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Comment by tptacek | Hacker News Reader

I don't understand how your company works. Your product is free. You've maximally leveraged yourself personally. You have no recourse in negotiations. Your BATNA may be bankruptcy. Your question is, "how long can you survive on bootstrapping". But you haven't booted yet.

Figure out something your team can do that will make money. Then think about the long term.

If you can strike a licensing deal with your technology, you should do it. You can't hurt your valuation any more by creating cash flow than you can by driving your company to the brink.

You can talk to companies that have expressed interest, and set up a contracting arrangement to build things for them. There are tons of mobile dev consultancies. Do that for awhile.

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+1 for "Figure out something your team can do that will make money. Then think about the long term."

I'm in the same boat at the moment, we've raised some seed money and are somewhat in the same boat. In our case, we spent 2-3 weeks of June talking to ~2K of our users on the phone to get some real feedback on how they use the product, what sucks and what else they want to see. At the end of it, we had a pretty solid list of bugfixes and enhancements... but, better yet, we noticed that there were 2-3 specific features that people actually offered to pay for. So, as a final sanity check, I emailed a small sample of those users with a credit card authorization form and asked them to fax it in... I got most of them back (and then shredded them since I don't actually have a way to process them just yet). :)

If your userbase is actively giving you feedback, maybe it's worth spending a little bit of time having in depth conversations to see whether any paid features might emerge?

Thanks paul. I think the most immediate answer is: improve the product and keep pumping out features. In the short-term our costs are really under control. I apologize if my initial thread sounded like I was shouting "fire" in a crowded theater. With the recession and downturn in the economic climate, startup logic (understandably) has shifted from the web 2.0/YCombinator preaching of: build, find users, get acquired or profit. The difficulty is that competitors in our space operate on this “free” model and are backed by substantial angel or VC money. In fact, the only widely visible startups that seem to still be operating under this logic were founded and funded pre-recession. What is going on here?

I’m somewhat confused by all the conflicting recommendations I get on early-stage startups. Again, cash is king and we have some ideas for monetization (which, of course requires more $).

In today's economic climate, can startups afford, literally, to avoid realizing a business model after you've scaled? I realize that YC has increased the number of seed investments, but has the angel community also increased the pace at which they invest in these fledgling ideas at the >$100k investment stage? I'm in Boston, so my perception is a little bit warped. Can someone offer their thoughts?

No apologies necessary, you're asking a good question that I also have been thinking about for some time now. Feel free to email me if you'd like to talk about this in-depth or just need to bounce a few ideas off of someone. :)

I don't have a whole lot of insight into what's going on in the minds of the investment community but, IMHO, I think we all tend to think that there's more investing going on out there than is actually true.

If my own experience is any guide to answer your last suggestion there is almost no investing going on other than a few proven horses. Risky stuff is way down.

Thanks, tptacek. Actually from a founder's perspective, my BATNA is maintaining the day job and surviving on Ramen noodles. Which in the short-term is a distraction but can keep the project going while controlling the increase in the userbase and minimizing costs. Bootstrapping could continue ad infinitum until a deal is struck.

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