During the early stages of your startup, how do you deal with the cash burn ticking clock?
Youri Nelson
3 replies
Early on in your startup, maybe you got a little bit of funding but you're idea/company is not quite at the stage where it's taking off. How do you deal with the anxiety of:
1) maybe running out of money in a couple of months?
2) that your idea may or may not succeed?
3) and a follow up to 2) that if you fail you'll lose a bunch of money to your early investors, some of which you may have a close relationship with...
Replies
TL Robinson@tl__robinson
This is are really good question.
Question #1 answer: I've pace myself and budgeted to save enough for 6 months before starting. My focus has been on building the technology and "marketing". The technology piece got me to a solid phase 1 completion that allows the app to stand on its own until there's more cashflow to develop the next phases. So, if it takes a while to get more money, there is no issue with the product having to be taken out of the app stores.
Question #2 answer: I vetted the idea well before I put any money into creating a product. It took about 3 months to ensure that there is a solid market for my app.
Question #3: I was upfront that they may lose money. They were okay with this possibility, along with the fact that it could be a while before a profit was made.
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@tl__robinson Those are all very good points. You mentioned marketing, what are some of your strategies to market early on when the MVP isn't necessarily ready for prime time?
@youreka I'm working through how to do this right now. It's definitely different from my other projects where I supported another non-digital product owner who had a lot of budget ($25-$50K) to hire a company to handle all of the work.
What's been working is "marketing" on social media and asking for testers and early adopters for a developing product. People's willingness to help has really helped me. That's how I got my first 100 users. From there, the online communities grew (prior to rebranding) and I got 3K in a couple of months. That got me my next 500 users. Now, I'm working on socializing GOTU to startup blogs. Those resources can help with growth and give feedback on needed improvements. And, from there, I'm asking current users to spread the word.