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First, I just want to compliment you on getting this far with customer acquisition. And, getting some customer traction before considering talking to investors

by mswen 10y ago

First, I just want to compliment you on getting this far with customer acquisition. And, getting some customer traction before considering talking to investors is great! I have personally been an early employee at a venture funded start-up that ultimately didn't succeed soon enough at paying customer acquisition and ended up selling intellectual property for only a bit more than it cost to develop it. And, then I took a go at the solo bootstrapped thing like you have been doing. I developed an enterprise type web app for a particular industry and have had potential customers tell me that is really cool and premium but their felt need wasn't sharp enough to make room in the budget and spend meaningful money. So I know what it is to build something and not get to a good market fit with paying customers. In looking at your situation it would seem critical to understand the backlog of customers that you mention. Are these customers who have already committed money/signed contracts? Or, would these be considered more like warm prospects? How long are they having to wait between decision and implementation? Do customers in this backlog know what kind of wait time they are facing under your current solo part-time commitment? Are they willing to wait? Or, are you losing customers to other competitors or internal solutions because of the wait time? What is the dollar value of your current backlog? If for example it was another $2000 in monthly revenue that is committed but at risk if you don't deliver fast - I would encourage you toward greater commitment try for a small business loan or take on your more personal sources of investment that you mention in option 3. On the other hand if the backlog is something more like $500 in monthly revenue I might suggest that you continue with #1 because your growth curve might already be slowing down.

throw9987432 10y ago
These are good questions. Let me hit them up in order. > Are these customers who have already committed money/signed contracts? Or, would these be considered more like warm prospects? Say a customer I have talked to on the phone or otherwise convinced to sell. Need to do a little discussion and a little work, and get them set up. I vetted them as a real customer, and they vetted me as sounding interesting. Historically at least a 75% chance to pay at this time. > How long are they having to wait between decision and implementation? Do customers in this backlog know what kind of wait time they are facing under your current solo part-time commitment? Are they willing to wait? Or, are you losing customers to other competitors or internal solutions because of the wait time? 1-3 week range. I don't think I am losing a ton. > What is the dollar value of your current backlog? If for example it was another $2000 in monthly revenue that is committed but at risk if you don't deliver fast - I would encourage you toward greater commitment try for a small business loan or take on your more personal sources of investment that you mention in option 3. On the other hand if the backlog is something more like $500 in monthly revenue I might suggest that you continue with #1 because your growth curve might already be slowing down. Closer to $500 in backlog. Here is the part of the story that perhaps I did not express fully. 1) I am spending like $20 a month on google adwords. I have some very hot words. I could up it to $20 a day, and probably get 2-3x the new customer flow I do now. I do not, because my backlog would go insane. Perhaps I should do it anyway though :) 2) I have some complex customers I am turning away. They would be good for pretty good money (perhaps $500 MRR each), but I cannot yet deal with them. I know part of a young business is turning away things that are too much work, but if I scaled up and had money - I totally know I could deal with them. So I think more than the raw backlog leaving money on the table, is #1 and #2 above leaving money on the table.
- mswen 10y ago
  If you really have a 75% conversion rate once you start talking to people that is outstanding. Next you should validate your intuition that spending relatively modest amounts of money on adwords will double or triple your flow of customer leads. If that hypothesis holds up under real world testing then you have a business and need to transition as quickly as possible! Even if that means taking on an investor. In most b2b environments I have been exposed to a 1 to 3 week wait time is not a deal killer if you have something they want/need. I think I might deal with customers in the wait time transparently. I would tell them something like the following. We are growing like crazy and our backlog for setting up and training new customers is about 2 to 3 weeks. Please be patient with us. We believe each new customer needs some personal attention up front to make everything go smoothly and ensure that we are set up to serve you well over the longer term. Obviously we won't start billing you until you are completely set up. If for some reason it takes longer than 3 weeks to get you set up we will give you a free month of service at the end of your first year.
  - throw9987432 10y ago
    I am not a sales guy, but I guess I say the right stuff? Not sure.. I am not having to force people to use my product, they are generally beating down the door to find ME. One guy last week found me on page 17 of google. I didn't know google had 17 pages....
    - mswen 10y ago
      Clearly you have built something that has some product market fit. Hope you find your path through the next few months without falling hard into burnout.

by mswen 10y ago

throw9987432 10y ago

These are good questions. Let me hit them up in order. > Are these customers who have already committed money/signed contracts? Or, would these be considered more like warm prospects? Say a customer I have talked to on the phone or otherwise convinced to sell. Need to do a little discussion and a little work, and get them set up. I vetted them as a real customer, and they vetted me as sounding interesting. Historically at least a 75% chance to pay at this time. > How long are they having to wait between decision and implementation? Do customers in this backlog know what kind of wait time they are facing under your current solo part-time commitment? Are they willing to wait? Or, are you losing customers to other competitors or internal solutions because of the wait time? 1-3 week range. I don't think I am losing a ton. > What is the dollar value of your current backlog? If for example it was another $2000 in monthly revenue that is committed but at risk if you don't deliver fast - I would encourage you toward greater commitment try for a small business loan or take on your more personal sources of investment that you mention in option 3. On the other hand if the backlog is something more like $500 in monthly revenue I might suggest that you continue with #1 because your growth curve might already be slowing down. Closer to $500 in backlog. Here is the part of the story that perhaps I did not express fully. 1) I am spending like $20 a month on google adwords. I have some very hot words. I could up it to $20 a day, and probably get 2-3x the new customer flow I do now. I do not, because my backlog would go insane. Perhaps I should do it anyway though :) 2) I have some complex customers I am turning away. They would be good for pretty good money (perhaps $500 MRR each), but I cannot yet deal with them. I know part of a young business is turning away things that are too much work, but if I scaled up and had money - I totally know I could deal with them. So I think more than the raw backlog leaving money on the table, is #1 and #2 above leaving money on the table.

mswen 10y ago
If you really have a 75% conversion rate once you start talking to people that is outstanding. Next you should validate your intuition that spending relatively modest amounts of money on adwords will double or triple your flow of customer leads. If that hypothesis holds up under real world testing then you have a business and need to transition as quickly as possible! Even if that means taking on an investor. In most b2b environments I have been exposed to a 1 to 3 week wait time is not a deal killer if you have something they want/need. I think I might deal with customers in the wait time transparently. I would tell them something like the following. We are growing like crazy and our backlog for setting up and training new customers is about 2 to 3 weeks. Please be patient with us. We believe each new customer needs some personal attention up front to make everything go smoothly and ensure that we are set up to serve you well over the longer term. Obviously we won't start billing you until you are completely set up. If for some reason it takes longer than 3 weeks to get you set up we will give you a free month of service at the end of your first year.
- throw9987432 10y ago
  I am not a sales guy, but I guess I say the right stuff? Not sure.. I am not having to force people to use my product, they are generally beating down the door to find ME. One guy last week found me on page 17 of google. I didn't know google had 17 pages....
  - mswen 10y ago
    Clearly you have built something that has some product market fit. Hope you find your path through the next few months without falling hard into burnout.