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Ask HN: My company went bankrupt today and I have 2 options

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Re: Ask HN: My company went bankrupt today and I have 2 options

#61

Post by sb8244 »

windexh8er wrote: post #60
sb8244 wrote: post #48

Earlier quoted context omitted.

Founders should be doing sales (not leading it, doing it) until at least 1M ARR. That solves a lot of that issue. Maybe it's a difference between bootstrapped mindset and VC-fueled one.

I would argue there's a soft spot at around $10M ARR where founders turned full time CXO lose focus and touch with their product. They turn it over to folks who don't seem to carry the customer focus but instead have a focus on building their version. It doesn't seem to play out well and I'm curious why this seems to keep happening.

I agree with this, although the timeline differs a bit between companies. I was at Salesloft from 1M ARR -> 100M ARR, so I saw this roughly play out. However, I will say that the founders did an exceptional job staying close to the product well after 10M ARR.

I think a lot of it is due to the VC playbook. The question of "who am I building my business for?" looks a lot different between VC and bootstrap. Once you start getting into heavy hitter revenue (grain of salt, I've never done this as a founder), the machine starts working largely on its own. It's probably more impactful to spend time on the business systems instead of the product.

But bootstrapped founders seem more likely to stay close to the product for longer. Eventually they may want some sort of out, and you see the playbook execute much much quicker.

Now, I have other theories on why it doesn't play out well. Going from 10M -> 50M ARR is a huge hurdle. You have to really level up a lot of the business itself to do so. It might be that it's just not possible for a lot of companies to bridge the gap. I think it's easier to go 50M -> 100M than 10M -> 50M.

Re: Ask HN: My company went bankrupt today and I have 2 options

#62

Post by gunapologist99 »

sb8244 wrote: post #56
ravelantunes wrote: post #53

Earlier quoted context omitted.

I think this is a very valuable insight, especially in the consumer and small/medium size business. I have fallen into this trap before. One area where I would say that full-time matters more is if your product's target is big enterprise customers. Those are a bit harder to sell bootstrapping/moonlighting.

For sure. Big challenge with those companies—that I found—is that they want a lot of credentials + proof that are simply outside of the reach of small businesses. So even if you're full-time, it may be a "good luck" scenario. Although SOC2 is fairly easy to get, it's expensive for bootstrapped founders (maybe $30-45k all in.) It wasn't enterprise, but the 600 person company (that I knew very well) simply wouldn't wor…

SOC2 (Type 1) doesn't have to be that expensive, not counting your own time. For a very small company, it can run as low as $12-15k. Shop around.

Don't invest a lot of time in individual deals when you're small. Aside from the time and probably attorney fees (and opportunity cost), it's pretty demoralizing if it doesn't come through, and most of the time it doesn't, especially when you're small. The distraction alone can kill your company.

Focus on many smaller deals rather than one or two big deals.

Re: Ask HN: My company went bankrupt today and I have 2 options

#63

Post by sb8244 »

gunapologist99 wrote: post #62
sb8244 wrote: post #56

Earlier quoted context omitted.

For sure. Big challenge with those companies—that I found—is that they want a lot of credentials + proof that are simply outside of the reach of small businesses. So even if you're full-time, it may be a "good luck" scenario. Although SOC2 is fairly easy to get, it's expensive for bootstrapped founders (maybe $30-45k all in.) It wasn't enterprise, but the 600 person company (that I knew very well) simply wouldn't wor…

SOC2 (Type 1) doesn't have to be that expensive, not counting your own time. For a very small company, it can run as low as $12-15k. Shop around. Don't invest a lot of time in individual deals when you're small. Aside from the time and probably attorney fees (and opportunity cost), it's pretty demoralizing if it doesn't come through, and most of the time it doesn't, especially when you're small. The distraction alone…

Agree completely. Going after small deals ruthlessly would've been my biggest change. We were trying to, but so much was wrong with the actual way we were trying to sell.

Btw the price comes from my latest adventure. I think 12k is too low unless you can literally do everything without help (i could have but it would've destroyed my time.) 20k is probably a realistic price floor with pentest included.

Although type 1 doesn't require a pen test or you to actually do anything. Just to say you would do it a certain way. Every prospect that has asked for SOC2 has wanted a separate pentest deliverable.

Re: Ask HN: My company went bankrupt today and I have 2 options

#66

Post by egesabanci »

uoaei wrote: post #29
mhx1138 wrote: post #20

Kind of sad to think that a company just went bankrupt, while their employees were working on their own companies instead. No blame for OP. But what should managers do in challenging situations to prevent their team from losing focus?

Why would you jump to the conclusion that a bankruptcy after 1.5 years is the fault of the underlings and not of leadership? Especially in such a shifty, cutthroat, regulated, and nuanced industry as fintech.

I could not agree more.

Re: Ask HN: My company went bankrupt today and I have 2 options

#67

Post by egesabanci »

chiph wrote: post #36

Why did the fintech fail? Was it poor market fit, failure to execute, or insufficient capital? Can you approach your previous customers and ask them what they want? Maybe you can collect some other previous employees and start a new firm in the same space (but do it right)?

I live in Turkey and the company which went bankrupt was in Turkey. The financial regulations and national economy management (especially the last 3 years) are too strict here. So, there was nothing much to do.

Re: Ask HN: My company went bankrupt today and I have 2 options

#70

Post by BadCookie »

I don’t think it’s an either/or situation.

In your shoes, I would spend a couple hours a day prepping for interviews and applying to jobs. I’d work on my business the rest of the time.

If you get a job offer you like, take it. If your business takes off, even better.

Depending on where you live and how strong your network is, it might take longer than you think to line up something new. Might as well work on your business in the meantime.

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