Edit: This may have come across as too terse to pass the not-just-civil-but-nice test so I've added more explanation to my choices
I wasn't following the initial wave of submissions so here's my fresh-eyes take on the finalists. I'd particularly like to see other people's assessments of the whole field (vs individual submissions)
Not Ambitious Enough: These are in competitive spaces -- even if they delivered on their goals they wouldn't be #1 of their kind
Krewe (There are so very many social networks -- and nextdoor already exists. What makes this indespensible?)
Pikii (There are tons of pseudonymous social networks in particular -- what are you trying to accomplish?)
Too Narrow: I don't think there's going to be enough customers in love with this product for a funded growth business to thrive. Specifically, these have a low enough ceiling that they'd be stronger self-funding than taking outside money.
Author Investments
AutoMicroFarm
Bad Market: Your customers don't care about the problem you're solving:
Casepad (Lawyers are pathologically tech-phobic and by their nature are spending someone else's money and taking a percentage. Cost savings are taking money out of their pocket.)
Tiz.com (Liquor distribution is a de jure or de facto monopoly/kleptocracy. Being inefficient is a profit center for them.)
Pet Rocks: These solutions lack a problem
Eat My Dust (It's free to check if you live next to a superfund site. Have you?)
Utiliz (For almost every residential customer this is saving literally dollars a month)
Too Ambitious: These applicants are so far from winning that money would be premature
Brodlist (This is one of the toughest markets on both tech and marketing grounds. You need to demonstrate that you are better than the teams that are currently struggling)
Gresham Dollar (Your competition has an army and a navy)
Cowardly Lions: You already have what you need to succeed within you
Hacksplaining
Pinboard
Yet Anothers: Techie itch-scratching is an overserved market
Hi, I'm Gabriel, one of the founders of Casepad. Your comment about our market, "lawyers are pathologically tech-phobic and by their nature are spending someone else's money and taking a percentage. Cost savings are taking money out of their pocket," is, based on our research, incorrect. We found that lawyers in the particular fields we are interested in, both young and old, are keenly interested in cost and TIME savings. In fact, most of these folks are so desperate for additional time that they would be willing to overcome any alleged "tech phobia" in order to get it.
Also, most public defenders, prosecutors, and court functionaries are not "spending someone else's money." Rather, at least in many metropolitan areas, they are salaried government or non-profit employees who are just trying to get the justice system to work.
The folks we interviewed have said if you can save us x amount of time we would be thrilled to pay you $y per case because it will be more than worth it. We will only be able to see how much the market will bear once we're done building our product but, so far, the fact that we have been able to get a public defense firm to sponsor some of our development costs bodes well for the idea that lawyers are interested in spending on tech that saves them precious, precious time.
EDIT: I'd encourage everyone to read through the application posts. I think the Q&A in our thread fleshed out quite a few of the concerns about starting a business for this particular subset of the legal profession.
" We found that lawyers in the particular fields we are interested in, both young and old, are keenly interested in cost and TIME savings. In fact, most of these folks are so desperate for additional time that they would be willing to overcome any alleged "tech phobia" in order to get it."
I sadly have some experience in this, and have to say this is 100% true.
However, doing the research for it, i'd say is 100% true that there are large subsets of the legal profession that desperately want to use technology to solve problems[1], it's just that they get sold a lot of snake oil, and don't have either the time or energy to try a billion solutions to find the one that works.
(which is one reason the book was so popular - we gave people actual viewpoints on what would work and what wouldn't. While this is useless for the HN crowd, which tends to either know or have time to play, for family lawyers, having an expert drop something in their lap and say "this will probably work for you" is quite invaluable)
[1] This is a very different subset than the "hey we need large scale enterprisey solutions", because, for example, in family law, it's almost all solo or small firms.
I disagree about Eat My Dust. It's more than just "check if I'm near a superfund site" It's about checking your actual (or prepurchase) home for various hazardous materials, regardless of superfund sites. This already happens regularly today.
