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Things learned while running your own self-funded startup

richg42.blogspot.com

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Re: Things learned while running your own self-funded startup

#51

Post by at-fates-hands »

Great checklist.

I self funded two startups and the point about targeting small companies is a good idea.

I would also add using a subscription based service (even for development) is the way to go. You can charge a monthly fee for a group of services to smaller clients while development is ongoing with a list of milestones and achievements to keep the project on track while ensuring you have recurring revenue coming in.

If you get multiple clients, you can really set yourself up for success. Having 3-4K coming in every month on a regular basis can keep you afloat and reduce the anxiety of having to send out bill and then waiting to get paid.

Re: Things learned while running your own self-funded startup

#53

Post by dannylandau »

matt2000 wrote: post #49

Great list. The only thing that I might take issue with is #5: "5. Every decision must be made extremely carefully. Bad decisions cost money." Taking too much time on decisions is a good way to kill a new company. Many, if not most wrong decisions you can recover from, and it's very difficult to know what the right decision is beforehand. So a lot of the time the "right" decision is just to do _something_ to learn wh…

Generally don't comment that much, but have to agree with your point 200%. Trial and error is the backbone of building a successful stat-up, going from 0 to 1.

Re: Things learned while running your own self-funded startup

#54

Post by ike_yeah »

acidburnNSA wrote: post #36

> Open source is great, because potential customers will get a chance to try out your work without spending a dime or ever talking to you. This boosts your credibility. On the flip side, if you give away too much, you are basically competing against yourself when you attempt to monetize your work as a product. > Your open source release should be a demo of the product, and no more. Give things away with the goal of e…

Give me a non-utopian incentive where widespread open source (when you can hire professionals for security) is practical.

Re: Things learned while running your own self-funded startup

#56

Post by Xeoncross »

jasode wrote: post #17
ganeshkrishnan wrote: post #2

You missed the most important part: Keep your sanity. Trying to get funding is described as "soul sucking" even by Paul Graham and in our experience this is a startup killing move. Very few people talk about mental health for entrepreneurs and for us the most challenging times was talking to investors. If a constant stream of people told you, your business was not worth spending time or money, after how many rejectio…

> but how often do we stop to talk about those that failed? The failures of VC-funded startups (e.g. recently Juicero, Rethinkdb, etc on HN) are discussed more often than the failures of self-funded startups. Also, as far as I can tell, a significant number (most?) of the startups listed at autopsy.io[1] are VC-funded. In contrast, the self-funded startups that fail usually die a quiet death without discussion becaus…

> die a quiet death without discussion

Perhaps the reason they died

Re: Things learned while running your own self-funded startup

#57

Post by beachy »

nottorp wrote: post #15
ernsheong wrote: post #5

A link to the product page (Basis) would be helpful to give context. Sounds like a lot of advice veers toward enterprise sales.

He does say "middleware" a couple hundred times in the article. Most of his sales advice doesn't apply to off the shelf consumer software. Doesn't mean the article doesn't look insightful though.

I imagine he was selling to techies.

> 7. If you have a product that a very large company really wants, they'll still do everything they can to delay purchasing it for the market price. They'll try to hire you or your partner(s) away individually, or they'll wait as long as possible to see if you encounter hard financial times and go under. They won't come and just offer to license your product or buy you out until they've exhausted all other possibilities.

This is the opposite of normal enterprise sales in my experience (we do HR software). If you are talking to the right person, and you have a solution to their business problem at a suitable price (not too high, not too low) then the very last thing they want to do is to kill the deal with these kinds of shenanigans.

Selling to programmers though is the opposite, and frankly is to be avoided at all costs.

Re: Things learned while running your own self-funded startup

#58

Post by contingencies »

ganeshkrishnan wrote: post #2

You missed the most important part: Keep your sanity. Trying to get funding is described as "soul sucking" even by Paul Graham and in our experience this is a startup killing move. Very few people talk about mental health for entrepreneurs and for us the most challenging times was talking to investors. If a constant stream of people told you, your business was not worth spending time or money, after how many rejectio…

My tip would be that if you squint and view your own time as unsalaried (to a defined point within bizdev, eg. raising external financing) and your initial capital as equivalent expense versus another option (eg. doing an MBA) then you can psychologically hack yourself to justify a larger commitment than you would otherwise. This also works for skipping college, but with time as the key resource. In the end, so much is subjective!

Re: Things learned while running your own self-funded startup

#59

Post by ci5er »

acidburnNSA wrote: post #36

> Open source is great, because potential customers will get a chance to try out your work without spending a dime or ever talking to you. This boosts your credibility. On the flip side, if you give away too much, you are basically competing against yourself when you attempt to monetize your work as a product. > Your open source release should be a demo of the product, and no more. Give things away with the goal of e…

What about a license that says:

"If you buy some X number of seats of our software, then you get a copy of the source-code to modify and do with as you will (today as well as when we, the vendor, die, as vendors are wont to do), but this does not grant a license to more seats (unless we, the vendor, are dead), nor the right to redistribute the source-code.

N.B. We do not support your changes. Unless you pay us a goodly sum in advance. And even then, we really can't put SLAs behind outcomes."

??

Re: Things learned while running your own self-funded startup

#60

Post by bogomipz »

Are the references to contracts in the article "contract work" i.e contract employee work for someone else in order to help subsidize your startup? If so that's an interesting approach to getting your startup of the ground and maintaining some income. Have people had success with this? I have found lining up contract work to be almost as time consuming as doing a regular FT job. Or am I reading these references wrong and it's your startup doing various short term and tangentially related contracts?
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