Sell product, not equity.
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Sell product, not equity.
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Re: Sell product, not equity.
#2Having never founded a startup myself, I always find advice like this to be slightly surreal. Surely everyone who starts a startup is intent on selling product? It kind of sounds obvious, and yet it comes up on HN again and again.
I'm sure these are intelligent people doing this, with all the correct entrepenurial traits, so can someone explain how people get to a state where they aren't worried that "amount of money spent" > "amount of money earnt"?
On a seperate note - I've always wondered how you work out how much to pay yourself if you've not actually made any money yet and you are only using your investor's cash.
Re: Sell product, not equity.
#3Having never founded a startup myself, I always find advice like this to be slightly surreal. Surely everyone who starts a startup is intent on selling product? It kind of sounds obvious, and yet it comes up on HN again and again. I'm sure these are intelligent people doing this, with all the correct entrepenurial traits, so can someone explain how people get to a state where they aren't worried that "amount of money…
There's a comment in the article that describes it as "land-grab mode". How long did Facebook operate with zero revenue? Twitter? For some businesses, their top priority is to grow the userbase as huge as possible so that when they start trying to generate revenue they have enough users that the tiny numbers they get from each user payout in huge quantities in total.
Would Facebook have taken over social networking if it had been slathered with ads during its growth phase? I don't know. Zuckerberg didn't think so.
Re: Sell product, not equity.
#4Having never founded a startup myself, I always find advice like this to be slightly surreal. Surely everyone who starts a startup is intent on selling product? It kind of sounds obvious, and yet it comes up on HN again and again. I'm sure these are intelligent people doing this, with all the correct entrepenurial traits, so can someone explain how people get to a state where they aren't worried that "amount of money…
Surely everyone who starts a startup is intent on selling product?
You'd be surprised! There are too many well funded companies to name whose offerings are aimed at exciting investors (by being needlessly novel, tying together trendy but impractical concepts, and so forth) rather than focusing on what end users actually want. But this is the VC game - if only one stupid bet out of fifty works out ridiculously well, everyone's happy, right? (Except the end users, of course.)
Re: Sell product, not equity.
#5Having never founded a startup myself, I always find advice like this to be slightly surreal. Surely everyone who starts a startup is intent on selling product? It kind of sounds obvious, and yet it comes up on HN again and again. I'm sure these are intelligent people doing this, with all the correct entrepenurial traits, so can someone explain how people get to a state where they aren't worried that "amount of money…
Surely everyone who starts a startup is intent on selling product? You'd be surprised! There are too many well funded companies to name whose offerings are aimed at exciting investors (by being needlessly novel, tying together trendy but impractical concepts, and so forth) rather than focusing on what end users actually want. But this is the VC game - if only one stupid bet out of fifty works out ridiculously well, e…
So does that mean it's possible to make a living from exciting VCs about latest / trendy / tech whatever, without really needing to sell product?
Like I could pitch a new social, HTML5, WebGL, mobile, NodeJS platform framework API that links to Twitter, Facebook, blah, blah, blah and these VCs would fund it if I make the PowerPoint presentation sexy enough?
Do people really make a living from not actually making any money?
Re: Sell product, not equity.
#6Having never founded a startup myself, I always find advice like this to be slightly surreal. Surely everyone who starts a startup is intent on selling product? It kind of sounds obvious, and yet it comes up on HN again and again. I'm sure these are intelligent people doing this, with all the correct entrepenurial traits, so can someone explain how people get to a state where they aren't worried that "amount of money…
There's a comment in the article that describes it as "land-grab mode". How long did Facebook operate with zero revenue? Twitter? For some businesses, their top priority is to grow the userbase as huge as possible so that when they start trying to generate revenue they have enough users that the tiny numbers they get from each user payout in huge quantities in total. Would Facebook have taken over social networking i…
I always thought that the percentage of "land-grab" companies was very small, and that most companies would need a better business plan than that. Wouldn't it be a warning to any potential VC that a company's intent was "we're going to get big and then we'll work out how to make money".
Re: Sell product, not equity.
#7Earlier quoted context omitted.
Surely everyone who starts a startup is intent on selling product? You'd be surprised! There are too many well funded companies to name whose offerings are aimed at exciting investors (by being needlessly novel, tying together trendy but impractical concepts, and so forth) rather than focusing on what end users actually want. But this is the VC game - if only one stupid bet out of fifty works out ridiculously well, e…
So does that mean it's possible to make a living from exciting VCs about latest / trendy / tech whatever, without really needing to sell product? Like I could pitch a new social, HTML5, WebGL, mobile, NodeJS platform framework API that links to Twitter, Facebook, blah, blah, blah and these VCs would fund it if I make the PowerPoint presentation sexy enough? Do people really make a living from not actually making any…
They can for a short time. Pitching is a bit of a game, and if and if you are a compelling technical person, you can probably get money a few times from non-savvy investors. The problem is that most founders have this feeling of relief when they take VC money. Really, though, the fuse has been lit and the real pressure has just started. At the same time, it is sometimes easier to sell to VCs than it is to hear from a customer that your idea isn't compelling. They both have money, it is easy to ignore that fundraising over and over isn't sustainable. TechCrunch doesn't write about your first 10k per month in recurring revenue, but you get a heck of a publicity bump when you raise your first round from Andreessen. If raising VC money is the Silicon Valley dream (many people see it that way), selling to customers can feel like a necessary evil.
So to answer your question directly: is it a sustainable model? No. Do people try to do it and start and crater companies on the way? Yes.
Re: Sell product, not equity.
#8VC money should be for scaling, not initial build. This is where the lean startup is a great philosophy (I have other issues with it) but making sure that people want -- and are willing to pay for -- what you are making is the way to build a company.
Re: Sell product, not equity.
#9[deleted]
Re: Sell product, not equity.
#10Earlier quoted context omitted.
So does that mean it's possible to make a living from exciting VCs about latest / trendy / tech whatever, without really needing to sell product? Like I could pitch a new social, HTML5, WebGL, mobile, NodeJS platform framework API that links to Twitter, Facebook, blah, blah, blah and these VCs would fund it if I make the PowerPoint presentation sexy enough? Do people really make a living from not actually making any…
They can for a short time. Pitching is a bit of a game, and if and if you are a compelling technical person, you can probably get money a few times from non-savvy investors. The problem is that most founders have this feeling of relief when they take VC money. Really, though, the fuse has been lit and the real pressure has just started. At the same time, it is sometimes easier to sell to VCs than it is to hear from a…
What might be a typical yearly income for someone who did this? Assuming they last a year of course...
Is there a "standard" salary that a VC might expect someone to pay themselves?