Los Angeles - Miracle Mile
We are a bus tracking startup ("bus in x minutes") - see www.ladotbus.com for a description of what we do. Customers include City of Los Angeles, Merced County Transit, BP Oil, Cedars Sinai, USC, etc.
We need two hackers soon and are paying competitively with equity.
Like many of us, I read the recent article along the lines of You're a Small Business, Now Act Like One. I've been hiring a lot lately so here's how I think that parlays into applying for a job.
You're a job candidate yes, but you're an interesting person with tastes and opinions, so act like one. Don't be overly formal in dress or manner, be ready to ask the interviewer tough questions of your own, and indicate that you are not your average candidate. The candidates I like best are the ones who act like they are sitting on the stool next to you at the bar, and keep it friendly and open rather than playing into the interviewer-interviewee roles.
There are two types of government entities: let's call them "private" and "pseudo private"....then there is a third type that is very public, very well funded, and very demanding. The first two markets were grossly underserved because they couldn't dream of affording the product for the third. A few startups have sprung up in this area, and that's where we got our start. Only the two rolls royces have any substantial market share in the big public market, and we're going to be the first company of the little guys poised to make the jump into the big one. We're trying to figure out how we're going to multiply our price by 20x, and it is probably going to mean we fork the product development into two separate lines for the smaller ones and the bigger ones even though the cost structure is more or less the same. The big big guys have been enjoying OBSCENE margins (think 5000%) in the big market for a long time due to the barrier to entry of "establishment" there.
Some clarification on what this product does...
* It requires a physical component beyond desktop computers, one that requires ongoing support and maintenance and precision installation. This isn't like a sales order system or something like that, it might more be called a public works project.
* It is a service-based ASP model
* Bear in mind that the usual pricetag for organizations of medium to large size is $2M to $30M and we are doing these deals in the $100-200k range so we very much are operating on razor thin margins
OK guys. I have to admit that I was planning on meeting the price and driving down to the customer site this morning to hand deliver it, but upon reconsideration with several advisors including the great ones here, I'm not going to do it. We do have the best product in the market at a very fair price by all measures, and our success shows that. The client in question has already admitted that he knows the funding people are making a mistake and they are probably going to eat it, so I'm going to emphasize the differences and let them stew in their own decision. We are all but guaranteed to win in three other sister entities to this one, and if we have to let one go to hold our line then that's life.
I owe you all some karma lollipops, they will arrive overnight tomorrow.
We are looking into a different product line that has reduced features for a different type of application in the same vein, but when that option was posed to our decision maker he said he wanted all our functionality and wasn't too interested in a stripped down product....
I use a programmable windows CE modem and an actual SIM, and I do inbound as well. I am well-versed in the SMS APIs and market and have worked with a bunch of the vendors. Clickatell is the best I believe for going the API route.
This is as thorny a discussion as which language is the best one. And the ultimate answer is in the same vein: it depends, but the decision should always be driven by the customer. My company had revenue from month 2 and won a $100K business plan because of value we brought to customers. I still looked into raising money, but at the end of the day I reminded myself what I had always thought: I don't need to raise money, and changes that would make existing customers less pleased were on the way if I did. The company is growing fast and customers love it because we concentrated on them and ignored the startup hoopla when it conflicted with bringing value to customers. Ultimately, you should raise money if you think it is in your _customers'_ best interests.
I built my entire startup on .NET because I think the feature set is richer, Visual Studio is a great tool, and speed of development is faster. I've done extensive work in PHP and Java in the past and both were much harder to work with IMHO. I also have backend applicatiosn and mobile devices that run versions of the framework, so the entire solution lent itself very well to .NET. I happily paid windows server and SQL server 2005 licenses as well; money well spent.
Feel free to crucify me now, but remember that customers don't care what you made it in -- just that it works and brings value to them.
The market doesn't need to be a quagillion dollars to need sales and ops guys; I still dont' quite understand the point of "sizing a market" -- I have already proven that there are plenty of people who want the product badly out there, and always thought that would be enough. No matter what you invest at what percent, this one has a lot of proven traction already and is more likely to be a winner than most deals (I think). I think what I'm getting at is the question of: what do you do if the VC model just isn't quite right? It seems everyone assumes there is no business growing with them.
Also:
-theyoungceo isn't naive enough to believe that investors are scouring news.yc for deals, although he'd love to be proven wrong.
-i didn't mention the company name because i know everyone knows everyone in SV and it might be unprofessional to be discussing this here from an investor's perspective (IMHO)
re: business plan money --> Customer base is growing fast. This business has a big hardware component to it -- one that requires remote devices at customer sites and lots of servers. (Think 100's of remote devices communicating 24x7) I spent most of the money buying up enterprise-ready servers to deal with a wave of business that is on the verge of closing, and backup devices to be ready for the wave.
optimal -- yes, and this was my longstanding position. I have had a lot of bugs put in my ear like "if you just took some funding, this could explode very fast, speed of acquiring customers will be key". I fall somewhere in the middle: I think it's a good idea to take a _small_ amount of funding to get some sales hounds on board, because I can't do sales by myself and I'm not a fantastic salesman. The product has been winning so far based on its own merit -- competition is really terrible, and people are hearing about it word of mouth and contacting me.
[email protected] will come direct to me for offline chat...I can discuss the business one on one but I'm wary of posting details publicly -- however open discussion here is definitely encouraged.
-need it for a sales force definitely and maybe one ops head, engineers won't be necessary for a while.
-no investor has shown any problem with the team. the company is extremely well advised for its space and has lots of people putting in time here and there.
-business has too much traction to pull an unknown cofounder right now and don't know anyone who is willing to jump off the cliff without money
-i am willing to talk to anyone seriously interested in investing, but this is a pretty public forum and I don't want to reveal company details here.
Banks say they won't loan more than 15-20% of revenue. SBA will guarantee and might be able to get loans up to $250K, but that requires a personal guarantee -- if for some reason something goes wrong, I don't want to be personally bankrupt.
We need two hackers soon and are paying competitively with equity.
http://www.syncromatics.com/jobs.aspx