

Why we stopped raising until we no longer need the money - pytrin
http://www.techfounder.net/2012/08/21/why-we-stopped-raising-until-we-no-longer-need-the-money/

======
nostromo
Some constructive (hopefully) feedback: I had a hard time figuring out what
Binpress actually does.

"Build software faster with mature code solutions that let you focus on the
interesting and unique parts of your product" and "Binpress is a discovery
service and marketplace for source-code components. We bridge the gap between
open-source and commercial software, improving the process of software
development."

That last statement is content-free fluff. If you would say, "Buy source code
snippets and packages" or something, I'd get it immediately.

I'm also not sure you should call anything a "discovery service." Nobody wakes
up in the morning and thinks, "I need to find a discovery service today."
Pintrest is a discovery service (so is HN) but they don't say that, they say
"Browsing pinboards is a fun way to discover new things and get inspiration
from people who share your interests."

~~~
pytrin
Thanks for the feedback, it is helpful. We are constantly trying different
messaging on the homepage to see what works best and we still haven't found
the magic words.

We can't say "buy source-code snippets" for a couple of reasons - first, we
have a mix of free and commercial open-source, and second we do not publish
"snippet" sized packages (see our publication guidelines). Our goal is to
create an inventory of curated, professional solutions to common needs in
software development, whether free or commercial (as long as we verify the
publisher is committed to supporting it).

You are probably right about the 'discovery-service' part as a user, we don't
use that messaging in our homepage anymore.

~~~
epo
If you're having trouble describing what it is (and so far, failing to make it
sound compelling) then it will be difficult for prospective customers to
decide if they want your service.

I keep seeing this sort of stuff. "Curated discovery service" is a weasel
phrase for "middle man", a species now practically extinct in many spheres of
activity thanks to Google and the web.

So, you're a middle man. What can you get that I can't get for myself? What do
you know that I don't? What value are you adding? What are your curatorial
skills? Prove it. There is your web copy.

~~~
pytrin
I'm not having any trouble, but thanks for the advice. I guess you never heard
of Airbnb, Fab or dozens of other online marketplaces (sorry, "middle man")
that have become huge businesses. Lucky for them they didn't know that Google
and the web made them extinct.

Thanks for sharing.

~~~
gizmo
Wow, that's a really rude and sarcastic reaction to somebody who's just trying
to be friendly. I also think his comments about your messaging were spot on.

~~~
pytrin
In my opinion that was a really ignorant and degrading comment, as opposed to
others who tried to offer real feedback.

------
BerislavLopac
_If you have an idea for a product and can talk a good game, build some
mockups or a basic prototype and try to raise with that._

That's assuming you live in Silicon Valley or can target their investors.
Elsewhere, especially outside US, it's extremely difficult to raise any
significant funding unless you are already huge.

~~~
pytrin
You can always travel to Silicon Valley, you don't have to live there - we
live in a global village nowadays. Even though I now live in Mountain View,
the funding attempt I mention in the post was done on a 3 week visit to the
valley (from Israel, no less).

~~~
BerislavLopac
_I now live in Mountain View_

I rest my case.

EDIT to elaborate: Your case just proves my point. You lived in Israel and
failed to get funding from Silicon Valley. Now you're in Mountain View,
presumably (I'm assuming a lot here, I know) because there's a better startup
climate.

Have you ever tried raising in Israel. I understand the funding scene is very
active over there.

~~~
pytrin
Not sure what your case is - if read my comment, you'd notice I said I
traveled to silicon valley from Israel. Just get on a plane and you're here,
if it's important enough for you.

Naturally, I did try to raise in Israel. The funding scene there is not active
at all, perhaps you meant the startup scene. There's very few funds that do
seed rounds and they do a very small amount of investments per firm (1-2 a
year). The angel scene is also underdeveloped. Israel is not a good place to
raise seed money.

~~~
BerislavLopac
That's really interesting position, considering all the news I keep hearing
about how Israel has a great approach to technology etc. Where I live
(Croatia), Israel is the poster boy of the right approach to startups and
investing outside the Valley...

------
davidw
> Funding will almost surely get you coverage on the major tech sites. For
> many startups, their main audience is the readers of those tech sites

 _That_ is a mistake too many of us make, I think, and one of the key things
you can learn from someone like patio11. Between "I could build that in a
weekend", open source, and a fairly critical audience, I think techies are not
that great a market for a lot of things. Find a group out there that's not
tech savvy, and make something that solves their problem, and they'll think
it's wonderful magic.

