

Ask HN: Save my dying Startup - traderjoe

Dear HNers, I am writing this post in hopes of getting some help on saving my startup which is slowly decaying before my eyes; countless hours of work, tens of thousands of dollars spent, and a ton of sacrifice just dying. There is a wealth of knowledge that exists at HN and I’m hoping some folks can steer me in the right direction with my dying startup because at this point I’m not sure what to do? About three years ago, my friend and I thought up an idea for creating a "social network for traders." He had worked in finance for one of the biggest forex brokers and was a trader of foreign exchange. A few months into his work, he realized that this company, with its millions of clients, was missing a critical component that clients constantly kept asking about "can I communicate with other clients regarding certain positions or trends in the market?" Coming from a web development/IT background,  I immediately got to work on creating a small prototype of what we both envisioned to be a forum for currency traders to come and discuss their strategies, trades, tips and suggestions on choosing brokers, etc. etc. The website was simple but as we put more effort into it, we realized there wasn’t any real competitor to a website that caters to an international community of traders at all. We figured our ideas are on a much bigger scale and we decided to proceed further and bring our ideas to fruition. What started as a hobby and then a venture soon turned into a business. Six months into it, we picked up an angel investor overseas (coincidentally, one of my buddy’s clients who was interested in such an idea). As money rolled in, web development expanded dramatically. We outsourced all the dev work to India, having two firms work around the clock, we hired mathematicians to help with formulas, and hired graphic artists. We managed teams of workers and went through countless design phases and formula tweaks. The overall premise of the site expanded from a simple forum to a world wide community, where traders can interact and compete with other traders by predicting the weeks end financial markets. Today, our weekly competitions, allow traders to pick from various local or world markets, and try to predict how that respective market will close. Besides forex, we include other markets such as futures, U.S. markets and world markets. Each prediction is graded based on a unique scale according to our internal algorithm. The scale "tiers" are provided on the website in layman’s terms to make the user understand how he can earn or lose virtual dollars (which in turn, can be redeemed for real-world prizes). In the short team, the momentum was flowing and we were convinced that we were on the up and up. We had enough money for development and knew what we needed to spend to get to where we wanted to be. Then in 2009, our investor backed out half way into the process leaving us with no money left for marketing (we originally wanted to leave 60% for marketing and advertising). Today, we still believe in our idea but ever since the money dried up, we found ourselves not being able to market the website properly and in turn leaving it stale and hope that word-of-mouth will help. Development is more or less complete and we have active users trading but the momentum is gone and in a way so is our motivation. The easy answer is to say "keep working at it" but it is difficult especially when time is so valuable (we are in our late 20’s and life is becoming more challenging i.e. jobs, women, money, etc.). What does an aspiring entrepreneur do now knowing that his idea can still work but has no motivation to continue without short-term incentives?
======
runjake
For me, the text is just one huge blob, so I made a half-assed attempt to
format it so that it's more readable:

The website he is referring to is <http://www.yatrader.com>

\---

Dear HNers,

I am writing this post in hopes of getting some help on saving my startup
which is slowly decaying before my eyes; countless hours of work, tens of
thousands of dollars spent, and a ton of sacrifice just dying. There is a
wealth of knowledge that exists at HN and I’m hoping some folks can steer me
in the right direction with my dying startup because at this point I’m not
sure what to do?

About three years ago, my friend and I thought up an idea for creating a
"social network for traders." He had worked in finance for one of the biggest
forex brokers and was a trader of foreign exchange.

A few months into his work, he realized that this company, with its millions
of clients, was missing a critical component that clients constantly kept
asking about "can I communicate with other clients regarding certain positions
or trends in the market?"

Coming from a web development/IT background, I immediately got to work on
creating a small prototype of what we both envisioned to be a forum for
currency traders to come and discuss their strategies, trades, tips and
suggestions on choosing brokers, etc. etc.

The website was simple but as we put more effort into it, we realized there
wasn’t any real competitor to a website that caters to an international
community of traders at all.

We figured our ideas are on a much bigger scale and we decided to proceed
further and bring our ideas to fruition. What started as a hobby and then a
venture soon turned into a business.

Six months into it, we picked up an angel investor overseas (coincidentally,
one of my buddy’s clients who was interested in such an idea). As money rolled
in, web development expanded dramatically. We outsourced all the dev work to
India, having two firms work around the clock, we hired mathematicians to help
with formulas, and hired graphic artists. We managed teams of workers and went
through countless design phases and formula tweaks.

