4 ms·

Well yes, that's called a regular company. Not sure if I'm missing something here?

cjs_ac 2y ago
'Be a normal person/company and do normal person/company things,' isn't talked about very often, and it can be useful to be reminded that it is a pathway that can lead to success.
- muzani 2y ago
  It depends very much on your definition of success. Many who grew up upper middle class would define survival as failure.
  - CharlieDigital 2y ago
    Life is too short and the works is to big for that kind of mindset.
  - palata 2y ago
    Who talked about survival? If you think that anything other than becoming as rich as Mark Zuckerberg is "survival", then you're in for a treat.
    - deleted 2y ago
      [deleted]
  - aloner 2y ago
    lifestyle businesses provide far more than "survival"
foobahify 2y ago
A million investment doesn't sound regular. Basically if you raise a mill for 33% you value yourself at $2m. That is without PMF or revenue! This seems like pulling a fast one on VCs if you then pivot to bootstrapping a nice family business. That ain't why they threw $1m at your PowerPoint. In "dragons den" style traditional business they'd offer you $50k for 50% at that stage. Maybe.
senko 2y ago
Regular companies aren't given $1m they don't have to pay back. They have to get loans and founders are usually on the hook if the venture fails. This is different from what the article advocates.
- jimmydddd 2y ago
  I run a small 20 year old service business in the US. Just getting a $300K line of credit from a bank required a lot of paperwork and both the company and me personally being on the hook. It took about a month to secure. In contrast, on a different occasion a secured a personal home equity line of credit for $100K in a bout 5 minutes.
  - rambambram 2y ago
    Was there a mortgage right in the mix in your second occasion?
Cthulhu_ 2y ago
At least some years ago, browsing HN's comment section felt like it was a different world, separated from reality. I think some people need this kind of grounding reminders every once in a while.
- esafak 2y ago
  Russ (VC): Why would you go after revenue? Richard (CEO): Because... to make money? Russ: No. If you show revenue, people will ask how much, and it will never be enough. The company that was the hundred x-er, the thousand x-er, becomes the two x dog. But if you have no revenue, you can say you're pre-revenue... you're a potential pure play. It's not about how much you earn, it's about what you're worth, and who's worth the most? Companies that lose money. Pinterest, SnapChat, no revenue. Amazon has lost money every fucking quarter for the last twenty fucking years and that Bezos motherfucker is the king. There's no revenue. No one wants to see revenue. Go! Richard: Oh, um, I just thought that mainly the goal of companies is to make money. Russ: Yeah, no no no, that's not how it works. I don't want to make a little bit of money every day, I want to make a fuckton of money all at once. ROI. ROI! — Silicon Valley, "Bad Money" (2015). https://www.youtube.com/watch?v=BzAdXyPYKQo https://www.youtube.com/watch?v=BzAdXyPYKQo
  - rmnclmnt 2y ago
    One of the best shows of all time, both extremely sarcastic but so on-point at the same time. We laugh because we know it's true
    - dehrmann 2y ago
      Part of it was Mike Judge (Office Space, among others). Part was that they did really good research. They nailed lots of little details about VC, technology, tech businesses, the locale, and industry.
  - louthy 2y ago
    > ROI Radio on Internet
- 2y ago
chamomeal 2y ago
That’s pretty much what I took away. I guess the difference is that in my mind a “regular” company gets its funding via a loan. The post is from someone who got into YC. But yeah “building for profitability” sounds a lot like… good business!
edanm 2y ago
It's not a "regular" company, because it's still raising angel investment, presumably from the tech/startup ecosystem. A more common route for non-tech-startup companies is to get money via debt - in other words, borrow money from a bank or financiers. That's a different model to with different risk/reward characteristics, but it's how most non-innovative entrepreneurship is done, I believe - things like building restaurants, buildings, etc. This is indeed a "middle path" in terms of raising money by selling equity, but selling a smaller amount of it for less money, which keeps more ownership stake and control in the hands of the founders, but necessitates slower spending cause they raised less capital.
- troupo 2y ago
  > because it's still raising angel investment, presumably from the tech/startup ecosystem. > A more common route for non-tech-startup companies is to get money via debt - in other words, borrow money from a bank or financiers. What do you think angel investors are if not financiers, and what do you think those investments are if not debt? The only difference is that in the software- and software-adjacent world everyone expects a 100-fold return on their investments.
  - edanm 2y ago
    > What do you think angel investors are if not financiers, and what do you think those investments are if not debt? No, those are equity investments, usually. It's a different thing with different rules. Equity investments give the angel investors ownership of the company - equity. This is either direct selling of shares of a company to angels, or (more typically nowadays) via instruments like convertible notes, which convert to equity in future funding rounds. Other than this ownership stake, they are typically not entitled to anything else. Debt investments, on the other hand, don't give any ownership to the financier. They only entitle them to receive some future payments from the borrower. These are completely different things, and large companies often use a mix of both. But in startup-land, the typical investment is done via equity.

