Our Odd Startup: 3½ Guys, No VC, Profitability, and Patience

Naw: Whatever doubts you listed VCs might have about my contacts they can resolve just by some e-mail with questions or a phone call. They don't do that.

VCs insist that a foil deck be really short. So, there's no room for a lot of, or, really, any details.

For production quality code, that's what I've written. There's nothing wrong with my code for revenue of a few million dollars a month. For 1000 times that revenue, will need a lot of attention to system management, monitoring, administration, etc., by then I'll have some software developers and we'll get some experts at Microsoft, etc. to guide us on what to do. Also Microsoft has some relevant products.

I didn't get into computing yesterday: E.g., at IBM for our AI language KnowledgeTool, I did an all-night coding session and at dawn shipped running code with the main ideas. That afternoon our relevant programmer had my code in our production code, weeks ahead of the approach my work replaced (I kept some code on the stack of dynamic descendancy, etc.). Our group shipped that code as an IBM Program Product, IBM's highest quality software product category.

At FedEx, I wrote some code to schedule the fleet. It saved the company from going out of business and was then long used for planning and evaluation of new aircraft, etc. Since that code worked fine in production, it was production code.

The VCs want references? Okay: I have listed the founder, COB, CEO of a famous Fortune 500 company and the President of one of the world's best research universities with one of the world's best computer science departments -- that person was one of my Ph.D. dissertation advisors.

For "Texas sized ideas", that's all the VCs can pursue. They need to back companies that can achieve $1+ billion exits in 10- years.

The estimate of $1T is first-cut, back of the envelope, ballpark but is not just a wild guess and has some solid data and reasoning behind it: E.g., the work is to deliver a "must have" solution for a problem nearly every user of the Internet in the world has nearly everyday, on average at least a few times a week. For the ads, run ones of interest in the more developed countries, use the revenue and market capitalizations of some well known, successful ad-supported companies, and that's the estimate.

We're supposed to knock one over the fences, and not just by luck but by planning, engineering, etc. No VC has ever looked at my estimates, planning, code, or core technology.

In this thread I listed five criteria the VCs want and my project doesn't have. A solid guess is that those are the crucial criteria. Of those, the main criterion is just traction -- the VCs want traction. My guess, explained here, is that the LPs insist on traction or something close.

I'm not some wild eyed dreamer. Instead, I hold an applied math Ph.D. from one of the world's best research universities and was a researcher in AI at IBM's Watson lab, have been at GE, FedEx, IBM, and in a lot of classified work for US national security.

All that is readily available to the VCs, but they don't care.

When my Web site goes live and if it gets traction significant and growing quickly, then via Comscore, Google's ad data, virality, publicity, etc., some VCs will notice and call me.

But by then with my meager burn rate, I won't need, want, or accept their check -- especially I don't want to report to their BoD and, with their check, suddenly go from 100% owner to 0% owner on a several year vesting schedule to get back to maybe 30% ownership while the BoD can fire me at any time for any reason or no reason. Really the VCs and BoD can just take my company, work, secret sauce, etc. and leave me with nothing. So, sure, as for Facebook and/or Google, I should have two classes of stock so that I can keep control. Hmm. It'd be mud wrestling with the VCs, BoD, and lots of lawyers.

I don't want to be a Delaware C Corp. Being a private company (Trump's companies are private), e.g., LLC, is fine with me.

Yes, the VCs want to make money. On average, in terms of ROI, they don't make much money. It's clear enough that a major fraction of VCs live well enough off their 2% without getting much from their 20%. So, they are making money enough now for all they know how to do.

No: Just a simple observation, e.g., much like horse owners needed something better, e.g., Ford's Model T which then became a "must have" for nearly every horse owner in the more developed countries. Essentially every user of the Internet has this problem everyday; currently there is no good solution on the Internet. The first good solution will be a "must have" for nearly every user on the Internet in the world. And my solution is not just good but excellent, better from being more powerful than possible with the techniques common on Sand Hill Road or in the computer science departments of Stanford, CMU, or MIT. My core technology is not computer science, AI, or ML, and is original with me. Current work in AI/ML can't get the solutions my work delivers. I'm able to do such original work; that's what my Ph.D. says and why I got it.

The estimate of $1T market capitalization is back of the envelope, first-cut, ballpark but with some reasonably solid evidence: The main evidence is just the prospect of getting on average, say, 30 minutes of eyeball time three times a week from nearly every Internet user in the more developed countries (where can get good ad rates). Comparing with other successful ad supported Web sites, the $1T is reasonable enough.

