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

91–100 of 209 posts

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

#91

Post by ezzzzz »

devit wrote: post #77

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'…

Yeah, this is sort of confusing to me. I know that B2B/SAAS is a preferred model for VC these days, but I'm sort of baffled that you wouldn't just take the tech that's been developed (assuming it works) and just integrate it with your own e-comm platform. Like, couldn't something be bootstrapped here? Maybe add a subscription/service model to create revenue?

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

#92

Post by toast0 »

nostrademons wrote: post #53
t222 wrote: post #51

Earlier quoted context omitted.

> The real question is who invested, and why? This always baffles me the most. Who gives money to a startup without a business model? I guess they just have funds to throw at the wall and hope something sticks.

Startups with scalable, repeatable business models are basically not startups anymore, since the whole point of a startup is to search for scalable, repeatable business model. And valuations match that: once the startup has actually found a scalable business model and is in its growth phase, expect to pay $100M or more for it, sometimes into the billions.

People aren't necessarily asking for a business. They're asking for a business model: a way, maybe untested, maybe lightly tested, that you might earn more than you spend. Just needs to be semi-plausible, doesn't need to be bulletproof.

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

#93

Post by streetcat1 »

tenpies wrote: post #61
jassmith87 wrote: post #58

Earlier quoted context omitted.

Seed and Series A is investment in the people always. They assume if the product doesn't work the team will pivot until they find something that does. It sounds to me like your friend failed to pivot when needed.

Not even. I'm seeing seed and series As/Bs on unproven teams of recent graduates with no experience in the field where the "start up" operates. No business plan, no prototype, huge regulatory walls to climb. It is worst than tulip mania.

Where? Can you give an example?

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

#94

Post by nostrademons »

toast0 wrote: post #92
nostrademons wrote: post #53

Earlier quoted context omitted.

Startups with scalable, repeatable business models are basically not startups anymore, since the whole point of a startup is to search for scalable, repeatable business model. And valuations match that: once the startup has actually found a scalable business model and is in its growth phase, expect to pay $100M or more for it, sometimes into the billions.

People aren't necessarily asking for a business. They're asking for a business model: a way, maybe untested, maybe lightly tested, that you might earn more than you spend. Just needs to be semi-plausible, doesn't need to be bulletproof.

If you don't care about whether it's tested this startup had a plausible business model: by coming up with an algorithm to identify fashion taste, fashion e-commerce sites could show more relevant recommendations, which leads to more sales, which leads to more revenue. Then they pay this company some fraction of that additional revenue, and both win.

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

#95

Post by CrazyStat »

TallGuyShort wrote: post #39
CrazyStat wrote: post #22

Earlier quoted context omitted.

Any interested party will get access to the books and have that information anyway.

The buyer, yes. But now they can't even spin this as strategic or synergetic. It's obvious and public that it hasn't been a commercial success yet. Granted, that's usually overstated and I don't think it makes much of a difference to most people. But it's something. But hey - we all got an interesting read out of it.

That's a reasonable point, but it's not the argument that was being made (and that I was responding too).

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

#96

Post by koverda »

dazhbog wrote: post #87

Haha, that is exactly what is going on with us now. We just launched our first Kickstarter[1] and its not going well. We will go ahead, eat ramen, and pursuit this, and its a HW product. Wish us luck. [1]: https://www.kickstarter.com/projects/pycno/pulse-building-sm...

Just a heads up, there's another IoT product called pulse: getpulse.co

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

#97

Post by felipap »

toast0 wrote: post #92
nostrademons wrote: post #53

Earlier quoted context omitted.

Startups with scalable, repeatable business models are basically not startups anymore, since the whole point of a startup is to search for scalable, repeatable business model. And valuations match that: once the startup has actually found a scalable business model and is in its growth phase, expect to pay $100M or more for it, sometimes into the billions.

People aren't necessarily asking for a business. They're asking for a business model: a way, maybe untested, maybe lightly tested, that you might earn more than you spend. Just needs to be semi-plausible, doesn't need to be bulletproof.

It is not clear at all from the article that they never had a business model. Most likely they had to scratch their original plan at one point.

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

#98

Post by btilly »

icedchai wrote: post #72
Analemma_ wrote: post #67

Earlier quoted context omitted.

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.

As long as your product is perfectly scalable and generates a profit for money spent that way, it makes perfect sense to take a loan, spend a fortune, make a fortune, then pay off the loan and take in profits. Then turn around and do it again.

It isn't the absolute size of the numbers that matters. It is the ability to rapidly scale the business once you have the right business model and product.

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

#99

Post by zaphod12 »

__jal wrote: post #89
Analemma_ wrote: post #67

Earlier quoted context omitted.

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…

> tech startups is specifically because of tech's unique promise of both worldwide scale and zero marginal costs This theory fails to adequately explain WeWork. I mean, I think you should be right, but in principle I do not see why WeDryClean should not work while WeWork does.

much like wework - all you gotta do is convince 1 person who controls vast sums of money that it will work. I'm very convinced by your WeDryClean idea! (Sadly no vast sums of money, though)

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

#100

Post by coldtea »

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…

>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 acquired by someone else?

If you can raise them why would it be crazy? It's only crazy for those that give the money (and for them they could be spare change)

Post reply on HN