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Ask HN: How and when did you decide and start your startup?

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Re: Ask HN: How and when did you decide and start your startup?

#11

Post by awillen »

Pandabob wrote: post #9
codegeek wrote: post #5

I couldn't start anything from scratch so I bought the damn thing. That was my MBA. If I failed, I would consider it a sunk cost of education. People spend 100K on a good MBA. I spent less than that on the business I bought. Happily running it for 6+ years now with a bootstrapped team of 15 of us. Ok, some advice now: There are 3 ways: 1. Join a startup and go from there. Learn how things work in the startup world. Y…

Out of interest, how much capital would one roughly need to buy a 1K MRR? I'd assume the valuation would be some multiple of the revenue with some combination of growth rate?

If you want to check out pricing on some low-revenue businesses, try Shopify's marketplace: https://exchangemarketplace.com/. Much more ecommerce than SaaS, and there's some crap in it, but it'll give you an idea of multiples (which are very low at that size).

Re: Ask HN: How and when did you decide and start your startup?

#12

Post by Mave83 »

As a 18 years old with fresh finished mechanical apprenticeship. I started a online gaming, irc bouncer, radio streaming company with my first salary.

Why? because I found no good gameserver to play on it at this time and bought myself a physical Server to fix that.

6 months later I quit my full time job and pumped up my business. Best decision ever! I never thought about my personal income. At that time I was still living at my Patents.

As of today, I founded multiple companies and sold them successful in the 8 digits euros.

Just do it, find something you like, focus on it and believe in your self.

Re: Ask HN: How and when did you decide and start your startup?

#13

Post by codegeek »

Pandabob wrote: post #9
codegeek wrote: post #5

I couldn't start anything from scratch so I bought the damn thing. That was my MBA. If I failed, I would consider it a sunk cost of education. People spend 100K on a good MBA. I spent less than that on the business I bought. Happily running it for 6+ years now with a bootstrapped team of 15 of us. Ok, some advice now: There are 3 ways: 1. Join a startup and go from there. Learn how things work in the startup world. Y…

Out of interest, how much capital would one roughly need to buy a 1K MRR? I'd assume the valuation would be some multiple of the revenue with some combination of growth rate?

For very small businesses, I would generally not go beyond 2-3 years of multiple on revenue max. But there are many other factors. For example, how old is the business and what is the track record ? There is a big difference between doing 1K MRR for last 18 month vs even 3K MRR for last 2 months.

I personally want to see at least 3 years of hard work. Anything less is too risky since the business hasn't gone through the ups and downs enough and frankly it is not enough grinding for me. But thats my criteria. There may be some gems out there that are younger and still worth a look.

I have a lot of interest in the business buying/selling space and one day I will be doing this professionally :). For now, trying to grow my bootstrapped SAAS to 5 million in ARR.

Re: Ask HN: How and when did you decide and start your startup?

#14

Post by codegeek »

awillen wrote: post #7
codegeek wrote: post #5

I couldn't start anything from scratch so I bought the damn thing. That was my MBA. If I failed, I would consider it a sunk cost of education. People spend 100K on a good MBA. I spent less than that on the business I bought. Happily running it for 6+ years now with a bootstrapped team of 15 of us. Ok, some advice now: There are 3 ways: 1. Join a startup and go from there. Learn how things work in the startup world. Y…

What kind of business did you buy? I've been looking into that, but it's tough for me to pull the trigger just due to fear of the unknown (e.g. if I buy an ecommerce business and the supplier immediately goes out of business, will I be able to find a new one?).

SAAS business. I don't understand the physical e-commerce business so I unfortunately am not the right person for those questions.

Re: Ask HN: How and when did you decide and start your startup?

#15

Post by Pandabob »

awillen wrote: post #11
Pandabob wrote: post #9

Earlier quoted context omitted.

Out of interest, how much capital would one roughly need to buy a 1K MRR? I'd assume the valuation would be some multiple of the revenue with some combination of growth rate?

If you want to check out pricing on some low-revenue businesses, try Shopify's marketplace: https://exchangemarketplace.com/ . Much more ecommerce than SaaS, and there's some crap in it, but it'll give you an idea of multiples (which are very low at that size).

Thanks this seems great!

