Ask HN: Surprised by your revenue? Easier than you thought?

A little off topic, but you should know there's a better way than the Yellow Pages to find customers. The ReferenceUSA database will give you all the companies in a given area that fall under the entered NAICS code. Here's a small sample of the information you'll get:

* Business Name

* Address

* Contact Information

* Number of Employees

* Number of PCs

* Location Sales Volume (in dollars)

* Credit Rating Score

* Names of Management and their Titles

* $ spent on accounting

* $ spent on contract labor

* $ spent on advertising

And this information is all free to you thanks to your local public library. It's pretty awesome if you ask me. Here's how to get access to it:

1) Get the NAICS code for the industry you're selling to. This code is used by the government to classify businesses. http://www.census.gov/eos/www/naics/

2) Go to your local library to access the ReferenceUSA online database. You may even be able to do that through the library's website (I can through mine).

3) Click on U.S. Businesses under Available Databases

4) Customer Search

5) Enter the NAICS code in one of the boxes at the bottom of Business Type -> Keyword/SIC/NAICS.

I'd upvote you twice if I could for pointing out this amazing resource. I'm amazed I never knew about it.

This morning I shopped our idea to 20 potential users. Cold-called them. They have been extremely nice and supportive, but it's been 4-5 hours since I sent them links and I am sitting on the edge of my chair staring at a blank tail -f /var/log/access :-|

-- Edit:

They have come! it's been 50 minutes since I wrote the above and already got two beta users. My other startup went for 43 days before I got a 2nd client, and the first was my former employer.

I had to warm them up with a phone call but so far 8 of them have followed the links and 2 signed up. Twelve more to go.

This is my first B2C, I think it's gonna be a different experience.

B2C = business-to-consumer.

Contrast to B2B (business-to-business). Slightly confusing as he mentions his former employer as his first customer, I presume he means his boss in a personal capacity.

I read it different. Last start-up was b2b, and his former company was one of this first clients. This time (b2c) much easier to attract interest. I bit its an apples to oranges comparison though.

You understood well.

This might be harder for a B2C company as people won't be in front of computers as frequent, but try to get them logged in on a demo account when you talk to them on the phone.

Guy Kawasaki had an article where he mentions doing a bottom up approach to financial projections. "How many biz dev meetings can I attend, how many people can I reach out every single day and add in the conversion rates for each one of them". It's probably better than saying my company will get 1% of a 10 billion dollars market.

I spent literally 35 minutes writing my first iPhone app and it's brought in over $4k in sales over the last two years. That works out to ~7k/hour.

Alternatively, I've spent weeks or months on projects for zero revenue.

The moral of the story is: there is only weak correlation (at best) between effort spent and revenue received. Entrepreneurs do not get paid by the hour.

What was that app?

Almost never fails. The apps you spend more time developing are the ones with the least success rate.

We had no goals–which is great because anything you get is gravy. Let me explain: 6 years ago I built something for a friend. "Hey, this is great. You should try and sell it," he said. "Meh, ok, whatever ... " I replied. Sent some emails. Got some good response. Fast-forward and we've got thousands of customers, 6 employees, and 7 figures in revenue.

Was the revenue easier than we thought? Well, yes ... because we never thought anything. I know that doesn't really help, but what I'm getting at is maybe it's a bad idea to waste energy "setting goals" to any degree beyond covering costs or being ramen profitable.

Just focus on finding a need, saving/making people money, doing customer development, and iterating/adapting. Most everything else is beyond your control.

And don't forget, when you're setting goals, there are a lot of numbers less than 1% (that came from an HN post/comment IIRC)

People tend to overestimate short-term revenue, and underestimate long-term revenue.

It will probably take you much longer than you think to get 200 users, but if you stick with it and your idea is good, you'll end up with more than you ever expected.

Do not be fooled by the field of dreams. It was a movie. You have to do much more than build it before they come.

It has taken longer to get to where I am that I thought. I have a number of spreadsheets I've made of the time showing cash flow based on number of customers. The growth has been much slower than I wanted. Part of that is the software aspect is much easier to me than the marketing. I would say that software is absolutely critical, but it is only the first 10% of the business. The rest is sales/marketing etc. That is what is going to get you the 200 customers you want. Its not the software by itself.

Even for Patrick, he did't get there over night and he is very good at his marketing. But the good news is that you can get there. I'd focus on the first customer. Getting that first customer is one of the best feelings ever. And the good news about SaaS, is that they stay with you. I still have my first customer paying me every month.

My thoughts were similar to yours going into it. I only need 500 customers and I'm set. I'm a long, long way off. The problem is not that there are not enough customers, the issue is reaching them. I have a ton of competition in my market, some good, some bad. I'm somewhere in the middle product wise and somewhere near the bottom half marketing wise. At my current rate of customer acquisition, it will still be a few years until I get there. But I keep plugging away.

Good luck!

Just found this link on HN:

http://blog.chrometa.com/you-launched-your-app-now-what