[0:00:11] Good afternoon. So today we're going to do something different. One of the things that we've learned at Y Combinator is that one of the best ways to learn about startups is to watch other startups get advice. And so we're going to do live office hours, which we've done a few times before in this class, three or four times. We'll try to do three companies each time. This is Yuri, also works at Y Combinator, and going to do this with me. And we're going to just give advice to three startups. You have to be very brave to do this.
[0:00:36] So I'm very thankful for the startups that have agreed to do this. These are some of the people that are taking the course online, and we'll just get going. So do you want to tell us, well, first do you want to introduce yourselves? Does this work? So I'm Sarah, and this is my co-founder, Andrew. We're building Canny. Canny helps teams collect and manage feedback from their users. Essentially what it is is teams can integrate our product into their website or mobile app, and that allows their users to post and vote on feedback.
[0:01:09] Is it live? Yes. And how many websites have integrated? Yeah, we launched our MVP about a month ago on Product Hunt, and that was pretty good traffic. We have 25 paying customers, so those are people who have either integrated or using us in a certain way. But yeah, we got maybe around 500 companies from the Product Hunt launch. That's great. Yeah. How much are you charging?
[0:01:35] It's the range. So on the low end, we have like a $2 plan, which was our alternative to freemium, GPM. And it goes from $19.49, $1.29 from there. And it's really early, and we're trying to iterate on this and figure out what our best price point is, which is probably one of our main challenges right now, I think.
[0:01:56] Oh, go ahead. No, no. How did you even arrive at the first set of numbers to test? Yeah, I mean, I think, so the $2 one was kind of special. We were flip-flopping between freemium and cheapium. And I think that was a good decision because it narrowed down our potential customers by a lot. And we figured that people who are not going to pay us anything were never going to pay us anything. How many of the 25 customers are on the $2 plan? Maybe. Seven? Yeah. That's a good seven. Really? Yeah. That's great. And what's the other most popular plan? Is it 19?
[0:02:26] 19. We limited our two-hour plan very heavily, so it's really people who are a solo founder, probably no revenue. How do you decide, what do you get with the pricing? I think I looked at your website. It's how many users you have? Right, so right now we're charging by how many end users you have. That was kind of our proxy to how much value the company was going to get from our product. This is kind of a challenge, especially because we can't particularly tell how many users they have. So we're iterating on this as well.
[0:02:54] What do people really love about this? Why do they use your product and not one of the many other services to accomplish the same goal? Yeah, I mean, there's a lot of different values that you get out of posting and voting on features. One of them is there's a lot of transparency, so you keep your users in the loop. A lot of current feedback solutions is email or live chat, where the user sends an email, and then the company says, oh, we'll pass it on to the team, is what inevitably happens. And then the user doesn't really know, did my
[0:03:25] Voice get heard. And so we've heard both from teams and users that this is a great experience. Their users are happy. They know what feedback their users are giving versus email and live chat, which takes just a ton of time to process all these conversations. Of the people that are using it, what's the average number of questions that have been posted on it so far?
[0:03:44] Average number of questions? What do you mean by that? Yeah, so people put a request or something else that they're voting on. Do you know of the 25 paying customers, how many on average have had questions posted? Well, it really depends on how many end users they have and also how well they've implemented our tools. If it's less discoverable, they're going to get less feedback. And so we've been trying to help that by giving them design advice. But our top team probably has
[0:04:13] 300 posts. And the thing about this versus email is that you might get, if a post has 100 votes, you might get 100 different emails. And so we help you save time by responding to all those 100 people at once instead of sending individual emails back and forth. Do you feel like you've gotten to the point where you have a product that some people really love? And at this point, if so, well, I guess, do you think you're at that point first?
[0:04:39] Yeah, I feel like we have a sliver of product market fit where some people are extremely happy with our product and we kind of know the next steps we need to do to expand that by 10x to address a larger portion of the market. What are the steps? Integrations with other SaaS services like Intercom, Slack, Zapier, and then a better answer on mobile. Is that the biggest challenge you face now, just figuring out how to grow and scale this, do you think? Or is there still a lot of product work?
[0:05:07] Other than sort of like integrations that are meant to drive growth, is there still a lot of product work before you really want to scale? There's some product work for sure. I think the core product is pretty good, but it takes a while for our leads to get stuck on our product because they have to integrate into their product. So it's a pretty big investment. How easy is it to integrate? It's pretty easy. It's really easy. It takes half an hour to an hour is what we see developers spending time on. But I think we need better onboarding to convince them that this is worth doing. And so I think right now our funnel is pretty leaky.
