I don't think it's a concern. The investors were out there all along, she just had to find them. Talking about efficient/inefficiency doesn't make much sense here.
Though seriously, there are no overnight successes and no-one is just going to give you $1m regardless of what we read on HN.
I don't have my notebook at hand to cite the exact number, but Matthew Prince of Cloudflare pitched to something like 60 or 70 investors. This was with Project Honeypot in the bag, and a stack of existing users via that, and the basis for what became Cloudflare tested.
My point is: Even with the idea and execution you're not just going to get the investment.
I think the real thing that Aihui achieved in a short time was to demonstrate determination, perseverance... and in the words of Mark Suster ( http://www.bothsidesofthetable.com/2010/11/15/invest-in-line... ) showed that her company (led by her) is a line going up and to the right, rather than a dot. It was most likely the weekly check-ins and constant hard grind at the communication that helped her get the investment.
But is it more efficient than 0 investors and $0? It seems like if most people doing startups are having 70 investor meetings they could be better spending that time working on the product right? I think cloudflare is kind of an outlying example here.
If you don't have a business at all, its efficiency is somewhat irrelevant. Not all startups can bootstrap their way up from nothing; some do require initial capital.
I'd guess that she built some small prototypes first on a shoestring budget, then used that to raise the funds over 3 months. Now that she has $650K, she can probably hire a few extra people and work on it full time for a couple years.
Fairly standard way to go. Putting the breaks on to acquire funding to continue is common.
I've actually thought about this a lot. I always wear a company shirt, yeah, but I also tend to wear the same clothing all the time, too, on the theory that it makes me more recognizable, and that being recognized is good.
My theory (which may, of course, be wrong) is that in branding? being consistent and recognizable is far more important than looking good. But then, I'm trying to generate word of mouth for small customers, not trying to get investors, so the rules may be different... but it sounds like she has a similar philosophy.
it is just you (kidding). How would they hear of you? Why not wear a t-shirt! T-shirts are a pretty low-cost investment in promotion. I can buy a black shirt with a single color imprint for $3.50 in small runs. A good pen with the company name on it would cost the same. (source: I have been buying giveaway crud for 20+ years)
Giving away a metric ton of shirts can have some other interesting effects. In the early days of my manufacturing company we gave away many shirts to people within the industry. We started getting calls about 'our people' attending events that we did not attend. It turns out that some of our customers really saw other customers at trade events, but there were so many people with our company shirt on that they impression was that we were attending in force - we werent at the trade event.
After giving away 20,000 shirts in a four year period, our customers started complaining about having too many shirts. So the technique does not last forever. It did always amaze me the delight a grown adult would show when they were given a $3 shirt. Almost always a better investment than a pen.
Best ideas: Have a decent looking shirt that people want to wear; change base shirt colors so people can have an option. Some people like blue, some like red. Give them what they want, it doesn't change the cost of the shirt.
well, for $3.50, you aren't getting a good T shirt, so it'd be better to compare it to the $0.25 pens.
Personally, I spend about 3x that, maybe 4x on small runs, and get nice T shirts. But then, it's rare I see people that I don't know/ that don't know they will be seeing me wearing the shirts. (and I've only given out a couple hundred) so it's possible that the 'blanket 'em with cheap shirts' strategy works better.
I worry about that, too. The way I see it, if it's your company, it does scream "I /really/ want to talk about my company" which is certainly obnoxious in some contexts... but not in others.
The difference, if it's a well known company, is that the talk is much shorter. "Oh, you work for Yahoo?" you know, they have the whole back story there. with my shirt? The conversation is longer, even if the level of enthusiasm is the same.
But yeah. It's a good point. And I'd probably have a better non-professional social life if I put some effort in to different outfits for several situations.
>You wear the same clothing everyday so you are more recognisable?
>That's not normal
that's... kindof the point, no? I'm trying to be abnormally recognizable.
(I mean, to be clear, I'm not a stinky hipster who goes for months without washing his jeans; I have a whole bunch of these things, and I wash them. They are just all the same.)
