October 2014 status - a live autopsy and question

As most of you know, Microcosm is approaching the end of our runway and we are not yet revenue producing to the point of covering running costs. In fact, revenue does not cover salaries, only hosting costs plus a little bit more. Whilst the user and traction numbers are impressive they only represented a seed of growth for a future harvest and not the harvest itself.

Each month we start with a question: "Quit, pivot or persevere?". Until now, every answer has been persevere. This month it is closer to quit.

Most of September was spent running up and down avenues chasing funding. We met angels, we met early stage venture capitalists, we met anyone who might introduce us to those people. From these meetings we only ever had 1 strong lead, and this was from an investor who has always been interested in the potential of the platform but is only able to invest a figure in the region of £50k and couldn't lead a round.

We were seeking a figure above £400k, ideally in the £500k > £1m range. The reason was that we felt we had proven the core hypotheses that led us to start the business (forums as a platform with richer structured content, mobile friendly, more efficient revenue sources, at lower total costs), and that we had enough traction to justify that we persevere.

However we still have two intractable issues with where we are today:

1. We had not achieved enough market awareness for growth to happen without being extremely time-consuming and costly.
   
2. We had a good product but were not yet at the stage that we could claim that we were 10x better than our competitors, and whilst we had fans who raved about the product we hadn't yet proven that we had broad market fit outside of a few fanatical customers.
   
   

Basically: We needed a sales and marketing capability that we were lacking, and we needed to be able to move much faster on product development to help make the sales and marketing easier and fuel growth.

Our plan therefore was to hire 2-3 people to drive awareness, and to hire 2-3 people to improve the product and to differentiate our offering more. We would spend 25% of a round on awareness, 50% on product dev, and the remainder goes to various other costs over the duration of the next couple of years.

Today it is very obvious that we have failed to secure funding at the level that would allow us to expand and grow.

Additionally some news to share is that today is Matt's (co-founder, developer and @motter on here) last day with Microcosm. He has been very active in the developer community within London for the last couple of years and it was really a matter of time before he was made an offer too irresistible to refuse. So he leaves Microcosm today with a good salary awaiting and the promise of interesting work that has a solid future.

With those two pieces of reality dropping at roughly the same time, the obvious question that arises is what is the future of Microcosm?

This is a difficult question and one that is hard to answer. As it stands Microcosm can not continue without future funding even with a single salary to pay, and I personally will require a larger salary than the one I have existed on for the last two years (£9.6k gross).