
Ask HN: When is it time to give up on a side project SaaS? - 9967d2cad_askhn
I started a SaaS business official in May 2019. (Although I spent about 8 months developing the application). I didn&#x27;t officially acquire my first customer until May 2019. Fast forward to May 2020, and I&#x27;ve got about 8 paying customers. I&#x27;m really proud and impressed by this accomplishment.<p>Growth is, however, slow. I have a good understanding of who my target customer is now, 1 year later, after talking to them and noticing common patterns in terms of their needs.<p>This is my first real business. I would really love to hear from someone experienced in building a SaaS business from scratch. Your insight would be appreciated. What should I expect in terms of growth? How fast did businesses grow in the beginning (BaseCamp, for example, Digital Ocean, MailChimp)?<p>Thanks
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mherrmann
I've been running various online businesses, including SaaS, for eight years.

There is no general answer to your question. Are those 8 customers paying you
hundreds of dollars each per month, or tens of dollars? What's the reason you
haven't gotten more? Have you lost motivation to work in this space / on that
project?

I was in a similar situation to you a few years ago. I had started a clone of
patio11's appointmentreminder.org for the Austrian market. After 2 years, I
had 8 customers and €2k monthly recurring revenue. But it was very difficult
to get new customers. I decided to stop growing this business. Since then,
I've lost 4 of the 8 customers, but those that remain now pay me more for
additional services, so I'm back at €2k MRR. I'm satisfied with my decision.

Another project I worked on is [https://fman.io](https://fman.io), a desktop
application. There, I wish I had stopped sooner. I spent 3,000 hours and made
<€20k. I actually recorded videos about this and the other business I
mentioned above [1], [2].

In general, I suspect most founders keep going longer than they should. The
fact that you are even asking the question indicates to me that you are losing
motivation. Maybe it is time to move on.

If you'd like to talk about more details privately, feel free to reach out by
email. You can find my address at [http://herrmann.io](http://herrmann.io).
Good luck!

1: [https://youtu.be/I1K3IkOlaVw](https://youtu.be/I1K3IkOlaVw)

2: [https://youtu.be/NWCOwvp23uk](https://youtu.be/NWCOwvp23uk)

~~~
kev2908
Thanks Herrmann, for the videos! They are really nice. I think that a lot of
"business" videos are made by guys in the US. I often wonder if business
advices are applicable here in Vienna. But hearing this from a guy of my own
hometown makes this very valueable information.

~~~
mherrmann
Happy to hear you like them!

------
codingdave
The most solid SaaS I've been a part of was not a fast start. It was almost 20
years from the first customer until the acquisition/exit. It was bootstrapped,
and added about one employee per year. It maxed out at 2 developers.

But it grew to around $15M ARR in that time. That might not sound like a huge
number compared to the best known startups, and VCs would have no interest in
such a company, but it does prove that slow growth does work.

So to answer your question... when should you give up? Give up when you no
longer feel fulfilled by working on it. There is no magical growth rate that
makes it a good project vs. a bad project. It is all about your personal goals
and whether it fulfills them.

~~~
mandeepj
> $15M ARR > That might not sound like a huge number

As a founder, I'd be more than happy to work on it for my entire life

------
jwr
I think it takes a very long time to grow a SaaS. Think multiple years. I
started 4.5 years ago and it took nearly 4 years until I felt fully
comfortable. Slow growth is to be expected. My growth curve, in fact, isn't a
curve at all: it's pretty much a straight line if you plot paying customers.
It looks better for MRR (monthly recurring revenue, your main metric), because
I've been working on raising ARPU (average revenue per user).

The "long slow saas ramp of death" is real. Google it.

You can supposedly grow faster if you do marketing well. But from what you
wrote I'd guess that you do not do marketing well. My adventures with
marketing came down to the following conclusions:

* Spending money on ads is basically burning money and does not work for me. (tried Google Ads, LinkedIn, Facebook ultra-targeted ads, Quora). This became painfully obvious after I implemented my own conversion tracking, because I did not trust their metrics/analytics.

* You will find plenty of marketing experts all around you, but none of them will work for a commission, which speaks to how much trust they really place in their "skills".

* Since I am a solo founder, I eventually decided that I'm OK with my organic growth and I'd rather concentrate on making the product better. This helps in building bigger product value, improves customer retention, allows me to raise the ARPU, and in general works great. I just don't get the marketing-pumped stream of new customers. But I'm OK with that, especially at this point.

That said, I think I would expect more than 8 paying customers after a year.
My ramp-up in the first year was slow (the product didn't have a lot of value
back then), but it was quicker. I just checked, and I had 25 paying customers
after one year from the first one.

