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Comment by hpvic03 | Hacker News Reader

What were they be spending 31,000 a month on? YC companies are expected to get by for 3 months with just half of that.

"an outsized sum was spent on professional services (legal, branding, design, etc…)."

You can get good branding and design for cheap if you know where to look. The only real (large) necessary expense I see here is legal services to draft up contracts and agreements for co-owning art. Why couldn't they make a deal to pay the lawyers after they raised their next round? Don't startups do this a lot?

It seems as if their quick demise could have been avoided (or at least delayed) if they had kept their burn rate lower and focused more on sales instead of marketing. In the end your sales numbers determine whether you live or die.

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I can't answer directly for Jordan, but I would assume that their costs were a lot hire than you would expect because they were working in the ultra-luxury goods category. When communicating in this market, everything is about extravagance- from your website to your office to you business cards. Building a company in this market is just a lot more expensive than getting feedback on consumer web app.

That certainly allows for an increase. It's a different type of market with different requirements. I have respect for the man in the arena and I'm positive there's more information that I don't know; I'm just genuinely curious as to how one could spend that much money so quickly.

Realistically a fancy website and business cards should not cost you more than a few thousand/month. However, a nice office in a good location with fancy decor could really burn some cash.

There's no reason 2 guys need a nice office in a good location. They were a pure internet company doing something like group-buys for fine art. Chances are the expenses might be something they couldn't reduce like warehouse space, escrow, or insurance related. Usually employee salaries are the biggest expense for typical internet companies.

I can definitely understand why you might think that this business was an pure internet play but it certainly wasn't. As PG learned, people don't buy highend art over the internet. They need to experience in person. The need to know what it is going to feel like to "live" with a piece.

Jordan knew this going in, and their model required a fair amount of in-person, highend selling.

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