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Not raising funds to stay small and happy

antoine.finkelstein.fr

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Re: Not raising funds to stay small and happy

#11

Post by ig1 »

Building a small boot-strapped company vs a funded company is in a large part dictated by market and product rather than by individual intention.

If you try to build a funded company in a space that can't sustain one you will struggle, likewise if you try to build a small bootstrapped company in a space that can you will similarly struggle.

If your direct competitors have a much better product then you (because they have more dev/product/ux resources than you), a professional sales org, marketing machine, etc. then it's very hard to compete. Your acquisition costs and churn will be high which will severely hurt your ability to grow to a sustainable level.

There are some ways to compete by going after the customers your competitors don't want (if they're price sensitive, too small, wanting unusual customization, services, niche needs, etc.) but you should think about upfront what your strategy is going to be.

Re: Not raising funds to stay small and happy

#12

Post by shubhamjain »

ig1 wrote: post #11

Building a small boot-strapped company vs a funded company is in a large part dictated by market and product rather than by individual intention. If you try to build a funded company in a space that can't sustain one you will struggle, likewise if you try to build a small bootstrapped company in a space that can you will similarly struggle. If your direct competitors have a much better product then you (because they…

> If your direct competitors have a much better product then you (because they have more dev/product/ux resources than you), a professional sales org, marketing machine, etc. then it's very hard to compete. Your acquisition costs and churn will be high which will severely hurt your ability to grow to a sustainable level.

I would disagree. If the customers are comfortable with your product, and they don't feel a big reason to switch, they probably won't. This is more true in the B2B space where customers tend to be less finicky. There are plenty of products that haven't innovated in years, but still enjoy decent sales.

Re: Not raising funds to stay small and happy

#14

Post by v_lisivka »

onassar wrote: post #4

Rarely comment, but definitely identify with this. Given HN's general focus on growth and funding, I think it's great/important for an article/concept like this to be given some reach. I find that there isn't enough critical thought given to why one ought to pursue an aggressive growth strategy. And that generally, staying small is seen as a failure to grow, rather than a conscious effort to grow in line with ones ow…

Startup is aimed at growth, to become next unicorn. If your business is not aimed at growth, then it is just regular business.

YCombinator is incubator for startups, hence their HN site is aimed at startups too.

Re: Not raising funds to stay small and happy

#15

Post by framestr »

I can definitely agree with this. I was developing http://framestr.com (SaaS), and at the time, we had to bring on a 2nd developer and server costs were increasing (we all wanted to avoid raising funds and aim to bootstrap). Rather than raise funds, my partners and I built a small SEO business. We ended up scaling the SEO business to around $200k MRR.

Having been through the financing process before for at a previous start-up, I can say that the time invested in the side business was not a whole lot different than time invested in fund raising (+ meetings, reporting to investors after the raise).

By hustling, we were able to build a nice life style business, while being able to grow our tech SaaS. At the same time, we had much more flexibility and have been able to build / invest in what we want, and for what we believe is best long-term.

Re: Not raising funds to stay small and happy

#16

Post by jchw »

v_lisivka wrote: post #14
onassar wrote: post #4

Rarely comment, but definitely identify with this. Given HN's general focus on growth and funding, I think it's great/important for an article/concept like this to be given some reach. I find that there isn't enough critical thought given to why one ought to pursue an aggressive growth strategy. And that generally, staying small is seen as a failure to grow, rather than a conscious effort to grow in line with ones ow…

Startup is aimed at growth, to become next unicorn. If your business is not aimed at growth, then it is just regular business. YCombinator is incubator for startups, hence their HN site is aimed at startups too.

I can see why YCombinator would be biased toward startups that raise funding, HOWEVER: I've always understood the word 'startup' to simply mean any new business.

Re: Not raising funds to stay small and happy

#17

Post by onassar »

v_lisivka wrote: post #14
onassar wrote: post #4

Rarely comment, but definitely identify with this. Given HN's general focus on growth and funding, I think it's great/important for an article/concept like this to be given some reach. I find that there isn't enough critical thought given to why one ought to pursue an aggressive growth strategy. And that generally, staying small is seen as a failure to grow, rather than a conscious effort to grow in line with ones ow…

Startup is aimed at growth, to become next unicorn. If your business is not aimed at growth, then it is just regular business. YCombinator is incubator for startups, hence their HN site is aimed at startups too.

Interesting view; I suppose if you look at HN as an extension of YC, then you're right: it would make sense that HN tends to focus/cater more to the growth/funding points of view.

For me, HN has become a source of news/ideas related to innovation (with an obvious leaning towards digital/technological innovation).

I guess, given how I see this community (and use it for access), it's refreshing to see an article like this :)

Re: Not raising funds to stay small and happy

#18

Post by [deleted] »

jchw wrote: post #16
v_lisivka wrote: post #14

Earlier quoted context omitted.

Startup is aimed at growth, to become next unicorn. If your business is not aimed at growth, then it is just regular business. YCombinator is incubator for startups, hence their HN site is aimed at startups too.

I can see why YCombinator would be biased toward startups that raise funding, HOWEVER: I've always understood the word 'startup' to simply mean any new business.

[deleted]

Re: Not raising funds to stay small and happy

#20

Post by joeblau »

edshiro wrote: post #8

I also identify with the author. Tried the startup game on two occasions and got burned 2 times (one as senior engineer the other as CTO) - somehow both companies managed to sell but not at a price that made my shares worth it. I then swore I would never be an employee again and decided to join an accelerator but crashed out. Now I am freelancing and building a bootstrapped business on the side: much less headaches,…

I moved to SF back in 2011 and I got burned by a few startups. I remember reading HN back then and someone said the average time to become a millionaire if you were chasing startup exits was 5 years. I probably in the best position now to have a successful exit, but I'm beyond the 5 year mark.

I think evaluating the viability of startups is a skill that I've gotten better at as time goes on. I've been at 5-6 failed startups (small old companies) with zero upside on exits. That being said, the time I was the happiest was when I was working for myself for about 18 months on things I was passionate about.

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