Startup Bootstrapping Plan

https://twitter.com/adam_keesling/status/1430219020419026945

by tosh • 5 years ago

152 32 5 years ago

adventured• 5 years ago

Examples of bad markets ... Marketplaces - suddenly you have 2 businesses instead of 1

It'd be far more accurate to say that marketplaces are very difficult products/services to build out, not bad markets. And you plainly don't have two businesses, the two sides of the marketplace are not separate businesses at all, they're two required aspects to that one business. That's not uncommon in business. If you open a convenience store you don't just need inventory, or a building/location, or employees, or customers, or a POS system, you need all of those things, that doesn't mean it's multiple businesses.

There are few better businesses than marketplaces once you get one established. They're monsters then. You have to nearly intentionally screw them up to lose the captured market. Just ask eBay, across its existence it has just about done every variety of thing wrong you can (not at the same time), and its monopoly remains 20+ years later, printing fat margins the entire time. Nobody can unseat it. There it is, $2b-$3b in operating income year after year. Amazon tried to take them down and failed spectacularly. What eBay does isn't complex per se, it's that they successfully built a marketplace, and that tends to come with a huge moat. Etsy will likely enjoy a similar moat, assuming they don't do anything drastic to mess it up.

antupis• 5 years ago

Market place are also offensiivin first come first served businesses so scaling fast is crucial and it extreme hard when you dont want funding.

unclebucknasty2• 5 years ago

And you plainly don't have two businesses

I read his comment as meaning WRT the work required to market to and acquire the two distinct customer constituents (buyers and sellers).

It's not two full businesses, but I think he has a point in that context. Actually, it's even harder than that: there's the whole chicken-and-egg thing that adds an additional timing factor to the customer acquisition effort.

polote• 5 years ago

Getting rich is the best way to become rich. Elon musk as done that.

Here is how he has done it :

- Create a company

- Raise money

- Sell a product

- Sell the company

You should do the same !

But others have done it other ways. Bill gates for example etc

Sorry but what the point of these kind of threads ?

TAForObvReasons• 5 years ago

For B2B, after years of software subscriptions with sudden 10x or 100x price increases, there is a bit of fatigue and companies are a bit more wary than they were 5-10 years ago. The expectation of price increases are now baked into the cost forecasts. Getting approval for $250/mo is actually a harder sell in many companies than getting a one-time approval for $25,000.

PaulWaldman• 5 years ago

Getting approval for $250/mo is actually a harder sell in many companies than getting a one-time approval for $25,000.

This.

I actually see a much greater multiple where customers still prefer to make a CapEx vs OpEx. The low cost of capital is a likely contributor.

bizzleDawg• 5 years ago

This is an interesting point! It raises the question of what kinds of software products could a bootstrapper create and sell with a, say, $5K+ one-off cost? (genuine interest, not sarcasm)

dmux• 5 years ago

there is a bit of fatigue and companies are a bit more wary than they were 5-10 years ago

This reminded me of a really disheartening (and probably 100% accurate) thread on Reddit recently. A developer was asking how to go about validating an idea for a SaaS that was catered towards small businesses. Most, if not all of the comments were along the lines of "no thanks, we've already dealt with a startup trying to 'solve' our problem."

timavr• 5 years ago

Still. The biggest hurdle is building what people want.

ghoshbishakh• 5 years ago

I think you can still get alway with a better execution of existing products. The market is very big it seems. Just observe how many SaaS CRMs are making big money.

ttul• 5 years ago

A good starting point is to fix something that sucks in your current job. Like a missing feature of a platform you use. It’s no guarantee of success, but maybe a good place to begin.

unclebucknasty2• 5 years ago

Yeah, that's a prerequisite. But, execution and marketing are at least as challenging.

Existenceblinks• 5 years ago

You don't know until you know. I've seen a lot of non-sense apps HN folks bash to death like "this is just a couple command lines to get it done", yet those apps' MRR (as I've monitored) keep raising slowly.

nowherebeen• 5 years ago

It’s interesting that he mentions ads is better than content marketing. Given that ads is a form of push marketing that usually attracts much lower quality leads than content marketing.

Ozzie_osman• 5 years ago

B2C = not worth it

I highly disagree.

Yes, B2B subscription / SaaS has a lot going for it. Lower price sensitivity, potential for negative churn, etc.

But dismissing B2C subscriptions is pretty terrible advice. Things have changed over the past few years and there's potential to build both healthy "side hustle" B2C subscription businesses as well as large venture-scale ones.

I work on a venture-backed B2C subscription startup, and despite what investors told us when we started building, we're seeing pretty healthy willingness-to-pay right now.

