I have to commend this article for actually doing the thing HN constantly demands. The article introduces the company and the problem it's solving to contextualize the story, rather than assuming you're a faithful reader of their newsletter. The article structure here assumes a successful viral spread out of its little bubble into the wider world, where people have no idea what this company is.
Copywriters working for HN-adjacent companies: please, copy the structure of this article!
I saw your comment before reading the article, and I was skeptical. After reading, I think you've captured this perfectly.
I'm not a marketer and I don't typically take an interest in this subject, but the blog post breaks down the problem in a way engineers can appreciate.
They describe how they characterized their unique market, the funnel to attract new buyers for their cell installations, and how Gruber's audience fits the necessary parameters. There's a lot more, and I'm not doing it justice, but it was a fantastic read.
This is an interesting case study, but my research on acquisition channels that consistently work for founders [1] has shown that sponsoring blogs/web-based "real estate" is hit-or-miss (and doesn't work) for most founders. Here are some dev SaaS examples:
1. SnapShooter ($1k+/mo), a tool to create daily backups of DigitalOcean droplets:
" I tried sponsoring blog articles with a little bit of success." [2]
2. BugFender ($35k/mo), a log storage service for app devs:
"Here's what didn't work: sponsoring developer newsletters and podcasts" [3]
The reason for this (IMO) is that most products that advertise themselves (especially on dev blogs) are not unique/compelling enough. Why should you buy a sponsored app logger when you know 10 other look-alikes with 5 other friends using them? The fact that these guys managed to invest $6k and get $200k in return from sponsoring a blog just shows how unique/compelling/valuable their value prop. is. Good luck!
It depends highly on your acquisition channel too. Twilio and Stripe famously target developers knowing that in a lot of organisations they don't make the final decision but have a lot of "pester power"; it's a risky, but big pay off strategy. I'd imagine (ie no data) that companies with that strategy may benefit more from sponsoring developer events/newsletters?
Jordi, co-founder of Bugfender here. I totally agree. We tried many thing and this kind of advertisement didn't work very well for us. We tried several things in this area, with varying degrees of success.
The main differential factor here is the price of what they're selling. In this case it's a high-value, pretty unique item sold to a highly targeted audience, that 1-2 items sold already make up for the investment. Good for them!
Also beware of confirmation bias: we know this particular campaign worked and was extremely successful, but we don't know the other things this company tried and didn't work, nor if this team had experience in a very similar market that saved them some experimentation.
Is it really $200k in sales if the people that are buying are guaranteed a rate of return? When I looked at the site a month ago it looked like these PoPs were being marketed as an investment. Given the capped upside, it looked as if the buyers were not buying equity, instead providing more of a loan with an expectation of getting their money back and more.
Don't get me wrong, I think this is a very cool project. I just find the marketing confusing.
That's a great question. You're right, It's a commercial agreement, not equity. We think it counts as a sale, but I'm totally open to a more appropriate term.
Ponzi Scheme? Half joking because this looks like an interesting concept. But reading your spreadsheet you have a "minimum guarantee" of 10% annualized return. Which is not possible.
TBH, I had the same thought. Theoretically if the return was that good, they would not need to break up the capital investment and manage lots of individual relationships. They could simply raise the capital they need at a very low price and have 1 relationship which would be much more efficient.
It is either a scam or an incredible investment opportunity. We will know in 3 months. If it is a scam, they will keep selling them individually. If it is an incredible investment opportunity, they will stop selling them and be funded by someone who is reading the article today. In the US, their investment proposal likely violates the law by guaranteeing a return.
I hope its an incredible investment opportunity and I hope they deliver what they say they will.
There is no better bargaining chip when it comes to negotiating with investors than paying customers. I'm saying maybe this is a baby step into the continuum you describe.
3% is good but fairly common conversion rate for an ad. Not really groundbreaking nor newsworthy.
But why it's on HN then? The answer - you are the product and HN is a marketplace. This makes HN kind of spoiled place to be at, as it amplifies the illusion of "good things" you "must have" or "participate in".
I really miss the golden era of BYTE magazine in the 80s. That was a classy act. But what we have now is a noisy reactor, where nearly everything is worthless but fuels illusion and false hopes. We give in without even considering an evident fact that we are being manipulated for cheap.
