Ryan Hoover: evaluation

Transcript context

…There's kind of two topics. One is around consumer startups and just a few things that I've been learning there. And then angel investing and then we wrap. So around consumer. By the time this post comes out, I'll have released some portions of this series that I'm working on, on kick-starting and scaling and consumer business. And there's a few things I've learned there that I just wanted to get your take on. One is that, and we talked a bit about this, just like 99% of consumer apps seem to just not work, especially if they're venture scale, if they raise money. Just a reminder of how hard consumer is. When is the last consumer app that really took off? And so I just wanted to get your thoughts as what's your take there? What should founders do that are starting a consumer company? Yeah. Yeah, it's tough. Obviously consumer is pretty broad, so there's different levels of difficulty. I think consumer social or games, building games is probably the hardest and the one filled with the most failures. And I think a lot of that is because a few things. I think one, monetization is generally harder than a B2B company. Historically, a lot of it's been advertising driven. And to do that you have to first get to massive scale for advertisers to really care. And then you have to double it and double it and double it again. So monetization is super tough. Versus a B2B company. It's like people have a problem, they have a need, they're willing to give you money on day one. The other thing about consumer that's tough is you're always fighting different... Essentially you're fighting for attention. And so you might be some consumer social company, but you're kind of competing with Netflix too, which isn't in your direct domain. But people could be watching Netflix or they could be using your product or your social app let's say. So now you're competing with so many different things. Many of those are incumbents where the consumer also has built-in habits, routines. This is a big, big part about consumers too, is eventually you want to be an internal trigger in someone's mind where they just without even thinking they go and use your product or services for some reason. Usually you'll start that way. You need external triggers to pull people in, but eventually you have to get to that point. So how do you overcome those internal triggers they have for other services, other products? It's really, really hard. And then I think a lot of it is like B2B companies, usually you have a clear problem that you're solving and you can talk to customers, you can understand what are their current behaviors, what solutions are they using now, what do they like about them, what do they not like about them? Whereas consumer, there's a little bit of that, but it's fuzzier. If you take Twitter and you even ask someone, why do you use Twitter? And people will have different answers that are all fuzzy and they ultimately tend to come down to some sort of innate human desire. For Twitter, it could be about I want to be informed with what's happening in the world, or it could be I want to feel less lonely or connected to more people or something like that. Whereas if you go to, let's say DocuSign I think is a great example of the B2B company, it's super simple. It's a way to get legal docs signed online. That's what it does. It's a thing that people have to do. It's very clear what it solves. And so B2B is easier just to navigate that idea maze. And so with consumer, your first blog post on this topic touches lot on the idea side, and a lot of it resonated with me, especially the insight piece. What is the insight that you as a founder have to build this thing? r, your first blog post on this topic touches lot on the idea side, and a lot of it resonated with me, especially the insight piece. What is the insight that you as a founder have to build this thing? Because I think it's really hard to build a consumer company without some sort of unique insight, maybe impossible. And you can get that in many different ways. It could be through your own experiences. I used to write a problem journal just when things annoyed me or when things were less efficient, I would write it down as a note and I didn't try to solve it. I didn't say, oh, here's the solution. I was just like, this is annoying. In San Francisco, one example is a lot of people don't have laundry in their unit, so I'm like, that's kind of annoying. That's a problem. Maybe there's a solution out there. So things like that, I don't know. There's a bunch of different ways. Your blog post does a better summary, I think, of the different ways different companies ideated and came up with their ideas. But yeah, many different ways to navigate it, but needs an insight of some sort.…

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