But yeah, I was joking with someone else I met a bit ago. "Yeah, I wear the same thing every day. Got a whole closet full of these. You know, like Steve Jobs... but without the good taste."
so... break it down for me. What social advantages do I gain by varying my clothing day-to-day?
(I mean, I understand the advantages of fitting your clothing to the situation; that's not my question. My question is, if the situation calls for a suit, what's the problem with wearing the same style of suit every time the situation calls for a suit? the same style of T shirt when the situation calls for a T shirt, etc...)
Or, maybe you are just telling me to fit my clothing to the situation. Which I'm not doing right now, mostly as a conservation of effort thing, which is to say, I'm too goddamn lazy to bother. But I understand why, at least.
If I wore the same clothes everyday (steve jobs style), I'm pretty sure my girlfriend would start to complain and people would start to notice. I don't think it's a good reputation.
You're that uninteresting guy from the office that always wears the same clothes.....
>You're that uninteresting guy from the office that always wears the same clothes.....
But, uh, yeah. I mean, I'm still thinking that the opposite is more true. I mean, fictional characters often do exactly the same thing[1], really for similar reasons. And, as you point out, it's somewhat unusual, which is not boring, even if it might be offensive to some people.
On being more interesting... heh. I should re-arrange my closet like the tvtropes photo below, and post photos.
You seem to relying on wearing the same clothes in order to make yourself stand out and / or differentiate yourself from other people. Why not do that by being good at what you do and friendly to everyone instead?
The whole same clothes thing you have going on is just odd. You don't need it and it just makes you strange rather than cool and interesting.
>The whole same clothes thing you have going on is just odd. You don't need it and it just makes you strange rather than cool and interesting.
Seriously? you think /that/ is what makes me strange? I'd be "Cool and interesting" if I just learned to dress a little nicer? Oh man. You Java folks really /are/ different.
>You're not a fictional character.
No... but the popularity of cosplaying[1] in our culture aside, stories and archetypes are how we understand humanity. Marketers try to build the public perception of their company into a sort of archetype that consumers can understand and relate to. It's a model for understanding and predicting behavior. (Personally, I don't know if it's a good model... but it is... poetic?) To the degree that I try to construct a public persona, I keep that in mind. (Not that I have done a very good job of staying within an archetype... I suspect doing so would require changing myself more than I like? But acting more consistently, really, is not a bad thing.)
[1] Seriously, like half my friends go to those anime conventions. I think it's kinda weird. My buddy runs http://i360.com - a cosplay photography website. He assures me it's not pornographic... but personally, I think that makes it more weird, not less.
B) $650K seems such a low amount of money, it's barely enough to hire 2-3 senior level developers for a year, and rent an office space. I have no idea how you guys launch startups with such small amounts of money.
You could hire lower-level dev staff, and you'll probably need some marketing and admin people, most of whom would be less expensive, and free more time up for a second round of fundraising (assuming that's a goal).
Meeting 75 investors is a great indication of much entrepreneurs (here Aihui) believe in what they are doing and ready to go to what extent.
Rejections can get on to you and worst is when they start making you doubt the very purpose of what you are doing. It becomes difficult to fuel yourself with passion all the time.
Some of the meetings even get you great feedback (along with VC boilerplates). But alls well that ends well.
It takes a special kind of person, or a fanatical belief in yourself or the product/company, to handle rejection after rejection after rejection. Supreme confidence in the company and the ability to channel that confidence to investors can be as valuable as a great engineer.
This is the kind of thing independent filmmakers would do to raise funds. There was no Internet or VC funds in those days to help. They'd pitch professionals who needed to invest: doctors, lawyers, accountants, dentists, and the like. Do people still go after them to raise funds for tech startups too?
Spending so much time on sites like HN and TechCrunch, it's easy to forget that there are over half a million businesses started in the U.S. per year, with only a tiny smattering of those being VC funded tech startups.
