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It’s very hard to have solid product, engineering, marketing, sales, and support on any scale without taking VC money.
by npo9 7y ago
It’s very hard to have solid product, engineering, marketing, sales, and support on any scale without taking VC money.
- toomuchtodo 7y agoBackblaze and Basecamp have, to name two.
- scarface74 7y agoBackblaze does have one VC backer, but they aren’t pushing for exponential growth. https://news.ycombinator.com/item?id=21016598 https://news.ycombinator.com/item?id=21016598 They are cash flow positive though. https://news.ycombinator.com/item?id=21006216 https://news.ycombinator.com/item?id=21006216
- toomuchtodo 7y agoTIL. I thought they were entirely bootstrapped.
- scarface74 7y agoYeah. I learned that after he responded to one of my posts....
- atYevP 7y agoYev here -> yes, we have one VC backer from 2012. We wrote a post about it that sheds a bit of light on why (Thailand flooding played a major role): https://www.backblaze.com/blog/backblaze-raises-5-million-why-we-took-funding-after-5-years-of-bootstrapping/ https://www.backblaze.com/blog/backblaze-raises-5-million-wh.... TL/DR we have a capital-heavy business and the $2.5m cash infusion helped us weather hard drive prices going up 3x overnight.
- scarface74 7y agoThis is very relevant to the discussion about Dropbox - which I really don't expect you to respond to being they are sort of a competitor (yeah I know -- not really https://www.backblaze.com/blog/sync-vs-backup-vs-storage/ https://www.backblaze.com/blog/sync-vs-backup-vs-storage/). But, how BackBlaze decided to run their business (bootstrapping) and how Dropbox decided to run theirs (VC backed early on and still not profitable), is the perfect example of how taking on VC funding rarely leads to a good long term customer focused outcome. Also of note, unlike Dropbox, Backblaze was able to release a new slightly more enterprisey product - B2 - without losing focus on the main product. On the other hand, it does take a certain amount of 'privilege" (yes I hate that word, couldn't think of a better one) to have five founders who could afford to not take a salary for a year.... But one criticism, any time you post a link to the Backblaze blog it should come with a warning. It quickly led me down a TVTropes type rabbit hole of reading more interesting articles.....
- atYevP 7y ago> It quickly led me down a TVTropes type rabbit hole of reading more interesting articles..... Hah! That's a good thing! As for VC vs. Bootstrap - our five founders all worked together previously at a company that raised VC funds and while they weren't made millionaires from that company, it did give them enough cushion to go without salary for a bit. Originally it wasn't supposed to be 2 years though, so when it started to drag out there were definitely some...uncomfortable times, but they pulled through them. That's not say that we HATE the VC model - it definitely works for a lot of companies out here, but there is something nice about being able to choose your own adventure. Re: Dropbox as a competitor -> You hit it, they kind of are, but I think that's mostly because people don't really know enough about how things work to tell the difference. Part of what I do with the Backblaze consumer service is a lot of education on why you should use both :)
- toomuchtodo 7y agoAppreciate the context in this thread. Keep on being awesome.
- nefasti 7y agonot really necessary to have a solid product, on the contrary. VC money bring unreliable and not always user first agenda.
- npo9 7y agoI’m seen really solid products go out of business while competing with inferior products with better marketing/sales.