Ask HN: Should I get investment? • Hacker News Board

Re: Ask HN: Should I get investment?

#11

Post by [deleted] » Thu, Jul 22, 2010, 1:25 PM UTC

byoung2 wrote: post #5

michael_dorfman wrote: post #4

If you've got a product with paying customers, and a business plan that shows how an additional $250K in capital will bring you X% growth over Y years, you're definitely in a position to pitch to VC/Angels. So, make some telephone calls, and set up some appointments with VC/Angels in your local area. Try to avoid the instinct to deliver the pitch over the phone; just paint the picture in broad strokes, and try to get…

Seriously: what's the problem? Like he said, fear of rejection. It's the same thing that stops guys from asking girls out. The reality is that the worst thing that can possibly happen is that you get a big fat "no" but your brain makes it out to be much worse. Like Hamlet says: "there is nothing either good or bad, but thinking makes it so."

[deleted]

Re: Ask HN: Should I get investment?

#12

Post by gyardley » Thu, Jul 22, 2010, 1:45 PM UTC

'Knocking on doors' won't work - that's just not how money is raised. Even if it got you meetings, the amount you need is lower than a Sand Hill Road VC invests. You need angel investors or 'seed stage' funds. Happily, there's lots of those. You also need a warm introduction from someone who knows them. This you can get through a little networking.

'Venture Hacks' is probably the best online 'how to raise money' resource.

Re: Ask HN: Should I get investment?

#13

Post by ohashi » Thu, Jul 22, 2010, 1:55 PM UTC

I am curious who the customers for this are? How come you need 250k if the price tag is pretty big at 500/month or 5k/month? Why do you need 250k?

If 250k for to last you 1 year (12 months) =~ 21k /month or 4 medium business accounts or 40 small biz accounts.

If there was some product adoption like you hint at, I can't see why you would be asking for such a small amount of money.

I feel like you're hiding something... "Everyone who knows about the product thinks it's absolutely amazing." and "I do have paying customers"... so where is the money? Is your pricing/business model flawed and you've had some people try it really cheap but not willing to pay those advertised prices?

Another issue I see is "Customers who can understand it love it." Why don't others understand it? Looking at your site it wasn't exactly clear what it does. Does your mother understand it? How about your grandmother? If you can explain it to them, your target customers shouldn't be a problem.

Re: Ask HN: Should I get investment?

#14

Post by findm » Thu, Jul 22, 2010, 1:57 PM UTC

Sorry, you might have "paying customers" and they might think it's amazing but I'm going to have to disagree with you on your perception of good. I don't quite understand what your product is, does or what problem it's solving or who it's even for and there's no immediate wow-I-get-it-ness to it. Custom Software App builder? Why do I need it? Is it even that? Are you building apps for people? Judging by the language on your site the level of sophistication needed to use your product, the person should be able build it themselves.

I highly doubt that anyone would give you money and why $250,000? how will that accomplish anything? It just seems like a finger in a wind number. Refine your idea then refine it some more. You're getting high on your own idea.

Your website is really off-center when browsed in chrome, try looking at it at 1024 screen.

Re: Ask HN: Should I get investment?

#15

Post by mrtron » Thu, Jul 22, 2010, 2:23 PM UTC

jacksoncarter wrote: post #9

davidw wrote: post #3

Now I'm curious what it is.

I added a link to the above, but here it is for you: http://design.qrimp.com It is a cloud platform that enables application development using only a browser. No IDE's to download, databases to configure, servers to manage. Upload your data and Qrimp builds a relational model to support it and let's you customize reports, forms, build pages. Use AJAX to customize the interface of your app. etc. Imagine MS Access for…

Looking quickly at your product - here is my advice.

Raising funding will be hard for this type of product. MS Access for the web is an extremely hard business model to raise any funding for. You have a platform you can build stuff in - what is your market for sales?

So they may be worried for good reason. Your product has a lot of uses, but no clearly defined market.

What I would do is take your product and figure out what the top 10 tiny niches are for it and do some testing/analysis. A good example here is the guys who do the restaurant ipad/mobile sites. Why are they just attacking the restaurant space and not any website? Surely the technology is the same. The reason is they chose the best battle they could. Consider doing the same approach - you have a general platform that could be very useful for many individual uses.

Then when you have a very clear concise business, market, customer growth strategy, basically a good story in one little niche - you could have more success with funding.

Re: Ask HN: Should I get investment?