[0:05:36] So that's what we're working on onboarding. What's the biggest value? So your biggest user has 300 questions? Or a couple hundred questions. Posts. Posts. There's over 100. Right. And so what's the biggest value that they see out of it? What do they tell you? Yeah, it's hard because a lot of our value add is very diverse. One thing is customer satisfaction. Another thing is product management. You know what you want to work on. Another thing is having a transparent roadmap, so keeping your users in the loop. And there's just all these different kind of values. There isn't one core value, which is also why it's kind of hard to
[0:06:05] That sounds like a mistake. A mistake. Almost everyone who says, oh, we have all these different values and there's all these different reasons people like it. It's really nice if you can figure out how that all abstracts into one message and then build all the company's sales and marketing and PR around this is what it's about rather than saying, oh, there's like six different reasons to use the product. I think one of the things that like, so when you say you have a problem with people,
[0:06:33] Integrating you. It's not that hard. It's just not high enough on their priority list. And there's a few ways to solve this. One thing that works is to send people around and say like, hey, we're going to send an engineer to come help integrate with you. And it's not that the company can't do it. It's just that otherwise you'll always be at the bottom of their backlog. And that's one way. The other is if it's like their CEO tells them to go do it.
[0:06:56] Or they themselves decide, I gotta go do this, it's really important. And that almost never comes from a bunch of disparate messages that are a bunch of nice to haves. It's one thing, which is maybe in this case, it's some version of user feedback and how if you don't have this, you will be iterating more slowly than your competitors. Or that your users will feel like you're more engaged with them if listening to the features that they want built. I have two big questions.
[0:07:27] One, I think back of the envelope math is always really important. And I think I worry that this is the kind of business where if you're mostly selling to startups and you're selling it, let's say on average 100 bucks, is it a month or a year? A month. A month. Like how big can this business actually get off of this model? Have you thought about that? We have thought about it. I mean, I think just doing napkin math, I think with a startup, you usually want to arrive somewhere around 100 million.
[0:07:58] Annual revenue. And so for us, right now it's looking like we'd be going for 10,000 people paying us $100 a month. And does that feel doable? Maybe it's $100,000. Yeah. There's a difference there. I mean, I think the number. I think it is $100,000. Yeah, $100,000. Sorry. I think the number of companies that need feedback and the number of websites and mobile apps is increasing.
[0:08:27] But do you feel there's 100,000? So part of it is like, do you feel you're going to have to own like 50% of the startup market to get there? Or do you think there's enough demand out there that you can actually get to the market without dominating the entire thing? Right. Right. I think as an aside to this, I think we've been getting a lot of feedback that we can actually charge a lot more. And so I think there's a few features that we can build out that will help a lot, including analytics. Do you use your own product?
[0:08:57] Yeah, definitely. That's a good way to figure out if it's providing value. Again, maybe the answer is to charge a lot more. Maybe the answer is that there are 100,000 startups. Maybe the answer is you need to tweak the product in a way that you can appeal to a lot of people outside of startups. But I think startups almost never just do the swag on this early enough. And it really informs product strategy. Right. Which also gets to my next big question. This feels like the kind of service that
[0:09:28] Is interchangeable and that a lot of people can build a similar service. And if one company uses product A and another company uses product B, there's no reason for a third company to prefer A or B. There's no network effect, there's no monopoly. Now I can imagine ways that you could build one of those into the product where there are sort of cross company incentives to use yours. But what is your plan to be a monopoly and not another SaaS business that just gets competed down to zero margins? That's a good question.
[0:09:58] I think. And if you don't have an answer yet, it's also fine. I mean, I think our strategy so far is to go after influencers. And these are including people who have users that would also use our product. So for example, we go after open source projects and tools like Optimizely, for example. You give it free to open source projects? Open source projects are free. Yeah, as an alternative.
[0:10:24] To GitHub and GitHub issues, I think. And they're bringing us in a lot of people. I think that's a good move for us. But so far, I think our strategy is really to put our product in front of the public. It's powered by Canny. And that's kind of where we're at with that. So do you have any thoughts about this?
