15 ms·

Tell HN: My startup is making money and I don't know what to do

• ASquare 12y ago
  Perhaps you're ready for Series A: http://avc.com/2014/06/what-seed-financing-is-for/ http://avc.com/2014/06/what-seed-financing-is-for/
  • sthielen 12y ago
    We've never raised money before this. We definitely want to do some kind of seed round, but we don't really have the connections to find the right people. We're all new to this game. We went to a few "pitch nights" back in March when all we had was an idea and a barely functional MVP, but they're all really theatrical and honestly we'd rather just sit down and talk with someone. We just don't have a clue about how to find those people.
    • rhizome 12y ago
      Why do you want to raise money (i.e. sell part of the company)? It sounds like you can grow organically, maybe raising your prices is in order?
      • ericcholis 12y ago
        Agreed, it seems like money might not be the barrier here. It also sounds like you are still bootstrapping (so to speak). You've identified a market, which seems to grow organically. Some (traditional business) problems you might have. - Sales. Looks like you need boots on the ground to get small businesses to advertise and owners to list property - Acquisition. How are customers (ie renters) finding you. - Advertising? Are you at the point where you need to spend money to advertise? Small scope might be useful here: local ads, flyers, etc... My suggestion, target your next (physically close) market, apply and refine your existing strategy. Find a more remote market, and see what's required to replicate your local success.
• illini123 12y ago
  Have you raised a family and friends round? What amount of capital are you looking for? If you just launched 3 months ago, I'd say seed level, but I don't have enough specifics on what you need / burn rate to judge. Depending on where you're based, I would look at getting in touch with some of the angel investing syndicates. Also, be realistic about the runway you're giving yourselves. My personal philosophy is to meet with investors in my network right at launch (not for money, but to alert them that I might be coming to them at some point). These relationships take time, and even an angel investment can take a month or more for due diligence. Expect Series A to take months longer. Given that you're not currently in touch with angels, I would start identifying 1-2 groups in wherever you're based (I hope the answer is a larger metro area). Find out if you have a mutual contact. If not, and I hesitate to say this, but make a cold call to the angel / angel group. You don't have anything to lose.
  • sthielen 12y ago
    We haven't raised anything. We're three broke college students who have been putting everything we have into keeping this thing going. We're planning to expand to 150 campuses and bring on some people to man the phones/maintain our property listings, as well as hire campus reps/brand ambassadors at 20 key schools from that set of 150. Our 1y budget for all of this is <1M. And yeah, we're based in LA, but we're all new to this and don't exactly have any connections with anyone in this industry, so we'll definitely start researching some groups and, I suppose, calling until someone wants to talk to us. Thanks for the advice!
    • illini123 12y ago
      First things first, get an advisor. You need someone whose been down this road before to mentor you. Not to downplay your intelligence, but as I decided to launch a company this summer, I went through to all the individuals in my network that could at least give me advice when it came to operations, growth, product development, etc. Although it happens less, there are times where startups fail because they balloon too fast. Based out of LA: https://www.techcoastangels.com/ https://www.techcoastangels.com/ http://www.maverickangels.com/ http://www.maverickangels.com/ https://angel.co/los-angeles/investors https://angel.co/los-angeles/investors Also, you may want to check here: http://thefunded.com/ http://thefunded.com/ This offers reviews of investors / investment syndicates. I can't speak to its accuracy, but it will at least provide some context. Good luck.
• JoshTriplett 12y ago
  What do you plan to do to "take this thing to the next level", and how much money do you need to make it work? The scale will determine what route you go; needing $10k is very different from needing $10M.
• thedmitry 12y ago
  Contact me, I can help - http://about.me/dmitry http://about.me/dmitry
• hoopism 12y ago
  How do you plan on replicating in the new cities? Is the unique element in this equation (it's certainly not the space that is novel) you and your team? Track record goes a long way. You've proven to be effective in a very small 'niche'. You may want to consider taking seed (if needed) from F&Fs and then prove it in another city. You may find that expansion step to be useful. It will also help answer the question of expansion for potential institutional investors.
  • sthielen 12y ago
    We're actually at three schools in California--Loyola Marymount University in Los Angeles, Chapman in Orange, and the University of San Diego. We've been able to replicate our success pretty similarly in three unique areas, and have plans for Campus Reps/Brand Ambassadors to help us out "on the ground" at some of the larger schools we're planning on targeting.
