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I am not sure what value this post is besides a sales pitch for the poster. Don't mean to be overly critical, but really the number one factor is always custome

I am not sure what value this post is besides a sales pitch for the poster. Don't mean to be overly critical, but really the number one factor is always customers. Do you have any? Also, How do you get more (cost of acquiring customers)? Market size? I suppose that's in the "underlying economics" section, but that's such a common question it should be addressed. VCs are looking for 100x return. Can you meet in person (or Zoom these days) and present yourself well? etc...

onion2k 6y ago
Don't mean to be overly critical, but really the number one factor is always customers. Do you have any? This is 100% true and 10,000% annoying. Effectively it blocks anyone who has an idea for an idea for a business that needs seed capital from competing unless they're already wealthy (directly or able to raise funds from within their own network of friends and family). 15 years ago seed capital was exactly that - money that was available to fund a startup based on little more than an idea and a persuasive team. It was massively high risk but that was kind of the point. The taste for risk that VCs once had is gone. Today what people call seed rounds are really Series A. You need to have already done the high risk proof of concept work and actually have something on the market before VCs will take your call. That's entirely up to VCs of course. If they want to do that they can. And no doubt they'll still make a lot of money. But society as a whole is faced with dull ideas thought up by middle class kids who want "innovative" ways to pay someone to do their chores because of it, and that pisses me off a lot. End Rant.
- mgamache 6y ago
  This is correct. Big capital ideas can only be funded by wealthy people who have the ideas. Wealthy people by definition, have an interest in perpetuating the system that made them wealthy.
- GuiA 6y ago
  Well, that's what happens when everything "standardizes" after the initial wave of disruption. 15 years ago, there weren't any "programming bootcamps" or "entrepreneurship workshops" or "become a UX ninja in 7 days crash course" to the extent that there is today, Harvard MBAs didn't give much of a crap about working in tech, computer science students were there for the nerdy stuff, not because they wanted to be the next Zuckerberg. There just isn't much risk left in tech. The path is that now you start a weird crypto startup (which aren't even that weird anymore because there's dozens of them) while you're comfy at Stanford, you hope to get a fat check before you graduate, and if not you go work to Google. Or you quit Google, start your company, get some investment because you were at Google after all, and hopefully a few years later your startup gets bought by Google. Tech startups just aren't weird and new and unknown anymore, as far as the money people are concerned. Does it fit their idea of what a company on its way to a billion dollar valuation looks like? If yes write a check, if not tell them thank you and let the next team in.
- nwsm 6y ago
  > But society as a whole is faced with dull ideas thought up by middle class kids who want "innovative" ways to pay someone to do their chores because of it, and that pisses me off a lot. If true: 1) VCs will stop making money, or there is an endless money stream available to boring startups as long as the barrier to entry is kept up. 2) We will see stagnation in many industries but particularly tech, which will only make it easier for actual innovation to shine. The endless money stream bit could be true, but if we accept that it negates 2), we should just give up anyway (or shift all focus to politics until it's solved).
- wpietri 6y ago
  I don't disagree, but 15 years ago it was much more expensive to do a startup. This was before AWS and Rails was just getting started, so just getting something up and visible was a major technological effort. Now I can spend a day writing some Terraform code and have an infinitely scalable, load-balanced cluster up and running. A day later and I can have a decent-looking basic CRUD app on the cluster. Then I can spin a lot of the other work off to pay-as-you-go SaaS tools. Payments, sales support, CRM, support, marketing, analytics, feature flags, landing pages, A/B testing: all of these are things I don't have to build any more. And now thanks to the rise of things like Slack, Zoom, and Trello, remote and/or part-time work is much more tenable, meaning we don't need an office and full-time commitment to get going. So yes, VCs are going to take minimum risk for maximum return. But they always have. What's different now is that you don't need to convince some rando that you need $250k in seed money just to find out if your idea might work. If it does, you'll at least be in a better negotiating position. And maybe you won't need to seek investment at all.
  - mgamache 6y ago
    Sure executing some ideas are cheaper and infrastructure can be purchased cheaply. But this covers a subset of all startups. For example: Let's say you wanted to do a med-tech startup. You'll have to work for at least two years without pay to get a non-medical device product launched.
    - wpietri 6y ago
      Undoubtedly. And I'd bet that in those areas you can still find seed money before you get customers. My point wasn't, "All startups are easy now!" It was that investors aren't going to pay for anything they don't have to. If there's a sufficient stream of web/mobile based startups coming to them who already have some proof, they're going to be much less likely to fund people who don't have that proof yet.
  - est31 6y ago
    > This was before AWS and Rails was just getting started, so just getting something up and visible was a major technological effort. Before rails there was LAMP. That's what Facebook used. Java servlets existed as well. And rented clouds existed before AWS as well. Despite the hype for them on pages like this, neither AWS nor Rails were really big disrupting inventions. The market for both existed before them, and will exist after they've fallen out of favour. Where innovation happened is in the scaling domain. Terraform, kubernetes, etc, as well as in the SaaS tools you mentioned. But most of those things aren't needed for earliest stage startups. You don't need to be super scalable from day one. You can just run everything from one very powerful box for a while. Of course this all depends on what your application is. If your product is a cloud based tool to post process movies, it will be a different setting from a CRUD app to plan events.
- deleted 6y ago
  [deleted]
- snowwrestler 6y ago
  Isn't this down to the rise of angel investors, though? I feel like that concept has exploded in the last decade, and established VC's have moved "up market" in response to it--hence their first look is now more like a Series A than a seed. Has available seed capital declined overall or is it just coming from different places now?
- toohotatopic 6y ago
  >This is 100% true and 10,000% annoying. Effectively it blocks anyone who has an idea for an idea for a business that needs seed capital from competing unless they're already wealthy There's your startup. Get some money and invest it in all those teams that need initial funding. You may also want to establish an online forum for young entrepreneurs and engineers to hang out and discuss news and ideas so that they know about you and approach you once they need the funding.

