by leon_sbt on 11/13/20, 8:34 PM with 6 comments
My formal background is mechanical engineering. After undergrad, I spent a year back home teaching myself to code then developed and iterated the MVP. The product is a highly customized e-commerce product targeted to industrial customers that is manufactured on demand.
Year 1: $500 gross. I did some SEO/website improvements. It took about 4 months to compound. Year 2: $70k gross Year 3 (covid): $50k gross
I put profits back in the business via buying manufacturing equipment The site is scratch built with a decent amount of tech (AI)
-COGS markup is between 300%-600%. Granted this on like a $30 product price.
-Spend per customer is $340. But its bimodal. Most spend $30 or $500+
-CAC: $0, everything is organic, no advertising or outreach. No time to invest right now.
-Customers love the service (Based on unsolicited feedback)
-Customers are mostly B2B, many are huge household names.
Here's what's killing me.
- I have no employees and I feel like a slave to the machine I built.
- I'm missing some critical features that cause customers to email me with orders. Turning everything into slightly high touch sales.
- I'm not netting enough to pay myself, but all the CAPEX is paid off.
- I need to gross about $180k a year in sales just to pay myself equivalent market rate. (6000 units per year)
- It's a specific niche. I don't know how well that scales long term and in volume.
- There is still a lot of software dev left to do
I want to quit my dayjob to free up time and brain space, to build out critical features. I can sustain for 12 months of no sales before bankrupting myself and the company.
But if I do go bankrupt, I'll be approaching my late 20's with nothing to show for myself.
Am I insane for thinking about closing this thing? And try to get a well paying job as a programmer for several years, which provides guaranteed money and benefits with much lower stress?
by robterrin on 11/13/20, 8:44 PM
Second, no you're not crazy. It is risky, but not crazy. Are there a few things you can do to derisk your decision? Identify what you would need to know to feel comfortable and work back from that to form testable hypotheses. Then figure out how much time/money/effort it would cost to test those hypotheses.
If that seems like too much work, or you still won't have the certainty, I wouldn't go all in, but there's one other option before shutting it down. Can you sell the business? Maybe to a search fund or a small investor? I'd get in touch with Arvid Kahl, here or on Twitter if I were you.
Best of luck!
by The_DaveG on 11/15/20, 11:41 PM
You've managed to build something that has brought in $120k without investing dollars into outreach. Then you've invested it into (assumably) hardware. You've got a business with some value to it.
I don't know what you're making, but industrial is my space. If you'd like to drop me an email, I'd be happy to take a look at what you're making and give you some thoughts, potentially some introductions. Dave @ Capelin.io
by galesky on 11/14/20, 2:47 AM
Can you clarify why you have no employees/outsource/freelancer/etc ?
I would want to focus on that because it looks like you could invest something like 10k/mo (or ~5k/mo if you offshore) for some time and actually have less work to do in the future - the features will already be build, forever.