Why Users Don't (And Shouldn't) Trust Startups

http://tech.li/2012/03/why-users-dont-and-shouldnt-trust-startups/

by edomain • 14 years ago

58 40 14 years ago

untog• 14 years ago

Don't?

I'd like to see some evidence of that. Don't get me wrong, I think the points raised are legitimate, and there is a future danger that people won't trust startups, but I'm yet to see any evidence that they don't right now.

gkoberger• 14 years ago

Let's say your company needs a new way to keep track of all its employees. It'll take a long time to document everyone and integrate it with your other systems.

You have to choose between two different products: one by, say, Microsoft, and one by a startup. While I might prefer the startup's version, an established company makes more sense.

lurker143• 14 years ago

But startups like Workday and Jobvite are mopping up customers from Peoplesoft/SAP....

Lewisham• 14 years ago

This is a wonderfully entitled piece.

No company owes you anything if you don't have a contract with them. No person should be indebted to "the users" so much that his/her career stagnates because of it.

edomain• 14 years ago

That is a fair assertion- but, a perfect example for me is the online app picnik (picnik.com)that is going away because the team joined big G+

If Google offered to buy my startup, I'd likely sell too....MAYBE. But I wish there wa s away for these apps people fall in love with to live on after their creators leave

lurker143• 14 years ago

Picnik functionality is actually being folded into Picasa Web, er, "Google+ Photos", though.

xpose2000• 14 years ago

Sometimes a startup creates a product just to cash out and make money. Their agenda is often times quite obvious as their product does not solve any particular problems.

Sometimes a startup creates a product because they see a need for it, and then try to find a way to monetize it.

It's up to the user to understand which company to trust.

wavephorm• 14 years ago

Between free online services (Google, Facebook), extensive piracy (bitorrent), and the proliferation of free open source software, internet users have had it drilled into their heads to not pay for anything, ever. I'm in the 37 Signals camp - I think the creators of software and services need to charge for it, and users need to start paying for software they like.

jiggy20112• 14 years ago

Agree totally, also I generally hate the ad supported model for software (there are a few exceptions like stack overflow).

I have downloaded android apps where the only option is a "free" version supported by ads, this makes the UI messy and means that I click ads accidentally when using the software. Often the software itself is actually useful and I wish they would just give me the option of paying them $x for a copy without the ads.

ahoyhere2• 14 years ago

Considering porn was a $13 billion industry last year, I think people dramatically overestimate the cost of piracy.

That number's from Wikipedia, in case you're wondering.

Certainly we sell downloadable digital goods, easy to pirate, and have seen no appreciable falloff in our income over 3 years.

freshlog3• 14 years ago

A simple way to show that your app is going to be around for the long haul is to charge users money for it, the founder of Pinboard, a paid bookmarking web app says it best:

http://blog.pinboard.in/2011/12/don_t_be_a_free_user/

While conducting the beta test for my selective link sharing-via-email digests tool, Handpick:

http://handpick.me

I asked my users whether they'd pay to support the app to run for the long haul. They love my app enough to say yes and were delighted that they could actually actively fund the operations and development.

Go on, try asking your users if they'd pay for your product. It's the best validation you can get!

vibrunazo• 14 years ago

> Go on, try asking your users if they'd pay for your product. It's the best validation you can get!

I'd be very careful with that. While I do partially agree with it, it's very easy to overvalue what your users tell you. Not only there's the danger that Steve Blank points out [1], that you might be making the mistake of listening to the wrong costumer segment (which is really hard to tell). But there's also the problem that, deep down, no one really knows what they want, much less how much you would pay for what you want. There's a huge discrepancy between "how much your costumer will tell you he'll pay", and "how much he'll pay". And telling the difference between those is also really hard to do.

So do ask your users. But take their opinion with a grain of salt and try other validation methods to complement it (A/B tests, analytics).

[1] http://steveblank.com/2012/02/27/killing-your-startup-by-lis...

ahoyhere2• 14 years ago

In my experience, you have to worry much more about people saying they won't pay (when they actually would) than saying they will pay (when they actually wouldn't).