[0:10:44] One little thought. I mean, I think one thing that we've found so far is that there are other products in the market that do this. And during our product hunt launch, we got people coming from those products wanting to use us. And the thing that they mentioned liking about us more is design and simplicity. And I honestly feel like our product out of all the products in the market right now is the best designed and the simplest for exactly what we do. I believe you that that's true, but here's the problem. Every startup...
[0:11:08] I'd say one out of three startups I meet with says, we're like this other thing, except we're better designed, we're more beautiful, and we're simpler to use. And it may be true that you are, I believe that it is, but someone else can come do that same thing to you. More importantly, or not necessarily more importantly, but oftentimes you start off very simple, and then you start having to build features because you see that they're missing, and then somebody else comes in and says, we're now the simplest. But in any case, it's really good. You've built a product that people love.
[0:11:38] You've got them to pay for it, and you have a growth channel you believe will work. That puts you in the top few percent of all startups, so that's great. But this is the time where your biggest problem now, part of that, the one thing you should be thinking about is what can I do early to build a product that A, can eventually address a very large market, and B, how can I build some sort of monopoly? How can I build something where, because this company uses my product,
[0:12:05] This other company is going to be more likely to use it as well. And design and simplicity, although everyone says it and it's kind of true, is usually not a long term win at some point. And it may just be that once you're integrated into a company, you're impossible to rip out and then you're going to win the mind share war. That could be it. I think that's what we're seeing, actually, yeah. A better answer, though, would be if there's some way that you can use aggregated data or learnings across all companies or aggregate, like,
[0:12:34] The kind of users that leave feedback on products tend to do it across all the products they use. So there's probably a very small percentage of users that give feedback and they do it across all the products. So my sense is that somewhere in there, there is a strategy to build a monopoly. But you want to figure out what that core is and build that into the core of the product so that you have a long term.
[0:13:01] This is actually very interesting because we probably started at more of an aggregate level where everyone could post feedback about anything. And that was hard because companies weren't on board first. And so that doesn't feel right either. Yeah. So right now, we've decided to go this other way for now. But there is a possibility that this is there one day. We're connecting all the users. If they post on multiple products that use Kani, we can connect all those people. So maybe there's some potential there eventually. Yeah.
[0:13:29] And why is it named Canny? Canny was really hard to find. We went through many different names, but a core part of our product is the subdomain. And we didn't want to use something that was like, get this or try this, use this. Yeah, short and sweet. Yeah, so something short and sweet. We got Canny.io, so it's not the worst, but it's not the best. You can still change. It's not too late. Yes, we can still change. I thought it was a play on Uncanny. Yeah. Actually, they're kind of different, but I think.
[0:13:58] Yeah, it means to make good judgment. And so I think that kind of plays in as well. If it's working, if people remember it, if they spell it right, that's all good. Anything else you'd like to talk about? Yeah, I mean, in general, I think, to your point about broad use cases, after our Product Hunt launch, it came out with a lot of people using Candy for different reasons. And so I think... Is there one reason that's surfacing? Yeah, so I mean, the top one is feature requests, which is what we expected.
[0:14:29] But also I think pricing is one of the big ones, like figuring out what our main value is. And that's what we're trying to do. We're trying to isolate that one thing, especially like market it on our home page. How do we pull people in with that one value? Yeah. Feature requests don't sound quite as good as user engagement. I don't know. I would be willing to.
[0:14:53] This is the place where I believe in A-B testing. I don't believe in it for everything, but in terms of messaging and communication, and what are those four words you put big on your website when people come there for the first time? This is the place I believe in A-B testing. And if feature requests are really what people want, then great. Yeah, just put it right up front. If that's the thing that's working, that's at least a candidate for the right answer. All right, we should move on to the next group. Thank you so much. Thank you. Thank you guys. Thank you. Thank you. Hey, Sam. Chris. Hey, Yuri. Chris. How's it going?
[0:15:30] By the way, I don't know what any of these companies do ahead of time. So you want to introduce yourself? Hi, everybody. My name is Chris Beltran. I'm the CEO and founder of Tummel. What we do is we connect homeowners, private property owners, and all sorts of parking lot owners to our app. And what your app does is it aggregates, essentially, their parking spaces, lets them lease it out. The owners are able to make some passive income. And the parkers are able to just go to that parking spot whenever they want to.
