
Ask HN: When has big $$$ before product-market-fit ever worked out? - ungerik
While it&#x27;s always usefull to be great at fund raising, it seems not always wise to raise big $$$ before achieving product-market-fit. When such a startup fails, it always makes for great headlines and 20&#x2F;20 hindsight commentary.<p>What are good examples of where it did work out great? And what can we learn from it?
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rwallace
The underlying assumption behind the negative attitude here is that everything
worth doing, is easy. That for every line of development which will turn out
to be worthwhile, it's possible to build a minimum viable product on a
shoestring. This is an understandable idea, because it would be great if it
were true. It would be very handy indeed if the universe worked this way.

Unfortunately, it doesn't. Sure, it's true enough for websites because the
industry spent several decades building infrastructure to the point where a
couple of guys in a garage can build a website. It's not true for much
anything else. If we want to make the transition to clean energy before we
wreck our environment, if we want to do something about the degenerative
diseases collectively referred to as old age before we all bankrupt ourselves
trying to prolong dying, if we want to get off this planet before we get snake
eyes on the cosmic dice, we need to get back into the habit of understanding
valuable goals need big investments.

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mentos
Pixar -
[https://en.wikipedia.org/wiki/Pixar](https://en.wikipedia.org/wiki/Pixar)

"..the Image Computer never sold well.[21] Inadequate sales threatened to put
the company out of business as financial losses grew. Jobs invested more and
more money in exchange for an increased stake in the company, reducing the
proportion of management and employee ownership until eventually, his total
investment of $50 million gave him control of the entire company."

I highly recommend reading 'Creativity, Inc. - Ed Catmull' which talks about
how Pixar was formed.

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whatshisface
Steve Jobs is probably the only person in recent human history that you would
actually want to have controlling your company instead of you.

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rafiki6
No. He was a huge jerk. I'd prefer someone who is just as brilliant and less
of a jerk. They exist, I've worked with them and they have contributed far
more to society than building over priced toys. Let's stop giving credit to
this a-hole.

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rafiki6
I don't know why this got down voted. It seems people don't appreciate honest
opinions here. There's more evidence that he was a jerk than there isn't. He
didn't need to be a jerk. His company doesn't contribute a net positive to the
world. They haven't necessarily made computing more accessible especially
since the primarily target a higher end market, and offer a very closed
system/ecosystem. I stand by my argument. Steve Jobs was an a-hole and other
equally intelligent business leaders who aren't a-holes could have done what
he did.

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klohto
> they have contributed far more to society than building over priced toys

You consider this honest opinion?

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rafiki6
It is an opinion and it is honest. So yes. If you don't share it about Apple
products great.

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sivayetski
Palantir and Addepar both would have gone bankrupt many times over if not for
Peter Thiel and Joe Lonsdale's fundraising ability, which kept the companies
solvent long enough to survive and stumble onto an even footing.

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kanishkvashisht
Segment -> Raised some 100k-ish $ after YC, didn't find PMF till their 3rd
iteration on an insanely different idea.

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cm2012
$100kish is not a lot in context though. Products like magic leap have raised
hundreds of millions before PMF.

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burtonator
The push toward PMF has been really great for the industry and really helped
avoid wasting a ton of cash.

The only argument AGAINST it rally is when a team has a proven track record
and already KNOWS how to find PMF and knows that it has value.

PMF is amazing when you do it right. With
[http://datastreamer.io](http://datastreamer.io) we were actually a meme
tracking app (similar to hacker news) but what ended up happening is that
people basically said "hey, that's cool and all but we really just want to
license your blog data crawling platform".

At the time I was thinking that I could just use the licensing sales to
continue developing the meme tracking app.

At some point it just dawned on me that we had 10-15 customers and that it was
the tail wagging the dog so I dropped the meme tracking app entirely and then
focused on the crawling and data licensing component.

For Polar, [https://getpolarized.io/](https://getpolarized.io/), (which is
something new I'm working on) I needed it for my own personal use as my
document collection was getting out of hand and I need some way to manage
annotations. I wanted something close to an IDE where I could keep all my
books and web content tagged and in one place.

Initially I was worried that there might not even be a market - even as just
an OSS product.

We've been soft launching for about 2 weeks now as an MVP and the results have
been really fantastic.

The app is definitely not complete - not by a long shot. There are pretty
clear holes in the app. For example, I shipped it without the ability to
delete books - which is kind of important.

If your customers are willing to put up with a feature incomplete and a broken
app and are interacting with you and requesting new features and suggesting
bug fixes - well you might be on to something.

I think the trick is realizing the minimum viable product that you need to
ship to measure this and then iterate from there.

If you keep iterating on an MVP that people are actually USING you will
eventually hit PMF and then take off.

None of this is new though.. the whole lean startup space talks about this
excessively.

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justboxing
Checked out Polar. Looks really cool!

Serious question: Why is it free? How would you be able to support and
maintain the product if you aren't charging for it?

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EGreg
Any product that took a lot of time and effort to build before it was
launched.

Such as Lightbulbs, Cars, Airplanes all famously took an incredible amount of
tests and funding before they achieved product market fit :)

Fundraising is more a function of having access to capital by knowing the
right people or being inside the right company, than about the product. It’s
rare that the product itself is such a new and revolutionary idea that has a
simple implemntation — but perhaps that happens occasionally whenever a new
platform comes out.

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camara
Successful innovation by growing or established companies are examples of this
— one of the superpowers of scale is being able to devote large amounts of
capital to essentially new ventures without having to return to the capital
markets incrementally and therefore pursue growth incrementally. Eg Apple. I
would say this is the _main_ advantage of scale.

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CM30
Ones where the team pivoted early on? I think that's how Reddit got started;
they got funded based on the team with a completely different idea, then moved
over to their current one and made it a huge success. Quite a startup
accelerators fund teams rather than ideas, including the one that runs Hacker
News.

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codingdave
Is Reddit profitable now?

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noodle
Depends on your definition of "big $$$" probably.

I don't have many specific examples, but the cases where it _would_ work tend
to be focused around investing in people with track records doing capital
intensive things.

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aaron_altamura
Most successful AI ventures.

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cp9
Slack

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rajacombinator
Jet immediately comes to mind. Many other examples too.

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jv22222
If Magic Leap works out it would be an example. Of course, we'll need to wait
a few years to find out!

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dplgk
Vine

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collinglass
Paypal, Flickr, Slack