~~~
Veen
> You will find plenty of marketing experts all around you, but none of them
> will work for a commission

You won't find many developers who work on a commission either.

~~~
zeptonix
The developers have a lot more risks (the product never gets built, the
product at its end isn't compelling, the founder moves on to something else
and/or there never is any follow-through). The marketers are being asked to
help take something that already has been built and make it take off. I think
his point is a valid one that this isn't something you often see, which does
run a bit counterintuitive to what you'd expect especially since commission-
based structures are so common generally in sales.

~~~
Veen
One of the issues is that sales generated by a salesperson are a lot easier to
attribute than sales generated by marketing. Let's say that, as a content
marketer, I write an article for a client's blog that is widely shared. The
article increases mindshare for the product, helps to establish the brand, and
makes a material difference to the number of sales over the next year. But how
does the business attribute those sales to me so that I get my commission?
Many of those sales will not be from people clicking a CTA on the blog
article, but from people who remember the brand and make a purchase weeks or
months later. It's not even as easy as it seems to attribute sales to PPC or
other forms of advertising.

------
jmchuster
So, to get an idea of what order of magnitude you're dealing with, you'll want
to run two experiments, at a cost of, say, $1000.

First experiment is to see how large a customer base there is. You want to see
how often people are looking for a product like yours or your competitors.
Make an Adwords campaign with the right keywords, bid high enough to always be
shown first, and then run this for a while to get an idea of what the search
traffic is like.

Second experiment is to see what portion of that customer base you can
capture. So, continuing on from the previous experiment, you now want your
site to be set up, and then measure what percentage of those searches result
in people actually clicking on your site. And then what percentage of those
clicks result in them actually putting in their credit card information and
paying for the first month. If you can't have people signing up on their own,
then give them a form to submit their information instead, and then make some
estimate on what percentage of those will fall through.

Then, that gives you an idea of what your baseline growth is. And then
anything beyond that, i'm sure you would've already hired someone who could
give you way better industry expertise than you would find by asking HN.

------
hellcow
I started my current enterprise SAAS company 4 years ago. It took more than a
year before we had our first customer (who left us!), 2.5 long years before we
raised $350k on the promise of signing a big company. After 2.5 years "without
a job" my whole family was pressuring me into just getting a job a tech
company. "It was obviously not going to work if we hadn't succeeded by now."

But I knew we had something special in the tech.

That little bit of cash helped us hire a great head of sales with experience
building companies like ours from the ground up. We couldn't afford to pay him
even an order of magnitude less than what he would normally charge, but after
seeing the product he turned down dozens (!) of offers from VC darling
startups to work with us, for free, on the basis that we would pay him when
the sales worked. For most of the next year and a half, we had steady linear
growth, but it was enough to attract funding.

Now we've built a great team of 20 people and are on track to way exceed our
numbers for this quarter. We still have a lot of work ahead of us.

If you know you have something special, then fight for it. It takes a lot
longer than you expect.

~~~
radihuq
Awesome story. Where did you find this head of sales, and how'd you convince
them to work at your company? I know you said the tech was special but was
that really all that it took to convince them? Was there more at play (eg.
Attractive company culture, industry, etc)?

~~~
hellcow
We met through our pre-seed investor--our first check. It was a combination of
track record of founders and tech that _seemed_ too good to be true, but he
could see it working.

Same reason a later seed investor put money in. "If it works, why wouldn't any
company buy it?" As we learned (and are still learning) great tech and an
obvious market need are only tiny pieces of the puzzle to figure out.

