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Some genuinely encouraging thoughts here - very interesting to my relationship with Inventions vs. Long-Form Writing: >Paul : The biggest one is made-up ideas.

Some genuinely encouraging thoughts here - very interesting to my relationship with Inventions vs. Long-Form Writing: >Paul : The biggest one is made-up ideas. The best startups come from personal experience. It was something you or someone you know needed. Occasionally, I’ll ask a company, “Why do you think is a good idea?” And they’ll say, “Oh, I read an article in TechCrunch.” You have to understand it at a deep level. It can’t just be something you read. I also like people who get things done. If you’ve been working on your startup for two years and have nothing to show, that’s a pretty bad sign. I’ve discovered that most people are really good at finding obstacles. I don’t fund these people. One thing I've learned, over five years plus of developing Inventions, Pitches, and the occasional Prototype, is that there's a really big realization that Angel Investors / PE-type Investors don't want small businesses to figure out: If your idea is good, you can obtain a patent, and afford to take a loan <$50,000 to go from "Prototype-to-Trade Show Ready" then you don't need Investors. You don't need "wisdom and guidance" aiming for a quick ramp-up and exit. You don't need to think in Quarterly Capitalism terms. And, most importantly, you don't need to dilute your control whatsoever[1]. For a while I've caught some whiffs that the Investing Realm is quite a bit more "Me Too" risk averse than often portrayed. Very similar to the Music Industry. Labels don't want interesting life story pieces, they want bubblegum they can market to kids with some discretionary money to burn. Thus, I take a lot of the recent "Start Up" culture with a grain of salt, because the time, effort, and study it takes to create a genuinely valuable idea basically points to starting a "Traditional Small Business" moreso than any super-duper-evolution-in-funding-or-growth. YMMV of course. [1] It does help to study both success stories, failures, and Public Slap Fights (Cruise, Otto); while I've solicited in the past, I've cooled to the idea and instead plan to go my own Patent-Prototype-Promote business model.

GFischer 9y ago
I disagree about the amount of money needed to bootstrap (for the kind of ideas VCs invest on, not for niche products or lifestyle businesses I mean). Patents aren't worth the paper they're printed on unless you have money to defend them, and are very likely to be overturned in court without that (OTOH there are some ridiculous patents that the patent-holders have enough money to make them stick). Going with your hypothetical model, once you've burned out your 50.000 ramp, then what? I'm trying to build my own product, and without outside investment it's freaking hard.
- LoSboccacc 9y ago
  but still, the heavy vc money only comes if they smell a chance at forming a monopoly with your idea - either thanks to patents, user lock in or having a plan that includes high barriers to entry after one gets the market
- Stanleyc23 9y ago
  well assuming you have something to demonstrate the value you are trying to provide for that $50k ramp, you should be putting time into attracting organic (non-paid) interest in your product from people who suffer from the problem you are trying to solve. You may need to also be searching for a technical or marketing co-founder depending on your skill set.
- rebootthesystem 9y ago
  > Patents aren't worth the paper they're printed on unless you have money to defend them Exactly. This is something I think most don't understand. Patents give you the right to sue. That's it. They don't provide any "protection" beyond that. It's like freedom of speech. You have the freedom to say whatever you want but the first amendment does not offer any protection from the consequences of your speech. In other words, say the wrong thing at the wrong time in the wrong place and you might just get beaten into a pulp. You had the absolute right to say whatever you wanted but no protections beyond that.
  - cma 9y ago
    >Exactly. This is something I think most don't understand. Patents give you the right to sue. That's it. They don't provide any "protection" beyond that. They give you the ability to credibly threaten to sue as well and reach a big settlement without a lot of expenditure. You can also sell a patent to a competitor who needs it.
    - rebootthesystem 9y ago
      I have a feeling you've never spent a significant amount of time dealing with IP and patent attorneys. You can't threaten to sue. That can backfire in a major way, having lawsuits filed against you. The idea of reaching big settlements with minimal expenditure's does not align with reality. This simply don't work that way, particularly if you are up against a large or well-funded company. The first thing an attorney is going to ask for is a retainer somewhere in the range of $100K to $250K to get started. Whatever they ask for, they are likely to tell you they will not move forward unless you can commit to $250K at a minimum to pursue a case. They don't do this because they are greedy, they do it because this is expensive and they don't want you to burn through $100K and then discover you'll need more, don't have it and you got nothing for your $100K. Selling IP is an entirely different conversation. Yes, patents can be worth millions, tens of millions, even without a real product behind them.
AndrewKemendo 9y ago
If your idea is good, you can obtain a patent, and afford to take a loan <$50,000 to go from "Prototype-to-Trade Show Ready" then you don't need Investors. You seem to be thinking about "Seen on TV" type of products, not software. You also seem to be talking about companies that would never see a BN+ exit or are made to flip (never actually seen one that was built with the intention to sell quickly and successful did). Those are great, but they are in a different category than venture backed companies so your measurement criteria are off.
kamilszybalski 9y ago
If your startup, or idea, is based on a perplexing problem that you yourself are experiencing, it's likely that others are also experiencing the same, or a similar, problem. Test that hypothesis, get some traction and the money will come, sometimes even with favourable terms.
- 6stringmerc 9y ago
  Agreed; I've witnessed this first-hand with a person spending years and years on their invention. One with a real-world application + personalisation (branding) tie-ins. If the "providing value" metric adds up (cost, production/deployment, scalaing, etc) then a good model should be kind of evident on paper following initial market tests. Whether it's a "Service" or "Item" do have different paths, the demand and revenue potential to feel things out just kind of seems natural to me. The person I know spent years, which is yes different than "start-up" but he is the absolute definition of boot-strapping while maintaining a full-time job. Dedication and investment and, yes, money.

