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Designing the Ideal Bootstrapped Business

ilrwbwrkhv 3y ago
This is great. I would add one thing. Things which work, work immediately.
Solvency 3y ago
"Good Market: Naturally recurring market Example: Server hosting" A few lines later... "Good Market: Not real-time A non-real time business is one where it’s not a disaster if your product is down for a few hours" Later on it describes hosting, image editors, and time-tracking software as examples of "finished" businesses that don't need to worry about dealing with feature competition. This is a joke. This is the equivalent of a rag magazine's "Top 10 ways to get RICH!" article.
- dimmke 3y ago
  I'd like to see an updated version of this talk - something that stuck out to me: "No picking up pennies" His example as to why this is bad was Kickstarter which was not bootstrapped, but a VC funded business. He also makes a point of saying Kickstarter is the 'best example' of this business model, and they still are losing money - but I'd argue that payment processing companies like Stripe are a successful example of this. Also, since this talk was given Patreon has become ubiquitous. I don't know their financials (if they are profitable), but they are a "picking up the pennies" company and I know they make a lot of money. If a software company is bringing in hundreds of millions in net income a year and is still unprofitable, it's either because you've grown headcount/expenses without regard to income in an attempt to quickly scale to some high multiple or your business model does not work on a fundamental level (costs increase linearly with income) or you took on too much debt and all profit goes to servicing the debt. I am pretty sure it's one or the other, right? If someone can think of another scenario I would like to hear it.
- mtlynch 3y ago
  I'm the author of the notes but I'm not Jason Cohen, the speaker on whom the notes are based. >Example: Server hosting" A few lines later... "Good Market: Not real-time >A non-real time business is one where it’s not a disaster if your product is down for a few hours" This is on me for summarizing poorly, but Cohen wasn't advocating server hosting as a good market. He explicitly said WPEngine was a counter-example because it was hard for them to do real-time support. He mentioned server hosting as an example of a business where customers understand that you have ongoing costs, so it makes sense that you bill them as an ongoing basis, but he didn't say server hosting is a good market for bootstrappers. >Later on it describes hosting, image editors, and time-tracking software as examples of "finished" businesses that don't need to worry about dealing with feature competition. This still seems true to me. What's the objection to this point?
deleted 3y ago
[deleted]

This is great. I would add one thing. Things which work, work immediately.

"Good Market: Naturally recurring market Example: Server hosting" A few lines later... "Good Market: Not real-time A non-real time business is one where it’s not a disaster if your product is down for a few hours" Later on it describes hosting, image editors, and time-tracking software as examples of "finished" businesses that don't need to worry about dealing with feature competition. This is a joke. This is the equivalent of a rag magazine's "Top 10 ways to get RICH!" article.

dimmke 3y ago
I'd like to see an updated version of this talk - something that stuck out to me: "No picking up pennies" His example as to why this is bad was Kickstarter which was not bootstrapped, but a VC funded business. He also makes a point of saying Kickstarter is the 'best example' of this business model, and they still are losing money - but I'd argue that payment processing companies like Stripe are a successful example of this. Also, since this talk was given Patreon has become ubiquitous. I don't know their financials (if they are profitable), but they are a "picking up the pennies" company and I know they make a lot of money. If a software company is bringing in hundreds of millions in net income a year and is still unprofitable, it's either because you've grown headcount/expenses without regard to income in an attempt to quickly scale to some high multiple or your business model does not work on a fundamental level (costs increase linearly with income) or you took on too much debt and all profit goes to servicing the debt. I am pretty sure it's one or the other, right? If someone can think of another scenario I would like to hear it.
mtlynch 3y ago
I'm the author of the notes but I'm not Jason Cohen, the speaker on whom the notes are based. >Example: Server hosting" A few lines later... "Good Market: Not real-time >A non-real time business is one where it’s not a disaster if your product is down for a few hours" This is on me for summarizing poorly, but Cohen wasn't advocating server hosting as a good market. He explicitly said WPEngine was a counter-example because it was hard for them to do real-time support. He mentioned server hosting as an example of a business where customers understand that you have ongoing costs, so it makes sense that you bill them as an ongoing basis, but he didn't say server hosting is a good market for bootstrappers. >Later on it describes hosting, image editors, and time-tracking software as examples of "finished" businesses that don't need to worry about dealing with feature competition. This still seems true to me. What's the objection to this point?

deleted 3y ago

[deleted]