7 ms·

We've been running a bootstrapped startup for a year

76 points by artembugara 6y ago

deleted 6y ago
[deleted]
idlewords 6y ago
Congratulations to anyone making even a modest living after one year. That said, I don't understand the section on investment here. The framing is that the startup is bootstrapped, and they don't mention taking any outside investment, and yet they're offering advice on how to approach investors. The product is also quite expensive ($400 and $700 monthly tiers). Nothing wrong with that either, but the sales experience will be quite different at that pricing level, and having fewer than ten clients limits the number of useful lessons you can draw at this point. The meta-point is that trying this teaches you some useful lessons, but also exposes you to a lot of randomness (lucky and unlucky) and it's easy to overanalyze that, particularly in early days. I think the 2 year post will have much more meat on its bones, and wish the authors every success.
- artembugara 6y ago
  Thx! We're bootstrapped though we want to raise one day. I tried to emphasize that there's no "advices" it's more like myself talking to my-1yearago-self. We had like a 10-times lower pricing. And MRR of 200$. The pricing we have now is same as competitors.
  - idlewords 6y ago
    I think it's terrific that you raised the prices and are finding customers at that level. I think there's also a ton of value in writing this stuff down for your future self, before you start remembering it differently. Best of luck in 2021!
  - karambahh 6y ago
    With your metrics and as you're based in Europe, you should probably send a deck to Kima Ventures. It's the seed fund from Xavier Niel (of Iliad/free fame).
    - artembugara 6y ago
      Oh thx. We’re Station F residents since last week. I’ve already booked a meeting with someone from Noel’s VC to talk next week
diydsp 6y ago
I took a year off to start a business and failed. The only thing missing from this list is a sense of how brutally true it is. As brand-conscious consumers, we swim in daydreams of products and images. "What if BMW made a blender?" But these are playground thoughts. As soon as you want you more than $100 to put something in someone's hands, they vanish to reveal the switchboard of a different system altogether :) My notion of a craftsmen or artisan doing what they love and getting paid for it is 100% out of touch. It's all about making others have $ by them giving you some of theirs temporarily. No romance or individuality. Save those expressions of personality for the consumer choices you make. Unless you happen to be launching a reusable rocket. Then you may get to choose the payload :)
allendoerfer 6y ago
I would add some sort of address to the website, pricing in Euro (or some description how rapidapi handles billing for you). As a European, I would be much more willing to buy something from you, if I would not have to switch to Linkedin to see that you are from Paris. I think it would give you a little edge in Europe, because people would guess, that you probably know how VAT works. It would also help you get over the small company trust issue, since we would actually have a chance to sue you, in case something goes wrong. I do not think, that it would cause you harm in the US/rest of the world. I guess it would slightly help there, too. At least they know, that you are SOMEWHERE, even if you are not in the US.
- nicbou 6y ago
  I prefer to deal with EU-based businesses because they are more likely to care about GDPR.
  - andi999 6y ago
    They better care.
- throwaway89456 6y ago
  They are clearly targeting hedge funds and financial institutions, USD makes sense. GBP would probably be likely more important than EUR as well.
Jabbles 6y ago
Wow, congratulations for attempting to run a startup in what must be a legal minefield of copyright issues.
- andi999 6y ago
  I was thinking the same. Probably it is illegal.
  - Drdrdrq 6y ago
    I guess it depends on their jurisdiction? If someone knows more, please do share.
  - riku_iki 6y ago
    News content has fair use cases, citing titles as this service does probably is Ok.
    - andi999 6y ago
      There is the https://en.m.wikipedia.org/wiki/Directive_on_Copyright_in_the_Digital_Single_Market https://en.m.wikipedia.org/wiki/Directive_on_Copyright_in_th... It depends on the country how this is implemented, but article 15 is informally called link tax.
  - cambalache 6y ago
    Why ? Maybe I am missing something.But if I understood their model correctly they are crawling websites(Not illegal) aggregating info of the articles(pub date, link, author,topic) and serving that as json. How is that different to the millions of link-aggregation websites, including HN?
    - deleted 6y ago
      [deleted]
    - andi999 6y ago
      It says "extract all possible information (title, published date, author, content, etc.)" which includes content. I presume content is protected by copyright.
sova 6y ago