Yes, I may sound too dark, but then let's not call HN "a community". This a commercial enterprise with its own interests under the hood. Not the neutral place for intellectual discussions as it tries to appear.
3% conversion on a product that costs $20k is normal? I don't think so.
As to your cynical meta-analysis, these people are doing something really difficult. I'm very happy to celebrate with them in any of their little victories, good on them! I hope to see more from them in the future
I kid you not, the last time I accidentally visited Product Hunt there was literally an app on the front page intended for the sole purpose of "mapping where you've cried". This type of Indie Hackers (as much as it saddens me to say) hype noise is nothing but counter-productive to "helping" side project hackers or aspiring founders.
Good to know. So what is the reason that yCombinator maintains and curates HN? It must cost them money even if it does not make them money. So why do they do it? Is it just good publicity?
Contrast this to Reddit. It is a big company with rather similar product, which is its only product and which makes them a lot of money I believe. How can YCombinator offer a similar product for free?
Reasons I can think of (unrelated to YC/HN though):
Fostering a community of tech-savy people interested in the latest technologies increases their brand size. HN is also a place where YC-related companies can advertise to and hire like-minded people. This in turn would increase the chances for those companies to succeed.
Regarding costs: I believe this site is hosted on one somewhat beefy machine, maybe two for redundancy. Compared to reddit, this site is (I believe) comparable to one active subreddit (Reddit has 100s of those), without image or video support. It has a rather simple domain model, only marginal styling, and has generally only a low overhead per page loaded, making it a rather lightweight application for the amount of traffic it receives.
Also, if you're interested, (parts of) the sources of HN are available here[0], it's a rather lightweight server in a dialect of Lisp.
The project is very interesting and I hope it succeeds, yet from a financial perspective I do not understand why to fund it through retail investors/franchise model/crowd debt funding.
From an investor's perspective there is limited upside with full default risk, yet the risk is hardly addressed. If the risk really was low, then why not self-fund the first X PoPs and convince with data on customers, ROI etc.?
Same question, why not “laser focus” your efforts on convincing one technically proficient investor with deep pockets, rather than having to convince 100s-1000s via crowd-funding?
Is it that investors need to provide the roof top too, so it’s a way to reach out to property owners?
Great question.
There's a few reasons. First, It's taken ~20yrs, the Indian government, 15 telecom companies and more than $200B to bring ~600M out of 1B Indians 4G. Broadband deployment is more expensive and currently only 20M Indians have 10mbps or greater 'broadband' connections. Even at Wifi Dabba's dramatically lower deployment cost, the price tag to connect 500M Indians is enormous and we're not willing to wait 20 years. Even if we're insanely successful and we raise a ridiculous amount of capital, the sheer magnitude of capital required is crazy high. Second, The reason net neutrality, censorship and other malaise that ails the internet happens is because of the high deployment cost of broadband networks, this automatically makes ownership of these networks only accessible to nation states and mega large corps. Power becomes centralized. This approach we are taking at Wifi Dabba is one small step in exploring more scalable ownership, deployment and maintainence models. The basic logic is this, as the price of broadband distribution tech goes down, the more number of people that can afford to buy and distribute it and therefore everyone gets connected faster. We'd like to accelerate that process. We have raised venture capital from YC and others and will continue to do so, but we also have a really strong focus on the long view.
> Second, The reason net neutrality, censorship and other malaise that ails the internet happens is because of the high deployment cost of broadband networks, this automatically makes ownership of these networks only accessible to nation states and mega large corps. Power becomes centralized.
But isn't the centralization happening here too? Since the investment capital has term-limited returns, eventually the equity and equipment belong to wifi-dabba.
> Even at Wifi Dabba's dramatically lower deployment cost, the price tag to connect 500M Indians is enormous and we're not willing to wait 20 years.
I think I understand, and it's similar to how railways in the US were built. Savvy investors won't cover the tsunami of small region losses you'll need to scale quickly. They'll only want to fund dense, urban markets with the lowest risk.
I do understand your capital requirements in X years down the line.
I also respect your goal of decentralisation and community ownership. (As an aside, what does ownership mean? If illegal things were to happen on my PoP are you saying I am liable?)
Yet, my question stands: Why do you want USD 2M in cash from retail investors today? Why not self-fund the first X PoPs, show it works, then scale?
