21–30 of 32 posts
You may realize this by now, but you should never "fund" your startup with credit cards. Get that debt out of the way as soon as possible and never do it again. I've been bootstrapping companies for 20++ years and always used what was in my pocket already and/or found investors.
I don't understand how your company works. Your product is free. You've maximally leveraged yourself personally. You have no recourse in negotiations. Your BATNA may be bankruptcy. Your question is, "how long can you survive on bootstrapping". But you haven't booted yet. Figure out something your team can do that will make money. Then think about the long term. If you can strike a licensing deal with your technology,…
I'm in the same boat at the moment, we've raised some seed money and are somewhat in the same boat. In our case, we spent 2-3 weeks of June talking to ~2K of our users on the phone to get some real feedback on how they use the product, what sucks and what else they want to see. At the end of it, we had a pretty solid list of bugfixes and enhancements... but, better yet, we noticed that there were 2-3 specific features that people actually offered to pay for. So, as a final sanity check, I emailed a small sample of those users with a credit card authorization form and asked them to fax it in... I got most of them back (and then shredded them since I don't actually have a way to process them just yet). :)
If your userbase is actively giving you feedback, maybe it's worth spending a little bit of time having in depth conversations to see whether any paid features might emerge?
I don't understand how your company works. Your product is free. You've maximally leveraged yourself personally. You have no recourse in negotiations. Your BATNA may be bankruptcy. Your question is, "how long can you survive on bootstrapping". But you haven't booted yet. Figure out something your team can do that will make money. Then think about the long term. If you can strike a licensing deal with your technology,…
+1 for "Figure out something your team can do that will make money. Then think about the long term." I'm in the same boat at the moment, we've raised some seed money and are somewhat in the same boat. In our case, we spent 2-3 weeks of June talking to ~2K of our users on the phone to get some real feedback on how they use the product, what sucks and what else they want to see. At the end of it, we had a pretty solid…
I’m somewhat confused by all the conflicting recommendations I get on early-stage startups. Again, cash is king and we have some ideas for monetization (which, of course requires more $).
In today's economic climate, can startups afford, literally, to avoid realizing a business model after you've scaled? I realize that YC has increased the number of seed investments, but has the angel community also increased the pace at which they invest in these fledgling ideas at the >$100k investment stage? I'm in Boston, so my perception is a little bit warped. Can someone offer their thoughts?
Earlier quoted context omitted.
+1 for "Figure out something your team can do that will make money. Then think about the long term." I'm in the same boat at the moment, we've raised some seed money and are somewhat in the same boat. In our case, we spent 2-3 weeks of June talking to ~2K of our users on the phone to get some real feedback on how they use the product, what sucks and what else they want to see. At the end of it, we had a pretty solid…
Thanks paul. I think the most immediate answer is: improve the product and keep pumping out features. In the short-term our costs are really under control. I apologize if my initial thread sounded like I was shouting "fire" in a crowded theater. With the recession and downturn in the economic climate, startup logic (understandably) has shifted from the web 2.0/YCombinator preaching of: build, find users, get acquired…
I don't have a whole lot of insight into what's going on in the minds of the investment community but, IMHO, I think we all tend to think that there's more investing going on out there than is actually true.
Earlier quoted context omitted.
+1 to dropping the free version. It sounds like going the free route was a mistake. Bootstrapped startups have to charge something to somebody, and you-pay-me-for-my-product is a time tested way of doing it. As for the rest, you need to tamp down your costs. $30/day is extremely high for a bootstrapped, no-revenue startup. Find a way to cut this down. Based on your comments about GAE and SQS, see about moving to a st…
Thanks Micah. The free version was dropped very quickly...although it was exciting to be in the top 25 free downloads for those few days. It was an experiment to get some sort of quick market validation (for ourselves and potential investors) and it worked in the short-term. The price at cost put the breaks on downloads fairly quickly and we are back keeping things manageble. Also, we ran into the surprise of discove…
One of the fellows at SmugMug has blogged about the "free" question, and pointed out this particular problem with "free". When it's free, you capture a part of the market that most wants anonymity and no recourse for their bad, possibly illegal, behavior. 12-18 year olds exchanging sexually explicit pictures via your service is a problem of epic proportions. Stopping it could very easily become your full-time job (and the full-time job of a dozen more people).