~~~
randall
We haven't raised a cent and we got decent coverage:

[http://www.lostremote.com/2012/05/07/vidpresso-offers-low-
co...](http://www.lostremote.com/2012/05/07/vidpresso-offers-low-cost-way-to-
get-social-tv-updates-on-air/) [http://techcrunch.com/2012/05/07/vidpresso-
wants-to-help-tv-...](http://techcrunch.com/2012/05/07/vidpresso-wants-to-
help-tv-stations-put-your-tweets-and-facebook-comments-on-air/)
[http://pandodaily.com/2012/05/07/vidpresso-aims-to-
disrupt-b...](http://pandodaily.com/2012/05/07/vidpresso-aims-to-disrupt-
broadcasters-signs-up-broadcasters-as-customers/)

The tech press actually helped with customer acquisition because people were
more willing to trust us. I think if you just spend your time meeting the
right people, you can get coverage if you, by just being you, can prove you're
not a douche / self promoter.

------
roasm
If you have a company that has good margins, decent numbers, and is not
particularly viral, it sounds like your company is a candidate for a business
loan, not an equity investment.

At the risk of over generalizing, early stage VC are interested in portfolio
investing in high risk / high return companies.

Well-run, non-viral, near-profitable businesses that could use an influx of
cash might be better off with a loan that won't dilute the owners' equity in
the company.

~~~
pytrin
Investment means much more than money, if you get the right investor.
Connections, exposure and social proof that can help you expand your company
in many more ways than with just money.

I can think of many similar companies that weren't really viral but used an
investment as springboard to get huge by developing strong customer
acquisition channels (for example, Mint).

------
filip01
Isn't being in closed beta a good solution to this paradox?

~~~
K2h
I was thinking the same thing. Could even an open beta be considered a 'not
launched yet' and give you an out should potential investors want to know why
the growth hasn't been demonstrated yet? What would the downside to an open
beta be vs a closed beta?

~~~
adambenayoun
You need to be careful with the 'closed beta' stage, It's really easy to get
"sucked" into that state for a longer period than you thought and blame all of
your shortcomings on being in closed beta. Don't forget to ship.

Regarding the 'open beta' - I don't think it's applicable, if you're open to
users and anyone can register and growth hasn't happened yet, investors will
spot that.

~~~
K2h
Thanks!

------
dools
From what I can tell, and based on my completely anecdotal analysis of the
situation, "raising based on a couple of mockups" is almost guaranteed to
result in an acquihire.

Look at when SEOMoz and Github raised money: they were already multi-million
dollar businesses. Raising money was entirely justified.

If you're a B2B product with a revenue model, you don't need funding, you need
patience.

~~~
pytrin
I agree to a point - you don't need funding, as we've found out the hard way,
reaching break even point without it. Funding can provide a strong springboard
that accelerates your growth at the critical first steps. Not to mention, that
best kind of investors give your startup a network of connections and exposure
that is very hard to duplicate on your own (see YC startups for example).

~~~
dools
I just totally disagree that funding in the "critical first steps" is what a
business that has a revenue model requires.

Basically, I have come to be of the opinion that the types of businesses that
need funding for critical first steps are B2C businesses with no revenue model
other than advertising which need a huge critical mass with a lot of
infrastructure investment before it can become profitable.

If you have revenue, you don't need a springboard. You just need to wait.
There isn't one dry cleaner in New York. I love Chris Savage's post on this
topic where he's talking about the idea creation process before Wistia and
saying basically that although there are a bunch of companies that already do
what you're doing, it's _really hard_ to get people to pay attention online
and saturation takes a really long time.

If there's only two of you, break even point is really low, and that's all you
need.

 _Some are preoccupied with glamour and glitz, Actin all boogee and making big
movies, But I'll be in the cut call me Incognito, Busy makin joints that will
bump for my people, You're listening to a man who was something for nothing,
Stay in me forever head, never be frontin_

~~~
pytrin
I agree that not every business needs to raise. If your goal is to slowly
build a lifestyle business, there's no rush. If you want to become huge,
funding helps a lot. Being patient means you give opportunity to others to
bypass you while they raise - we had 2 funded competitors rise up after we
launched. Luckily, we outperformed them both, and one of them will soon become
an affiliate, but if they had stronger teams the outcome could've been the
opposite.