Determined entrepreneurs get money however they can, but mostly pay out of their own pocket or borrow from local banks or credit unions. VC funded businesses are few and far between (except in SF), but seem to get a lion's share of the attention.
Yea, if you venture outside the HN/500startups tech ecosystem, you notice that there are many, many companies working on the same problems that YC companies are attempting to solve. They just don't get any recognition on HN, which is a little dangerous for HNers.
Please don't get me wrong, but it seems a lot of work in the wrong thing instead of developing and improving the product, even more wrong if you are a solo. Just my opinion.
Maybe I'm misunderstanding, but $650k seems like a huge return on 3 months of one person's work, which they can then pour back into the product, hopefully improving it far more than they could've in 3 months without $650k.
OP is a middlebrow dismissal, but I'll bite. She went through 500startups, so it's pretty likely she wants to go through the VC path. Looking at the site and the product (sample food monthly subscription like birchbox but for food), the challenge is not do people like this or does the business model work, but how can I scale from 500 subscribers to 50,000 subscribers to get economies of scale and become profitable. Focusing on getting money to acquire new customers over focusing on improving design/product makes a lot of sense in this specific case.
In the context of that quote, she was referring to how that particular investor was from Singapore. So they might have talked about their favorite foods from their home as an ice-breaker?
Thanks for all the comments and encouragement. Everyone has a different experience and would love to hear other's fundraising experience.
I bootstrapped Love With Food 6 months before being accepted into 500 Startups. I'm a Rails developer and was able to build and market the product all by myself. At 500 Startups, I hired 2 more people to join the team. We've been very scrappy even after raising $650,000. Now we are a team of 8. The funding has definitely helped our business scale to a different level.
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[ 3.1 ms ] story [ 84.4 ms ] threadConcern: is 650k after 75 investors inefficient?
Though seriously, there are no overnight successes and no-one is just going to give you $1m regardless of what we read on HN.
I don't have my notebook at hand to cite the exact number, but Matthew Prince of Cloudflare pitched to something like 60 or 70 investors. This was with Project Honeypot in the bag, and a stack of existing users via that, and the basis for what became Cloudflare tested.
My point is: Even with the idea and execution you're not just going to get the investment.
I think the real thing that Aihui achieved in a short time was to demonstrate determination, perseverance... and in the words of Mark Suster ( http://www.bothsidesofthetable.com/2010/11/15/invest-in-line... ) showed that her company (led by her) is a line going up and to the right, rather than a dot. It was most likely the weekly check-ins and constant hard grind at the communication that helped her get the investment.
And he wasn't exactly a nobody at the time either.
Fairly standard way to go. Putting the breaks on to acquire funding to continue is common.
heh.
I've actually thought about this a lot. I always wear a company shirt, yeah, but I also tend to wear the same clothing all the time, too, on the theory that it makes me more recognizable, and that being recognized is good.
My theory (which may, of course, be wrong) is that in branding? being consistent and recognizable is far more important than looking good. But then, I'm trying to generate word of mouth for small customers, not trying to get investors, so the rules may be different... but it sounds like she has a similar philosophy.
Giving away a metric ton of shirts can have some other interesting effects. In the early days of my manufacturing company we gave away many shirts to people within the industry. We started getting calls about 'our people' attending events that we did not attend. It turns out that some of our customers really saw other customers at trade events, but there were so many people with our company shirt on that they impression was that we were attending in force - we werent at the trade event.
After giving away 20,000 shirts in a four year period, our customers started complaining about having too many shirts. So the technique does not last forever. It did always amaze me the delight a grown adult would show when they were given a $3 shirt. Almost always a better investment than a pen.
Best ideas: Have a decent looking shirt that people want to wear; change base shirt colors so people can have an option. Some people like blue, some like red. Give them what they want, it doesn't change the cost of the shirt.