[0:15:59] Easily and quickly. So this tool was meant for specifically San Francisco, highly industrialized cities in which people need to park easier and faster rather than circling the block. It's like Airbnb for parking. Essentially, yes, it is. Yeah, I've wanted to see something like this happen for a long time because it feels like in urban cities like San Francisco, there's just not enough street parking. That is, but right now it is more of the issue, is this a perceptive problem or is this an actual problem?
[0:16:29] So are you live in the city right now? We are not live in the city. We're currently building out the MVP right now. Got it. So unfortunately, my co-founder's not here. She's actually taking a vacation through Mexico. I think she's doing some traveling. So mind you, I'm not a solo founder. I do have a co-founder. That's all right. Yeah. So have you been talking to homeowners in the meantime? Are they willing to rent out their parking spots? You know what? The funny thing is I am actually hitting the ground running.
[0:16:55] And what do they tell you? More often than not, they say, this is awesome. Why haven't anybody else created this? Are they willing to say, hey, I'm ready to pay? Or would they pay you? No, you would do a roughshod with them, right? Correct.
[0:17:24] The percentage of sales that occur when the commuter parks in their parking space will collect 15%, they collect 85%. So can you sign them out? I mean, part of the thing for you is that when you launch in a city, you're going to want as much critical mass as you want for a parking spot. So are they willing to sign up and say, hey, my parking spot is yours the moment you're ready?
[0:17:42] Currently, what we're doing is we're creating a list and we're pitching the idea to them. So essentially what we're trying to do is we're trying to curate all these homeowners and private property owners throughout San Francisco that apply to, or pretty much that play with San Francisco standards because you cannot park or impede over onto the sidewalk. So obviously there's some things that we have to do to double check to make sure that they are completely legal. But otherwise, what we're doing is we're collecting data from them.
[0:18:08] And yes, they are more than willing to sign up with us. When do you think you'll launch? I pretty much projected to launch within six months. And why so long? About six days. I would love to pitch it. I would love to build this out in six days. But currently, I'm not a technical founder. So that was a technical person. Is your co-founder? My co-founder is technical. So she has the tools and resources and clout to build this, essentially. But she's on vacation. She was here. What is she back?
[0:18:37] She should be back within the week. Six days after that. I know. I know. I would love to push this. One of the things that's really hard is no one ever wants, like you're putting this product of yourself out there when you launch a startup, and no one wants to do it until they feel like it's really good.
[0:18:56] But in six months, the world will look entirely different, and every good idea you have, someone else has. And now a lot of people are going to hear about this, because we're talking about it, you know? Don't steal my idea, all of you, don't steal it. I mean, stealing the idea is not. So it's like- NDAs for all of you. Speed and execution really matter. And it actually, you could tell 10 million people the idea, and probably all of them would be busy with their own things. But a few of them will be interested at least, and there's this issue of-
[0:19:25] Speed and how quickly you can build and iterate. And especially in a marketplace, there is a big first mover advantage. So even if it's not the version you want, my most important piece of advice to you would be to get this launched really quickly in an ugly first version. And then you'll learn so much about how to build a better version that you can go from there. It's great that you're talking to customers. That is clearly the number one thing to go do. And getting people signed up so that you have inventory. But I would think about how you
[0:19:54] Bring the launch in, even if it's a soft launch that you're embarrassed about by a lot. Yeah, especially if the problem is acute enough. If it's something that people really struggle with, finding parking spots, they won't care how pretty the app is or how ugly the app is as long as they can find the parking spots. So having something live, even if it's just a website wrapped in a little icon. That's literally what we're doing is we're targeting certain neighborhoods.
[0:20:20] For instance, there's neighborhood, I'm sure you've been to San Francisco multiple times. I live there, yeah. You live there, obviously. Pate District is one of them. Yeah, right. Which is severely impacted, nine times out of ten, even during the week. How do you know? Well, I've been there physically and had to check board out and checking the times and stand there for eight hours a day. But there are times where it does free up a little bit. But for the most part- So I understand how you're gonna get the parking places on board, which is, I think, the harder half of the marketplace. But you still need people that wanna park.
[0:20:49] Correct. How are you going to get those people? So what we're going to do is we're going to reach out to people during festivals. There's tons of festivals. There's outside lands. There's some that go on on Treasure Island, even though that's out of our reach. But there's many that happen around Golden Gate Park. There's Beta Breakers. There's tons of festivals that we're going to be pitching this around or some type of theme or some type of festival.
