The young founder was starting to lose hope with the product. Technology-wise they were good but were failing on the marketing side. They found it difficult to even get some decent press coverage, while the competitors got everything going even with an inferior product or atleast it seemed so. The team was getting impatient.
They suggested to take the advertising route to create product awareness. To make the product a success a cultural shift was required. The founder knew very well that advertisements do not change culture. He was unable to explain the importance of PR against pure advertising to his team, which had only 3 members left now.
He instead found an excuse in saying,’We do not have enough money.” Which was partially true though. Few more days passed. The team was getting used to killing the whole day in removing the minor IE6 bugs, optimizing the codes further and tracking the 800-900 visits that the site managed to get.
They met again and a techie guy suggested that they could put ads on their site. The revenue from the ads could be used to cover advertising costs. The revenue would be very minor but calculations said they could run a small campaign from 2 months of ad revenue. The young entrepreneur did not have any excuse as he had no other plan.
He could not let down his team that was already losing motivation but he promised to himself that the ads would be a temporary thing only, just experimental. The founder had setup Google-Adsense account long ago, when he thought the site would have millions of visitors and the ads could help show the investors some additional revenues.
They implemented the ads on their site and the next day booked a campaign they thought would be most helpful. As expected the ad campaign was no good for the product. But the revenues kept flowing in and the founder was now tempted to not remove the ads from the site as it was bringing enough to pay for office rent.
Over 2 months the focus had changed from creating product awareness to increasing revenue from ads. The site had more ads now. The founder had started believing that this was the max-potential of his idea and is now working on a new product.
The socially active entrepreneur had read all such stories about importance of regular cash flow. His product was mature enough to take it to the market. Apart from removing some minor bugs the tech team was mostly unoccupied. He had seen a lot of other product companies offering tech. consultancy as alternative revenue stream and decided to take the same route.
It would mean busy employees and that much needed revenue, while he could concentrate on marketing the product. Through some reference he managed to get a small project from this retail giant and then another from their reference. The projects were keeping the tech. team busy and the advance payment called for a celebration.
The deal was initially a cake walk but soon reality took shape. Pitching for work and following up on payments is suppose to be one time activity he believed but the project sucked most of his time. Time that was meant for marketing his mature product. He was now spending all of his time in living upto the commitment on the consultancy projects. The revenue from services was regular but the potential was only limited. In the meanwhile competing products had a upper hand in the market.
The young founder was left with a busy team and a few projects to follow up. Also, a handsome bank balance that wouldn’t really last for long.
Regular revenue is required to keep the wheel turning but not at the cost of losing focus. Beware before you take that step. Getting to smell cash through alternate means is very addictive and can deviate you from the bigger picture, your real goal.
[Naman is a startup enthusiast and has worked with couple of Indian startups as Product Manager. He is the founder of FindYogi]