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Invisible unicorns: Big companies that started with little or no money

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Re: Invisible unicorns: Big companies that started with little or no money

#61

Post by traviswingo »

replicatorblog wrote: post #42
cr0sh wrote: post #38

Isn't this the way companies, until fairly recently, have always been started and grown? Basically, come up with an idea/product, reach around to back pocket (or into your purse) and fund it ad-hoc. That, or take out a loan or such. It seems like this was the way things were always done - until fairly recently. It seems like things changed sometime around the early 1990s. I tend to wonder if this had anything to do w…

The birth of VC as an asset class is generally considered to be in the mid-1940s and created by Harvard Professor George Doriot. The early employees of Fairchild Semiconductor built on the model in the 1960 and helped give birth to Silicon Valley. You're are correct that VC moved into the popular psyche in the 1990s in the run-up to the dot-com boom.

There's a great documentary on Netflix about this titled "Something Ventured."

Re: Invisible unicorns: Big companies that started with little or no money

#62

Post by elihu »

I think it's interesting that private businesses that self-funded tend to have a different internal organization and different values compared to businesses that took VC money and/or went public.

Outside money seems to demand rigid hierarchy and (not surprisingly) good returns for investors, whereas self-funded businesses tend to prefer a flatter peer-to-peer structure and adherence to whatever values are important to the founders/employees beyond a steady income. That's my impression, anyways.

Re: Invisible unicorns: Big companies that started with little or no money

#63

Post by nameless912 »

patrickg_zill wrote: post #57
replicatorblog wrote: post #22

Earlier quoted context omitted.

Fair enough, but I don't see how they could run a loss on a hardware business for a decade without raising capital. More likely it's got standard ecommerce margins, blended with higher margin from their own product line.

Their margins are high. About 8 times what you would pay for quantity 1 of the component from a Chinese supplier. E.g. 1.8" TFT screen they sell for $29.95 is less than $4 shipped via AliExpress.

However, they do provide a value add in the form of dealing with the Chinese supplier and their knowledgebase. Of course you could buy the same board off of aliexpress and then hit up Adafruit for the documentation (or be a badass and go out on your own) but they provide both the ability to buy just one from a US supplier and decent docs in the same place. Sometimes I value convenience over raw costs.

Re: Invisible unicorns: Big companies that started with little or no money

#64

Post by p_rude »

replicatorblog wrote: post #11

I'm one of the authors of this post and plan on releasing an updated version with some companies that we missed on the first pass. If you know of other substantial startups that went far before raising capital, please let me know: JoeFlaherty@FounderCollective. The current list of misses includes: + Grammarly + 37 Signals/Basecamp + Zip Recruiter + Outcome Health + Wistia Who else?

MathWorks

Re: Invisible unicorns: Big companies that started with little or no money

#65

Post by [deleted] »

Animats wrote: post #51

Autodesk. Started with $60,000 put in by the founders. No further investments until the IPO. Current market cap $24 billion. (Autodesk did have some conversations with VCs, but they were so profitable and growing so fast that by the time the VCs had made an offer, it was ridiculously low. Here's the history of those deals.[1]) [1] https://www.fourmilab.ch/autofile/www/chapter2_32.html

[deleted]

Re: Invisible unicorns: Big companies that started with little or no money

#66

Post by hchasestevens »

replicatorblog wrote: post #11

I'm one of the authors of this post and plan on releasing an updated version with some companies that we missed on the first pass. If you know of other substantial startups that went far before raising capital, please let me know: JoeFlaherty@FounderCollective. The current list of misses includes: + Grammarly + 37 Signals/Basecamp + Zip Recruiter + Outcome Health + Wistia Who else?

Skyscanner

Re: Invisible unicorns: Big companies that started with little or no money

#68

Post by pacaro »

brudgers wrote: post #39
pacaro wrote: post #13

Microsoft is pretty close too. Founded in 1975, issued stock in 1981 (5% to an investor, the rest to founders and employees), IPO in 1986 Source: http://www.techntechie.com/early-investors-in-microsoft-you-...

Microsoft is also interesting for the amount of wealth it created for regular employees via stock...10,000 millionaires in 1986 dollars. [1] I often wonder about how having so many millionaire employees shaped company culture in the late 80's and through the 90's. [1]: https://www.forbes.com/2010/06/28/microsoft-company-numbers-...

I was only there 1999 to 2013, so I didn't directly experience it, although there were still plenty of "Microsoft Volunteers" when I started.

A friend who was there through much of the 90s used to remark that it was great when the share price was exponential because "the assholes" would leave as soon as they could "call in rich", but the people who loved the job would stay. When the share price went flat, "the assholes" would start gaming the review system.

There was definitely a change from an era in which salary was the smaller part of compensation to an era in which it became the dominant component, it took senior management too long to realize how important this change was

Re: Invisible unicorns: Big companies that started with little or no money

#69

Post by pacaro »

pacaro wrote: post #68
brudgers wrote: post #39

Earlier quoted context omitted.

Microsoft is also interesting for the amount of wealth it created for regular employees via stock...10,000 millionaires in 1986 dollars. [1] I often wonder about how having so many millionaire employees shaped company culture in the late 80's and through the 90's. [1]: https://www.forbes.com/2010/06/28/microsoft-company-numbers-...

I was only there 1999 to 2013, so I didn't directly experience it, although there were still plenty of "Microsoft Volunteers" when I started. A friend who was there through much of the 90s used to remark that it was great when the share price was exponential because "the assholes" would leave as soon as they could "call in rich", but the people who loved the job would stay. When the share price went flat, "the asshol…

There are also stories of employees wearing pins that said FYIFV as a warning that their tolerance of BS was low

(Fuck You I'm Fully Vested)

Re: Invisible unicorns: Big companies that started with little or no money

#70

Post by pacaro »

replicatorblog wrote: post #15
pacaro wrote: post #13

Microsoft is pretty close too. Founded in 1975, issued stock in 1981 (5% to an investor, the rest to founders and employees), IPO in 1986 Source: http://www.techntechie.com/early-investors-in-microsoft-you-...

That's a great one! I tried to avoid companies that were more than a decade or so old, with a couple exceptions like Lynda/Epic. My concern was that examples like that, or Amazon which only raised $8M, are such crazy outliers and relied on strong timing, amazing founders, and other good fortune, that it made them hard to be approachable. That said—I'll make sure to give MS a headnod in the next revision!

In a sense these are all crazy outliers, regardless of era. This is the essence of survivorship bias.
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