Are you building an R&D lab or a business

http://markmaunder.com/2010/r-and-d-lab-or-business/

by mmaunder • 16 years ago

47 14 16 years ago

adamilardi• 16 years ago

Without investors or a nice endowment it's hard to work the years needed to create a nice "r&d" product. If I launched twitter the first server bill would have put me out of business. There is a balance between making something cool and something "uncool" that people might pay for today.

jerguismi• 16 years ago

If you would be building the Twitter, had no money and server costs were exploding, I guess it would be pretty easy to get some money somewhere by just showing your visitor stats?

mmaunder2• 16 years ago

That's correct for an angel round in the valley right now provided the stats are very recent and they're trending upwards i.e. your growth is accelerating.

The reason is because growth is what all valley angels look for. So if you have growth you create (as Cialdini would put it) social scarcity for your stock which creates a feeding frenzy.

This is only in the valley. Seattle (where I'm based) is different. Many startups here focus on generating revenue from early on and there is less growth based demand. The valuations here are also lower. I think the number of investors is the reason. Not enough for a feeding frenzy and less growth-based exit stories to fuel the appetite.

lsc4• 16 years ago

really? Servers are cheaper than you think, if you don't use the cloud.

I got a quote from one of my vendors the other day... fifteen hundred bucks a month for a full gigabit of traffic and 15 amps of power. (now, I haven't bought from this guy, so I dono... but he is reselling he.net bandwidth, which is fine stuff. I got another quote direct from he.net at a /much/ better data center for just the gigabit, and they wanted two grand a month, before negotiation. Now, for me, power is a big deal and bandwidth is less so... but both are pretty cheap when you get down to it.)

that's enough power to run 9 single-socket 8 core 32GiB ram opterons, give or take. each one of those puppies is about two grand in parts, give or take, before disk. And a gigabit is a ridiculous amount of bandwidth, especially if you mostly push text and thumbnails.

Now, I don't know how much ram/cpu/disk per user twitter uses. But you can push rather a lot of text with that much cpu/ram, and a grand and a half a month is pretty reasonable 'hacker with a job' sustaining money... hell, the 18 grand for the servers isn't any more than you'd pay for a low-end new car.

Now, obviously, working full time and running a startup is /hard/ - but my point is that you don't need VC level money to do this... just about any fully employed hacker has the means to support a ridiculous amount of infrastructure.

teisho• 16 years ago

> Servers are cheaper than you think, if you don't use the cloud

I'm confused why the cloud is viewed as expensive. For managed hosting on a big name provider perhaps, but there are dozens of virtualization providers who are capable of providing power and bandwidth for unbelievably small amounts of money.

Sure you don't get the uptime, reliability, and support of a big name host, but it's usually good enough. From what I've gathered, twitter's growth has not been severely hampered by the fail whale, especially in the beginning.

Once you've reached critical mass, you can move on to a larger host. I think it makes sense to rent rather than own, especially if you're just starting out.

javanix• 16 years ago

Wow, from the title I thought that article was going to take the opposite tact (ie, you should be building a business, not an R&D lab).

Very interesting though.

JangoSteve• 16 years ago

And every one of them is focused on generating cash in their business. The road they’ve chosen is a longer, harder road with a lower chance of success but a much higher reward (think Michael Dell, Bill Gates, Larry Ellison) if they succeed.

Wait, so generating cash in your business has a lower chance of success than getting acquired? Maybe it's because I'm not on the west coast, but I know at least 20X more people with cashflow-positive companies than people whose companies have been acquired.

Or maybe he just means they have a lower chance of becoming as successful as Dell and Gates and Ellison, than others have of being acquired. But he seems to imply that if these people don't generate as much cash as those super-companies, that they've somehow failed.

...which reminds me of the thread on here not long ago on when exactly a startup can be considered successful: http://news.ycombinator.com/item?id=1383566

Are you building an R&D lab or a business

Related Stories