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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

#241

Post by awongh »

aleph_minus_one wrote: post #190
awongh wrote: post #188

Earlier quoted context omitted.

> For example in the USA, they will refuse to speak German with you. So what? In the USA many official government forms are made in several different languages. This may not always be the federal government (probably less likely these days), but in California you can cast your vote in like 5 different languages (maybe more)? This would never happen in Europe. It's simply less friendly to diversity.

> This would never happen in Europe. It's simply less friendly to diversity. In Germany, six minority languages are protected: * Dänisch (Danish) * Nordfriesisch (North Frisian) * Saterfriesisch (Saterland Frisian) * Romanes (Romany) * Niedersorbisch (Lower Sorbian) * Obersorbisch (Upper Sorbian) Source: https://www.bmi.bund.de/DE/themen/heimat-integration/gesells... This means in the respective German regions you ca…

The difference is that in the USA people are willing to add languages just based on the languages the people there already speak.

Edit to add: In Germany this might mean you could interact with the government if not in english, then also arabic, turkish or vietnamese.

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

#242

Post by margalabargala »

all2 wrote: post #221
ZeroTalent wrote: post #204

Earlier quoted context omitted.

This is exactly what I am doing. I started another startup in February 2024. After a year, I crossed $1M in annual profit with three employees. I am not planning to scale humans. Profits are growing, and we don't need to hire more people. LLMs and scripting automation are doing the work of approx. 20-30 people — this wasn't possible before.

I'd be curious to hear about how you are managing quality on LLM generated stuff.

They probably mostly don't need to be.

Most SaaS companies are not doing anything particularly innovative or novel. Most of them provide value via putting in the work to glue together several other APIs, automating something that previously was harder to script/automate, or simply applying an idea that another company pioneered to another market segment: "It's like Theranos but for barbers!"

These use cases are generally so typical of the technology being used, that LLMs can do a lot of work to script things and it's usually pretty easy to QC.

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

#243

Post by haloblue »

Currently in a seed funded by a very simple cap table, pre-series whatever SaaS company. This post resonated with me as we will have to raise money later this year and I'm dreading having to take institutional capital. There is another way.

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

#244

Post by tptacek »

9rx wrote: post #225
tptacek wrote: post #220

Earlier quoted context omitted.

Literally every freelancer can tell you a story that refutes what you're saying here.

The only real tech "freelancing", if we are to call it that, opportunities as it pertains to consumers is possibly in fixing someone's home computer/phone, and that is within the small set of things consumers are still willing to pay for. In fact, one's phone was explicitly mentioned. But it is unlikely that most "freelancers", within the tech sphere, are making a business out of that. Maybe we all have a grandmother…

Are we just talking past each other here? Are you saying that it's hard to bootstrap a pure B2C business using only B2C revenue sources? Because that's not what I'd do; I'd consult to other businesses. That's what 37signals did.

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

#245

Post by tptacek »

thuanao wrote: post #227
tptacek wrote: post #214

Earlier quoted context omitted.

Creating a company in the US doesn't require tax returns or internal accounting. (But perhaps you meant European jurisdictions).

It does if you're actually incorporating (C or S corp). You'll need to at least file both federal and state returns. And in many cases you'll need to pay money even if your business earned $0. An LLC setup as a passthrough can get away with filing personal returns, but that only works for small freelance operations. Once you've got payroll or investors it's constant paperwork hassle.

Having payroll is always a tax hassle, but I've been at passthrough-structured LLCs with employees and mid-high 7 figure revenue (at some point, you start filing as an S for your LLC).

But can we get back to the original thing here? Creating an LLC in the US is trivial and does not require accounting.

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

#246

Post by 9rx »

marcinzm wrote: post #212
9rx wrote: post #110

Earlier quoted context omitted.

> The characteristics in that paragraph don't apply to new mom & pop restaurants, dry cleaners, new law practices, etc I fully expect the founders of those businesses originally have dreams of their business becoming the next F500. But when validation fails... > and very often associated with funding from VC. If you keep reading we get to: "Unlike an entrepreneur, a start up founder doesn’t have a major financial mot…

> I fully expect the founders of those businesses originally have dreams of their business becoming the next F500. But when validation fails... I take it you've not met many such people or business owners. No one except the utterly delusional would think a mom & pop restaurants, dry cleaners, new law practices, etc. would become a F500 company. Amazingly people start companies for reasons other than becoming a F500 c…

> No one except the utterly delusional would think a mom & pop restaurants ... would become a F500 company.

