Hacker News Reader

Comment by ddtaylor | Hacker News Reader

One problem we are facing is that it's very hard to compete in online advertising with a small budget. I feel we did a really good job at building the software with a small team that would cost a large established company at least $600,000 to develop but I don't know a good way to do a similar thing with advertising and growing yo 10k users.

View on HN

Why can’t you raise funding? If you truly have a great product with product/market fit, and established LTV greater than CAC, then you are a perfect investment for a VC who just needs to pour some gas on the fire.

This is exactly the kind of problem a Series A is meant to solve.

On the other hand, if the problem is your competitors are VC funded and are spending more than LTV on CAC, then (1) that sucks, but eventually they will burn out, and (2) you need to find ways to compete with more finely targeted ads that result in higher CTR to outweigh the bid differentials. Or, you need to raise the price of your product to increase LTV in line with the inflated CAC.

Our attempts to raise funding essentially investors want us to grow to 10k users.

With our limited budget we have seen pretty good customer acquisition cost. I can't share exact numbers but lower than $10 for targeted ads.

We spent our money already on development and it looks like it could be $80,000 or more to reach the goals to get investors interested.

We are trying WeFunfer currently as well.

We have no competitors right now. Everyone else is doing screen time management with rigid controls etc. Our innovation is the integration with learning sites and rewarding the child/student with Internet access after they meet goals.

Thanks for giving me a quick marketing 101 we are not good at this part of things.

Have you written documentation/POCs specifically targeting ERate funding?

More specifics... https://www.fcc.gov/general/e-rate-schools-libraries-usf-pro...

ERate has a 5 year cycle for rural school districts. The problem you are solving is a very real one. Also I would look to people like LightSpeed (produce Rocket appliances) for bundling. Possibly see if you can provide a "service" on Clover as well. Good luck.

I took a look at your site. I would also recommend a chrome extension with easy management in G Suite. 10k customers is one rural school district for you. Many, many of them don't do Apple but use G Suite, since it's free, along with Chromebooks.

We have not looked at E Rate yet but we have been at a few conferences and related to K12 space with Clever - they are really good people. We originally were targeted to parents and only recently have tried tapping into the school space. It's not easy to get the word out to the right people, for example we get rejected by Peach Jar for many districts and have $1500 of funds sitting there until we can find a strategy.

I will grant you K-12 is difficult to break into. This is advice for specifically Georgia. I am not familiar with other states. Clever is a path through teachers. Teachers generally push joining Clever not Ed Boards or parents. ERate is a path through district boards. Parents don't care or understand what/how technology is being used in the classroom. They see iPad, Surface, Chromebook and generally think that most kids can access the same stuff they can on the internet. It is really locked down and usually through Lightspeed Rocket, Palo Alto, Cisco Umbrella/OpenDNS. Many push DNS through Umbrella or forcesafesearch.google.com. Make sure you accessible. Accessible also means you are categorized as "safe". "unknown" or "unsafe" will keep you out of schools.

Chrome extensions, chrome extensions, chrome extensions. I cannot stress this enough. This is the "hidden application pool" that students, teachers, and principals pull from. There is a cottage industry that does nothing but figure out extensions to create, disguise them as "informational sites/extensions" in order to give kids access to games so that they can show ads. It is a constant thorn in the side of IT.

If you have a chrome extension ...teachers will find you.

Most ERate customers make purchases on 5 year contracts or a "buy once keep forever" model...month to month is a pariah. This is due to the fact that with ERate government funds projects, software, and infrastructure can be purchased. ERate funding is viewed like the lottery.

In Georgia at least there is a state run "Tech" board (email list) where different techs exchange ideas. They make recommendations to the individual school boards. You get someone to champion you there and you will pick up several districts.

...again good luck.

You could try an affiliate program, if you can make the offer payouts good enough. That way the affiliates front the ad cost and you only need to pay them for conversions.

Also, $80k is really not much when talking about investment. I would suggest talking to some angel investors and trying to raise a seed round with convertible notes, either $25k per investor or one or two investors at $100k, both of which are common deal sizes for early stage companies.

Show them the CAC and LTV numbers in the pitch meetings.

All that said... I would be looking for growth from non-advertising channels. Specifically I would be looking at partnerships with schools, which reduces your problem to negotiating deals with a finite number of institutions. I would just straight up cold call school administrators and pitch the product. If you do it right, each school could onboard multiple users (parents) to your platform. This way you only need to worry about reaching N/K schools, instead of N parents.

You can create a token right outside of securities law. DAICO seems like a good candidate. The ambiguity is extra risk, but the SEC says they are only going after ICOs.

The key to getting the most bang for your buck for advertising is in undiscovered channels. If you only advertise through mature efficient channels you will pay more for less. If you are a startup with little money that is not where you should be.

Is this similar to guerilla marketing? How do I find such channels - although asking that may be stupid because they are "undisclosed"? I am BAD at marketing!!

They’re not “undisclosed”, they are just untapped.

Consider Instagram, there was a time when it didn’t have as much advertisement as it does now. In those days you could cheaply advertise a product through someone with a high follower count. As more people started doing this, demand went up and so did prices, and then standardization came in. Now it takes big money to advertise effectively on Instagram.

Is this studycity.org?

Yes. Any feed back is appreciated it's okay to be critical and we know we are not perfect.

I'm not familiar with the space in the slightest. My guess is if you can't raise a seed round in this market, you either don't know how to do it or your business is not promising enough.

Have you filled in a YC application? If you send me that I can probably spot the problem very quickly. Email is gomox.ar (with the free Google email).

We applied for YC 2017 but didn't get accepted. I don't know if we still have access to the application we submitted.

You usually get a copy in your e-mail when you submit.

Reply on news.ycombinator.com