How much equity do you need to give away to get VC money for an unproven business idea? Is there a ballpark figure? I heard like $100k for 20% or something but I guess that's more like angel investing? What's the minimum amount of work you need to do before getting money with no track record as a founder?
Is the Lean Startup Dead?
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Re: Is the Lean Startup Dead?
#42As a bootstrapper, I see the point of what this article is trying to say. It's been increasingly difficult to create products that can find product market fit/validation and reach a scale where the income justifies the effort. And to top it off, the MVPs are becoming much more full product than simple landing page MVPs of years past -- and all of this requires a lot of capital (time, money, connections, volunteers, e…
> MVPs are becoming much more full product than simple landing page MVPs of years past -- and all of this requires a lot of capital It depends. If you're a developer then it's just your time.
You still need to pay for marketing, sales, some administrative work (accounting, legal...) Maybe you need help outside of your expertise (graphic design, UX...) There is a lot that goes into a startup on top of just building the product.
Re: Is the Lean Startup Dead?
#43I wish it wasn't so but I do think to the degree you can declare something dead the lean startup is. The problem is that lean startups requires a number of things that aren't accessible anymore. A) Maybe the most important is time. You need time in a good environment to actually develop something. Which has become a lot more costly. B) Large companies are controlling more areas than ever. People often wary of regulat…
B is really important. For all the lovely American paranoia about oppressive government killing business opportunity, the power of massive but still fast-moving companies in the same industry is far harder on innovation.
Re: Is the Lean Startup Dead?
#44As a bootstrapper, I see the point of what this article is trying to say. It's been increasingly difficult to create products that can find product market fit/validation and reach a scale where the income justifies the effort. And to top it off, the MVPs are becoming much more full product than simple landing page MVPs of years past -- and all of this requires a lot of capital (time, money, connections, volunteers, e…
Why is it increasingly difficult? Has something really changed in the past few years?
I'd guess the shift from Desktop to SaaS, the demands of keeping a service running 24/7 are quite high compared to just offering a download.
Re: Is the Lean Startup Dead?
#45For every Startup raising $X million in funding there are probably a thousand solo entrepreneurs bootstrapping their way into profitability. The spotlight only shines on "Startup X raises millions in new round". Side projects are the new Lean startup.
Solo entrepreneurs are not starting a startup, not as I (and most people) understand the term. After all, those thousands of "solo entrepreneurs" are starting things like coffee-shops, restaurants, garages, etc. They're examples of entrepreneurship, sure, but not startups. Startups are specifically organizations that are trying to grow very big, or that are looking to try a new business model. The reason the spotligh…
Pretty interesting how much argument there is against this view on HN. I guess most people coming here now are not familiar with Paul Graham's essay (maybe most HN posters don't even know who Paul Graham is any more)
http://www.paulgraham.com/growth.html
> A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of "exit." The only essential thing is growth. Everything else we associate with startups follows from growth.
Re: Is the Lean Startup Dead?
#46How much equity do you need to give away to get VC money for an unproven business idea? Is there a ballpark figure? I heard like $100k for 20% or something but I guess that's more like angel investing? What's the minimum amount of work you need to do before getting money with no track record as a founder?
Upvoted just because I want to see where this is going...
Re: Is the Lean Startup Dead?
#47So Blanks thesis seems to be go lean when money is hard to come by, otherwise take the cash and go big because there is more out there if you fail. I’m not sure this is much different than what has been talked about for a while, but it puts a nice point in what most people just talk around.
The capital is there, there’s a very good chance you’re going to fail anyway, you might as well fail while eating something other than ramen.
Re: Is the Lean Startup Dead?
#48"It’s a response to scarce capital, and when that constraint is loosened, it’s worth considering whether other approaches are superior. With enough cash in the bank, Katzenberg can afford to create content, sign distribution deals, and see if consumers watch."
There are two main thoughts from this that occurred to me: 1. There are very few Katzenbergs out there, so him personally raising that money is not surprising. If Spielberg or Lucas wanted to create a short form video company I am certain that they would be able to raise similar amounts. I am not him; therefore the lean rules still apply to me
2. the times that I have had enough money to buy my way out of problems has not yielded the best results. In my 30 years of doing this the clever answers have always come when my resources have been restricted, with often the best results from the most constriction. Extra money can bring bad results sometimes, the beauty is in the restraints.
TL;DR You are not Katzenberg. Neither am I.
Re: Is the Lean Startup Dead?
#49I wish it wasn't so but I do think to the degree you can declare something dead the lean startup is. The problem is that lean startups requires a number of things that aren't accessible anymore. A) Maybe the most important is time. You need time in a good environment to actually develop something. Which has become a lot more costly. B) Large companies are controlling more areas than ever. People often wary of regulat…
>A) Maybe the most important is time. You need time in a good environment to actually develop something. Which has become a lot more costly.
Why do you think that is? I'm not sure what you're referring to exactly.
>B) Large companies are controlling more areas than ever. People often wary of regulation as a barrier, but as time goes by the market participants creates their own barriers. Many areas are just harder to have an impact in than it used to be.
That one definitely sounds true to me, the complexity of modern software definitely makes it harder to be competitive with big shops. You can be the smartest coder on earth, if you want to write a complex application today (say, video editing software, smartphone interface, a kernel, a web browser etc...) you're looking at man-years of work if you want to start from scratch. And if you don't start from scratch it'll be harder to differentiate yourself from the competition and "disrupt" the status quo.
I'm always amused when I read stories from the 70's and 80's about lone hackers writing a cool hack for a computer or application of the time and managing to sell it for a lot of money. Like this story I remember reading on HN of the hacker who managed to write a task switching application for some Apple computer of the time and managed to sell it to Steve Jobs (I don't remember all the details and I can't find the article at the moment). It was a clever and completely non-portable use of the hardware resources, in the end it was probably a few kilobytes of (very clever) code. It's hard to imagine something like that today.
Re: Is the Lean Startup Dead?
#50Earlier quoted context omitted.
Solo entrepreneurs are not starting a startup, not as I (and most people) understand the term. After all, those thousands of "solo entrepreneurs" are starting things like coffee-shops, restaurants, garages, etc. They're examples of entrepreneurship, sure, but not startups. Startups are specifically organizations that are trying to grow very big, or that are looking to try a new business model. The reason the spotligh…
This is a weird argument. Lots of people raise big money to start a restaurant. And lots of people don't raise any money to start a SaaS.
It’s not the amount of money, it’s the amount of money, relative to costs. A restaurant buildout can cost $1 million pretty easily, so raising $1.5 million isn’t really “big” money in that context. But for a SaaS, $1.5 is “big” relative to the startup cost. Thus more of that $1.5 goes towards growth rather than just opening the door for business.
“Big” money is relative to the costs of getting the business started.