There was a time when there were Feudal Lords and now there aren't.
Similarly, we're moving away from a time of microserfs to hackers and coders who are free.
Love the downvotes - Guess people would rather take advice on how to be mediocre and miserable and do things you don't want to do than take control of their own destiny and find a company they love being at or start one themselves.
Replace affiliate by middleman and you get a lot of examples.
Obviously it's difficult - because everyone's trying to do it and it gives you so much power.
Look at what Amazon is trying to do with books and music.
What Apple is doing.
What Google is trying to do.
What Facebook is doing.
they are all doing the same thing. Become a middle-man and then try to take up power and start producing stuff themselves.
It's why Google is buying content companies. It's why Facebook is a walled web - they want to replace the Internet.
Don't focus on her post. Because her post (not her, just her post) is very short-sighted.
You don't want to read it and catch the disease of not realizing the real prize.
The real prize is not becoming a small service company for the incumbents. The real prize is to take over a part of the supply chain or customer to product pipeline. Then collate all power.
It's how Google and the Internet has made most content worthless.
That's what all the fashion startups have as their end goal. She can't see it because she's caught in her concept of what fashion should be/could be. As opposed to the real underlying dynamics.
In sports terms - she's focused on a particular pitcher vs batter when the real game has a lot more than just how one batter does against one pitcher.
Replace affiliate by middleman and you get a lot of examples.
Obviously it's difficult - because everyone's trying to do it and it gives you so much power.
Look at what Amazon is trying to do with books and music.
What Apple is doing.
What Google is trying to do.
What Facebook is doing.
they are all doing the same thing. Become a middle-man and then try to take up power and start producing stuff themselves.
It's why Google is buying content companies. It's why Facebook is a walled web - they want to replace the Internet.
Don't focus on her post. Because her post (not her, just her post) is very short-sighted.
You don't want to read it and catch the disease of not realizing the real prize.
The real prize is not becoming a small service company for the incumbents. The real prize is to take over a part of the supply chain or customer to product pipeline. Then collate all power.
It's how Google and the Internet has made most content worthless.
That's what all the fashion startups have as their end goal. She can't see it because she's caught in her concept of what fashion should be/could be. As opposed to the real underlying dynamics.
In sports terms - she's focused on a particular pitcher vs batter when the real game has a lot more than just how one batter does against one pitcher.
Starting Point: Where people start their search (to buy something or find something).
Decision Engine: Where people make a decision.
Buying Point: Where people actually buy.
What are all the reviews at Amazon for?
Amazon is both a decision engine and a buying engine. They are trying to wean off starting engines like Google and that is why they first tried A9 and now are trying devices in customers' hands.
If you step out of your attempt to defend the poster of the first article you'll realize that her article (not her, just the article) is very short-sighted.
The Internet is destroying entire industries - yet she thinks fashion internet startups should instead compete in the real world.
That makes no sense. We should all play to our strenghts. While she's trying to do backend stuff and help existing Fashion companies, some 'only 3 to 8%' earning Internet startup is going to disrupt the entire industry.
A hacker, in my opinion, is not meant to figure out how to solve the problems the existing industry power players created or want solved.
A hacker, again in my opinion, should solve the most elegant things and solve things for actual people.
Amazon started off selling books. What do you think their margin for each was?
Then they took over a large part of the market. Then they moved into selling other things like electronics.
Then they made the Kindle and controlled the device people read on and the starting point and the buying point.
Now they are getting into publishing and self-publishing.
They are taking over everything starting with taking over the online selling point for books.
That's what a fashion startup earning only 10% can do.
Use the 10% (which is mostly profit) to power an engine that slows takes over all of fashion.
Move into parallel areas like shoes and accessories.
Then starts making their own stuff.
I appreciate your trying to defend the poster of the original short-sighted article.
However, if you look at building a real business that has the power and control to completely take over an entire industry then starting online is much better than starting in the backend.
If you want to provide services to publishers who publish books (which is what back end would be for books) - well and good.
But there's nothing transformative about it.
The real transformation is to replace Publishers.
that's why the poster of the original article is so wrong.