[0:21:11] Some type of balding. I worry that those, A, don't happen frequently enough, and B, those are people who are not looking for parking super regularly in the city. It would be interesting if you could figure out a way to find people for whom this is truly a hair on fire problem that drive to the city every day and have to park or live in the city and don't have a parking place. That does not strike me as the most urgent need or the best way to find people who are...
[0:21:39] Really feeling this problem every day, which there are a lot of. This is a great problem to be solving. I would think about other strategies to find a lot of people. The festival thing, I worry there aren't enough festivals and there aren't enough people at those that have this as a regular ongoing problem. You want the people who are going to be daily or at least weekly users of this, and I bet you can come up with better ways.
[0:22:04] Well, I think if you're feet on the ground and actually surveying the place, I would actually ask the people who are parking, why are you here? That's exactly what I'm doing. So what's the feedback? Are they working there? So nine times out of ten, people are either commuting into the city, so there are people that are not living in the city, obviously, because a lot of people who live in the city don't necessarily own a car. Right. But they're commuting for what? Are they commuting for work? They're commuting for work, and sometimes they're just commuting to do some contract work. They've got to come into the city every so often. There's people that come in for meetings, a whole host of reasons that they come in. I mean, these people are...
[0:22:34] Driving today and parking today, maybe they'll do it more if it's easier, but can you put signs in the parking lot, in the parking spaces that say to park here, download this? That'll work. So when that time comes in which we do have a product launch, I'm going to create maybe little signs at first, something cheap just to get started, maybe laminated or whatnot, to put it on those places where it needs to be. You need something because in a lot of cases it is an impulse buy.
[0:22:58] They're going to be looking for parking. They didn't find the street parking, and now they're ready to buy whatever it is that you're giving them. Yeah. I have a general thought for you about this kind of marketplace. Airbnb is a really good business because if you own a space and you're renting it out, you can only put it on basically one platform if you're going to use the instant book feature. And if you're a guest, you really care if you get this particular house or this particular house. They're not interchangeable. Ride sharing.
[0:23:26] If you're a driver, you can drive for any service. You turn the apps on and off. And if you're a passenger, you don't care much which car you get in. And it's really nice if you can somehow have the former kind of marketplace where there's not just perfect substitution and everyone is switching between each service depending on price. And so if you can do something with, I think this is actually a very big and important insight about marketplaces that most people miss.
[0:23:51] And if you can do something where people can only list their space on your marketplace because you're going to have around the clock instant booking or something, that would be really important to figure out early. And a very valuable tweak that doesn't sound that big, but is actually a huge difference to the long-term viability of the business. I think that's a good take on it. So right now, as far as the 24-hour booking and whatnot, I want to give the...
[0:24:18] Property owners or homeowners, the ability to set their own times. Sure. So sometimes maybe some owners or property owners say, we'll just say like Wells Fargo. They can obviously set theirs a little bit later after business hours. Or do you think that you'll be able to get businesses to give up their parking spots as well? I would love to reach out to businesses to give up their parking spots as well. Because I was thinking that this is more around homeowners or people who have extra spaces on their own.
[0:24:41] But businesses could be really interesting. It's a very different sale now because now you really have to go and convince whoever the property manager is or somebody else to actually do it. Correct, correct. Go ahead. Sorry, just one thought here, which is I would pick one of them in the beginning because you won't be able to sell to both. Yeah, so I essentially wanted to focus on possibly residential and private lots first and then start slowly building out. Do you have any sense yet for pricing? Yes.
[0:25:09] I pretty much wanted to model this after the meters in San Francisco. And right now the meters are all timed. SF Park actually did a survey in which they increased meter pricing, so similar to variable-based pricing. So that's what we're going to pretty much mimic. Essentially, we want to be competing with the meters themselves for residential. For private lots, obviously, we're going to be competing with private lot prices. So we're just going to base our model off of the model that San Francisco has already done. And people will be able to park?
[0:25:38] I assume as long as they want. As long as they want and the property owner is. As long as the property owner has set their times to say 8 to 5, they can park 8 to 5 and it'll be on an hourly rate. What's the legal situation of this? I assume it's okay if it's part of the property. It is legal. It is completely legal. I've looked into it. I've talked to an SF law attorney specifically for San Francisco themselves and I've asked them, can I, it's kind of a funny question. The story goes is I called them up. I said, hey, my.