I can't tell you how many folks went from "gee, why on earth would I ever pay for that?" when we were building our apps to plunking down money after they saw all that we offered, & how much better our apps would really make their daily lives. Or after they heard about it from their friends.

Don't ask your close friends & family, unless they're total straight-talkers. They may say "yes" when they really wouldn't. But you can't just ask "Would you pay for x?" and take a "No" at face value, either.

That's where salesmanship comes in, and if you're bad at salesmanship, then you will never get a truthful result by asking.

georgemcbay2• 14 years ago

I don't know that calling out Kevin Rose personally is fair, but I do know (and have mentioned on Hacker News several times in the past) that I'm far less likely to invest any time using the products of startups because I've been burned multiple times by a service that I came to enjoy using disappearing nearly overnight.

This isn't just a problem for startups (though for practical financial reasons it tends to occur on a bigger scale there), it is basically a huge problem for the entire web app ecosystem in general. In the desktop-centric past there were apps I used that were killed off but I continued using for years afterward because the existing code didn't suddenly stop working when it wasn't being supported anymore. The web gives you no safety net here, once the app is killed the servers are likely to be brought offline within a matter of days/weeks and then you're usually SOL.

Feels bad man.

freshlog3• 14 years ago

Would you feel more confident that the app is going to be around in the long haul if they charged you money for using it?

See my other comment about charging users money too.

georgemcbay2• 14 years ago

Charging money just by itself isn't enough to boost my confidence, charging money and reaching a publicly obvious critical mass of users combined would help but then you've still got a chicken and egg problem in creating that critical mass.

epo• 14 years ago

If you can't meaningfully export your data from the service (such that you can reuse it in a different context) then treat the service as disposable. This is true whether startup or not but is especially true for startups. For similar reasons be wary about subscriptions. All startup founders, all of them, are get rich quick fantasists, some are justified in this, most are not, don't entrust them with anything important.

jpdoctor• 14 years ago

> then treat the service as disposable.

This has implications for pricing.

narrator• 14 years ago

Speaking of app longevity: Recently, I had someone email me saying that they were including some shareware I wrote in the mid-90s in a collection of software that they were going to be bundling with a Mac 680x0 emulator. Look at all the ancient games from the 80s that are still around in emulators and what not.

aw3c2• 14 years ago

I'd rather call this "don't trust anyone who is not you to give a rats ass about your data" aka http://ascii.textfiles.com/archives/1717

lurker143• 14 years ago

Um, nice article?

Title: FUCK THE CLOUD

Headline: FUCK THE CLOUD

Conclusion: Hell yeah, use the Cloud, blow whatever you want into the Cloud. The Internet’s a big copy machine, as they say. Blow copies into the Cloud.

Nice backpedal.

There's one line of excellent advise in that rant: "Don’t blow anything into the Cloud that you don’t have a personal copy of.", but it's buried in a mindless ramble.

chintan• 14 years ago

Why just startups? here are a few counter examples:

Google Health, Desktop,..

Microsoft Money, Encarta,...

Apple G4 Cube, Newton,..

stephencanon• 14 years ago

I can't speak to the Google examples, but the Microsoft and Apple examples were products, not services. They didn't magically stop working when Microsoft/Apple stopped producing them -- In fact, I know someone who still uses his Newton today.

laconian• 14 years ago

I bet the dozen people that used eWorld were pretty PO'd. ;)

WadeF• 14 years ago

> This is an excellent business model for founders, but it’s a raw deal for users.

How many free app companies get to a point where this business model is actually aplicable for founders? Very few I doubt. Calling it an excellent business model is a little short sited.

rokhayakebe• 14 years ago

To everyone who cries about this and cares so much about users, why don't you simply create clones of these services and rescue users. Both Posterous, and Oink aren't technically challenging. Stop crying and do it.