None of us had any experience in the industry, and the company was 3 people at
the time our head of sales came on board--not much of a culture to speak of.

~~~
radihuq
Very interesting, thanks for sharing.

Just checked out your site - landing page looks very aesthetically pleasing
and I think the product does have a ton of potential. I can see how others
thought this was too good to be true 4 years ago.

Goodluck with everything!

------
simonw
The biggest myth of SaaS (and startups in general) is "if you build it, they
will come".

You win your first one hundred customers one at a time, through massively high
touch sales.

Once you've hit a hundred, you might start seeing some organic growth via
word-of-mouth - maybe. But you gotta put in the sales effort to get there.

If you're an engineer with no sales experience this can be a painful lesson to
learn!

~~~
fxtentacle
It depends on the market.

I built an app that helps people have a better gaming experience and my domain
is basically just the best Google Trends keywords concatenated. I immediately
had 500 monthly unique visitors just from Google organic search.

But launching a bikini brand, for example, took lots of advertisement and
social media presence and sales dropped as soon as we stopped paying everyone
for ads.

------
simplecto
You might consider taking this question over to IndieHackers as well. That is
a good community of people like yourself who are bootstrapped and working on
their primary/side/exploratory hustles.

[1] - [https://indiehackers.com](https://indiehackers.com)

~~~
throwaway413
Off-topic, just an FYI, you have a typo in the blog link on your profile page.

~~~
simplecto
Fixed. Thank you!

------
fxtentacle
I've seen many founders slowly grind out their spirit in a bad market. So the
first thing you need to clarify is:

\- do your customers know that they have a problem

\- is the problem painful enough that people are happy to pay for a solution

\- do your customers have money?

I've been running a SaaS for professional freelance photographers for 10+
years now. Customers going bankrupt really drives up my churn rate. It's a
frustrating market. I keep the company around because it's profitable, but I
would never want to invest additional work in that product.

I also once built a sound plugin to add 3D audio support to existing movie
production software. Pretty much no chargebacks and no returns at a much
higher price. Here, marketing was easy because a good prospect would buy 20
licenses in bulk for the entire studio. We got featured on magazines, had
interviews with famous actors, musicians, and directors. In short, everyone
was feeling great about working on it.

I've also released some games that gained no traction even when I made them
completely free with no ads. That was pretty frustrating.

What I'm saying is choosing the right market can make the difference between
you feeling great and making easy progress, and wasting lots of effort only to
feel frustrated later on. Make sure you choose a market that makes you happy.

There is a reason why nobody is making X optimized for broke cynics.

~~~
k00b
> Make sure you choose a market that makes you happy.

People really do underweight enjoyment when they choose something to build.
There's a lot of dimensionality when choosing something to work on, but
enjoyment is one of the most important.

------
redis_mlc
I hate to break it to you, but most startups take 7 - 10 years to reach their
stride.

Your choice is to either slog this one, or use the experience and pivot.

BaseCamp - used Ruby on Rails consulting to promote and finance it

Digital Ocean - rode pre-AWS hosting craze

MailChimp - founders worked full-time until enough revenue, rode moderately-
early email marketing craze

Are you riding a craze, and/or funded from side gigs?

~~~
mkl
DigitalOcean was founded 5 years after AWS launched. Were you thinking of
someone else?

~~~
redis_mlc
Thanks for pointing that out. I thought DO was a vanilla VPS like the rest of
the bunch, but it's not.

Hats off to DO (2011) for rolling their own cloud after AWS (2006), and
gaining mindshare!

Anyway, to the GP: what DO has done when head-to-head with a giant like AWS is
pretty rare.

------
michaelbuckbee
Baremetrics has shared actual data on this exact topic:

How fast SAAS companies hit ARR milestones:

[https://baremetrics.com/blog/how-fast-saas-companies-hit-
arr...](https://baremetrics.com/blog/how-fast-saas-companies-hit-arr-
milestones)

------
gingahbread31
I'm gonna repeat what has been said but yes it really depends on your
vertical. For example if we look at the companies that you quoted, they
probably have had (and still have) completely different growth strategy.
Moreover, it doesn't take as much time to build the MVP of Digital Ocean from
scratch than it would take to build the Mailchimp's one. If you have customers
you can talk to and if they are happy with your actual product, they might
give you advices on what they're expecting in the future and you can turn that
in features that a lot more people may want right now.

In my very personal opinion, having 8 customers shouldn't give you the
sensation that your product is finished and that you can scale (although I
really don't know what you do so I may b wrong), so you must figure out what
is missing to acquire more customers before thinking in terms of "Growth"

~~~
sweeneyrod
> Moreover, it doesn't take as much time to build the MVP of Digital Ocean
> from scratch than it would take to build the Mailchimp's one.