    • hoopism 12y ago
      I didn't mean to sound dismissive. I think the early success is great. But I anticipate that the biggest question is going to be "will it scale?". Investors know that it's trickier than 1m+ bucks and some ambassadors. So if you can prove out that you have a model that works (and actually prove it to yourself) then you eliminate a big barrier in funding. This is not a new model. The issue is it's VERY hard to scale. Proving it as much as possible before walking into a pitch will change the dynamic drastically. You may also find that it does not scale as well as you hopes... or that managing college kids and relying on them to grow your business is not always reliable (that's a tough one).
    • jonlucc 12y ago
      It seems like your biggest hurdle might be getting local advertisers in an area. Maybe I don't know anything about small-scale ad sales, but I would think that part of the business would really benefit from having local/regional people doing ad sales. Do you have a way to get around that? Is it a solved problem that I just don't know about? For that reason, it seems very obviously simpler to grow into regions, maybe not expand to the whole country at once. Edit: I would have killed to have this service when I was in college. Props for making it work.
• gamerDude 12y ago
  1) Check online for investors. Angellist would be a great place to find Local Investors interested in your space. 2) Search online for angel groups in the area and go talk to them. See if anyone in that group is a connection somehow to do a warm call instead of a cold call. 3) Tell your friends and family what you are up to and ask them if they know anyone that is an angel. If you find an angel that isn't interested in your industry, they probably know other angels, so you can ask them to reach out. 4) Ask the university for help finding people that are investors. They would probably love to help and have a success story come from their college.
• state 12y ago
  Just grow the business. You can "take it to the next level" by just making money and reinvesting it in the company.
  • late2part 12y ago
    Another way to look at this is that you can meter and invest in the risks and opportunities regarding your upside and your downside. If you over-invest in your upside optionality, you may risk big downside. If you are too conservative, you'll limit your upside. Only you can figure out the right risk reward balance.
• RamunasM 12y ago
  Awesome idea. I'd love to have a site like this in my country
• cglee 12y ago
  First, decide if you really need to raise money. Can you bootstrap (ie, self fund) your business? Too many people immediately go for capital when they don't need it. It's extremely distracting and not all that necessary. You should only look into raising capital if you have a capital constrained opportunity or problem. So many problems initially look like money problems, but they're really disguised as something else (culture, product/market fit, market timing, etc). Usually, it's best to really get to know your market really well first, before reaching for funding. Second, make sure your legal documents are in order. Incorporate, if you haven't already, and open up a business bank account. Make sure to use your business bank account for all business related expenses. This will make accounting much easier down the line. Third, hire a great bookkeeper. Trust and loyalty is really important here, so best if you hire someone who is somehow connected to you. Fourth, hire a great accountant. Some accounts will also do bookkeeping for you. I don't think this is a good idea, as you typically want someone "on your side" watching out for your day to day finances. Intelligence and industry expertise is really important for an accountant. Fifth, if you're making real money, it's important to put some words on paper about how the company ownership is divided, and other "what if" scenarios. You typically also want some sort of Operating Agreement between the founders. Usually this document covers: 1) ownership division 2) provisions for terminating members 3) provisions in case of long term disability or death of a member (for example, do you all of a sudden want your cofounder's spouse or parents as your cofounder in case of death? Look into "key man" insurance.) 4) provisions for adding new members Some people say get a lawyer for these documents, which isn't a bad idea, but most of these types of documents at this stage is pretty boilerplate. If you have some unique circumstance, like an international cofounder or something like that, then perhaps consulting a lawyer is best.
  • ixmatus 12y ago
    Getting into an accelerator or incubator (even if it's one that's not popular) can really help with the legal stuff since you'll be able to get more advice and they will always have those boilerplate docs for you. Form a C corp in Delaware and get the ownership figured out ASAP. I also generally think that all of the founders should vest (no cliffs or anything, but a four year vest for everyone will keep the company safe in the event one of you leave, even the CEO). I agree with cglee's comment that you don't need capital right now, get more traction and build more product. Then in six months revisit the topic and determine if your organic growth is enough to sustain further growth or whether you'll need capital injection. Raising money, btw, isn't always just about the money - if you pick your investors correctly they can help you and your business tremendously.
• peterjancelis 12y ago
  You should sit down with the team and work out the unit economics per city. This will give you a tangible and precise target for what it takes to make the next city profitable. (E.g. "70 apartments available, 4 ad sponsoring business for break even.") Once you have that you can do like all franchise models do, reinvest your profits organically for company-owned cities and let franchisees come in to fuel growth beyond that, with the process manual based on the cities you did yourself. You got to where you are by focusing on just the client. Think hard before spending time trying to play the venture capital game.
• alexsherrick 12y ago
  I have a few associates that would probably invest in this type of company rather quickly. Drop me an email if you want me to pass your name along.
