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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

#351

Post by cseleborg »

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.

That's a bit exaggerated. I did have a company, and while it did come with bureaucracy, the vast majority of my time was spent on what you expect a founder to do (sales, marketing, product, etc.).

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

#352

Post by InkCanon »

jamesjyu wrote: post #185

This is what we did for Sudowrite. Took a small seed and got to profitability within 2 years by hiring within our means and laser focusing on our users. Happy to answer questions!

Hi, I write as a hobby and really like Sudowrite. There's a huge gap between it and virtually every other AI writing tool I know of. The insight that writers:

A) Largely only want AI when they are blocked, and not all the time B) Want to consider options (which is how writing happens all the time, IMO)

Is really what sets your product apart. So I'm curious, how did you get these insights? Were you a writer and instinctively knew of these, and so you dogfooded your own product? Or did you do a YC style feedeback loop to writers to find this differentiator?

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

#353

Post by ahzhou »

julianeon wrote: post #330
garrickvanburen wrote: post #270

I'm always conflicted about this because it's like saying the sky is blue. Stepping outside of the VC startup bubble, we see small self-funded businesses are the norm. It's the neighborhood businesses all around us. 82% of all US business have https://forstarters.substack.com/p/for-starters-10-the-three... 99.976% of new businesses don’t raise venture capital. https://forstarters.substack.com/p/for-starters-32-start-…

But the percentage we're really interested in is "what percentage of tech based startups are VC vs. bootstrapped." Especially in, say, the Bay Area. I don't know what that figure is, but I'd like to know.

Not common in Silicon Valley, but much more common in the rest of the country. There’s an archetype for bootstrapped tech businesses: - highly vertical specific - couple hundred million TAM - founder started the business in their 30s and is now in their 40s

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

#354

Post by ahzhou »

bbor wrote: post #299
garrickvanburen wrote: post #270

I'm always conflicted about this because it's like saying the sky is blue. Stepping outside of the VC startup bubble, we see small self-funded businesses are the norm. It's the neighborhood businesses all around us. 82% of all US business have https://forstarters.substack.com/p/for-starters-10-the-three... 99.976% of new businesses don’t raise venture capital. https://forstarters.substack.com/p/for-starters-32-start-…

I'm guessing you know this, but for those new to the terms: what this post describes as the "VC route" and the "bootstrap route" are usually referred to as "growth businesses" and "lifestyle businesses" (i.e. pays for the lifestyle of the founders). As a big believer in the need for syndicated worker's coops, I think this basic distinction is a pretty great radicalization tool against the current system ;)

VC vs bootstrap is usually based on company TAM. There are certainly high growth bootstrapped businesses.

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

#355

Post by sanderjd »

conductr wrote: post #205
sanderjd wrote: post #195

Earlier quoted context omitted.

I guess I have a different view on this... I feel like you left out that the past 20 years has also seen enormous success in this industry, even to a historically unprecedented degree. You listed a number of things that have been super hyped flashes in the pan that never really panned out (or in the case of self driving cars, have taken way longer to pan out than people expected), but you didn't list the things that…

> It's certainly difficult to predict which hype-y things are going to mature into sustainably large markets, and which are going to fade into obscurity, but a model of "things that are hyped are doomed" is not predictive Perhaps this is where we differ. I offered a list of things that, granted IMO, were all hype with little substance. Or perhaps just on a timeline so long that many people got the hype timing wrong.…

My contention is that if you went back and did a sentiment analysis of the early to mid hype cycle conversations around the things in your list and compared them with the things in my list, there would be very little difference between the two sets of things. There was lots of hype and also lots of skepticism, for both sets of things.

My point is that hype vs. skepticism just isn't the useful metric.

I agree with you that this does not mean that it's impossible to identify which technologies have a "there" there, and which don't. I just don't think the level of hype is a very helpful input into the calculation.

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

#356

Post by sanderjd »

mediaman wrote: post #260
conductr wrote: post #205

Earlier quoted context omitted.

> It's certainly difficult to predict which hype-y things are going to mature into sustainably large markets, and which are going to fade into obscurity, but a model of "things that are hyped are doomed" is not predictive Perhaps this is where we differ. I offered a list of things that, granted IMO, were all hype with little substance. Or perhaps just on a timeline so long that many people got the hype timing wrong.…

There is a happy medium between "AI eating the world" and "AI is a scam," that is generally best described as "AI performing valuable but often boring services within enterprises." We don't often see that because it gets totally drowned out between cynics and moralist scolds battling vapid hype-bros and pumpers, and also because it's boring. It turns out there's actually a lot of tedious classification, OCR, entity e…

Well put!

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

#358

Post by cseleborg »

notanormalnerd wrote: post #198
codethief wrote: post #173

Earlier quoted context omitted.

Having gone through the process of incorporation myself, I agree with everything you said: Yes, there is some paperwork you'll have to take care of and a bit of a learning curve to everything but not outrageously so. It can all be done within ~2 weeks (including roundtrip times for mail). Yes, that's still a lot more than it'll take you in e.g. Estonia (where you can do everything online in a few minutes from what I'…

This is my general opinion with regards to bureaucracy in Germany. All the data is most likely already there and all the technical challenges have been solved in the meantime. Why do I have to do the runaround from office to office, when they are physically connected by a piece if wire (aka the internet). There is a reason why we have so much bureaucracy in Germany (1. because we like it) and second because it is sup…

There is something to be said for trust here. I like that I can go straight to the imprint ("Impressum") to know with whom I'm dealing with online, where the company is located and who the CEO is. This is not always easy to decipher from the "Terms" pages companies in the US and elsewhere provide.

The downside for founders is that you have to divulge your address, unless you take additional steps to give yourself a mailbox address, but this can also be illegal if you're not careful. You can also rent an office of course, but for indie devs and freelancers, this is usually not financially viable.

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

#359

Post by AlchemistCamp »

Gud wrote: post #338
Bewelge wrote: post #132

Earlier quoted context omitted.

I agree that the process is unnecessarily complex, but I also think hiring someone for that would be the wise choice in most places anyway. And even in Germany hiring someone for that would probably amount to paying 500-1000€ for the whole registration of the company instead of doing everything yourself and only paying the 100-200€ notary fees. It's not as bad as you might think. > I will never try it in my home coun…

Why would that be “a wise choice”? I’m from Sweden and live in Switzerland. I know many people who have their own companies, and I was looking to start one myself before moving to Switzerland. It is SUPER EASY. I’ve helped my wife become self employed in Switzerland. I do most of the admin work for her. Again, very straight forward.

I think Sweden is one of the very most entrepreneur-friendly EU countries. It's got a big safety net, but doesn't impose much bureaucratic or financial burden on new businesses or even solopreneurs just getting started out.

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

#360

Post by boxed »

Ylpertnodi wrote: post #290
boxed wrote: post #258

Earlier quoted context omitted.

> For most B2B SaaS businesses, you shouldn’t need more than $1M in capital to get to PMF, find a GTM motion that works (not that it needs to scale), and reach an ARR figure where the revenue multiple for valuation starts to look pretty tasty—enough to offer significant upside even after investors are paid out. That sentence (yes, ONE sentence) is some of the worst I've seen.

>That sentence (yes, ONE sentence) is some of the worst I've seen. "[S]ome", as in 'plural'? Perhaps 'one of', may be better?

Doh. You're right.
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