I've had trouble finding case studies of B2B development deals. My past experience includes lots of milestone-based development as a contracted solo dev.
Now, I'm bootstrapping (in stealth) a B2B service with 3 employees. The basic service exists. To continue funding, I can get VC investment, or I can get business customers to pay up-front development costs, to customize to their use case.
Let's say for a normal customer, the service costs $X / month. I want to write a deal with a business customer where they pay $Y up front, for us to build the service for their use case. Maybe in return, we discount their usage cost:
* their cost is $ 0.5 * X per month for Y/X months, OR
* their cost is $ 0.5 * X per month for (1.5 * Y/X) months (like a loan with interest), OR
* their cost is $ 0.7 * X in perpetuity (permanent discount), OR
* no discount at all, and we the cost to the customer as early access.
Is the long-term pricing model seat/usage based? Value based?
Consider how much you want/need to be charging customers in 3-5 years time and work backwards from there. Be open with early customers on these prices. Offer discounts (sometimes even permanent) against these target prices for early customers/design partners.
Pricing is something I struggle with too. I really need to figure out my pricing model and price point as it makes a difference to some deferred architecture decisions. I can't put the decision off much longer as I'm getting to the point where I need to make a decision.
The struggle is the name of the game. Heck, it starts with the word entrepreneur -- I'm struggling to type it properly and even pronounce it all the time :)
My biggest issue at the moment is that development of the MVP is taking way longer than I had initially thought. It's just me working on it and it has turned into a real grind. I am just so ready to get this done. I could hire contractors, but quality contractors are expensive and cheap ones don't deliver quality. Either way I would be burning runway and I'd rather save my money for later.
My other issue is that it is just me sitting at my home office working. I don't really have anyone that I can talk to. I started this venture after I took a sabbatical from work, so everyone IRL just thinks I'm unemployed farting around the house all day. Whereas I am working 6 days a week, I'm just not getting paid. I have tried to join some online communities, but there are just people stumping for their own start ups. I am considering joining a coworking space next year that is geared toward startups. The problem is that is also expensive, especially considering that next year I have to pay full freight on my health insurance.
Right now I am living off my investments. I have done well this year, but like others I am starting to be concerned that we might be in a bubble. I am pretty conservatively invested, but it would suck to have a prolonged 20 or 30% draw back.
I really need to bring on a cofounder to help with business development. Though I have to find someone willing to work for equity only as I don't have enough cash to pay them a salary.
So I guess you could say money is one of my biggest struggles.
Man I really feel you, being a solo founder is tough. If it's possible for you to relocate temporarily Antler has a accelerator-esque program. They'll pay you a tiny stipend to move to Austin or NYC depending on which location you get into, for the duration of the program (5-6 weeks). You'll have like minded people around you giving you an opportunity to maybe find a co founder and get some motivation.
At the end you'll get a chance to pitch and get 100+k(varies by location) in seed and then another shot at getting funding.
Tbh their deal is doodoo compared to YC but it's a lot less competitive and you'll be out of the rut you're in right now.
As for the MVP taking time... I think it's perfectly fine, probably better even. The bar to impress it's very high now, specially since llms have made it pretty easy to add polish. I completely understand that feeling where you've already whittled your idea down to it's bone but you still can't get it done. That happens, I've faced that same problem numerous times. Whenever we thought we'd done enough we'd go out to testers and they'd point out the exact rough edges we'd intentionally tried to ignore to ship it out faster. Most of the time those edges put off people completely.
All you need to know is your target audience. If it's enterprise, having that added polish will make or break your deal if they're larger companies, specifically when they're customer 1-2. What won't matter is having 1-2 more metrics in a dashboard or maybe a customizable layout. But let's say you're report generation is a csv file that's generated client side with nothing asynchronous or email based, that would raise some eyebrows about the expected quality of service. This isn't to say you won't have understanding and patient customers, however you'll always have to earn it first.
Get the basics right, make sure it's all functioning together well and hopefully it'll all go well. The hardest part is always bd, that's where you'll truly start to feel like Will Smith walking around with your bone density scanner.
Have you considered slashing features in order to speed up your MVP release? Our own "must have" features are often not must haves for users. I was in the same boat a few years back and released a cut down version missing what I thought were must have features. Many years and 1,000+ users later no one has ever requested the missing "key features."
I have the same issue as him but the issue is that users today expect a certain level of fidelity otherwise they will stick to incumbents.
I think your advice worked back in 2010-2018 when the bar was very low.
My audience literally didn’t want to use my product because while it was solving their problem it didn’t have the same level of fidelity as their current stack. So I had to spend a lot of time improving it.
These days the bar is so high. Unless you really do find something unique that has not been technified.
These days it’s mostly a David vs Goliath style of battle.
