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Again, the context is important: You need to look at the percentages retained in those funding rounds relative to what was happening at the time. Their low capi

Again, the context is important: You need to look at the percentages retained in those funding rounds relative to what was happening at the time. Their low capital needs, which gained them leverage, and the following high return spawned a generation of bootstrapped software startups. And since the VC pot of money is finite, hardware startups (the domain of the article's author) became quite unfashionable by the standards of the 90s.

jasode 5y ago
> Their low capital needs and following high return is what spawned a generation of bootstrapped software startups. I don't see how "$25 million from a VC" would be interpreted by outsiders as inspiration for bootstrapping. Doesn't "bootstrapping" mean self-funding from revenue instead of investors? Google didn't have meaningful revenue & profits until 2002. I think the best way to apply "bootstrapping" (the way most people think of that term) to Larry & Sergei would be the early phase of 1996 to 1998 where they used Stanford's computers & datacenter for $0 cost to build a MVP search engine "Backrub". But a lot of startup founders can't apply that to their situation because they are not in PhD programs with the university providing a "pseudo AWS" for $0. (Stanford did share credit in the pagerank patent so they got license $$$ from Google in return.) EDIT reply to: >, and realized that Google did not actually need the money. What do you mean by they "didn't need the money"? How would the early Google survive for 3+ years with no revenue? Immediately after the June 1999 $25 million, they hired an ex-Grateful Dead celebrity chef to cook free meals for their employees and rent datacenter space. If Google didn't have any revenue, what money is there other than that $25 million to pay salaries of the chef, the employees, food, datacenters? That's the opposite of "bootstrapping". Are you using that word in a different way?
- jpmattia 5y ago
  > I don't see how "$25 million from a VC" will be interpreted by outsiders as inspiration for bootstrapping. Yes, outsiders might not see it. At the time, insiders saw the percentage the company retained, and realized that Google did not actually need the money. It opened quite a few eyes. Reply to your edit: > How would the early Google survive for 3+ years with no revenue? That was the point: They had revenue, and at a level that they did not need the VCs, which enabled them to negotiate the A round of $25M as well as they did. It would be difficult to pull that off with hardware.

jasode 5y ago

> Their low capital needs and following high return is what spawned a generation of bootstrapped software startups. I don't see how "$25 million from a VC" would be interpreted by outsiders as inspiration for bootstrapping. Doesn't "bootstrapping" mean self-funding from revenue instead of investors? Google didn't have meaningful revenue & profits until 2002. I think the best way to apply "bootstrapping" (the way most people think of that term) to Larry & Sergei would be the early phase of 1996 to 1998 where they used Stanford's computers & datacenter for $0 cost to build a MVP search engine "Backrub". But a lot of startup founders can't apply that to their situation because they are not in PhD programs with the university providing a "pseudo AWS" for $0. (Stanford did share credit in the pagerank patent so they got license $$$ from Google in return.) EDIT reply to: >, and realized that Google did not actually need the money. What do you mean by they "didn't need the money"? How would the early Google survive for 3+ years with no revenue? Immediately after the June 1999 $25 million, they hired an ex-Grateful Dead celebrity chef to cook free meals for their employees and rent datacenter space. If Google didn't have any revenue, what money is there other than that $25 million to pay salaries of the chef, the employees, food, datacenters? That's the opposite of "bootstrapping". Are you using that word in a different way?

jpmattia 5y ago
> I don't see how "$25 million from a VC" will be interpreted by outsiders as inspiration for bootstrapping. Yes, outsiders might not see it. At the time, insiders saw the percentage the company retained, and realized that Google did not actually need the money. It opened quite a few eyes. Reply to your edit: > How would the early Google survive for 3+ years with no revenue? That was the point: They had revenue, and at a level that they did not need the VCs, which enabled them to negotiate the A round of $25M as well as they did. It would be difficult to pull that off with hardware.