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What to do when you are BROKE: building your startup?

By paritoshsharma1231 on 38 Comments / 5499 views

I don’t exactly have an answer to the question above, though here’s the case:

I started up 4.5 months back. Have had a pretty exciting run till now. The product we are building is due for launch in January 2014.

The situation which Im in right now, Im sure many have gone through before, so I thought, lemme hear it from the guru’s!

Situation Startup:
team of 3 (full time), in love with life and what we’re doing. Absolutely inspired state of being. Product due for launch mid-January 2014. One of the winners of the Intel & UC Berkeley global challenge.

Situation Personal:
INR 2k in the bank, all personal savings used up. Home husband. Wife supporting!

What is making all 3 of us stick along through this?
 We are absolutely in love with what we’re building. Its not just a product. Its a way of being, a way of life for us. Take the company away and we will still be what we’re building.

What next?
The challenge is to sustain through the next 4 months, as we launch, build traction and then go to raise serious institutional money. We actually don’t need a lot even now, but sure giving up a good chunk of the company on the basis of a working prototype, (soon to launch, for a small sum) ain’t making sense (@Alok)?

I see 3 evident options:

  • Host events: we are already doing it (check out the DOERS) happening in Delhi

  • Rapid Prototype Building for startups: with a team which can deliver a working prototype at least for your desktop/ laptop screen, in 2 weeks, startups, we’re open for business

  • Consulting: businesses into marketing & growth

Any other novel ways? I’d be happy to know and explore!

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38 Comments

  1. I believe, if you can share the investment amount required and expected ROI and if possible, detailed plan, then you may get an angel investor.

  2. Firstly – congrats! You guys are definitely going to do wonders! 🙂 I’m definitely not an expert but my two cents worth – Yes, definitely don’t waste time on raising institutional funding – focus on your product till you launch. Unless you have a friend/family member who wants to invest and will send you money in the bank quickly! 

    Have you tried random freelance jobs via Odesk etc? Even if your team spends 2 hours a day each on them – it might help with the basic sustenance costs right?

  3. I can connect with you as I am also an entrepreneur and working with my saving, and my wife supports us as a family 🙂

    Now, do you have any early adopters of your product who absolutely need/love it? If not, may be a good time to look for them, you might be able to sell first feature that you are building, or part of the solution. I realize this is only possible in some cases, but worth a try.

    If you don’t mind sharing what you do and what problem you intend to solve, TRH is a good platform to talk to early adopters and test waters before you build the whole thing..

    All the very best..

  4. Borrow

  5. I completely agree with Natwar as you might be able to sell first feature that you are building, or part of the solution.

    It will definitely help and plan your strategy in product development as well as future business development with market understanding.

    All the very best

  6. Thanks Rahul. The right time for us to raise angel money will be in March 2014. When we would have usage numbers and traction to show.

    Raising money now is selling the company too cheap!

  7. Thanks Prukalpa!

    Kinda tried a local version of Odesk (getting work from people we know). In the drive to deliver quality stuff, we end up putting in more time than 2 hours each day to an outsourced project.

    For the same reason, keeping the philosophy of Hashtaag alive, we are hosting interesting gatherings each month, all over the country. Starting from our first DOERS gathering in Delhi. We are inviting people to contribute to the DOERS community with anything from INR 100 to INR 10,000. People sure are liking and contributing!

    I think if we get the support of sponsors to the DOERS, it will sure help us sustain Hashtaag too!

    You can check out the DOERS here: https://doers.collisionable.com/

  8. Welcome to the ship Natwar 🙂 exactly the case with me!

    In 1 line, this is what we’ve built:
    hashtaag is a cool way to share your passion projects with the world and find collaborators, who help you overcome obstacles.

    Think of it as a kickstarter, where people don’t back you with money, but they back you with real expertise and their networks! They collaborate with you to get your passions to life 🙂

    Ohh and the kind of feedback we are getting from people who’ve seen the early version of the product is amazing. Inspiring enough for us to keep moving ahead!

    The very best for your venture too, lemme know if I could be of help 🙂

  9. 🙂

  10. What if you were to hashtaag yourself ?

    – You’ll get your product out

    – You’ll have a case-study to show investors 

    – You’d have eaten your own dogfood (quoting what Microsoft says , not meant to be derogatory!)

  11. Paritosh

    We are an angel fund called B-Hyves. But Not just that.

