Ask HN: Is YC Worth It for a B2B SaaS with $8.5k MRR and Linear Growth?

[snowhale]

My startup acquired 87 customer companies and reached $8.5k MRR recently. We have around 4-5 new paying customers every week, and 13% monthly churn rate. However, the new growth rate has been linear for 2 months.

We raised pre-seed funding last July, and have 18+ month runway as of now. This can be decreased if we hire more people and spend more on marketing.

Would YC be worth it for us? We are considering next fundraising or YC to accelerate our growth.

[lowkey]

Your problem isn’t lack of marketing, it is the false assumption that you have product market fit. With 13% monthly churn customers are telling you they either don’t really care about the problem you solve or they don’t value your solution. Cut your burn to extend your runway so you can have enough time to figure out why your product isn’t sticky enough. You can’t, won’t and shouldn’t raise funding till you solve this.

[gardenhedge → lowkey]

What's an acceptable churn rate?

[jononor]

13% monthly churn?? You are on track for replacing all your customers in under 1 year. Effectively you have no recurring revenue at all. Something is seriously wrong if B2B customers are leaving that fast, and you need to find out what and fix it fast. I would plug that hole before thinking about scaling.

[snowhale]

Thank you all for the excellent advice. I understand that we need to improve our business and deliver more value to our ICPs before scale.

[jags-v]

The short answer is it depends.

Insights you may gain at YC may help you either pivot or improve the current SaaS you have either from an offering or operational perspective.

Most importantly folow your gut feeling because that's what got you to $8.5k MRR. If there is even a 5% chance to improve your product or increase your revenue or both, you should take it. Define your success metric and proceed accordingly.

Hope this helps you :)

[codingdave → jags-v]

That 5% statement feels off to me - if you flip it, you are saying that if there is a 95% chance that it won't help the business... do it.

I'd make sure that OP knows what they would do with the funding before answering their question. More money does not directly mean growth. It means resources to solve problems. If growth is stifled due to things that can be solved with money, then VC funding is one way to solve it. Not the only way.

So I would not jump to metrics. Metrics are a way to measure progress towards goals, but you first needs to identify goals, and outline what problems exist in the business that are preventing those goals from being achieved. Then identify possible solutions, and determine whether or not money is the roadblock to implementing those solutions. If the answer is yes, then pursue money. If not, pursue whatever the solution is.

Metrics come into play once you've implemented solutions, to determine if the solutions are working.

[snowhale → jags-v]

It helps for sure! I'm impressed with the 5% bar.

I understand that I, of course, should decide it based on our goals. Thank you for your advice!

[ipaddr]

You acquired 87 customers and are getting 5 new month but losing 10 customers. The question is how many new customers are leaving vs part of the 87 batch. They are going to wonder if your new customer pipeline is scalable.

[pestaa → ipaddr]

They said 5 new customers per week so still adding twice as many as churn.

Still, it's going to plateau relatively soon.

[b20000]

You should not need customers to get accepted. If you do then i’m not sure i understand what YC is about.

[aristofun]

Mind sharing the link?

[snowhale]

* last July -> July, 2023