

Ask HN: french start-up in a difficult situation, looking for feedback/ideas. - Personne

Hi All,<p>I am the founder of a french start-up in a difficult situation, and I am looking for fresh perspective of what to do. I feel HN is the best place to ask. So please take a few min, and tell me what you think.<p>We are a small software publisher, our product is a heavy client (too computations-intensive to be web-based) and we are at a crossroad. Our numbers are much better this year but our current market position is weak and 20-30% of our customers are either dying or moving to new markets. I am not sure the market will be big enough for us in a few months : our value/price ratio being unadapted to a small market with small companies.<p>Because of that, I am thinking about our next move if the situation/market doesn't improve. I see basically 2 opportunities:<p>- Mercenary coding : we are a team of experienced python coders (over 50k in python + a few k in C or C++) with a complete production pipeline/organization. We know how to ship (complex) software in time. This may be interesting for some, but I feel the time to build the connecting with the potential buyers may be too long. As I said, we are located in France, not Cali.<p>- Selling the company to a software group/big company : Our tech is innovative and quite solid but our marketing is not very strong (we try to be clever but good marketing costs money). A group that have the proper marketing and distribution infrastructure would have a good ROI selling our tech through its channels. Again, our location doesn't help to connect to US software publisher (most are in our markets).<p>So, what do you think ? What would you do ? Other ideas ?<p>Thanks,
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wdewind
This sounds like way too complex a question to answer with the small paragraph
of information provided. So with that little amount of information, I think
the best way to make the decision is by thinking about your team. Of the two
mercenary coding has the advantage of actually feeding people so if you really
like your team I think you should try that, build and ship a few products for
other people and see if with a new perspective you can't think of another
product.

You already have a network and customer base, why not try to build products
for the new businesses THEY are entering?

~~~
Personne
Because the new market looks like a blind gold rush. Everybody is going to the
same place but the maths says that most won't have any ROI.

Maybe you could help with this more-focused question : How to promote a team
of (quite) expert python coders ? I've seen some freelancing sites but 1/
indians/chinese/whatever can undercut everybody there and 2/they focus mainly
on task that doesn't need good coders.

Thanks

~~~
wdewind
Unfortunately I don't know a ton about a) the python market or b) freelancing
in general, but as a fundamental rule you can't be chasing the same clients as
the 1 Indian guy. I don't know where the big fish are, but minnows wont feed
you anyway.

Maybe try finding some other, larger firms and work on a project by project
basis? Contact some agencies, other dev firms etc. Short of that it's all
sales: find the big guys, get an audience, convince them. Not so complicated
just very difficult :)

Good luck.

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drallison
There is not enough information in your post to offer any serious suggestions.
What is the product you currently have in the market? Did it require special
domain expertise? What happens if you decide to close the doors--how would it
impact your current customers? Is there any potential for expanding your
market? Why would someone want to buy your company? What is the company
culture like? Could you could accept outside direction and management?
Detailed answers to many of these questions are likely to not be appropriate
for a public forum like HN. Your profile has no email address for contact.

~~~
Personne
Sorry about the email adress, it is now corrected.

About your questions, I am sorry I can't go into the specifics but I don't
want to damage our brand. I would be more transparent if the situation was
desperate but we are not there yet (that's what I want to avoid).

Here is what I can say : \- our product is a complex (pc/win) software. \- it
requires some investment but not much (domain expertise is too strong a word).
\- most customers can find alternatives even if much more costly \- our own
market could grow (especially under a focused marketing push). \- our company
culture is quite informal \- I suppose we could accept outside direction. Not
sure, though, I never thought about it.

Don't hesitate to contact me if you want details.

~~~
drallison
I still do not see your email in your profile. Please contact me off grid as
drallison@gmail.com.

~~~
LBarret
Corrected again. a (network) bug I suppose. Anyway, I'll contact you by mail.

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ozziegooen
If you really have some innovative developers, you could try to do what Odeo
did :)

~~~
ericmsimons
what did they do?

~~~
koevet
they built twitter: [http://www.140characters.com/2009/01/30/how-twitter-was-
born...](http://www.140characters.com/2009/01/30/how-twitter-was-born/)

~~~
Personne
interesting...I'll think about it but that looks like a shot in the dark,
sometimes you hit something, most of the time not.

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bluethunder
Firstly understand that the most precious thing that you are losing here is
time - or rather time not spent on building a break-out business. Every day
that you spent on the dead end business is time not spent on building a break-
out business.

This is what I would suggest:

1\. Try selling your startup. Put a time frame on it - say 2 months at the
max. Research and Pitch potential buyers. Don't be too rigid on the price.
Again, you need to sell so that the business (and its employees) can stretch
for as much as possible, and you need to sell to save your time.

2\. If the sale doesnt happen in two months, disassociate from the business.
For all practical purposes assume that the business is dead. Detach and Break
Free. Do not let the dead-end business take your mindspace. Plan the business
contingency - you might let your employees keep running the business so that
it helps pay their salaries - or you might make it clear to your employees
that the business is dead end and they should jump ship. Offer them salaries
till the business pays the bills and help them in whatever way they want.
Whatever you do, do not engage in the business.