>Same question, why not “laser focus” your efforts on convincing one technically proficient investor with deep pockets, rather than having to convince 100s-1000s via crowd-funding?
Traditionally the franchise model allows for small entrepreneurs to tackle local problems while benefiting from economies of scale. In this case, small entrepreneurs can tackle connecting at the neighborhood level while wifi dabba can negotiate bulk equipment rates and tackle things like support. It's hard to scale out something like laying wire in a neighborhood because ultimately you have to hire people that don't really care about the business. They're less effecient and effective than a franchise owner who has a profit motive.
Per Wikipedia, "Franchising is one of the few means available to access venture capital without the need to give up control of the operation of the chain and build a distribution system for servicing it."
This is exactly why the JOBS-act style crowdfunding model doesn't work, and may harm small-time investors. If your business is low-risk, you self-fund or bootstrap. If your business is high-risk but has a decent team you can just raise from a VC. It's only high-risk, low-reward ventures that can't raise from a VC that will seek funding from a boatload of zero-value-add small-time investors.
I think this probably falls into a very niche category of high-risk but "I get to brag about owning a piece of piece of broadband infrastructure 8000 kms away" assets. As it stands right now, investors are essentially purchasing novelty, not a risk-assessed financial instrument. It would be cool if they can make this into a legitimate funding model though.
IMO (and that's a big IMO), you raise from VCs not just for the working capital but also for the network and the advice. Rando JOBS act investors provide none of that, which means their money is worth a lot less. It creates a really big adverse selection risk for main street investors.
From what I've read, the PoP franchisee revenue is based on a 70/30 split of subscriber revenue generated by that PoP (with a guaranteed minimum monthly return). The idea is the PoP will serve 1000s of monthly customers and part of Wifi Dabba's take from that income is what is paying for the upstream/backhaul.
I enjoyed similar success with a DF sponsorship back in October 2015 (I’m guessing his audience has grown significantly since): I purchased a sponsorship my book ICONIC (shameless plug at http://www.iconicbook.com) for $9,250. Looking back on my stats I approximately tripled that in direct sales, but I’m sure the actual return was higher as I’m certain some folks went to Amazon instead of my site where I was selling direct at the time. I recently sold out and decided to close down my Shopify store so I can’t provide traffic details but IIRC there was a massive spike in visits when the ad went live.
Gruber’s audience was obviously a no-brainer for this product. And dealing with John, which was brief, was a pleasure.
Seems like about 7.5k a week in revenue, or about $400k. Not much different than a senior engineer at Google then, so I guess it depends on perspective. (his brother, formerly an apple employee, probably made more than him).
He is and it’s well deserved - he’s built an incredible following and he has earned enormous respect and trust from Apple leadership (and his Apple insiders who he taps as needed). Don’t forget he’s also one of the creators of Markdown (https://en.wikipedia.org/wiki/Markdown)
If I'm reading the 'buy' page correctly, this is in fact only $10k in deposits with $190k in commitments at an unknown future time, similar to Tesla reservations.
A bit different than $200k in hard sales. Actually for $10k you may as well buy your own reservations just for the marketing value of "$200k in sales"
That sounds like what the production company for the movie _Unsubscribe_ did four months ago to 'top the US box office' [0] by buying out / sponsoring all their showings and then trying to resell the tickets themselves. Because of the way the sales are reported and the limited viewership then and now, they got to claim a headline.
Rain and fog are the traditional enemies, difficult to defeat with redundancy. I suspect the answer is that downtime does happen but customers value the price/performance more than they dislike the downtime. The steepness of the tradeoff also probably depends on local climate, but that's a blessing as well as a curse: initial deployments can preferentially happen in advantageous locations.
A laser cutter is not at all the same as a laser transmitter. The beam focus, wavelength, emission pulse, etc. are all different to the point where comparing power outputs is not a good idea.
This is an interesting idea and innovative approach - exciting stuff and congratulations on securing the 200k investment.
Some questions regarding the underlying technology:
You mention a "self-healing" grid. If one of these laser lines gets disrupted, say by a bird, or someone knocks over the laser receiver - how quickly does the PoP reroute traffic over a different path in the grid? Does it wait for a timeout, or is there some meta-data from the laser link to know when the interface is down?