I know you've said you've already halted free distribution. I just wanted to point out that this one is a well-known problem with free, and if you don't have good, automated, methods for dealing with it, it can be a huge resource drain.
Actually, you should have named this 'how long can I survive on bootstrapping'. It seems as though your answer is 'not much longer' at your current trajectory. So you need to change something. It sounds like you couldn't afford to release a free version, with all the costs involved. So don't. Stop releasing the free version. Think of a price you would be comfortable charging for it. Now double that price. Chances are…
Thanks for your well thought out comments, cmos. And I apologize for not including the link in the original posting! http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewSoftwa...
Do contract work to float yourself. And charge for your app. Integrate with Twitter, Facebook chat, etc. OK, I'm done my rant, sorry.
Earlier quoted context omitted.
+1 to dropping the free version. It sounds like going the free route was a mistake. Bootstrapped startups have to charge something to somebody, and you-pay-me-for-my-product is a time tested way of doing it. As for the rest, you need to tamp down your costs. $30/day is extremely high for a bootstrapped, no-revenue startup. Find a way to cut this down. Based on your comments about GAE and SQS, see about moving to a st…
Thanks Micah. The free version was dropped very quickly...although it was exciting to be in the top 25 free downloads for those few days. It was an experiment to get some sort of quick market validation (for ourselves and potential investors) and it worked in the short-term. The price at cost put the breaks on downloads fairly quickly and we are back keeping things manageble. Also, we ran into the surprise of discove…
but then $1200 a month isn't much, really. that's what, two, three days of contracting at bay area SysAdmin rates?
Get a dayjob. Yeah, it sucks. But if you bootstrap, that's what you've got to do. I do consulting 3 days a week, and you know what? if prgmr.com revenue stopped tomorrow, I'd go back up to 5 days a week, and I'd have no problem paying for my server space for as long as I cared to do so. (and I have done this... prgmr.com is doing ridiculously well at the moment, but if you look at my history, well, I've been doing this since 2005, and have made my expensive mistakes. All paid for by contracting income. It can be painful, I mean, in 2006, I got a little optimistic and locked myself into a year-long contract for almost two orders of magnitude more bandwidth than I ended up needing. a $15K mistake or so. But eh, it looks like we might have that much revenue this month alone, so I was right to stick with it.)
It sounds like your business is one with low capital requirements, and low monthly overhead. That is the best kind of business to bootstrap, I think; you just need to build your life so that you are OK with supporting the business until someone notices you and the business takes off.
Earlier quoted context omitted.
Thanks paul. I think the most immediate answer is: improve the product and keep pumping out features. In the short-term our costs are really under control. I apologize if my initial thread sounded like I was shouting "fire" in a crowded theater. With the recession and downturn in the economic climate, startup logic (understandably) has shifted from the web 2.0/YCombinator preaching of: build, find users, get acquired…
No apologies necessary, you're asking a good question that I also have been thinking about for some time now. Feel free to email me if you'd like to talk about this in-depth or just need to bounce a few ideas off of someone. :) I don't have a whole lot of insight into what's going on in the minds of the investment community but, IMHO, I think we all tend to think that there's more investing going on out there than is…
From a product / technical perspective, you also need to look at how many of your "users" continue to use your app after a month or more and how much they use it. That will give you an idea of how many tyre kickers you got and how many switched on, passionate users you got.
Do do a joint venture, you decide on split of revenue, a buy-in value that gets you off stressing about where your next Ramen meal is coming from. Heck, I'd even put the word out to your user base and invite applications for a venture partner. You can't get a better marketer than a passionate user with sales, marketing and business expertise.