5 ms·

If the company was bootstrapped it could just have kept running and creating profits. Many business can create value in the world, but who are not VC material.

If the company was bootstrapped it could just have kept running and creating profits. Many business can create value in the world, but who are not VC material. Unfortunately the people behind was hitting for the fences and missed, instead of playing it more safe.

dec0dedab0de 5y ago
But would they have been able to pay the licensing for all those lyrics if they didn't have investors?
brianwawok 5y ago
Bootstrapping has an opportunity cost that a lot of people gloss over, wages you could have made at a BigCo for years. Even if you are "successful" you still could be millions in the hole vs working at FAANG. Source: am a bootstrapper
- dannyw 5y ago
  That's contextual. For example, as someone living outside the USA with no immigration pathways, I simply can't get a FAANG salary.
  - brianwawok 5y ago
    Very true, so you would compare it to the <best job you could get>. But simply saying "It's such a bad idea to take VC money, just bootstrap" is too simple of a statement. Again, I say this as a bootstrapper.
  - thebean11 5y ago
    Sure, but they also will have a much more difficult time getting the type of VC money American startups get.
    - Avalaxy 5y ago
      A bootstrapper doesn't need that.
- acdha 5y ago
  This is true but I think there's also a question about the difference between VC as in huge amounts of money trying to build the next unicorn versus traditional business startup loan levels. I think a lot of startups would be better getting _some_ investment but with a target valuation in the millions rather than billions range. The founders can still do well in that range but they won't have hundreds of employees and expensive offices in NYC.
  - brianwawok 5y ago
    Right, you can do this to some extent with midwest angel / VC. If you stay out of coastal VC, you can a bit more modest, but the trend for even midwest VC seems to be pushing for unicorns lately...
- deleted 5y ago
  [deleted]
- john_yaya 5y ago
  Seems like bootstrapping isn’t just about the money for many bootstrappers, perhaps including you. There’s a type of person who would much rather grind out $150K ARR at something they create and own than pull down $450K/yr at Netflix.
antoinec 5y ago
This is assuming that they could have created profits early enough to support them, which might not have been the case (then maybe it means that this shouldn't have been a business at all, but that's another question...)
trynewideas 5y ago
Nothing to add, except I unironically love seeing this written on Hacker News on a story about a YC company. Genius should've stayed a bootstrapped side project, but the founders got swept up in VC culture via YC and convinced themselves they were making a world-changing product. https://genius.com/Tom-lehman-how-rap-genius-raised-s18m-in-seed-funding-without-knowing-what-we-were-doing-annotated https://genius.com/Tom-lehman-how-rap-genius-raised-s18m-in-...
peterthehacker 5y ago
I don’t think this model is bootstrap-able. It’s pretty much a social media play, which requires lots of burn to acquire first cohort of users. My friend bootstrapped a genius for books competitor with a subscription model and it was really difficult to grow. It’s hard to build value based on network effects with subscription model.

dec0dedab0de 5y ago

But would they have been able to pay the licensing for all those lyrics if they didn't have investors?

brianwawok 5y ago

Bootstrapping has an opportunity cost that a lot of people gloss over, wages you could have made at a BigCo for years. Even if you are "successful" you still could be millions in the hole vs working at FAANG. Source: am a bootstrapper

dannyw 5y ago
That's contextual. For example, as someone living outside the USA with no immigration pathways, I simply can't get a FAANG salary.
- brianwawok 5y ago
  Very true, so you would compare it to the <best job you could get>. But simply saying "It's such a bad idea to take VC money, just bootstrap" is too simple of a statement. Again, I say this as a bootstrapper.
- thebean11 5y ago
  Sure, but they also will have a much more difficult time getting the type of VC money American startups get.
  - Avalaxy 5y ago
    A bootstrapper doesn't need that.
acdha 5y ago
This is true but I think there's also a question about the difference between VC as in huge amounts of money trying to build the next unicorn versus traditional business startup loan levels. I think a lot of startups would be better getting _some_ investment but with a target valuation in the millions rather than billions range. The founders can still do well in that range but they won't have hundreds of employees and expensive offices in NYC.
- brianwawok 5y ago
  Right, you can do this to some extent with midwest angel / VC. If you stay out of coastal VC, you can a bit more modest, but the trend for even midwest VC seems to be pushing for unicorns lately...
deleted 5y ago
[deleted]
john_yaya 5y ago
Seems like bootstrapping isn’t just about the money for many bootstrappers, perhaps including you. There’s a type of person who would much rather grind out $150K ARR at something they create and own than pull down $450K/yr at Netflix.

antoinec 5y ago

This is assuming that they could have created profits early enough to support them, which might not have been the case (then maybe it means that this shouldn't have been a business at all, but that's another question...)

trynewideas 5y ago

Nothing to add, except I unironically love seeing this written on Hacker News on a story about a YC company. Genius should've stayed a bootstrapped side project, but the founders got swept up in VC culture via YC and convinced themselves they were making a world-changing product. https://genius.com/Tom-lehman-how-rap-genius-raised-s18m-in-seed-funding-without-knowing-what-we-were-doing-annotated https://genius.com/Tom-lehman-how-rap-genius-raised-s18m-in-...

peterthehacker 5y ago

I don’t think this model is bootstrap-able. It’s pretty much a social media play, which requires lots of burn to acquire first cohort of users. My friend bootstrapped a genius for books competitor with a subscription model and it was really difficult to grow. It’s hard to build value based on network effects with subscription model.