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> [...] took $350,000 of his own money to write a business plan. That is by far more money than I've seen in my entire life. Of course you don't need money for

> [...] took $350,000 of his own money to write a business plan. That is by far more money than I've seen in my entire life. Of course you don't need money for your startup if you're already rich.

icedchai 10y ago
"Rich" is relative to ones own cost of living. Where do you live, approximately?
- jdavis703 10y ago
  Even in the most expensive cities like NYC, San Francisco or London that is still a lot of money to have sitting around, enough money that I think qualifies one as rich (if that was all your savings it puts you near the 80th percentile of wealth holders in the U.S., but he likely owns a house, and other assets). And as it turns out they're company is near the dead-center of Pennsylvania, in between Philadelphia and Pittsburgh, where cost of living is pretty low.
  - zanny 10y ago
    Its only about two years living expenses in most major cities. People have mostly forgotten, but traditionally having the ability to survive at your standard of living for a year or so (ie, having some wealth, just not enough to live off exclusively) was defining of the middle class. Its tangential, but it is very interesting that even in developer circles devs think they are middle class when they make $130-150k a year even if their cost of living is ~100k which means their total savings even after a decade (and something eating into their rainy day fund, including vehicle / home purchases and such) they still don't have two years living expenses saved up, you are still definitively working class. Very few people today are actual middle class anymore, by reasonable standards of what to define it as, since cost of living has gotten so absurdly high relative to income compared to what it was decades ago.
    - shams93 10y ago
      Thats a really great point in cal8fornia even 6 figures is poverty the cost of living is incredible. Taxes on singles in california are sky high as well
    - dmoy 10y ago
      350k is two years of living expenses? Can you break that down?
    - whamlastxmas 10y ago
      If you had 350k in savings and decided to quit your job and take a break, you would probably move out of your $2 million NYC apartment. 350k would easily last you a decade in a smaller, low cost of living town. You'll be driving a 2011 Honda Civic, limiting how often you eat out at nice restaurants, and not buying name brand, but you won't exactly be struggling.
  - icedchai 10y ago
    It is a lot of money, no disagreement. I know developers who have saved up that kind of cash in about 6 or 7 years, working in relatively low cost of living areas. You simply have to save and invest half your income. ;)
budu3 10y ago
$350000 for a business plan? Isn't that a bit too expensive for a business plan?
- zeemonkee3 10y ago
  Perhaps it was written on gold-lined vellum? I'm assuming the plan required the input of lawyers or other expensive advisors. Still it seems excessive for a bootstrapping company.
  - tim333 10y ago
    I think it should have read "took $350,000 of his own money to write a business plan in 2007 and form his online mattress company, Saatva."
AndrewKemendo 10y ago
I'm not sure how they seriously wrote this story with that as the lede. “I’m much more meticulous and efficient. I might go a little slower, but in the end I believe I win.” Slow is not how you win. I think this article fundamentally misunderstands the goal of VC backed companies: Billion dollar exits and paradigm shifting technologies. That's not for every company.
- avs733 10y ago
  >Slow is not how you win. This presumes a lot about entrepreneurial ventures at a vastly generalized level. While this may not be true of the high tech entrepreneurship most at focus on HN, there is a myriad of other entrepreneurial activity (maybe not using the 'startup' marker) where this is a very reasonable statement.
  - AndrewKemendo 10y ago
    >While this may not be true of the high tech entrepreneurship Right. While still generally debated, when talking about "startups", across the board speed, aka high growth, is the common factor [1]. If the discussion is around "entrepreneurship" generally, then high growth and speed isn't even a goal usually. [1] http://www.paulgraham.com/growth.html http://www.paulgraham.com/growth.html
- adventured 10y ago
  That's obviously far too broad of a statement. Lots of extremely successful businesses started slow. It depends on what kind of business you are, what you're selling, what your brand is about and so on. After 16 years in business, Starbucks had a whopping 17 locations. After five years in business, Domino's had three locations (12,500 today).
  - AndrewKemendo 10y ago
    For both of those examples, they weren't winning. They started winning when they had breakneck speed. Specifically Dominos was taken over and completely restructured to move really fast.
whamlastxmas 10y ago
Agreed, the premise for this article is ridiculous. That's three times the amount YC offers. Even the 120k YC offers would be critical for me in letting me take several months of full time work towards my project without worrying about blowing through personal savings.

