Justin Kan

This format is painful to read, so I'm copying the content here. This is a series of tweets by https://twitter.com/balajis

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If you are using software to go after a legacy physical vertical, we are most excited if you do it "full stack" [0].

With @counsyl, we found that one cannot live by bioinformatics alone. So built a full clinical lab + software + national salesforce.

Here is a video of our robotic genome factory: Also: insurance coverage, clearances, clinical integration... [1]

The reason to do full stack is that it's hard to replace just one layer of an outdated legacy stack. CAC & integration costs can kill.

For example, consider "restaurant powered by technology" vs "tech for restaurants". With code, reinvent industry and make better margins.

You cannot automate something till you've done it manually many times. You cannot abstract an API till you've seen many specific examples.

Need to build a site of the scale of http://Amazon.com - and encounter all the problems - before you could do http://aws.amazon.com .

Reinventing agriculture? Build new kind of farm, w/ solar panels & self-driving tractors. Control all factors, show that code cuts costs.

More examples of full stack startups.. Education: [2], Autos: [3], Hospitality: [4]

By doing it end-to-end, you see things. First, sometimes a good reason beyond tradition (eg regulatory, logistical) for legacy practices.

Second, your control of adjacent layers may eliminate the initial problem you were trying…

Firstly congrats, that's great that your business has driven so much ARR with 1 person and no funding! Based on your question I assume that you haven't sold a business before so here's some things to think about, ultimately before even deciding whether a sale makes sense for you. This is a timely post, my company had an acquisition offer that we ultimately rejected so I have some insights FWIW. A brain dump:

1. Only engage in acquisition talks if you're very serious. They consume a lot of time - negotiating will become your new job. The view is don't talk to Corp Dev unless you're serious [1] (this is very true)
2. Really you should sell when you don't want to sell [2]. Firesales will produce a minimal $ outcome. The upside is it's a complete package - a sale is still a sale (successful entrepreneur/exit), you're getting something for the business, it's a good resume story especially if you're a first-time founder. You'll also get a good job at the acquirers business
3. The market price isn't based on some X of your ARR, it's whatever someone is willing to pay you, so $200k ARR sounds great (congrats btw), but it's what you're worth to them.
4. Asset sale vs stock sale - generally businesses want your assets not your stock, whereas the tax for you (assuming you owned you stock >1 year) will be less via a stock sale, you'd be double-taxed from an asset sale so really try against this way [3]
5. Tax is a big consideration. In CA, long term capital gains is ~30% vs ordinary…

How much are you paying though? The service is undoubtably being heavily subsidized by VC money. This is the classic silicon valley model, a model I love, but there has to be a light at the end of the tunnel.

As noted in the OP, this also reminds me a lot of Exec, and Exec didn't work. In the post-mortem, JK makes a very interesting point:

> if a job request came in and there were no Execs available to run them ... we sent someone from the office to run the jobs ourselves. Unfortunately, this gave us a false sense that the quality of service for our customers was better than it was, as the average competence of our employees was higher than our average recruitable errand runners. [1]

This is a critical problem that any service business like Magic will run into. Training and quality becomes much harder at scale, and the more you have to pay for "Magicians", the more you have to charge. And if it costs too much money, it isn't "Magical" anymore. Yes, they have advantages over Exec because they can arbitrage less expensive labor overseas, but quality at an efficient price is still going to be a huge issue.

1: http://justinkan.com/exec-errands-post-mortem

Another 30something here:

Just spent the past month forcing myself to understand Snapchat and I finally get it now. Took a bit, especially since the whole experience is heavily gamified. I swear the developers are huge video game junkies!

The big takeaway is that Snapchat is just much more personal and real than the text based social networks.

For those interested in trying it out I recommend.

Mark Suster => https://www.snapchat.com/add/msuster (Venture Capitalist, tech/leadership 'Snapstorms')

Justin Kan => https://www.snapchat.com/add/justinkan (creator Justin TV, now Twitch, very open in business/tech)

Here is my snapchat as well https://www.snapchat.com/add/mrelijahlynn

edit: This article got me to try Snapchat, I was a big fan of Justin TV and streamed a ton of content, including live broadcasts from the Ron Paul Blimp. http://justinkan.com/why-i-love-snapchat

Also, this article can get you up to speed on the very different UX => https://bothsidesofthetable.com/snapchat-101-for-vcs-and-old-folks-47fbfcb29f78

again pre-dating the strategy.

YC has been actively seeking to grow as fast as it could since 2009-2010, and was funding over 70 companies in a batch as early as 2012, then they scaled back in 2013 after experiencing growing pains.

Plenty of well-known companies have come through in that time eg, Pebble, Stripe, Firebase, Parse, Crowdtilt, Coinbase, Instacart.

Cruise went through YC in 2014, after the time you (inaccurately) assert was the beginning of the "growth strategy".

BTW when Criuse first hit HN, commenters were generally nonplussed or critical [1], just as they had been with Justin.tv (some dude with a camera on his head??) and then Twitch (watching other people play video games??).

From the dude with a camera on his head to Twitch's $1Bn exit took 8 years, and even at year 7 people didn't think it was a winner [2].

So, go easy on the new guys hey? :)

[1] https://news.ycombinator.com/item?id=7933045

[2] http://justinkan.com/the-99-percent

Best you're going to get is a Rashomon-style retelling. Anybody early on has retold the story so many times - pitching new hires, onboarding the next wave of employees, and then the next wave, and then the next wave - that they probably don't really remember the real thing very clearly anymore.

Then there's also the pressure to agree to a similar narrative, not necessarily in a bad way, just like any couple has agreed on a how they met story, they've been telling it for so long and had the arguments about "did that happen?" that the story has been set. Who knows what happened.

You'd have to assemble a collage of The Official Story, some of the weirder first interviews the group gave in the press, early non-hires who interviewed and caught a glimpse of a weird snapshot, the inevitable disgruntled folk (who may not inevitably wrong).

Aside from that, I do like http://justinkan.com/three-stories , it's a good series of disasters.