One of the reasons you use the laser PoPs is that underground fibre is expensive. However - given that you have to pull overground fibre to every customer within the PoP - the total "length" of fibre in play will be roughly equal to the length of fibre required in a traditional underground installation. What's the advantage then? Why can't you pull all the fibre overground and bypass having laser PoPs completely?
Finally - given the massive investment in 4G and price wars in India, I would assume you are competing with mobile broadband routers. How is performance of such solutions in dense cities like Bengaluru? Is it unreliable or congested enough for people to want to pay for a dedicated fibre/laser internet connection?
OP here. Thank you for the questions. Yep, metadata and quick reconnection is the key for birds and such - we are able to do it almost instantaneously. Regarding 4G, our networks are choked and as many towers that can be placed, have. The spectrum is packed and noisy and dense commercial areas get horrible signal and speeds, the situation in rural areas is worse. And to make matters worse, less than 30% of the mobile towers themselves have fiber backhaul - so we hope to make a contribution there too. And finally, the core of the network can't be overhead fiber simply because it's not reliable enough to be the backbone because you're stringing it across trees, poles and over buildings. It's fine for the last mile to the customer's premises, but overhead fiber is not good enough for the core.
> The $20,000 price point of our product + the high friction of the contact process + users that are OK with ads = A high signal to noise ratio from DF visitors.
I’m curious about the “users that are OK with ads” part of the equation. (From the article - these are DF readers who don’t have ad blockers and are willing to click on ads). I can’t wrap my head around how this is a signal. Are seasoned tech investors (the target audience for the product) more likely to browse the internet without ad blockers and more likely to click on an advertisement? Is it the other way around - people browsing the internet without ad blockers signal some amount of naivety that somehow makes them better customers?
I don’t understand this. Can someone please explain?
I’m not sure what the author intended this to mean, but I know that I whitelist sites like daringfireball because I respect the author and the ad platform (Carbon and its ilk) are very non-intrusive.
For what it’s worth, I am not part of the target audience.
I never turn off uBO, but when I browse DF I see several laudatory sponsor mentions in the text. (I don't see any flashing sidebars...) When an "ad" is not tied into any ad networks, it is unobjectionable and is not blocked by ad blockers.
It seems there has been an overhaul of the company since I last checked them out in January.
Key changes I could immediately see from their current website-
• Inexpensive WiFi Mesh service targeted at mobile users, small shops (1GB/1 INR) -> Broadband service aimed at homes and offices (Although the backend still seems to be their FSOC).
• WiFi Dabba India Pvt. Ltd. -> Delaware C Corp.
• Raising funds by selling PoP.
I (we?) would love to hear what led to these overhaul? @mildlyclassic.
I've been an advocate for Non-Cellular mobile Internet[1] in India and was eager to see WiFi Dabba venturing into this space, now that broadband seems to be their focus I'm bit sad although I understand if fighting the oligopoly's cheap cellular Internet(coupled with free voice calls) is an unwinnable battle for small startup building the ecosystem(innovative computer networking) from scratch.
Then again I'm excited to see the sale of PoPs, as I've been advocating for monetary incentives in sharing Internet[2] as well. Although WiFi Dabba's PoP isn't directly related to that, distributing the ownership of network is very exciting. I hope it ends profitable to both the company and its investors.
Recent reports said Internet penetration in India is limited to ~40% in Cities and ~15% in rural areas; So obviously there's a huge need gap in the country and attempts improve that through existing Internet players has repeatedly yielded disappointing results.
My previous startup was involved in VSAT services for in-flight entertainment system through a major U.S. Telecom, I've worked with several talented Network Engineers in the country, I hope some of them get motivated by WiFi Dabba to start their own network startups and bridge the need gap.
I suspect that partially motivated their post. Nothing wrong with that, but I'm sure they realize HN readers are likely early adopters and many may have the capital to invest.
OP here. Thanks for the questions! We are a licensed ISP so we've got the regulatory aspect covered pretty well. The best part of our laser system is that it uses so called 'free space' which doesn't require government approval. We're confident in our superior technology and lower costs when competing with telcos and ISPs.
It seems like the real lesson is narrowly targeted sites/markets for your ads are smarter than trying to appeal to the machine's data.
It reminds me of the food delivery company that targeted porn sites to better utilize ad spend. Or another article a couple days/weeks ago discussing why an advertiser might want to include/exclude certain groups from ad targets.
