
Ask HN: Should I shut down my startup? - ahmedaly
here is the story:
I started working on my startup last january.
it&#x27;s an ecommerce chatbot for selling on facebook, backed by crm&#x2F;platform for managing orders and customers.<p>we are targeting the middle east.<p>As a single founder, launched in a private beta last march, and in 9 months I got 300+ sellers signed up with over 35000+ orders&#x2F;mo.<p>I did all of this progress alone, with barely $600 all I put for my startup.
And I am running out of cash. I am working full time on this.<p>I can&#x27;t find any investor to fund me.
I got rejected at every program I tried.
I got rejected for this startup at ycombinator twice.<p>I am running out of cash, and can&#x27;t go on with the harsh and aggressive competition, as I have no money to spend on marketing!<p>I wonder if you suggest to just shutdown and get back to a regular job?
With numbers mentioned, is it considered a bad progress?<p>I am really tired and lost hope in getting funded.
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yellow_lead
Since you said you aren't currently charging anything for it, I would say you
should wait to see if the market will validate it before shutting down. I.e,
see if you can raise the price to something > $0 before calling it quits.

~~~
CyberFonic
If you are not charging then you don't have a business and investors want to
see revenue and a return on their investments.

With the small number of active users, perhaps you should look at selling your
technology to a company that will be able to spend on marketing.

~~~
ahmedaly
facebook is not charging users for using it. still it got a ton of investment!

facebook had a serious trouble monetizing it's service. so no revenue or
monetization method is not enough for deciding that this business is not worth
it.

~~~
CyberFonic
Facebook is an advertising platform. You might not be paying for it, but
corporations are paying for the data and eyeballs. As it is often said: "If
you are not paying, then you are the commodity being sold."

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rajacombinator
35k orders per month .. charge $1 per order and you have a nice business. If
you couldn’t figure this out on your own, then yes just shut down.

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nwrk
Focus on positive things.

Whats the current income ?

Why do you think you need to be funded ?

300+ active sellers sounds like great achievement!

Kudos

~~~
ahmedaly
Thanks. The active are around 25 only. I am working quickly to help other
sellers activate their accounts.

The income is close to zero. I am charging nothing out of it.

~~~
K0SM0S
Couple questions:

\- If it's not zero but "close", what's the little bit then?

\- What is your business model? How will the company eventually make money?

~~~
ahmedaly
I generated less than $500 over 9 months period. I have 10+ paying customers
who pay around $6/mo each.

my business model is charging 2 cents per order processed. Or $6/mo flat rate
subscription.

~~~
K0SM0S
OK. First off, the actual figure doesn't matter as much as the trend: if you
tell me it's $400 the first month, down to $10 this month, it's worrying; but
if it's a steady progression (more each month than the last), that's very
good. This is what you want: growth. The only comparison metric is yourself,
yesterday: how far further along are you? Nobody else matters — the market is
well able to 'absorb' you if you provide value, i.e. solve problems, needs.
Which I think you are.

Look, here's my intuition: your obstacle lie more on the business side than
the technical side; so the hat you need to grow is the CEO/COO in you, more
than the CTO/CIO. It's about organization (your time, your revenue, etc), it's
about strategy (how to monetize, attract customers, etc), it's not about the
'what' (the product) but about 'how' you're gonna pull this off.

Just know this: most _successful_ businesses emerge after 2 years of "survival
mode" (very, very hard, most don't make it), then about 3 more years until
it's "stable enough". On average, statistics, YMMV, etc. Also, most successful
entrepreneurs make their first successful company on the third try — they fail
twice before making it. Again, averages, stats, YMMV.

Being relentless is certainly more determining of eventual success than
anything else.

Listen, you've got something good going on. You've made it this far. It's
already a lot more than most will ever do. You gotta pat yourself on the back
for that, you gotta give yourself props. You are the man. Look, it's right in
front of you, _you_ made this. Don't ever question this: what you've done so
far is yours, your achievement, your doing. Whatever comes next won't ever
change that. You know, sometimes we win, and sometimes we learn. That's the
life of a business, of an entrepreneur, but you know that already, so don't
forget it when times are trying you.

I can't do consulting like that but general perspectives:

\- step by step: if you're currently generating 10+ × $6/mo, aim for twice
that — $120/mo or so. Can you do that? Can you focus on this next goal and
reach it? I'm pretty sure you can, going from $60 to $120 isn't crazy wishful
thinking, it's totally within your ability. Once you get there, focus on
getting to $240. And so on and so forth. It will always feel impossible to go
from $100 to $10,000 in one move; but going from $100 to $200 is totally
imaginable, doable; then from $200 to $300 or $400; etc. — you eventually
reach the $10,000, step by step. That's how growing revenue works best.

\- if you're alone, try to 'multiply' time by killing several birds with one
stone: most things you do should ideally let you produce several things — for
instance, documentation you produce for some purpose may also serve as basis
for a blog post or video to increase your digital presence. Years down the
road it may become a book, or course (e.g. you may sell in-person B2B
training), or a basis for consulting. Now these are examples which may not fit
your plans at all, the point is to look for synergies in your work and
production, and double-down on these because they're extremely valuable in the
long run, they generate compound effects.

\- For a pure SaaS, ads indeed make sense, but since you can't spend too much
now, I'd look at meetings, conferences, etc. Just show up, meet people, talk
about what you do, give cards/links/referals, in other words do the
advertising yourself, in person. It's magnitudes of order slower to reach N
people, but the level of trust and engagement you'll get in return is also
orders of magnitudes better. And it's your best shot at actually meeting
people to fund you. Go to any professional meeting where there's a chance you
might sell even just 1 subscription, get 1 solid lead. People will trust you
infinitely more if they actually know you. And people talk about people they
know much more than things — again, compound effect.

You may also get many good business advice by talking to people, find mentors
with perspective. Entrepreneurship alone is too damn hard if you ask me, you
need to be part of some circle, have peers, people to talk to.

Heck, you may even request to be a talker in some of these meetups and
conferences, tell your story, your vision for the product, increase your
'authority', just become known by real people who actually run businesses as
CEOs, CTOs, the kind of people who go to business conferences and domain-
related meetups. Infiltrate that circle, these should become your peers. Trust
me, they have a lot to learn from you — to each their domain —, don't feel
like you are "asking" for business but rather "offering" all you have, know,
can do.

If your product is basically OK, I'd spend as much time as possible generating
leads and following-up on any of them. Increase your customer base. You've
become a salesman for the foreseeable future. Remember, it's only about
reaching those $120 for now. It's doable.

In the background, use that early feedback on your product to iterate ever-
closer to what your customers actually want/need. It's likely to be very
different from your initial vision. This will be useful in progressively
forming a clear vision for what your next step should be.

Also, deadlines. It does not really matter if your estimates are totally off
the mark, but apply gentle pressure on yourself, to keep yourself 'honest' —
we're so great at lying to ourselves and justifying our every fault. When do
you think you can reach those $120? Great, now commit to that, and work
relentlessly for this objective. It's good to have the big picture in the back
of your mind — the 'why' you're doing this — but it only moves forward if you
push the ball towards the next pole, the _very next_ step, not the last one
10,000 miles away.

Hand-write it 10 times on a sheet of paper: _" I will reach $X/mo by DATE"_.
Every day, re-read or re-write it. It's nothing but it just programs your
brain to really commit, it's just easier. It makes it _real_ to your brain
when you read your own writing, for some reason, so it'll try to make reality
conform to it as much as possible. Whatever you do, just live for these $120.

Once you're there, figure out the next step towards e.g. $240.

You haven't really tried until you have it two years.

You can do this. The work you do now will get you closer to success, whether
it's this business or the next, or the one after that. Just commit to the next
step.