    Do look us up at http://www.b-hyves.com

    ready to hear from you when you are.

    you can reach me at arun.kumbhat@b-hyves.com

    Cheers

    Arun

  12. Some HARD thoughts:

    • This is the worst time for you to look for investment. Never look for investment when you need money

    • The time you waste in looking for investment, you are better off building your product and focusing on customer

    • Why do you not have a prototype out yet? Please read Lean Startups book / blog and follow it

    • When you launch in Jan ’14, be ready to launch something that (potentially) no one wants. You have spent far too much time on the product

    • If its B2C product, give it another year at least to monetize

    • If its B2B product, you should have sold it first and then built it. That would give you money to survive.

    • You mention time to raise angel money will be March 2014. Thats 4 months AFTER you run out of cash – BAD planning. You should raise money 3 months BEFORE you run out of cash

    If I were you I would do the following:

    • Find a relative, close friend, rich neighbor and borrow 6 months of cash that you need for survival (nothing less)

    • Buy lean startups book and read it up in 1/2 days

    • Release prototype ver 1 by Dec 15th

    What I would NOT do at this stage:

    • Do any sort of freelancing job

    • Do any sort of consulting

    • Do any event (DOERS?? focus on product guys.. )

    Best of luck!

  13. You are getting feedback from people who have seen early version..that is good to know 🙂 

    At the end of the day, who pays you the money? (trying to understand business model)

    Also, please please be very careful of people giving great response and never coming back to a service to use it. I have seen/experienced this a lot 🙂

    All the very best..

  14. I read this somewhere i don’t remember:

    At the earliest, get a first,happy customer who can talk about your product to his friends.

    Thanks.

  15. paritosh,

    didn’t have the heart to mess up the top of your post – so messed the bottom!

    hang in there!!!

  16. Love also needs money to sustain my friend!

    Looking at your situation and your requirement along with your bank balance your roti,kapda makaan are all looked after; so you really are not in such a bad situation. Nothing that you cannot handle for a few months.

    I think you should just postpone all payments and just concentrate on your product. You seem to have a great background and I am sure that you guys have already tested feasibility and scale for your product so why waste time writing a post. Get down to business and get that product rolling out sooner. Less money only means lesser time for you as your deadline has moved closer.

    You must have heard the story of the pregnant dear surrounded by Fire, a hunter, a lion and the river. You know what the dear did…your situation is less different!

  17. Hi Natwar,

    What I will write now will be shocking if nothing less, but that’s how it is!

    We have built the platform called Hashtaag, with no expectations but love. The vision is very different. What drives us crazy men is, if we can make you, me, everybody out there live a life of passions.

    We all have passions. Most of us don’t pursue them OR we leave them mid-way due to obstacles that we face.

    Eg: if I leave building the startup only coz, I am broke. No sir.

    The way everyone is reaching out with ideas on this discussion thread, on Hashtaag people from all around the world, will reach out to you, helping you overcome your obstacles and finally make your passion project come to life!

    So I am not concerned about who pays me the money for now. Its almost as if we are in a meditative state of being. Somehow I feel (@Alok) can comment on being in this meditative state better than me.

    The one’s who are giving great response are also helping out with our early beta invites catching quite a craze: in less than 36 hours we have some few hundred folks asking for more!

    Here’s your link to the pre beta invite: https://hashtaag.com/?ref=P8pkM

    I know you are making all the sense up there! Every business must make money. So will we. For now, its more like a prayer, its meditative love for us!

  18. @Mahesh awesome stuff. Absolutely! We will and thanks for saying this Hashtaag ourselves! That’s the sauce 🙂 Infact Hashtaag will be one of the passion projects on Hashtaag once we are LIVE!

    I am happy about one thing. This discussion thread! People actually reaching out with ideas and support. And real ideas, no crap!

    This is exactly what will happen on Hashtaag! Your passion projects will get discovered by people around the world and they help you make them come alive!

    We sure will Hashtaag ourselves!

    Here’s your invite to the early beta: https://hashtaag.com/?ref=P8pkM will keep in touch with you and get your feedback once we are LIVE!

  19. Hi Sarang,

    I loved every bit of what you have said in your comment. Absolutely every bit.

    • We are B2C: monetization aint our top priority for now

    Releasing a prototype version by Dec 15th. We are putting it together to be around that day and roll it out in a very closed community.

    January will be the launch in India, for startups!

    • Raising money: bad planning

    You are right. The planning went kaput.

    • DOERS: read what Paul Graham says: do things that don’t scale and part of your growth strategy

    Thanks and will keep in touch with you. Do drop in : https://hashtaag.com/?ref=P8pkM and register for the beta invite!

    Be Hashtaaged!

  20. Naresh. Absolutely!

    In less than 36 hours, we have a couple of hundred folks who have registered for our pre beta release. Heres’ your invite:  https://hashtaag.com/?ref=P8pkM

    What we have built is not a business venture. Its LOVE! Its a meditative state of being, where our passion is to give power to people around the world, to overcome obstacles and fulfil their passions!

