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Tell HN: My startup is making money and I don't know what to do

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Re: Tell HN: My startup is making money and I don't know what to do

#31

Post by santoshsankar »

While everyone has suggested bootstrapping, friends and fam, local angel groups and Angel List, have you tried your university?

Many large public institutions have launchpads and accelerators (they just don't always market it well). This could be a natural fit for them.

I think like most people are echoing, continue to fund it out of pocket (maybe with the help of family) to get it to be the best product possible. From there, slowly build out into other geographies. You can learn lessons from your early expansions so as to not repeat it. Given the product is still young, there is likely a good amount you can build on prior to scaling out.

Good luck and will def be monitoring University Niche

Re: Tell HN: My startup is making money and I don't know what to do

#32

Post by sbashyal »

First of all, congrats on your success.

I am based in Los Angeles and I currently work in the apartment industry. I can meet with you in person and provide you guidance and possibly help you raise seed money if you choose to go that route.

Send me an e-mail to my user name at Google's e-mail service.

Re: Tell HN: My startup is making money and I don't know what to do

#33

Post by mikekij »

First, congrats. Having real revenue probably puts you in the top 5% of startups already. Great work.

- Incorporate. You want the legal protection of (at least) an LLC.

- Really think about if you need to raise money. If you do, it should be easy to raise $100k-$200k with real revenue and traction. But it sounds like you're in a position where you could actually bootstrap this. Equity is expensive. Think twice before raising money.

- Think in terms of milestones. What can you do to get to $XX,XXX in revenue per [week,month,year]. Then, what can you do to launch at an additional school while still staying cash-flow positive? This sort of thinking breaks the process into bit-sized chunks. Much easier to digest.

- Your biggest problem will likely be scaling the ad sales efforts. Walking into local businesses works great for 1, 2, 3 schools. But it will be hard to scale that to 100 universities.

I'd love to help out in any way I can. I started a company in grad school that I sold last year. I've been through many of these issues before. mkijewski at g mail.

Re: Tell HN: My startup is making money and I don't know what to do

#34

Post by [deleted] »

rexreed wrote: post #27
ixmatus wrote: post #18

Earlier quoted context omitted.

Getting into an accelerator or incubator (even if it's one that's not popular) can really help with the legal stuff since you'll be able to get more advice and they will always have those boilerplate docs for you. Form a C corp in Delaware and get the ownership figured out ASAP. I also generally think that all of the founders should vest (no cliffs or anything, but a four year vest for everyone will keep the company…

Agree with the above - altho forming a Delaware C Corp at this early stage is not necessary. It's become much easier now to form an LLC in your state of residence and convert at a later stage (if at all) to Delaware C if you end up raising money.

[deleted]

Re: Tell HN: My startup is making money and I don't know what to do

#35

Post by rwhitman »

sthielen wrote: post #21
cglee wrote: post #13

First, decide if you really need to raise money. Can you bootstrap (ie, self fund) your business? Too many people immediately go for capital when they don't need it. It's extremely distracting and not all that necessary. You should only look into raising capital if you have a capital constrained opportunity or problem. So many problems initially look like money problems, but they're really disguised as something else…

We've been bootstrapped since the beginning, but, as much as we don't want to admit it, we're starting to outgrow what we can do as our very limited personal savings start to decline. Yeah, it's cool to have some money in the bank after doing these advertising deals, but it's not nearly enough that it's sustainable right away. We have plans to expand to 150 schools across the country, and if we do that we project to…

Being on the HN frontpage is really going to expose you to both opportunities and competitors. Taking funding is probably a winning strategy for you right now

Re: Tell HN: My startup is making money and I don't know what to do

#37

Post by jonlucc »

sthielen wrote: post #14
hoopism wrote: post #9

How do you plan on replicating in the new cities? Is the unique element in this equation (it's certainly not the space that is novel) you and your team? Track record goes a long way. You've proven to be effective in a very small 'niche'. You may want to consider taking seed (if needed) from F&Fs and then prove it in another city. You may find that expansion step to be useful. It will also help answer the question of…

We're actually at three schools in California--Loyola Marymount University in Los Angeles, Chapman in Orange, and the University of San Diego. We've been able to replicate our success pretty similarly in three unique areas, and have plans for Campus Reps/Brand Ambassadors to help us out "on the ground" at some of the larger schools we're planning on targeting.

It seems like your biggest hurdle might be getting local advertisers in an area. Maybe I don't know anything about small-scale ad sales, but I would think that part of the business would really benefit from having local/regional people doing ad sales. Do you have a way to get around that? Is it a solved problem that I just don't know about? For that reason, it seems very obviously simpler to grow into regions, maybe not expand to the whole country at once.

Edit: I would have killed to have this service when I was in college. Props for making it work.

Re: Tell HN: My startup is making money and I don't know what to do

#38

Post by sthielen »

webmaven wrote: post #22
sthielen wrote: post #5

Earlier quoted context omitted.

We haven't raised anything. We're three broke college students who have been putting everything we have into keeping this thing going. We're planning to expand to 150 campuses and bring on some people to man the phones/maintain our property listings, as well as hire campus reps/brand ambassadors at 20 key schools from that set of 150. Our 1y budget for all of this is And yeah, we're based in LA, but we're all new to…

Do you really need to roll out to 150 campuses in one year? Use the profits from your first to roll out to a 2nd, then use the profits from 1+2 to roll out #3, etc. BTW, for each new city you roll out to you should be trying to figure out how to do it better. When you've proved you have a repeatable, scalable model, you can take on investors to accelerate the growth. This is more or less what FB did.

Our roll-out process involves having people getting and maintaining the property listings (a fundamental component of our business involves vetting properties to make sure they will take students, as about 60% will not), then building traffic at the school, and then securing advertising placements. We've successfully rolled out to three separate, unique campuses, and yeah, we've definitely learned a lot from each one.

But it's a lot of work for three people, in addition to the rest of the business development and sales and all that. As we add more campuses it's going to become impossible. It makes far more sense to hire a campus rep at a school to go around getting students to use the site, putting up posters, talking with administration, sharing on facebook, etc. than it does to have the CEO and CTO of the company driving down there once a week and spending the whole day doing that. And even though we have revenue it's still not enough to start doing that while simultaneously keeping the lights on.

We're looking to raise money to streamline this whole expansion process and keep our business alive long enough to see that expansion through. We've validated our product and revenue model, but we need some initial capital in order to, for lack of a better phrase, do things right.

Re: Tell HN: My startup is making money and I don't know what to do

#40

Post by hoopism »

jonlucc wrote: post #37
sthielen wrote: post #14

Earlier quoted context omitted.

We're actually at three schools in California--Loyola Marymount University in Los Angeles, Chapman in Orange, and the University of San Diego. We've been able to replicate our success pretty similarly in three unique areas, and have plans for Campus Reps/Brand Ambassadors to help us out "on the ground" at some of the larger schools we're planning on targeting.

It seems like your biggest hurdle might be getting local advertisers in an area. Maybe I don't know anything about small-scale ad sales, but I would think that part of the business would really benefit from having local/regional people doing ad sales. Do you have a way to get around that? Is it a solved problem that I just don't know about? For that reason, it seems very obviously simpler to grow into regions, maybe…

It's what made Living Social and Groupon both valuable (they grew this network of local) and also continues to be their biggest challenge.

It cost big dollars to grow.

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