~~~
ahmedaly
One of the most insightful and helpful and energizing responses I ever read!

I can't thank you enough!!

~~~
K0SM0S
You're welcome, I really hope this helps!

If you want to read books (level up!), I'd recommend this for early stage
entrepreneurs:

\- The E-Myth Revisited, by Michael E. Gerber. Some of it is a bit outdated
maybe, maybe, but it's still a _great_ perspective for first-time founders,
especially working solo.

\- The Obstacle Is The Way, by Ryan holiday. It's a rather short and simple
introduction to Stoicism. If you know nothing about it (or about Zen) I
strongly suggest taking a look. It's a philosophy which correlates strongly
with successful entrepreneurs, people who make/build things, athletes,
soldiers — those who prevailed when faced _hard_ challenges in every way
(especially emotional, spiritual even, things that can really take you down,
the storms of life and fires in our minds).

As you can see there's one for your business and one for you. I find that it
works like that, you need to grow to grow the business, which in turns makes
you grow, rinse and repeat.

Best of luck, or should I say courage!

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jacquesm
Where are you incorporated? How much cash are you looking for? How long a
runway would that give you?

Are you charging for the product yet? If not, why not? Free is easy! But if
people are using it they may well be willing to pay for it.

Would it work to continue to work on it while having a normal job?

Sounds like it may be too early to give up by you have to figure out what
level you need to reach to be profitable and how much $ you need to get there.

~~~
ahmedaly
I am not incorporated anywhere. :D

I need at least $25,000 to push this startup to it's real potential. It will
give me 18 months, a point I would be able to monetize comfortably without
worrying about churn rate.

After 18 months, and after burning $25,000... this is the point I would reach
the break even point, and I might get profitable as well. It's well
calculated! Ecommerce is booming in the middle east!

I am providing long free trial - up to 1 year! Still my sellers/users know
very well they will be charged after a trial ends. I have 10+ paying
customers.

It won't work if I get a job. I am working alone on this, and I have to work
full time on this. otherwise I would not be able to achieve such progress!

I do everything! I code, I sell, I provide customer service!

~~~
jacquesm
Ok. So you need to move up your timetable. Contact your customers, explain the
situation. If the service is as valuable to them as you say it is then they
will be happy to pay. $25000 over 18 months works out to a shade under
$1400/month. Divided by 300 active users works out to less than $5 / month for
each. Call it $10 to build in some safety. Let them know that not charging for
the product any longer is no longer an option, but that because they are the
first 300 they will get a 40% discount on what everybody else will be paying
from now on: $25.

If what you say is true then your problems will be solved, if you are making
an error of assumption then it will surface and maybe you will be able to
address it, or maybe not and then you will have the answer to your question.

Best of luck!

~~~
ahmedaly
yes my numbers are real. No assumptions. All my customers know they will pay
at some point.

I like your approach and I plan to do it as a last resort. my point is that I
expect at least 30% churn rate when I start charging my customers.

So I prefer to reach 1000 or 1500 sellers signups before starting charging.

$25 is too much for an emerging market like Egypt. I prefer to charge $5 or
$6.

~~~
jacquesm
> my point is that I expect at least 30% churn rate when I start charging my
> customers.

That's a huge assumption. It might be 0% it might be 99.9%. Answering that
question will give you a much better idea whether or not you should shut down
your startup. Willingness _and_ ability to pay for your product are the most
important bits. The rest is secondary.

~~~
ahmedaly
How much a churn rate is considered a reasonable one? so I can measure it.

I can force a portion of users to do pay and check the percentage Of the churn
rate.

~~~
jacquesm
B2B churn should be very low, low double digits annually.

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abhishek99
Hey, I can help you. Please contact me via the email in my bio. Thanks.