If you consolidated a bunch of different checks through one company, you could do a ton of really valuable things. First, it's convenience for the end user. But even cooler are what it provides for the business. For example, the data by location could be used for targeted marketing (send notices to neighbors advising them that similar homes have X problem, and they should get checked too). Or you could make the data SEO friendly, so when people search for "[local neighborhood] [problem]" it would show a map with incidences for their neighborhood. Or you could bring in service providers to compete for remedying the problem, while giving discounts and convenience to the homeowners.
It's a real problem too. I know someone who had serious health issues that were only fixed when they discovered a hazardous problem in their home.
Agreed. I'll go back to the Flint, MI situation and suggest that if they include a water test as a feature, there could be considerable demand for this. Yeah, there are at-home tests, so they'll need to be better than that in some way, but I do think people want to know if their (water|air|food|etc) is safe or not. And now we know we can't just blindly trust the State, on things like water quality.
I disagree about your assessment on AutoMicrofarm. If they execute it well, I believe there is a good market for such things. If it doesn't break my bank, I would love to have my own micro farm to product most of what I need, for the most part. I think its fun and I don't think I am alone in this regard.
I think the market will be obvious when each AutoMicroFarm pays for itself in a year (or even better, a growing season). But, that's a few orders of magnitude away in terms of manufacturing scale.
I'm positive about your idea and it's potential use in the future. Moreover, since you have already moved onto 4th prototype, this looks promising.
May I suggest you to think about integration with other vendors (e.g. SolarCity) for a sustainable home or place.
All the best! [Voted]
Would it really "pay for itself" given the labor costs (time)? I mean you say it is automated, but what about refilling water, cleaning up dead fish, and whatever else comes up? Do I have to clean the fish tank?
How do you prevent animals from getting into it and eating your plants or fish?
If this becomes popular, what's preventing competitors from making the same thing, and commoditizing your product?
Almost everything you grow in a garden can grow in aquaponics. The only limitations are extremes: plants that require a really low pH, such as blueberries, large trees (banana trees will wreck your veggie bed), etc.
How important are the fish and aquaculture part?
The fish are very important. They provide the nutrients for the plants (you still would need to add a bit of iron once in a while). Without the fish, you have a hydroponics system, with ongoing nutrient costs.
Maintenance is minimal. When I ran my first proof-of-concept system for a year and a half, I averaged 15 minutes a day, and that was mostly to feed the fish (easily automatable for ~$10).
Do I have to clean the fish tank?
It depends on how clean you want it to be. If you're looking for aquarium-level of cleanliness/clarity, then you'd have to clean it a few times a year. If you're ok with backyard-fish-pond-level cleanliness (a bit of algae growing, etc) then once a year (or less often) is fine.
How do you prevent animals from getting into it and eating your plants or fish?
I had my system in a greenhouse, so that wasn't an issue. If you get an outdoor system installed, you can add a number of off-the-shelf measures to prevent animals from eating your harvest, such as nets.
If this becomes popular, what's preventing competitors from making the same thing, and commoditizing your product?
If we're able to figure out the mushroom media feature, that would be a huge differentiator, but that will be an R&D journey to get there. Another way we can build a sustainable advantage is to develop AI to tell you signs of early-stage pest infestation/disease, and what you can do to avert it (But that requires both smart hardware and software dev).
Good luck, I voted for you. I would love a simple system like this - fresh food in my background with low effort and cost. Lots of reduced waste from grocery store shopping (in terms of shipping to the store and associated spoilage). Also a great program for the surprisingly large amount of families in the US that struggle to get enough food.
I agree with you and the parent post -- I think it's a neat idea that people will want I just doubt the total market being big enough that the "get investment and grow fast" model makes sense.
I don't think anybody's going to drink your milkshake if you take a few years more to come to market so unless you truly need big capital to do anything at all you seem like an ideal candidate for running super lean and self-funding.