The overall premise of the site expanded from a simple forum to a world wide
community, where traders can interact and compete with other traders by
predicting the weeks end financial markets.

Today, our weekly competitions, allow traders to pick from various local or
world markets, and try to predict how that respective market will close.
Besides forex, we include other markets such as futures, U.S. markets and
world markets.

Each prediction is graded based on a unique scale according to our internal
algorithm. The scale "tiers" are provided on the website in layman’s terms to
make the user understand how he can earn or lose virtual dollars (which in
turn, can be redeemed for real-world prizes).

In the short team, the momentum was flowing and we were convinced that we were
on the up and up. We had enough money for development and knew what we needed
to spend to get to where we wanted to be.

Then in 2009, our investor backed out half way into the process leaving us
with no money left for marketing (we originally wanted to leave 60% for
marketing and advertising).

Today, we still believe in our idea but ever since the money dried up, we
found ourselves not being able to market the website properly and in turn
leaving it stale and hope that word-of-mouth will help. Development is more or
less complete and we have active users trading but the momentum is gone and in
a way so is our motivation.

The easy answer is to say "keep working at it" but it is difficult especially
when time is so valuable (we are in our late 20’s and life is becoming more
challenging i.e. jobs, women, money, etc.).

What does an aspiring entrepreneur do now knowing that his idea can still work
but has no motivation to continue without short-term incentives? \---

~~~
traderjoe
Lesson learned; don't type and paste from notepad when you want someones full
attention. Sorry!

------
bendmorris
This comment is for your post, not your question.

Maybe I just have a short attention span, but I could not read through this
giant block of text. I'd suggest breaking it up into bite-size paragraphs and
adding a URL so people can have more of an idea what you're talking about.

------
coryl
The only reason you'll fail is because your product sucks, not lack of
marketing or money.

You are trying to do too much too soon, making everything mediocre crap.

1) Simplify everything; figure out what the one thing your site does well is
(whatever is doing most successful, which looks like contests/predictions).
Get rid of everything that people aren't using, like yaNotes.

2) Don't do international, focus on building where you live and work. Nobody
cares that theres international traders. I'd rather have 500 US traders then
25 traders from 20 countries. This is called the network effect.

3) Clean up your homepage after you've done accordingly. Users probably only
need to see 3 sentences out of what you've written.

4) Make something viral a core part of your product (getting users to announce
predictions on twitter to be part of a giveaway?).

I hate to say it, but you did it wrong (I did this too while trying to build a
social network). You poured money into it thinking you could design the
perfect community and features and just launch it. I see nothing that requires
hiring graphics artists, mathematicians, or two outsourced dev firms.

You can still make this a success, just expect to lose a majority of what you
have now. All the work you've put in will essentially be deleted and you'll
have to let it go. Good luck.

~~~
notahacker
Agree with the above. The problem is that by the sounds of your description
your product has one killer feature - an algorithm to rate peers' predictions
- but the website itsef looks like a generic consumer portal/network

Marketing spend itself shouldn't be an issue - you can drive traffic
organically through blogging and even banging on the doors of your friends'
old contacts.

------
aspir
At the risk of sounding foolish, there is some truth to "keeping at it." Check
out airBnB's talk startup school; you guys seem to be in a similar place as
they were a year or so ago.

According to you, you're nearly complete with development, and marketing is
your biggest expense. That's better than some situations (no cash, no products
either). Marketing is the easiest thing to reduce in expenses.

The most powerful tools in your marketing arsenal are handshakes, telephones
and business cards. Go to small groups for face-to-face conferences with
potential users, and take your current users out for a series of
lunches/beers. Contribute as much as possible to the user generated content of
the site itself. If it is a form of web2.0 for traders, you and the rest of
the team should post things several times a day - the site may become much
richer because of it.

------
traderjoe
The URL of my startup is <http://www.yatrader.com>.

    
    
        * When users Sign Up, they choose their geographic location (choices consist of City/State and Country around the world). So let's say, Joe Trader (from Moscow, Russia)  joins. He can find other traders from Moscow/Ukraine. Or also see other traders from other Cities and Countries (Main page description should emphasize that this is a International community site) 
    
        * Traders can come and showcase their skills by making prediction on future markets through our weekly contest. Again, the markets can be their local COUNTRY markets or they can play other (international) markets (Joe Trader from Russia can play our NASDAQ U.S. market).
    
