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Comment by patio11 | Hacker News Reader

If you have any questions, I'm happy to answer where I can.

Huge congrats on the business and personal accomplishments.

Can you talk a little more about the two paths for AR? Specifically, talk about the math behind growing it organically and why you couldn't grow it to $N million / year (or even $NN million / year) in the next five years without taking money?

From my perspective, you'd be crazy to take investment right now, but I haven't run the numbers and maybe there's a hard ceiling on your growth rate if you don't.

EDIT: The "crazy to take money" part is because of you saying this: Things I really enjoy other than money: my kinda quirky work-life balance, a fair deal of freedom in how I arrange my affairs, not being bossable, etc.

If you raise money, all that goes out the window. Not only do you now have new cofounders to answer to, but they're expecting you to spend their money, which means hiring a team and growing quickly, working crazy hours, etc. Doesn't seem to fit you, does it?

Dharmesh Shah actually has covered this topic in much more depth than I could. Basically, for a SaaS business, cost of customer acquisition is going to put you into the red for each customer for the first X amount of time of their customer life. My CoCA for "a small number of self service accounts per time period" is very, very low. My CoCA for "a scalable number of enterprise accounts" would be very, very high. The Take Over The World From Hollowed-Out Volcano Lair plan would likely involve hiring a team of sales reps to get accounts with LTVs in the 6 figure region. I don't have their salaries in my back pocket.

The math for getting to a modest, profitable business with $N0k of monthly revenue, on the other hand, is fairly similar to BCC with radically higher per-customer values. Work on SEO and paid traffic acquisition strategies, convert people in a scalable fashion, business supports approximately 1 employee at full wages per 125 paying accounts, gradually hire out things that don't increase number of accounts added per time period so I can focus on things that do, optionally go after a few low-hanging-fruit enterprise sales.

(n.b. There exist enterprise deals in this space where I could literally just be "The company that provides reminder services for $ONE_PARTICULAR_CUSTOMER" and that would support a very profitable company with a modest number of employees.)

But surely if you've demonstrated the ability to print money by covering your CoCA in 6-12 months with a LTV of 24-36 months or whatever, you have additional options beyond selling off a big chunk of your business. Isn't this the ideal scenario for debt financing?

What about doing creative deals with your first few enterprise customers, where you give them a 50% discount in exchange for a larger upfront payment, which you can then plow back into sales and marketing for the next group of customers. You cut your profits down for those customers, maybe even to zero, but you get the cashflow immediately. What about doing sales distribution deals with companies in a similar space, so you can piggyback on their sales and marketing efforts, thus reducing your need for upfront CoCA?

Come on, you're so creative at finding ways around these kinds of things that I have a hard time believing all that's left is to take a pile of VC like everyone else does.

You have a product people want. The main thing that will get investors aboard aren't numbers so much as proof that you have a scalable acquisition channel.

Once you get that, the money will be on great terms. I don't understand why you're putting any attention on BCC or consulting. What is stopping you from rocking this?

Hey Patrick, first of all congrats on your engagement and your business success.

Secondly, I was wondering if you could share a bit about how you decide which ideas to invest your time in. Why did BCC and AR make the cut, while other ideas didn't (I assume you had a lot of other probably-good ideas along the way)?

Could you expand on your reference to Sendgrid? What problem does that solve for your business? I have not experienced a lot of problems in the past with getting emails out to customers, but maybe you are referring to marketing emails? I know you have emphasized the conversion rates from marketing to email lists in the past. Thanks.

Basically, I'm the world's most overpaid sysadmin for doing stupid commodity work like making sure postmaster stays up and email gets delivered. Email costs me $80 a month. Stuff lands in inboxes. Time spent worrying about configurations / RBLs / etc: zero.

One might also note that this lets me trivially spin up does-not-share-trust-metrics-with-me-or-my-other-customers system on behalf of a high-volume enterprise client if that were hypothetically a requirement.

It seems with a 1% conversion rate you need to make something the other 99% would be interested in paying for. There must be something for the same market you can make that can convert some % of that 99%. It is like the low hanging fruit asking for you to pluck it off of the tree.

I could make a second product for teachers, but Achievement Unlocked already with regards to most of the things in that area. It is approximately as much work to create AR, where I have publicly available plans that cost $2.5k a year that real people actually buy, as it is to make another teaching tool. I'm allocating resources efficiently.

Plus, buying myself another five years of "Optimize this software until you stop getting 'MY GOOGLES GOT A VIRUS' from email addresses ending in aol.com" is not on the agenda.

You know how you keep talking about underserved markets? The customers look like that. Perhaps the large set of engineering talent going to build yet another TODO list app are saving themselves the heartburn.

Congrats Patrick (she said yes)! You have been an inspiration to tons of folks on HN that are starting out on their own. Wish you the best for 2012 and beyond.

You mentioned "homegrown bookkeeping software" ... what was wrong with all the other bookkeeping software out there?

P.S. Congrats.

It didn't publish stats directly to my website. (http://www.bingocardcreator.com/stats/)

At some point I'll do the sane thing and just use Quickbooks like everyone... but I always put it off.

You may find the Ledger[0] accounting program useful. It's a CLI parser for a specially-formatted text file, and should be pretty easy for you to integrate with your existing infrastructure.

I don't know what sort of API Quickbooks offers, but I'd be surprised if it's easier to rig up than appending to a text file and running a couple commands.

[0] http://ledger-cli.org/

she said yes. We’re announcing to our family on Christmas, as per our family tradition.

Congratulations, Patrick.

What I thought was, 'do none of them read his blog?' But I suppose they all know already, and that is just the 'official' announcement.

Well, given that it was at the bottom of a long, tech-heavy post, I wouldn't be surprised if his family members missed it.

Yes, congratulations! My wife and I just celebrated our 20th year anniversary, and it's been a blast.

Also, thanks for keeping us in the loop. I feel a little like a voyeur when I read your blogs, but I'm finding they are an excellent resource as I go through the stages of learning myself.

Best wishes for 2012!

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