rstocker99

That drive through customer… oh my. I have new found empathy for drive through operators.

If only handloom operators hadn’t been replaced by steam looms we’d all be in a better place.

Postgres RDS has version 0.5 of the pgvector extension installed by default.

Adding vector support to our app was as easy as enabling the extension and created a table with vector columns. No additional database required and trivial to do mixed queries. Maybe Pinecone and friends have better scalability, but if you need basic vector support, you can do it easily on RDS.

See here for details:

https://aws.amazon.com/about-aws/whats-new/2023/10/amazon-rd...

Likewise! Hope you are well too.

One of my friends does a productized (fixed price) roadmapping session (1) as part of a larger "build your MPV" service. My understanding is that it works out really well for him and his clients. They get to try him out with a fix priced engagement. The output leads naturally to the next step in a larger engagement. If for whatever reason it doesn't workout the client has useful documentation they can take to someone else.

(1) https://www.reemer.com/consulting/build-mvp

Unfortunately, I don't think you're going to find a good way to ballpark their financials without them supplying them. It's common in the cold email to say something like, "Our sweet spot is companies with an EBIT of $X-$Y". So the person you're contacting knows if they are too big or too small.

For deals of this size you can also look for smoke signals e.g. you're looking to buy something for 200k-300k in EBIT and you go to their about page and find 50 employees you're probably barking up the wrong tree.

It's also worth pointing out that you're looking for one person to say yes. If you hit on folks that aren't a fit and never email you back or laugh you away so what. That's the nature of the game. You just need one.

There are lot of similar type formulas. For larger deals you'd have some form of vender (seller) financing which is what the above really is. It's a type of loan from the seller. For smaller deals that are reasonably competitive you're going to probably have to do an all cash offer.

If you think you're in a good negotiating position or if you've got concerns about the business then a vender take back or an earn out or both should definitely be on the table. It never hurts to ask ;).

For sure. As a seller I think services like FE make a lot of sense. They have relationships with a lot of potential buyers to put your business in front of. Unless you're well connected it's going to be a lot harder to drum up buyers on your own. As a seller what you want is an auction where multiple buyers are competing to buy your business.

As a buyer that's the last thing you want because it drives the price up. See point 6: http://www.berkshirehathaway.com/2000ar/acq.html.

Are you asking about valuations? FE has a post on how valuations work. It's pretty simple. Basically a multiple of how much cash you can take out of the business. If that number is small and not growing then the multiple is small. If the number is big and/or growing fast then the multiple will be larger. The key is it's about how much cash the business makes now vs. traditional tech VC land is about... how big this might be some day maybe.

If you're interested in buying a business the people who know how all this stuff works are the private equity people (PE). These guys do this stuff all day long (obviously at much larger scales. If you search you can find a fair amount of info on PE. On a smaller scale there is good info from people researching search funds. Search funds are basically small scale PE. Here's a good starting point: http://www.gsb.stanford.edu/faculty-research/centers-initiat....

From the seller's perspective you've got to have a buyer and buyers at this price point buy on a multiple of SDE vs. development cost. If dev cost is greater than what buyers will pay then as the seller... you're probably going to have to eat it and take less.

Importantly as the buyer a big part of what you're buying is customers that you can talk to and work with vs. just the code. If we thought Codetree would have taken twice as long to build but had zero customers we wouldn't have bought it at half the price. Having paying customers proves that you've bought something that other people value. Buying code just gets you code and you may find out that no one will ever pay to use it.

Having your financing together is going to give you a leg up in a competitive deal for sure. Of course not all deals are competitive so it might not matter. In some cases your bank will give you a letter saying they are willing to lend you $X under reasonable circumstances which might help you get in the door with with sellers by convincing them you can close even if you don't actually have the cash upfront.

See my comment above on the alternative approach. The short answer is to approach the problem the other way. Build a list of businesses you'd buy and start emailing.

kareemm has already answered the questions about financing but I actually think your second question about "where to find these deals" is really the more interesting and important question. The obvious answer is places like FE where we found Codetree but that was a total fluke and it's not the right way to approach it.

The truth of the matter is that many business are for sale if you ask. The right approach is to think about the type of business you want to buy, build a list of all of the ones that fit and to cold email them and see if they'd be interested in selling. Basically the same approach you'd take if you were trying to sell B2B software i.e. Predictable Revenue style.

I can already hear people saying, "No way people don't do that" or "That would never work" but it does and people do. In fact we know a number of people that bought their businesses using that approach and it is exactly what we were about to start doing before Codetree fell in our laps. It's also the way that a lot of PE, VC and search fund deals get done.