    See you getting Hashtaag’ed soon!

  21. You’re absolutely fantastic. Hey absolutely Im not throwing the towel in.

    This too shall pass. We are on full steam!

    I talk to people when I deliver talks at colleges, see the blind man who can’t see the world. That poor kid who’d on the road, the army jawan who’s training to take the bullet.

    My issue is nothing. Its deal-able! And we will deal with it. Deliver a great product to the world and make this world a better place 🙂

  22. @Pawan yes it does!

    As I wrote to Asha up in my answer. My situation is nothing as compared to so much more in this world. I mean every bit of it when I say it.

    The philosophy of Hashtaag is sharing with the world and I shared my passion project and the obstacle that Im facing. Look what the awesome Rodinhooders did!

    Helped with all kinds of thoughts/ action items and ideas!

    We’re absolutely at work sir. Every moment of it. Infact you won’t believe how MAGICAL this post is for me and the team at Hashtaag!

    Lets take a look at what happened at this post:

    1. I posted about a real obstacle which Im facing building my passion project (my venture)

    2. Rodinhooder’s shared their expertise and experience

    3. One of them even shared his network

    This is precisely what will happen on Hashtaag! Your passion projects in life (whatever they might be) will get discovered by people around the world, who will help you overcome obstacles by doing what you did right here!

    So in the worldly perspective, what happened is no less than a proof of concept for me!

    Though this is only to say that writing this post is about the philosophy of getting Hashtaag’ed!

    Thanks for your amazing answer. I so wish, I could give you Karma (which you will earn on Hashtaag) for helping people out!

    Though here’s a pre beta invite: https://hashtaag.com/?ref=P8pkM

    Thanks for being who you are!

  23. Paritosh, I love your passion and optimism. But, I would really echo what Sarang has said. Having an early release that people can try out and give feedback is critical.

    I don’t know what the collaboration model is in hashtaag, but there will be assumptions that you have to validate early. Examples I can think of: What if you realize that plain voluntary collaboration is not catching up and you have to add in some fun/gamification aspects (like leaderboards, points etc). What kind of help can I give? Is it help them with my network? Is it give my time to physically go and volunteer? Are “location” aspects important? Do you need a mobile-app to really drive engagement or is a website enough?

    Its better to find the core pieces of the product and have people actually try them out early (even if it is just limited set of friends who can see it). For example, I signed up because I am curious about hashtaag, but that doesn’t necessarily mean that I will be an active user after it is launched (it all depends on the details of hashtaag).

  24. HI Guna,

    Many thanks for replying and the kind appreciation.

    Absolutely I understand, many of the sign ups would be ‘curious’ sign ups at this stage and that we must do all that is possible to ensure that we retain YOU and not just that. Grow with YOU 🙂

    The pointers you shared:

    • We got that feedback when we presented at Silicon Valley: hence we introduced Karma (then came the stage, can Karma be traded?) and the people out there who are genuinely willing to help and create opportunities (our users), said NO. Hence Karma makes you more visible on the platform globally

    • What kind of help: 1. Your Experience/ Expertise , 2. Your network

    • Physically go and volunteer: the world is changing. We actually have people who have written to us from Kenya, Los Angeles (I met this guy in Delhi), who are ready to travel around the world and be part of passion projects (there’s a lot of interest shown by people who are willing to explore startups as passion projects) – this way they get to know the real Obstacles the startup is facing and how they can add value

    • Absolutely we need a mobile app: though we are launching the large screen version in January and then will learn from users as to what mobile experience will they want

    And let me for the firs time share with you something very amazing which we learnt from this guy from LA. He said: what you guys are doing is one of the pieces of human evolution.

    A few years back no-one imagined, people could fund random people around the world. People could help random people around the world. Kindness could spread itself.

    Humans are evolving and Hashtaag is part of the evolution. Its about how you could help someone overcome obstacles and be part of their passion projects.

    People around the world coming out of their closets and living their passions, the world will be a brilliant place to be!

  25. Will definitely try out as soon as you launch.

    Best of luck! 

  26. Thanks Guna.

    Not only for being supportive but also, with the key thought around user retention. One thing that we all will maintain at Hashtaag is quick responses, service and building better.

    We won’t be a perfect product, but the day we get the world together for lets say someone in Kenya whose passion project is to build a school for the needy kids there, we will define success that day!

    I will keep in touch with you throughout and take feedback and help from you. Infact if you’re open, I’d be happy to get on a Skype call and show you what Hashtaag looks like and see your reactions/ feedback/ ideas?

    If you have people in your life, who are yet not living their passions in life, do share Hashtaag.com with them.