3\. Use the now free mind space to figure out the next break out business. Do
not try to adapt your existing business. Do not try to 'do something' with
your business competencies. Do not 'pivot' your existing
business/employees/software.

~~~
Personne
I never thought about dissociating from the business but I see the reasoning
behind it. The 'free mind space' versus sad burnout is really a good image.

Thanks,

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dualogy
My 2 cents for free, for whatever that is worth...

While the old product still makes you money, invest all resources into
building the new product.

Selling the company / IP: if you don't have willing buyers lined up and
competing-up the sales value, common wisdom suggests that this is usually not
worthwhile / a losing proposition. Buyers are usually trying to enter into
growing markets / products, but you expect negative growth. So not sure who'd
be looking to invest in this area right now...

~~~
lifeisstillgood
Could not agree more. You have a dying product, not a dying business or bad
employees. Level with your employees (who probably already know this is a
dying product) - and then set a revitalising target - Build in the next two
months at least two online profitable (cash positive) services. Which ones?
Ask your employees now, and over next few weeks ask your customers. They have
pain points that clearly are being better met elsewhere, but when someone
credible asks what pain can I solve, most people reply seriously.

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tttp
What's the size of your organization? Having a core team used to work
together, and that doesn't need to find a huge amount every month is quite a
different beast, and probably much easier to redirect following a different
path than a big(er) and with more inertia.

Are you using/working with open source libaries/platform? Surely if you are
active in a big community (say django), finding some gig to cover the salaries
and buy you some time shouldn't be too difficult.

Btw, there is nothing to be ashamed of to work on others' ideas and projects,
and 'mercenary coding' sounds a bit like you feel you are prostituting
yourself, probably neither good for the ones in your team that will end up
selling their services to keep the company afloat, nor for your customers.

What about your market ? if you think it's really dying, don't die with it.
You should consider open source your product. Might bring more visibility, new
customers and new "mercenary coding" ;)

If your market isn't dying and is small only if you focus on a national
context, selling your team/product to someone having more connections to your
market abroad could be an option, but will likely have an impact on your team,
and on your product. Is this worthwhile ?

Bonne chance.

~~~
Personne
We are 8, 5 devs including myself. Not huge but still costly.

We do use open source libs (mit license), its the combinations which is quite
unusual. But we could leverage some of them like web2py.

About mercenary coding, I am all for it as I know my team would do right and
create a good margin on each project. What I wonder is how to promote a team
like us.

Delegating the sales at the international level might be indeed the best
option. Some of our customer are foreign and in bad shape but someone with
more connections could be more successful than we have been. Open sourcing
(even partially) the product is also on my mind. The increased visibility is
indeed something to consider.

Thank you for you input,

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teyc
You have existing customers right?

Pick the customer who believes you the most, and ask him to honestly tell you
why this product is important to him. What kind of disasters does the software
prevent in his business. How does this software affect him personally.

The problem right now is your company is very engineering focussed and doesn't
have enough domain understanding. You need to cut back on your engineering
focus and spend more time with your customers.

Also talk to potential customers who are one notch bigger than your current
ones. For example, if you are dealing with 5 person company, talk with 50
person company. Their problems are magnified. Enterprise sales require people
who understand their problems and require some kind of software integration.
Usually, if you have integration or plugins preconfigured, it is a selling
point because customization is very expensive.

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revorad
Do you have competitors whose products you could sell as affiliates? This
might hurt your pride but will help you stay alive and learn about what
products to build next.

~~~
Personne
Indeed that would hurt my pride but that's a good idea. Thanks.

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adulau
Concerning the second option:

Sometime you might find potential buyer of your company within your existing
or past customers. Have you reviewed that option?

Another option, maybe your competitor could be a potential buyer too? If they
have some customers they don't have or they are willing to integrate new
functionalities only available in your version?

~~~
Personne
yep, but the transformation from "buy our product because they're good, we are
a reliable company" to "buy the company because it is valuable but cannot
survive independently" is a delicate maneuver.

Our competitor have a quite different framework, the tech integration looks
complicated. They could buy us autodesk-style : to dominate the market
absolutely. Not sure they have enough money for that.

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hrasm
If you honestly think you are going to fold in coming months, why not hire a
sales/marketing person? Hopefully, he/she will be able to turn your business
around/get new clients/etc.

~~~
Bootvis
Agreed, why not try to get better at marketing and sales yourselves? If, given
with good sales and marketing, you are not able to be profitable in the
changing market then BigCo is probably not interested in a buy-out.

~~~
LBarret
yes, that's the idea. getting better at marketing. See my above comment.

About BigCo, I agree with you but I was thinking more about an industrial/tech
fit something along the lines "this tech adapted to my needs would help me be
a lot more competitive. Buying the company might be simpler than paying a lot
of customization.". Not sure about the validity of that.

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petervandijck
Your customers are dying?

~~~
LBarret
Some of them are which makes the rest quite conservative about their
toolchains/spending. The financial crisis + some disruptive change in their
production model did a lot of damage.

We adapted but the new shape of the market might be too small for us. As I
said, I am trying to be a step ahead.

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len
get in touch with some details about your team. might have a project for
you...