Cool writeup. Would you say you had a product idea and then talked with clients to verify it, or talked with clients first and then created a product to suit? I wrote a little handbook about starting startups based on a year+ of research and integrating that into my own experience, you can read the first few sections here: https://satisologie.substack.com/p/rocketshipping-book-excerpts https://satisologie.substack.com/p/rocketshipping-book-excer...
- artembugara 6y ago
  It was my problem at first.
  - baxtr 6y ago
    So you had the problem yourself first and then built the startup around that?
    - artembugara 6y ago
      Exactly.
- baxtr 6y ago
  I like the idea. However, is 5 bucks for 20 pages a fair deal?
  - jgable 6y ago
    If it’s 20 pages of useful information and insight that saves someone time, yes. Assuming that’s the case, s/he should charge more.
  - have_faith 6y ago
    No idea what quality of OPs book is but it’s peanuts if you get any value from it.
  - sova 6y ago
    Not to split hairs but it is about 40 pages and it would have saved me at least several months worth of effort in research and validation, so I think so, yeah.
acwan93 6y ago
This is a great list. I’m taking over a bootstrapped family business, and a lot of what you wrote echos the founders’ (my parents) sentiment. > 2. Do not think you/your product/your team/your approach are any different or unique I have a hard time struggling with this, especially as I’m trying to SaaSify the business and see a never-ending list of competitors and substitutes out there. Maybe that’s being too product focused, but I’m curious to see how you got past this. I think there’s non-product aspects to consider (support, pricing, etc.) > 6. Do not be afraid to charge > 8. Only those who pay you money have to decide which features to add These two are so true, and my parents say this all the time. So many prospective/existing clients express interest in a particular feature, only to never follow through with committing to contracts or paying anything. They usually come with the excuse of one of the three buckets: -The product should’ve had feature X to begin with -They’re willing to be a guinea pig to beta test feature X in exchange for the whole product to be free (not a discounted price) since without feature X it’s a dealbreaker -They can’t afford the price and we’re charging too much For the latter, we’ve done price analyses across similar products online and found that our price points are competitive, so we can (usually, if the salespeople of our company have backbone) push back. It reminds me of telling artists and graphic designers to do work “for exposure”, to which I really want to reply with the Goodfellas reference of “fuck you, pay me”. > 9. Carefully choose co-founders Corollary: NEVER choose your spouse or family members as co-founders. I can’t speak about friends as I don’t have personal experience, but the personal and professional get really intertwined even if both sides try to set boundaries. My parents and I still get along fine, but I just don’t like having the burden of mixing professional and personal. > 11. Things that no one actually cares about at the beginning In my experience (which is very likely wildly different), I find the logo and the founders’ background to be important. With our clients I’ve found that I had to name drop a couple times on my background (ex-FAANG) or pull the nepotism card several times to close a deal or reassure a client. A new logo and a new UI also gives a great first impression to our existing clients who’ve seen a 90s style UI.
- ziftface 6y ago
  > I just don’t like having the burden of mixing professional and personal Can you elaborate on this? I'm starting to do something similar with a parent, and I'd like to know what kind of burden you mean, and what your experience were like.
indymike 6y ago
These are great takeaways. Especially this when talking to people about your startup's product: "What you really want to hear is I like it. What’s the price? How can I buy it?" So much time and money is saved by getting your value proposition and product to the point people say this.
llIIllIIllIIl 6y ago
I got confused. They mention it’s a bootstrapped business but then they recommend to prepare the pitch deck for investors. If you take investment from VC you’re not bootstrapped company any more, are you?
- artembugara 6y ago
  Correct. Now, we are bootstrapped. But we might rise later.
Jugurtha 6y ago
