All good questions. The big wins for us at RescueTime (I imagine this would vary by situation) were:
1) We got crazy excited and worked our asses off and ultimately set aside great jobs to work on this full-time. I don't know if we could've sustained the energy if we didn't have our users (and potential users) dragging us along.
2) We applied to YC. I honestly don't know if we would've done this if we didn't have such a great response to our "this is what we're building... coming soon!" page.
3) We got accepted to YC. I dunno if it mattered, but it certainly is easier to say "we're building something people want" when we've got a line of thousands of people who have signed up for the beta, contributed ideas, blogged about us, etc. Showing "love letters" from users was huge, IMO.
4) the product is HUGELY better than the original vision IMO, because we've been buried in several thousand emails from people who want certain things that never occurred to us or didn't want things that we thought were important.
For VCs and for internal morale/energy, traction wins. There is simply no substitute for being able to say, "people LOVE us" and being able to prove it. There is nothing that keeps you working harder than users applauding your featureset and clamoring for enhancements. At least for me.
Regarding funding beyond YC, we currently aren't looking for investment but we might be eventually. We have been approached by several investors. Ask me in a few months. :-) Either way, I think being out-there helps on this front, and stealth would hurt us.
Funny you ask. We just added a new one today for some new features we're planning for businesses. http://www.rescuetime.com/forbiz Very similar in style to our original one which was basically the site as it is, with the product tour (prototypes at the time), but without the sign up form.
1) We got crazy excited and worked our asses off and ultimately set aside great jobs to work on this full-time. I don't know if we could've sustained the energy if we didn't have our users (and potential users) dragging us along. 2) We applied to YC. I honestly don't know if we would've done this if we didn't have such a great response to our "this is what we're building... coming soon!" page.
3) We got accepted to YC. I dunno if it mattered, but it certainly is easier to say "we're building something people want" when we've got a line of thousands of people who have signed up for the beta, contributed ideas, blogged about us, etc. Showing "love letters" from users was huge, IMO. 4) the product is HUGELY better than the original vision IMO, because we've been buried in several thousand emails from people who want certain things that never occurred to us or didn't want things that we thought were important.
For VCs and for internal morale/energy, traction wins. There is simply no substitute for being able to say, "people LOVE us" and being able to prove it. There is nothing that keeps you working harder than users applauding your featureset and clamoring for enhancements. At least for me.
Regarding funding beyond YC, we currently aren't looking for investment but we might be eventually. We have been approached by several investors. Ask me in a few months. :-) Either way, I think being out-there helps on this front, and stealth would hurt us.