[0:26:06] My dad is bedridden, but he's not able to work. He doesn't get enough from Social Security. And essentially, he needs to make some passive income. Is it okay if we could rent this space out to our neighbor? And they said, as long as it's his house, we don't see any issue with it. Great. That's great. Again, this is a really good idea. If you don't move fast, it won't work. So I think it's always important as a startup to know what the number one biggest problem in front of you is. For you, it's like not shipping quickly.
[0:26:36] And so just get this working in one neighborhood as quickly as you possibly can, even if it's hacked up and doesn't look that great. Okay. Any other questions you want to discuss? I think that's it. I'm- Great. Pretty good. I'm excited to try it out. Awesome, thank you. Thank you. Email us when you want. Awesome, thank you. How's it going? Yuri, nice to meet you. Yuri, nice to meet you. Hi. What do you guys do? So I'm Philip. I'm Emma, and we're Moonlight Work.
[0:27:15] So we're building a marketplace for software engineers and designers to match up with companies who need them 10 hours at a time. So specifically 10 hours at a time? Yeah, I think we'll start with 10 hours at a time, but some companies want more than that, and some people want more work. So if they want more time, they can have more time. Is this launched up and running? We have.
[0:27:36] That's a great way to start. That's good. So we started it because we have this need ourselves. What do companies find you? There's been a variety of them. Some of them have been friends of friends that heard that we were doing contract work and would come in and assign jobs through there. Another thing is when we shut down our last company, we open sourced all the code. And so we had people coming in and paying us to deploy that code for them on their own servers.
[0:28:05] They found us through GitHub, basically. What kind of projects are people having you build so far? So far, it's a lot of people who have a very specific need. So they're like, I need an expert in this language or an expert that knows how to build this thing really well. And so they're looking for someone who there's not going to be much onboarding. They're just going to be able to jump in and do a project. Why do they choose you instead of something like Upwork or Totel or one of the other kind of outsourcing houses? Yeah, I think the biggest reason is because we're...
[0:28:33] Promoting it as something that experts are working on. So these aren't just anyone in the world who wants to make $15 an hour. This is someone who maybe works at a Google or an Uber, and they want to make a bunch of extra money on the side, but they're really good at what they do. So you're going to have to actually curate these people then. Is that something you're already doing? Yeah, that's what we're starting to do. And I think that's going to be the biggest barrier for us, is being able to make sure that these people are really quality workers.
[0:29:01] How much are you charging for a 10-hour project? So the contractors set their own rates, and then we're handling the invoicing and charging 15% on top of that. But true marketplace? Correct. Other than quality, given that this is clearly a good business, so a lot of people want it and a lot of people are already in it, how will you become the marketplace where everyone goes for contracted engineering help?
[0:29:29] I think we can speak from our own experience and say there have been times in the past when we had student loans and would have worked extra time every week to pay them off. And there's not really marketplaces out there where people who want over $50 or $70 per hour can find short-term projects that they can do on the side. So that's true on the developer side, but how do you get the companies to come to you and say, when we need an expert, we go to you guys? We're working on a couple different ways of matching, but I think the short of it is that there are very specialized needs that some companies have.
[0:29:59] It doesn't even have to be core to the product.
[0:30:04] I want a landing page and our design team is focused on an app or something like that. I wonder if you want to become known as the place to go to for a particular set of skills. Not for every expertise, but in the beginning just like a particular set where they just go to you and then you open up additional verticals as you go. And for that we're looking at open source projects. So like an open source project is something where it takes a lot of knowledge, a lot of experience to kind of understand the ins and the outs. And so we tested that with our own open source projects and got projects coming through there.
[0:30:33] And people signing up. And I think that matching people based on very specific open source projects. Not saying like a Ruby programming language, but something like the MongoDB bindings for Chef for something very specific like that. I think the insight of going after high end work and also for people who are just looking for smaller pieces is really good. I wonder if you could pick projects that particularly need that.
[0:31:04] Harder to build and take less time. Sort of needs specialized skills and are not the normal like, I just need people to grind through this. That would strike me as a good initial focus. What's the biggest problem in front of the company right now? I think it's making sure that matching, I mean obviously every marketplace has that issue. But making sure that the people we have are worth what they're trying to get charged for. Cuz we wanna set a limit on how much people can charge per hour. Why? So we wanna have a higher.
