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I've been mostly in startups for the last 10+ years. Until recently the main thing you needed to be good at is getting more VC money. That is correlated to cert

I've been mostly in startups for the last 10+ years. Until recently the main thing you needed to be good at is getting more VC money. That is correlated to certain measures of success but having a ton of free money means you can patch a lot of failures over that would bankrupt most companies. Then either sell or IPO before the house of cards came down. It's been interesting watching over the last year as that strategy started to no longer work.

lmeyerov 3y ago
That is only something like 1% of businesses: money-burning VC-funded companies who have to advertise enough to get more VC money or die.
- marcinzm 3y ago
  But the vast majority of companies referred to as "startups" versus "small businesses" fall into that category. We can discuss the other case but the person I replied to explicitly said "startups."
  - lmeyerov 3y ago
    Most new and growing tech startups are not in fact VC funded. My point is it's an amazing marketing win by financiers. And here we are now, with what the weird minority do sounding like the expectation for startup business practices vs what most actually do.
    - pc86 3y ago
      "Startup" by definition is companies that need large-scale growth to succeed. Uber, DoorDash, those kinds of businesses are start-ups. It doesn't need to be VC investment necessarily, but it needs a lot of capital to get going and there's a certain amount of network effects. That's not marketing, that's what the word means. > Most new and growing tech startups are not in fact VC funded. Then they're probably not startups, but just tech businesses. Nothing wrong with that - they're objectively better in my opinion - but let's not call them something they're not just because we like the word or we want the cachet of being associated with something we're not.
      - wpietri 3y ago
        I would draw the line slightly differently. Bootstrapped startups are still startups. So for me the definition is more "company exploring a novel technology, product, or business model". Most new businesses are doing something that's well understood. Opening a new restaurant or corner store is hard, but it doesn't have the same need to figure out something fundamentally new.
        lmeyerov 3y ago
        Yep. Numbers-wise, I'd think VC-funded startups merit the distinction. They're (a) relying on financiers to make their strategy work (b) there's significant positive & negative impacts of that decision vs everyone else (c) they're the minority. Startups using non-VC revenue are the majority and also doing all sorts of great work in invention+innovation in tech, business model, doing with scalable ideas, etc. VC $ buys things like press relationships and "X raised Y" headlines, but thankfully the days of breathless capital raise news on tech crunch are much more zzz now.
      - rfrey 3y ago
        > "Startup" by definition is companies that need large-scale growth to succeed By your definition. And maybe a bunch of people who read the PG essay that narrowed the word that way. But not by the definition of 99.9% of economic participants. Investopedia's definition, for example, bears no relationship to the PG definition. Neither does Webster's, dictionary.com's, or any entrepreneurship textbook you might find. Even Steve Blank doesn't define it that way.
indymike 3y ago
> Until recently the main thing you needed to be good at is getting more VC money It's always better to be getting money by selling to customers. It's amazing how well that works and how much less capital you need to grow.
- marcinzm 3y ago
  If your goal is to make a lot of money (not just some money) then using VC money to get there is a very reasonable play. Just siphoning some money from later rounds could give you tens of millions. You don't even need to succeed after that as a business. The goal for many founders isn't to run a long term business but to make money.
  - indymike 3y ago
    > You don't even need to succeed after that as a business. The goal for many founders isn't to run a long term business but to make money. Getting a big exit is my goal as a founder. Investor capital is spent to get to that exit. People who have the goal of making money off investors make self-enriching, bad for the company decisions.
brigadier132 3y ago
This really depends on a definition of success that includes creating massive money burning firepits. Now to be fair some of the chief firepit architects got very rich doing so.
wpietri 3y ago
On the one hand, I'm grateful that era is finally coming to an end. Things were so much saner after the dot-com bubble popped. On the other, I really worry that we now have a generation of entrepreneurs and employees who have only ever known a bubble environment. Many will have a hard time adapting to the actual reality of running functioning businesses.

lmeyerov 3y ago

That is only something like 1% of businesses: money-burning VC-funded companies who have to advertise enough to get more VC money or die.

marcinzm 3y ago
But the vast majority of companies referred to as "startups" versus "small businesses" fall into that category. We can discuss the other case but the person I replied to explicitly said "startups."
- lmeyerov 3y ago
  Most new and growing tech startups are not in fact VC funded. My point is it's an amazing marketing win by financiers. And here we are now, with what the weird minority do sounding like the expectation for startup business practices vs what most actually do.
  - pc86 3y ago
    "Startup" by definition is companies that need large-scale growth to succeed. Uber, DoorDash, those kinds of businesses are start-ups. It doesn't need to be VC investment necessarily, but it needs a lot of capital to get going and there's a certain amount of network effects. That's not marketing, that's what the word means. > Most new and growing tech startups are not in fact VC funded. Then they're probably not startups, but just tech businesses. Nothing wrong with that - they're objectively better in my opinion - but let's not call them something they're not just because we like the word or we want the cachet of being associated with something we're not.
    - wpietri 3y ago
      I would draw the line slightly differently. Bootstrapped startups are still startups. So for me the definition is more "company exploring a novel technology, product, or business model". Most new businesses are doing something that's well understood. Opening a new restaurant or corner store is hard, but it doesn't have the same need to figure out something fundamentally new.
      - lmeyerov 3y ago
        Yep. Numbers-wise, I'd think VC-funded startups merit the distinction. They're (a) relying on financiers to make their strategy work (b) there's significant positive & negative impacts of that decision vs everyone else (c) they're the minority. Startups using non-VC revenue are the majority and also doing all sorts of great work in invention+innovation in tech, business model, doing with scalable ideas, etc. VC $ buys things like press relationships and "X raised Y" headlines, but thankfully the days of breathless capital raise news on tech crunch are much more zzz now.
    - rfrey 3y ago
      > "Startup" by definition is companies that need large-scale growth to succeed By your definition. And maybe a bunch of people who read the PG essay that narrowed the word that way. But not by the definition of 99.9% of economic participants. Investopedia's definition, for example, bears no relationship to the PG definition. Neither does Webster's, dictionary.com's, or any entrepreneurship textbook you might find. Even Steve Blank doesn't define it that way.

indymike 3y ago

> Until recently the main thing you needed to be good at is getting more VC money It's always better to be getting money by selling to customers. It's amazing how well that works and how much less capital you need to grow.

marcinzm 3y ago
If your goal is to make a lot of money (not just some money) then using VC money to get there is a very reasonable play. Just siphoning some money from later rounds could give you tens of millions. You don't even need to succeed after that as a business. The goal for many founders isn't to run a long term business but to make money.
- indymike 3y ago
  > You don't even need to succeed after that as a business. The goal for many founders isn't to run a long term business but to make money. Getting a big exit is my goal as a founder. Investor capital is spent to get to that exit. People who have the goal of making money off investors make self-enriching, bad for the company decisions.

brigadier132 3y ago

This really depends on a definition of success that includes creating massive money burning firepits. Now to be fair some of the chief firepit architects got very rich doing so.

wpietri 3y ago

On the one hand, I'm grateful that era is finally coming to an end. Things were so much saner after the dot-com bubble popped. On the other, I really worry that we now have a generation of entrepreneurs and employees who have only ever known a bubble environment. Many will have a hard time adapting to the actual reality of running functioning businesses.