        * Traders can interact through private messaging or through profiles by posting comments on wall to wall. 
    
        * Every trader has a profile that shows their information such as but not limited to: contact info, buddies, and local buddies (users that are from their location) as well as their preference for markets they follow.
    
        * There is also a "Streak" indicator. When a user correctly (or accurately) makes predictions each week he/she will be awarded Streak points that will allow them to earn extra points which can later be redeemed for prizes. Streaks will also elevate the user's reputation on the website because it will show him to be knowledgeable in the financial markets he plays.
    
        * Prizes can be redeemed for virtual dollars earned called YaDollars -- it is our unique currency system.

------
jon_dahl
This is the key phrase to me:

 _What does an aspiring entrepreneur do now knowing that his idea can still
work but has no motivation to continue without short-term incentives?_

Startups are 1% idea, 6% brilliant founders, and 93% tenacity[1]. Of course,
you have to be tenacious in a smart way, which typically means iterating and
knowing when to pivot. If you're not motivated to stick it out, then your best
bet is probably to put the project on ice. Maybe you'll find the funding and
motivation in a year or two. But unless you want to do that, you need to keep
grinding it out.

The hard part about grinding it out is that you're out of money, and you
outsourced your development. That puts you in a hard position. Can you take
over lead development yourself, and work on it nights/weekends?

Beyond that, read some Steve Blank. Are you convinced that: (1) people really
want your product, and (2) you've built a product that clicks really well with
the market? If not, you need to do that before you do anything else. No point
in marketing a product that doesn't click. If you've done that, then it's a
matter of getting the word out.

[1] Citation needed.

------
athst
Have you looked at competitors like Stockpickr, StockTwits, inTrade, and
Motley Fool CAPS? How is your site different from them and what can you do
better? When I go to the site it shouts "contests" and stock market game,
which has existed in a lot of forms before.

It's not clear to me what the value proposition is - this could use some work.
Sites like this essentially come down to one question: "How does this help me
make money?" You have a lot of users making predictions about the market - can
you roll this up in a more understandable and actionable way? Why should
someone be required to log in before they can see the data? If you're trying
to create a community, it would also be helpful to actually see community
content on the front page (like discussions, etc) not just their cold
predictions.

~~~
wenzi
I agree. As a trader, I see no point in joining. I really do not care.

------
lsc
so, here's what I'd do. I'd make it free (if you intend to start charging at
some point, make that clear to your customers. It's best to never raise
prices, you know instead add some premium feature... you can have the old
thing for free, but we have these new useful features you have to pay for. but
sometimes, that's not practical. Next best is to say "It's free... but won't
always be so")

Now, for free to work, you need to make sure your infrastructure is cheap.
You'd be amazed how many users you can cram on to a $2500 AMD server with 8
cores and 32GiB ram that costs you $200/month to co-locate. (depending on your
financial situation... if those numbers aren't trivially small to you, you may
want to start with a $20/month VPS and scale up as you need. I'm just pointing
out you can save a whole lot of money once you start needing capacity by
outsourcing less.)

This will give the site a chance to grow, if users like it. If it does grow,
well, that's exciting, right?

See, meanwhile, I'd get a job. It's nice to have a job. It's a different pace,
you get health insurance and a bunch of cash, and you don't have to work so
hard. A job isn't forever. My experience has been that if I'm feeling
frustrated and hopeless with my company, a year at a regular job cures me.

If people start getting interested in the site and it excites you, you can
quit and go back to doing it. If people start getting interested in the site
and you still want to keep your job, well, customers will attract new
investors and possible partners. Stock brokers are usually good marketers, so
I think you may have potential marketing people in your customer base.

~~~
traderjoe
Although I said a lot in my original post I did leave out some key points as
it relates to the startup; a. Our website is 100% free to join and play... for
now. Obviously future investors will want to see ROI but for the near future
it remains to be free (subscription plans for better prizes is what's planned
for long-term. b. As far as infrastructure goes, we are actually lucky in that
our original investor is hosting our website for free with his own server(s)
and security --it was part of our original agreement. c. I'm actually employed
full time, and finished up my masters not too long ago. That's I think where
the problem began, when I actually decided to take on more responsibilities at
work AND enroll into grad school... All of a sudden the startup now had 1/4 of
my attention and I assume things went static from then on.