Shouldn't this be the other way round? The MVP of Mailchimp is a generic CRUD
web app TM hooked up to a mail server, while the MVP of Digital Ocean needs
something approximating a data centre.

------
muzani
[https://a16z.com/2017/02/18/12-things-about-product-
market-f...](https://a16z.com/2017/02/18/12-things-about-product-market-fit/)

"So what are considered some of the best tests for PMF? Rachleff writes that
“You know you have fit if your product grows exponentially with no marketing.
That is only possible if you have huge word of mouth. Word of mouth is only
possible if you have delighted your customer.”"

Generally, if growth is slow, your product is not good enough, or rather
there's no market for it. You should try different things until you get to a
point where you have more customers than you can deal with. Slack originally
worked on a MMO, then shut it down and worked on the messaging tool they used
while building it.

------
throwawayffffas
You should really, include a link to your product. It will give people an
opportunity to give a better answer to your question. Additionally this post
made it to the frontpage, it could be good exposure. You should always be
pitching. Edit: grammar

------
135792468
I’m not going to say don’t give up without knowing your business but you’ve
got 8 paying customers so there is some validity to your idea. I’m one of the
few non-programmers around here so my advice is different than most.

Alternatively to everyone in this thread: find a partner. There are plenty of
folks like me who can’t dev but are able to grow businesses, you just have to
find the right one that fits the channel your customers hang around in and you
enjoy talking with.

One of my partners and I talk all day every day, we met on some random
subreddit and three years in he’s one of my closest friends and we have quite
successfully generated ARR

The side benefit of this is it allows you to focus on what you’re good at
which is building the product.

I don’t have capacity but I could probably connect you with some potential
people if you’d like or at least willing to talk through some potential
marketing thoughts with you if you’d like to talk. Just let me know how to
connect

------
andrewstuart
It's got everything to do with your business and product.

I had a business once that was not fast moving and I thought "probably because
I'm not much of a salesperson". Then later I started another business and the
work started flowing in hard and fast. I was the same person but it was a
different business. That was a huge lesson for me - when you're selling the
right thing, clients come running to you "take my money!".

If you've built something people want then the difference will be amazing -
the work and customers will fly in on their own because they'll hear about it
and want it.

Other less compelling businesses will be a grind forever.