Pandabob• 5 years ago

Can you elaborate on this? What are the product categories that work for bootstrappers in B2C?

ssss11• 5 years ago

I’ve long suspected consumer willingness to pay _for things they value_

E.g. people pay heaps for entertainment (Spotify, Disney+ etc)

It’s about finding the line between whether the individual service is worth x% of their pay check or not

I don’t know how we ended up in this twisted “everything’s free on the internet” model based on surveillance ads but I hope it ends. I’d rather pay a reasonable amount for value.

The only question is how general browsing would be paid for.. maybe ads will always be there for some sites. Maybe we could do micro payments in the browser.. I don’t know.

bserge2• 5 years ago

Just get some celebrity onboard. People buy Drake merchandise ffs.

Abishek_Muthian• 5 years ago

The issue with B2C, If it's an app based product(not associated with any physical service) then immediately we're competing with the likes of Facebook, TikTok, YouTube etc. for screen time no matter what problem the app solves.

With B2B again we might end-up serving those who are building B2C products and they would face the aforementioned problem. So if our customers couldn't succeed can we? Yet the room operate in B2B is larger than what B2C currently is.

Unless the size of behemoths is controlled, fair competition is ensured thoroughly even B2B might not be a safer bet in the future.

surfsvammel• 5 years ago

Argh. This needs a Twitter account to read the full thread.

_Microft• 5 years ago

You can use this instead: https://nitter.net/adam_keesling/status/1430219020419026945

timdaub• 5 years ago

then why don't people post this link to HN? Twitter links should be banned/downvoted

ignoramous• 5 years ago

https://archive.is/jZJfU

I find myself using archive.is to read most text-heavy webpages these days.

pbronez• 5 years ago

Oh hey that’s great - will use nitter in the future!

bserge2• 5 years ago

It's not 140 chars? TLDR

alexanderskates• 5 years ago

Blocking cookies for twitter seems to work for me... sometimes I need to refresh the page a few times however.

dudul• 5 years ago

"Money back guarantee >> free trial"

is there an explanation for this? I tend to favor free trial myself because the "money back" seems like a headache to go through if I'm not happy with the product.

"Consumers complain about cost all the time Companies don't. It's that simple"

But don't company expect a much higher uptime and level of support? I would imagine that a bootstrapped startup would have limited bandwidth to offer support SLA for example.

Robin_Message• 5 years ago

They also switched from 14 days to 60 days if I remember TFA correctly.

I might guess that "free trial" converts badly because people don't really invest and use the product properly, whereas "money-back guarantee" forces people to (however temporarily) invest money in the product (and therefore they tend to spend the time to actually set it up and use it), as well as communicating more confidently that the supplier believes the product will add value.

agoldis• 5 years ago

tl;dr

To build a $10k/mo software startup:

- Revenue: get 150 customers paying at least $66/mo RECURRING - Market: choose a BIG market, build a product that people need and is naturally recurring - Customer acquisition: ads > content. It's more reliable

pembrook• 5 years ago

Some good advice, some not so good.

For example, he recommends A) going after a big B2B market with lots of existing demand (good)

Then he recommends B) spend on advertising instead of content marketing (not so good)

You can't both do A and B. Big markets with lots of demand also have tons of competition in the advertising space.

The talk he's referencing for these tips is from almost a decade ago (Jason Cohen's microconf talk). I'm sure Google adwords was a much more viable strategy back then, however, if you're remotely close to a big market in B2B, adwords is now going to be cost-prohibitive for growing a bootstrapped business.

The reason Jason's personal blog didn't convert well is because his content wasn't targeted towards the products he was creating. If you're writing about general life/tech news/etc. the chances your audience will overlap with a niche B2B product offering are slim to none.

On the contrary, most of the B2B Saas startups I've worked with in the last 5 years grow almost entirely from SEO.

Content is like real estate. Once you start ranking for a few key niche search phrases, your position grows in value over time, without you doing anything.

Advertising on the other hand is like a money treadmill. The minute you step off the treadmill, you're no longer getting leads...at all.

If you want to bootstrap a sustainable business, ignore content/SEO at your own peril.

rexreed• 5 years ago

This is the problem with these twitter-thread microblog posts. There's never enough space to really explain or discuss something. It seems to me that Twitter microblogging a complex, multipart idea is a quick way of getting half-baked thoughts out that provides an excuse for not being more verbose. Sometimes being less verbose is good. Sometimes brevity isn't the answer.

simonw• 5 years ago

The Twitter thread is a summary of this hour-long MicroConf presentation by Jason Cohen from 2013 https://www.youtube.com/watch?v=otbnC2zE2rw

(Not intended as a criticism: summarizing an hour long talk into a Twitter thread is super-useful)

Startup Bootstrapping Plan

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