I can give you a dozen reasons why Krewe IS ambitious. And the competitive space is a joke. Every other company is trying to do a "Tinder for friends," but that model is inherently broken. Krewe is doing something entirely different as it actually replicates the way people naturally make friends (particularly when they're young).
Response to edit:
Krewe is not a social network in the same sense as something like Facebook. It's aims to get you to actually meet (in the real world) and get to know people who live near you. It does so in an a way that's both comfortable and convenient, which gives you the best chance of forming real friendships. Everything else fails at either comfort or convenience (or both), which is why no one has been able to make a dent in the (massive) market.
Krewe is bottom up vs Nextdoor which is top down. Krewe places you in a group of five other people and then lets you expand from there. Nextdoor dumps you into a chat room with all your neighbors -- it doesn't exactly encourage you to meet people. It's really more like Craigslist. My neighborhood (which has 60,000 people in it) has no activity in it.
I can go on on how Krewe's different, but rest assured, it is very different from anything that's out there. I have exhaustively looked.
+1 on the problem with a law startup. A couple of years ago I went to some law firms and asked about their need for search over all their documents. They weren't really interested in it as they can bill out s librarian at $125/hR while paying them $45/hr. So they actually make money on this.
That isn't to say this can change in the future but until then it is a very hard market to crack.
Oh and lawyers are cheap, many of them still use word perfect as why pay to upgrade?
Alternative fee arrangements, billing analytics (Sky Analytics and others), and technology audits (http://www.abajournal.com/legalrebels/article/could_you_pass...) are slowly killing the billable hour for large corporate clients. You can think of an AFA as a fixed price contract. Billing analytics make it easier for clients to compare rates between law firms.
To get back to the topic on fixed fee: I asked a young lawyer at that firm why don't they move to that. He replied that every case that comes to them is different. That they always dig up some weird data that time isn't budgeted for. What's a client going to do? Tell them no and potentially loose a million dollar case to save $10k?
Granted this sounds like a license to print money and shows that the legal profession isn't as cut and dried as say building a bridge. But the reason you are going to a law firm is because something weird showed up and you need it fixed as there is a lot to lose.
Notice I said "weird". There's plenty of room in this space for routine contracts. But that's rapidly going to zero profitablity with canned downloadable forms.
> Tiz.com (Liquor distribution is a de jure or de facto monopoly/kleptocracy. Being inefficient is a profit center for them.)
This might make for a crappy exponential growth "startup", but there is most likely a great business there.
If you can grok Vertical Market X well enough that you can build software to make their life simple, Vertical Market X will happily share their inefficiencies with you.
(And it wouldn't surprise me if the incumbent in this market is a Delphi/VB/FoxPro/Access guy who eventually gets around to coding new features while sitting on the balcony of his beach house.)
I am the founder of CADWOLF. There is no product that links a CAD model to a mathematics background to an FE model to a part tree system to a documentation and analysis system. While there are a number of products like Matlab to solve mathematical problems, we are looking to redefine the entire field of engineering.
Our system as it stands now with web pages that act as documents that solve mathematical problems is just a first step. It represents a large amount of work already put into the platform, plus the ability of the founder to achieve the stated goals, and the ability to break the system up into steps that can hopefully make the company financially viable without large scale funding.
Bcoates,
At Utiliz we have spent a significant amount of time looking at the energy market, average usage and addressable customers and our estimate on savings is more than a few dollars. Kevin came up with this idea after saving a few hundred last year through frequent switching. We estimate we can save the average household on the order of $150-300/year, at a cost of $30. It's free money, and that doesn't include the time we save people having to do it themselves. The bigger ambition is that by doing this we rationalize the chaotic consumer electricity market, force bad suppliers out, reduce electricity rates through broker negotation on our increasing client book, and finally help states deliver on the promise of deregulation. That is the moon shot
You can categorize the potential customers into 4 main cohorts:
(1) Educated and spend time every few months finding the best plan and enjoy it - we will never get these guys
(2) Educated and spend time every few months finding the best plan and hate it - we will win all of these - Kevin lives here
(3) Educated and keep forgetting to switch on time - we will win all of these - Tom lives here
(4) Not educated and need to better understand the whole process - this is a massive cohort where we can probably win 25 - 50%
Feynman nano (unnamed Infection-resistant materials) definitely ticks both the ambition, problem and market boxes. There is currently a ~$30 billion market for catheters, production at scale of nano-structures is currently unsolved. Combined with the current growth of antibiotic resistant golden staph infections, they would seem to be poised for market dominance if successful.