See my comment up the thread. It seems like that might be changing at least in Canada. I've heard similar things about SBA loans in the US though so perhaps similar changes are afoot in the US as well.

(I'm one of the purchasers of Codetree) I had also thought that banks wouldn't be interested in lending in cases like this but surprisingly enough when we talked with our bank after we made the purchase they mentioned they'd be very interested in financing us if we were looking at buying other software businesses in the future. When I had talked with them a few years ago there was no way they'd have loaned money for a purchase like this because it has no tangible assets. They told us straight up that they understand the world is changing and they are now interested in making these types of loans. They get that small businesses owners today are just as likely to be software companies as they are to be restaurants. We're Canadian and our bank is TD.

Actually this is why I'll likely use GDrive and it's one of the few things that leads to frustation for me with Dropbox.

I use Dropbox for two reasons: backup and sharing. Almost everything I have in Dropbox is documents. I mostly use Google Apps for my document editing needs but I sometimes use Office b/c I prefer Excel for complicated spreadsheets. I also use Word when the folks I'm sharing with aren't hip to Google Apps and/or I need to do a level of formatting that Google Apps doesn't support. I prefer Google Apps to Office because the collab is so good.

Because I use both Office (files) and Google Apps it means that my docs live in two places. Dropbox (my local hard drive) and Google Apps. That drives me crazy. Where does that doc live again? Why doesn't it show up in Spotlight searches? I want them in one place. I could manually import/export but I'm lazy and can't be bothered.

Also GDrive could make for a great leaver to get "normal people" that use Office to start using Google Apps.

That is an example of a great headline. It's amazing how effective good copy writing is.

First off this is a great idea. I'd pay (see caveats below).

100% agree on YABP. It never even occurred to me that this would lead me into your "non-standard" blogging platform. I can't imagine most people wanting to do that. I know I wouldn't.

But I think combining this with WordPress hosting would make for a killer unique selling angle for non-tech savvy folks that need to setup a blog for their business. Selling a one-time use blog template generator isn't super compelling. Recurring revenue is SO much nicer.

If it was me I'd either:

1. Go into the same business as http://wpengine.com/ and use this as the differentiator or

2. Make this in to an engine you could sell to every company that hosts WP and it's friends.

Well that would explain it wouldn't it.

Branding is already better.

Picplum reminded me of picwing which I believe is another YC company.

I had a chuckle when I noticed that they both have the exact same testimonial from Jessica Livingston, modulo the company name.

I'm not quite sure how both can be true:

"Picwing is the easiest way for me to get digital photos printed. I just email pictures to my account and never have to think about it again. With Picwing, I can be sure that my family back East receives photos of my new baby regularly. They couldn't be happier!"

"Picplum is the easiest way for me to get digital photos printed. I just email pictures to my account and never have to think about it again. With Picplum, I can be sure that my family back East receives photos of my new baby regularly. They couldn't be happier!"

http://dl.dropbox.com/u/3637134/quotes/jl_picplum_quote.png http://dl.dropbox.com/u/3637134/quotes/jl_picwing_quote.png

You know what would get me excited? A post that advertised, "Domain expert with deep understanding of high value business problem and strong selling skills looking for technical cofounder". Ring me up when that guy posts.

This is something that I've wanted for awhile. Even better would be recording session data your collecting and then giving a means to play it back so you can actually "see" the what the user does. Maybe using Selenium or something for the playback. This later feature would be killer for business users who would likely find the current event stream a bit intimidating.

I think your right though. Being able to watch 20ish user sessions for particular flows would really help you understand how to tweak things to improve conversion rates.

You know what I'd pay for? Enterprise sales office hours and online customer acquisition office hours. That would rock. Basically 15 minutes of an experts time over Skype. They'd have to really be an expert but I'd happily pay.

This is topic that is near and dear to my heart as well. I'm not sure there is a well worn path especially if you're looking to start a business (i.e. something that puts cash in your pocket vs. "starting a startup").

From my experience the trickest and most difficult areas are around customer acquisition and monetization. Both are sort of black arts and are tricky (at least for me) to learn. As best as I can tell these each take a lot of practice. Anyone can list out tactics from the "big list" but knowing which ones to use when and how to taylor them to a particular business isn't easy. Typically you can't know which will work in a given scenario until you've tried them in the individual business in question. It appears that this is an area where deep business experience (at a P&L level) really pays off.