I like it. I'll expand a bit on the following point: >Be a consulting company We've been a consulting company for many years, and we built bespoke machine learning products for enterprise from varying sectors and industries. Through these projects, we've had many of the problems people in the field are having, and then with that experience, we built our platform to solve them. I tweeted a small thread https://twitter.com/jugurthahadjar/status/1310668293305499653 https://twitter.com/jugurthahadjar/status/131066829330549965... with small pointers for people who might want to do it. Sometimes people post an Ask HN wanting to go freelancing, the twitter thread argues for creating a small consultancy and selling to enterprise instead of doing it as an individual, because of many reasons. It then explains how to extract patterns into a product. Twitter thread: 0. Form: 0.0. It pays to provide services through a company. Companies write large checks to companies without blinking; not so large for individuals. 1. Contracts: 1.0. Get a lawyer to prepare contracts for collaborations. Someone at some point might disagree or have trouble remembering what they have agreed to pay you, make sure to have a mnemonic device in the form of a clear contract. 1.1. Companies have typical contracts for collaboration: don't sign anything without legal counsel. 1.2. Retain intellectual property to amortize engineering and sell what you make to others. 1.3. Companies might ask that you do not sell to competitors: define them and contain geographic zone and duration. Get paid for the opportunity cost. 1.4. Split project into tranches for which you get paid. This can help cash-flow and reduce risk, especially in the beginning. 2. Presentation: 2.0. Your company solves problems and being open minded about these problems is useful; so it's not much about finding problems for your solutions, but more like finding solutions to clients' problems. 2.0.0 After enough problems you built solutions for, patterns emerge and you can abstract a solution that serves several use cases. See "Abstraction" section. 2.1. General presentation with broad strokes of your capabilities, including previous work with other clients 2.2. Conversation with the prospect on their worries in a given space 2.3. Conversation with the prospect on their worries in a given space 2.4. Extract problems from that conversation and send a list of N problems to solve/ideas to explore. 2.5. The client finds one problem urgent/highest priority/highest value 2.6. You get together and talk about "desirability, fasiblity, viability". 2.7. Once you agree on what to do, prove the concept. 2.7.0. e.g: organizations give us data and ask us to predict something, say customer churn or subway car malfunction. We return predictions, they validate the predictions, and we can then start the project because they have proof we actually can predict what they want us to. 3. Execution: 3.0. Your opinion on what is valuable for the client does not matter. It doesn't have to be valuable to you, only to the client. A client who gets excited by a functionality that took one hour to implement because it solves a real problem is a learning experience. 3.1. Go above and beyond. Some sectors/clients are hard to get in, but once you're in, you're in. 3.2. Listening and assuming the client is smart goes a long, long, long way. 3.3. Send meeting notes to the client. It clears ambiguities during/after the project. 3.4. Press to get the client's domain experts' collaboration. They will actually use what you're building. Get them at the table. 3.5. Some of the most valuable insights are gleaned after a meeting and not necessarily with your "counterpart". Don't build the wrong thing. 4. Abstract: 4.0. When you solve many problems, some patterns emerge. You built custom products for your clients, but you can abstract functionality and build tooling to scale your services, and enable others to do the same. 4.0.0. e.g: we we built machine learning products for enterprise clients. After many projects, we built iko.ai, our own machine learning platform to "Get Data Products Released". 4.1. One advantage of this approach is to explore the space while being profitable. Some problems exist not for lack of a nice front-end or lack of knowledge of the target audience. Coming at them from a purely "webdev"/"devops" mindset can bring bad surprises. All the best, == End thread
rdiddly 6y ago
Before raising capital, ask: 1) What exactly will raising capital do for this business? What will we use the money for? And when you've answered that, ask: 2) Is it worth giving up some autonomy to get that? Many people over-value the outside help, and under-value their autonomy.
ab_testing 6y ago
Is this even legal to crawl news sites, get their contents and then sell them to others without paying anything to the publishers . Even if you buy a subscription to New York Times or the Wall Steet Journal, that only gives you the permission to personally use that content and not sell it out to others. I believe that the founders business is very small right now and currently flying under the radar but if they grow to o big and get noticed the news companies, their model might be at risk.
- greenyoda 6y ago
  Their sample JSON response suggests that they're not returning the content of the article, only a one-line summary and metadata (title, author, date, etc.): https://www.notion.so/News-API-46632a5cd61548919ff0132b15b0f0fa?p=2eff4d9b6e6b4a87a8e2230424aee4be https://www.notion.so/News-API-46632a5cd61548919ff0132b15b0f... This seems similar to what a search engine like Google would provide.
the_resistence 6y ago
You guys are truly admirable!