But for being speculative, it might be that, like cars where the Model T was not the end and not even the beginning of the end but just the start of the beginning, the usage and ad revenue might make the effort worth several times $1T. And there is a chance that the ad targeting can be come a big, new thing beyond just the ordinary views of ads for several times more. But that's speculative. Sure, cars are an example of how just improving on horses can become really big, e.g., create the suburbs. So are phones, PCs, dial up modems, AOL, CompuServe, and Prodigy, radio that became TV, computers, transistor based computers, microprocessors, and 14 nm line widths, aluminum, and more. Amazon is a big change, not just in retailing but even in logistics and the economy. So, with my project, it could become much bigger than the $1T. E.g., likely the current ad business would have difficulty supporting much over the $1T, but if go beyond ads, say, as Amazon went beyond just retailing and cars went beyond just replacing horses, and airplanes beyond what the Wright Brothers did, and satellites well beyond Sputnik, then could replace ads with something much better and get still more. But that's the speculative part. The $1T is reasonable enough, for a ballpark, first-cut, back of the envelope estimate.

But, my applied math has some generality for taking in common data and putting out valuable information and could be applied to and be the core of something bigger than my current goal of the $1T.

Then a solution, based on some new data and some rock solid applied math, complete with theorems and proofs (I hold a good Ph.D. in such work) based on some advanced pure/applied math prerequisites. The math is nicely typed into a document via Knuth's TeX. No, not LaTeX, just Knuth's original, long essentially totally bug free TeX. It's a nice applied math document. Am I going to publish that secret sauce? Heck no!

A new, innovative, very different, but simple and easy to use, UI/UX that is interactive, iterative, somewhat game like, and for some users addictive and that helps generate the new data. The UI/UX needs just a Web browser up to date as of 10+ years ago. E.g., ASP.NET automatically wrote a little JavaScript for me, but I never wrote even a single line of it. That ASP.NET is the only JavaScript for the site, and even that is optional (I suspect it has to do with cursor positioning). The Web pages, then, are just dirt simple, send for controls nearly everyone on the Internet understands; there are no icons, roll-overs, pull-downs, pop-ups, overlays, etc.; the screens just load, BAM, and don't jump around during loading. The pages will look fine on everything from a smartphone to a high end workstation.

Production quality code in solid Windows Visual Basic .NET (no, NOT the old, simplistic, weak, unsupported Visual Basic 6.0), essentially the most powerful language for the .NET Framework on Windows, e.g., essentially just a different flavor of syntactic sugar compared with C#, fine, about as good as it gets these days for production quality software. The code is 24,000 programming language statements in 100,000 lines of code; so, right, is profusely documented in the code but also otherwise.

Code running as intended with no known bugs and in alpha test. Code intended for first production through a quite significant company, say, $10 million a month in revenue with nearly nothing in opex. So, no prototype code. No minimum viable product. No stuck together with chewing gum and bailing wire. No refactoring needed. Instead, solid, production code. My first Web site, first use of SQL Server, first use of Visual Basic .NET, first use of .NET, ASP.NET, ADO.NET, my first UI design, my first Web page design, all production quality work from the beginning with no intermediate steps, prototypes, redesigns, refactorings, etc. I typed in the code myself using just my favorite text editor KEdit. I made no use of an integrated development environment (IDE). I had no difficult debugging. Timings show that the code is shockingly fast. The data base has only clustered keys, no foreign keys, and no joins. SQL Server is being used as not much more than just a B-tree data base system. In production, SQL Server is being lightly used -- the main data manipulations are elsewhere in my code. There is an off-line, batch program that reads the SQL Server data and does some initial processing later used on-line.

It's a good project, a darned good project. There's just good planning, applied math, software development, etc. and nothing over confident.

I didn't get into such work yesterday or even recently. I've been successful doing applied math and computing for US national security and business for decades. I know very well just what the heck I'm doing. It all worked just as I originally intended. There were some problems but not specific to my project. All the work unique to my project was fast, fun, and easy for me.

Oh, by the way, I am 100% completely, totally, absolutely, permanently unemployable for any job above stocking shelves at Wal-Mart and likely even that. I'm a native born US citizen, never arrested, in good health, never filed an insurance claim of any kind, never sued or been sued, never convicted of any crime worst than a minor traffic violation, have not had a traffic violation in 10+ years, never used illegal drugs or used legal drugs illegally, etc. Yup, permanently unemployable.

For a solo founder to build a company worth $1T is exceptional; same for $100 billion, $10 billion, $1 billion (the VCs hope for), $100 million. So, one might suspect that in some ways such a person and project would be a little different from what is quite common. So be it.

A good thing about the Web is that the users don't know anything about the owner of the Web site; they might be a dog, wearing blue jeans.