from Hacker News

Ask HN: Shut down a startup despite strong traction?

by Freddie111 on 8/18/22, 6:59 AM with 66 comments

• by withinboredom on 8/18/22, 9:05 AM

  Fuck investors. Set your product’s price and let the customers run away or stay. Then see if it’s enough. Then and only then, if it’s not enough, drop the product. Or, if you really want to keep working on it even if it isn’t sustainable, find investors.

  In the meantime, kill off your cloud. Purchase or rent bare metal servers and stop paying per minute for shit. You can get 100+ of cpu cores, terabytes of ram, and disk space for less than a few hundred USD a month. Self-host the things you need (garage for s3, longhorn for persistent storage, harbor for Docker images, Loft for k8s management, etc).

• by tsunamifury on 8/18/22, 7:30 AM

  Not to belittle your achievement at all but 100k monthly can mean many things, many of which are not traction. For example what is your growth curve on that, what percentage of those users are paying or have potential to pay, what is your total addressable market. Many of these are the deeper forward facing questions that investors are looking for when investing. Mainly what is your definition of success, is it big enough, and are you actually in the path to get there.

  Ive burned high $xx million/year at only 10k monthly users because the answers to those forecast questions were good. And got to XXX million users and line of sight to X billion in revenue. However I’ve seen plenty of others who had better initial traction but no real path to a multi billion dollar company so they fizzled.

  Just food for thought.

• by snoopy_telex on 8/18/22, 7:31 AM

  You posted 10 days ago that your startup has failed. What has changed?

• by cheerioty on 8/19/22, 11:41 AM

  Mate, I've read the whole thread / comments, but still couldn't figure out what you're actually doing. Is it possible that you for some reason just make it unnecessarily hard for people to discover/invest in you?

  I'm a serial founder, business angel, and LP of two larger funds... But man, where's your pitch? I've tried to find it by looking into your submissions, and all I found is "New Molecule Discovered That Strongly Stimulates Hair Growth ...

  Are you seriously looking for investment or just messing around and wasting your and other people's time? If it's the former, then please (with a cheery on top), tell us what you do and at what terms you are raising.

• by buro9 on 8/18/22, 8:40 AM

  I shut mine down... crowdfunded a 2y runway (living on scraps) whilst I built a forum platform.

  We were successful in that we hit all of the numbers we set ourselves and had 50k monthly active users at the end of 2y.

  We were unsuccessful in that we hadn't pulled in enough revenue to survive early enough, and were reliant on raising a next funding round. That did not materialise in part because we hadn't understood what angels and investors were looking for given their interests, where they were in their fund, their portfolio. We were too late into our runway to learn that lesson.

  The story is over here: https://medium.com/tech-london/the-journey-of-a-london-start...

  But my tip for you would be to go harder on getting a "No" from investors... it prevents wasting your time on false promises.

  Also... can you get revenue from those users? I could, but not enough to achieve growth which is what we needed to get the product to a place where it could financially sustain itself in a viable way. I could only get it to a modest lifestyle company that would be in decline instantly without the investment to take it further.

  I set a hard deadline... we were all in and 100% committed... but when we hit the deadline, it wasn't sustainable, there was no more runway. We'd built something, it was successful by many criteria... but not financially self-reliant and so by the only success criteria that ensures the viability of the company it definitely failed.

  I don't regret shutting it down, and I took a lot from the experience. The forums we launched still exist and are now up to 250k monthly active users, it runs on a shoestring entirely from donations.

• by drx on 8/18/22, 7:19 AM

  Apply to YC - it’s perfect for startups with some early traction and no VC network. Even just doing the application is a great exercise.

  An alternative to VC money is monetize your users and live cheaply while you grow revenue.

  I shut down a company with really great product-market fit, but a small TAM. I don’t regret it, but I wish I didn’t have to. Real traction is gold.

• by pavlov on 8/18/22, 8:24 AM

  If there’s any value in your 100k users, you can probably sell it on a site like MicroAcquire:

  https://microacquire.com/

  Don’t expect a crazy valuation, but anything is better than shutting down?

• by boffinism on 8/18/22, 7:42 AM

  Do you believe, privately, that there's a really great business here? (I don't mean 'do you believe that if enough miracles happen what you have might turn into a great business?')

  In my experience, that's the question that causes people to ditch a startup despite whatever headline metrics it has.

• by pharmakom on 8/18/22, 7:20 AM

  100k mau is hard to achieve. Don’t throw that away. Maybe you set the price too high for investors?

• by tiborsaas on 8/18/22, 7:56 AM

  How much income do you generate?

  If it's not monetised yet then start doing that instead of chasing investors.

• by bradwood on 8/18/22, 7:07 AM

  Have you considered a friend's and family round? Or opening up a round to you user base as a kind of crowd funding round.

  The startup I'm at did both of these to good effect.

  You'll also notice VCs perk up once you've told them you managed to pull that off.

• by kypro on 8/18/22, 9:19 AM

  Is there a path to profitability near-term? That would give you some time then perhaps you could consider options like taking out a loan instead.

  It wasn't my startup, but I was the third employee of a small startup which we had to shut down despite having a few hundred paying customers after failing to raise money. In our case though it was clear the business wasn't financially viable. We would have needed something closer to ten thousand customers to have broke even.

  In your case 100k monthly users seems like quite a lot. You'd only need to be making a few dollars per user to have a decent amount of turnover. I'm guessing this is free service or something?

• by cercatrova on 8/18/22, 7:14 AM

  What is the startup? Is it something you can run solo and charge money for?

• by muzani on 8/19/22, 5:19 AM

  We had the same problem. Our traction was actually profit, growing at 30%/month. We had banks calling to offer loans, and investors were red flagging us for not taking loans, lol.

  It was a lot easier to sell a profitable company than raise funding.

  You have an asset, even if it's not profitable. For us, we were able to attract the target market of our acquirers cheaply. We'd get a paying customer for cents, while they'd need about $5 of advertising costs for the same customer. So you could probably sell yours as a marketing channel.

• by dewey on 8/18/22, 7:45 AM

  Is it a business that makes sense to a VC and do you actually need investors? Maybe it could be a nice, sustainable business if you manage to monetize more of the existing user base.

• by rasz on 8/18/22, 7:33 AM

  >100k monthly users

  how many monetized?

• by mkl95 on 8/18/22, 7:14 AM

  What feedback are potential investors giving you? What are your pain points?

• by raspasov on 8/18/22, 8:00 AM

  Link to product or website?

• by simonswords82 on 8/18/22, 8:57 AM

  What is the startup?

• by faangiq on 8/19/22, 6:29 AM

  Sounds like you’re not trying hard enough either on investors or revenue.