You talk about build, learn and then acquire but the devil is the details and your perspective on how to approach these things is of critical importance.

I think there is huge benefit (especially for technical folks) in spending some time upfront during the idea stage (i.e. BEFORE coding) really thinking through who will pay you, why they will pay you and a rough sketch on how that scales up into some meaningful cashflow. Do the back of the envelop arithmetic and prove it makes some basic sense. This sort of backwards thinking on how you will actually make money from your efforts is the difference between coding software and starting a software business regardless of how small or large it will be. This business level thinking should be a key part of your everyday idea validation process. Something that you are doing all the time as you have ideas for businesses to start. It helps you develop some instincts on what might make money and what actually won't.

Obviously you'll be wrong in a million different ways that you'll never know until you actually plough forward with an idea but you'll be less wrong than you would have been if you just pick the first cool idea and start coding. You'll also develop useful assumptions that you can check. Learn to share these thoughts with other people (and potential customers) to deepen your understanding.

You're likely already in good position on the technical side so I'd suggest focusing on sales, marketing and general business side.

For books you'll likely find a lot of value on http://personalmba.com/best-business-books/ and on http://www.joelonsoftware.com/articles/FogCreekMBACurriculum.... Some also mentioned Four Steps to the Epiphany which I think is required (if not totally pleasant) reading.

Books are great. They will give you useful background and food for thought but at the end of the day you need to JFDI. If you're like me that will be a bit scary but there really isn't another option if this is path you want to pursue.

It also helps if you make some connections with other folks who have some experience to get ideas, perspective etc.

If you're interested in discussing in more depth my contact info is in my profile.

The fact that the company was rejected by YC and went on to get bought by google seems relevant given the forum and the timing.

Lots of people have recently been rejected by YC and hearing about people that have gone on to succeed seems like it might give an emotional boost to people that have applied and not got in. Seems like a worthwhile trade off for the extra "noise".

I'm not sure the problem is that most politicians don't have a decent grasp of the power of incentives or lack a basic understanding in economics.

Unfortunately I think they are in fact extremely adept at understanding incentive. Is it possible that you haven't carefully considered which incentives are driving their behaviour :).

If you're doing something enterprise-y (which it sounds like you are) then you should take a look at the article, "Sean Murphy on the first dozen enterprise customers" that was recently posted to HN here: http://news.ycombinator.com/item?id=1671852

It goes through the process of getting your first customers in detail. It jives with my personnel experience and some others I see on this thread.

Key point: Go through your network and find a way to get introductions to folks in your target market. Be creative on this. Once you've got an introduction leverage it to get more e.g. "Do know other folks that you think would be interested in a solution like this? Could you provide their contact info?" etc. Repeat.

1) Books. A number of years ago when the startup I worked for got acquired my wife suggested that I go out and buy myself something nice to celebrate. After wandering around looking for something fun to buy and not finding anything that excited me I eventually bought myself a $10 book.

2) Things that save me time and make my life more convenient. Often this means services vs. products e.g. paying someone to do work around the house I don't want to do. I'm a sucker for convenience.

3) Good food. Because I love to eat.

4) Experiences e.g. travel. For some reason paying for something that will provide a lifetime of memories always seems worth it.

I'm not particularly price sensitive. If I perceive what I'm buying as worth it I'm happy to pay. For example, if I'm buying a steak at the butcher I'll pay more to get a really good ribeye vs. a cheaper cut.

In general I'd rather have less stuff but really enjoy what I have.

If you're into this sort of thing and want an engineer friendly breakdown of different approaches for getting off fossil fuels that actually add up I highly recommend, "Sustainable Energy – without the hot air". It lays out a number of alternative plans complete with plenty of math :).

The book is available online for free. It can also be purchased at Amazon. http://www.withouthotair.com/

It's written by David MacKay a Professor in the Department of Physics at the University of Cambridge.

How often have you picked one product over another because of a key difference between them besides price?

Price is an important difference but not the only one and not the most important one for all people all of the time. Be different on something besides price and move on.

Before heading down the freemium path be sure to take the time upfront to build two bottom up revenue plans. One plan for freemium and one for strictly paying customers. Be sure and include a detailed breakdown of each of the channels you'll be using to acquire customers and their costs. It's ok to make educated guesses here.

It can be quite painful so see how many customer you'll need with freemium before you reach your revenue goal and what it will cost to get them vs. just charging. Are you sure you're setup for that? Does it make sense given the size of your market? Given the likely customer acquisition channels available to you and their costs. Does it work with your budget?

Not everyone is Facebook.