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Rich vs. King in the Real World: Why I sold my company

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Re: Rich vs. King in the Real World: Why I sold my company

#21

Post by kansface »

agsamek wrote: post #18
Alan01252 wrote: post #3

Earlier quoted context omitted.

My Dad did exactly the same thing. He ran a steel company with profits of around £600,000 was offered ~£2 mill for the company and turned it down. The recession of the 1990's came and completely wiped out the steel/construction industry and his company went under. In the highly unlikely event I'm ever given that opportunity I'll definitely pick Box A, I've seen first hand just how hard it can be when Box B doesn't wo…

2M for 600k profit was just a very poor offer and your father chose right regardless of what happened next. (Judged by the limited information provided)

Considering the company went bankrupt shortly thereafter, the offer actually reflected the actual value of the company. Its hard to know that at the time.

Re: Rich vs. King in the Real World: Why I sold my company

#22

Post by auctiontheory »

I think the most telling line in the article is "100% of the negative reactions were from people who had never started their own company."

If working for myself has taught me one thing, it is to be much less judgmental of other people's choices. Those who've never done it just cannot understand.

Re: Rich vs. King in the Real World: Why I sold my company

#23

Post by ChuckMcM »

michaelochurch wrote: post #9

I'd take Rich. I hate that I would, but I would. I'd make that call not so I can quit working full-time. I'm only 29. I'd take it so I can start working full-time. So I can guarantee that I focus on real work for the rest of my active life. Liberate the cognitive 1% from subordination, and creation (real work) happens. (Humility is not a virtue in people like me. If we don't raise up our confidence to overwhelm Autho…

Two comments, one actual and one meta :-)

So your statement is that you'd take 'rich' so that you could work on 'king.' (trust me working full time on "real work" has King written all over it). Tom Lyon (emp #7 at Sun) told me early on in my years there that you really needed 3 startups, one paid for by VC's that taught you about what startups were all about. Then you need one that you founded but was VC funded that let you exit with enough money so that you could fund #3 without any outside investment and run it the way you wanted to run it. Sort of the three step plan to becoming a "king." Of course that middle one needs a "successful" (aka lucrative) exit :-)

The meta-comment is on the term you've coined "VC-istan" which seems to characterizes VC funded companies as a dysfunctional collection of feudal enterprises in the way that the various former provinces of the USSR were in many ways dysfunctional feudal states (and now nation states). I bugs me. I cannot help but read it as a put down on both groups and like other generalizations I find that by grating on my sensibilities it makes it more difficult for me to see the points you are trying to make (which are generally reasonable, well argued points). I can fully accept that I'm the only person who gets that vibe from the term but I don't really have any way to test that (except by calling it out :-)

Re: Rich vs. King in the Real World: Why I sold my company

#24

Post by adestefan »

nugget wrote: post #12

I'm curious what the author and others think is a reasonable "freedom line". Silicon Valley is pretty expensive and it's hard to know exactly what's implied when someone says "never have to work again". Of course everybody is different and has different expenses, but it's a worthwhile data point.

If I ever got the freedom line, the first thing I would do is sell my house in the Baltimore/DC metro area and move to the middle of nowhere.

Different strokes for different folks though.

Re: Rich vs. King in the Real World: Why I sold my company

#25

Post by mhb »

w3pm wrote: post #19
nugget wrote: post #12

I'm curious what the author and others think is a reasonable "freedom line". Silicon Valley is pretty expensive and it's hard to know exactly what's implied when someone says "never have to work again". Of course everybody is different and has different expenses, but it's a worthwhile data point.

I believe it's about the money your money will earn that buys you the freedom. Consider having $5 million in the bank. You buy some conservative Pimco bonds earning 5% per year and bam, you've got $250k in yearly income (pre-tax) doing literally nothing and never spending a dime of that 5 million. If that's not freedom in any city in the world then I don't know what is.

What are these conservative bonds that return 5%?

Re: Rich vs. King in the Real World: Why I sold my company

#26

Post by _dps »

ChuckMcM wrote: post #23
michaelochurch wrote: post #9

I'd take Rich. I hate that I would, but I would. I'd make that call not so I can quit working full-time. I'm only 29. I'd take it so I can start working full-time. So I can guarantee that I focus on real work for the rest of my active life. Liberate the cognitive 1% from subordination, and creation (real work) happens. (Humility is not a virtue in people like me. If we don't raise up our confidence to overwhelm Autho…

Two comments, one actual and one meta :-) So your statement is that you'd take 'rich' so that you could work on 'king.' (trust me working full time on " real work" has King written all over it). Tom Lyon (emp #7 at Sun) told me early on in my years there that you really needed 3 startups, one paid for by VC's that taught you about what startups were all about. Then you need one that you founded but was VC funded that…

FWIW Chuck, I agree that the phrase "VC-istan" rubs me the wrong way in Michael's otherwise quite interesting and compelling writing. For me there are two reasons, one bad and one not-terrible (note I don't have any "strong" reasons... as Chuck says this is merely something that irks me):

1) The bad reason: while I'm a startup founder who has deliberately eschewed VC money for many reasons that overlap Michael's analysis, I have many friends who thought VC was the right choice for them. These people are not stupid, dinosaurs, corrupt, or anything else that warrants a pejorative. They made a rational cost-benefit decision that they believed to be best for them. It irks me to have a significant group of people whom I respect categorized in this "feudal" taxonomy, as you put it.