From what you describe, there's no reason to think your product will suddenly
take off. Sounds like it will be a long slow grind.

~~~
dman
It took me way too long to learn this lesson.

------
drchiu
Beyond the question of whether it’s your marketing, is it also a problem of
the size of your addressable market? How novel is your solution compared to
the ways (Ie. how well) existing solutions work?

I’ve been in projects before where things grew very easily due to no effort
simply because people wanted that product. And then in other projects where
the solution is elegant but people were already satisfied with existing
solutions. And so the few who wanted it simply meant the product was niche.

Zapier is one that comes to mind where I could see the solution, before its
successes, could have gone either way. Either people were happy with their
existing workflows and ignore what Zapier could do, or it would change their
lives. If your product is defining a new segment, this could be the problem.

------
monkeydust
With my Angel Investor hat on (doing it 6 years, multiple deals, few exits):

\- Very difficult to be successful if this is your side project, if you cant
take the leap because of funding then try to raise money, your in a better
position than most because you have a product and traction (although without
knowing the domain hard to say if someone will be interested).

\- If your thinking about giving up, perhaps your not convinced enough to go
full time on it (fair enough) then look to potential sell it - OR - merge it
with a complimentary offering. There are SO many SaaS products now (just look
at ProductHunt) but very few of them I would say are viable businesses on
their own right but put together that could be a different story.

------
zeuch
I ran multiple side projects in the past years, including SaaS. In my opinion
you should stop when you're not happy with it anymore and also not excited
enough to continue building it until you're happy with it again.

But don't give up easily! Don't expect you should grow as fast as the popular
startups you've mentioned. You can allow yourself to grow slow and steady and
still be extremely successful. Growing fast is what investors want, not
necessarily what your customers want. Focus on working for your customers, not
your investors (or potential investors).

If you're delivering value for those 8 customers, get closer to them, get into
their shoes and then find more customers just like them (maybe they can even
help you with that).

Then automate your operations as much as possible, and focus on getting your
SaaS really stable for them. Then, slowly, deliver the most critical and
important features for those customers, always focusing in high standards for
quality and security.

Be a strong business, even if a small one. Run your business in a profit first
approach. You might grow slow, but you grow healthy and strong this way, and
if you persist, you may eventually find yourself grow really fast later.

------
saluki
Check out the StartUpsForTheRestOfUs.com podcast. Lots of info on SaaS.

The latest episode is right up your alley.

[https://www.startupsfortherestofus.com/episodes/episode-499-...](https://www.startupsfortherestofus.com/episodes/episode-499-the-
first-six-stages-of-saas-growth)

Some ideas/products will grow faster than others. Congrats on launching and
having paying customers that is a BIG accomplishment.

Since you have the experience of creating one, start thinking about your next
SaaS. Think more about the value it would provide, niche, market size, how
would you market to them and idea validation.

I've built and manage SaaS for clients, I'm building my first one for myself
right now.

I've been following SaaS for years, some have taken off right away to $10k,
for most though the growth is very slow.

I think it depends a lot on your market/niche. How many people have the
problem your app solves and what marketing channels you have available.

If you have happy paying customers chances are you're on to something. It just
might not grow as fast as you want. Think about how to market it to potential
customers similar to your current signups.

Congrats and good luck.

------
chris_f
Firstly, congratulations on getting people to pay you money for your product.
That is usually much more difficult than many realize.

Without more information on the business (MRR, vertical, customers, etc.) it
is difficult to provide better feedback, but now that you know more about the
customers, do you have a plan to grow faster or at least a path of
sustainability?

One year in most cases is not enough time to know whether to give up.

------
aww_dang
Keep running your existing project and build another with the lessons learned.
Think about low hanging fruits, where customers are easier to acquire. Also
consider the maintenance required to maintain the business. Work backwards
from there and find problems you can solve.

Starting from a point of passion and personal interest isn't always the best
strategy.

------
StavrosK
When it takes more effort to run it than what you get out of it.

I never give up on my side projects, I have too many to count now.

------
econcon
Without seeing your product it's very hard to give any advise.

Maybe you've not done marketing correct, maybe your product has steep learning
curve. Maybe too many alternatives exist at lower price point.

There are lots of maybes, so send me an email I'll take a look
zerocorebeta@gmail.com and offer some feedback.

------
winrid
All I can do is share experience.

I worked on watch.ly for about five months. Cool product, no customers. Didn't
do any significant marketing.

FastComments - couple months in had a handful of customers. I think almost six
months in now. There were Sundays where I would wake up and just do marketing
stuff all day, crash from the coffee, and then work the next day.

What you're trying to do is not easy. After you have something that even
mildly works you should start spending most of your time trying to talk to
potential customers.

As a famous salesman once said - "Major time is for major things".

Think and visualize your end goals here, then plot a path to them. You might
realize you are way off.

Good luck!

------
anoncareer0212
if you're building a point of sale for $1000 flat, keep at it

if you're building a notifier for recent job postings for $9/month, stop

~~~
mvind
I'm sorry - I don't understand what you mean, can you expand?

~~~
arcturus17
I think they mean if after a year of operations OP has only sold eight $9
subscriptions, the business might not be considered validated.

~~~
anoncareer0212
yes, apologies for lack of clarity

basically if you have 8 users and you need 1,000 users/month to quit your day
job, stop

------
chucky123
It really depends on your vertical. I suggest reading interviews of people who
started businesses in similar verticals and see how much time they took to
achieve profitability

------
battery423
I'm not sure where the urge comes from to have your own business. I dream of
that sometimes as well.

But to be honest, i still focus more on my carrier and it looks good. I don't
think i would make more money as a business owner.

It still sounds great to have your own business.

But what is your motivation? Did you create that specific SaaS because you
wanted to have a SaaS Product or because you like your SaaS Product/Idea and
you use it yourself?

