
What are chances of startup getting funded if it has multiple-unrelated products - kingdomofshawn
I read the post talking about an entrepreneur working in multiple startups(https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=5454804) at a time which brings me to this question. If there are 2-3 cofounders(or may be 1 founder) who work on 2 different unrelated unique products(such as one being a social networking website the other being a financial services iOs app) and they constitute this as 2 products under 1 company(just like Automattic Inc has multiple products), what are the chances of this company getting funded? I mean how do the investors&#x2F;incubators&#x2F;accelerators look at it? Is it the same as working on multiple startups at one time?
My Views:
The positive side being not all the eggs are in one basket so if one fails the other can become the product the company runs on.
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tlb
Investors (including YC) prefer to invest in teams focused on one specific
product. Every successful company will end up competing against other
companies with similar products, so ones that are more focused are more likely
to win.

Investors already have their eggs in many baskets, so additional
diversification within a given investment isn't attractive to them.

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bbissoon
Bingo. There has to be some correlation among the products else you run into
competition on all fronts. On top of this - the competition you will run into
are often solely focused on that product.

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trcollinson
I don't know how incubator/accelerators look at this, but I know that
generally speaking investors think of this as a very bad thing. It is not a
matter of diversifying risk allowing one product to fail while another product
succeeds. It's a matter of amplifying risk.

Starting a single product is very hard. It takes a whole lot of effort, time,
energy, and finance to get a product off the ground and viable. By adding a
second unrelated product into the mix you are multiplying those tasks. Let's
imagine the scenario where the financial services app is doing well in the app
store and the social networking website is struggling. The logically thing
would be to cut the social network loose and focus on the financial services
app. Unfortunately, a co-founder generally won't do that. They will pull the
profits from the financial services app and use that to try to save the social
networking website. This removes resources from the successful application and
pushes them towards the unsuccessful. This probably won't solve the social
networks problems, and it will probably cause problems for the financial
services app. In the end, both will fail.

Some would say you can build a successful business with related product
offerings that are different but complementary. This can be true. It would be
like a car company that also owns a finance arm, an insurance arm, and a
maintenance arm. All are different but complementary. However, again there is
a substantial amount of risk in this and you would have to be well established
for an investor the believe you have what it takes to make a business
ecosystem like this succeed.

At any rate, I would suggest picking a product and sticking to it. If it
fails, then try the other.

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loumf
VCs don't put all of their eggs in one basket, but they want to put them very
specific baskets. They are not looking for you to manage their portfolio.

I would think of them as investing in a team focussed on solving a problem in
a market -- not an investment in the product they currently have. Your product
is your current best evidence that you can execute and know how to try to
solve a problem (the one they care about).

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notahacker
the only way I can see the additional product helping is as a fall-back "we
also started work on Y before focusing our efforts on X", if their reaction to
your attempts to pitch them product X _only_ , gets a "we'd love to fund you
as founders but don't like product/market X"

I doubt people get the response very often, but reportedly Reddit came into
existence when PG told the team they were welcome to join YC if they ditched
their original idea...

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kingdomofshawn
Thanks a lot everyone for your detailed and helpful answers. This definitely
has cleared my mind about building what I want to build.

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3327
Slim to None. Focus is key you have limited resources.