> [...] took $350,000 of his own money to write a business plan. That is by far more money than I've seen in my entire life. Of course you don't need money for your startup if you're already rich.

icedchai 10y ago

"Rich" is relative to ones own cost of living. Where do you live, approximately?

jdavis703 10y ago
Even in the most expensive cities like NYC, San Francisco or London that is still a lot of money to have sitting around, enough money that I think qualifies one as rich (if that was all your savings it puts you near the 80th percentile of wealth holders in the U.S., but he likely owns a house, and other assets). And as it turns out they're company is near the dead-center of Pennsylvania, in between Philadelphia and Pittsburgh, where cost of living is pretty low.
- zanny 10y ago
  Its only about two years living expenses in most major cities. People have mostly forgotten, but traditionally having the ability to survive at your standard of living for a year or so (ie, having some wealth, just not enough to live off exclusively) was defining of the middle class. Its tangential, but it is very interesting that even in developer circles devs think they are middle class when they make $130-150k a year even if their cost of living is ~100k which means their total savings even after a decade (and something eating into their rainy day fund, including vehicle / home purchases and such) they still don't have two years living expenses saved up, you are still definitively working class. Very few people today are actual middle class anymore, by reasonable standards of what to define it as, since cost of living has gotten so absurdly high relative to income compared to what it was decades ago.
  - shams93 10y ago
    Thats a really great point in cal8fornia even 6 figures is poverty the cost of living is incredible. Taxes on singles in california are sky high as well
  - dmoy 10y ago
    350k is two years of living expenses? Can you break that down?
  - whamlastxmas 10y ago
    If you had 350k in savings and decided to quit your job and take a break, you would probably move out of your $2 million NYC apartment. 350k would easily last you a decade in a smaller, low cost of living town. You'll be driving a 2011 Honda Civic, limiting how often you eat out at nice restaurants, and not buying name brand, but you won't exactly be struggling.
- icedchai 10y ago
  It is a lot of money, no disagreement. I know developers who have saved up that kind of cash in about 6 or 7 years, working in relatively low cost of living areas. You simply have to save and invest half your income. ;)

budu3 10y ago

$350000 for a business plan? Isn't that a bit too expensive for a business plan?

zeemonkee3 10y ago
Perhaps it was written on gold-lined vellum? I'm assuming the plan required the input of lawyers or other expensive advisors. Still it seems excessive for a bootstrapping company.
- tim333 10y ago
  I think it should have read "took $350,000 of his own money to write a business plan in 2007 and form his online mattress company, Saatva."

AndrewKemendo 10y ago

I'm not sure how they seriously wrote this story with that as the lede. “I’m much more meticulous and efficient. I might go a little slower, but in the end I believe I win.” Slow is not how you win. I think this article fundamentally misunderstands the goal of VC backed companies: Billion dollar exits and paradigm shifting technologies. That's not for every company.

avs733 10y ago
>Slow is not how you win. This presumes a lot about entrepreneurial ventures at a vastly generalized level. While this may not be true of the high tech entrepreneurship most at focus on HN, there is a myriad of other entrepreneurial activity (maybe not using the 'startup' marker) where this is a very reasonable statement.
- AndrewKemendo 10y ago
  >While this may not be true of the high tech entrepreneurship Right. While still generally debated, when talking about "startups", across the board speed, aka high growth, is the common factor [1]. If the discussion is around "entrepreneurship" generally, then high growth and speed isn't even a goal usually. [1] http://www.paulgraham.com/growth.html http://www.paulgraham.com/growth.html
adventured 10y ago
That's obviously far too broad of a statement. Lots of extremely successful businesses started slow. It depends on what kind of business you are, what you're selling, what your brand is about and so on. After 16 years in business, Starbucks had a whopping 17 locations. After five years in business, Domino's had three locations (12,500 today).
- AndrewKemendo 10y ago
  For both of those examples, they weren't winning. They started winning when they had breakneck speed. Specifically Dominos was taken over and completely restructured to move really fast.

whamlastxmas 10y ago

Agreed, the premise for this article is ridiculous. That's three times the amount YC offers. Even the 120k YC offers would be critical for me in letting me take several months of full time work towards my project without worrying about blowing through personal savings.