    We will make the world a happier place one successful passion project at a time.

  27. Kishor, thanks buddy.

    We’re a B2C product. So can’t really break out a feature and sell. The market size for us is the world. Everyone who has at least one passion in life to live.

    Checkout: https://hashtaag.com/

  28. I think working on events, prototypes etc for additional revenue now will remove the focus from all important launch. focus only on the idea/company you are building.

    Best option is to raise debt (preferably no interest) from friends, family & fools. I was faced with same situation 2 years ago. My 3 friends trusted me & gave me the money then. You can also give them tiny equity, only as goodwill gesture, but money received is debt.

    all the best.

    Milind

  29. A very simple thing I did when I started my own practice as a CA. Just try to work for a few hours as visiting faculty to MBA colleges in your city. It will pay you well and keep you floating. A few hours would not disturb your schedule. Try it – have already suggested to 3-4 new start-up people in my circle and it worked.

  30. Hey Paritosh !

    Can you please send me more details about your company, or if you can convince me about your product in some other way…

    Now here is the deal, if I am convinced about your product, after your presentation / talk, I will support you with Rs.5000 per month for next 6 months.

    I DO NOT need any stake. I DO NOT need any equity in return of that Rs.30000 odd some of money.

    Also, you are free to use the way you want. I can give this you in writing on email and on stamp-paper (if you send it across to me).

    I know this is kind of peanuts, but at least this is something. Also, I would have to save this amount by curtailing my daily expenses by Rs.170 odd out of very meager amount that I allow myself, while working on my own startup.

    May be it would be enough to pay your server rent.

    Let me know, if this sounds something to you…

    Cheers !

    Abhishek

  31. hello Paritosh, hashtag sounds interesting. I would have loved to see pitch/more detailed information about project than your current article. i do understand your need and feel bad that you are in this situation right now but i still feel that you should concentrate on your product launch.

    Best of luck and many wishes.

    gaikwad.abhijit@gmail.com

  32. Hi Abhijit,

    Thanks for the kind words and signing up for the early beta!

    The page: https://hashtaag.com says it real simple, how hashtaag is for creators and collaborators around the world. Its for you, me everybody!

    hashtaag is the kickstarter, where you find people around the world who collaborate with you to help you overcome your project obstacles.

    As you begin to overcome your project obstacles, you get more confident of bringing your project/ dream to reality. That’s when you go and raise funds from the crowds!

    The team is absolutely committed to building not ‘just a great product’. Many teams can do that. We intend to make real impact. hashtaag is not just a venture. Its about YOU!

    Imagine, if you were to collaborate with teams around the world who are working on projects which will impact things around them. Solve problems and one project at a time, make this world a better place!

    Do help us share the love, here’s your unique link: https://hashtaag.com/?ref=W2Okf

    We’re always looking to get better, your feedback and support sure will be great!

    Thanks,

    Paritosh

  33. Hey Abhishek,

    First, THANKS, a great heartfelt thanks!

    Second, YOU ARE BRILLIANT. Mathematics rolled back to INR 170 a day seems super achievable, Im sure for a lot of people out there!

    What I truly respect is people with straight minds, black or white, no middle paths! Kudos to you!

    I super appreciate your support. More people like you out there can change things around for entrepreneurs who are trying to make this world a better place for sure.

    For now, Im putting up with all odds and marching ahead. And trust me, these times are making the entire team super inspired to make something really worth while.

    I’d love to know more about you and if your’e in Delhi, lets grab a coffee: ps@collisionable.com 🙂

  34. Sure thing Sanjay. Im already delivering lectures.

    Infact a stint which I do every year is take lectures as a visiting faculty for the freshman batches of IIS Officers of the Govt. of India. which does not pay even the petrol cost, but sure immense satisfaction, of building officers, challenging them, to be GREATS. And not just another league of babu’s!

  35. Also, thanks for igniting the idea of crowd funding hashtaag, in a very different way!

    Google IPO’ed a one of its kinds. It was interesting. Im sure we can come up with something to get hashtaag to the world!

  36. Great Paritosh.

    Wish you best of luck. looking forward for product:-)

  37. Hey Paritosh !

    Thanks for accepting my proposal !

    I shall write you on the email address provided.

    Also, You need not return money, if you do not get funds for the product. If you do get funded, just return the principal. That’s it.

    I am based out of Pune at present, but might come to Delhi in future. A lot of my friends are there. Till then we can e-catch up…

    Cheers !

    Abhishek

  38. hey paritosh….

    so many of us have wondered what happened to you NEXT?

    pls do share how you’ve been and what you’ve been up to!

    your journey seems to be the journey of so many others….

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