• rainer89 12y ago
  i can accept it , and invest in giving scholarship and fund projects to students in my country , and train them, so after that you can had low cost and happy human resources happy to work with u, invest in train people
• ChuckMcM 12y ago
  Are you paying yourselves salaries? Do you have an actual office? Benefits? etc? I would suggest that you not get ahead of yourself with "making it big" and instead focus on making it a solid business. Get to the point where you're paying yourselves and everyone who works for you a market rate salary and benefits, and you have office space, and you're cash balance is growing. Basically this is the classic definition of being 'profitable' (you have net income). Then hire a CFO. The CFO will help you organize your thoughts around how much money you make and need to make in order to maintain a level of profitability. Then take your net revenue and feed it back into the business, pick up your next campus. Work on the process for organizing a campus, what you need to know who you need to contact. You will be able to start hiring sales people. These people should be paid based on advertising sales delivered, not 'leads generated'. Once you've got your next campus, quickly post mortem what went well and what didn't. Then move on to the next one. As you add campuses your revenue stream will increase and you will be able to add additional engineers to help integrating the data. Every million dollars a year in revenue shines more light on what works and what doesn't in your business. Have fun, enjoy the experience of all the things you are learning, (even the bad things teach something).
  • sthielen 12y ago
    No salaries, no office. My two cofounders and I have been throwing everything we've got into this; we're all broke. Our business model requires people actively maintaining property listings at each school, and then growing student traffic at that school and then, once we're established, securing advertisement deals. Our rationale behind raising funding is that we can either cut corners and struggle and keep adding one or two schools a month until it's simply impossible for three people to maintain, or, with a little bit of money behind us to do our own advertising, have someone making cold-calls to collect properties, and have a student representative on the actual campus helping us brand locally, we can streamline the process and achieve the kind of wide-spread adoption we need in order to secure large advertising deals (right now we target our placements toward local businesses, but once we are established we'll be able to secure deals from places like banks or office supply retailers).
    • 12y ago
• factsfinder 12y ago
  First of all make an app on Android and iOS platforms. Then give your venture a piece of advertising. Meet a bunch of investors, convince them , choose the best of them that suits your needs and get it done. Soon you can be a billionaire. SO what are you waiting for just do it already. Thank you :)
• rwhitman 12y ago
  To have such a slam dunk in the apartment rental space, and such big wins selling advertising to small businesses so quickly, thats huge. I've met so many people over the years struggling so hard with products trying to get in on this market and never making a dent. The product design is top notch too. No wonder its a hit. Congrats
• santoshsankar 12y ago
  While everyone has suggested bootstrapping, friends and fam, local angel groups and Angel List, have you tried your university? Many large public institutions have launchpads and accelerators (they just don't always market it well). This could be a natural fit for them. I think like most people are echoing, continue to fund it out of pocket (maybe with the help of family) to get it to be the best product possible. From there, slowly build out into other geographies. You can learn lessons from your early expansions so as to not repeat it. Given the product is still young, there is likely a good amount you can build on prior to scaling out. Good luck and will def be monitoring University Niche
• gibbonraver 12y ago
  By a margarita machine.
  • sumedh 12y ago
    Is there a joke in here somewhere?
    • _random_ 12y ago
      The Silicon Valley show reference.
• santoshsankar 12y ago
  While everyone has suggested bootstrapping, friends and fam, local angel groups and Angel List, have you tried your university? Many large public institutions have launchpads and accelerators (they just don't always market it well). This could be a natural fit for them. I think like most people are echoing, continue to fund it out of pocket (maybe with the help of family) to get it to be the best product possible. From there, slowly build out into other geographies. You can learn lessons from your early expansions so as to not repeat it. Given the product is still young, there is likely a good amount you can build on prior to scaling out. Good luck and will def be monitoring University Niche
• sbashyal 12y ago
  First of all, congrats on your success. I am based in Los Angeles and I currently work in the apartment industry. I can meet with you in person and provide you guidance and possibly help you raise seed money if you choose to go that route. Send me an e-mail to my user name at Google's e-mail service.
• mikekij 12y ago
  First, congrats. Having real revenue probably puts you in the top 5% of startups already. Great work. - Incorporate. You want the legal protection of (at least) an LLC. - Really think about if you need to raise money. If you do, it should be easy to raise $100k-$200k with real revenue and traction. But it sounds like you're in a position where you could actually bootstrap this. Equity is expensive. Think twice before raising money. - Think in terms of milestones. What can you do to get to $XX,XXX in revenue per [week,month,year]. Then, what can you do to launch at an additional school while still staying cash-flow positive? This sort of thinking breaks the process into bit-sized chunks. Much easier to digest. - Your biggest problem will likely be scaling the ad sales efforts. Walking into local businesses works great for 1, 2, 3 schools. But it will be hard to scale that to 100 universities. I'd love to help out in any way I can. I started a company in grad school that I sold last year. I've been through many of these issues before. mkijewski at g mail.
