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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

#71

Post by giarc »

sthielen wrote: post #55
ChuckMcM wrote: post #45

Earlier quoted context omitted.

Well that helps clarify the question considerably. > No salaries, no office. My two cofounders and I have > been throwing everything we've got into this; we're > all broke To put it nicely, "So what?" (I know that sounds cruel but trust me it isn't) What you have is a bit of traction, you don't actually have a business yet and as such its probably too early for any but the most inexperienced of investors to invest in…

Haha don't worry about the harshness--comments like yours are why I posted here. The point I wanted to make with needing to hire people is that it becomes more cost-effective to have one "listings manager" maintaining 35 schools (we've budgeted for four "listings managers" total, once we're fully operational at the 150 campuses--the job mostly a lot of calling), and one sales person handling multiple schools, etc. Th…

There was a HN post the other day about another startup that provides proven sales people on the ground as a service. You don't have to pay them full time, it's like odesk but for sales people.

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

#73

Post by dkrich »

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.

Thank you- somewhere it became lore that filing in Delaware is a necessary step to running a successful business. Most businesses that are cited as examples didn't start in Delaware, but did so after they had much to lose and on the advice of their highly-paid counsels.

If you have $1k in revenue, congrats, that's a great accomplishment, but with all due respect, nobody is going to file suit against a group of college students with $1k in cash.

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

#74

Post by larrys »

Used to own a business that sold advertising in the same college market.

Be very careful when extending credit to advertisers. The sale is only one part. The other part is collecting the money. Would suggest you try and not extend credit and get paid if at all possible by credit card. The back office and aggravation can be quite aggravating. People will take advantage of you. They will tell you to show up to get a check (after you pester them) and then they won't have the check and tell you to return.

Edit: I made this comment because the op had mentioned closing sales in person (or perhaps over the phone). This is not the same as a website with a "pay here" link. When you close in person there will always be customers who attempt to get credit terms. Think in particular what a chain restaurant would do or a company where the management is located elsewhere. They will say "send us a bill and yeah sure we will pay" or "can I give you a PO". So the question is how lucky do you feel. Of course if the COGS is very low it pays to take a risk. But just get ready to have to follow up multiple times over many months to collect that money. And don't act like it's in the bank because it's not in the bank.

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

#75

Post by larrys »

patio11 wrote: post #67

Choose your own adventure: 1) You currently have approximately $500 to $2k in revenue. That's great, because it is $500 to $2k in revenue more than the vast majority of people will ever achieve. You need to work the numbers on whether the founding team can solo-close $100k in revenue in the next twelve months. If that appears achievable, you tighten your belts, perhaps run up larger balances on your credit cards than…

"you're going to hire a bunch of folks who will do that job to your script on the telephone all day, every day"

Cracking this particular market without a super motivated and nicely paid phone force is really difficult. SMB are hard to get on the phone and to pitch. Over the long term of course. Anything short term is possible. I've been in this market and even purchased a company that did this where the previous owner moved out of town [1] and specifically said "you can't do this type of selling remote you have to be physically in their face".

Others have done this of course but iirc they tended to be well funded and able to lose a ton of money gaining sales. (Groupon).

[1] My point being he wouldn't have sold the company if it could be operated remote and that had in fact been tried by previous owners. (This was advertising to reiterate in a printed publication).

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

#76

Post by smoyer »

I'm probably going to be a minority voice here but I think there are a couple opportunities/risks ... since you're curating properties around each campus AND selling ads to local businesses, I think there's a pretty good opportunity to franchise the "feet-on-the-ground". You might be able to charge for the franchises, but even if you can't, you can still pay straight commissions as a percentage of the income from each campus area. If the franchisee gets 50% of the ad revenue and is in charge of driving traffic to your site, the 50% you keep would need to cover your server costs and the founders living expenses.

As an aside, I'm near Penn State and I'm not sure whether this would work here. Most of the properties that will rent to students at all are managed by property management companies and the students tend to find those companies first (there's a lot of local advertising). First year students are required to live on campus, but they tend to start visiting the "apartment stores" during their second semester. Do the three campuses you're currently servicing operate in a similar way? Maybe the current crop of tech-savvy students look to the Internet first since they've had it from birth?

In any case, great to hear you're making money and good luck!

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

#77

Post by webmaven »

pbhjpbhj wrote: post #68
dsugarman wrote: post #61

1.4 1.4 1.4*1.4 != 2 not really close and super suspicious. know if you actually need to raise money and why and if you do, know your numbers. also don't just look to raise money and hire whoever you can get your hands on to 'manage a business' know who you need and why, plan a top line growth strategy, and a more humble strategy with less capital

This was actually the thing that leapt out at me - I don't really have experience of investors except watching Dragon's Den(!) but they've always been super-harsh on those that misrepresent their figures [or at least are caught doing it]. 1.4^5 ~= 5.4 Make sure you're being truthful about your figures with yourself - like don't assume you're making a profit just because you're taking revenue, especially not if you're…

I assumed that the latest w/w is 1.4, whereas the m/m includes earlier weeks that aren't as good, eg. 1.1 x 1.1 x 1.2 x 1.4 ~= 2.03

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

#79

Post by mikeho1999 »

First of all.. congrats! It's always exciting to see something you've created grow and start to gain traction.

Second of all, please take all of the advice that you see here with a grain of salt. I think most of the ideas that people have shared are really good things to keep in mind for consumer-oriented SaaS platforms in general, however, IMHO the university / college student listings market is a completely different beast.

Speaking as someone who co-founded the largest student classifieds system (at our peak 4-5 years ago we had over a million students using our system at over 400 universities nationwide), I can tell you that a lot of the business modeling that people do for consumer software service businesses are not necessarily compatible with the market that you are in.

I couldn't help but notice from your site that you're in San Diego -- I'm actually in SD as well, and if you're up to chatting more, I'd be more than happy to meet up. From my HN profile you can link to my website -- the very bottom of the "With Whom" section talks about the startup I helped to co-found, and the "Where" section provides contact information if you want to get in touch with me further.

Best of luck!

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

#80

Post by rhizome »

Blahah wrote: post #65
sthielen wrote: post #21

Earlier quoted context omitted.

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…

Why not grow at the rate you can sustain? Rather than taking on 150 schools, grow by as many schools as you can afford with the profits from the initial set.

After all, Boston Market wasn't that long ago.
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