5 ms·

Seems jet brains managed so there is an alternative that doesn’t suck?

sillysaurusx 6y ago
That's a bit like saying "This person won the lottery, so therefore..." Sure, it's possible. But having met a few founders, their lifestyle from taking VC money seems far preferable to the bootstrap approach. It's true that you have to grow, but if you have growth, then nothing else matters. And if you don't, then you're one of the most employable people in the entire world. A shocking number of people, somehow, end up in insane amounts of debt by trying to start their own companies. And you're sort of forced to. An example: one of our family members had a lucrative pole barn business. (Apparently in the midwest, lots of people wanted pole barns built, or something.) But in order to pay his employees to go construct the pole barns, he needed loans, leveraged against the future income from the construction project. Then 2008 hit. Poof! Contracts all went poof. And he was left holding the bag. So, if you need employees, and you're bootstrapped, how exactly are you going to pay an engineer roughly $130k per year? (Remember, the fully-loaded cost of an employee is much higher than their salary.) Loans must be so quite tempting. And sure, LLCs are designed to mitigate personal risk. But that implies you can find someone willing to risk loaning to you. I'm not saying that VC is great, just that it fills a need.
- GVIrish 6y ago
  Yeah but all the successful VC funded startup stories are a form of survivorship bias too. The whole idea of venture capital is to fund many companies that will fail with the hope of finding the one unicorn that will make up for all the losses. A lottery just the same. It's true that if you're taking out loans to fund your bootstrapped company you could be left holding the bag. But it's also true that you can build an IT startup without taking a lot of big loans for capital expenditures. You only grow when you're making money, so it's a slower path, but for some businesses it may make more sense.
- edoceo 6y ago
  Or, don't start a business with a loan. If you're gonna bootstrap (the "right" way) then step zero is have 12mo runway of your own capital and step one is start a business
  - sillysaurusx 6y ago
    $130k to pay a single employee for one year. I don't know about you, but it's extremely difficult for most people to save up that kind of runway.
    - ardy42 6y ago
      > $130k to pay a single employee for one year. I don't know about you, but it's extremely difficult for most people to save up that kind of runway. I think the idea is that step one isn't hiring a subordinate employee; it's having secure enough finances that you (or you and your co-founders) can work for yourself for a time. Step two is actually working on the business, and step three is growing is revenues to the point where it can sustain you, four is growing them further to the point where they can support an employee, and five is actually hiring that employee and paying them $130k a year.
      - sillysaurusx 6y ago
        Co-founders? Why are they co-founding? Profit sharing? That's an excellent way to devolve into squabbling about who gets what. VC also protects against that: the money is for the company, and it's illegal to siphon it out of the company. Unfortunately in practice your suggestion tends to become "You're working for yourself, alone." And sure, I love the idea of a one-person company. Lots of talented devs can sell, if they try. But lots of talented devs are also trying to get rich on the iOS app store; few do.
        ardy42 6y ago
        > Co-founders? Why are they co-founding? Profit sharing? Because they had an idea with you and want to work together to make it happen? Or all kinds of other things like that? And yeah, if you're going to do that, you're going to have to be careful make sure you're not the kind of people who will need adult supervision to avoid squabbling. VC might have its uses, or provide some service, but that shouldn't be misunderstood to mean that it's essential or alternatives aren't worth considering. The other thing to note is that one of the things VCs do is sell the VC paradigm, so they're going to try their hardest to make it seem like it's essential or at least the best product out there.
- Razengan 6y ago
  What you’re saying is like “I have never won the lottery, so therefore it must be impossible...”
- jonfromsf 6y ago
  No one will loan to an LLC without a personal guarantee from the founder. LLCs protect against legal liability, not against financial liability for debt.
- webmaven 6y ago
  > But in order to pay his employees to go construct the pole barns, he needed loans, leveraged against the future income from the construction project. Rather than collateralized loans, a better financial instrument might have been factoring (selling the receivable outright, typically for 90-95¢ on the dollar), plus having a reasonable penalty clause in the contract. This isn't a criticism. Hardly anyone outside of the fashion industry (that has long waits, like net-90, for payment after eventual delivery) or heavy industry (that has expensive equipment that can be amortized long-term) seems to know about factoring.
- signal11 6y ago
  > That's a bit like saying "This person won the lottery, so therefore..." Caveat: I love Jetbrains, and am a happy subscriber. However, as the parent commenter says, it's important to realise that Jetbrains has been lucky as well. Java dev tools suffered from poor performance and poor UX for the longest time. Eclipse, despite its early promise (SWT and native widgets) has much 'rougher' UX compared to IDEA. But I remain surprised how much better even simply typing feels on IDEA, and how good the refactoring tools are. (The latest Eclipse has improved a lot in the refactoring dept, though.) Java's combination of openness and poor dev tools definitely helped Jetbrains a lot and gave them a cachet in the marketplace that helped them as they expanded into other languages. That said, I've also used their Microsoft VS addins and those were very good too, but they likely would have made much less money if they were a Microsoft-only shop.