  • giarc 12y ago
    I'm thinking they should set up school representatives. Post an ad at each school they are interested in. Have a 3rd/4th year student at each college who is familiar with businesses that are particularly keen to attracting students. They know the student area's and housing issues.
• davidhariri 12y ago
  keep.... going?
• oniTony 12y ago
  > We've seen a lot of success (~40% w/w growth, 100%+ m/m growth). This _might_ be, in large part, seasonality. Once the school starts in September, most of the target demographic would have already found _some_ place to live for the school year.
  • sthielen 12y ago
    Oh, absolutely, the business is incredibly cyclical--that's something we did a lot of research about before starting. The housing market is in full swing Apr/May/Jun, but students are still looking through September. Then it's going to die down a bit until December (though some will be coming in the middle of the year, or returning from study-abroad), and people start looking again as early as January. We plan to use the downtime in our cycles to promote and brand ourselves through our blog and things like that. We want students to know about us before they even need to use us, and we're doing that by selling the "off-campus lifestyle" and glamorizing the idea of getting out of the dorms and living on your own. (Unfortunately this involves writing up a bunch of mindless top 10 buzzfeed style lists)
    • trumbitta2 12y ago
      Sorry if I sound naive, but I was a college student myself not so long ago and... I stayed at the same place even when I hated it, just because it was so difficult until Apr/May/Jun to find a better one. Enter your service. Difficulty starts going down, business starts being less cyclical. Who knows how much less?
• santoshsankar 12y ago
  Another thought-- Since there is all kinds of advice coming out of this which can be confusing / hard to parse, here is a slideshare on raising seed capital. It reflects what almost everyone is saying to focus on product. If you need funds to help that happen, try an Indiegogo / Kickstarter / etc. This is a serious problem so it could see some interest http://www.slideshare.net/schlaf/raising-a-seed-round http://www.slideshare.net/schlaf/raising-a-seed-round
• 11thEarlOfMar 12y ago
  Have you gone back to the businesses you've sold to to see how much traffic or actual $ sales have been brought in by your service? If there is a measurable and verifiable ROI for them, you have a powerful lever moving into new markets. Those testimonials would be priceless. What I would think about is recruiting commission-only sales persons in new markets rather than trying to go manage them yourselves. Likely, you'd use other college students. Start with another local school so you can jump in if necessary. Write up a 'how-to' guide with marketing materials for the prospects, and then look for self-starters who will go do the selling on commission only. Do some training. If they are empowered with testimonials from businesses who have seen a real return, they will find it as easy to sell as you did. So the question is: can a single sales rep, likely a college student themselves, make enough money selling ads for you that it would be worth their while? The goal is to get cash coming in without having to spend any to get it started.
• pbreit 12y ago
  If you want to pay yourselves even $50k/year you're going to need a few hundred grand. You could start with friends and family. But it does sound like some sort of accelerator might be a decent idea. Are there any in your vicinity (or in vicinities you would consider moving)? The accelerator would ideally help you with funding and pretty much every question you're asking. If you do go the outside investor route, be careful with your pitch. Most startup investors are wary of near term cash flow & profits. That indicates a small return for them.
• josephjrobison 12y ago
  What school do you guys go to? I went to USD, and was surprised to see it listed as one of the 3 schools. Definitely think this is a great alternative to Craigslist, and the fact that the properties are pre-selected to accept college students saves a ton of time. And it's beautiful - good work. I don't have much advice on the raising money side, but as a user I love it.
  • sthielen 12y ago
    Glad you like the site! We are all Chapman students. The whole reason we started the site was actually because we all had horrible experiences renting properties when we transferred here last fall, and found out there weren't really any resources to help college students.
• meerita 12y ago
  I would recommend hire someone with economics sale perspective while you focus on getting the product better.
• zefi 12y ago
  Submit a late application to YC? I'm an Alum and would be happy to chat more. My email is in my hn profile.
  • tejasm 12y ago
    This actually sounds like a good idea!
