Big News: FounderDating is joining OneVest to build the largest community for entrepreneurs. Details here
Latest Notifications
You have no recent recommendations.
Name
Title
 
MiniBio
FOLLOW
Title
 Followers
FOLLOW TOPIC

Question goes here

1,300 Followers

  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur

How to Grow to next level?

Our Startup TPSynergy started last year and has reached a reasonable level of success. Commercial version of the product in the market, about 10-15 paying customers and I would consider that to be an achievement considering we did it with no external investment and a very small dedicated team.

Now we are stuck at this stage, how to take it to next level. Most of the investors are expecting our revenue to be in at least a 500K before they will consider it as an investment. But to reach that level, we need more people and need money to pay salaries and spend on advertising and marketing.

What will be the best strategy to move out of this catch22 situation. As our team is very small, most of our time and energy is spent on managing existing customers and product fixes. No time to go out and ask for investment.

The market we are operating is huge (B2B Data Integration -EDI) and our team has the expertise also. Our product is doing great and our current customers are happy about our product. But looks like we are stuck at where we are now.

Have others been in this situation. How did you grow your company to next level


10 Replies

Ram S. Ramanathan PCC, BCC
0
0
Leadership Coach and Mentor @ Coacharya
Srini, It is great you managed to get traction in a year with over a dozen customers. There are many in your situation.
The fact is that market is tight, expected to get tighter, and investors are looking for turnover floor levels, break even at the minimum and customer traction to avoid getting caught in the 90% melt down among start ups in first 3 years.
In my own experience as an entrepreneur, angel investor and now a mentor coach, it has been about prioritising spend and managing cashflow along with growth. Nothing new in this and every brick and mortar company follows this, though every tech start up believes that funds will flow no matter.
we work as a virtual accelerator to mentor coach companies that have reached the take off growth stage and will be happy to talk if you like cheers
Michael Brill
2
0
Michael Brill Entrepreneur
Technology startup exec focused on AI-driven products
Nothing kills a story like revenue. :-(

People want to invest in growth stories - either an abstract (pre-revenue) story about how everyone on earth will perish without your service, or concrete, impressive traction that they can project forward.

But that middle ground where you have proven that people will buy your product but you're sort of limping along with flat revenue is kind of a buzzkill. It's easy for an investor to visualize in the abstract going from $0 to $100M ... it's very difficult to visualize $0.1M to $100M.

Sooooooo, you have two choices:
(1) Manufacture traction with some bullshit metrics. There's *nothing* wrong with this. Find something that can be extrapolated into future growth. Maybe 10 of your customers took forever to close and have low growth potential... but maybe 1 customer has some unique characteristics where they bought instantly, are planning on rolling it out to 50 divisions. Convince an investor that there are 10,000 of these companies on the planet and you need money to double down and focus product and sales on this segment, then maybe they don't care so much about current slow revenue growth.

(2) Go back to story-telling mode. Just pretend you're a pre-revenue company and tell a story that is much larger than your existing product. Your existing product is simply to prove out a few concepts, but the real opportunity is to do X. They may even be impressed that you're dismissing real revenue as insignificant compared to the big idea.

Everyone here knows how hard it is to build a product and get 10-15 paying customers. You're to be congratulated for that. But remember that the investor is being hit with 5 pitches a day, promising him the world. You need to start promising the world in a way that isn't inconsistent with your existing revenue.

