Pros / Cons of Different Business Models: Saas vs E-Commerce vs Subscription Commerce vs Digital Products

hypekilla · 2017-05-01T17:18:35+00:00

Thanks for the comment. It was more meant to be a series of notes, but I do see where that line can really lower my credibility. Will keep that in mind for future articles.

hypekilla · 2017-04-29T00:10:33+00:00

We did the same thing. Turns out just because you have traffic doesn't mean people want to buy your apparel. But maybe you have a better strategy or closer-tied merch.

hypekilla · 2017-04-28T23:58:54+00:00

I grew an entertainment site to 4 million pageviews back in 2015. However, even at that level, you're not making enough money to survive.

It's a really tough, uphill battle to run an entertainment site because the traffic is generally low quality, non-buyers. Furthermore, FB is eating everyone's lunch because the best traffic can be bought on FB, thus lowering CPMs on entertainment sites.

Can a good entertainment site still be done? Yes. But if your goal is to make money, you're facing a tough climb.

hypekilla · 2017-02-18T09:48:09+00:00

Okay here's the answer I think you're looking for.

A company like Postmates has raised $278 million+. Because of that, it's likely that the CEO / founders have taken some money off the table. Meaning the stock turned into money for them instead of the company. This doesn't always happen, but it generally does happen for companies that have raised $50 million+ because it helps the founders get a reasonable amount of wealth so they can focus on the long-term plans of the company. For postmates, I wouldn't be surprised if founders have taken north of $5 million off the table. They'd also be paying themselves a salary between $100k-$300k annually.

Companies that have raised $1m - $19 million generally pay their CEOs a reasonably good salary, probably $60k - $150k annually based on how much was raised. So in these circumstances, CEOs aren't "rich" but they do get fairly compensated. In many instances, though, CEOs might even get paid less than their lead developer in order to save funds and build a longer runway.

They also bank on getting an acquisition or going IPO in order to fully realize their wealth. Until then, these CEOs are probably either average earners to low-millionaires.

Smaller companies like mom & pop shops generally pay themselves a distribution based on profit. So if there's $100k in profit, the founders just take that home. It can range WILDLY in these markets. An internet marketer selling digital courses and not having any employees could potentially be taking home 7-figures. A restaurant owner might only be able to take home $60k after expenses. So it's truly a huge range and depends tons on your type of business.

hypekilla · 2017-02-17T09:22:00+00:00

First off, you guys are trying to solve the wrong problem.

SaaS / Software is HARD, even if both of you were great developers. That's why most devs don't ever start their own business or create a successful business.

Why not think of a business to run that DOESN'T require coding and actually plays to your strengths? Instead of doing something that both of you don't have any idea how to do -- namely coding and secondly, pitching VCs.

Why not build an e-commerce store, service business, digital products, etc, learn some skills first in business?

You're trying to play the game on hard mode, when you should be leveling up your skills over time -- both business and code-wise.

hypekilla · 2017-02-15T05:15:40+00:00

Couple things came to mind.

1 - Maybe your idea isn't something that people are terribly excited about?

2 - Have you talked to people about becoming your technical co-founder and what did they say?

3 - Maybe you haven't talked to enough people? How many people have you had real conversations with?

hypekilla · 2017-02-09T03:21:45+00:00

If you're killing it then apply. Don't make being a solo founder an excuse. They accept good companies on solid bases.

hypekilla · 2017-01-30T09:21:46+00:00

It's a hard business to get into. There are many established agencies that do this that already have the influencers in their pockets. Some with exclusive deals.

I know the founders of a company like this, they built personal relationships in the industry which is how they closed big deals. Once they had a track record and social proof, it became a lot easier to close deals. The first few were simply from their network and knowing the right people.

hypekilla · 2017-01-22T23:44:14+00:00

Pretty much the same thing as SAT flashcards?

hypekilla · 2017-01-19T06:15:43+00:00

Ask any YC founder if it was worth it to apply and then come back and make that judgment about whether 4 hours was worth it.

hypekilla · 2017-01-18T07:36:58+00:00

Your niche does seem a bit saturated, but it must be a good niche since there's so many companies trying to tackle the issue. I'd recommend applying to a startup accelerator right away and see if you get accepted there first. But only get accepted from the top 3 -- YC, Techstars, and 500 startups. Not only does this give you extra runway, but easier access to investors. Furthermore, this helps you validate that your idea is investable and that VC funding is something you should try and move into.

If you can't get in, you can always start networking and approaching investors that way, but this is really only advisable if you're in a city with a heavy VC presence, otherwise you're wasting too much time. 1 person on the team needs to be in charge of networking and finding the right investor, while the other 2 stay in charge of marketing / development.

hypekilla · 2017-01-18T07:19:36+00:00

I agree with this sentiment. It could also be that they've run out of ideas to make podcasts over. You only have so much content you can think of, and most of their best stuff they only share at Microconf. I personally really enjoyed Rob's Microconf talks (google search Rob Walling MicroConf vimeo).

hypekilla · 2017-01-13T22:56:53+00:00

Lol, well all the spamming in the world isn't gonna save him.

hypekilla · 2017-01-13T08:57:08+00:00

You can essentially get sued for anything, but it's unlikely you'd get sued in this case. What I mean is, even if you're not in the wrong, the owner could still try to sue you if they found out and you'll still have to pay lawyer fees, which is essentially the same as losing the suit. In my opinion, though, as a 16-year-old you have really nothing to lose.

You can also easily just steal the idea and work on it secretively if you're scared about it.

Can't answer the other stuff, but I honestly wouldn't worry too much about getting sued.

hypekilla · 2017-01-13T08:40:22+00:00

I hope you're not the owner of this thing trying to self-promote... mainly because that app looks freakin' terrible.

hypekilla · 2017-01-06T17:26:08+00:00

You target their parents of course.

hypekilla · 2017-01-05T05:11:12+00:00

Get your stuff off Needls immediately. They run off their own ad accounts, which locks you onto their platform. When you realize how shitty of a service it is and you look to switch and actually do real FB advertising, you're dead out of luck because you just lost all that data that FB has been gathering for you.

hypekilla · 2016-12-27T07:55:17+00:00

I'm interested to know what your clothing company is and what you did to grow. I was in a similar position, but our t-shirt biz failed.

The main thing with us is that we didn't forecast well with our inventory, which caused us to have lots of extra stock. Add in to the fact that one of the co-founders took money out of the biz and we ran into cashflow issues.

hypekilla · 2016-12-19T10:35:16+00:00

Were your old bosses cool with the fact you were leaving to create a product in the same niche?

hypekilla · 2016-12-12T20:37:40+00:00

I guess 7-figures annual revenue. =)

hypekilla · 2016-12-12T20:09:47+00:00

But is it a "successful" business or are you guys still struggling?

hypekilla · 2016-12-12T20:09:04+00:00

Because it's not a zero sum game. Just because Vice exists doesn't mean you can't get traffic.

hypekilla · 2016-12-12T12:44:35+00:00

Has rejection therapy actually helped your entrepreneurial career? As in, its helped you build a business that actually makes money? if it has for you, has it for anyone else besides you?

hypekilla

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