• mmaunder 12y ago
  First ask yourself if you really are making money. Does the amount of money you will bring in equate to market rate salaries for you and your co-founders 12 months from now? With some money left over for growth? If the answer is yes then it sounds like you have a business on your hands. Create a cash flow plan. It should show how much you'll be bringing in and how much you'll be spending on a month by month basis. Do it 18 months out. Make it as close to reality as possible. Then try really really hard to make it work without raising money. If that means you grow a little slower, that's OK. If it means you have to be a bit more frugal, that's OK because that's the cost of your own company's stock. (The alternative being, you sell that stock and get money to grow the business, so you lose that chunk of ownership). Assign someone as your CFO. They're the cash-flow tzar. Anytime someone wants to spend, they have to go through that guy. The tzar should also have a talent of finding new pockets of money even when it seems that you're about to run out. Just because you're going to get a TON of offers from investors doesn't mean you should raise money. I'm sure you get a lot of offers from credit card companies too. Once you raise, your definition of success is no longer 1 million bucks a year in revenue and $300,000 a year salaries for you and your two buddies (which would be awesome right????!). Instead you're going to have limits on how much you can pay yourself, who gets to be boss and how much of a boss you get to be, and your definition of success becomes $10 million a year in revenue instead or you raise again and again and then you have to IPO.
  • danesparza 12y ago
    OP also posted "as our very limited personal savings start to decline. Yeah, it's cool to have some money in the bank after doing these advertising deals, but it's not nearly enough that it's sustainable right away." It sounds like they have revenue, but they do not have profit.
• ar7hur 12y ago
  > (~40% w/w growth, 100%+ m/m growth) You should fix this enormous mathematical inconsistency, or everything else you claim is suspicious.
• sharemywin 12y ago
  I'm not sure your upside is very big. you might what to think about where you go from there. 150 universities. real busy once a year when everyone is looking for housing but not much most of the year. how big were you advertising deals? have you had anyone re order adverting? Any business owner is willing to give a couple kids just to starting out $200. Most investor would want this to be at least $10M business. 60k per year per university. 5k mo per univeristy. Not trying to be negative but, I would hate for you to chase a bad path when you can focus on what could work. if someone has better incite let me know? Also, maybe you want to talk to the group doing rent a sales force. saw it a couple of days ago on here.
• dsugarman 12y ago
  1.41.41.4*1.4 != 2 not really close and super suspicious. know if you actually need to raise money and why and if you do, know your numbers. also don't just look to raise money and hire whoever you can get your hands on to 'manage a business' know who you need and why, plan a top line growth strategy, and a more humble strategy with less capital
  • pbhjpbhj 12y ago
    This was actually the thing that leapt out at me - I don't really have experience of investors except watching Dragon's Den(!) but they've always been super-harsh on those that misrepresent their figures [or at least are caught doing it]. 1.4^5 ~= 5.4 Make sure you're being truthful about your figures with yourself - like don't assume you're making a profit just because you're taking revenue, especially not if you're not paying wages yet.
    • webmaven 12y ago
      I assumed that the latest w/w is 1.4, whereas the m/m includes earlier weeks that aren't as good, eg. 1.1 x 1.1 x 1.2 x 1.4 ~= 2.03
  • sthielen 12y ago
    I'm going to be honest and admit that I'm still not entirely comfortable with calculating this metric. I've just been going into Google Analytics and dividing our weekly "Users" graph by the previous week, and then averaging all those percentages together. Same for monthly growth. I'm assuming, from people pointing out errors, that this is not the correct way of calculating growth? Regardless, we've seen significant and consistent increases in traffic, but I'd definitely like to not sound like an idiot (or worse, have my errors be decried as misrepresentation), in the future.
• codingdave 12y ago
  Take small, manageable steps, and do not be in too much of a hurry. Startups don't have to have explosive, expensive growth... that may be the path that makes news and excites people, but most small companies grow slowly. If you have revenue, then your next step should be to decide what can be done within the limits of that revenue. Nothing you described sounds like you need any capital investment. Funding is a shortcut, not a requirement.
