

Ask HN: What would you do with $20000 USD for your startup? - Concours

I'm in the position of using a $20 000 USD budget (seed funding) to grow one of my main side projects, what would you do with the money if you were in my position, how would you proceed ?<p>So far: Purchased a MBP for iphone dev. (I needed a new computer), hired a virtual assistent to help me on a couple of administrative tasks for a couple of hours a week, purchased a better VPS hosting plan. I'm planing to allocate a small budget to Google Adwords and maybe Facebook Ads. I understand the only thing I shall really focus on now is growth (not just in number of users but also revenues/profit)<p>What should come next or better, wow would you use the money for your own project? What would your plan be?
======
grantph
Definitely search advertising like AdWords + Yahoo + Bing. Capture the people
looking what you are offering. Therefore, they will probably search and be
willing to pay. Think about search terms. Worth every cent if done right! And
don't believe the "automated" bid stuff in AdWords. Fine tune your own bids
and review regularly. Squeeze as much as you can out of your spend and
understand your market. Use LOTS of different messages to experiment.

FB is nothing more than broadcast advertising, like TV. Too unreliable and not
worth the money. I'm still dubious about click fraud on FB.

Consider your VPS environment and make sure it's redundant (ideally multi-
location). Depending on your project, nothing worse than disappointing your
paying customers, so best to get the production environment right.

Hold on to as much CASH as you can so that you can react to opportunities as
they arise. Depending on your product, some other careful marketing could
really pay off - like booths at appropriate conferences.

Make sure you build up lists of interest (email & sms) so you can repeat
market later at much lower cost. Conversion isn't just about immediate sales;
sometimes it's acquiring targets to sell to later. Depends on the sales cycle
and decision process of your offering.

Hope it helps!

~~~
Concours
This Sir, is Gold! It gets me on the right mindset, Thank you.

As for the VPS environment, I'm giving Hetzner a shot, my front-end is very
light so, it should be even faster faster soon, almost all my static assets
are hosted on Google cloud storage and I'll probably being moving them to
amazon as well, once I merge CSS files as well as JS files into single CSS &
JS files. I'm also thinking of deploying a caching server (Varnish) in front
of the site, but not yet sure if it'll really make sense or is just over-
engineering.

As for the lists, that's what the virtual assistent is doing so far and I'm
happy with what I see. Yes, it helps a lot. Thank you.

------
aleprok
Really depends on what kind of product I would have at which state and what I
need to do next.

If I were at your position and the product is actually ready already I would
spend all of that cash on advertising after I would make sure that my current
server infrastructure can handle the possible growth.

Though first I would calculate how many new visitors I possibly could get from
adwords with the cash. Once the calculation is done I need to test if the
possible growth can be handled. If I can not handle the growth I would check
how much new hardware I would need and buy and install those. The rest of the
money would be used in adwords for new possible clients to create more
revenue.

I would not have used the money to get new computer or hired virtual
assistent, because I see that as a waste of money. Then again I would not even
bought that VPS as I would have one or two dedicated servers anyway.

~~~
Concours
Thank you for the great suggestions, well, the really big spending here was
the computer (Mac Book pro) , as for the virtual assistent, that's not a big
deal (marginal cost/hour, 5 hours/week), her work is so far worth every penny
I've paid till now... I'll try to figure out how to optimize an Adwords
campaign, so far my approach was to focus on retargeting people who already
visited my site and didn't convert...

------
anon6567
I'd skip the FB ads unless your product is not related to tech. Most tech
savvy users have adblock and won't see the ads resulting in poor conversion
rates.

For 20,000, I would spend it on a designer to make your product look great if
you already have an MVP. If not, you should be working on getting an MVP and
not worry about ads just yet.

An easy way for market validation would be to use a sign up page like
launchrock and put in a elevator pitch. Ask friends to share on FB/Twitter and
see the response.

~~~
ig1
Not true, I ran a Facebook campaign targeting developers and my conversion
rates were inline with what you would see with other groups.

~~~
anon6567
What kind of of CTR were you getting?

~~~
ig1
(from memory so these figures aren't precise but right order of magnitude)

Between 0.01 - 0.1 depending on the target. Highest CTR was with Perl
developers.

~~~
anon6567
I was getting around .019% - .03%. Which I thought was awful. Around a dollar
a click and targeting all the major programming languages.

~~~
ig1
Average for FB is around 0.04%. I was paying around 5-10 cents a click. Were
you paying CPC ? - if you optimize for CTR I find buying CPM more effective.

~~~
anon6567
Yeah CPC.

------
jamesjguthrie
I'm almost at MVP point so once that's ready I need a server upgrade or a
decent hosting plan. Then when that's in place I need Adwords etc. though as
others say, FB is untrustworthy at the moment so stay away from them.

Really it's just infrastructure and advertising that needs investment at this
stage.

------
mneumegen
I would combine your Adword budget with an investment in a suite of analytic
tools to answer assumptions you've made about your customers and discover how
you can you can improve your application.

My recommendations:

KISSmetrics, Google Analytics & Crazy Egg

------
dreamdu5t
Your first mistake is assuming you need to spend this money.

Buying a MBP and hiring a virtual assistant, combined with asking this
question, tells me you do not have a business plan with your required expenses
planned out.

I think you should hold onto the money until you find something that _does_
leverage growth, then pour the money into that. Don't spend the money figuring
out what that is.