Re: Ask HN: How and when did you decide and start your startup?

#16

Post by talhof8 »

codegeek wrote: post #5

I couldn't start anything from scratch so I bought the damn thing. That was my MBA. If I failed, I would consider it a sunk cost of education. People spend 100K on a good MBA. I spent less than that on the business I bought. Happily running it for 6+ years now with a bootstrapped team of 15 of us. Ok, some advice now: There are 3 ways: 1. Join a startup and go from there. Learn how things work in the startup world. Y…

Actually I currently work at a small startup (just got thru the 1-year cliff), and kind of saw it crash. Not only business-wise, but also management-wise. The shit kinda hit the fan to the point that the atmosphere got really toxic. The stuff I witnessed opened my eyes for the less sexy, more mean things happening in the tech world. It got me to worry I could easily repeat those same harsh mistakes, making me question whether it's worth it.

Re: Ask HN: How and when did you decide and start your startup?

#17

Post by jacobobryant »

I quit my job at 23 to become a startup founder (18 months ago). Quitting wasn't too difficult for me. I started the job with the expectation that I'd work for a year and then do the startup. I had been spending my free time working on my idea(s) for a long time and was excited to go full time on it (I also didn't get much fulfillment from my job).

I was surprised to discover, long after quitting, that working full-time on your own ideas can come with it's own distraction: pressure to make money. Probably the biggest mistake I made from months 6 to 12 (startup idea #2) was being too concerned about structuring things in a way that would (hopefully) make it easier to charge money. I ended up spending a lot of time doing things that in hindsight weren't generating any value. It would've been much better to focus on doing meaningful things, whatever those may be.

I don't know the details of your situation, but that might be something to consider: if you can figure out a way to have a decent amount of time to work on whatever you want while still having an income from elsewhere, it might actually be easier to focus than if you were doing the idea full-time.

On the other hand, I am glad I quit myself. So maybe that advice is just BS.

For income: I might switch the "weeks/months" estimate to years ;). Running out of money hasn't been an issue (lots of savings from my job, my wife worked until recently, then we moved back in with my parents until the pandemic winds down). Opportunity cost of course is large, but that's fairly easy to ignore. I've learned an incredible amount during the past 18 months, so even if I can't get my startup to work, it'll have been a worthwhile investment.

I don't know if any of that is helpful. I'd be happy to chat if you like, my email's in my profile.

Re: Ask HN: How and when did you decide and start your startup?

#18

Post by ta1234567890 »

First one, was in college, didn't really understand what I was doing, got invited by a friend and I was just really excited about programming real stuff on my free time outside of school. Got out 2 years later, right before my partners graduated and really grew the company.

Second time, almost right after college, I started working as the first employee at another startup, at first it was really exciting, I felt like I was part of the founding team, contributed a lot to the direction of the company and got to work on the pitch as well as go to meetings with investors, but when the company started growing, a line was drawn between founders and employees. That's when I got together with one of the other employees and left to start our own company.

Thirds time, while running my previous company I decided to participate in a hackathon with a friend, we won the local chapter, then the global chapter and then we got funding.

Looking back, I've been extremely lucky and never really planned anything too much, things just happened. Also, if I could go back in time, I might have chosen to just dedicate myself to being a very good programmer instead of playing the startup game.

Re: Ask HN: How and when did you decide and start your startup?

#19

Post by picodguyo »

I worked a normal 9-5 job after college and knew within 3 months that it wasn't for me. I quit and did freelance work until I'd saved $100k. Then I stopped freelancing and put all energy into a startup. Having a cushion saved is the only way to sleep despite not drawing a salary. I recommend you find someone to start a venture with as it's less psychologically difficult when someone is in the same boat with you.

Re: Ask HN: How and when did you decide and start your startup?

#20

Post by cj »

> making the move of quitting my fulltime job

> How was it going to sleep knowing that you probably not going to have an income in the next upcoming weeks/months?

Do you need to quit your job to start working on a startup?

When I started my company at 23, I spent a full year working long nights/weekends and then quit my day job only after the company had some momentum.

If you can manage a day job and a side hustle, I'd very much recommend that. Although if your current day job expects more than a 40 hour work week from you, that could be a problem.

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