Morning Tea #6: carbon on the blockchain, the big startup tax

Altroleum is picking up steam and things are getting busy. I’ve written a slightly longer piece on a single topic both to cover a bit more ground on one issue and because I have loads of actual work to do.

I’ve been kept fairly busy thinking about how carbon certificates can be issued and traded as a standalone asset. The right way to do this appears to a programmable instrument with instant settlement and an extremely low cost of administration. This is a use case for blockchain.

For this to work at its best, we need to tackle an immature market that’s poised to explode — hydrogen. This builds on our business in hydrogen market intelligence and is a great fit for a company based in the UK, where hydrogen is playing a key part in the decarbonisation of energy and industry.

If you have any thoughts on this, or you’d like to hear more about how we’re designing our solution (there’s a lot I can’t share in public), I’d love to chat.

Also, if this sounds like a mission you’d like to be a part of, I’d be delighted to hear from you. We advertise our job openings here, but if there’s another way you think you can help, please get in touch.

The big startup tax

Much of a startup’s cash will go to AWS, Google, and the vast array of SaaS services that go in and out of fashion. Whilst AWS and Google have long been (very useful) startup tax collectors with a noticeable impact on the bottom line, the ‘other SaaS’ category has gradually become more pervasive and expensive.

I like Typeform, it makes forms not horrible. However, £79/mo is a lot for a form builder and response storer. I won’t cancel because I integrated Typeforms all over our app whilst we had a startup discount and switching isn’t worth my time, but it doesn’t make me feel nice. In contrast ❤️ Webflow ❤️ does our entire web design, hosting, and blog CMS for $20.

Recruiting SaaS is another culprit. Since we are beginning to hire, I explored the usual suspects — Workable, Greenhouse, Lever, etc. None of them want to tell you how much they cost without a long phone sales pitch to soften the blow because they are expensive. For a properly featured package, you can expect to pay ~$400/mo, but you must also commit to a full year. I tried Workable’s ‘paygo’ package, the only one with an advertised price ($99/mo) and the only one that charges on a monthly basis. Great, I thought, until I realised it was $99/mo per job, before you are upsold $499 per job for some machine learning lead gen thing.

In the spirit of science, I decided to experiment with Workable’s 15-day (weird — why not two weeks) free trial. I thought they would show their value by getting my job ad on every job board under the sun. They did, but it didn’t really matter since 99.5% of our responses came from LinkedIn.

The product was also limiting. You cannot change the headings for your job ads (old weird back-end? Don’t trust me to write a job ad?) and its automatic post to LinkedIn was badly formatted. To edit and manage your ad on LinkedIn, you have to ‘claim’ your job, which requires that you pay more to promote it.

Then there were the conversion tactics. Once the trial was up, I was totally locked out. $297, please. I couldn’t take down any ads that were still running and I couldn’t access the list of applicants that had already applied. This is bad for job seekers, and bad for us, since I couldn’t get back to those who had applied and would still receive applications that I’d never see.

If you’re an early-stage startup and you’re starting to hire, put your ads on Notion, and post a job on LinkedIn. That’s what we’ve done. Your ads will be beautiful, flexible, basically free, and you’ll get 99.5% of the inbound straight to your inbox. Do the outbound yourself — that’s your job!

What’s the reason for the growing SaaS tax? I thought SaaS was meant to be low marginal cost. If companies are charging lots because they can, why are they not printing money? Have they become so horrendously bloated that they need to do this and raise capital to survive? If so, somebody will come along and eat their lunch.

I suspect it has something to do with startups raising increasingly large amounts of venture capital. SaaS providers know this so they jack up the price. They’re earning more so their valuation increases and investors get nice returns. Investors have more money to put into startups, and the cycle repeats. Meanwhile, the SaaS companies become bloated and inefficient because they have to do something with all this cash. This isn’t to say that increasing investment in promising startups isn’t a good thing (it is a good thing) but if it’s not genuine value creation (eventually outside SaaS world) it can’t be sustained.

Just because it’s fashionable to give startupable/startuply/startupify 1% of your seed round to administer a CRUD app, it doesn’t mean you should. Use Notion or Airtable instead.

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