But note mainstream users don't care. Did mot users even use the application once a week? This is simply the voice of a small group of startup techies who know who K.R. is, mainstream users do not know. Furthermore this is not as if someone shut down 911. This not a life-threatening issue. And for the love of everything, please stop insulting the guy, he does not owe you anything.

moocow01• 14 years ago

Sounds like a great way to get acquired.

dirkdk• 14 years ago

lets stop running web sites for free and charge users $1/month. Like on all web sites. Curious what the uproar will be

k-mcgrady• 14 years ago

That would kill the internet over night. Think of the thousands of links you couldn't visit because you need to pay that site $1. The internet is supposed to help people access the world's information. If you charge $1 per site they would have to choose a few sites to use and not use any others - and they could end up getting fed biased information. The other problem would be content ownership. If you embed YouTube videos on your site and charge $1 to access your site are you charging for access to that content (which you do not own)?

tlogan2• 14 years ago

It is not like that: you should not relay on a service for which you don't pay.

Yes certain services needs to be "free" (since they are social network kind of things), but for services which hold and manage your data, email or anything like that (something like cloud storage, email, project management, source control, etc.): it is stupid to have a free service handling that.

But I still meet people who pay $5 for starbuck coffee every single day, but they use some free system for their cloud storage. And Dropbox is just $10/month.

Somebody will say that paying for some service still does not guarantee the service will be around. Yes it is true: but chances are lower.

talmand• 14 years ago

You should not rely 100% on a service you pay for either, be ready to switch gears on a moment's notice as fast as possible. You never know, the US government may shut them down without warning due to some government bureaucrat trying to get his moment in the spotlight.

tlogan2• 14 years ago

I agree: paying for a service does not guarantee that the service will be around. However, if the service is 100% free, then it guarantees that none of the users of that service are actual customers.

Osiris• 14 years ago

The nice thing about selling a desktop application is that the software will work even if the company goes out of business or shut down since it's just a locally running application.

Perhaps users should start demanding that startups provide an "Export my data" feature as a core function so they at least always know they can get their data back out at any time.

jiggy20112• 14 years ago

Problem is that you need to be able to re-import it elsewhere , so you are relying on another company popping up that is going to target customers who are leaving the last one.

Also you still get some problems with desktop software too, for example if you are using a proprietary desktop app that has an unpatched security vulnerability that will never be patched because the vendor went out of business.

wildmXranat• 14 years ago

I believe it's a consumer to business relationship overall. What would make a difference is if there was a contract that protected consumers against loss of service. If this was approached as a default behaviour, it would single out the odd, shrewd business that flips the switch and turns off the lights.

That brings me to a topic of balancing consumer and business rights for the sake of continuity and data protection. What if this was a movement on a wider scale ? How would that affect risk taking on the business side, and liability to provide or hand over the service at the end of their turn ?

NameNickHN• 14 years ago

As a startup grows, so does the user or customer base. First come the early adopters. If you're one of those, you should be prepared that the service you're using can be discontinued any day. That shouldn't be a problem, because, being an early adopter, you already have the next new thing in view.

Once the early adopter phase is over, a service should - in my opinion - have started making profit. It's very nice for a startup to have enough funding to take their time while figuring out how to generate revenue, but from the user's point of view, that's hardly reassuring.

Users should trust services, that are making money. It reduces the risk of the service being shut down when the funding money runs out or the company gets bought.

CPlatypus• 14 years ago

When exactly did "startup" come to mean only "social web-oriented startup that has access to user data in the first place"? I mean, come on, I know that's the kind of startup the YC folks specialize in, but there are other kinds. There's software that doesn't run in a browser, doesn't require a login, and doesn't serve ads . . . but you wouldn't know it from articles like this, which say you shouldn't trust startups because of a phenomenon specific to only one kind of startup. Is it too much to ask that people who write about startups not limit themselves to one kind?

qq66• 14 years ago

This is why I prefer to use the services of companies that have a viable and long-term business model, such as charging me money for a service.

I didn't want this to be a barrier to people using LiveLoop (my startup) for PowerPoint collaboration, and have to worry about their files going missing, so we offer customers the option to run their own server.

Why Users Don't (And Shouldn't) Trust Startups

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