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Exactly. My favourite slide that I saw at Startup School was Paul Bucheit's one that said "Advice = Limited Life Experience + Overgeneralization", since it was

by hugh 19y ago

Exactly. My favourite slide that I saw at Startup School was Paul Bucheit's one that said "Advice = Limited Life Experience + Overgeneralization", since it was a great antidote to all the other talks. If you listen to the 37signals guys, they're going to tell you the best way to get rich is to do pretty much what they're doing. If you listen to PG, he's going to tell you the best way to get rich is to do pretty much what he did. Both business models are valid, and they both work. If you're thinking of starting a business, you should keep both models (and several others) in mind and pick the one that best suits your situation, your needs, your ambitions, your available funding and your product. Of course, that doesn't mean that it's useless to sit around and discuss the upsides and downsides of various business models -- that's actually a very useful discussion. But it is silly to argue that one is better overall.

ojbyrne 19y ago
Having a fairly unhealthy obsession with entrepreneurship, and having actually read some of the research, rather than generalizing from my own experience, there is one basic reason why VC funding works better than bootstrapping. That is that small companies (less than roughly a million $ in revenue) are much more likely to be hurt by random events - key employees leaving, acts of god, macroeconomic events, etc. Getting big isn't just about making millions, it's about increasing the chances of survival. And when you hear a bootstrapped company talking about their path as the only way to go, just repeat the words "survivorship bias" to yourself.
- dennykmiu 19y ago
  I agree. My only input is that I believe entrepreneurship is about wealth creation. One can make the argument that if we make money for VC's, then we make money for ourselves. I think there are plenty of examples (especially in the Silicon Valley) where this is true. That's the "a small slice of a large pie" school of thoughts. The other side of the same argument is that if you bootstrap your company, then you are on your own and the world conspires against you. So at best you have "a large slice of a small pie". I think these are false choices. My own experience (I had two startups, one of each) is that bootstrapping is not a lifestyle but a tactic in wealth creation. I believe the speakers at Startup School are all in agreement that the world has changed and that it is possible to build a meaningful company with sustainable revenues by bootstrapping. But bootstrapping does not mean that you don't take VC money, just not for R&D. When you have a working product and a workable business model, then you can go out for VC money, but now as "working" capital. And if you can take it further and actually become profitable, trust me, VC's will be kicking down your doors wanting to buy a piece of the action. I enjoyed the Startup School presentations very much, especially that of PG, PB & DHH and the following is my takeaway ... “Make something people want … don’t ignore but try to understand [people’s] advise … listen [mainly] to yourself … don’t worry too much about money … the secret to making money online … is to ask for it.” I believe they are arguing that the optimal solution might be "a medium slice of a medium pie". As one of the commenter has stated, "getting the bus back in the middle of the road where it belongs".

by hugh 19y ago

ojbyrne 19y ago

Having a fairly unhealthy obsession with entrepreneurship, and having actually read some of the research, rather than generalizing from my own experience, there is one basic reason why VC funding works better than bootstrapping. That is that small companies (less than roughly a million $ in revenue) are much more likely to be hurt by random events - key employees leaving, acts of god, macroeconomic events, etc. Getting big isn't just about making millions, it's about increasing the chances of survival. And when you hear a bootstrapped company talking about their path as the only way to go, just repeat the words "survivorship bias" to yourself.

dennykmiu 19y ago
I agree. My only input is that I believe entrepreneurship is about wealth creation. One can make the argument that if we make money for VC's, then we make money for ourselves. I think there are plenty of examples (especially in the Silicon Valley) where this is true. That's the "a small slice of a large pie" school of thoughts. The other side of the same argument is that if you bootstrap your company, then you are on your own and the world conspires against you. So at best you have "a large slice of a small pie". I think these are false choices. My own experience (I had two startups, one of each) is that bootstrapping is not a lifestyle but a tactic in wealth creation. I believe the speakers at Startup School are all in agreement that the world has changed and that it is possible to build a meaningful company with sustainable revenues by bootstrapping. But bootstrapping does not mean that you don't take VC money, just not for R&D. When you have a working product and a workable business model, then you can go out for VC money, but now as "working" capital. And if you can take it further and actually become profitable, trust me, VC's will be kicking down your doors wanting to buy a piece of the action. I enjoyed the Startup School presentations very much, especially that of PG, PB & DHH and the following is my takeaway ... “Make something people want … don’t ignore but try to understand [people’s] advise … listen [mainly] to yourself … don’t worry too much about money … the secret to making money online … is to ask for it.” I believe they are arguing that the optimal solution might be "a medium slice of a medium pie". As one of the commenter has stated, "getting the bus back in the middle of the road where it belongs".