Thanks for clarifying your reasoning but remember, a 1998 Google would have also fallen under Too Ambitious. At the time, search was one of the toughest markets on both tech and marketing grounds. What they found was that by being significantly better, a lot of those challenges, such as marketing, melted away. We would like to prove that Brodlist is significantly better, and this seed round would let us do that.
Co-Founder of Brightwork here. Just wanted to address the classification of "Yet Anothers" because I feel like the summary YC put next to our name may have done more harm than good when it comes to what we actually do.
Brightwork is an API Developer Platform. Meaning we built a platform that enables Developers to see usage data, performance information, as well as cost projections of their APIs. No other API Management platform offers this level of granularity.
On top of the aforementioned feature set, we also allow API swapping in which Developers do not have to re-code or re-deploy their application.
We're also offering pre-bundled APIs to enable fast prototyping so Developers can focus on the front-end design rather than the cumbersome task of standing up a back-end which can take some time.
If you have further questions don't hesitate to ask or email me at [email protected] Hope that helps!
Edit: Fair enough. My competition does have an army and a navy. But I still think we can do it. Unless they start providing a basic income in their own currency, I'm confident that my currency will disrupt theirs.
The two I voted for were Brodlist and Gresham Dollar (my own). Why do you feel that they're too ambitious?
For all the platitudes you see on Facebook and LinkedIn about being innovative, it's surprisingly rare. Everyone is scared. They only dream of moon shots when they already know the happy ending.
When people actually stand up and try ideas like the Gresham Dollar, they're attacked instead of supported. When they say "too ambitious" they just mean "ambitious in any way". They'll be scared until it works, and then they'll love it and swear that they supported it all along, and post some platitude about it on LinkedIn.
They'll get in your way, maybe even try to stop you, Suncho. Don't let them. Keep going.
Customers can save a lot more than dollars a month on utility bills.
After my freshman year, I interned at a small company in Texas that had the same business model as Utiliz. Send us your bill, we analyze your usage data and get you on the best plan. You split the savings with us.
Do NOT underestimate the energy bills in Texas... The average prices I saw were ~ $800. Obviously this was a luxury market, but your perception that people are spending 80-150 on energy is completey wrong. Not only that, but they are often far overspending from what they need to.
The problem with electricity deregulation is that every company is selling and reselling the same service, often even from the same plants. So the only differences are superficial pricing and marketing differences. Two customers living a mile apart, in similar size houses, using similar amounts of electricity, might be paying drastically different amounts of money.
When I got there, the processes were all manual... but I automated a bunch of it. The whole business is very automate-able, as it's just a matter of parsing .pdf electricity bills and comparing prices on the homepage.
Hi chatmasta, Kevin from Utiliz here. How did your business do? Splitting savings is always a hard pricing model to sell. Our unique angle is that we don't just switch customers to the best plan once, we remain their agent, track the market daily and switch them whenever a new opportunity comes up. We do that in return for a low, transparent, annual fee from our customers instead of taking a hidden spread on the rate. In deregulated states one can almost always find short term 3-6 month rates lower than the incumbent's rate, often as much as 20-30% cheaper, so our service can pay for itself in as little as one month. Brokers who can bring large aggregated loads can negotiate better than retail rates, even with their supplier commission. Because we will be a zero-commission broker for the suppliers (we're paid by our own customers), as we scale we'll be able to negotiate even lower rates for our customers. Not sure how long ago you were looking at this space but many suppliers now have some mechanism to help with automation of bulk switching and for those that don't we are building the tech.
