Interesting! I'm probably not the target audience for this, but $50 per year for an unsubscribing service seems quite ambitious. Especially as it's unlikely someone is unsubscribing from 10 services every month!
Have you considered other pricing models? Maybe buying credits, or them rolling over?
StatusPage (YC S13) | San Francisco or Denver | Full-time | ONSITE
StatusPage is building a transparency layer for the internet. Our current product exists as hosted status pages for public facing SaaS companies and groups internal to companies (private status pages)
We're bootstrapped, profitable, and looking to grow the team with people that like learning from each other and take pride in their work.
Current positions:
- Development Lead
- Operations Lead (DevOps in flavor)
- Lead Designer
Just looking at YCs returns, the vast majority of the wealth appears to be concentrated into 3 of 600+ starts (Dropbox, AirBnB, and Stripe). Even a Heroku sale for 200M+ is a drop in the bucket compared to $10B private market valuation, say it out loud and it will sound weird. "Dropbox is worth 50 Herokus"
Betting the farm implies that they have no other options, which is not the case with VCs, and it's impossible to know which will be their "super unicorns" when they write the checks, so they write lots of checks.
There's not much reason to believe YC is unlike other angel groups, individuals, or VC firms, and their data should back up that the majority of their returns is 1 or 2 companies every so often with huge wins.
The difference is that YC isn't investing $15m into companies, they're investing $20k. The corresponding valuations for the companies that they invest in is $1m on the high end (20k / 2%), not $100m. The risk profile for different check sizes is vastly different.
The risk profile as you seem to be thinking of it is an irrelevant metric when you're only interested in the return profile. They're optimizing for dollars returned, not % of companies sold for greater than money put in.
Consider a "soft landing" (VC gets their money back), vs complete death (VC gets no money back). When put alongside a $3B acquisition they're both completely irrelevant, even if on paper the 1x money back is not considered a "failure".
Check size doesn't appear to matter, the data for YC and for VC that I've seen suggests a similar power-law-ish distribution of returns.
Nitpick: VCs are optimizing for % return, not on an dollar return basis.
I would say that the risk profile is not irrelevant: if you're betting that 1/10 of your investments are returning your fund, then just one miss is the difference between a good year and "I don't have a VC firm anymore". Compare that to betting that half of your investments are returning your fund: one miss is the difference between a good year and an "ehh" year.[0]
That's true; when you compare both of them to a 30x, the difference between a 1x and 0x is small. But what I'm saying is that at a $15m investment, very few VCs expect to see a 30x, and when you compare it vs. a 3x or a 5x acquisition, the difference between no money back and your 1x liquidation pref paying out is much larger, proportionally.
The same power law may apply, but you see more of the tails in when you have a much larger sample size. If there were just as many $15m investments happening as $20k investments, you'd see the same result, but there aren't.
Off-topic: are you the same Scott Klein I talked to over the summer re: statuspage.io?
[0] Of course, that glosses over different probabilities of success and failure, but what I'm trying to say is that VCs are risk averse.
> if you're betting that 1/10 of your investments are returning your fund, then just one miss is the difference between a good year and "I don't have a VC firm anymore"
To add to this, the top 10 VC firms make up around 85% of all of the returns of VC firms combined, and the top 15 VC firms make up around 95%. (don't quote me on those specific numbers, but I believe they are roughly accurate based on a report from a16z).
Long story short - very very few VC funds see worthwhile returns. The one's that do are absolutely killing it.
The best VCs have basically created a self-fulfilling prophecy: many of these firms do well BECAUSE the top VC firms invested in them. If a16z or KPCB invests in you, it makes it a lot easier to get press and additional rounds of funding from other VCs because one of the top firms "blessed" you.
I get the feeling that YC (and similar incubators) are less about making a profit and more about connecting successful entrepreneurs with up-and-coming entrepreneurs. This isn't bad; it gives the YC partners (most of whom never need to work another day in their lives) a way to give back to their community, and I suspect many of them enjoy it.
It can't be based on pure charity because that's not a sustainable model, so there's got to be an equity component. But I suspect YC barely breaks even.
Regardless, the way VC measures returns is typically at between 70% and 100% of the life of the fund. If after 7 years, you're getting 1x your money back, that's a pretty big loss considering you could have just put it in an S&P index fund and earned ~7%. Even a 2x return after 10 years isn't that great; you're looking at an equivalent annual interest rate of ~7%. Things don't even get interesting till you start talking 5x or more (~17%). The time component of the equation is very important; the only reason people invest in VC is because it has the potential to provide greater returns than other asset classes if you're patient enough to wait 10 years for the payoff.