76 points by artembugara 6y ago

deleted 6y ago

[deleted]

Congratulations to anyone making even a modest living after one year. That said, I don't understand the section on investment here. The framing is that the startup is bootstrapped, and they don't mention taking any outside investment, and yet they're offering advice on how to approach investors. The product is also quite expensive ($400 and $700 monthly tiers). Nothing wrong with that either, but the sales experience will be quite different at that pricing level, and having fewer than ten clients limits the number of useful lessons you can draw at this point. The meta-point is that trying this teaches you some useful lessons, but also exposes you to a lot of randomness (lucky and unlucky) and it's easy to overanalyze that, particularly in early days. I think the 2 year post will have much more meat on its bones, and wish the authors every success.

artembugara 6y ago
Thx! We're bootstrapped though we want to raise one day. I tried to emphasize that there's no "advices" it's more like myself talking to my-1yearago-self. We had like a 10-times lower pricing. And MRR of 200$. The pricing we have now is same as competitors.
- idlewords 6y ago
  I think it's terrific that you raised the prices and are finding customers at that level. I think there's also a ton of value in writing this stuff down for your future self, before you start remembering it differently. Best of luck in 2021!
- karambahh 6y ago
  With your metrics and as you're based in Europe, you should probably send a deck to Kima Ventures. It's the seed fund from Xavier Niel (of Iliad/free fame).
  - artembugara 6y ago
    Oh thx. We’re Station F residents since last week. I’ve already booked a meeting with someone from Noel’s VC to talk next week

diydsp 6y ago

I took a year off to start a business and failed. The only thing missing from this list is a sense of how brutally true it is. As brand-conscious consumers, we swim in daydreams of products and images. "What if BMW made a blender?" But these are playground thoughts. As soon as you want you more than $100 to put something in someone's hands, they vanish to reveal the switchboard of a different system altogether :) My notion of a craftsmen or artisan doing what they love and getting paid for it is 100% out of touch. It's all about making others have $ by them giving you some of theirs temporarily. No romance or individuality. Save those expressions of personality for the consumer choices you make. Unless you happen to be launching a reusable rocket. Then you may get to choose the payload :)

allendoerfer 6y ago

I would add some sort of address to the website, pricing in Euro (or some description how rapidapi handles billing for you). As a European, I would be much more willing to buy something from you, if I would not have to switch to Linkedin to see that you are from Paris. I think it would give you a little edge in Europe, because people would guess, that you probably know how VAT works. It would also help you get over the small company trust issue, since we would actually have a chance to sue you, in case something goes wrong. I do not think, that it would cause you harm in the US/rest of the world. I guess it would slightly help there, too. At least they know, that you are SOMEWHERE, even if you are not in the US.

nicbou 6y ago
I prefer to deal with EU-based businesses because they are more likely to care about GDPR.
- andi999 6y ago
  They better care.
throwaway89456 6y ago
They are clearly targeting hedge funds and financial institutions, USD makes sense. GBP would probably be likely more important than EUR as well.

Jabbles 6y ago

Wow, congratulations for attempting to run a startup in what must be a legal minefield of copyright issues.

andi999 6y ago
I was thinking the same. Probably it is illegal.
- Drdrdrq 6y ago
  I guess it depends on their jurisdiction? If someone knows more, please do share.
- riku_iki 6y ago
  News content has fair use cases, citing titles as this service does probably is Ok.
  - andi999 6y ago
    There is the https://en.m.wikipedia.org/wiki/Directive_on_Copyright_in_the_Digital_Single_Market https://en.m.wikipedia.org/wiki/Directive_on_Copyright_in_th... It depends on the country how this is implemented, but article 15 is informally called link tax.
- cambalache 6y ago
  Why ? Maybe I am missing something.But if I understood their model correctly they are crawling websites(Not illegal) aggregating info of the articles(pub date, link, author,topic) and serving that as json. How is that different to the millions of link-aggregation websites, including HN?
  - deleted 6y ago
    [deleted]
  - andi999 6y ago
    It says "extract all possible information (title, published date, author, content, etc.)" which includes content. I presume content is protected by copyright.

