Ask HN: What Stage Is My Business At? | Hacker News Reader

Ask HN: What Stage Is My Business At?

3 pointsonlyrealcuzzo10 comments

Morning HN,

I've done some market research by asking ~30 developer/manager friends to take a survey. I found that there's definitely a demand for my product. I've built an MVP. I'm currently showing it to prospective business clients and have received very little negative feedback. I'm trying to learn if they'd want to sign up for the service, and how the decision would be made whether to sign up or not.

So, in a sense, I think I've discovered who my customers are, validated them, I'm figuring out the distribution, and I have an MVP -- I think (I'm an engineer, just learning the business side of things).

I technically don't /need/ any other employees at the moment. But I would like to bring on a co-founder for several reasons. I'm a little reluctant to split the business 50-50 with someone, though. I've put in 4 months of development and $60k. I do have four friends that want to be a first hire, and at least one interested in being a co-founder, but the two I really want as a co-founder aren't interested in quitting their job and working for no pay.

I'm also curious what type of funding, if any, I should seek. After signing my first 3 clients, which it seems like will happen by the end of the month, I'll be profitable. I'm in the early stages of developing a business model with a friend of mine who is a consultant for BlackStone, and it seems like there is a clear path to $54M in revenue by 2022 (I realize this is still very hypothetical).

It seems kind of silly to go through an accelerator at this stage. Although, I do really need and want the help of more experienced business people. My product is great -- that's validated -- but it's still not going to sell itself.

Anyway, if you managed to read all that, I'd really appreciate some feedback. I really only have one business friend, I've been bugging him a lot, and he's already busy AF, so I feel bad to keep reaching out to him.

Thanks!

If you have a few dozen people who want to pay you what, a total of $2,000 a month, you are already better than 99% of businesses.

Paul Graham had 50 customers for Viaweb like this, and eventually scaled it to 200 before being acquired.

If you only have 3 people who are interested and they only want to pay maybe $10 a month, then you need to scale up your outreach and get in front of more potential users

Hey, thanks!

It's closer to $2k a month than $10 a month.

I'm 3 for 3 with companies I've propositioned. So I think if I had the connections to reach dozens of software companies, it's not unreasonable that I might have a dozen or so companies willing to sign up. I don't have those contacts, though. So I'm not there yet. I'm a 3.

I still don't know what this means. Should I be thinking about an accelerator? Should I be thinking about raising a lot of money? Should I be thinking about hiring? Or am I still really early? Should my focus still be on talking to software companies and figuring out the distribution?

Sorry for the late reply!

I'm going to continue to think outloud here for you, just my thoughts :)

I think if the addressable market is only 54mm then an accelerator might not be too interested. You would also need a cofounder in their mind, someone who does the business stuff I guess, and success is not easily screenable there.

It sounds like your product is quite niche and requires high touch enterprise sales? If your product is in maintenance mode only, then you could probably handle this yourself, even without many connections.

If you have a multi billion dollar market to <<disrupt>> and a small team of people to do demos, contracts, support, etc, then you are a strong candidate for an accelerator I think, since in their mind it's all about growing or dying.

But if not, then you can run a lifestyle business with a few dozen customers :)

I currently am working on a b2c product and I'm doing everything myself after most investors panned the idea, despite decent user count :)

Interesting. I'd love to learn more about your company and the journey! It sounds like you've already been where I am now [=

Also, I'm unfamiliar with the term addressable market, but after Googling, it sounds like the TAM is closer to $500M annually (maybe). This is a new product in a new market. So I don't know if the TAM would be whatever I capture. But, given how fast somewhat similar products have grown, it seems like I would be able to capture around 10-15% of the total market by 2022. The total market being the number of software companies in the world, a somewhat easily estimatable number, multiplied by the price of my service. I don't know if that's how to calculate the TAM or not.

Please drop me your contact info if you'd like :)

Yeah the more I hear now, I think you should network with whoever will give you more solid advice from the Y Combinator network, or any of the other ones out there.

Someone you trust can hopefully help you estimate the TAM, I think 10% capture is a good number to target.

If it needs lots of enterprise sales and you need to grow quicker than your competitors, you will need outside capital of say 100-300k for salaries and etc to give it a shot!!

Good luck :) You are definitely in a better place than people who only have an idea, or an MVP with no sales!

Right on. Yeah, I'd love to hear more. My email is yahn007 at gmail.

Get somebody to sign up. Once you have some customers you have a much better pitch to everybody (employees, possible founders, funders, etc.)

It is better to have "no co-founder" than a bad co-founder.

Yeah, the last thing I want is a bad co-founder or a half-hearted one. I've really been prioritizing getting my first customer. But I wasn't really ready for that until this week. My hope is to have one (or all 3) signed up by the end of September.

What's your product do?

Automated risk assessment for changes to software

Reply on news.ycombinator.com