There’s a lot to unpack. I belong to a mastermind with multiple seven and eight figures founders. If you want to talk about some of this things, send me an email (my username @ gmail)
Booting up startup (even the startup needs to be started, it doesn't start by itself) is a constant struggle. Almost every simple and basic sounding action/operation/step causes heavy reaction/resistance by the reality. The reality just doesn't want you to succeed.
I am lucky to run my startup with my own funding, and it causes me to be very responsible with spending.
Finding PMF is the most mysterious thing I have ever encountered. How is it possible to sell anything in this world? People who can sell are the most valuable people in this world.
I guess I have had "burnout" so long, that I cannot anymore feel it. It has now become the feeling of accepting and observing the reality as realistically as it is. "It's just life.", says my friend when reality slaps/hits on face.
Technical problems for technical startups and for everyone else, normal life.
Customer acquistion, individual case of PMF? Mysterious.
Co-founder issues. Hopefully you can resolve things out, because it is the only good way out for the co-founders and therefore for the company. You need to have a real talk.
Runway stress? Time is money (because of expenses), so do things now that leads to making deals (= your product/service + marketing/selling). Do them now. Now. Do it.
Yeah, the struggle and pain is hard. So hard. Let us wish power to for the survival of each other. Good luck, and don't fuck it up (message directed also to myself).
PMF is usually the tricky one. You should focus and talk the people you are trying to sell your product to even before you build anything. Starts with asking and identifying if they even have a problem you are trying to solve, how are they solving it today, is it even important to them … You can get sooooo much info just by talking to you potential customers, users … And, it’s really mind-boggling how few startup founders ever really talk to their customers.
I know what you mean by charting/mapping the problems and their solution. But I think/feel this method doesn't work anymore, it feels like "2012-2022 world". How can one sell something that doesn not exist even by the seller? You are selling just the idea, not the implementation. Of course that could lead deal also, but it's more of people-to-people trust/business, than about real existing products.
And now in the "post-AI" reality, trusting anything people sell is hard.
> I guess I have had "burnout" so long, that I cannot anymore feel it.
I've had every possible type of rejection: from banks, financiers, partners, accelerators and developers, over three years of 'booting up startup'. I joke that if I ever have an office one day, I'll print them all out and use them as wallpaper.
And after all I'm still at the very beginning.
I can give only one piece of advice: cold water. 7-10 minutes in the winter sea (<10°C) makes me feel normal. In Finland, probably 3 minutes will be fine. It may sound too obvious for being in survival mode, but any regular physical exercise somehow helps to works under startup pressure.
the struggle is believing I'm a founder of a startup when all I have is an idea and some code
Isn't that most founders, at some stage? Maybe your idea is great!
I've had trouble finding case studies of B2B development deals. My past experience includes lots of milestone-based development as a contracted solo dev.
Now, I'm bootstrapping (in stealth) a B2B service with 3 employees. The basic service exists. To continue funding, I can get VC investment, or I can get business customers to pay up-front development costs, to customize to their use case.
Let's say for a normal customer, the service costs $X / month. I want to write a deal with a business customer where they pay $Y up front, for us to build the service for their use case. Maybe in return, we discount their usage cost: * their cost is $ 0.5 * X per month for Y/X months, OR * their cost is $ 0.5 * X per month for (1.5 * Y/X) months (like a loan with interest), OR * their cost is $ 0.7 * X in perpetuity (permanent discount), OR * no discount at all, and we the cost to the customer as early access.
Is the long-term pricing model seat/usage based? Value based?
Consider how much you want/need to be charging customers in 3-5 years time and work backwards from there. Be open with early customers on these prices. Offer discounts (sometimes even permanent) against these target prices for early customers/design partners.
Pricing is something I struggle with too. I really need to figure out my pricing model and price point as it makes a difference to some deferred architecture decisions. I can't put the decision off much longer as I'm getting to the point where I need to make a decision.
The struggle is the name of the game. Heck, it starts with the word entrepreneur -- I'm struggling to type it properly and even pronounce it all the time :)
My biggest issue at the moment is that development of the MVP is taking way longer than I had initially thought. It's just me working on it and it has turned into a real grind. I am just so ready to get this done. I could hire contractors, but quality contractors are expensive and cheap ones don't deliver quality. Either way I would be burning runway and I'd rather save my money for later.
My other issue is that it is just me sitting at my home office working. I don't really have anyone that I can talk to. I started this venture after I took a sabbatical from work, so everyone IRL just thinks I'm unemployed farting around the house all day. Whereas I am working 6 days a week, I'm just not getting paid. I have tried to join some online communities, but there are just people stumping for their own start ups. I am considering joining a coworking space next year that is geared toward startups. The problem is that is also expensive, especially considering that next year I have to pay full freight on my health insurance.
Right now I am living off my investments. I have done well this year, but like others I am starting to be concerned that we might be in a bubble. I am pretty conservatively invested, but it would suck to have a prolonged 20 or 30% draw back.
I really need to bring on a cofounder to help with business development. Though I have to find someone willing to work for equity only as I don't have enough cash to pay them a salary.