The F500 has quite a few restaurants on the list. Other than maybe Starbucks, it seems all of them have humble "mom & pop" beginnings.

Who opens a business thinking "I hope customer response is so poor that I will struggle and never be able to grow"? That is often the outcome – but when is that the dream?

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

#247

Post by 9rx »

tptacek wrote: post #244
9rx wrote: post #225

Earlier quoted context omitted.

The only real tech "freelancing", if we are to call it that, opportunities as it pertains to consumers is possibly in fixing someone's home computer/phone, and that is within the small set of things consumers are still willing to pay for. In fact, one's phone was explicitly mentioned. But it is unlikely that most "freelancers", within the tech sphere, are making a business out of that. Maybe we all have a grandmother…

Are we just talking past each other here? Are you saying that it's hard to bootstrap a pure B2C business using only B2C revenue sources? Because that's not what I'd do; I'd consult to other businesses . That's what 37signals did.

> Are you saying that it's hard to bootstrap a pure B2C business using only B2C revenue sources?

I said that consumers don't like to buy much these days, so business opportunities are effectively limited to selling to other businesses.

But businesses can't absorb buying your wares if they can't sell to someone else in kind – eventually meaning the consumer. That is, unless they have angel money to burn. So what was also said is that even within the B2B space, you are bound to be dependent on angel money even if you don't receive it directly. Meaning, as it pertained to the comment that came before it, that someone needs to accept the angel money to keep the house of cards standing.

> That's what 37signals did.

37signals doesn't strike me as trying to tackle B2C in any meaningful capacity either. 'Hey' plays that angle a little bit, which is maybe what you are thinking of, but it is clear that selling to business is still the bread and butter even there.

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

#248

Post by YetAnotherNick »

senko wrote: post #29

I do like the idea in general and feel there's a lot of room for improvement between the (VC / bootstrapping) extremes. However, the middle path from the article presumes the existence of VCs willing to join you on that path. The article waves this away with: > angel investors are generally more open to a 2-3x ROI For a $1M round you'd need to find 10-20 such angels (assuming $50k-$100k average check size) willing to…

Also almost always angels profit either from secondary in next rounds from VC or acquisition or IPO. In general it is very hard to return back 2-3x in say 2-3 years without going to VC for next round.

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

#249

Post by YetAnotherNick »

_fat_santa wrote: post #125

> even a relatively small deal would produce a life-changing outcome for the founding team. I run a SaaS with a business partner and this is basically our thesis for getting rich. My saying around this is "This amount of revenue/profit will cause a company of 500 or 1000 to go bankrupt, but it will make a company of 5-10 filthy rich"

Sorry but I think your saying is wrong.

> This amount of revenue/profit will cause a company of 500 or 1000 to go bankrupt

Or more likely it would make them fire 995 out of 1000 and the remaining 5 could be almost as rich as you 10, and they have advantage of spending for few years on marketing and better development.

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

#250

Post by tlogan »

pc86 wrote: post #102
tlogan wrote: post #96

I think the post is off. How exactly is a VC—or any investor, really—supposed to make money from a startup that’s aiming for a “middle of the road” outcome? That just doesn’t add up. In that case, wouldn’t it make more sense to invest in something safer or more traditional? From what I understand, the very definition of a startup is tied to ambition. Founders need to be aiming for the moon—or at least something close…

People use "startup" to mean "start up business" and not "business that is aiming for rapid, borderline-unsustainable growth and very likely requires hundreds of thousands, millions, tens of millions of dollar to even start thinking about achieving it," which is what the actual definition is. VCs aim for 1 out of 50 investments to return 100x what they put into it, and the rest of them to die quickly and stop taking…

In the tech and venture capital (VC) world, a startup is usually defined by its intent to grow fast and at scale.

If you’re using the term “startup” in a tech/VC context: Yes, high growth is core to the definition.

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