Ask HN: What are some black arts used by founders?

18 pointsnotabanker4y ago17 comments

I'm hoping this to be a funny-but-it-somehow-works thread of tactics.

Of late I've seen product creators declare staggering (unverified) revenues for their side-projects and make it to the front page of HN.

I've also seen people get keynote talks due to staggering user and revenue numbers they declared. Yet nobody seems to have asked for verification of their numbers.

Can you share examples of unwholesome tactics used by founders that got them results?

17 comments

muzani4y ago

Set aside a marketing budget, and then basically sell the $10 item at $9, justifying that the $1 difference is marketing.

Have a marketplace. Buy $100 of goods from users selling stuff. The $100 is a marketing expense. Add $100 to GMV.

Have 5k users on Android, 3k on iPhone, 8k on web. Add them up to show the product has 16k users.

Raise money from an angel who owns a conglomerate. The angel forces all his businesses and people working in these businesses to adopt the app that others wouldn't otherwise trust. Use these totally legitimate clients to create glowing testimonials.

As an early stage investor, instead of putting a lump sum into the account, create a dummy company (or several) for the purpose of feeding cash into the startup. When you're raising money, just sign off half a million dollars of consulting fees to show that the startup is making money.

Create a review site targeting the users. Write a glowing review about how amazing this app is. Share it to gullible Facebook groups.

ecf4y ago

> Raise money from an angel who owns a conglomerate. The angel forces all his businesses and people working in these businesses to adopt the app that others wouldn't otherwise trust.

In other words, the YC model.

computator4y ago

> Have 5k users on Android, 3k on iPhone, 8k on web. Add them up to show the product has 16k users.

If it's a traditional desktop program like Word or Excel, I think it's perfectly fine to add up users from different platforms (which often even require a separate purchase). If it's something like Skype or Netflix, I can see how there might be some overlap -- the same person might use it from their iPhone one day and from the web on a different day. Is that what you mean?

muzani4y ago

As with all the other examples, there's some legit situations and some less honest situations.

The word hustle describes this activity well: https://www.merriam-webster.com/dictionary/hustle

notabankerOP4y ago

Now I'm glad I started this Ask HN as your response is eye opening. You should write a blogpost about it.

muzani4y ago

That's interesting. I thought this was something everyone has experienced, to the point that it's possibly a Dilbert strip somewhere.

arduinomancer4y ago

“AI” startups that are actually just linear regression/random forest as a service

notabankerOP4y ago

"AI" also gets used for cosmetic reasons. I knew a startup that got acquired. They had a .ai domain with no AI product whatsoever.

avalore4y ago

Sold a small SaaS product 2 years ago, which was marketed as an "AI" product.

Extract from the "model":

                $yearsBetween = $comparisonItems->created_at->diffInYears(Carbon::now());
                if ($yearsBetween <=1) {
                    $multiplier = 1.08;
                } else if ($yearsBetween <= 2) {
                    $multiplier = 1.12;
                } else if ($yearsBetween <= 3) {
                    $multiplier = 1.15;
                } else if ($yearsBetween <= 4) {
                    $multiplier = 1.22;
                } else if ($yearsBetween <= 5) {
                    $multiplier = 1.37;
                } else {
                    $multiplier = 1.41;
                }

Those multipliers were just from a bit of human-playing-around-with-the-data.

The thing is, customers were happy with the result and, as far as I know, still are. Internally it was always called the random number generator.

1 more reply

andrefuchs4y ago

Talking about revenue without one word about profits.

notabankerOP4y ago

I knew a startup founder who was spending 10-15K Euros on marketing each month. He knew the startup was a dead-end but had raised money and wanted a "managed X million $ budget" bullet point on his resume so he could apply for high-level job positions later on. It came down to fundraising for resume building.

muzani4y ago

Everyone raising money is expected to be unprofitable, no?

notabankerOP4y ago

Unprofitability is rampant among public software companies: https://survivingtomorrow.org/why-do-so-many-famous-companie...

Wonder if you have an opinion -- has unprofitability always been this pervasive or is this how businesses are generally run?

1 more reply

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17 comments

muzani4y ago

Set aside a marketing budget, and then basically sell the $10 item at $9, justifying that the $1 difference is marketing.

Have a marketplace. Buy $100 of goods from users selling stuff. The $100 is a marketing expense. Add $100 to GMV.

Have 5k users on Android, 3k on iPhone, 8k on web. Add them up to show the product has 16k users.

Create a review site targeting the users. Write a glowing review about how amazing this app is. Share it to gullible Facebook groups.

ecf4y ago

> Raise money from an angel who owns a conglomerate. The angel forces all his businesses and people working in these businesses to adopt the app that others wouldn't otherwise trust.

In other words, the YC model.

computator4y ago

> Have 5k users on Android, 3k on iPhone, 8k on web. Add them up to show the product has 16k users.

muzani4y ago

As with all the other examples, there's some legit situations and some less honest situations.

The word hustle describes this activity well: https://www.merriam-webster.com/dictionary/hustle

notabankerOP4y ago

Now I'm glad I started this Ask HN as your response is eye opening. You should write a blogpost about it.

muzani4y ago

That's interesting. I thought this was something everyone has experienced, to the point that it's possibly a Dilbert strip somewhere.

arduinomancer4y ago

“AI” startups that are actually just linear regression/random forest as a service

notabankerOP4y ago

"AI" also gets used for cosmetic reasons. I knew a startup that got acquired. They had a .ai domain with no AI product whatsoever.

avalore4y ago

Sold a small SaaS product 2 years ago, which was marketed as an "AI" product.

Extract from the "model":

                $yearsBetween = $comparisonItems->created_at->diffInYears(Carbon::now());
                if ($yearsBetween <=1) {
                    $multiplier = 1.08;
                } else if ($yearsBetween <= 2) {
                    $multiplier = 1.12;
                } else if ($yearsBetween <= 3) {
                    $multiplier = 1.15;
                } else if ($yearsBetween <= 4) {
                    $multiplier = 1.22;
                } else if ($yearsBetween <= 5) {
                    $multiplier = 1.37;
                } else {
                    $multiplier = 1.41;
                }

Those multipliers were just from a bit of human-playing-around-with-the-data.

The thing is, customers were happy with the result and, as far as I know, still are. Internally it was always called the random number generator.

1 more reply

andrefuchs4y ago

Talking about revenue without one word about profits.

notabankerOP4y ago

muzani4y ago

Everyone raising money is expected to be unprofitable, no?

notabankerOP4y ago

Unprofitability is rampant among public software companies: https://survivingtomorrow.org/why-do-so-many-famous-companie...

Wonder if you have an opinion -- has unprofitability always been this pervasive or is this how businesses are generally run?

1 more reply

j / k navigate · click thread line to collapse