YC is seed stage; you expect a higher failure rate and higher returns from your successes.
Basically, you can break VC firms down into categories based on the size and timing of their investment. Typically you have the following:
* Seed / angel funds. <$1M investment, 90-99% failure rate (failure rate is higher the less you invest). Astronomical returns because they buy equity when it is at its cheapest; a "home run" here can net you several thousand times your initial investment. Your founders are often very raw and you have to work with them on basic business fundamentals.
* Series A funds. ~$1-3M investment, 70-90% failure rate (though this is dropping as more funds move from Series A to seed funding.) Probably the riskiest of the bunch since you're placing pretty big bets on a lot of companies; this is typically what people think of when they think "VC". Returns for a "home run" are 10-100x initial investment. Your founders think they know what they're doing but they don't; good VCs will help the founders through their network and by letting them make enough mistakes to learn from.
* Growth funds. $10-25M investment, 50% failure rate. These guys go after companies that have proven a market exists and there's an opportunity for huge growth if only they can scale. Still risky because scaling a business is hard. Returns for a "home run" are closer to 10x, but these guys can pull their funding if things are starting to circle the drain so a "failure" doesn't always mean a loss. Good founders here are starting to realize they are in way over their head and ask their VCs for help.
* Pre-IPO funds. $25M+ investment, very low failure rate. Returns are relatively low but also much safer: investors here are basically funding you pending an inevitable IPO. This is basically your traditional private equity firms at this point. Founders here need guidance on how to take their company public (legal, cultural, etc.) -- hence why PE guys who are often ex-investment bankers play in this space.
This is 100% a tool problem, and a problem we're actively working on for customers of ours that plan on having thousands of customized "views" for what they normally consider a "status page". Per-user functionality is one use case, but it can and will go deeper than that. If they could post an incident such that only you can see it, or such that only you are notified, they most certainly would.
I disagree that posting everything to be globally viewable is the right course of action, as this outage doesn't necessarily implicate fault on DO as a provider, but it also doesn't mean that you as an individual customer shouldn't have access to your specific view of a status page as it relates to exactly what infrastructure you live on.
You'd be surprised how prevalent this issue is, and how much inaction it creates on the provider end.
Or the OP could use a cloud IaaS provider that creates tickets on his behalf. The fact he submitted a ticket to DO and got a response indicating what the issue is, and that they are working on it is fine IMO since you get what you pay for. He's embarrassed and angry that he didn't plan for HA and had down time.
The whole point of IaaS is that the hardware/hypervisor/network is the provider's responsibility, and everything inside of your VM is yours. If the provider isn't doing due diligence to monitor their infra, then what infra are you selling as a part of your IaaS?
How do you know that they're not monitoring their infra?
The OP is complaining that they didn't post an update on the status page. I see no evidence that they were not aware of the issue at the physical hypervisor level before he filled the ticket.
customized views for relevant infra is probably the most important part of a good statuspage. I'm surprised it isn't as common yet.
Most people don't go to a status page to check out how their provider as a whole is running. They just care about stuff that is directly relevant to them.
once they're already a customer you're correct. the OP did mention the other major factor of a status page - a sales tool. prospective customers want to see incident history, who was affected, their response modes, metrics like uptime and latency are always good, etc.
your first characterization seems incorrect (did you read the story? it wasn't application errors), and your second characterization is hyperbolic at best. calling it a high-level constraint doesn't mean it's common, nor obvious.
calling them "terrible practices" is redundant, all devops horror stories can be characterized as exposing terrible practices if you're simply looking at the post-hoc view. it's a feature, not a bug, to make light of them. they're laughed about, but with the intent that they're not made again.
anecdotally, probably half and half. even personal connections can be slow and are super busy :). the other 10 were cold signups that surprised us, but enjoyed what we were doing.
This is a great writeup. Any time we can bring subconscious "gut feel" into the conscious is a win for everyone, and uncovering these kernels of truth has got to be enjoyable from a CEO standpoint.
Are you asking about us having an outage on our site, or you having an outage on your site? If the latter, you could definitely set up a redirect like the mentioned article to forward all of your traffic to your status page. We'll be doing a similar integration with Heroku for their maintenance and error pages.
Right, I'm asking about us, as a prospective customer, having an outage on our site.
I only skimmed (and bookmarked / todo'ed) the "emergency mode" article. I haven't dug into it yet. Maybe it's not much work, but in the spirit of offloading the status page work to a SaaS provider such as StatusPage.io, I wondered if StatusPage.io couldn't also allow me to cross "set up an emergency mode site" off my list by solving the whole site-down communication problem at once.
https://captainzero.ai