She thinks she's thinking big by talking about tackling the back end instead of doing online sites.
However, the real prize is to replace the entire pipeline and then, if the company so chooses, to replace labels and the entire fashion industry.
She did a fashion startup for a few years and she never figured out that nearly every luxury company gives 10% to 15% commissions?
If she really thinks it's 3 to 8% then she's blissfuly ignorant.
She doesn't get the fundamental concept of capturing the starting point. If a site becomes the destination for fashion i.e. where people go to search for the next thing they buy.
Then that site can very easily expand into selling that very thing.
At some point we say - Instead of getting 15% from this luxury watch maker, we ask for 25%.
Then we say - Let's make stuff ourselves and see if we can get more than 25%.
What Google is doing and what Facebook is trying to do is very similar. Expand and take over all the profits. But first you need to be the starting point or decision point for something (search, social interactions, dating, buying clothes).
c) If you become the decision engine (something Google and Bing are trying to do with their Flight Search and other initiatives in various verticals), then you can easily take over the entire business.
If people are coming to you and you help them decide what to buy - then you can start selling them that stuff.
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If you become the decision engine for Fashion you can decide everything else.
I think perhaps it's not very clear until you consider what WalMart has done and what Amazon is doing.
And what Google is trying to do.
You start off as the starting point and then you start taking over more and more until you start producing the products you were originally only linking to.
Not really a well thought out article. Here's why -
1) Why should anyone care about solving the problems that the writer of this article wants to see solved?
2) She fixates on the 3-8% that affiliate sites make without considering a few things:
a) Sites make that regardless of where the user actually buys. So if someone comes to your site and decides to buy a jacket you make money whether they buy it from Retailer A or Retailer B.
b) It's usually 10% for fashion sites and once you are driving larger volume you can cut deals for 15%.
c) If you become the decision engine (something Google and Bing are trying to do with their Flight Search and other initiatives in various verticals), then you can easily take over the entire business.
If people are coming to you and you help them decide what to buy - then you can start selling them that stuff.
3) The costs and barrier to entry is much lower if you are trying to fix the discoverability problem.
4) The real problem, and the most important thing, is the role of fashion. What fashion really does. That can be tackled completely in the online world through a website.
5) Fashion is a market that is going to make a lot of startups a lot of money.
Things that signal status (such as special electronic brands and designer bags and Grey Goose vodka) are never going to go out of style.
Instead of listening to this writer's advice, any company going into fashion should look at how backward thinking most people in the industry are, how little they understand technology, and how they are unwilling to admit the core purpose of fashion.
The easiest entry is discoverability and influence and that's also the most powerful element of the fashion ecosystem.
If you become the discovery engine and the decision engine then it's game over for everyone else.
All those VCs funding fashion startups are not idiots.
You have a point there. That someone could possibly anticipate what Doodles are going to be used and SEO map their site to that.
It still isn't the kind of thing I personally am hoping to get at Hacker News.
It seems to me that more and more people are interested in shortcuts to success and praying to the Tech Religions than actually doing something themselves or sharing stuff that is really worthwhile.
My suggestion to you would be to consider whether you can put in more effort into your next startup.
We each have our own beliefs on what works and then there's reality. So there's probably a chance that there is something that works very well but both of us would have to look at things from a different perspective.
For me I tend to believe that you can't really succeed unless you're 100% in it. That having a family pretty much rules out having a successful start-up. That's obviously not true as there are exceptions. Perhaps lots of them.
I think in the end it comes down to not giving up. However, again, that's just a belief and who knows what the reality is.
Thanks for offering to connect me to your friend. Not interested at the moment as I'm quite overwhelmed and already places like Hacker News are putting too much of the possibility of failure into my head.
My attitude is that failure isn't really possible and it's working amazingly well so perhaps I should only read posts that are very positive like the Yoghurt business one.
I'd rather learn from the experience of someone who became an absolute master. Because the lessons of absolute mastery apply across fields.
Who cares about the top 10%? The top 10% isn't worth wasting your time on. Especially if it means you spend 6 months each on 20 different areas and become top 10% in 20 areas.