#16

Post by jacksoncarter » Thu, Jul 22, 2010, 2:31 PM UTC

ohashi wrote: post #13

I am curious who the customers for this are? How come you need 250k if the price tag is pretty big at 500/month or 5k/month? Why do you need 250k? If 250k for to last you 1 year (12 months) =~ 21k /month or 4 medium business accounts or 40 small biz accounts. If there was some product adoption like you hint at, I can't see why you would be asking for such a small amount of money. I feel like you're hiding something..…

Great questions. Customers are individuals and small businesses who want a web application or to web enable their business. Most of the revenue is from building custom apps on top of it, then charging a monthly rate for hosting, essentially. I don't want to get too specific about the details. I feel uncomfortable enough as it is just talking about it publicly. That's part of the problem I suppose.

The pricing/business model very well could be flawed. I'm constantly refining pricing. Some customers think $8/mo is too expensive, others tell me I'm not charging enough, so I experiment with pricing. I'm not really sure what the best price is. If I lower the price, I do get more signups, but I read all the time about charge more and people will think it is worth more, so you'll get more customers, so I wonder if I should just make it $5/mo and get lots of customers, or $5,000 and sell harder. The issue at that price point is that customers want to be sure the platform will never die and the bus factor is low. The largest sale was to a Fortune 1000 for an enterprise license.

I have got plans asking for as much as $2M.

But you're right. It's not clear what it does. My family does understand it, to some extent. I do need a lot of help on the marketing side. Explaining it. Helping customers understand how to use it. That's what I mean when I say customers who can understand it. The market is split between developers and business users. I'm a developer and have tended to focus on that route, but developers want 100% control like they get with PHP or RoR. Business users need more assistance and quite frankly, building information systems is hard, so it takes a lot of time to help them figure out how to create a system -- with any tool. I spend a lot of time helping customers define a model for their systems. There is a large learning curve and I continue to shrink it. That's what I spend a lot of time on.

Re: Ask HN: Should I get investment?

#17

Post by jacksoncarter » Thu, Jul 22, 2010, 2:38 PM UTC

mrtron wrote: post #15

jacksoncarter wrote: post #9

Earlier quoted context omitted.

I added a link to the above, but here it is for you: http://design.qrimp.com It is a cloud platform that enables application development using only a browser. No IDE's to download, databases to configure, servers to manage. Upload your data and Qrimp builds a relational model to support it and let's you customize reports, forms, build pages. Use AJAX to customize the interface of your app. etc. Imagine MS Access for…

Looking quickly at your product - here is my advice. Raising funding will be hard for this type of product. MS Access for the web is an extremely hard business model to raise any funding for. You have a platform you can build stuff in - what is your market for sales? So they may be worried for good reason. Your product has a lot of uses, but no clearly defined market. What I would do is take your product and figure o…

That's pretty much what I'm doing now. Building apps on top of it and selling those as customizable CRM's, intranets, etc. I have lots of ideas: catering businesses who want to put menus online, online stores, warehouses with lots of inventory, things like that.

I think at this point, it may be easier to sell a product for a specific niche than to sell the platform itself, which is why I wonder about funding at all.

People don't want to build a custom system. They either want a system that is up and running or to pay someone to build a system for them.

And then there is the market who has very specific needs for which there are no niche apps for them. They are left stranded, because the cost to build from scratch is too high. The goal of the platform is to reduce development costs and help more people who need information management systems get them.

Re: Ask HN: Should I get investment?

#18

Post by Retric » Thu, Jul 22, 2010, 3:11 PM UTC

jacksoncarter wrote: post #16

ohashi wrote: post #13

I am curious who the customers for this are? How come you need 250k if the price tag is pretty big at 500/month or 5k/month? Why do you need 250k? If 250k for to last you 1 year (12 months) =~ 21k /month or 4 medium business accounts or 40 small biz accounts. If there was some product adoption like you hint at, I can't see why you would be asking for such a small amount of money. I feel like you're hiding something..…

Great questions. Customers are individuals and small businesses who want a web application or to web enable their business. Most of the revenue is from building custom apps on top of it, then charging a monthly rate for hosting, essentially. I don't want to get too specific about the details. I feel uncomfortable enough as it is just talking about it publicly. That's part of the problem I suppose. The pricing/busines…

The other option is to have 5$:40$:300$ pricing based on a small list of new features.

PS: Once someone is happy with your product it's far easer to upsell them on new features even if the cost difference is crazy. Many people don't go I like new feature Y, is it worth the extra price. They go "I like Y and product X, is the product still worth it at the new price?" which is why people will pay far more for extras when buying a new car than they will for the same extras after they have the new car.