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If your business depends upon having a monopoly to be sustainable then it isn't a sustainable business. Competition is good, actually, and is essential for a f

If your business depends upon having a monopoly to be sustainable then it isn't a sustainable business. Competition is good, actually, and is essential for a functioning free market. When you have insufficient competition, you end up with a situation where large companies can exercise tyrannical power over consumers and their own employees by all colluding informally or formally. That doesn't happen if you have a functioning market where a consumer can switch to a competitor or an employee can quickly change jobs if a company is misbehaving.

yladiz 3y ago
You're missing the point. It's not about having a monopoly and isn't really about the "free market" (which I don't think applies here anyway), that's not what the parent comment was about. It was more about that if you don't take on money and grow organically without outside funding, there's a real risk that someone else will take the idea, make their own version of it, but pump a lot of money into development, sales, and marketing and very likely overtake you, regardless of the quality of your product. Of course some companies are able to withstand this or are able to thrive without much outside capital, but given the risk, it's safer to take the VC money.
- mindcrime 3y ago
  but given the risk, it's safer to take the VC money. I agree that the risk exists, but I don't necessarily by that it's a fait accompli that taking VC money is the safer route. Consider that taking VC money comes with it's own risks, including: 1. VC's who think of themselves as "smart money" and want to be actively involved in running the company, and wind up muddling the vision and taking the company in non-productive directions. 2. The need to adhere to artificial timelines w/r/t spending, fund-raising rounds, etc. which are inherent in the VC model for structural reasons (funds are time-boxed, etc) 3. Taking VC money acts as validation of the idea on a much broader scale, prompting even more competitors to enter the market and so on. Keep in mind, as another commenter mentioned, if you stay private, focus on talking directly to your customers, don't get caught up in the "attract massive attention to yourself at all costs" cycle, and fly under the radar, you can most likely get yourself pretty well entrenched before this hypothetical "idea thief" even becomes aware you exist. I'd also argue that most people - especially the actually talented ones - aren't just sitting out there waiting to steal someone else's idea. If they're talented enough to execute your idea, they most likely have plenty of ideas of their own. That's not to say that "idea thievery" never happens, but I think this notion is over-stated. YMMV, of course.
  - yladiz 3y ago
    I mostly agree, and a big point that you mention here which a lot of companies that take on VC money miss is that it is inherently risky, even if the terms are good, and you need to have a purpose for getting the money that isn't just keeping in the cool kids club or a desire for hyper growth. I think it is possible to do it right, for example trying to get net-positive ASAP while taking on some money to be able to afford early engineers, but few companies try to approach it like this. Also, for the sake of clarity, to expand on what I meant by it's safer: it's definitely not without its risks (as mentioned), but if we assume that the idea and team is good, and that it is possible that a competent competitor to take your idea but execute on it faster with more money, if you approach things right, with an actual good idea and business plan, taking on VC money can be good and relatively safe for the business.
    - mindcrime 3y ago
      Fair enough!
- logifail 3y ago
  > given the risk, it's safer to take the VC money That's quite the claim. Can you explain why you think this is the case?

yladiz 3y ago

You're missing the point. It's not about having a monopoly and isn't really about the "free market" (which I don't think applies here anyway), that's not what the parent comment was about. It was more about that if you don't take on money and grow organically without outside funding, there's a real risk that someone else will take the idea, make their own version of it, but pump a lot of money into development, sales, and marketing and very likely overtake you, regardless of the quality of your product. Of course some companies are able to withstand this or are able to thrive without much outside capital, but given the risk, it's safer to take the VC money.

mindcrime 3y ago
but given the risk, it's safer to take the VC money. I agree that the risk exists, but I don't necessarily by that it's a fait accompli that taking VC money is the safer route. Consider that taking VC money comes with it's own risks, including: 1. VC's who think of themselves as "smart money" and want to be actively involved in running the company, and wind up muddling the vision and taking the company in non-productive directions. 2. The need to adhere to artificial timelines w/r/t spending, fund-raising rounds, etc. which are inherent in the VC model for structural reasons (funds are time-boxed, etc) 3. Taking VC money acts as validation of the idea on a much broader scale, prompting even more competitors to enter the market and so on. Keep in mind, as another commenter mentioned, if you stay private, focus on talking directly to your customers, don't get caught up in the "attract massive attention to yourself at all costs" cycle, and fly under the radar, you can most likely get yourself pretty well entrenched before this hypothetical "idea thief" even becomes aware you exist. I'd also argue that most people - especially the actually talented ones - aren't just sitting out there waiting to steal someone else's idea. If they're talented enough to execute your idea, they most likely have plenty of ideas of their own. That's not to say that "idea thievery" never happens, but I think this notion is over-stated. YMMV, of course.
- yladiz 3y ago
  I mostly agree, and a big point that you mention here which a lot of companies that take on VC money miss is that it is inherently risky, even if the terms are good, and you need to have a purpose for getting the money that isn't just keeping in the cool kids club or a desire for hyper growth. I think it is possible to do it right, for example trying to get net-positive ASAP while taking on some money to be able to afford early engineers, but few companies try to approach it like this. Also, for the sake of clarity, to expand on what I meant by it's safer: it's definitely not without its risks (as mentioned), but if we assume that the idea and team is good, and that it is possible that a competent competitor to take your idea but execute on it faster with more money, if you approach things right, with an actual good idea and business plan, taking on VC money can be good and relatively safe for the business.
  - mindcrime 3y ago
    Fair enough!
logifail 3y ago
> given the risk, it's safer to take the VC money That's quite the claim. Can you explain why you think this is the case?