My Startup has 30 Days to Live

What's the value of that kind of user growth? It very much depends on the quality of the user, and the startup's ability to convert users to customers. The Techcrunch effect might give you rapid user growth, but are these the right kind of users for the business? Maybe. Or maybe not.

But for the short term story, the VCs love 'user growth', and let's not worry too much about the detail, right?

The problem with taking the VC dollar is that you also need to take their metrics and KPIs. I can think of no better KPI in business than average customer lifetime value, but I doubt most VCs could care less about that, as it's a long-term KPI. It is the short-term vanity / hype metrics ('user growth' being a good example) that they're more interested in. They want to be in and out within a relatively short timeframe.

Explosive growth is all well and good, but as ever we're overly focused on user / customer acquisition, and not with retention, which is far more profitable over the long term. A healthy business concentrates on the latter, and not just the former. For VCs, it seems to be the other way around, concerned as they are with exit strategy.

But I still consider them start-ups. They are entrepreneurs fighting in the marketplace. Not every start-up needs VC money.

I too am running a startup with a downward trajectory. We have more like 6-12 months of runway left but things aren't looking good.

Our path tracks your alternate reality.

I started a project several years ago that took off. It wasn't meant to be a business at the beginning but once it started getting traction I slowly devoted more and more time to it.

It was "profitable" from the first day; the Adsense ads more than made up for the costs of hosting it and the initial design work. I programmed it myself so there was no development cost.

From the beginning it snowballed. It had a thousand users the first week, ten thousand the first month, and 50k users 3 months in. It was at that point that my amateur coding got in the way and the server crashed and burned.

By this time the business was making about $300/day in advertising. The costs were basically zero (a single virtual server + me part-time while I was still in school).

In retrospect this is the point I wish I had dropped out of school, raised some funding, and started building a development team. But I didn't; I read up all I could on scaling and hacked together some more code. That helped the project grow to a million users by the end of the first year.

By this time I had added in for-pay features to the free product to augment advertising and was making well over $1000 per day. I started plugging some of this into advertising to accelerate the growth but most of it was being distributed to me as the only shareholder. Things were going peachy until the servers crashed again.

Again, I read up on scaling, bought a couple hours of consulting time, and patched things up. Within a few months the advertising spend had paid off and at the peak the project was raking in $20,000/day (most funneling straight back to me since at this point it was just me [still part-time] and a couple of part-time customer service reps). This was where the project hit its peak of about 1 million monthly actives.

And, of course, the servers tanked again. This time by the time I was able to get things stable again the market was not as good and we weren't ever able to get back our exponential growth.

I wish I had at the very least "gone for it" and plugged the profits back into the business to hire people to help me. It was about this time that my competitors were discovering the same things I had been experiencing (easy viral growth, cheap user acquisition) and raised about 100 million in VC funding to buy up and saturate the market.

Long story short, we stagnated and slowly declined (no longer able to compete effectively with our newly extremely well-funded competition). Our competitor who raised 100MM in VC is now a public company with several billion in market cap, and there are several others who took a similar path that are worth in the range of a billion as well.

By the time I decided to hire and build a team it was too late to make much of a difference.

I made a couple million bucks and had a fun ride but I'm still kicking myself for not seizing the opportunity to go all-in while the window was open.

We're now playing catch-up but the market is more fully developed now and it's harder for underdog players to get an upper hand.

Mailchimp is a fantastic example. Bootstrapped with 9 figure revenues and crazy profits. http://www.quora.com/MailChimp/How-much-revenue-is-MailChimp...