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Reflecting on My Failure to Build a Billion-Dollar Company

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Re: Reflecting on My Failure to Build a Billion-Dollar Company

#351

Post by adwn »

goatherders wrote: post #340
adwn wrote: post #334

Earlier quoted context omitted.

> People addicted to Startup Porn GREATLY underestimate the value of a business that generates a million dollars a year. Annual sales of $1M does not mean "generating a million dollars a year". In some industries, those $1M in sales might be as low as $30k to $50k in earnings (though it would probably be more for a software company).

Semantics aside, I'll say it again: people addicted to Startup Porn GREATLY underestimate the value of a business that generates a million dollars a year. Even if the earnings are 5% or 3% or even 1% ....getting someone to give you that much money for something you are selling is a lot harder than most people realize. Whether it's a million widgets at one dollar each or one widget at a million dollars, that's a LOT o…

It's not just "semantics": We're talking about an order of magnitude difference, and revenue is not the same as earnings.

> getting someone to give you that much money for something you are selling is a lot harder than most people realize

Absolutely, I agree! But the value of a business – which you were talking about – isn't determined by its revenue alone. In fact, earnings and earnings growth determine the value of a business a lot more than revenue.

Even for a "mom and pop" business – especially for a mom and pop business – earnings are much more important than total revenue.

Re: Reflecting on My Failure to Build a Billion-Dollar Company

#352

Post by mdonahoe »

super-serial wrote: post #183
lquist wrote: post #128

On the one hand I applaud KPCB for giving up their interest in a founder friendly way, but this also leaves a bad taste in my mouth and seems a bit “Heads I win, Tails you lose” from Sahil’s pov. The VC investment let him build a fully fledged product capable of breaking out. But it didn’t and he still got to keep the company without much liquidation preference. This is an example of a true VC subsidy.

I wonder if an entrepreneur with less connections and not a part of YC would get that $1 buyout deal. I would think the default would be ousting the founder and selling the assets. Then the founder would be left with nothing. They'd have no lifestyle business, even though they could have had one if they never took VC.

If he only did a series A, I doubt he gave up enough control to get ousted.

Re: Reflecting on My Failure to Build a Billion-Dollar Company

#353

Post by retsibsi »

mindcrime wrote: post #167
zild3d wrote: post #164

Earlier quoted context omitted.

Agreed, these two metrics are just as arbitrary as any other life-defining metric, "the number of healthy grand children you had", "the number of phish concerts you went to", "the number of Free AOL hours CDs you collected"

"the number of phish concerts you went to" Yep. For me it's "number of Mötley Crüe concerts attended" and "number of Trans-Siberian Orchestra concerts attended". (currently "4" and "4 or 5" respectively)

> "4 or 5"

I'm curious now: is there a story behind this ambiguity?

Re: Reflecting on My Failure to Build a Billion-Dollar Company

#356

Post by goatherders »

adwn wrote: post #351
goatherders wrote: post #340

Earlier quoted context omitted.

Semantics aside, I'll say it again: people addicted to Startup Porn GREATLY underestimate the value of a business that generates a million dollars a year. Even if the earnings are 5% or 3% or even 1% ....getting someone to give you that much money for something you are selling is a lot harder than most people realize. Whether it's a million widgets at one dollar each or one widget at a million dollars, that's a LOT o…

It's not just "semantics": We're talking about an order of magnitude difference, and revenue is not the same as earnings. > getting someone to give you that much money for something you are selling is a lot harder than most people realize Absolutely, I agree! But the value of a business – which you were talking about – isn't determined by its revenue alone. In fact, earnings and earnings growth determine the value of…

Apologies for the snark but my original comment was intended to say "profit of 1 million a year"; my shorthand of "generate" inadvertently created some shade of gray and I might have been well served to simply clarify.

Then I thought about it and said to thyself, "actually, a million is a lot either way." I've actually founded two companies that grossed over a million in a year (one at about 40% gross, 5% net and one closer to 75/65) and both times have required a whole lot of work.

So my fault for being vague, not intended.

Re: Reflecting on My Failure to Build a Billion-Dollar Company

#357

Post by boyband6666 »

sytelus wrote: post #309

This is very inspiring and kudos to author for being so transparent to share the experiences. However I really wonder if he actually did any analysis on market sizing and if there is something preventing them to capture the share. I visited Gumroad website, explored it around and even signed up as user and still I have very little clue how exactly does it work. Yes, I can see it "helps" me sell something but I absolu…

I was thinking the same thing. I really enjoyed reading a candid perspective of the process, but think there's more that can be done.

You almost need a second page 'GumroadTunes' where I can browse all the products. I strongly suspect there is a lot I'd be interested in, but it isn't in one place. The website justifiably focusses on the product for creators, but since there are a lot of thinm, it also feels like you could be driving more traffic/sales to them, and by extension yourself.

Again though, thanks for the interesting read (and the comments too - also interesting to read).

Re: Reflecting on My Failure to Build a Billion-Dollar Company

#358

Post by Tepix »

sahillavingia wrote: post #3
sixQuarks wrote: post #2

Ouch, number 2 employee at Pinterest - a $10 billion company that’s about to go public this year. He probably would have been worth an easy 100-200 million.

I prefer not to do the math.

What's the big advantage of having 200m vs 15m or so?

It's fuck-you money either way.

Re: Reflecting on My Failure to Build a Billion-Dollar Company

#359

Post by Tucanix »

This guy is self absorbed, delusional, and pretentious. I can't believe what I'm reading. This guy is wiping his tears with cash and drowning his sorrows in caviar and champagne.

This kind of entitlement deserves REAL defeat. This guy deserves a real life lesson instead of pretending to be a failure on the internet. Look at me and the millions I made by myself, wont you feel sorry for me buuuh huuuh. Give me a break.

Re: Reflecting on My Failure to Build a Billion-Dollar Company

#360

Post by Retra »

chillwaves wrote: post #320
Retra wrote: post #223

Earlier quoted context omitted.

One wonders why you have those morals if they mean so little to you. And if you don't need to justify your behaviors to others, why are you trying to justify them to me?

It's called having a discussion. You felt like participating, why isn't the person you are replying to given the same courtesy?

Um... Because I don't believe "other peoples' assessment of your life is irrelevant to you."
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