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Things learned while running your own self-funded startup

richg42.blogspot.com

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Re: Things learned while running your own self-funded startup

#31

Post by josaka »

ykler wrote: post #3

I'm unclear about what he means by "Don't blindly sign NDAs". What are the risks, and what items to watch out for would be on the checklist my lawyer would ideally provide?

One common fact pattern: 1) small co is going to sell some partially-customized product to big co; 2) small co signs big co's NDA that leaves the definition of "confidential info" and other rights vague/favorable to big co; 3) big co floods small co with low grade confidential info relevant to customization of the product for a trial; 4) then (often through incompetence, some times through malice) big co becomes convinced that small co is misusing confidential info to sell to big co's competitors and sues for breach/trade-secret misappropriation, etc.

Effectively, the NDA gives big co the option to force small co to, at the very least, pay lawyers $50k a month until dead or the suit is resolved in two-plus years because the NDA and facts, at the very least, left a lot of issues to dispute.

Re: Things learned while running your own self-funded startup

#32

Post by gumby »

Having bootstrapped a couple of successful businesses myself, I think this is chockablock with great advice/observations.

I am surprised he seemed happy with his Valve experience but it is insightful of him to see that it taught him some good bootstrap lessons.

Re: Things learned while running your own self-funded startup

#33

Post by jasonkester »

smt88 wrote: post #30
jasonkester wrote: post #16

Earlier quoted context omitted.

They need another catchy phrase to reply to this, along the lines of "if you never try, there's nothing to survive". Survivorship Bias is at the top of the list of "reasons not to try", and it's a shame to see it dragged out every time you see a success story. The thing I live on today was Job Quittin' Sideproject #5. The first four died without ever letting me quit any jobs. Is #5 "survivorship"? Or is it "persistan…

> Let's say the chance of getting a business working, even for a smart guy, is only 10%. It's much, much lower, according to any reasonable estimation. For all startups, I've seen "less than 1%" on many occasions. That obviously excludes tons of failures that are never reported anywhere -- sometimes that are never even incorporated, despite trying to build/sell a product. > Does that mean you shouldn't try? For the v…

"less than 1%"

Are you thinking VC-backed startups, or maybe lumping them in to your calculation?

Remember, we're talking bootstrapped businesses designed for profitability. I think you'd be hard pressed to make ten real efforts in a row, learning lessons as you go, without getting one of them to stick.

For VC's, where "profitable and growing linearly" equates to failure, then sure, the odds are worse. But that's just another reason not to go that route.

tens of thousands of dollars

For what it's worth, the 4 big multi-year failures I reference above cost maybe a few thousand dollars total over the span of 10 years, and happened primarily in spare nights & weekends during the course of an otherwise active and non-ruined life. Most people who met me never knew it was happening at all, and no friday beers were missed as a result of the aforementioned bootstrapping.

Re: Things learned while running your own self-funded startup

#34

Post by gbacon »

scardine wrote: post #28

> 22. If you're at a company with deep pockets and you want to really have influence, offer the potential of a very large license fee for key software middleware. It works. What is number #22 (sorry, English is not my native language)? Is he talking about clients that offered him a large licensing fee and gained huge influence over him for doing so?

The opposite. To a company with lots of money to spend (deep pockets) the author offered the client a large license fee for middleware that was important (to the client).

This is a bit of a mind game. Confirmation bias[0] and the sunk-cost fallacy[1] being what they are, after a client makes what she sees as a large investment in you and your product, she has tied her success to your success.

[0]: https://en.wikipedia.org/wiki/Confirmation_bias

[1]: https://en.wikipedia.org/wiki/Sunk_cost#Loss_aversion_and_th...

Re: Things learned while running your own self-funded startup

#36

Post by acidburnNSA »

> Open source is great, because potential customers will get a chance to try out your work without spending a dime or ever talking to you. This boosts your credibility. On the flip side, if you give away too much, you are basically competing against yourself when you attempt to monetize your work as a product.

> Your open source release should be a demo of the product, and no more. Give things away with the goal of eventually converting the users of the free software into paying customers.

Eh, I get it, but I also kind of dislike when people use open source solely as an advertisement. Either open source something useful or don't bother open sourcing it at all. A lot of smaller open source work I've seen is done by people who put a lot of work into making a cool tool who then want to share it with other people that may find it useful and use it for new and interesting purposes.

Re: Things learned while running your own self-funded startup

#37

Post by hw »

ganeshkrishnan wrote: post #2

You missed the most important part: Keep your sanity. Trying to get funding is described as "soul sucking" even by Paul Graham and in our experience this is a startup killing move. Very few people talk about mental health for entrepreneurs and for us the most challenging times was talking to investors. If a constant stream of people told you, your business was not worth spending time or money, after how many rejectio…

The funding race is soul sucking, but there are many people who like to play the startup+funding churn game. Lots of $ involved, and some people like the nature of it

Not seeking funding can also be soul sucking especially when it comes to hiring and you don't have enough resources to hire. Of course, if you're self funding, the ideal scenario would be to build something that doesn't require a lot of human resources and maintenance and cost, and run it as a lifestyle instead of an actual job.

Re: Things learned while running your own self-funded startup

#38

Post by Mouse47 »

gumby wrote: post #32

Having bootstrapped a couple of successful businesses myself, I think this is chockablock with great advice/observations. I am surprised he seemed happy with his Valve experience but it is insightful of him to see that it taught him some good bootstrap lessons.

>chockablock

I had to google that :)

Funny it's 'x is chockablock with' rather than 'x is chockablocked with'

Re: Things learned while running your own self-funded startup

#39

Post by chmike »

bcarroll22 wrote: post #35

> Research the concept of "Death Prices". Google doesn't come up with anything on this one, is there a different term for the same thing?

Is this the same as "hidden costs" ? That is a cost not showing up on the bill. For instance the time spent to get the thing working and keep it working.

I've heard it used as argument against linux and free software.

Re: Things learned while running your own self-funded startup

#40

Post by sogen »

lemmings19 wrote: post #4

Does anyone know of similar articles to this that they like and wouldn't mind sharing? I always find these perspectives and retrospectives useful and interesting. Different people always point out different things, because everyone's business is at least slightly different in one respect or another. (be it funding, customer base, product scale, product type, employee count, number of concurrent projects, how successf…

I'd recommend checking marco.org, panic, nevenmrgan and this article: https://medium.com/@adrianhon/how-we-made-an-app-store-subsc...
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