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The gist was fine - the notion of the advantages in not taking serious VC backing. My concern in reading the post was how you're gauging opportunity, scale, an
by shingen 15y ago
The gist was fine - the notion of the advantages in not taking serious VC backing.
My concern in reading the post was how you're gauging opportunity, scale, and competition. The $50 million remark in particular threw me.
In my experience and opinion, while legally you may have no other employees or investors right now, you'll benefit from assessing your business as a founder, an investor (your time or money put in), and an employee (CEO of Airtime, LLC or so on). You are all three in one, and I think that's an advantage if you use it. Those perspectives will all help you shape the business and its future. Do you have investors and employees? Yep, you and Patrick. You guys should be the most demanding investors you'll ever deal with.
If you're pursuing an idea that can be worth $50 million (in either sales or valuation), some sizable companies, whether venture backed or other, are going to want to eat your lunch. The competition will absolutely be there, and it'll be every bit as fierce at $10 to $50 million as at $1 billion.
Clearly you can target a market and not need to make much money for two years (what that might be implying about your product or execution is another matter). I imagine you know that you can buy one or two good servers for $250 to $500 / month, enough for a web server + database setup, plenty strong enough to support a load of tens of thousands of users or more in almost any segment. Financially it's very possible to keep that afloat with zero sales for an indefinite amount of time, particularly with no kids or family to support at 20 years of age. Sometimes products and companies go through crazy iterations and reboots. Point being, definitely don't assume it won't take up to two years to get consistent sales rolling in.
It's mostly regurgitated propaganda that you don't have time, the idea that everything is moving at light speed. That's true in a very small subset of Internet segments. There are a lot of web companies out there running $5 to $10 million businesses that took ten years to build up from scratch.
- dshipper 15y agoI understand what you're saying and I think we actually agree on a few points. I'm not saying that bootstrappers can target a market and not make money for two years. In fact it's the opposite. It seems that that's the kind of idea that's suited for VC if you can get traction in other ways (signups, engagement etc). To me, the kind of concept that's best fitted for bootstrapping is one that you can build in a few days and make money with right away like a project I did recently called DomainPolish. I guess I should have been more careful about choosing the figures I cited, but I really didn't mean $50 million vs a billion as hard numbers. I was trying to say that as a bootstrapper you can target a smaller market or a smaller problem. That's something that you can't do as a venture funded business. That means that all of the people who get funded early on who might ordinarily target your small problem are off building businesses targeted at HUGE markets. This means less competition for the bootstrapper and a greater chance to capitalize on the market opportunity. I definitely realize how hard it is to do this stuff and I didn't want to make it seem like it's super easy to build a $50 million business. I'd love to actually some time man you seem like you have a good amount of experience with this stuff. I couldn't find your email but mine is dshipper@gmail.com. Would love to hear from you.