Do you dream of becoming another Zuckerberg? If yes, forget it.

~~~
simonw
If you only ever work for other people there is a natural cap on your overall
earning potential. This cap is lifted if you start your own businesses.

Starting businesses is no guarantee that you'll see that benefit of course.
Chances are you'll earn less running your own business than you would if you
worked for other people instead. But there's a small chance that you'll do a
LOT better.

~~~
cambalache
I have been absolutely miserable working for others, as in:"life is gray"
miserable. I tried on my own, with very bad outcome, so now I am in the
difficult position to choose between give another shot with more age and way
less money or get back to the grinder.

------
gcheong
If you have a good idea now of your target user and the size of the market
seems sufficiently big that it could grow to the size you want and if those 8
customers can't live without your product or are at least raving about it then
that would be good signals to continue. If they can just flip a switch over to
a competitor without losing any value then maybe not so much.

------
andrea_sdl
There are many things that might influence the result and therefore your
decision.

I once worked for a product in the SaaS business and what helped us is
understanding "where are our customers". So, where are _your_ customers? How
do they come to your product, how do they discover your product? After having
this answer we focused on improving that conversion rate (for us it was all
about being first on google and having a high-converting landing page, but in
your case forums might be a better place to look at. It all depends on the
target customer)

Also, one issue I've often encountered is that knowing the customer and
selling to the customer might be very different things. Did you only sell
online? One great piece of advice is try to sell the product IRL and record
the audio. After many failed and successfull attempts you'll have recordings
of _what works_ and what doesn't work for the kind of customer. That
information will be useful to convey the benefits into your landing page /
homepage.

Back to your question: How much growth should you expect? It is a generic
question. How many people are impacted by your product? How many have that
specific itch to be scratched? How fast can you get to them? How good is your
product at scratching the itch? The (partial) sum of these questions might
lead to the answer. If you have many people impacted by your product, if the
product scratch a big itch and you can reach all the people at the same time,
chances are you're going to grow fast.

If you grow slow, is it bad? It might be bad if you're asking 5$/month for an
extra. If it is 100$/month maybe a slow growth might make sense.

In the end, if I were in your shoes, I'll wait a year to decide if it's time
to give up, but at the same time I'll set some monthly checks to see how
growth is going, what are the feedbacks and how the community is reacting and
test each month a different way to market the product. A good book on this is
"Traction" by Gabriel Weinberg

PS I also run a side business creating cosmetic products (not saas) and my
growth has been relatively slow. The product (in my case) fixes a big itche
and had no competitors. Reason for that is that achieving a stable efficient
result is quite hard, but we somehow made it (bootrapped obviously). In our
case slow growth was a good thing because it allowed us to fix the issues in
the product before being too much known in the public.

------
edimaudo
Congratulations buddy! All businesses are not the same so you can't really
expect to grow at the same rate. You are in a great position as you have
paying customers. I would suggest the following, looking at your niche to see
what other needs they have. You can then add more ancillary products which you
can cross/up-sell.

------
kissgyorgy
It is always a good idea to set concrete targets whatever you do. If you have
those targets (KPIs if you wish), you will know when to quit.

Your goal can be 10 or 100 paying customers by the end of the year, it doesn't
really matter, you just have to make conscious decisions whether you are okay
with those numbers.

------
krewast
This video is a few years old now, but I found it interesting:

The long, slow, SaaS ramp of death

[https://businessofsoftware.org/talk/how-to-negotiate-the-
lon...](https://businessofsoftware.org/talk/how-to-negotiate-the-long-slow-
saas-ramp-of-death/)

------
syed123
Never 1: Change market 2: Change product 3: Change team 4: Change yourself by
upgrading your knowledge/experience 4: Market changes on its own 5: Customers
needs changes 6: Environment changes All of the hunger has to come within

~~~
quickthrower2
Looks interesting but I’m finding that hard to parse, could you reformat?

------
duxup
Do you want to keep working on it?

Is there something else you want to do?

If you're still motivated and want to do it, keep at it. I don't think
timelines for success (depending on how you measure that) are fixed.

If you're not motivated / want to move on, you probably should.

------
adamzapasnik
Hard to say without knowing the product.

But if you understand your customers better now, focus on a marketing towards
the same kind and see where it gets you.

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WrtCdEvrydy
From personal experience: before you start.

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scottporad
What's the URL to the app?

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1cvmask
What is your startup called?

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sturza
Do you need help?

