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I mean, $15K is just their first month, who knows how much their revenues have grown since then. I feel that with the manpower they currently have and their tra

I mean, $15K is just their first month, who knows how much their revenues have grown since then. I feel that with the manpower they currently have and their traction, they can scale much higher (and in turn spend profits on new hires) on organic revenue growth instead of seed funding. But hey, what do I know? Many times things look too easy to those who don't know what they're talking about or are on the outside. I do agree that living in NYC isn't cheap. But neither is Silicon Valley, where many YC start-ups are based and are probably struggling to make $15K in their first three months after launch. Rent, which is most likely their biggest cost, could possibly be scaled down if they do live in the true spirit of being "ramen profitable."

hussong 17y ago
If you look hard enough, you can get rent down to $400-500 a month. If you have a kitchen, food isn't expensive (rice and beans). And thanks to the good public transport, you can do without a car (unless you have to go to Sand Hill Road every day).
nobody_nowhere 17y ago
Organic growth vs investment is an interesting question. To play devil's advocate a bit, think about their competition. What if a competitor with a slightly inferior but "good enough" service invests a lot of money into sales, marketing and business development, then eats their market whole? What if a large real estate firm with deep pockets more or less copies the service? What if craigslist suddenly decides to redo their apartment listings? As an entrepreneur, you need to count on your competitors being absolutely ruthless. Having already taken Y Combinator money, they're now obligated to steward that investment. That implies a couple of things -- growing fast enough not to get outpaced, paying for some benefits for yourself (what happens to YC's investment if these guys get really sick?), and building some cash reserves to weather variations in the market. They're lucky to be faced with the dilemma to be sure. And for whatever combination of reasons they've decided to go for the investment. It's a pretty modest size, and they'll be able to retain control.

hussong 17y ago

If you look hard enough, you can get rent down to $400-500 a month. If you have a kitchen, food isn't expensive (rice and beans). And thanks to the good public transport, you can do without a car (unless you have to go to Sand Hill Road every day).

nobody_nowhere 17y ago

Organic growth vs investment is an interesting question. To play devil's advocate a bit, think about their competition. What if a competitor with a slightly inferior but "good enough" service invests a lot of money into sales, marketing and business development, then eats their market whole? What if a large real estate firm with deep pockets more or less copies the service? What if craigslist suddenly decides to redo their apartment listings? As an entrepreneur, you need to count on your competitors being absolutely ruthless. Having already taken Y Combinator money, they're now obligated to steward that investment. That implies a couple of things -- growing fast enough not to get outpaced, paying for some benefits for yourself (what happens to YC's investment if these guys get really sick?), and building some cash reserves to weather variations in the market. They're lucky to be faced with the dilemma to be sure. And for whatever combination of reasons they've decided to go for the investment. It's a pretty modest size, and they'll be able to retain control.