the stuff I listed is meaningless to my customers, and I never even mentioned it to them -- they don't care! :)
Also, I didn't go into it in the post (I was going for something shorter and readable/consumable) but I had two customers. Small businesses listing coupons, and people using the site looking for coupons. I thought about it from both perspectives every moment I worked on it. I geeked out about how I was doing it, but never lost sight of my customers. Sorry if that wasn't clear in the post.
You're also absolutely right that it was a poor choice of spaces. That was a huge lesson I learned. :)
So to summarize, take it for what you think it's worth. There's no law that says you have to read my lessons learned and apply them. But they are lessons I learned, regardless. Thx for reading!
1) Firstly, that you were in business to add value to customers and that was the primary motivation. It seems your primary motivation was to learn/experience it. Which is fine - it's just not what I assumed it was.
As Zig Ziglar would put it - To get everything you desire in life you just have to give enough other people what they want from life.
* Who knows what approach works better. For me, the Zig Ziglar approach has worked much better but that's a sample size of 1 person.
2) Secondly, my mistake in assuming your post was meant to help other people. If you could have added a note that it was meant mostly as a catharsis and written for yourself.
Then I wouldn't have assumed that there might be a lot of value for me.
Right now the value is in seeing a few things but the amount of effort is just not enough to actually know whether any of your mistakes other than not putting in enough work matter.
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See, the key thing is your line on work being from 0 to 10 hours per week with some weeks being over 10 weeks.
How can you know your ideas and business were right or wrong with that amount of time?
For entirely selfish reasons (to help myself) I wanted to learn from your experience. However, if your experience is based on working an average of 10 hours a week, then it doesn't really say anything about what the market opportunity really is/was.
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On a related note there seems to be a fascination on hacker news lately on apps done in 5 days and 'passive income' and how to succeed without working hard.
Are there any people there who are succeeding after working really hard?
Who are spending 5 months on their app and not 5 days?
You seem intent on believing the worst about my experience and efforts, and that's okay, as I said before, "take it for what it's worth." :)
But you did nail item #1 - I was primarily interested in learning/experiencing, and secondarily interested in adding value. That's one of the reasons I lost motivation and shut down the site, it is extraordinarily difficult for coupons/discounts to add value to businesses across the spectrum of business. Some businesses it works great for, many it doesn't. It was when I had that realization that I decided to end it.
I did spend time (sorry, probably not "much time") brainstorming business ideas that actually would add value to the businesses I knew, and I think some of those ideas are good, but just not feasible for me to do alone, so I'm not even pursuing them either.
I have a friend that has spent _years_ and tons of his own money working on his startup, and it's still struggling to succeed. I learned a lot from him as he was my mentor through this process. I hope his endeavor takes off, but it's a long road, and he has worked incredibly hard. I can connect the two of you if you actually want to talk to someone like that.
My suggestion to you would be to consider whether you can put in more effort into your next startup.
We each have our own beliefs on what works and then there's reality. So there's probably a chance that there is something that works very well but both of us would have to look at things from a different perspective.
For me I tend to believe that you can't really succeed unless you're 100% in it. That having a family pretty much rules out having a successful start-up. That's obviously not true as there are exceptions. Perhaps lots of them.
I think in the end it comes down to not giving up. However, again, that's just a belief and who knows what the reality is.
Thanks for offering to connect me to your friend. Not interested at the moment as I'm quite overwhelmed and already places like Hacker News are putting too much of the possibility of failure into my head.
My attitude is that failure isn't really possible and it's working amazingly well so perhaps I should only read posts that are very positive like the Yoghurt business one.
Failing fast doesn't mean much if you don't have a definition of failure to work off of so you can iterate. How exactly does one define these kinds of failures?
If you believe the premise and results of the '10000 hours to expert' research cited by Gladwell's "Outliers", then the obvious conclusion is that time invested is highly correlated with learning.
"Failing fast" and "10,000 hours to expert" are two entirely different kinds of learning. "Failing fast" is a lean startup idea where you are trying to learn, as quickly as possible, whether you have a viable product. You do the least you can do to determine this. After you have learned this one thing, if you find that no one is interested in your product, you are done. Move on to the next idea.
"10,000 hours to expert" is a different idea. Here, the idea is that to become an expert in a specific skill, you have to put in 10,000 hours of 'deliberate' practice.
These are two different kinds of learning. The '10,000' hours approach is not the kind of learning you need or want to do to determine the validity of one business idea. In this case, time invested is not necessarily correlated with learning.