• patio11 12y ago
  Choose your own adventure: 1) You currently have approximately $500 to $2k in revenue. That's great, because it is $500 to $2k in revenue more than the vast majority of people will ever achieve. You need to work the numbers on whether the founding team can solo-close $100k in revenue in the next twelve months. If that appears achievable, you tighten your belts, perhaps run up larger balances on your credit cards than usual, and start solo-closing every business you can find locally. You'll spend approximately 95% of your effort in the short term on ad sales and 5% on everything else. After you can consistently keep the lights on, you're going to hire a bunch of folks who will do that job to your script on the telephone all day, every day. They will be the heart of your business. They will always be the heart of your business, for values of "always" which map to "as long as you primarily keep the lights on by convincing local businesses to buy advertising." There is a reasonably achievable path to you having a business here which closely resembles a well-run local newspaper (except you'll potentially have nationwide reach): millions of revenue, ~20% margins, etc. Much like local newspapers, it may be a not-quite-straightforward proposition to confidently say "The people who pay us get great value for their advertising spend." If your team cannot reasonably solo-close $100k in revenue by repeating your current model, which I allocate a very non-trivial percentage of the probability space to, you do not actually have a revenue model yet. I'd have a hard look at my bank account and say "Can we figure out a revenue model before I get thrown out of my apartment for non-payment of rent?" If not, you may consider winding down the business. There is no shame in this and, while you may think your current level of success is a once-in-a-lifetime opportunity, if you hypothetically believe that I would take the other side of that bet. 2) You have a very compelling pitch for getting into YC, 500 Startups, or another incubator. You have actually shipped a software product. You won't believe me when I tell you, but many, many people who you might think are better fits for incubators cannot actually ship a software product. You have also successfully demonstrated hustle, by being able to walk into a furniture store and ask them for money, which is something which is lamentably rare among people who are capable of actually shipping software products. The combination of shipping and hustle is pretty much exactly what incubators look for. This is a straightforward pathway into Door #3, in case executing on Door #3 doesn't sound straightforward to you. 3) You have all the elements necessary for raising a small seed round. You make an AngelList profile and curate it diligently. You approach a few investors privately, show them your stats and paint a rosy picture of the future ("We've potentially got Groupon's growth trajectory ahead of us! [+]"), and secure, say, three to four commitments of $25k each. You start to trend on AngelList and fill out the rest of the round, probably for $250 to $500k. (I'm unaware of what the Going Rate is for valuations at the moment -- probably mid single digit millions but ask someone who does this professionally to fill you in there.) You bump yourself up to greater-than-subsistence salaries, hire three or four people who are young and hungry, and aim to sustain those growth rates for the next 8 to 12 months. If you do, you will sail easily to Series A, on your way to creating an rather large business which may or may not resemble the one you are presently running. If you don't, your company implodes. [+] "Patrick, is that a good thing?" None of the seed stage investors in Groupon are cursing their name right now. To put it mildly.
• slapresta 12y ago
  Sadly I have nothing to contribute on raising money, but I just want to say that the idea is amazingly well thought. It's uncommon to see a platform in which ads are unintrusive and helpful. Well done.
• larrys 12y ago
  Used to own a business that sold advertising in the same college market. Be very careful when extending credit to advertisers. The sale is only one part. The other part is collecting the money. Would suggest you try and not extend credit and get paid if at all possible by credit card. The back office and aggravation can be quite aggravating. People will take advantage of you. They will tell you to show up to get a check (after you pester them) and then they won't have the check and tell you to return. Edit: I made this comment because the op had mentioned closing sales in person (or perhaps over the phone). This is not the same as a website with a "pay here" link. When you close in person there will always be customers who attempt to get credit terms. Think in particular what a chain restaurant would do or a company where the management is located elsewhere. They will say "send us a bill and yeah sure we will pay" or "can I give you a PO". So the question is how lucky do you feel. Of course if the COGS is very low it pays to take a risk. But just get ready to have to follow up multiple times over many months to collect that money. And don't act like it's in the bank because it's not in the bank.
• smoyer 12y ago
  I'm probably going to be a minority voice here but I think there are a couple opportunities/risks ... since you're curating properties around each campus AND selling ads to local businesses, I think there's a pretty good opportunity to franchise the "feet-on-the-ground". You might be able to charge for the franchises, but even if you can't, you can still pay straight commissions as a percentage of the income from each campus area. If the franchisee gets 50% of the ad revenue and is in charge of driving traffic to your site, the 50% you keep would need to cover your server costs and the founders living expenses. As an aside, I'm near Penn State and I'm not sure whether this would work here. Most of the properties that will rent to students at all are managed by property management companies and the students tend to find those companies first (there's a lot of local advertising). First year students are required to live on campus, but they tend to start visiting the "apartment stores" during their second semester. Do the three campuses you're currently servicing operate in a similar way? Maybe the current crop of tech-savvy students look to the Internet first since they've had it from birth? In any case, great to hear you're making money and good luck!
• Paul_Dessert 12y ago
  At first, I thought, "Oh good, another classified site" but then I looked at your site. Loved the UX. Nice work. One thing that seemed a bit "meh" was the name. Good luck!
• mikeho1999 12y ago
  First of all.. congrats! It's always exciting to see something you've created grow and start to gain traction. Second of all, please take all of the advice that you see here with a grain of salt. I think most of the ideas that people have shared are really good things to keep in mind for consumer-oriented SaaS platforms in general, however, IMHO the university / college student listings market is a completely different beast. Speaking as someone who co-founded the largest student classifieds system (at our peak 4-5 years ago we had over a million students using our system at over 400 universities nationwide), I can tell you that a lot of the business modeling that people do for consumer software service businesses are not necessarily compatible with the market that you are in. I couldn't help but notice from your site that you're in San Diego -- I'm actually in SD as well, and if you're up to chatting more, I'd be more than happy to meet up. From my HN profile you can link to my website -- the very bottom of the "With Whom" section talks about the startup I helped to co-found, and the "Where" section provides contact information if you want to get in touch with me further. Best of luck!
