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The Advantage of No Funding (2011)

sive.rs

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Re: The Advantage of No Funding (2011)

#31

Post by truted2 »

devops000 wrote: post #9

Totally agree. I think this crazy belief about raising money as a priority was driven by the low interest rate environment and broad acknowledged success of big tech. With lots of money every body wants to find next Google and are willing to invest. At the same time, having a loss company is not anymore a shame, it’s a success because also AMZN was unprofitable. I really hope in next years, with higher interest rate,…

How does a low interest rate affect investment? In the end you still need to return the principle so is the idea that it just offers you smaller loan payments (ie. More time for your investment to succeed)?

Re: The Advantage of No Funding (2011)

#32

Post by deltarholamda »

manwe150 wrote: post #23
deltarholamda wrote: post #21

>the desks were just planks of wood on cinderblocks from the hardware store While used as an example of bootstrapping, I have to say that one of my favorite desks ever was a solid-core door on cinderblocks. You can adjust the height to your specifications with bricks or wood shims; the cinderblocks can become cubbies for holding various bits and bobs; you can paint the door whatever color you want cheaply; it can tak…

Solid-core doors (new) seem to be a bit north of $250 at the lower end: https://www.homedepot.com/p/Masonite-30-in-x-80-in-Roman-Smo... I think I have seen standing desks for not much more At least the cinder blocks don’t add much cost at $2 each retail

This was something like 25 years ago, so the economics were different.

Since you don't have to support giant CRT monitors anymore, unless you're one of those people, a hollow-core door does just as well now. Not that they're much cheaper. Nowadays, you have to haunt building demo sites and go dumpster-diving.

Re: The Advantage of No Funding (2011)

#33

Post by mattgreenrocks »

horsawlarway wrote: post #17
tnzk wrote: post #8

Earlier quoted context omitted.

> The fact that some people who take venture funds see fit to use those funds in a vain way, doesn't mean that you're forced to use that kind of funding in a vain way. Most of them force it actually so they believe invested to the right company. The best VCs won't, not all VCs aren't though.

> Most of them force it actually This is my experience. I literally watched the VC board at a previous company get mad at my then CEO for not spending their cash quickly enough. Moreover - he was hardly the most fiscally responsible to begin with - exorbitant class A office space, expensive contractors, fully stocked kitchen and snacks, game systems and bean bag chairs in break rooms. Paying customers? Nah - not so m…

Admittedly, I don't think about these CEO-type issues much, so my opinion is not worth even two cents here, but that loss of autonomy in how to structure and run what was believed to be one's own business sounds horrible. I understand what VC funding can do, but delegating those decisions to people not completely invested in the outcome would keep me awake at night.

It explains the behavior of VC-funded firms well though: they elected to receive VC funding, and they flaunt the results of that funding to justify it to others and themselves. It's part of the game. How will others know that you are successful if you are not showing it over and over?

Re: The Advantage of No Funding (2011)

#34

Post by truted2 »

daenz wrote: post #22

What if you're experiencing rapid growth and not sure if you can afford it? Investment is basically required at this point, no?

There is also cost cutting. I personally experienced very high hosting bills unexpectedly and then spent a month changing my infrastructure to run for almost free again. I personally prefer these optimization challenges over borrowing money. Self-reliance is important for some people.

Re: The Advantage of No Funding (2011)

#36

Post by vidarh »

daenz wrote: post #22

What if you're experiencing rapid growth and not sure if you can afford it? Investment is basically required at this point, no?

Depends. If you have a business model that means new customers becomes profitable for you sufficiently predictably and quickly then funding sudden growth with bank loans is often doable even for quite high-risk businesses.

If your bank isn't prepared to and you're struggling to handle the growth and you don't want to find an investor, maybe it's worth considering raising prices for new customers until you find a balance that works for you (or a balance that makes your bank reconsider)

One of the tradeoffs of not taking VC funding is often accepting that your growth is likely to be slower for all kinds of reasons, including sometimes being forced to intentionally slow it to a manageable level.

Re: The Advantage of No Funding (2011)

#37

Post by thoraway77f »

deltarholamda wrote: post #21

>the desks were just planks of wood on cinderblocks from the hardware store While used as an example of bootstrapping, I have to say that one of my favorite desks ever was a solid-core door on cinderblocks. You can adjust the height to your specifications with bricks or wood shims; the cinderblocks can become cubbies for holding various bits and bobs; you can paint the door whatever color you want cheaply; it can tak…

In 2011 I bought $300 in various lengths of 1/2” plumbing pipe, couplers, and flanges, and one sheet of smooth plywood.

From it I made a standing desk, and a seated desk, both on four legs.

In my current home the same desks are now supported by two legs in front, with the back edge screwed to 2x4 mounted on the wall.

Moving again this year and will take the pipe but replace the plywood as it has a lot of screw holes, ugly holes for cables I made in a rush. Maybe, we’ll see. Seems like I’d have issues securing it since the holes are in just the right places already, but I might have a go in order to keep my desk budget at $300 in 2011 dollars.

The pipe is so sturdy I expect to never need to replace one piece of that.

Re: The Advantage of No Funding (2011)

#38

Post by csa »

truted2 wrote: post #31
devops000 wrote: post #9

Totally agree. I think this crazy belief about raising money as a priority was driven by the low interest rate environment and broad acknowledged success of big tech. With lots of money every body wants to find next Google and are willing to invest. At the same time, having a loss company is not anymore a shame, it’s a success because also AMZN was unprofitable. I really hope in next years, with higher interest rate,…

How does a low interest rate affect investment? In the end you still need to return the principle so is the idea that it just offers you smaller loan payments (ie. More time for your investment to succeed)?

> How does a low interest rate affect investment?

More capital is looking for returns and is effectively willing to take more risk (like funding VC startups) to find those returns since “safe” investments return almost nothing.

Re: The Advantage of No Funding (2011)

#39

Post by fairity »

sivers wrote: post #18
lbriner wrote: post #15

I agree with a lot of the spirit in the article but I don't think learning to code from a book because you can't afford a dev is not a great example. How many people lost their crypto-currency because the exchanges were written by people with no experience/training in development (or security specifically). The counter-point is to buy in people who can do better than you can for less money. In other words, if a Devel…

Depends what you're doing. I was selling CDs from my living room. Making $300 per month. It was the appropriate solution for the situation.

Hi Derek, just wanted to say that your book Anything You Want had an outsized impact on me when I started my entrepreneurial journey many years ago. And, I used your "CD Baby Loves You" open rate learning to great affect many times for my own businesses :). Thank you for being so open and sharing your hard-earned wisdom!

Re: The Advantage of No Funding (2011)

#40

Post by frans »

VC's invest in 30 companies to find 1 unicorn on average. The profit on that one justifies the investment in the 29 others.

Problem is that no one knows which one is going to be the hit in the pack of 30. So VC's push all ceo's to grow as fast as possible to find out as soon as possible who will succeed/fail.

Great for the VC, too bad for the 29 unlucky ones.

Never be the agenda of someone else, be your own agenda.

I never understand why so few people see this.

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