------
bond
And the URL is?

~~~
traderjoe
Sorry for not posting the URL at first. The website is
<http://www.yatrader.com>.

To reiterate, the goal of the site is to create an international community,
where traders can interact and compete with other traders by predicting the
week’s end financial markets (we offer 4 categories of markets). In return for
user participation (i.e. predicting markets, posting "YaNotes" which are
reasons for trades) we give them a chance to earn virtual dollars called
"YaDollars" which can then be redeemed for real prizes.

------
joystickers
What's the lack of motivation due to? If you're not motivated by the product
anymore then get out now, but if you're just feeling beaten down then
absolutely keep at it.

When you say you outsourced all the development it sounds like you expected
this project to take off without getting your hands dirty. What have you been
doing to market it? Word of mouth won't help you if you're not even talking
about it. Go out to conferences and meetups and talk. Get to know bloggers or
journalists who write about investing. You have some users? Talk to them. Ask
them what they love and what they hate about your product. Find out how
they're using it. Find people who aren't using your product and see how
they're solving their own problems. I know a trader who still uses IRC chats.
Start asking a bunch of questions and get excited!

------
ketanb
I think the main page of the site has too much information. It is difficult to
find out what is the main purpose of this site?

The site have stats and recent activities sections where only one user keeps
reporting some values. These sections should be removed as it makes me think
does this site has only user? Such sections make sense when site has enough
activities to report, otherwise new users would think no one is using it so it
is not worth signing up.

Basically the website looks more like old-styled corporate website than call-
to-action website. You may have to hire professional website designer to get
any mileage. Alternatively put only one thing which you do the best and remove
everything else.

------
jacquesm
That's a lot of words, basically it boils down to:

We are a late stage start-up and our follow up money failed us at a critical
moment.

What made your investor back out ?

Can you scale back your expenses to below your income ?

------
donniefitz2
If you know the idea can work, than a limited/non-existent marketing budget
shouldn't stop you and it certainly shouldn't discourage you this much.

It sounds to me like you need to dig deeper, both into getting more funding
and reviving your motivation. You've come this far. It seems a foolish idea to
me that you would consider pulling the plug becacuse you lack cash for
marketing.

Cash can be found. Keep at it. Perseverence is hard and success has peaks and
valleys. Just because you're in a valley right now, doesn't mean it will last
forever.

------
thetylerhayes
I agree with most of the comments here: trim the fat. Hack away the
unnecessary. Omit unnecessary words. And other such sage wisdom.

An idea: if you have enough of a core user base who would be willing to help
fund you, consider <http://kickstarter.com>. You could have one helluva
comeback story on your hands if you tell the story right and make it
emotionally resonant. Play with the idea however you like, I don't want to be
too specific as it will hinder the process.

------
willheim
I have no encouragement to sign up. Why not? Because I can't see what kind of
discussion is happening in the community. If I click on any of the communities
I get a sign up pop up and no discussion. I'm not handing over my info till I
see what kind of discussion is happening. I get frustrated and then I'm off to
Motley Fooll CAPS or Stockhouse.

------
heywood100
Interesting post. Perhaps you and the guys from Intrade could work something
out. I know their CEO and he is always looking out for cool ideas and joinh
ventures. Why not mail him. His eamil is john.delaney @ intrade.com

Say Billy Flynn suggested you make contact with him.

------
danielhodgins
See that big dark grey blank area in your header? Give me the strongest
benefit/advantage I could get from using your service up there. For instance:
YaTrader: Information Advantage For Financial Junkies.

I need to see it spelled out clearly and boldly.

------
aresant
The international time clocks on your landing page say it best: you need to
trim a lot of fat from your landing page, and probably the app itself.

The join button's on the bottom left, and I'm forced to read a half dozen
paragraphs to even figure out what the site does.

Digging in, the site carries this feature-rich / benefit-poor style
throughout.

If you're serious about saving the start-up I would reccomend that you either
hire a professional UI / marketing firm or look for that skill set in a late
stage "co-founder".

The underlying tech and idea are great, but the execution of the user
interface and messaging need a lot of work before you're going to get
traction.

------
charlesdm
By the looks of it, you could also consider offering this for free and charge
for some sort of api access.

------
jarsj
I am curious. Did you outsource the UI/US as well to the Indian Development
firms ?

------
bgnm2000
ever see currensee.com?