[0:31:35] We want people who are making more money per hour because that's going to bump up the quality of the work. How much do you charge per hour? We're both trying to charge about $1.50 an hour. So we've had about 300 people sign up so far, and we asked them what their hourly rate is.
[0:31:53] Usually from about 70 to 200 per hour. The interesting thing is that it's not so much how much the people are charging, it's more the perceived value on the other companies, right? So if the companies think that these developers are worth $150 or $200 an hour, they're happy to pay that. But you need to convince them that they're worth that money, regardless of what the developers think they're worth. And how do you do that? How do you convince a company that your developers are worth $200 an hour if they can go somewhere for $25 an hour?
[0:32:20] Yeah, and I think right now for the MVP, what we're trying to say is we are personally experts in these fields, and we are making sure that the quality of talent we have is up to that par. I think that we need to figure out how we're going to scale that. I also think in addition to figuring out how to scale it, you need to figure out how you're going to communicate it. The website really has to give across the impression with testimonials from well-known customers or whatever that these are the best people. In terms of setting the prices, one thing we have consistently seen is when you ask,
[0:32:50] A user to set their prices in the marketplace. If you give them guidance, if you say based off what you've said, here's what we recommend or here's the range you recommend, 85, 90% of users will do that. And so if you want to move people towards a specific range because you want people that are at that quality level, you can probably do that. So we did that. Our sign up form says the average hourly rate is $70 per hour and it also says.
[0:33:18] If you have your annual salary, that's about what your hourly rate is. So $100 per hour is about $50. Sorry, $100,000 per year is about $50 per hour. When do you think you'll have the first external developer live? So that's not the two of you. So we're working on basically building out invoicing right now. And so that'll be the next week or two, probably.
[0:33:42] Do you need invoicing? Can you do it more manually in the beginning? Just so that you can see someone who's not you. Because you obviously don't have invoicing, right? So we've been doing this ourselves and there's just a lot of moving parts. There's sending contracts back and forth. There's setting up bank accounts. There's getting companies to pay.
[0:33:59] And when we talk to the potential contractors who want to be on the platform, some of their biggest concerns are, if I'm only working 10 hours per week, how much time does it take to ramp up? Do I need to talk with the customer? And how long does it take until I get paid? I would try and hack all of that away and just do it behind the scenes manually right now just to get the developers developing. Take all of the pressure away from them so that they can just start interacting with the customer. And if you need to manually process it, do that. But it's so important that someone who's not you starts doing this on your platform.
[0:34:28] And then when they do, for the first ones especially, I would be super involved just to learn what the issues are. It may be that people aren't sure they're allowed to do this and they need help looking at their current employment contracts. It may be that people need training to know how to engage with a customer and how much they should communicate. There are all of these things, many of which will surprise you and your guesses on many will be wrong. And the way you find this out.
[0:34:57] For the first, let's say, 20 users, go sit with them or at least go talk to them all the time. I would almost think about it like become their agent. If they were a talent and you were an agent for them and you take care of everything for them and answer all their questions. And then you can just start building that into the product. But in our experience, almost every time when people think they know where the breakpoints are going to be or what they need to teach their users.
[0:35:23] They're almost always wrong. But you find it out really quickly. It's like you don't need a giant sample set to start hearing the common concerns people have at every stage in the process. And then you just knock those off one at a time. And that is a way I think you can differentiate from other coding talent marketplaces that don't do this. And if you can figure out, if you can be the person that makes it so that people who want a little extra income but don't know how to go be a freelancer.
[0:35:53] Learn, and if that becomes your reputation, that'll be a great way to get the top talent in the field. One of the other, just an idea which you may or may not want to pursue, but if you want to be known as the experts in the field, see if you can get any experts to actually use your platform, right, through your network or somewhere else, where get someone who's well known on a particular niche area and have them sign up on your platform and do projects on your platform, if they're willing to. Yeah. So what's your biggest problem right now?
[0:36:24] Us personally? Or the companies. In this stage, it's often one and the same. I think it's more just getting the machinery up. If we were to manually take payments, my biggest concern would be that 10 months down the line, I'm going to have to manually calculate 1099. Oh, but you're not going to be 10 months down the line. You need to get to the next two months. Yeah.