sova 6y ago

Cool writeup. Would you say you had a product idea and then talked with clients to verify it, or talked with clients first and then created a product to suit? I wrote a little handbook about starting startups based on a year+ of research and integrating that into my own experience, you can read the first few sections here: https://satisologie.substack.com/p/rocketshipping-book-excerpts https://satisologie.substack.com/p/rocketshipping-book-excer...

artembugara 6y ago
It was my problem at first.
- baxtr 6y ago
  So you had the problem yourself first and then built the startup around that?
  - artembugara 6y ago
    Exactly.
baxtr 6y ago
I like the idea. However, is 5 bucks for 20 pages a fair deal?
- jgable 6y ago
  If it’s 20 pages of useful information and insight that saves someone time, yes. Assuming that’s the case, s/he should charge more.
- have_faith 6y ago
  No idea what quality of OPs book is but it’s peanuts if you get any value from it.
- sova 6y ago
  Not to split hairs but it is about 40 pages and it would have saved me at least several months worth of effort in research and validation, so I think so, yeah.

acwan93 6y ago

This is a great list. I’m taking over a bootstrapped family business, and a lot of what you wrote echos the founders’ (my parents) sentiment. > 2. Do not think you/your product/your team/your approach are any different or unique I have a hard time struggling with this, especially as I’m trying to SaaSify the business and see a never-ending list of competitors and substitutes out there. Maybe that’s being too product focused, but I’m curious to see how you got past this. I think there’s non-product aspects to consider (support, pricing, etc.) > 6. Do not be afraid to charge > 8. Only those who pay you money have to decide which features to add These two are so true, and my parents say this all the time. So many prospective/existing clients express interest in a particular feature, only to never follow through with committing to contracts or paying anything. They usually come with the excuse of one of the three buckets: -The product should’ve had feature X to begin with -They’re willing to be a guinea pig to beta test feature X in exchange for the whole product to be free (not a discounted price) since without feature X it’s a dealbreaker -They can’t afford the price and we’re charging too much For the latter, we’ve done price analyses across similar products online and found that our price points are competitive, so we can (usually, if the salespeople of our company have backbone) push back. It reminds me of telling artists and graphic designers to do work “for exposure”, to which I really want to reply with the Goodfellas reference of “fuck you, pay me”. > 9. Carefully choose co-founders Corollary: NEVER choose your spouse or family members as co-founders. I can’t speak about friends as I don’t have personal experience, but the personal and professional get really intertwined even if both sides try to set boundaries. My parents and I still get along fine, but I just don’t like having the burden of mixing professional and personal. > 11. Things that no one actually cares about at the beginning In my experience (which is very likely wildly different), I find the logo and the founders’ background to be important. With our clients I’ve found that I had to name drop a couple times on my background (ex-FAANG) or pull the nepotism card several times to close a deal or reassure a client. A new logo and a new UI also gives a great first impression to our existing clients who’ve seen a 90s style UI.

ziftface 6y ago
> I just don’t like having the burden of mixing professional and personal Can you elaborate on this? I'm starting to do something similar with a parent, and I'd like to know what kind of burden you mean, and what your experience were like.

indymike 6y ago

These are great takeaways. Especially this when talking to people about your startup's product: "What you really want to hear is I like it. What’s the price? How can I buy it?" So much time and money is saved by getting your value proposition and product to the point people say this.

llIIllIIllIIl 6y ago

I got confused. They mention it’s a bootstrapped business but then they recommend to prepare the pitch deck for investors. If you take investment from VC you’re not bootstrapped company any more, are you?

artembugara 6y ago
Correct. Now, we are bootstrapped. But we might rise later.