It was a small shop run by two guys, mostly drawing from their first and second degree connections. But they had hundreds of customers and were making in the mid five figures per month IIRC. Take that with a huge grain of salt.
People were more than happy to pay a percentage of their savings, but that might have been due to personal relationships with the founders and the fact that these people were pretty rich already.
And yes, the ongoing relationship you mention helps. That gives an answer to "why wouldn't I just do this myself and keep 100% of the savings?"
Chatmasta, you are 100% correct. There may be times where the best rate we can find is publicly available but the service aspect will retain customers in this case, especially as we are charging a reasonable flat fee. However as we are a broker we have access to private rates and as our book grows so will our ability to negotiate discounts thus making us more sticky. A core part of the beta is a 'how much did I save' feature which will make cancelling a tough choice. Thanks for your comments!
Thanks for the breakdown of the shortlisted startups. It's really thorough and I largely agree with your assessments.
Your breakdown reminded me of a PG essay (http://paulgraham.com/startupideas.html). It's essentially a long form checklist for coming up with and testing your start up ideas.
I'll try to answer some of my check list here to validate why we think there is a great deal of promise in our small little startup.
>>
Problem/Solution —
1. Are you solving a problem that you, as founders, have themselves? Yes. We have all either gone through the painful process of planning a wedding or see that process happening in our horizon. Speaking for myself, I'm starting to budget the money and time necessary for my eventual wedding, and I kept asking myself.. Why can't I do something a bit smarter when iterating with vendors. After using 99designs, I thought that their process of iterating with potential designers could work well for wedding vendors.
2. Is this a solution you/your team can build? Yes, Absolutely. We don't think this is necessarily a hard technology build and we have backgrounds in electronic trading systems/marketplaces.
3. Do few others realize that this is a problem/solution set worth doing/building? While the wedding space is big, we have yet to see any innovation in the process behind actually planning a wedding, iterating with and paying vendors.
Well —
4. Is there a small “well” of users who need your solution urgently? Yes! We have already a small group of clients who don't have the time to try to line up vendors, sit with them, and iterate with them to produce a proposal.
5. Who wants this “crappy first version” now? Pretty much anyone who wants to save a bit of time when it comes to wedding planning and wants someone else to do the leg work to get vendors to bid on their ideal wedding.
6.Starting with a small market is good, but do you have a fast path out of it (to grow into a bigger market)? As mentioned elsewhere the wedding market is globally as big as $300 bn globally.
Self — “Live in the future, then build what’s missing.”
7. Are you a “leading edge user”/”living in the future” of this silo? Yea! I kept asking myself, when I looked at budgeting time/money for wedding, why can't I do more of this online? Why does iteration have to be face to face?
8. How is this a “gap in the world”?
Literally anytime I hear anyone say the word "paper checks" my startup mind turns on. There will be a world where not only will a couple get to iterate quickly through technology, but we will be able to pay initial and final payments with the press of a button.
Those were just a few questions/answers from PG's essay, but it could be helpful for other startups to think about these. Would love to hear from others.
I wasn't following the initial wave of submissions so here's my fresh-eyes take on the finalists. I'd particularly like to see other people's assessments of the whole field (vs individual submissions)
Not Ambitious Enough: These are in competitive spaces -- even if they delivered on their goals they wouldn't be #1 of their kind
Too Narrow: I don't think there's going to be enough customers in love with this product for a funded growth business to thrive. Specifically, these have a low enough ceiling that they'd be stronger self-funding than taking outside money. Bad Market: Your customers don't care about the problem you're solving: Pet Rocks: These solutions lack a problem Too Ambitious: These applicants are so far from winning that money would be premature Cowardly Lions: You already have what you need to succeed within you Yet Anothers: Techie itch-scratching is an overserved market Survivors: