7 ms·

I want to start a company, but will not. The main reason why the existence of YC does not change this is because I know my idea, even if I go all in, does no

I want to start a company, but will not. The main reason why the existence of YC does not change this is because I know my idea, even if I go all in, does not promise explosive growth on par with Airbnbs of this world, and therefore is not attractive to investment. It does have the potential to eventually become a lifestyle business, though, which would be good enough for me. Unfortunately, I guess it will have to wait until I have some more spare time (ah, the age old excuse).

JohnFen 3y ago
VC money is essential for certain, specific sorts of businesses. If what you have in mind is not one of that type, then I argue VC money is something you want to actively avoid. That's not to say you should avoid investors -- there is a dizzying array of different kinds of investors outside of venture capital. > Unfortunately, I guess it will have to wait until I have some more spare time (ah, the age old excuse). In my experience, such a time will never arrive. You need to consciously prioritize starting a business (although that doesn't mean you can't hold down a day job at the very start). How does the old saying go? The best time to plant a tree was 20 years ago. The next best time is now.
brigadier132 3y ago
Why do you need investment? If you can build it on your own and there is a real niche with people willing to pay money for what you build then you can make a lot of money as an individual.
- JohnFen 3y ago
  Yes! If your goal isn't to build a kind of empire or to shoot for unimaginable riches, but instead to start a solid small business that lets you do the sort of work you enjoy and provides enough income to live in your preferred style, then it's never been easier than it is today. All you really need is to find a niche that has a small market. How small is OK depends a lot on the specifics of a business, but if we're talking a one-person software shop, you can probably live decently with a customer base of a handful of thousands. Even less if your niche supports very high profit margins. And, as an old mentor pointed out, if you're fishing in the pool of the entire world (which the internet allows at low cost), then you can just nail two boards together and find a thousand or two who are willing to buy it.
  - 8n4vidtmkvmk 3y ago
    My app is attracting a lot of Australians. It was built for US and Canada but I won't say no to AUD.
- anileated 3y ago
  I can’t because I need money to survive, and this will not provide that money for months until the thing is written, deployed, and has an established enough paying user base… And good luck me not getting seriously ill or get affected by whatever calamity in meantime!
  - jstanley 3y ago
    If it will be a matter of mere months until this thing is making enough money to pay for you to live, then it shouldn't take you too long to save up to start? Maybe a bank would even lend you the money? Maybe even a credit card would be enough?
    - anileated 3y ago
      Yes, saving is the way to go, but with my salary and life costs to save enough to last even 6 months will take me about 1 year without much other spending. Like probably with most people, my job and this project are not the only things I care about, I have other hobbies and interests too. I want to buy a camera and travel a bit in meantime for example.
  - 8n4vidtmkvmk 3y ago
    Fwiw my web app costs like $80/mo in hosting fees, and could be done for even less. I forget how much we paid to register our company but it wasn't much. The startup costs aren't that much, it's mostly time. I wouldn't be so optimistic on a few months to start generating cash tho unless it's a simple yet novel idea.
    - anileated 3y ago
      I could spare that much, but the idea in question is a bit different. Without going into too much detail, each upload consumes some compute, equivalent of like 10 seconds on a M1 MBP with 16GB RAM when nothing else is heavy is running. So I think my costs will be a bit higher and I would need to start billing customers early on.
  - imilk 3y ago
- tiedieconderoga 3y ago
  Simple: capex and economies of scale. Suppose that I have an idea for a widget which market research indicates could sell for $20/, but probably not $50/. I can hit the $50/ target with small contract runs, which would cost about as much as a down payment on a house. Or I can make it in volume for less than $10/, but I need a large minimum order, space, equipment, logistics. Now we're looking at 7-8 figures. If you aren't independently wealthy, neither option is really feasible, and the former option will almost certainly end in tears if you try to stretch and bootstrap with your own money.
  - Domenic_S 3y ago
    If you're really sure, you do that first run and lose money, then show a bank/investor the explosive popularity and get money for manufacturing at scale. Relatively speaking it's close to the easiest type of funding you can get.
    - deleted 3y ago
      [deleted]
  - brigadier132 3y ago
    > I can hit the $50/ target with small contract runs, which would cost about as much as a down payment on a house. I wasn't thinking of this from the perspective of a hardware startup but a software startup which doesn't require either of those things. I should qualify my original post with that. You don't need to be independently wealthy to launch a software business on your own provided you have the ability to build it yourself.
    - groby_b 3y ago
      Kind reminder that starting a software business still requires you to, you know, live and stuff :) Even if you can build it all by yourself, for most people runway is limited by savings. And that means that with a few exceptions, it's hard to stretch beyond a couple of months (or maybe one-two years) before you need to think about shutting down. If you can get to profit before that, awesome, your business might be a good idea. (You'll still have depleted a good chunk of your savings, and it's not like the world comes with profit guarantees) Investment buys runway, opex, and scale. Some businesses need that, some don't. Software work reduces the opex load (for many attempts), but scale and runway might still be necessary.
s1artibartfast 3y ago
As you point out, not all VCS are right for all businesses, nor should anyone expect them to be. Some businesses aren't suitable for Venture Capital at all. There's a lot of friction and transaction costs around finding capital for even suitable Investments. Reputation is one way to overcome this but it's difficult to bootstrap reputation.
timewasterthrow 3y ago
I have used this excuse in one way or another for 15 years, over several iterations. I made great money in sales, so was able to step away every few years to tackle the great startup lifestyle businesses I have. The #1 rule I have now, and advice I have for you is, if your idea does not pull at you so strongly to work on it on whatever 'spare time' you have (aka, time you make for it by ignoring other non main job related things), then DO not quit your job to make time. And do not think you will work on it when you retire. Most people just wont. Unless your idea/business naturally grows to the point where you are spending SO much time on it that you can basically not function while having your job due to sleep deprivation, do not quit your job thinking you will do the work then or you'll have the skill/ability to get it to that point if only you had more time.
- anileated 3y ago
  I think it is a fair point. Imagine quitting your job, assuming it is an OK job, and finding you have to do something you dislike in order to survive…
deterministic 3y ago
99.9999% (or whatever) of businesses are started without VC funding.

JohnFen 3y ago

VC money is essential for certain, specific sorts of businesses. If what you have in mind is not one of that type, then I argue VC money is something you want to actively avoid. That's not to say you should avoid investors -- there is a dizzying array of different kinds of investors outside of venture capital. > Unfortunately, I guess it will have to wait until I have some more spare time (ah, the age old excuse). In my experience, such a time will never arrive. You need to consciously prioritize starting a business (although that doesn't mean you can't hold down a day job at the very start). How does the old saying go? The best time to plant a tree was 20 years ago. The next best time is now.

brigadier132 3y ago

Why do you need investment? If you can build it on your own and there is a real niche with people willing to pay money for what you build then you can make a lot of money as an individual.

JohnFen 3y ago
Yes! If your goal isn't to build a kind of empire or to shoot for unimaginable riches, but instead to start a solid small business that lets you do the sort of work you enjoy and provides enough income to live in your preferred style, then it's never been easier than it is today. All you really need is to find a niche that has a small market. How small is OK depends a lot on the specifics of a business, but if we're talking a one-person software shop, you can probably live decently with a customer base of a handful of thousands. Even less if your niche supports very high profit margins. And, as an old mentor pointed out, if you're fishing in the pool of the entire world (which the internet allows at low cost), then you can just nail two boards together and find a thousand or two who are willing to buy it.
- 8n4vidtmkvmk 3y ago
  My app is attracting a lot of Australians. It was built for US and Canada but I won't say no to AUD.
anileated 3y ago
I can’t because I need money to survive, and this will not provide that money for months until the thing is written, deployed, and has an established enough paying user base… And good luck me not getting seriously ill or get affected by whatever calamity in meantime!
- jstanley 3y ago
  If it will be a matter of mere months until this thing is making enough money to pay for you to live, then it shouldn't take you too long to save up to start? Maybe a bank would even lend you the money? Maybe even a credit card would be enough?
  - anileated 3y ago
    Yes, saving is the way to go, but with my salary and life costs to save enough to last even 6 months will take me about 1 year without much other spending. Like probably with most people, my job and this project are not the only things I care about, I have other hobbies and interests too. I want to buy a camera and travel a bit in meantime for example.
- 8n4vidtmkvmk 3y ago
  Fwiw my web app costs like $80/mo in hosting fees, and could be done for even less. I forget how much we paid to register our company but it wasn't much. The startup costs aren't that much, it's mostly time. I wouldn't be so optimistic on a few months to start generating cash tho unless it's a simple yet novel idea.
  - anileated 3y ago
    I could spare that much, but the idea in question is a bit different. Without going into too much detail, each upload consumes some compute, equivalent of like 10 seconds on a M1 MBP with 16GB RAM when nothing else is heavy is running. So I think my costs will be a bit higher and I would need to start billing customers early on.
- imilk 3y ago
tiedieconderoga 3y ago
Simple: capex and economies of scale. Suppose that I have an idea for a widget which market research indicates could sell for $20/, but probably not $50/. I can hit the $50/ target with small contract runs, which would cost about as much as a down payment on a house. Or I can make it in volume for less than $10/, but I need a large minimum order, space, equipment, logistics. Now we're looking at 7-8 figures. If you aren't independently wealthy, neither option is really feasible, and the former option will almost certainly end in tears if you try to stretch and bootstrap with your own money.
- Domenic_S 3y ago
  If you're really sure, you do that first run and lose money, then show a bank/investor the explosive popularity and get money for manufacturing at scale. Relatively speaking it's close to the easiest type of funding you can get.
  - deleted 3y ago
    [deleted]
- brigadier132 3y ago
  > I can hit the $50/ target with small contract runs, which would cost about as much as a down payment on a house. I wasn't thinking of this from the perspective of a hardware startup but a software startup which doesn't require either of those things. I should qualify my original post with that. You don't need to be independently wealthy to launch a software business on your own provided you have the ability to build it yourself.
  - groby_b 3y ago
    Kind reminder that starting a software business still requires you to, you know, live and stuff :) Even if you can build it all by yourself, for most people runway is limited by savings. And that means that with a few exceptions, it's hard to stretch beyond a couple of months (or maybe one-two years) before you need to think about shutting down. If you can get to profit before that, awesome, your business might be a good idea. (You'll still have depleted a good chunk of your savings, and it's not like the world comes with profit guarantees) Investment buys runway, opex, and scale. Some businesses need that, some don't. Software work reduces the opex load (for many attempts), but scale and runway might still be necessary.

s1artibartfast 3y ago

As you point out, not all VCS are right for all businesses, nor should anyone expect them to be. Some businesses aren't suitable for Venture Capital at all. There's a lot of friction and transaction costs around finding capital for even suitable Investments. Reputation is one way to overcome this but it's difficult to bootstrap reputation.

timewasterthrow 3y ago

I have used this excuse in one way or another for 15 years, over several iterations. I made great money in sales, so was able to step away every few years to tackle the great startup lifestyle businesses I have. The #1 rule I have now, and advice I have for you is, if your idea does not pull at you so strongly to work on it on whatever 'spare time' you have (aka, time you make for it by ignoring other non main job related things), then DO not quit your job to make time. And do not think you will work on it when you retire. Most people just wont. Unless your idea/business naturally grows to the point where you are spending SO much time on it that you can basically not function while having your job due to sleep deprivation, do not quit your job thinking you will do the work then or you'll have the skill/ability to get it to that point if only you had more time.

anileated 3y ago
I think it is a fair point. Imagine quitting your job, assuming it is an OK job, and finding you have to do something you dislike in order to survive…

deterministic 3y ago

99.9999% (or whatever) of businesses are started without VC funding.