
As venture capital dries up, tech startups discover frugality - prostoalex
http://www.latimes.com/business/technology/la-fi-tn-tech-downturn-20160429-story.html
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zeemonkee3
There's lots of talk in there about office space and perks like ping pong
tables and beer on tap and the like.

I wonder however if "frugality" might extend to software development practices
- for example, we're not going to rewrite the frontend in ReactJS this month
because it's working fine as it is and we need to concentrate developer time
on new (profitable) features.

In other words things like "JS fatigue" (not pointing at JS in particular) are
symptoms of over-staffed, over-funded teams looking for things to do.

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leetrout
I would caution a counter point that this wouldn't be a bad thing if it were
reducing technical debt or improving automation. Of course, you did say
avoiding it if it were working fine, but sometimes things that work fine still
end up having a lot of impact on day to day routines and ability to get work
completed.

I'm focusing a bit more on devops so naturally I would defend my point of view
and job security but I think if you have some balance in there with regards to
rewriting something to reduce technical debt in some fashion would be OK.

But I'd venture a guess that lots of organizations have to find that middle
ground between building constantly vs remodeling / improving the foundation.

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zeemonkee3
"Rewriting something to reduce technical debt" is the kind of nuclear option
you would use if you had money - or developer hours - to burn.

Technical debt is better managed through gradual refactoring as part of the
normal development processes. Of course there's still going to be a struggle
between taking time to maintain code quality and sales wanting the next
feature yesterday, but it's a different argument than "we want to rewrite this
in shiny new framework X because someone on Hacker News said so" (not that
this _exact_ argument will be used, of course).

Automation I'd see more as a sensible move, if it reduces costs in the long
term. Again it may take a back seat to short term priorities, particularly
when cash is short.

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leetrout
Yes, indeed, I agree with all your points. And in pretty much all cases I
would opt for "gradual refactoring" (and hopefully with lots of tests before
starting).

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jondubois
I was really surprised at how expensive a lot of B2B software tools were
considering how easy they were to build. Then I remembered that a lot of these
companies have to feed hundreds of idle investors, board members, advertisers,
landlords, property managers, etc...

Anyway, so I got together with a co-founder (a big open source contributor
like me) and we built a cheap realtime pub/sub (push notification) service:
[https://baasil.io/#!/plans](https://baasil.io/#!/plans)

We are like a tenth of the price of some of our competitors but our profit
margins are still ridiculously large. I guess it's because we don't have to
give our profits to hundreds of idle investors and board members. We just have
to feed a couple of hard-working engineers (myself included).

I look forwards to this new age of frugality and restraint with open arms.

~~~
morgante
More accurately, you don't have to pay a bunch of sales people. Sales is the
dominant expense of SaaS companies (many SaaS companies in fact have more
salespeople than engineers, especially when you consider that most "support"
people are in fact sales).

Baasil looks interest. I've also never heard of it, but I have heard of your
competitors—thanks to the marketing/sales which their higher fees pay for.

If you're actually planning to grow a business, you need to cover acquisition
costs in your pricing. For many businesses, CAC is by far the biggest expense.

~~~
jondubois
Yes, true. I do think that generic B2B software services like this should be
treated more like commodities. Maybe this will happen as more competitors
spawn up.

In my view, paying to advertise such a service is equivalent to a farmer
paying to advertise his wheat.

~~~
jkarneges
A farmer may not have to advertise his wheat to consumers, but he still needs
the stores to know about him if he's going to sell anything. I'm not a farmer,
but I would imagine this would mean advertising or doing direct sales with
stores. Also there is such a thing as commodity advertising. :)

Nobody really wants their product to be a commodity though, as that means low
margins. Fortunately, software products tend to be complex enough that even if
there are generic product categories (e.g. "email service provider"), there
are still ways to stand out. Even the "pub/sub service" market has quite some
variety.

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duncanawoods
For real frugality, I'd like to see much more innovation supporting non-
collocated teams. The advantages are huge for everyone to work from home: no
offices, no commute, recruit from anywhere without relocation. Instant
messaging isn't enough. 10 years ago we had always on video phones and such.
What is state of the art today?

~~~
RHSeeger
> no offices

Don't forget that, in working from home, you do want to have an office; its
just a home office. For a lot of people, that means paying more for a home
with an office room. Overall, working from home doesn't save money, it saves
time (which is, at least to me, worth more than the extra money is costs to
work from home).

~~~
leetrout
Yes, having a dedicated working space is very important. I think when you have
people that work remote and cover their own working environment costs it is
cheaper for the company on the whole.

But if the company is assisting remote work, e.g. paying for coworking space
with an allowance that is probably still cheaper. Consider a team of 10...
Even at a $200 / mo allowance for coworking that it still only 20~30% of what
it would cost per month for a decent space in most major cities and there's no
long term commitment.

So I think when you scale it out for small to medium teams it is cheaper and
would be cheaper for a lot of startups that weren't already in a shared space.

~~~
duncanawoods
Yep.

Even if every employee worked in their own coworking space, the advantage is
that they can choose one within walking distance of their front door.

No-one needs to cause carnage to their family life if they are forced to
change jobs multiple times. The idea that to find a job, you have to relocate
and separate your children from their friends, clubs and schooling is quite
horrifying really.

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coldcode
As long as Facebook and Google pay interns and recent college graduates
ridiculous salaries, then startups have to match them. As long as they offer
crazy working environments with massages and free food and fantasy offices,
then startups have to do the same. At least in SV frugality isn't a word.

~~~
jonwachob91
Maybe, just maybe... What a startup lacks in fringe benefits they can make up
for in solving real/unique/enjoyable problems ;)

Oh... And escaping corporate BS.

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philangist
But most startups aren't even solving those types of problems. They're
building marketing analytics or hr management or food delivery software..

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dhimes
I think he means solving these problems in the work environment.

~~~
jonwachob91
Not really... But if you want to interpret it that way it's still a valid
point.

I meant not working at the startup doing marketing analytics (although this
could be fun if the problem is unique and challenging) hr management or food
delivery. Maybe look for the next Pied Piper and work for them :D

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faraggi
I might be generalizing, but I get the feeling this is how world-wide start
ups have operated for a long time. The reality I've seen (in France and Chile)
is quite different from what I've heard of Silicon Valley Startups.

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noir_lord
Also virtualpascal is good for this, better language than BASIC and the
included IDE is very TurboPascal like.

After that there is Free Pascal and the excellent Lazarus IDE which allows
much more modern programming for a beginner in a friendly low friction
environment.

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puranjay
About damn time.

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timeisapear
Where was this general agreement and skepticism about the industry in the
comments for Mims' "tech bubble" article yesterday?