Much better to find 1 or 2 areas you absolutely love and become top 1%.
Top 1% - Going to the Olympics.
Top 10% - Impress your friends.
1) Firstly, that you were in business to add value to customers and that was the primary motivation. It seems your primary motivation was to learn/experience it. Which is fine - it's just not what I assumed it was.
As Zig Ziglar would put it - To get everything you desire in life you just have to give enough other people what they want from life.
* Who knows what approach works better. For me, the Zig Ziglar approach has worked much better but that's a sample size of 1 person.
2) Secondly, my mistake in assuming your post was meant to help other people. If you could have added a note that it was meant mostly as a catharsis and written for yourself.
Then I wouldn't have assumed that there might be a lot of value for me.
Right now the value is in seeing a few things but the amount of effort is just not enough to actually know whether any of your mistakes other than not putting in enough work matter.
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See, the key thing is your line on work being from 0 to 10 hours per week with some weeks being over 10 weeks.
How can you know your ideas and business were right or wrong with that amount of time?
For entirely selfish reasons (to help myself) I wanted to learn from your experience. However, if your experience is based on working an average of 10 hours a week, then it doesn't really say anything about what the market opportunity really is/was.
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On a related note there seems to be a fascination on hacker news lately on apps done in 5 days and 'passive income' and how to succeed without working hard.
Are there any people there who are succeeding after working really hard?
Who are spending 5 months on their app and not 5 days?
Please Note: This might seem critical but I'm just pointing out three problems i.e. lack of effort, lack of measuring effort and other statistics, lack of empathy with customers.
My argument would be that without at least 2 of these 3 the OP will keep running into problems and keep blaming extrinsic meaningless things.
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Credit to the person (aaron?) for writing this. However, the lack of measured numbers is terrifying. And the disconnect with the customer perspective is just hard to fathom.
1) How much time did you spend on this? Over what period of time?
2) How much traffic did you get? How many people bought coupons? How many people went to other sites from your sites?
3) What amount of money did you spend? On what areas?
What amount of money did you make? From what sources?
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You say that you didn't listen to your customers. My point would be that you didn't realize that you were making something FOR THEM and not for you.
You should consider thinking from your customers' perspective.
They really don't care about some of the things that you think are successes i.e. using hosted services and learning Ruby and the site being BEAUTIFUL because you think a site being beautiful is important to you personally.
Unless Indianapolis is 99% users of HackerNews.
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You say that you were shocked that small business owners don't track things - yet you write this post without giving any figures. Which makes a great post meaningless because we don't know what 'You had no skin in the game' means.
Did you spend 40 hours a week after doing your day job? Did you do that for 3 full years?
Did you put in $100K of your own savings?
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Finally, you went into a space where you had very few competitive advantages - not the first mover, not the best product, not the most money, not the most resources, no brand recognition.
If you had tried a niche within coupons or a new area you might well have seen much better results.
Also, you don't mention anywhere how much total time and effort you spent on this which makes it difficult to know whether your lessons are worthwhile or not.
If you spent 10 hours a week for 6 months - then obviously all your 'learning' is probably useless.
If you spent 40 hours a week for 2 years - then it's very valuable stuff.
This is amazing. You've hit the nail on the head. Google would be much more successful if it focused on being Google and didn't try to be Apple+Fecaebook+X companies all in one.
Perhaps US entered its period of decline a long time ago and it's only now that all the good work of past generations has been undone.
The last few wars were attempts to strengthen the US - quite frankly Oil really is more valuable for the US than winning the title of prom king.
Regardless of your or my personal opinion on what the war is doing there can be little doubt that Iraqi and Afghanistani Oil is going to play a huge part in the US keeping its position in the world.
The thing that actually unsettled things is that the Wall Street people got out of control and made too many inroads into the Government and started stealing from the Average American.
There was a time when there were Feudal Lords and now there aren't.
Similarly, we're moving away from a time of microserfs to hackers and coders who are free.
Love the downvotes - Guess people would rather take advice on how to be mediocre and miserable and do things you don't want to do than take control of their own destiny and find a company they love being at or start one themselves.