In the end, it's ALL about value. I think general brands might be better served with more generic reach than we typically see though. I'd like to see ad networks that only try to bid 2-3 levels and fallback to generic quickly (even if less profitable) rather than go a dozen layers of IFrames in the browser. I think browser vendors could help with this by disabling scripts after 2 layers of IFrames and I've said this for a while.
edit: of course the fact the biggest advertising company is also the biggest browser vendor prevent this from being realistic.
I haven't been more excited for a company and their model like this before. Everything they do just seems to... make sense. I really wish them best and hope the bureaucrats won't catch up.
I'm imagining in the US they will be met with a bunch of hurdles and legal stuff due to "lasers bad"
Pretty sure one of the local ISPs here in San Francisco (Money Brains) already uses lasers for their consumer network (as opposed to their business network, which is something else iirc)
The reason it will be hard in the US overall is that Comcast lobbied their monopoly into local law across the entire country, and the fight to revert it is fought one city at a time it seems. I don’t think Comcast will reign like this forever, but things are going to be shit for many more years.
The tech reminds me of the nearly two-decades old RONJA, which is open-source hardware: https://en.wikipedia.org/wiki/RONJA Of course this here is much more advanced.
I would love to know this too. I never got AdWords or FB ads to work for us. A big part of our SaaS's value proposition is its integrations (G Suite, Slack, O365) - so my hypothesis is that most of the potential users that care about integrations will tend to find us via those app marketplaces, and thus most of the leads that are left for us to pick up from other channels are just less qualified. It certainly doesn't help that there's no way to target 'decision makers at companies that use Slack/G Suite' as a demographic.
Anyways, I've heard of people having success with LinkedIn for B2B SaaSes - but my impressions is that this is mostly lead generation for sales rather than automated marketing.
No links as I'm not here to sell but I do seven figure revenues in the newsletter space from sponsorships by such companies looking to extend their audience (and most of them return so it must work most of the time!)
More broadly, I've seen a lot of people have good experiences with email newsletter advertising/sponsorship generally if they use the right publications and audiences (for instance I saw https://twitter.com/DenehyXXL/status/1326172165616570368 earlier today).
Podcast advertising is worth looking at too, but it mostly succeeds in a somewhat different way (podcasts seem to work better as a branding and door opening play than for trackable conversions despite what coupon codes imply). Reddit may also be worth investigating but you really need to play it right there, it's not a hugely forgiving place for sponsored items.
I haven't used, but I've been wanting to hear more about Spotify's new ad model. You provide the copy, they provide the voice acting and production. I figure rates are cheap as the product is new.
A 4G hotspot for regular desktop work is simply unreliable due to latency and network congestion issues in major Indian metros. Also, you can do a whole lot more with 1 Gbps of bandwidth v/s 40 mbps.
I live in a remote village in India, working from home currently. I use my 4G mobile hotspot (Jio) for my work and I didn't face any issue till now. I normally attend team meetings, development and some Youtube.
On the contrary, in cities the network is less reliable with 4G as you said.
That's barely solving the problem. Consumers and businesses want high-speed low-latency reliable and unmetered connectivity; which is the exact opposite of mobile data plans.
This is phenomenal to see, Karam! I still fondly remember our first chat when we met outside YC after the interview; you shared a Classic Mild with me... Really happy for you and it's great to see you guys continuing to execute
I wonder how the return would have differed if they had advertised in The Talk Show, Gruber's fantastic podcast, rather than his blog. My guess is there is a lot of overlap between readership and listenership.
where can I buy a laser PoP, or rather two of them and practice doing this myself from my roof across town to my friend's roof? Does someone have a list of materials to buy? I assume I might need a few more things than just the PoP lasers.
This whole thing looks like more of a university project than a serious attempt at deploying connectivity... I'm going to take a guess that $20k will never be returning to the 'investors'.
I'm also really curious how much of real "ownership" there is to the PoPs, especially given the unaddressed comments in one of their previous threads about foreign ownership of Indian ISPs.
A lot of the language on their website seems very reminiscent of the one used by many cryptocurrency projects.
We're a YC company registered in the US with an India subsidiary. We're also a fully licensed telecom holder. The ownership agreement is super clear, if you'd like, please drop us a line on the site and we'd be happy to share them with you.
Copywriters working for HN-adjacent companies: please, copy the structure of this article!