Insightful Hacker News Posts, #1
“I don’t think that any startup wants to sell to other startups forever. However, in general startups are early adopters, so it makes sense to start there in a vertical-by-vertical approach. No startup can sell a future “billion dollar” vision to investors with a market constrained to just other startups. A startup is differentiated from other businesses by growth prospects and potential, and a startup must grow outside of the startup market to survive. A landing page may not signal long-term vision, but the plan to disrupt a broader market exists in most of the companies.
Some degree of a “House of Cards” certainly exists. Look at Y Combinator — part of its value is being able to sell within the network to other YC startup companies. At demo day, many of the logos on the “current customers” / “traction” slides are other YC companies. When a company doubles in size every year, almost everything breaks — from HR to communication to hiring — so, of course it make sense to start sales with customers whose pains are so dire that the sales cycle is days instead of months. The customers may be startups, but revenue is still revenue. A startup is defined by growth, though, and at some point leads in the startup market get exhausted and a company must search for prospects beyond other startups to continue growth.
Breaking out of a single vertical, whether it’s selling to other startups, a market outside of San Francisco, or even a product that doesn’t cater to just high-end consumers is the key to making it huge. Uber started in a niche market — high-end on-demand chauffeur services to people who could afford their own car, but managed to go beyond that vertical. Shyp just shut down Miami — that’s a far bigger signal than the health of their SF market. Can Mattermark find a market outside of tech investors? That’s the key to justifying their valuation. Many startups will not find develop a repeatable growth strategy outside of other startups, but alas many startups do not succeed.
No startup can continue the growth prospects that define them as a startup by just selling in a narrow market, whether it’s startups, San Francisco, or on-demand black cars. There’s low-hanging fruit in any approach, and the ability to continue growth beyond that defines success.” -philip1209