'Be a normal person/company and do normal person/company things,' isn't talked about very often, and it can be useful to be reminded that it is a pathway that can lead to success.

muzani 2y ago
It depends very much on your definition of success. Many who grew up upper middle class would define survival as failure.
- CharlieDigital 2y ago
  Life is too short and the works is to big for that kind of mindset.
- palata 2y ago
  Who talked about survival? If you think that anything other than becoming as rich as Mark Zuckerberg is "survival", then you're in for a treat.
  - deleted 2y ago
    [deleted]
- aloner 2y ago
  lifestyle businesses provide far more than "survival"

foobahify 2y ago

A million investment doesn't sound regular. Basically if you raise a mill for 33% you value yourself at $2m. That is without PMF or revenue! This seems like pulling a fast one on VCs if you then pivot to bootstrapping a nice family business. That ain't why they threw $1m at your PowerPoint. In "dragons den" style traditional business they'd offer you $50k for 50% at that stage. Maybe.

senko 2y ago

Regular companies aren't given $1m they don't have to pay back. They have to get loans and founders are usually on the hook if the venture fails. This is different from what the article advocates.

jimmydddd 2y ago
I run a small 20 year old service business in the US. Just getting a $300K line of credit from a bank required a lot of paperwork and both the company and me personally being on the hook. It took about a month to secure. In contrast, on a different occasion a secured a personal home equity line of credit for $100K in a bout 5 minutes.
- rambambram 2y ago
  Was there a mortgage right in the mix in your second occasion?

Cthulhu_ 2y ago

At least some years ago, browsing HN's comment section felt like it was a different world, separated from reality. I think some people need this kind of grounding reminders every once in a while.

esafak 2y ago
Russ (VC): Why would you go after revenue? Richard (CEO): Because... to make money? Russ: No. If you show revenue, people will ask how much, and it will never be enough. The company that was the hundred x-er, the thousand x-er, becomes the two x dog. But if you have no revenue, you can say you're pre-revenue... you're a potential pure play. It's not about how much you earn, it's about what you're worth, and who's worth the most? Companies that lose money. Pinterest, SnapChat, no revenue. Amazon has lost money every fucking quarter for the last twenty fucking years and that Bezos motherfucker is the king. There's no revenue. No one wants to see revenue. Go! Richard: Oh, um, I just thought that mainly the goal of companies is to make money. Russ: Yeah, no no no, that's not how it works. I don't want to make a little bit of money every day, I want to make a fuckton of money all at once. ROI. ROI! — Silicon Valley, "Bad Money" (2015). https://www.youtube.com/watch?v=BzAdXyPYKQo https://www.youtube.com/watch?v=BzAdXyPYKQo
- rmnclmnt 2y ago
  One of the best shows of all time, both extremely sarcastic but so on-point at the same time. We laugh because we know it's true
  - dehrmann 2y ago
    Part of it was Mike Judge (Office Space, among others). Part was that they did really good research. They nailed lots of little details about VC, technology, tech businesses, the locale, and industry.
- louthy 2y ago
  > ROI Radio on Internet
2y ago

chamomeal 2y ago

That’s pretty much what I took away. I guess the difference is that in my mind a “regular” company gets its funding via a loan. The post is from someone who got into YC. But yeah “building for profitability” sounds a lot like… good business!

edanm 2y ago

It's not a "regular" company, because it's still raising angel investment, presumably from the tech/startup ecosystem. A more common route for non-tech-startup companies is to get money via debt - in other words, borrow money from a bank or financiers. That's a different model to with different risk/reward characteristics, but it's how most non-innovative entrepreneurship is done, I believe - things like building restaurants, buildings, etc. This is indeed a "middle path" in terms of raising money by selling equity, but selling a smaller amount of it for less money, which keeps more ownership stake and control in the hands of the founders, but necessitates slower spending cause they raised less capital.

troupo 2y ago
> because it's still raising angel investment, presumably from the tech/startup ecosystem. > A more common route for non-tech-startup companies is to get money via debt - in other words, borrow money from a bank or financiers. What do you think angel investors are if not financiers, and what do you think those investments are if not debt? The only difference is that in the software- and software-adjacent world everyone expects a 100-fold return on their investments.
- edanm 2y ago
  > What do you think angel investors are if not financiers, and what do you think those investments are if not debt? No, those are equity investments, usually. It's a different thing with different rules. Equity investments give the angel investors ownership of the company - equity. This is either direct selling of shares of a company to angels, or (more typically nowadays) via instruments like convertible notes, which convert to equity in future funding rounds. Other than this ownership stake, they are typically not entitled to anything else. Debt investments, on the other hand, don't give any ownership to the financier. They only entitle them to receive some future payments from the borrower. These are completely different things, and large companies often use a mix of both. But in startup-land, the typical investment is done via equity.