I’m running a SaaS company with a platform & we have a few small time paying customers after 6 months of sales. My cofounder has another gig to pay the bills, but oversees some work with our developer at night. He is the idea guy for the platform and I’m the business guy. Otherwise, he isn’t a good business partner, not providing help at all in sales or being able to turn to share emotional issues, frustrations, etc about the company not being able to raise money or sell more. His communications skills are bad, including not returning emails and texts promptly or following through on things. I’m out here on my own…this isnt my first rodeo and I have been down this road before with several other startups and it sucks.
My day consists of waking up and cold calling potential customers. I’m good at selling, but this is a competitive space with a slow sales cycle (government related). As mentioned, we haven’t been able to raise more money, so we dont have the money to properly market the software or hire salespeople. The lack of fundraising is a source of frustration in itself. The guy I hired and paid $30K to help us with the capital raise has not delivered, so I terminated our deal.
I’m hanging in there, but 2+ years without a dime to show from this gig (I have another company on autopilot so that pays the bills), and everyone else who isn’t working full-time is making money and I’m not and I’m the full-time dude. I do own 50% of the company, but 50% means little if we never sell and I never draw salary. Also, people I have helped in the past have pretty much been non-existent when I have asked them directly for help with introductions.
What can I do next? Why can’t we raise money? How can we sell more? I have a positive attitude in public and believe in our product, but investors won’t budge. Without cash, we will crawl along. While I love startups, it’s much better when there are others along for the ride.
Hey man, I feel you. Was in the exact same situation before with a co-founder, where he had a full-time gig to pay the bills and I was just burning through my savings. Had to rely on him as I was the business guy, and he was the one coding the entire thing.
Emotionally, he wasn’t as invested as me because of the full-time gig– if things weren’t going well or were seeming to plateau then he would slightly pull away which would only make things more difficult for me, as I was the one driving the entire operation.
It’s kind of crazy to put that level of trust in someone, with them having that much power over you. But going it alone is rough, especially if you aren’t technical (and are building a SaaS product.. which we were before)
Right now things are in a much better place, I gave him a small percentage and I made a slight pivot on the product so there is much more traction. Hired a consulting company and poured some money into it and things are definitely looking up for now, but think it will be necessary to bring on a different co-founder and potentially try to raise money next year.
Would be happy to chat more if you’d like man, wish you the best.
Sure, let’s chat…but how?
Why won’t the product sell itself ?
Good questions. It’s not one of those type of products like an app that sells itself. It’s an educational platform that teachers use related to testing. Once I get an appointment scheduled and do an online demo of the product, people seem impressed. The difficult part is getting past the gatekeepers and hitting all the right people up for appointments. School administrators are either busy or not open to new things.
If I had a group of 8-10 people calling all the time, the pipeline would be full. For now, it’s just me. We need investment to hire, but we need sales to get investment (traction). Typical chicken and egg scenario.
The other business is in a high growth area, but it is saturated and commoditized. My old business is competing against one company with an $11B market cap, another company purchased by a company with a $200B market cap.
Are investors impressed with this venture ?
Being honest, no. They come up with various excuses. One might be “you dont have enough traction” (how does one do this if you dont have the resources to put salespeople on the street?). Another is the sales cycle can be slow, especially for big school districts. However, I sold our first client in 10 mins on the phone and the second in 15. I dont have the deep rolodex of contacts for investors and we have only presented in front of a few angel groups or early stage funds, to no avail. The guy I hired said many people werent interested in our industry.
Might be they arent impressed with our management team. Ive got a good track record, helping take two companies public on the NASDAQ (my personal sales and client lists were what those companies used to impress investors), and I became a VP at the second one, which had 600+ employees. Beyond that, I dont have a rock star CTO and my cofounder comes from education. I am not the kind of guy that will overembellish during an investor presentation, like some others out there. I think Im solid, but Im not the kind of guy that screams this CEO has it all.
We have come a long way. Our platform is built and functioning, we have filed a provisional patent with the USPTO. and we have customers, albeit they are small and pay little amounts of cash.
If I had a rockstar CTO and maybe someone else on the mgmt team, we might be able to raise some capital. That’s a big might. Seems that investors are looking for every reason NOT to invest more than why they should.
If you helped take two companies public and became a VP in a big company why don’t you have the means to hire sales people?
Good question. With the first company, I used my options proceeds to put a downpayment on my house. The second company’s shares didn’t go anywhere as it was right before the tech bubble burst in 2000.
If I had the spare cash hanging around, it wouldnt be an issue.
And then you see an app like YO and you get sick ?
The market is the market..Simple as that.
Yes, the market is the market, but I think most of us can agree that it is misaligned priorities. Yo is not something that serves anybody, and quite frankly, it’s a ridiculous business model (if there even is one).
You have another company on auto-pilot so you’ve done well there, based on your past experience you should have an idea whats wrong with your current situation since its not your first rodeo.
I’m in the similar situation my self.
I risk everything by jumping a full time into this start up
My cofounder who suppose to support me for non technical stuff most of the time unreachable. Fund from him that we’re going to use as our bootstrap fund got suspended for some reason.
While I’m still working hard to get enough traction, but I’m just a techie.
I’m not sales guy so my odds just getting smaller to work on some traction
Funny how’s thing work in this world, so there’s you who are a great business guy that totally dive fully into the business and dying to meet tech partner who willing do to the same
And on the other side of this blue planet, there’s my self, a tech person who in the opposite situation sigh
wish you (and anyone else who in the same situation) the best 🙂
Yeah, it is interesting. Most of our work is complete for the first version of the system, so having a CTO would be to impress investors so we could raise capital for round 2 of development and sales/marketing.
Seems like most “investors” dont really want to invest in making a small company bigger, but rather are just waiting on the big payout. I’ve seen some really dumb business models out there, including this one, which I cant understand.
Here I am busting my hump for something that not only is good and useful for society, but has promise to make good money. Then these monkeys come along and raise capital.
Anyway, thanks for reading my rant. Good luck to you too!
Investors invest in anything that has lots of users. A lot of the times these users were acquired using scammy tactics, but guess what Investors don’t care… because they know they can pawn it off to other unsuspecting schmucks later.
At the end of the day its a numbers game, you either need customers, or users. Investors are dumb they really don’t understand business models even if they claim they do so. So they behave like lemmings.
The digital goldrush.
Wow, how true. Lemmings.
My favorite experiences are meetings with potential angel investors. Many are former doctors and lawyers, and suddenly become digital experts and experts regarding all things in education. Maybe their only experience is attending school. You spent 8 years directly involved in education and almost 20 years in tech and within 10 mins they are telling you how to run your business.
One of my favorites was meeting with a group of older gentlemen and watching them argue for 30 mins over how the term “Rolodex” was or was no longer appropriate to use in the digital age. Yeesh.
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