Jugurtha 6y ago

I like it. I'll expand a bit on the following point: >Be a consulting company We've been a consulting company for many years, and we built bespoke machine learning products for enterprise from varying sectors and industries. Through these projects, we've had many of the problems people in the field are having, and then with that experience, we built our platform to solve them. I tweeted a small thread https://twitter.com/jugurthahadjar/status/1310668293305499653 https://twitter.com/jugurthahadjar/status/131066829330549965... with small pointers for people who might want to do it. Sometimes people post an Ask HN wanting to go freelancing, the twitter thread argues for creating a small consultancy and selling to enterprise instead of doing it as an individual, because of many reasons. It then explains how to extract patterns into a product. Twitter thread: 0. Form: 0.0. It pays to provide services through a company. Companies write large checks to companies without blinking; not so large for individuals. 1. Contracts: 1.0. Get a lawyer to prepare contracts for collaborations. Someone at some point might disagree or have trouble remembering what they have agreed to pay you, make sure to have a mnemonic device in the form of a clear contract. 1.1. Companies have typical contracts for collaboration: don't sign anything without legal counsel. 1.2. Retain intellectual property to amortize engineering and sell what you make to others. 1.3. Companies might ask that you do not sell to competitors: define them and contain geographic zone and duration. Get paid for the opportunity cost. 1.4. Split project into tranches for which you get paid. This can help cash-flow and reduce risk, especially in the beginning. 2. Presentation: 2.0. Your company solves problems and being open minded about these problems is useful; so it's not much about finding problems for your solutions, but more like finding solutions to clients' problems. 2.0.0 After enough problems you built solutions for, patterns emerge and you can abstract a solution that serves several use cases. See "Abstraction" section. 2.1. General presentation with broad strokes of your capabilities, including previous work with other clients 2.2. Conversation with the prospect on their worries in a given space 2.3. Conversation with the prospect on their worries in a given space 2.4. Extract problems from that conversation and send a list of N problems to solve/ideas to explore. 2.5. The client finds one problem urgent/highest priority/highest value 2.6. You get together and talk about "desirability, fasiblity, viability". 2.7. Once you agree on what to do, prove the concept. 2.7.0. e.g: organizations give us data and ask us to predict something, say customer churn or subway car malfunction. We return predictions, they validate the predictions, and we can then start the project because they have proof we actually can predict what they want us to. 3. Execution: 3.0. Your opinion on what is valuable for the client does not matter. It doesn't have to be valuable to you, only to the client. A client who gets excited by a functionality that took one hour to implement because it solves a real problem is a learning experience. 3.1. Go above and beyond. Some sectors/clients are hard to get in, but once you're in, you're in. 3.2. Listening and assuming the client is smart goes a long, long, long way. 3.3. Send meeting notes to the client. It clears ambiguities during/after the project. 3.4. Press to get the client's domain experts' collaboration. They will actually use what you're building. Get them at the table. 3.5. Some of the most valuable insights are gleaned after a meeting and not necessarily with your "counterpart". Don't build the wrong thing. 4. Abstract: 4.0. When you solve many problems, some patterns emerge. You built custom products for your clients, but you can abstract functionality and build tooling to scale your services, and enable others to do the same. 4.0.0. e.g: we we built machine learning products for enterprise clients. After many projects, we built iko.ai, our own machine learning platform to "Get Data Products Released". 4.1. One advantage of this approach is to explore the space while being profitable. Some problems exist not for lack of a nice front-end or lack of knowledge of the target audience. Coming at them from a purely "webdev"/"devops" mindset can bring bad surprises. All the best, == End thread

rdiddly 6y ago

Before raising capital, ask: 1) What exactly will raising capital do for this business? What will we use the money for? And when you've answered that, ask: 2) Is it worth giving up some autonomy to get that? Many people over-value the outside help, and under-value their autonomy.

ab_testing 6y ago

Is this even legal to crawl news sites, get their contents and then sell them to others without paying anything to the publishers . Even if you buy a subscription to New York Times or the Wall Steet Journal, that only gives you the permission to personally use that content and not sell it out to others. I believe that the founders business is very small right now and currently flying under the radar but if they grow to o big and get noticed the news companies, their model might be at risk.

greenyoda 6y ago
Their sample JSON response suggests that they're not returning the content of the article, only a one-line summary and metadata (title, author, date, etc.): https://www.notion.so/News-API-46632a5cd61548919ff0132b15b0f0fa?p=2eff4d9b6e6b4a87a8e2230424aee4be https://www.notion.so/News-API-46632a5cd61548919ff0132b15b0f... This seems similar to what a search engine like Google would provide.

the_resistence 6y ago

You guys are truly admirable!