Chris Rider
1
0
Chris Rider Entrepreneur
(Founder) Director, R&D/Tech at DirtGlue Enterprises, www.dirtglue.com
I share the sentiment of the others who answered. I can especially relate to Mr. Brill's comments. I've been running a small business started from scratch with no investors and a shoestring budget for 14 years now. Obviously we started with no revenue and like you, after about a year we had several customers and small amount of revenue but not enough to allow for growth. We hung in, struggled, persevered and each year we doubled gross revenue and at the same time learned to work with our suppliers to cut costs to the point that we reached $1M in sales at year 6. At year 7 we reached $3M and profitability. Year 8 & 9 we maintained but did not grow. Year 10 - 13 we actually shrank and had to tighten our belts to weather the tough times brought on by practices of the current gov't admin (half of our sales were to the US Military). Since the military is now dead to us we had to rethink and revamp our sales strategy. We now go after large non-govt entities. This year we just landed a $9M contract with a multinational company. All of this without investors and with only 4 - 7 people (inc principles and employees). So, investors are one way to get there but they take a big piece of the pie. Perseverance is the other way and if you can hang in there and make it on your own then the rewards are all yours.
Patrina Mack
0
0
Patrina Mack Advisor
Experts in global commercialization
Have you thought about leveraging your current customers for referrals? That's typically a B2C play but I would go back to your installed base and ask them if they have contacts at other companies that would benefit from your technology. It's guerilla marketing but might help you better leverage your sales and marketing dollars to get a bump in revenues.
Raghu Ananthanarayanan
0
0
Raghu Ananthanarayanan Entrepreneur
Founder Flame TAOKnoware and Chief Mentor at Ritambhara
Dear Srini,
I have founded many organizations and mentored young entrepreneurs through their most difficult times. I am a Behavioural Scientist (and an Engineer:) so i will take a very different route in my response. What I have seen when start ups reach an inflection point is that the founders are faced with two contradictory emotions simultaneously namely, excitement and anxiety. Both are real, and therefore the ability to stay anchored in a balance between the two while dealing with the challenges you will encounter is very important. This balance will help you remain rooted on the ground while you are pulled and pushed by the Challenges. I have seen funders test the resilience of the founders as much as they look at data and prospects. Projecting a solidity and confidence while looking at the future while being realistic will help you connect with the funders. Also, the balance within will help you listen attentively and this is critical in a dialogue with the funder. Getting caught either with the excitement or the anxiety will show through in your dialogue and seem like lack of solidity.
Jason DeMorrow
0
0
Jason DeMorrow Entrepreneur
Senior Software Engineer at iSpot.tv, Inc.
Here's a book I'm reading that has some concrete suggestions and a framework to follow. You might find it helpful:tractionbook.com
David Pike, P.Eng., MCITP
0
0
Consulting CTO/CIO for Small Businesses
Patrina and Michael, I had a similar thought. Having proved the existing technology, perhaps Srini could engage a larger customer in joint development of a more ambitious product. With the additional credibility of a larger partner and customer, it may be possible to get funding for just that project. If the project is successful, use that as evidence to justify funding foran expansion program.
Lonnie Sciambi
0
0
Lonnie Sciambi Advisor
"The Entrepreneur's Yoda"- inspiring, guiding entrepreneurs to achieve their dreams - CEO Mentor/Advisor, Author/Speaker
Some great advice here (well except for the going back and making believe you're a pre-revenue company). You should be proud that you have bootstrapped it and gotten paying customers. However, if you spending all your time supporting a dozen or so customers and you haven't reached any kind of volume revenue, two things come to mind. You are either pricing your product too low or your cost of support is too high; or both. You need to look hard at both of these. You, usually, grab early customers by deeply discounting prices and providing "over the top support." But there comes a time when you have do re-assess what it took to get the first couple of customers and realize you've continued to give away much of your product and your support with the ensuing group.

Too good suggestions from others. Use your customers as references in your pitches and social media. Find partners with whom your product might be complementary who might consider selling your product or others with whom you might bid bigger deals, where you can further enhance your product.

Hope this helps.
Srini Raja
0
0
Srini Raja Entrepreneur
Expert Supply Chain, Ecommerce, B2B Saas Applications
Thanks to everyone who provided their feedback. Our action plans are

1. Get a Co-founder with Funding and Growth skills to take care of the growth.
2. Our core team will continue to focus on delivering to existing customers and adding few more customers.
3. Once we receive a considerable investment, hire a full team and spend on marketing to grow further.

We hope this strategy will work. Currently we are actively trying to locate a Co-founder with skills on Funding and Growth.

Thanks Again

Srini
Henry Chou
0
0
Henry Chou Advisor
Product & Marketing Leader
You might think about hiring a "growth hacker" type. Not sure how senior a person you were thinking for the co-founder role. Also not sure what kinds of marketing you have tried if any.

Going this route may be a way to drive some additional growth without as big of an investment. It may be difficult to get someone that has hands on experience driving growth as well as fund raising.

BTW: There are some good growth oriented articles here

Join FounderDating to participate in the discussion
Nothing gets posted to LinkedIn and your information will not be shared.

Just a few more details please.

DO: Start a discussion, share a resource, or ask a question related to entrepreneurship.
DON'T: Post about prohibited topics such as recruiting, cofounder wanted, check out my product
or feedback on the FD site (you can send this to us directly info@founderdating.com).
See the Community Code of Conduct for more details.

Title

Give your question or discussion topic a great title, make it catchy and succinct.

Details

Make sure what you're about to say is specific and relevant - you'll get better responses.

Topics

Tag your discussion so you get more relevant responses.

Question goes here

1,300 Followers

  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
Know someone who should answer this question? Enter their email below
Stay current and follow these discussion topics?