• southflorida 12y ago
  You could put your idea on kickstarter. It may help you bridge the gap until you can hire more help with your own resources. Or hire virtually to make sales in each of the target states and pay on a commission base for closed deals.
• Killswitch 12y ago
  I have no real advice here, I just have to say your site is beautiful and well done. Congrats.
• leonhuu007 12y ago
  I believe you should concern on the quality of the business first before you raise any capital. $695-$1200 can be alot of money for some local businesses since landlords are killing them with high rent. The key here is to train your sales team to show your potential advertisers the Math. Compile data and show them if they spend $695 they can get 3-6x that in return otherwise chances they will call you can cancel 6 months later. Numbers never lie so try to focus on tracking how many students click or view a particular ad and maybe come up with a conversion funnel analytic data for the local business owners. This can be a powerful selling tool. If you can bootstrap it with profits then stick to it. Growing something too fast can lose the quality of the product. Once you have happy paying customers, growing it exponentially won't be so hard. I love your idea, love your design, keep it up.
• leonhuu007 12y ago
  I believe you should concern on the quality of the business first before you raise any capital. $695-$1200 can be alot of money for some local businesses since landlords are killing them with high rent. The key here is to train your sales team to show your potential advertisers the Math. Compile data and show them if they spend $695 they can get 3-6x that in return otherwise chances they will call you can cancel 6 months later. Numbers never lie so try to focus on tracking how many students click or view a particular ad and maybe come up with a conversion funnel analytic data for the local business owners. This can be a powerful selling tool. If you can bootstrap it with profits then stick to it. Growing something too fast can lose the quality of the product. Once you have happy paying customers, growing it exponentially won't be so hard. I love your idea, love your design, keep it up.
• clark-kent 12y ago
  Find a successful entrepreneur who has gone through the process, get them interested in your business and go from there. Take them in as an adviser for your business. This will save a lot of headache and pain.
• alasdair_ 12y ago
  I have a very similar problem. We have built a system for building niche websites for collectibles and plan on scaling horizontally - adding new collectibles in a similar way to the way you add universities and re-using the same code to power each niche. We're making some money on the trial niche ($5000/ MRR and growing) and have our first 100K monthly users close to product/market fit (78% would be "very unhappy" to lose us). Just like you guys, we don't really know where to go next. Right now, we plan on bootstrapping (we both work full time for well-known firms so all the revenue goes to contractors) but raising a "real" seed round could change everything. Just like you, we have no idea if we should raise a seed, crowdfund (people LOVE their collections and we made 10K in 3 days in a small crowdfund) or continue to bootstrap. Not sure it matters, but coming from someone in a very similar place - we are rooting for you!
• ericwu01 12y ago
  Happy to chat as well. I know this space well. Would chat with a few seed funds to gauge interest - Resolute is a good place to start.
  • mhirshland 12y ago
    Mike from Resolute here. We'd be happy to chat and see if we can be helpful. Mike@resolute.vc.
• wiseleo 12y ago
  Nice site. You are creating something similar to the change of address packet and welcome kit by the USPS. When you move to a new area, you get an envelope with a ton of local offers for new movers. This is what I am talking about: http://imagitas.com/mover-advertising-solution/welcome-kit.html http://imagitas.com/mover-advertising-solution/welcome-kit.h... You will find its companion Mover's Guide at your local post office. Simply ask for it from any USPS clerk. Studying it may prove to be very interesting as it will help you identify which companies already advertise to movers. I like that you offer to connect prospects with landlords by prompting the site user for her phone number. Someone needs to figure out how to get them to pay you. You may want to offer landlords pre-filled rental applications instead of just phone calls. "Apply Online" becomes a premium feature for which some landlords may be willing to pay (this needs to be tested). We should talk as I may have a way for you to make more money involving my product. I also have contact information for every moving company. I am wiseleo on skype, gtalk, gmail.
• endeavor 12y ago
  Well done! The site looks great. I've actually been thinking about a similar product in a totally different space. If you could spare a couple minutes to answer, I have a couple questions that are probably really basic but I've been struggling with: 1. I see that you have a "LIST YOUR PROPERTY" feature, but how did you seed your DB? Just search CL, call the owner and ask if they're open to renting to college students? 2. How did you settle on making your own advertising platform your main revenue stream? When you have a niche market like this, is Adwords (or similar) not a viable alternative? Have you thought about charging the listing agent directly?