[0:36:53] I would say to go along with that, the reason we feel like we have to have some sort of payment thing set up is because there's so many laws around how you can pay people and kind of the logistics of all of that and paperwork that needs to be gone through. So I think you're right. We need to do those first couple ones to know what those are. But I think we're both apprehensive of doing that. Is there not just some other startup that you can use that handles invoicing really well? It is complicated. Just like an accountant that can help you. Yeah.
[0:37:19] Yeah, so we're using Stripe Connect, which handles everything, including the 1099s. But there's no turnkey invoicing system built on top of that right now. Yeah, I get that. I really do get that. But I still feel like it's so... So I get that feeling as a developer all the time, where it's like, if only I have this built.
[0:37:37] You'd be ready to go. But it's so much more important to actually find out if you can. Even if you have the platform built, there's a chance that people won't start using it. And you'll only know that when you do the non-scalable things. That's one of the things that we drive home almost every single office hour session, which is just do the non-scalable things. Do it manually. Don't worry about 10 months down the road. 10 months down the road, it's a new company. It will look very different than it is today. But today, it's so important to just do the non-scalable things.
[0:38:03] And we're just talking about a small handful of users. You don't have to bring on. Everyone's like, well, my problem is that if I do this non-scalable thing, 2,000 users will sign up tomorrow. You should be so lucky. I don't have to deal with them. And that is not what's going to happen. It's a slightly worrying instinct to say that my biggest problem is that I haven't built this one piece of the software yet. Not that my biggest problem is how I'm going to get those 2,000 users. So what we're focusing on basically is
[0:38:34] The invoicing right now, it's not people logging in or anything like that. It's just being able to take a credit card or bank account details right now. Okay, well, again, if that's the one thing you want to do, I would get that. If you think you'll have it live. My answer to that question about your biggest problem, I'm not worried about the fact that you'll be able to get people that need developers to build something. There's a lot of people that have an idea for an app.
[0:39:04] The thing that I worry about is everyone, so often we've seen the idea of I'm going to get these great developers to sort of build stuff for other people. And it has been so hard to actually do that because the reasons that people have thought they're going to get the developers or the sort of assumptions in developers know how to do this well have just been so wrong. And so you still don't have like, you won't notice your own problems because you've thought about this a lot.
[0:39:34] And I think you may find out that invoicing doesn't even need to be built the way you think it needs to be built because there's something fundamental about the model that's going to change. But getting people you don't know or you don't know well to sort of build projects on the platform, I think that's a really important step. I agree with that. I would just add in that the idea came from a prior company where we didn't have
[0:40:03] That's right. The time to go hire people and we started hiring part time people. People who were like friends of friends, things like that. And so we started to do a lot of like first hand research like that. No, I, I, I think that's great. That's actually super important because it means you have the pain and you understand the pain. But it's still like, seminars just kind of drive into the same thing, which is just, it's so critical to get someone who has nothing to do with your previous business or your current kind of core business that wants to start using it. That makes sense. Any other issues you'd like to talk about?
[0:40:33] Any other questions? I don't think so. I think that's our main thing that we know we need to do right now. Great. That's super exciting. And how did you decide about 15% is the amount to charge? I think that's another thing we need to test out. But we feel like that's a number that's not crazy for businesses to pay on top of something. My roommate's a recruiter, and she gets 30% off of the top of all of their salaries. But it's also enough for us to not have too many people to start with and be able to start testing things out.
[0:41:05] Is that a price that you're going to charge on top of the hourly rate, or is that just going to be blended into the hourly rate? Yeah, so if somebody's $70 an hour, we'll add $15 to that. Sorry, $100 an hour, we'll add $15 to that. And this is a good problem to have in the future. What will prevent people from, once they work with someone they like, just hiring them off the platform and not?
[0:41:24] I think that's another thing that a lot of developers and designers have pointed out to us. And I think we want to make sure that the tools inside of the platform are keeping people there. So it's so easy for them to get work and keep work, and they can do this on the side. So building internal tools that allow people to work remotely and as contract workers will be another thing. That's another thing that works well about the short-term projects. All right, great. Thank you very much. Thank you. Nice to meet you. Thank you.
[0:41:57] So format-wise, that was an experiment. Is that something you'd like us to do more of in the class? Was that useful, more regular lectures? Yes, yes, some middle? Okay, we'll do some more about them. Great, thank you very much. Thank you, Eric.