So I guess you could say money is one of my biggest struggles.
Man I really feel you, being a solo founder is tough. If it's possible for you to relocate temporarily Antler has a accelerator-esque program. They'll pay you a tiny stipend to move to Austin or NYC depending on which location you get into, for the duration of the program (5-6 weeks). You'll have like minded people around you giving you an opportunity to maybe find a co founder and get some motivation.
At the end you'll get a chance to pitch and get 100+k(varies by location) in seed and then another shot at getting funding.
Tbh their deal is doodoo compared to YC but it's a lot less competitive and you'll be out of the rut you're in right now.
As for the MVP taking time... I think it's perfectly fine, probably better even. The bar to impress it's very high now, specially since llms have made it pretty easy to add polish. I completely understand that feeling where you've already whittled your idea down to it's bone but you still can't get it done. That happens, I've faced that same problem numerous times. Whenever we thought we'd done enough we'd go out to testers and they'd point out the exact rough edges we'd intentionally tried to ignore to ship it out faster. Most of the time those edges put off people completely.
All you need to know is your target audience. If it's enterprise, having that added polish will make or break your deal if they're larger companies, specifically when they're customer 1-2. What won't matter is having 1-2 more metrics in a dashboard or maybe a customizable layout. But let's say you're report generation is a csv file that's generated client side with nothing asynchronous or email based, that would raise some eyebrows about the expected quality of service. This isn't to say you won't have understanding and patient customers, however you'll always have to earn it first.
Get the basics right, make sure it's all functioning together well and hopefully it'll all go well. The hardest part is always bd, that's where you'll truly start to feel like Will Smith walking around with your bone density scanner.
Have you considered slashing features in order to speed up your MVP release? Our own "must have" features are often not must haves for users. I was in the same boat a few years back and released a cut down version missing what I thought were must have features. Many years and 1,000+ users later no one has ever requested the missing "key features."
I have the same issue as him but the issue is that users today expect a certain level of fidelity otherwise they will stick to incumbents.
I think your advice worked back in 2010-2018 when the bar was very low.
My audience literally didn’t want to use my product because while it was solving their problem it didn’t have the same level of fidelity as their current stack. So I had to spend a lot of time improving it.
These days the bar is so high. Unless you really do find something unique that has not been technified.
These days it’s mostly a David vs Goliath style of battle.
There’s a lot to unpack. I belong to a mastermind with multiple seven and eight figures founders. If you want to talk about some of this things, send me an email (my username @ gmail)
Booting up startup (even the startup needs to be started, it doesn't start by itself) is a constant struggle. Almost every simple and basic sounding action/operation/step causes heavy reaction/resistance by the reality. The reality just doesn't want you to succeed.
I am lucky to run my startup with my own funding, and it causes me to be very responsible with spending.
Finding PMF is the most mysterious thing I have ever encountered. How is it possible to sell anything in this world? People who can sell are the most valuable people in this world.
I guess I have had "burnout" so long, that I cannot anymore feel it. It has now become the feeling of accepting and observing the reality as realistically as it is. "It's just life.", says my friend when reality slaps/hits on face.
Technical problems for technical startups and for everyone else, normal life.
Customer acquistion, individual case of PMF? Mysterious.
Co-founder issues. Hopefully you can resolve things out, because it is the only good way out for the co-founders and therefore for the company. You need to have a real talk.
Runway stress? Time is money (because of expenses), so do things now that leads to making deals (= your product/service + marketing/selling). Do them now. Now. Do it.
Yeah, the struggle and pain is hard. So hard. Let us wish power to for the survival of each other. Good luck, and don't fuck it up (message directed also to myself).
PMF is usually the tricky one. You should focus and talk the people you are trying to sell your product to even before you build anything. Starts with asking and identifying if they even have a problem you are trying to solve, how are they solving it today, is it even important to them … You can get sooooo much info just by talking to you potential customers, users … And, it’s really mind-boggling how few startup founders ever really talk to their customers.
I know what you mean by charting/mapping the problems and their solution. But I think/feel this method doesn't work anymore, it feels like "2012-2022 world". How can one sell something that doesn not exist even by the seller? You are selling just the idea, not the implementation. Of course that could lead deal also, but it's more of people-to-people trust/business, than about real existing products.
And now in the "post-AI" reality, trusting anything people sell is hard.
> I guess I have had "burnout" so long, that I cannot anymore feel it.
I've had every possible type of rejection: from banks, financiers, partners, accelerators and developers, over three years of 'booting up startup'. I joke that if I ever have an office one day, I'll print them all out and use them as wallpaper.
And after all I'm still at the very beginning.
I can give only one piece of advice: cold water. 7-10 minutes in the winter sea (<10°C) makes me feel normal. In Finland, probably 3 minutes will be fine. It may sound too obvious for being in survival mode, but any regular physical exercise somehow helps to works under startup pressure.