How long can you survive on bootstrapping? • Hacker News Board

Re: How long can you survive on bootstrapping?

#11

Post by rcmorin » Fri, Jul 10, 2009, 3:43 PM UTC

MicahWedemeyer wrote: post #9

cmos wrote: post #3

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…

+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 discovering our potential userbase: the 12-18 crowd stormed in like bulls in a china shop posting sexually explicit pictures, profanity, etc. which created a whole new slew of headaches. It's a valuable/lucrative audience, but you need a fair amount of policework to prevent things from getting out of control...

Re: How long can you survive on bootstrapping?

#12

Post by rcmorin » Fri, Jul 10, 2009, 3:49 PM UTC

tptacek wrote: post #4

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,…

Thanks, tptacek. Actually from a founder's perspective, my BATNA is maintaining the day job and surviving on Ramen noodles. Which in the short-term is a distraction but can keep the project going while controlling the increase in the userbase and minimizing costs. Bootstrapping could continue ad infinitum until a deal is struck.

Re: How long can you survive on bootstrapping?

#13

Post by jasonkester » Fri, Jul 10, 2009, 3:53 PM UTC

tptacek wrote: post #10

rcmorin wrote: post #7

Earlier quoted context omitted.

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...

Can somebody who can actually click on iTunes links where they are tell me what this thing is? If you've built a successful iPhone application, you're a marketable contracting operation. Stop talking about getting funding.

It appears to be a chat application.

Which naturally raises the question: "Doesn't the iPhone already have a perfectly usable chat application built in?"

Re: How long can you survive on bootstrapping?

#14

Post by jasonkester » Fri, Jul 10, 2009, 3:59 PM UTC

rcmorin wrote: post #5

jacquesm wrote: post #2

It looks like you need a business angel NOT a VC, they are two completely different things (and from your description above it doesn't look like the distinction is clear). Find someone that is already fairly wealthy from being in business for themselves and pitch your idea to them, make it a partnership and not an outright investment, that would help to get some interest going. How much money are you looking for ? 30…

Thanks for your reply, Jacques. This was helpful. We released on GAE and we're also using Amazon SQS. At our peak load, we were getting over 1.5-2k users streaming in during the initial price drop. CPU Time was our biggest drain: we've combined instant messaging with a local and global search option which eats up resources fairly quickly. I was very surprised at GAE server costs given a userbase that is The VC approa…

Wow, that's rough. I noticed on my brief foray into AppEngine that it is really easy to run up against their CPU limitations (as in, four trivial queries on a single pageload will do it), but it's amazing that you've managed to run up a $1,000/mo bill with them.

Or are you really burning through SQS requests fast enough to make it cost cash money?

Either way, it sounds like you've painted yourself into a corner it will be hard to get out of. AppEngine is probably the most difficult platform imaginable in terms of how hard it is to migrate off of. You'll have a ton of work to do just to get out of BigTable, and then you're left with a Django app.

I guess the best you can do is start charging money, and start developing a new version as quickly as possible to stop the bleeding.

Good luck!

Re: How long can you survive on bootstrapping?

#15

Post by rcmorin » Fri, Jul 10, 2009, 4:01 PM UTC

tptacek wrote: post #10

rcmorin wrote: post #7

Earlier quoted context omitted.

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...

Can somebody who can actually click on iTunes links where they are tell me what this thing is? If you've built a successful iPhone application, you're a marketable contracting operation. Stop talking about getting funding.

Correct: we are a chat message application. You can find friends and exchange messages with online/offline users based on location-based proximity. Offline messaging is available in the next iteration, v.1.2.

Re: How long can you survive on bootstrapping?

#16

Post by 9oliYQjP » Fri, Jul 10, 2009, 4:07 PM UTC

What is your current cash flow? That is all that matters. At a minimum your cash flow needs to be enough to service your debt and living expenses. Then, you can all work for equity and make a go of this.

Figure out what this number is, and then ask yourself how you can earn that money. You may need to do a part time job in order to get that money. Yes, your ability to focus on this company will be hindered. But imagine how much of a bottleneck being absolutely broke and potentially bankrupt will be to the progress of your company.

EDIT: You may as well call up your credit card issuers and ask them to drop your interest rate. I've had about a 50/50 success with this approach. Both times I was successful I went from an 18% interest rate on an account down to 12%.

Re: How long can you survive on bootstrapping?

#17

Post by arohner » Fri, Jul 10, 2009, 4:13 PM UTC

rcmorin wrote: post #11

MicahWedemeyer wrote: post #9

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…

> It was an experiment to get some sort of quick market validation

Market validation is once you have the data to say "customers in demographic X will pay Y dollars for this app, I will make a margin of Z percent, and there Q customers willing to pay."

Unless you can survive on your free version (which it sounds like you can't), you haven't validated the market yet. Find the price point where you are profitable (and people will pay!)

Re: How long can you survive on bootstrapping?

#18

Post by marram » Fri, Jul 10, 2009, 4:30 PM UTC

So we're bootstrapping, also in Boston, and also use GAE.

We've been able to manage to stay afloat by keeping day jobs. One of us works full-time and the other part-time, while working on the startup all nights and all weekends. Obviously, it takes a toll on you, and isn't very sustainable in the long term. But we've also learned to delegate: we hired two excellent interns, and we pay them in munchies and free lunches.

$30-$40 in CPU costs seems very high. I'm not sure if you have a technical background, but there might be room for optimization, especially in datastore entity structures and queries. Just the other day, we refactored the way we were storing a certain entity to be able to compute a list of key_names and then fetch them from memcache or the datastore in parallel rather than seriallly. That resulted in a 16x performance boost (measured by response time and CPU cycles). There are some other tricks, like "relational" index entities to speed up datastore lookups so that you're not doing too much processing in Python code.

I would be happy to chat more about our experience with GAE. mahmoud [at] thesponty

Re: How long can you survive on bootstrapping?

#19

Post by jhancock » Fri, Jul 10, 2009, 4:47 PM UTC

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.

Re: How long can you survive on bootstrapping?

#20

Post by andrewljohnson » Fri, Jul 10, 2009, 4:56 PM UTC

How many requests per day does your server handle? 30-40 dollars per day seems pretty high... I know Hacker News doesn't spend that much serving 10s of thousands of people per day.

And after looking at your app, it doesn't seem like you have nearly enough reviews to justify that high of a cost. I'm no server expert, but it seem like you should be able to cut costs on the back-end.