onion2k 6y ago

Don't mean to be overly critical, but really the number one factor is always customers. Do you have any? This is 100% true and 10,000% annoying. Effectively it blocks anyone who has an idea for an idea for a business that needs seed capital from competing unless they're already wealthy (directly or able to raise funds from within their own network of friends and family). 15 years ago seed capital was exactly that - money that was available to fund a startup based on little more than an idea and a persuasive team. It was massively high risk but that was kind of the point. The taste for risk that VCs once had is gone. Today what people call seed rounds are really Series A. You need to have already done the high risk proof of concept work and actually have something on the market before VCs will take your call. That's entirely up to VCs of course. If they want to do that they can. And no doubt they'll still make a lot of money. But society as a whole is faced with dull ideas thought up by middle class kids who want "innovative" ways to pay someone to do their chores because of it, and that pisses me off a lot. End Rant.

mgamache 6y ago
This is correct. Big capital ideas can only be funded by wealthy people who have the ideas. Wealthy people by definition, have an interest in perpetuating the system that made them wealthy.
GuiA 6y ago
Well, that's what happens when everything "standardizes" after the initial wave of disruption. 15 years ago, there weren't any "programming bootcamps" or "entrepreneurship workshops" or "become a UX ninja in 7 days crash course" to the extent that there is today, Harvard MBAs didn't give much of a crap about working in tech, computer science students were there for the nerdy stuff, not because they wanted to be the next Zuckerberg. There just isn't much risk left in tech. The path is that now you start a weird crypto startup (which aren't even that weird anymore because there's dozens of them) while you're comfy at Stanford, you hope to get a fat check before you graduate, and if not you go work to Google. Or you quit Google, start your company, get some investment because you were at Google after all, and hopefully a few years later your startup gets bought by Google. Tech startups just aren't weird and new and unknown anymore, as far as the money people are concerned. Does it fit their idea of what a company on its way to a billion dollar valuation looks like? If yes write a check, if not tell them thank you and let the next team in.
nwsm 6y ago
> But society as a whole is faced with dull ideas thought up by middle class kids who want "innovative" ways to pay someone to do their chores because of it, and that pisses me off a lot. If true: 1) VCs will stop making money, or there is an endless money stream available to boring startups as long as the barrier to entry is kept up. 2) We will see stagnation in many industries but particularly tech, which will only make it easier for actual innovation to shine. The endless money stream bit could be true, but if we accept that it negates 2), we should just give up anyway (or shift all focus to politics until it's solved).
wpietri 6y ago
I don't disagree, but 15 years ago it was much more expensive to do a startup. This was before AWS and Rails was just getting started, so just getting something up and visible was a major technological effort. Now I can spend a day writing some Terraform code and have an infinitely scalable, load-balanced cluster up and running. A day later and I can have a decent-looking basic CRUD app on the cluster. Then I can spin a lot of the other work off to pay-as-you-go SaaS tools. Payments, sales support, CRM, support, marketing, analytics, feature flags, landing pages, A/B testing: all of these are things I don't have to build any more. And now thanks to the rise of things like Slack, Zoom, and Trello, remote and/or part-time work is much more tenable, meaning we don't need an office and full-time commitment to get going. So yes, VCs are going to take minimum risk for maximum return. But they always have. What's different now is that you don't need to convince some rando that you need $250k in seed money just to find out if your idea might work. If it does, you'll at least be in a better negotiating position. And maybe you won't need to seek investment at all.
- mgamache 6y ago
  Sure executing some ideas are cheaper and infrastructure can be purchased cheaply. But this covers a subset of all startups. For example: Let's say you wanted to do a med-tech startup. You'll have to work for at least two years without pay to get a non-medical device product launched.
  - wpietri 6y ago
    Undoubtedly. And I'd bet that in those areas you can still find seed money before you get customers. My point wasn't, "All startups are easy now!" It was that investors aren't going to pay for anything they don't have to. If there's a sufficient stream of web/mobile based startups coming to them who already have some proof, they're going to be much less likely to fund people who don't have that proof yet.
- est31 6y ago
  > This was before AWS and Rails was just getting started, so just getting something up and visible was a major technological effort. Before rails there was LAMP. That's what Facebook used. Java servlets existed as well. And rented clouds existed before AWS as well. Despite the hype for them on pages like this, neither AWS nor Rails were really big disrupting inventions. The market for both existed before them, and will exist after they've fallen out of favour. Where innovation happened is in the scaling domain. Terraform, kubernetes, etc, as well as in the SaaS tools you mentioned. But most of those things aren't needed for earliest stage startups. You don't need to be super scalable from day one. You can just run everything from one very powerful box for a while. Of course this all depends on what your application is. If your product is a cloud based tool to post process movies, it will be a different setting from a CRUD app to plan events.
deleted 6y ago
[deleted]
snowwrestler 6y ago
Isn't this down to the rise of angel investors, though? I feel like that concept has exploded in the last decade, and established VC's have moved "up market" in response to it--hence their first look is now more like a Series A than a seed. Has available seed capital declined overall or is it just coming from different places now?
toohotatopic 6y ago
>This is 100% true and 10,000% annoying. Effectively it blocks anyone who has an idea for an idea for a business that needs seed capital from competing unless they're already wealthy There's your startup. Get some money and invest it in all those teams that need initial funding. You may also want to establish an online forum for young entrepreneurs and engineers to hang out and discuss news and ideas so that they know about you and approach you once they need the funding.