• shyn3 12y ago
  Curious if you thought about franchising your site. It might work in terms of cost because you would only have to profit from your first location and keep growing it. i.e. Offer an instance of universityniche.com but purchase a domain, host the site, setup the login and credentials, configure, maintain, and support the site. Control all the features. Let the person decide what domain they want. In my instance you could offer torontouniversityhousing.com and I would only have to manage the sales/listings. Charge say 80% of profit or fee based or something a lawyer/accountant recommend.
• swalkergibson 12y ago
  You have an absolutely gorgeous product. I say that as someone who contributed on a contract basis to a similar system for a couple of guys in Arizona trying to do the same thing. I think that your local advertising model is going to be extremely difficult to execute and is going to scale poorly, so I would recommend moving that to a secondary revenue model. There are lots of ways to make money in this market that does not involve inefficiently calling up shops and asking them to part with advertising dollars. My feeling is that you are technically savvy enough to create a more complete property management solution that landlords would pay for. One other revenue stream that I thought was interesting for the guys I worked with was pre-approving tenants with a background check, credit report, etc. That way, the tenant would pay an application fee once to you, and then that application could be used at different properties during the tenant's search process (think of it as The Common Application for housing). Additionally, your advertising prices are obscenely low. Your largest package tips the scales at $1,200/year. To be perfectly honest, selling five of those packages is not especially impressive. Assuming that you sell your largest package to every advertiser, you will need 83 advertisers to clear $100k revenue, assuming no turnover and nobody ever calls you to complain or whatever (and believe me, they will). Furthermore, your UI can probably only support fifteen or so advertisements per university without becoming utterly saturated, so you are constrained there as well. Suppose that you sold fifteen placements per college and had no turnover, your max revenue is $2,700,000 and now you have 2,250 advertising customers to coddle and keep happy. Granted, that is a huge pile of money and anyone would be absolutely thrilled to make it, but now you have to back out your expenses. Assume that each of the three of you are going to draw $100k salary, now you are talking $2.4M, and now you need to pay account managers, sales people, customer representatives, not to mention all of your technical staff and infrastructure. You have a phenomenal product, but find out how to sell it for money to people that use it instead of advertisers. Advertisers should be the gravy! Feel free to email me if you want to discuss further. Email is my username [at] the gmail.
• InclinedPlane 12y ago
  Just keep doing the same thing until everyone working on the business is earning a decent, regular paycheck and the business has built up several months worth of operating expenses in savings. Then you can start to thinking about investing in expanding elsewhere. Start by streamlining your processes and keeping your expenses down.
• peterlada 12y ago
  Incubators are a good idea at this stage. They will groom you, get your ownership in order, teach you not to say stupid stuff and curate the VC space for you. You will raise if growth keeps up. YC, 500, TS on west coast or TC, DreamIt, ERA on the east. Go for it.
• randomthoughts 12y ago
  I really like the interface. I think if you have enough properties listed you can't fail. If it was me doing this the next step would be employing local people responsible for taking care of schools in their region. The only expense here could be legal fees for drafting a contract template making sure those people are self employed "suppliers" paid a percentage of profit their activity generates. This way you wouldn't need to worry about all other costs associated with employing people. Also, why not talk to few large property listing websites like (UK examples)rightmove.co.uk or zoopla.co.uk to partner with them? Those guys get fees when properties they list are filled. It is in their interest for them to be advertised as widely as possible. Or alternatively create another type of a user. An estate agency. You could have hundreds of estate agents sign up and list properties on your website paying extra to make them come up first etc.
• allochthon 12y ago
  I've worked at a startup that got a large infusion of capital. I hope never to work at such a place again. I would aim for organic growth over VC and plans that aim for high-octane supercharged expansion any day. I would bootstrap if necessary.
• Im_Talking 12y ago
  Jeez, everyone is talking incubators, YC, angels, etc. People don't realise that this type of money is the most expensive you will EVER get. And trying to get this funding will consume your business for the better part of a year, at least, with everything else on-hold to the point where you have neglected the actual business long enough that you will need the funding, and die without it. Bootstrap for as long as you can. Be smart. Be imaginative. Seek out partnerships with customers as they can be a great source of money/advise/contacts if they feel it can benefit them. Sounds like customers love the concept, so get them to pony-up some money or contacts. Then, the cheapest money is the money you don't need. Equity should be treated as gold. And a lot of founders who create successful businesses kick themselves for the mindless throwing-around of equity in the early stages. I would suggest setting-up an advisory board. I'm sure you and your co-founders will know several smart people, or ask customers who they recommend.