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The vast majority of businesses.... 1. Are outside the valley 2. Started with minimal or no funding 3. Hire a ton of employees overall 4. Give their founder
by eric4smith 6y ago
The vast majority of businesses....
1. Are outside the valley
2. Started with minimal or no funding
3. Hire a ton of employees overall
4. Give their founders comfortable lives.
5. Do their thing very quietly without anyone really knowing.
6. You've never heard about.
- divbzero 6y agoI’d love to hear more of these stories, but suspect 5. Do their thing very quietly is in the spirit of many of these businesses.
- mmaunder 6y agoIt is. And there is always a reason private companies post their numbers. Unless there’s a strong reason to do it, it is a better strategic move to keep them private.
- flukus 6y agoAt least for software, the vast majority are in some sort of niche you've either never heard of or thought about. Software for managing operating theater procedures, software for managing doctors/dentists, software for managing money exchanges, software for managing legal conveyancing, software for managing schools, etc. Those are examples from places that I've worked that were purely software shops, add to that just about any sizeable company in any industry that have software developers, everything from you pet food brand to your toothbrush manufacturer likely started outside of silicon valley, most without little to no venture capital. They used to be called micro independent software vendors (mISV) and before the silicon valley gold rush this was the dream of young entrepreneurs.
- spullara 6y agoThose are absolutely terrible companies for software developers to work for though. I have several family members that work for them. If you want average pay and the owners to take all the profits, go for it. Otherwise, work for FAANG, a great startup or a finance company (hedge fund or investment bank).
- boatsie 6y agoI think that is sort of the point, though. If you are able to work/succeed at FAANG, you could build software in these niches quite profitably, because the competition is likely not all that good.
- eric4smith 6y agoMost companies are average to above average pay. FAANG's are an aberration, not the norm.
- barry-cotter 6y agoBut they employ a lot of software engineers. Amazon employs ~150,000 if I remember right.
- vram22 6y agoNit: With some companies paying below average, too, by the very definition of the term 'average', and also because the sizeable handful of FAANG companies skews the average even higher.
- newman8r 6y agoThis is why I've been putting more energy into networking and finding the right partners - people who understand these niche problems, have an existing network to sell the solutions to and just need the technical team to build and iterate on the product. Brainstorming is still important to me, but I'd rather brainstorm with a specialist. If any HNers fit the bill, please do send an email.
- ZephyrBlu 6y agoI was looking for a different example from @patio11, but this one will have to do: https://twitter.com/patio11/status/701765026286206976 https://twitter.com/patio11/status/701765026286206976
- bootstrapper101 6y agoI run one of these companies. USD 50M+ ARR, USD 20M+ profit. 3 people company. Could grow 10x if we want to. But we are enjoying staying low and enjoying our family lives. Excellent article by the Canary guys. They seem like really honest people. We didn't raise any money. Only focus was how to do faster iterations. By the time 25 of my ideas didn't succeed, every iteration became very fast. Idea to launch in 3 months. Happy to answer any questions. Looks like this is dead. Happy to answer any questions @dang ! Once kids are in high school, maybe will try something bigger!
- nonane 6y agoWhat is your preferred tech stack for quick iteration of ideas?
- weakwire 6y agoThis thread totally hijacked the OP. Extremely interesting.
- radihuq 6y agoHow much of the $30M expenditure do you spend on marketing?
- bootstrapper101 6y ago70% of expenses are marketing.
- frongpik 6y agoHow did you get to the decision makers to pitch your idea? Unless you were already well connected, I presume it wasn't easy to get attention from the right people.
- bootstrapper101 6y agoI pitched my ideas just twice and got some funding for them. However either my approach was wrong or I wasn't working with the right people. I felt that funding was too big of a waste of time. Without traction, everything I did was being second guessed. And too much time was being wasted pitching. I haven't raised any money for 20+ of my ideas including the current one. But I can imagine it would be easier for me to raise money on better terms in future! I use the nanny vs parent analogy for involvement with a product. When you are working for someone else, you are a nanny. The product isn't your baby. Be careful how much you get invested. If you get sentimental and attached you will end up hurting yourself. If you own your company, it's like being the parent. You have sole responsibility but except government no one else can interfere. VC funded business can be like a wild ride. You may start as a parent, but you will eventually end up as a nanny. In some rare cases you can have majority voting rights till the end. Only famous case for that I know is Facebook.
- melomal 6y ago>5. Do their thing very quietly without anyone really knowing. 6. You've never heard about. I love going to industrial estates and checking out what is going on in there for this exact reason. CNC machine, 3D printing, endless engineering all of which will never be appreciated or create a fan boy cult but they will keep many, many other businesses operational and growing. These places actually build things too, real tangible things that have requirements and so forth.
- JumpCrisscross 6y agoSilicon Valley is a blind search algorithm for novel scaling advantages from digitisation. These advantages exist for mass retail. The medium-sized businesses who tried to compete with Walmart and Amazon had to adapt fast or fail. These advantages do not (EDIT: have not been shown to) exist for commercial real estate; WeWork was a dud. Most American commerce is, and should be, in the hands of these medium-sized businesses, if for nothing else than resilience and local optimisation. My worry is the advantage of centralising customer data is too general. That lets a single entity exert broad scaling advantage, which is scary and inefficient. I increasingly think this should be a measure for antitrust enforcement: does a company possess an edge that gives it a competitive advantage in almost any market it tries to compete in. If so, it’s an economic nerve bundle and at the very least needs to be regulated.
- daniellarusso 6y agoThere is also the public health issue. Many Walmarts were shutdown for multiple days to disinfect the store after an excessive number of employees tested positive for COVID. Mom and pop stores would reduce spread simply because there is less concentration of people.
- peteretep 6y ago> These advantages do not for commercial real estate; WeWork was a dud WeWork was a dud. That doesn’t show in any way that these advantages can’t work for commercial real estate, just that nobody’s done it yet.
- JumpCrisscross 6y agoQuite fair. Edited.
- sub7 6y agoWeWork is not done and has been a big win for everyone involved
- jack_riminton 6y ago
- jbverschoor 6y agoLifestyle businesses are something demonic in the valley
- MangoCoffee 6y agothere are ton of successful business outside of silicon valley but Wonder kids like Mark Zuckerberg (Facebook) make better headline to sell news.
- habosa 6y agoThe SV startup business model is basically: "I've identified a profitable industry which seems 'unoptimized' ... if I used VC funding to outflank every traditional player in this industry would there be room for one billionaire? And could that billionaire be me?"