That's a bit like saying "This person won the lottery, so therefore..." Sure, it's possible. But having met a few founders, their lifestyle from taking VC money seems far preferable to the bootstrap approach. It's true that you have to grow, but if you have growth, then nothing else matters. And if you don't, then you're one of the most employable people in the entire world. A shocking number of people, somehow, end up in insane amounts of debt by trying to start their own companies. And you're sort of forced to. An example: one of our family members had a lucrative pole barn business. (Apparently in the midwest, lots of people wanted pole barns built, or something.) But in order to pay his employees to go construct the pole barns, he needed loans, leveraged against the future income from the construction project. Then 2008 hit. Poof! Contracts all went poof. And he was left holding the bag. So, if you need employees, and you're bootstrapped, how exactly are you going to pay an engineer roughly $130k per year? (Remember, the fully-loaded cost of an employee is much higher than their salary.) Loans must be so quite tempting. And sure, LLCs are designed to mitigate personal risk. But that implies you can find someone willing to risk loaning to you. I'm not saying that VC is great, just that it fills a need.

GVIrish 6y ago
Yeah but all the successful VC funded startup stories are a form of survivorship bias too. The whole idea of venture capital is to fund many companies that will fail with the hope of finding the one unicorn that will make up for all the losses. A lottery just the same. It's true that if you're taking out loans to fund your bootstrapped company you could be left holding the bag. But it's also true that you can build an IT startup without taking a lot of big loans for capital expenditures. You only grow when you're making money, so it's a slower path, but for some businesses it may make more sense.
edoceo 6y ago
Or, don't start a business with a loan. If you're gonna bootstrap (the "right" way) then step zero is have 12mo runway of your own capital and step one is start a business
- sillysaurusx 6y ago
  $130k to pay a single employee for one year. I don't know about you, but it's extremely difficult for most people to save up that kind of runway.
  - ardy42 6y ago
    > $130k to pay a single employee for one year. I don't know about you, but it's extremely difficult for most people to save up that kind of runway. I think the idea is that step one isn't hiring a subordinate employee; it's having secure enough finances that you (or you and your co-founders) can work for yourself for a time. Step two is actually working on the business, and step three is growing is revenues to the point where it can sustain you, four is growing them further to the point where they can support an employee, and five is actually hiring that employee and paying them $130k a year.
    - sillysaurusx 6y ago
      Co-founders? Why are they co-founding? Profit sharing? That's an excellent way to devolve into squabbling about who gets what. VC also protects against that: the money is for the company, and it's illegal to siphon it out of the company. Unfortunately in practice your suggestion tends to become "You're working for yourself, alone." And sure, I love the idea of a one-person company. Lots of talented devs can sell, if they try. But lots of talented devs are also trying to get rich on the iOS app store; few do.
      - ardy42 6y ago
        > Co-founders? Why are they co-founding? Profit sharing? Because they had an idea with you and want to work together to make it happen? Or all kinds of other things like that? And yeah, if you're going to do that, you're going to have to be careful make sure you're not the kind of people who will need adult supervision to avoid squabbling. VC might have its uses, or provide some service, but that shouldn't be misunderstood to mean that it's essential or alternatives aren't worth considering. The other thing to note is that one of the things VCs do is sell the VC paradigm, so they're going to try their hardest to make it seem like it's essential or at least the best product out there.
Razengan 6y ago
What you’re saying is like “I have never won the lottery, so therefore it must be impossible...”
jonfromsf 6y ago
No one will loan to an LLC without a personal guarantee from the founder. LLCs protect against legal liability, not against financial liability for debt.
webmaven 6y ago
> But in order to pay his employees to go construct the pole barns, he needed loans, leveraged against the future income from the construction project. Rather than collateralized loans, a better financial instrument might have been factoring (selling the receivable outright, typically for 90-95¢ on the dollar), plus having a reasonable penalty clause in the contract. This isn't a criticism. Hardly anyone outside of the fashion industry (that has long waits, like net-90, for payment after eventual delivery) or heavy industry (that has expensive equipment that can be amortized long-term) seems to know about factoring.
signal11 6y ago
> That's a bit like saying "This person won the lottery, so therefore..." Caveat: I love Jetbrains, and am a happy subscriber. However, as the parent commenter says, it's important to realise that Jetbrains has been lucky as well. Java dev tools suffered from poor performance and poor UX for the longest time. Eclipse, despite its early promise (SWT and native widgets) has much 'rougher' UX compared to IDEA. But I remain surprised how much better even simply typing feels on IDEA, and how good the refactoring tools are. (The latest Eclipse has improved a lot in the refactoring dept, though.) Java's combination of openness and poor dev tools definitely helped Jetbrains a lot and gave them a cachet in the marketplace that helped them as they expanded into other languages. That said, I've also used their Microsoft VS addins and those were very good too, but they likely would have made much less money if they were a Microsoft-only shop.