Why Being Broke Is A Founder's Greatest Asset
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Re: Why Being Broke Is A Founder's Greatest Asset
#2This is nonsense, or at least misleading for this audience. The example, selling a company for $1.1million isn't even getting to the start line for most folks.
If you look at many made-it-from-nothing founders of the companies we know, they rarely start out broke, are often independently wealthy (it's a lot safer to drop out of an ivy-league school with a wealthy family as a backs-stop) or have made significant money from earlier stages in their careers.
Being broke is a huge distraction to most founders, having to focus on the distractions of family, sometimes a spouse and/or kids, and struggling to pay bills - none of that is a good thing for one's ability to focus on getting your startup to any kind of critical mass.
Motivation-by-commitment, as many sales organizations will put it, is more like what's being talked about in the article - that if desperate a smart person will figure out ways to make money and often stabilize some sort of business out of that. But even that is a stretch to claim being an advantage over not being broke.
This is the kind of advice that leads mediocre founders to romanticize ramen-noodles and cheapskate their talent - either getting second tier people or trying to cajole talented engineers into taking much-below-market rate wages.
Obviously it's better for founders to be capital efficient and keep costs low. Being hungry clearly is necessary to success. But if you can get yourself to some degree of financial stability it'll make you more able to focus on what matters building your startup, and if you pay people fairly you'll attract talent and loyalty.
Re: Why Being Broke Is A Founder's Greatest Asset
#3This is nonsense, or at least misleading for this audience. The example, selling a company for $1.1million isn't even getting to the start line for most folks. If you look at many made-it-from-nothing founders of the companies we know, they rarely start out broke, are often independently wealthy (it's a lot safer to drop out of an ivy-league school with a wealthy family as a backs-stop) or have made significant money…
I couldn't agree more in my experience (joint founder, bootstrapping a new business from personal small amount of savings).
Re: Why Being Broke Is A Founder's Greatest Asset
#4This is nonsense, or at least misleading for this audience. The example, selling a company for $1.1million isn't even getting to the start line for most folks. If you look at many made-it-from-nothing founders of the companies we know, they rarely start out broke, are often independently wealthy (it's a lot safer to drop out of an ivy-league school with a wealthy family as a backs-stop) or have made significant money…
This. I can't even imagine how founders with families and kids deal with the stress that goes hand in hand with being broke. Being scrapy and hungry is a good thing. But not knowing how to pay rent or having to freelance a couple of days a week is a huge distraction.
Re: Why Being Broke Is A Founder's Greatest Asset
#5I can assure you that having no money is not an asset.
Re: Why Being Broke Is A Founder's Greatest Asset
#6I'm a founder. I'm broke. It doesn't feel like an asset to me...
Re: Why Being Broke Is A Founder's Greatest Asset
#7This is nonsense, or at least misleading for this audience. The example, selling a company for $1.1million isn't even getting to the start line for most folks. If you look at many made-it-from-nothing founders of the companies we know, they rarely start out broke, are often independently wealthy (it's a lot safer to drop out of an ivy-league school with a wealthy family as a backs-stop) or have made significant money…
This. I can't even imagine how founders with families and kids deal with the stress that goes hand in hand with being broke. Being scrapy and hungry is a good thing. But not knowing how to pay rent or having to freelance a couple of days a week is a huge distraction.
I can tell you from personal experience how: If you take literally the advice of investors and startup-ra-ra types and put everything on the line for your startup, your own money, your time... and then something like the financial crash of 2008 hits just as you're raising your round, your $500k Salesforce.com pipeline of business that depends on marketing spend from big corporates in q4/08 and q1/09 collapses and literally 0% closes... You get divorced. Being broke isn't a bonus feature of the startup process. It can be an unfortunate side-effect and one that takes some effort to dig out from. You'll make it out again if you stick at it, but it's not fun and it WILL cost you things in your life that are important to you.
Remember, families didn't sign on for your start-up dream. Not being able to pay the bills is not cool. It's bad advice from people who've either never honestly been there, or folks who've forgotten what it was like there and are romanticizing it, or folks who are insecure about their success and want to build a struggle-against-adversity narrative to feed the myth of the hero-founder.
Re: Why Being Broke Is A Founder's Greatest Asset
#8This is nonsense, or at least misleading for this audience. The example, selling a company for $1.1million isn't even getting to the start line for most folks. If you look at many made-it-from-nothing founders of the companies we know, they rarely start out broke, are often independently wealthy (it's a lot safer to drop out of an ivy-league school with a wealthy family as a backs-stop) or have made significant money…
Some people romanticize being broke ... others romanticize raising funding. It's unfortunate that you think selling a company for $1 million isn't the starting line.
Outside of Silicon Valley, most people would not understand why you are thinking that way. Perhaps saying "Broke" is the incorrect term ... "almost broke" will light a fire under your ass.
Re: Why Being Broke Is A Founder's Greatest Asset
#9Survivor bias mixed with anecdotal folksy wisdom.
"She scrounged what hardware she could get and succeeded" does not mean that everyone who does that will succeed. I'm sure most successful businesses buy or lease or subscribe to the hardware they need.
Being a hustler and working hard is required for success. Money, or lack of it, doesn't change that. But, having access to money, even just enough to get by day-to-day, will make a hustler that much more powerful.
Sidenote: Compare the comments here on HN to the blog comments. Almost exactly the opposite, which I find strange given the supposed overlap in audience.
Re: Why Being Broke Is A Founder's Greatest Asset
#10I disagree.
Hunger may be a driver, but too much hunger can start to be consuming and distracting. Too much hunger and it would be tempting the next time someone offers to acquihire.
Yes it's important to take a Senecan long view and prepare yourself for the hardships you'll encounter, but to purposefully create hardship isn't a wise thing.
You should earn as much as you need, as little as you can take to give your company the best chance. But you shouldn't be broke, too hungry, and as a result distracted.