GFischer 9y ago

I disagree about the amount of money needed to bootstrap (for the kind of ideas VCs invest on, not for niche products or lifestyle businesses I mean). Patents aren't worth the paper they're printed on unless you have money to defend them, and are very likely to be overturned in court without that (OTOH there are some ridiculous patents that the patent-holders have enough money to make them stick). Going with your hypothetical model, once you've burned out your 50.000 ramp, then what? I'm trying to build my own product, and without outside investment it's freaking hard.

LoSboccacc 9y ago
but still, the heavy vc money only comes if they smell a chance at forming a monopoly with your idea - either thanks to patents, user lock in or having a plan that includes high barriers to entry after one gets the market
Stanleyc23 9y ago
well assuming you have something to demonstrate the value you are trying to provide for that $50k ramp, you should be putting time into attracting organic (non-paid) interest in your product from people who suffer from the problem you are trying to solve. You may need to also be searching for a technical or marketing co-founder depending on your skill set.
rebootthesystem 9y ago
> Patents aren't worth the paper they're printed on unless you have money to defend them Exactly. This is something I think most don't understand. Patents give you the right to sue. That's it. They don't provide any "protection" beyond that. It's like freedom of speech. You have the freedom to say whatever you want but the first amendment does not offer any protection from the consequences of your speech. In other words, say the wrong thing at the wrong time in the wrong place and you might just get beaten into a pulp. You had the absolute right to say whatever you wanted but no protections beyond that.
- cma 9y ago
  >Exactly. This is something I think most don't understand. Patents give you the right to sue. That's it. They don't provide any "protection" beyond that. They give you the ability to credibly threaten to sue as well and reach a big settlement without a lot of expenditure. You can also sell a patent to a competitor who needs it.
  - rebootthesystem 9y ago
    I have a feeling you've never spent a significant amount of time dealing with IP and patent attorneys. You can't threaten to sue. That can backfire in a major way, having lawsuits filed against you. The idea of reaching big settlements with minimal expenditure's does not align with reality. This simply don't work that way, particularly if you are up against a large or well-funded company. The first thing an attorney is going to ask for is a retainer somewhere in the range of $100K to $250K to get started. Whatever they ask for, they are likely to tell you they will not move forward unless you can commit to $250K at a minimum to pursue a case. They don't do this because they are greedy, they do it because this is expensive and they don't want you to burn through $100K and then discover you'll need more, don't have it and you got nothing for your $100K. Selling IP is an entirely different conversation. Yes, patents can be worth millions, tens of millions, even without a real product behind them.

AndrewKemendo 9y ago

If your idea is good, you can obtain a patent, and afford to take a loan <$50,000 to go from "Prototype-to-Trade Show Ready" then you don't need Investors. You seem to be thinking about "Seen on TV" type of products, not software. You also seem to be talking about companies that would never see a BN+ exit or are made to flip (never actually seen one that was built with the intention to sell quickly and successful did). Those are great, but they are in a different category than venture backed companies so your measurement criteria are off.

kamilszybalski 9y ago

If your startup, or idea, is based on a perplexing problem that you yourself are experiencing, it's likely that others are also experiencing the same, or a similar, problem. Test that hypothesis, get some traction and the money will come, sometimes even with favourable terms.

6stringmerc 9y ago
Agreed; I've witnessed this first-hand with a person spending years and years on their invention. One with a real-world application + personalisation (branding) tie-ins. If the "providing value" metric adds up (cost, production/deployment, scalaing, etc) then a good model should be kind of evident on paper following initial market tests. Whether it's a "Service" or "Item" do have different paths, the demand and revenue potential to feel things out just kind of seems natural to me. The person I know spent years, which is yes different than "start-up" but he is the absolute definition of boot-strapping while maintaining a full-time job. Dedication and investment and, yes, money.