10000 hours are needed to become a master or expert at something. An expert or master is in the top 1% of people who know that skill. But with learning something, anyone could reach the top 10% within 6 months. Dedicate to learning something for 6 months and you reach the top 10%. It doesn't take much time to go from nothing to a decent skill level. It does, however, take a lot of time to go from a decent level to a mastery level.
I'd rather learn from the experience of someone who became an absolute master. Because the lessons of absolute mastery apply across fields.
Who cares about the top 10%? The top 10% isn't worth wasting your time on. Especially if it means you spend 6 months each on 20 different areas and become top 10% in 20 areas.
Much better to find 1 or 2 areas you absolutely love and become top 1%.
Top 1% - Going to the Olympics.
Top 10% - Impress your friends.
While I mostly agree with you there are plenty of times where it's worth it to be in the top 10% (or upper quadrant) but not the top 1%. These are things that are important to be good at but not worth the time to be excellent at. To say it's a waste of time to be in the top 10% is nonsense.
Take driving for example. When I started driving I enrolled in a driving course for several months. Now it's debatable that this course put me in the top 10% but it probably helped to put me above average. I have no ambition to be a race-car or stunt car driver so this is a great trade-off. I believe I'm a safer driver because of it.
Negotiating would be another example. It would make a lot of sense for a lot of people to take a negotiating course or read and practice it for a few months to get good at it in order to be able to negotiate their salary. The payoff of just a few months work could result in tens of thousands of dollars over your whole career. It wouldn't really be beneficial to spend 5-10 years getting your negotiating skills to the top 1% unless you wanted to actually do that for work.
Also the 10,000 hours really depends on if you are actually progressing or not. I think it's pretty debatable whether merely 10,000 hours of driving would put you in the top 1%. It's like the old joke that some people with 20 years of experience actually have one year of experience repeated 20 times.
Yes, you can't be great at everything but I think it's more valuable to great at one thing and good at a lot of things rather than just great at one or two things and mediocre at everything else.
Basically my point is, strive to be in the top 1% for what you want to earn money at or do with your life and then be in the top 10% for other things that either help you with that or benefit you in some way.
This is amazing. You've hit the nail on the head. Google would be much more successful if it focused on being Google and didn't try to be Apple+Fecaebook+X companies all in one.
Perhaps US entered its period of decline a long time ago and it's only now that all the good work of past generations has been undone.
The last few wars were attempts to strengthen the US - quite frankly Oil really is more valuable for the US than winning the title of prom king.
Regardless of your or my personal opinion on what the war is doing there can be little doubt that Iraqi and Afghanistani Oil is going to play a huge part in the US keeping its position in the world.
The thing that actually unsettled things is that the Wall Street people got out of control and made too many inroads into the Government and started stealing from the Average American.
His theory still holds true. Unless you can conclusively argue that 'Peace' isn't the MAIN reason for the downfall of non-warring civilizations and countries - don't see where your argument leads.
In a way you're supporting him.
Finally, he's pointing out something that might be The Truth. If it's the truth then it says a lot of positive things about his capacity for logical thinking and his ability to be HONEST with himself and others.
Great theory. Having lived on 3 continents and observed how countries and people behave and reading lots of history -> There might be a lot of truth to what you say.
The standard quote about all the peace in Switzerland leading to nothing other than the Cuckoo Clock and all the strife in Italy leading to the Renaissance comes to mind.
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As human beings we want to give 'meaning' to our lives and underplay the role genetics and survival of the fittest play.
We also want to pretend that we don't have a baser nature and that we can 100% 'civilize' ourselves.
So we often make the wrong assumption that the perfect natural state is perfect harmony where everyone taps into some global 'peace wave frequency'.
Is it possible? Who knows.
It's just interesting that it's never happened. Ever. There has never been a point of time when the entire world was at peace. There are always wars because human nature never changes - no amount of 'civilizing' can change that, nor can everyone pretending that we are flawless perfect peace-loving creatures.
Orson Wells came up with that line in the motion picture _The Third Man_. The screenwriters didn't come up with it. The author of the original novel didn't come up with it either (though he liked it). There was a space of time in the film that needed to be filled, so Orson Wells filled it.
The full quote is:
Like the fella says, in Italy for 30 years under the Borgias they had warfare, terror, murder, and bloodshed, but they produced Michelangelo, Leonardo da Vinci, and the Renaissance. In Switzerland they had brotherly love — they had 500 years of democracy and peace, and what did that produce? The cuckoo clock.