Personally, I spend about 3x that, maybe 4x on small runs, and get nice T shirts. But then, it's rare I see people that I don't know/ that don't know they will be seeing me wearing the shirts. (and I've only given out a couple hundred) so it's possible that the 'blanket 'em with cheap shirts' strategy works better.
The difference, if it's a well known company, is that the talk is much shorter. "Oh, you work for Yahoo?" you know, they have the whole back story there. with my shirt? The conversation is longer, even if the level of enthusiasm is the same.
But yeah. It's a good point. And I'd probably have a better non-professional social life if I put some effort in to different outfits for several situations.
That's not normal and is certainly not required.
>That's not normal
that's... kindof the point, no? I'm trying to be abnormally recognizable.
(I mean, to be clear, I'm not a stinky hipster who goes for months without washing his jeans; I have a whole bunch of these things, and I wash them. They are just all the same.)
But yeah, I was joking with someone else I met a bit ago. "Yeah, I wear the same thing every day. Got a whole closet full of these. You know, like Steve Jobs... but without the good taste."
(I mean, I understand the advantages of fitting your clothing to the situation; that's not my question. My question is, if the situation calls for a suit, what's the problem with wearing the same style of suit every time the situation calls for a suit? the same style of T shirt when the situation calls for a T shirt, etc...)
Or, maybe you are just telling me to fit my clothing to the situation. Which I'm not doing right now, mostly as a conservation of effort thing, which is to say, I'm too goddamn lazy to bother. But I understand why, at least.
You're that uninteresting guy from the office that always wears the same clothes.....
But, uh, yeah. I mean, I'm still thinking that the opposite is more true. I mean, fictional characters often do exactly the same thing[1], really for similar reasons. And, as you point out, it's somewhat unusual, which is not boring, even if it might be offensive to some people.
On being more interesting... heh. I should re-arrange my closet like the tvtropes photo below, and post photos.
[1]http://tvtropes.org/pmwiki/pmwiki.php/Main/LimitedWardrobe
The whole same clothes thing you have going on is just odd. You don't need it and it just makes you strange rather than cool and interesting.
You're not a fictional character.
Seriously? you think /that/ is what makes me strange? I'd be "Cool and interesting" if I just learned to dress a little nicer? Oh man. You Java folks really /are/ different.
>You're not a fictional character.
No... but the popularity of cosplaying[1] in our culture aside, stories and archetypes are how we understand humanity. Marketers try to build the public perception of their company into a sort of archetype that consumers can understand and relate to. It's a model for understanding and predicting behavior. (Personally, I don't know if it's a good model... but it is... poetic?) To the degree that I try to construct a public persona, I keep that in mind. (Not that I have done a very good job of staying within an archetype... I suspect doing so would require changing myself more than I like? But acting more consistently, really, is not a bad thing.)
[1] Seriously, like half my friends go to those anime conventions. I think it's kinda weird. My buddy runs http://i360.com - a cosplay photography website. He assures me it's not pornographic... but personally, I think that makes it more weird, not less.
B) $650K seems such a low amount of money, it's barely enough to hire 2-3 senior level developers for a year, and rent an office space. I have no idea how you guys launch startups with such small amounts of money.
Without that info, this "story" is not worth much.
Sure, ok. Hire one experienced person to train & supervise some fresh-outs, and solve the harder problems.
Some of the meetings even get you great feedback (along with VC boilerplates). But alls well that ends well.
Congrats to Aihui.
Determined entrepreneurs get money however they can, but mostly pay out of their own pocket or borrow from local banks or credit unions. VC funded businesses are few and far between (except in SF), but seem to get a lion's share of the attention.
Source: http://web.sba.gov/faqs/faqindex.cfm
Isn't your company called LOVE WITH FOOD? Aren't you supposed to talk about food regardless?
I bootstrapped Love With Food 6 months before being accepted into 500 Startups. I'm a Rails developer and was able to build and market the product all by myself. At 500 Startups, I hired 2 more people to join the team. We've been very scrappy even after raising $650,000. Now we are a team of 8. The funding has definitely helped our business scale to a different level.