Contrary to some people here, I don't think DHH is arguing that taking a 40m pay ouy is a bad thing by itself. He argues that it shouldn't be your primary goal.
Mojito island is a mirage
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Re: Mojito island is a mirage
#42“So after a much-needed vacation, the retirement is canceled and they’re back to start a new company. (Not always with as much passion as the first time around, but that’s another story).”
But sometimes with twice the passion as the first time around. You should only "rush to get out" if you've got something that you're really passionate about to look forward to. I don't know virtually ANY entrepreneurs who envision a life of pure leisure if/when they cash out. I personally have 2 or 3 companies/non-profits I'd LOVE to start and there are probably a few (generally young) that I'd even take a job at, assuming that I'd have enough autonomy to do cool stuff.
Re: Mojito island is a mirage
#43[deleted]
Re: Mojito island is a mirage
#44Citing sports stars who came back from retirement in the context of this argument is idiotic. In most professional sports, there is a point at which your abilities start to decline due to age. The tension is between going out at the absolute top of your game, vs. enjoying a few more years of something you are supremely good at, and will never get to do again.
This whole premise for an essay is silly - if you are one of the tiny number of people in a position to make this kind of choice, are you really going to turn to some dude's blog post to make up your mind? But the sports comparison puts it over the top.
Re: Mojito island is a mirage
#45In this thread http://news.ycombinator.com/item?id=829583 Jason from 37signals said they'd have a post that FU money is a myth. I hope this isn't it. The point of FU money isn't that you'd actually quit everything and walk away. Its about the ABILITY to do so. Once you reach this point everything else is about being able to make your own choices, not being backed into a corner because you have bills to pay.
"Once you reach this point everything else is about being able to make your own choices, not being backed into a corner because you have bills to pay." You're an individual. You can already make your own choices. My big problem with this whole "FU" money concept, and your thought I quoted above, is that people seem to think they need to get this opportunity from someone else. That someone else gives them the opportun…
If you're trying to say -- as a sub-post said -- "don't wait for a rich man to come and give you permission to pursue your dreams," then you're not looking at the whole picture. 'FU money' doesn't mean that you go down to 'Mojito Island' and sip drinks on the beach for the rest of your life. 'FU money' is money that says, "I'm set for life."
After you have 'FU money' you don't have to worry about making tough choices to try and make ends meet. At that point, you can create another start-up or whatever it is you want to do, without needing to worry about becoming homeless at some point (or going into major debt).
I posit this example:
I like programming and working on web apps/etc. So I create
a startup to use my passion to develop a cool and marketable
idea. The idea takes off and someone wants my to cash out
to the tune of $40M.
Yes, I won't have my startup (i.e. baby) anymore, but I will
also have the freedom to create another startup, or just to
do development on whatever I like (without regard to whether
or not it is marketable). In this case, I've given up my
startup for the chance to free myself from having to say
things like, "I better stop working on this cool idea
because I have a family to feed." Or, "I really want to
work on this idea, but my mom has cancer, needs constant care,
and we can't afford to have someone looking after her."Re: Mojito island is a mirage
#46Earlier quoted context omitted.
I know MBA's aren't the most popular people around these parts, but they do get Net Present Value. Basically, you need to discount the value of future earnings relative to current cash flow. http://en.wikipedia.org/wiki/Net_present_value
Yub, took that course :) MBA or not, NPV (and the derived methods) are incredible useful tools in financial planning and decision-making for any business.
I could by your comment that you got it, but it gets a little lost in the rest of the thread debating the philosophical aspects of selling out vs. plowing through.
Re: Mojito island is a mirage
#47In this thread http://news.ycombinator.com/item?id=829583 Jason from 37signals said they'd have a post that FU money is a myth. I hope this isn't it. The point of FU money isn't that you'd actually quit everything and walk away. Its about the ABILITY to do so. Once you reach this point everything else is about being able to make your own choices, not being backed into a corner because you have bills to pay.
> Jason from 37signals said they'd have a post that FU money is a myth.
I can think of one example. Nico Mak from Nico Mak computing wrote the original WinZip. About 10 years ago, he was making about $1m/month in corporate license fees. I can almost guarantee he is on his own private island somewhere, living the anonymous rich life.
Re: Mojito island is a mirage
#48Earlier quoted context omitted.
Are people sure that the principals at 37s haven't just taken $40M out of earnings? Selling your company isn't the only way to get paid.
Does 37signals even make $40M in revenue?
Maybe. How many paying customers do you think they have? 1k? 10k? 100k?
I think $40M/year for them would require somewhere between 30k and 50k paying customers.
I suppose we're all just guessing, but when I run the numbers on their business I think that the founders are already millionaires, are on their way to being 100-millionaires, and, when you take into account that when you don't gamble your money away it has a tendency to accumulate and compound, that their model could produce a billionaire over a 20 or 30 year period.
I don't ever read their writing and think that they're jealous of other people's exits. I think they're already filthy rich and they look down on the venture industry in the same way that Warren Buffett looks down on Wall Street.
Re: Mojito island is a mirage
#49In this thread http://news.ycombinator.com/item?id=829583 Jason from 37signals said they'd have a post that FU money is a myth. I hope this isn't it. The point of FU money isn't that you'd actually quit everything and walk away. Its about the ABILITY to do so. Once you reach this point everything else is about being able to make your own choices, not being backed into a corner because you have bills to pay.
"Once you reach this point everything else is about being able to make your own choices, not being backed into a corner because you have bills to pay." You're an individual. You can already make your own choices. My big problem with this whole "FU" money concept, and your thought I quoted above, is that people seem to think they need to get this opportunity from someone else. That someone else gives them the opportun…
>> "My big problem with this whole "FU" money concept, and your thought I quoted above, is that people seem to think they need to get this opportunity from someone else."
What???? It's exactly the same as selling your product to customers. Only difference is there's one sale, and it's a big one.
Re: Mojito island is a mirage
#50Look: if you love what you do (they seem to), and you make enough money at it to be secure (they seem to), why would you "sell out"? Yeah, you could sell out--but why?
You might have other things you love to do but which are much less likely to yield up the financial security you want (or need, if you have a family). Suppose you want to dedicate yourself to, I don't know, singing opera. Maybe you know you'll never make it big professionally but you'd like to run an amateur opera company and perform moderately well for free. Or you want to run a charity of some sort. Or paint. Or...