Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

How to proceed when you run out of cash, but you still believe?

medium.com

Post reply on HN
Print view View original

71–80 of 209 posts

Re: How to proceed when you run out of cash, but you still believe?

#71

Post by nikanj »

bobloblaw45 wrote: post #64
AchieveLife wrote: post #30

Earlier quoted context omitted.

"Maybe I'm being naïve here, but isn't it kind of crazy to raise 3.5M in funds for a business that has no plan but to be acquired by someone else?" That's a sane question. IMO it's the current financial environment that encourages such "leap without looking" strategies. Fear of missing out is huge right now. I know of a startup that received a multi-million valuation and many more million in funding. They don't even…

I know this might sound stupid but if you can get that much for something that wow's people, can you get like 100k for a "meh" idea? Like if you wanted to open a dry cleaners.

As parodied some 5 years ago: https://medium.com/signal-v-noise/press-release-basecamp-val...

Once you make money, it's much harder to come up with outlandish numbers. A dry cleaners has a well-established range for revenue and profit, so it's hard to justify why it would be worth $100 billion.

Re: How to proceed when you run out of cash, but you still believe?

#72

Post by icedchai »

Analemma_ wrote: post #67
bobloblaw45 wrote: post #64

Earlier quoted context omitted.

I know this might sound stupid but if you can get that much for something that wow's people, can you get like 100k for a "meh" idea? Like if you wanted to open a dry cleaners.

No, because the mania for throwing money at tech startups is specifically because of tech's unique promise of both worldwide scale and zero marginal costs after the initial Big Spend on capex, and hence potentially gigantic returns for investors. Now, how well the current crop of startups is delivering on that promise is an exercise left to the reader, but it's there in theory. A dry cleaner has marginal costs and no…

Zero marginal cost in theory. In reality, you often find enormous cloud costs combined with huge marketing spend.

Re: How to proceed when you run out of cash, but you still believe?

#73

Post by williamstein »

excalibur wrote: post #68

> One of our processes. This process needs some work. It replaced the girl with an entirely different girl, and swapped her Metallica tee for H&M, effectively removing her taste.

Indeed -- I found it difficult to read the post after studying the first mangled diagram.

Re: How to proceed when you run out of cash, but you still believe?

#74

Post by vechagup »

bobloblaw45 wrote: post #64
AchieveLife wrote: post #30

Earlier quoted context omitted.

"Maybe I'm being naïve here, but isn't it kind of crazy to raise 3.5M in funds for a business that has no plan but to be acquired by someone else?" That's a sane question. IMO it's the current financial environment that encourages such "leap without looking" strategies. Fear of missing out is huge right now. I know of a startup that received a multi-million valuation and many more million in funding. They don't even…

I know this might sound stupid but if you can get that much for something that wow's people, can you get like 100k for a "meh" idea? Like if you wanted to open a dry cleaners.

Yes you can. It's called a small business loan. See https://www.sba.gov/funding-programs/loans and https://www.bankofamerica.com/smallbusiness/business-financi....

You'd finance your dry cleaners with debt rather than equity because (unless you are starting a chain) you are not shooting for the massive, near-zero marginal cost scaling that the venture capital model focuses on. Instead, the bank looks for a modest, predictable return through interest payments.

Re: How to proceed when you run out of cash, but you still believe?

#75

Post by adrianpike »

TallGuyShort wrote: post #46

>> We are a team of 8. We are 2 full-stack, 1 iOS, 1 Android and 4 product people What were the 4 product people doing day to day?

This stuck out to me too - maybe OP's using product as a catchall for "non-engineers", but with a ratio like that I'd be very curious what kind of bottlenecks the team's facing and what kind of daily work output's being generated.

Re: How to proceed when you run out of cash, but you still believe?

#76

Post by Cd00d »

vassilyk wrote: post #33
dwrodri wrote: post #26

As someone who is interested in one day starting my own business, I have nothing but respect for someone who has the guts to follow through with that and pursue their vision. That being said... why did you (or if anyone else can chip in) decide to chase funding when you didn't have a business model? Maybe I'm being naïve here, but isn't it kind of crazy to raise 3.5M in funds for a business that has no plan but to be…

The real question is who invested, and why? Even though being an investor doesn't mean being smart at it, it's still a signal that those guys are/were onto something and needed the cash to accelerate/deploy. $3.5M for such a small remote team though... I'm not running the numbers but they were cash burning big time, for a long time.

I don't think it's that bad a cash-burn. That's less than $100k per month for a team of 8. Even full remote, salaries and overhead don't seem recklessly out of alignment.

Re: How to proceed when you run out of cash, but you still believe?

#77

Post by devit »

Assuming this can recommend clothes that someone is going to immediately love based on previous purchases, this seems incredibly valuable for all the fashion e-commerce sites starting from Amazon, and could in fact turn any large site with this technology into a monopoly at least until someone replicates it.

Of course it needs to actually work though, which is not clear from the article (categories like "comfy" aren't going to cut it, you probably need a sophisticated deep learning approach on product images plus brand identity data and maybe Instagram posts with a lot of training data).

Obviously you can also run a store or an affiliate-based site yourself with it, but the problem is that you are going to be missing data on customer's taste; maybe you could exclusively cater to people who love posting their photos on Instagram, connect to their Instagram account and understand their fashion taste from their posted photos - or you could even support imitating someone else fashion's taste by looking at their Instagram profile.

Re: How to proceed when you run out of cash, but you still believe?

#79

Post by StillBored »

vechagup wrote: post #74
bobloblaw45 wrote: post #64

Earlier quoted context omitted.

I know this might sound stupid but if you can get that much for something that wow's people, can you get like 100k for a "meh" idea? Like if you wanted to open a dry cleaners.

Yes you can. It's called a small business loan. See https://www.sba.gov/funding-programs/loans and https://www.bankofamerica.com/smallbusiness/business-financi... . You'd finance your dry cleaners with debt rather than equity because (unless you are starting a chain) you are not shooting for the massive, near-zero marginal cost scaling that the venture capital model focuses on. Instead, the bank looks for a modest, p…

Yah, but re:wework, throw in a dry cleaning app that schedules a dirty laundry pickup and suddenly the valuation goes from marginal to billions. Especially if you get some machine learning in there to detect spots (or something).

Re: How to proceed when you run out of cash, but you still believe?

#80

Post by kirubakaran »

dang wrote: post #12
grogenaut wrote: post #11

Dangit I was hoping medium had decided to call it quits. Wish hn would highlight the blog name not the domain.

It's on our list.

For at least 12 years :-p

https://news.ycombinator.com/item?id=60806

https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...

Post reply on HN