2) The not-terrible reason: if you follow Michael's writing you find that he has had one or more bad experiences with startups in the past, and he has never mentioned a good one. If you are someone who believes that good startups do exist, then it is very easy for your monkey-brain to short-circuit to "sour grapes" whenever he discusses the VC ecosystem, even though I mostly don't believe that to be the case. I think it detracts from the strength of his writing to give lazy readers an easily-avoided prompt that might lead them to inaccurate conclusions. If one merely wants a shorthand for "the VC-ecosystem", I think VC-land conveys the same grouping of concepts without provoking a potentially suspicious reaction. I know that I have a very minor ego vs id battle every time I read "VC-istan" in his essays, and I suspected others did as well.

Re: Rich vs. King in the Real World: Why I sold my company

#27

Post by CurtMonash »

w3pm wrote: post #19
nugget wrote: post #12

I'm curious what the author and others think is a reasonable "freedom line". Silicon Valley is pretty expensive and it's hard to know exactly what's implied when someone says "never have to work again". Of course everybody is different and has different expenses, but it's a worthwhile data point.

I believe it's about the money your money will earn that buys you the freedom. Consider having $5 million in the bank. You buy some conservative Pimco bonds earning 5% per year and bam, you've got $250k in yearly income (pre-tax) doing literally nothing and never spending a dime of that 5 million. If that's not freedom in any city in the world then I don't know what is.

Inflation says hello.

Re: Rich vs. King in the Real World: Why I sold my company

#28

Post by walshemj »

auggierose wrote: post #2

A good friend of mine (actually back then, my boss) decided to roll the dice in that situation instead of just cashing in 15mill. He lost that game, and he only told me a long time later that he was offered that choice. I think this is one reason why VCs want young entrepeneurs, because VCs need people who think that they get many more opportunities to cross that line in case the current startup tanks. Because VCs wi…

I recall a mate about 15 years ago who worked at Texas Instruments - once shared a plane ride with a director (they had a policy of upgrading people if they where on the same flight)

Apparently after the 3rd stiff G&T the older guy mused "gee I wish i had gone in with those guys" and he was referring to the traitorous 8 who left Shockley labs :-)

Re: Rich vs. King in the Real World: Why I sold my company

#29

Post by michaelochurch »

ChuckMcM wrote: post #23
michaelochurch wrote: post #9

I'd take Rich. I hate that I would, but I would. I'd make that call not so I can quit working full-time. I'm only 29. I'd take it so I can start working full-time. So I can guarantee that I focus on real work for the rest of my active life. Liberate the cognitive 1% from subordination, and creation (real work) happens. (Humility is not a virtue in people like me. If we don't raise up our confidence to overwhelm Autho…

Two comments, one actual and one meta :-) So your statement is that you'd take 'rich' so that you could work on 'king.' (trust me working full time on " real work" has King written all over it). Tom Lyon (emp #7 at Sun) told me early on in my years there that you really needed 3 startups, one paid for by VC's that taught you about what startups were all about. Then you need one that you founded but was VC funded that…

I've actually used "istan" for things I like also, e.g. I might use "high-IQ-istan" for the collection of intelligent people. It's just that a negative one (VC-istan) stuck. I make up lots of words and only a tiny percentage catch on.

There's nothing pejorative about "-istan". It's (probably) a cognate of "stone" and means "homeland" in Farsi. Nothing pejorative.

I agree that it's probably distracting or confusing and I know some people don't like it, but I can't come up with anything better. "VC-sphere" sounds more ethereal (so it might include the blogs and stray comments), "VC-land" sounds more concrete (like it might pertain to the land, e.g. Silicon Valley, in particular).

Your point about the 3 startups makes a lot of sense. I've heard the same about records. The first makes the name (because new artists can't get decent terms), the second makes the money, and the third is for creative vision.

The issue with companies is that so many more people are involved. I'd want to be in someone's 2nd if optimizing for money and 3rd if optimizing for interesting work.

Re: Rich vs. King in the Real World: Why I sold my company

#30

Post by michaelochurch »

_dps wrote: post #26
ChuckMcM wrote: post #23

Earlier quoted context omitted.

Two comments, one actual and one meta :-) So your statement is that you'd take 'rich' so that you could work on 'king.' (trust me working full time on " real work" has King written all over it). Tom Lyon (emp #7 at Sun) told me early on in my years there that you really needed 3 startups, one paid for by VC's that taught you about what startups were all about. Then you need one that you founded but was VC funded that…

FWIW Chuck, I agree that the phrase "VC-istan" rubs me the wrong way in Michael's otherwise quite interesting and compelling writing. For me there are two reasons, one bad and one not-terrible (note I don't have any "strong" reasons... as Chuck says this is merely something that irks me): 1) The bad reason: while I'm a startup founder who has deliberately eschewed VC money for many reasons that overlap Michael's anal…

My dislike for "VC-istan" isn't uniform. There are good VCs and good VC-funded companies out there. And as you said, pragmatic concerns (cost/benefit) are more important than hollow principled stands that make no sense in the context of individual variation. If you can get a decent VC and it makes sense for your business then, by all means, work with him.

If you are someone who believes that good startups do exist, then it is very easy for your monkey-brain to short-circuit to "sour grapes" whenever he discusses the VC ecosystem, even though I mostly don't believe that to be the case.

I'm a hard-core cynic about the VC scene and even I will agree that plenty of good startups exist. :)

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