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A Terrible, Horrible, No Good, Very Bad Hardbound Update

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Re: A Terrible, Horrible, No Good, Very Bad Hardbound Update

#11

Post by austenallred »

mysterydip wrote: post #9
jeffjose wrote: post #7

Earlier quoted context omitted.

VC's are only interested in high growth startups. That means they'll have to pass up on a lot of good ideas such as OP's. The whole thing boils down to power law that guides investment. VCs are hoping that out of 10, at least 1 would be a super-duper hit (think facebook, google) that'll offset the losses of the other 9. In short - go with "disrupting" world-changing ideas to the VCs. If your idea is good, but not gre…

Wouldn't an investor want a "diverse portfolio" divided between low yield low risk (such as OP pre-unicorning) and high yield high risk such as you mention?

An angel investor would want a diverse portfolio. A VC wouldn't. VCs make all of their money from the one startup that becomes a billion dollar company and lose or break even or make a little on the rest. So they're really only looking for huge swings with enormous returns.

If you're a seed stage VC you're where a larger fund has allocated a portion of its capital to play insanely high risk/high reward investments.

Re: A Terrible, Horrible, No Good, Very Bad Hardbound Update

#12

Post by nerdponx »

jeffjose wrote: post #7
nerdponx wrote: post #3

Earlier quoted context omitted.

I was wondering about this too. Why does this product only work if you're huge? It sounds like something you and a programmer buddy could have started as a side project and grown organically.

VC's are only interested in high growth startups. That means they'll have to pass up on a lot of good ideas such as OP's. The whole thing boils down to power law that guides investment. VCs are hoping that out of 10, at least 1 would be a super-duper hit (think facebook, google) that'll offset the losses of the other 9. In short - go with "disrupting" world-changing ideas to the VCs. If your idea is good, but not gre…

But that's my point. Why go the VC route instead of building a user base organically, eventually getting a small business loan, etc.?

Re: A Terrible, Horrible, No Good, Very Bad Hardbound Update

#13

Post by scandox »

> I see a huge range of possibilities:

> 1. Try to get acqui-hired and pretend I didn’t fail to fundraise, as is the tradition in our industry (“our incredible journey!”, etc). Hint: I’m not going to do this.

In the words of Oliver Cromwell: 'put your trust in God; but mind to keep your powder dry'.

Re: A Terrible, Horrible, No Good, Very Bad Hardbound Update

#14

Post by goodJobWalrus »

mysterydip wrote: post #9
jeffjose wrote: post #7

Earlier quoted context omitted.

VC's are only interested in high growth startups. That means they'll have to pass up on a lot of good ideas such as OP's. The whole thing boils down to power law that guides investment. VCs are hoping that out of 10, at least 1 would be a super-duper hit (think facebook, google) that'll offset the losses of the other 9. In short - go with "disrupting" world-changing ideas to the VCs. If your idea is good, but not gre…

Wouldn't an investor want a "diverse portfolio" divided between low yield low risk (such as OP pre-unicorning) and high yield high risk such as you mention?

No, because people who give the money to the investor (limited partners) can optimize their own portfolios. It is not the VC's mandate to do that. From the LP's point of view, investment in the VC fund is the risky component of their portfolio.

Re: A Terrible, Horrible, No Good, Very Bad Hardbound Update

#16

Post by mcguire »

mysterydip wrote: post #9
jeffjose wrote: post #7

Earlier quoted context omitted.

VC's are only interested in high growth startups. That means they'll have to pass up on a lot of good ideas such as OP's. The whole thing boils down to power law that guides investment. VCs are hoping that out of 10, at least 1 would be a super-duper hit (think facebook, google) that'll offset the losses of the other 9. In short - go with "disrupting" world-changing ideas to the VCs. If your idea is good, but not gre…

Wouldn't an investor want a "diverse portfolio" divided between low yield low risk (such as OP pre-unicorning) and high yield high risk such as you mention?

For the same reason Berkshire Hathaway isn't investing in your lemonade stand: they have billions to invest, so if you're only making hundreds of thousands on the best day, you're not worth the required effort.

Re: A Terrible, Horrible, No Good, Very Bad Hardbound Update

#17

Post by chongli »

bbrizzi wrote: post #5
taneq wrote: post #2

Why didn't the fundraise work? Maybe because your business model doesn't appear to be working at your current scale, you're not scaling fast enough to make it work any time soon, and you didn't seem to have any clear plan to change this. I don't mean to be harsh, it sounds like you gave it a shot and it went pretty right. But you got caught up in the unicorn-chaser Silicon Valley mindset: 1) Do something that only wo…

Reminds me of DHH's talk about having just a "nice italian restaurant" : https://www.youtube.com/watch?v=0CDXJ6bMkMY

Seriously. I kept thinking about YouTube when reading the story. What Hardbound tried to do is get VC money for an early stage YouTube channel. That's just silly. The business model for a YouTube channel is to start with nothing, make a video, nobody watches it, so then you make another video. Thousands of videos later you have a few people watching. You get a few of those people to give you a couple bucks on Patreon. You invest the money in better equipment and polish your videos up a bit.

It's just a long, slow grind. It requires direct communication with your audience. You have to listen to what they want and meet their needs.

Re: A Terrible, Horrible, No Good, Very Bad Hardbound Update

#19

Post by rainbowmverse »

nerdponx wrote: post #3
taneq wrote: post #2

Why didn't the fundraise work? Maybe because your business model doesn't appear to be working at your current scale, you're not scaling fast enough to make it work any time soon, and you didn't seem to have any clear plan to change this. I don't mean to be harsh, it sounds like you gave it a shot and it went pretty right. But you got caught up in the unicorn-chaser Silicon Valley mindset: 1) Do something that only wo…

I was wondering about this too. Why does this product only work if you're huge? It sounds like something you and a programmer buddy could have started as a side project and grown organically.

The company I use to distribute my music is like that (DistroKid). Three employees and they turned the music distribution game on its head. I think the founder is active here on HN.

Re: A Terrible, Horrible, No Good, Very Bad Hardbound Update

#20

Post by jaclaz »

Maybe it is just me, but I cannot refrain from noticing how the "layman examples" and "imagining" he makes seem a bit off in a funny way.

>There’s an image in my head that helps me make sense of this:

>

>I’m driving towards the horizon in the desert.

Wait a minute, a man can dream, but the image in your mind is driving in a Ferrari towards the horizon in the desert.

And right after:

>Instead, the car ran out of gas, and it’s just me now.

Maybe if you had an ordinary pickup with a couple jerry cans in the back you would have gone further?

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