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A startup doesn't need to be a unicorn

mattgiustwilliamson.substack.com

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Re: A startup doesn't need to be a unicorn

#111

Post by bpicolo »

marcinzm wrote: post #61
summarity wrote: post #9

Here's a model that exists in Germany, which I like: You can present a business plan to the state's investment bank and apply for several financial aides, including: * 1.5 years of universal basic income for you plus up to 2 other people. It's a tiny amount of money, but the point is to free you up to invest your actual time an money into the business. You do not have to pay this back. * up to 20k EUR in "consulting…

That just sounds like traditional small businesses. Which is cool but re-branding them to "startup" seems silly. The US has 35 million small businesses and maybe 1 million would qualify as startups.

> You do not have to pay this back.

There's a very big key difference from standard small business here

Re: A startup doesn't need to be a unicorn

#112

Post by martin_a »

zwnow wrote: post #77
summarity wrote: post #9

Here's a model that exists in Germany, which I like: You can present a business plan to the state's investment bank and apply for several financial aides, including: * 1.5 years of universal basic income for you plus up to 2 other people. It's a tiny amount of money, but the point is to free you up to invest your actual time an money into the business. You do not have to pay this back. * up to 20k EUR in "consulting…

It's also connected to so much bureaucracy that you almost need to hire someone for that alone, because you wont have as much time for your actual business. Founding a company in Germany is so much unnecessary paperwork its crazy. Single handedly the only reason I will never try it in my home country.

Not true.

Go to your hometown administration, pay 35 Euro and leave 15 minutes later with a "Gewerbeanmeldung" which enables you to start doing business right away.

Re: A startup doesn't need to be a unicorn

#113

Post by earthnail »

flessner wrote: post #103
zwnow wrote: post #77

Earlier quoted context omitted.

It's also connected to so much bureaucracy that you almost need to hire someone for that alone, because you wont have as much time for your actual business. Founding a company in Germany is so much unnecessary paperwork its crazy. Single handedly the only reason I will never try it in my home country.

Actually just founding the company is the easy part nowadays. You can do it online or let a notary work it out for you. It's just everything else that's dreadful.

Small German business owner here. I still find the notary egregious. But yeah, the admin afterwards is facepalming.

Had a startup in the UK before; that was a walk in the park in comparison.

Re: A startup doesn't need to be a unicorn

#114

Post by earthnail »

mentalgear wrote: post #55
summarity wrote: post #9

Here's a model that exists in Germany, which I like: You can present a business plan to the state's investment bank and apply for several financial aides, including: * 1.5 years of universal basic income for you plus up to 2 other people. It's a tiny amount of money, but the point is to free you up to invest your actual time an money into the business. You do not have to pay this back. * up to 20k EUR in "consulting…

Good to see startup strategies which help build stable, solid middle-sized companies. Germany has a great success story by the name of the "Mittelstand" (SME businesses), which means a big part if the market are small to middle enterprises. This is far more consumer-friendly and innovative, as more competitive as it's not relying on a few big players like in the US that might also collude with each other.

Small business owner here. Only works if you can carve out a niche. Lots of software areas have clear scaling benefits and then you just can’t compete as a small company.

That’s why MS Office continues to dominate after decades.

Re: A startup doesn't need to be a unicorn

#115

Post by bob1029 »

istvanmeszaros wrote: post #89

I am a big believer in Seed-Strapping. You need some initial capital to get you started (can be as low as a few months of your own salary). But you should aim to bootstrap your solution.

Being forced to bootstrap with your own funds is the best bullshit business filter I am aware of. I also think it says a little bit about the founder's ability to maintain some amount of stability in their life and put their money where their mouth is. Everyone can come up with ideas. How sure are you of yours? Are you willing to use some of your own money to prove it out? No? Then I guess I'm not that interested either.

The way I am trying to do this now is to only ask for money if I can obtain at least one paying customer who is willing to vouch for me. If I can't market an MVP to at least one small shop, I don't know why a non-fraudulent business partner would want to work with me. In any case, I wouldnt feel great about that relationship.

I've done the burn someone else's fifteen million bucks thing on tech stack shiny rabbit chases. It's really not a fun time in retrospect. Mostly just a sick feeling all the way to the bottom.

Re: A startup doesn't need to be a unicorn

#116

Post by AbstractH24 »

tiffanyh wrote: post #109

“Startup” implies VC-backed company. And VC’s invest in companies to get a 100x return. Which almost by definition means, if you run a startup - you need to get it to become a unicorn for it to be successful. Otherwise, why take VC money … and just bootstrap it instead.

I’m by no means an expert on this, but I never assumed “startup” implies VC-backed. I thought “VC-backed startup” meant that and “bootstrapped startup” meant not.

That “startup” was an indicator of not being an incumbent in the space and using technology to disrupt things.

But in an increasingly tech-first world, it does beg the question what separates a tech first SMB from a startup.

Re: A startup doesn't need to be a unicorn

#118

Post by smjburton »

Although it's good to look into alternatives to bootstrapping vs VCs, the funding source isn't the only factor to consider. Balancing how quickly you need to enter the market and how much ownership you feel comfortable having over the final product will ultimately drive the decision on how to fund a venture too.

Re: A startup doesn't need to be a unicorn

#119

Post by the_bear »

tiffanyh wrote: post #109

“Startup” implies VC-backed company. And VC’s invest in companies to get a 100x return. Which almost by definition means, if you run a startup - you need to get it to become a unicorn for it to be successful. Otherwise, why take VC money … and just bootstrap it instead.

I think there are two common definitions of startup, and neither require VCs to be involved.

One (seen elsewhere in these comments) is any small business. I personally don't like that definition because there is a pretty big difference between a local coffee shop and the thing we all mean when we say "startup".

The other one which is more common here is a company that is currently small, but the business model involves getting much much larger. There's a blurry line between a small business and a startup with this definition, but it seems to be a "you know it when you see it" type of thing.

Companies like Mailchimp and Atlassian (in their early days) clearly qualified as startups even though they hadn't raised VC. You might say they're outliers, but so are the VC-backed companies that reach that level of success. If a small company is growing quickly and on pace to become a multi-billion dollar company, it seems weird to say they're not a startup just because they didn't raise money from the right people.

Re: A startup doesn't need to be a unicorn

#120

Post by Fokamul »

zwnow wrote: post #77
summarity wrote: post #9

Here's a model that exists in Germany, which I like: You can present a business plan to the state's investment bank and apply for several financial aides, including: * 1.5 years of universal basic income for you plus up to 2 other people. It's a tiny amount of money, but the point is to free you up to invest your actual time an money into the business. You do not have to pay this back. * up to 20k EUR in "consulting…

It's also connected to so much bureaucracy that you almost need to hire someone for that alone, because you wont have as much time for your actual business. Founding a company in Germany is so much unnecessary paperwork its crazy. Single handedly the only reason I will never try it in my home country.

Comparing to what country? A lot of EU countries has big administration.
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