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Not raising funds to stay small and happy

antoine.finkelstein.fr

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Re: Not raising funds to stay small and happy

#51

Post by unitboolean »

aeden wrote: post #34
amelius wrote: post #19

> Not raising funds to stay small and happy But in this winner-takes-all reality, is that possible? If your business concept becomes successful, what prevents a bigger player to copy it, improve upon it, and steal away your customers?

> But in this winner-takes-all reality, is that possible? This is an assumption, and I would say, an invalid one. The reality is actually that there are many successful businesses in any given industry. This is thanks to the fact that one-size does not fit all. Niching down is a good way to build a small, profitable business, because you can address the needs of the niche better than those bigger players that have to…

Good point

Re: Not raising funds to stay small and happy

#52

Post by WhyNotHugo »

What worries me the most about freelancing, or being a small 3-person shop, is retirement.

A 3-person shop might not be sustainable if me (1/3) decides to retire and has to pay someone to keep it afloat. And that is, if I find such a person. I also have to make sure that whatever service I provide, will keep making sense in ~30 years.

Saving might work in countries with stable economies, but you still have to set aside quite a bit of money -- and should you outlive your saving, you're in trouble.

Re: Not raising funds to stay small and happy

#53

Post by smhg »

WhyNotHugo wrote: post #52

What worries me the most about freelancing, or being a small 3-person shop, is retirement. A 3-person shop might not be sustainable if me (1/3) decides to retire and has to pay someone to keep it afloat. And that is, if I find such a person. I also have to make sure that whatever service I provide, will keep making sense in ~30 years. Saving might work in countries with stable economies, but you still have to set asi…

This. Being in such a situation it keeps me awake sometimes.

There are 2 obvious solutions:

- keep making sense until your retirement (innovate, adapt, ...)

- sell (for a significant amount, at the right time) in case of a saas or shop

Neither sounds solid, but they might turn out to be less bad than we think now?

Re: Not raising funds to stay small and happy

#54

Post by jjeaff »

njyx wrote: post #47
ig1 wrote: post #11

Building a small boot-strapped company vs a funded company is in a large part dictated by market and product rather than by individual intention. If you try to build a funded company in a space that can't sustain one you will struggle, likewise if you try to build a small bootstrapped company in a space that can you will similarly struggle. If your direct competitors have a much better product then you (because they…

This is the crux of it - the world doesn't stand still. So if you're in a small team in a space that's fast moving and very competitive then the comfortable life wont last long... If you're in a space where the addressable market is very hard to reach or fragmented, a venture based run will probably run aground. Whereas a small player hitting a niche might be great for a long time.

The key is finding a niche that simply isn't profitable to a VC funded firm.

Theoretically, I can run my small bootstrapped company and make a profit for myself of $1m a year. Thats excellent for me since I own the entire company. It's peanuts for a VC funded startup, assuming there isn't that much room to grow above $1m.

In fact, I co-founded a startup that raised millions and makes 10x more than my bootstrapped company. But it will likely fail and pay me nothing because if it can't generate an exit in the $100m+ range, then the VCs would rather run it into the ground trying to hit that Mark than sit back and let the net income flow.

Re: Not raising funds to stay small and happy

#55

Post by npgatech »

jasode wrote: post #45
npgatech wrote: post #44

Earlier quoted context omitted.

I found your comment a bit abrasive, yet you’re lacking the grit to support it besides just anecdotal evidence (just as the parent comment). I have yet another opinion - I’ve seen a wide variety of articles on HN from how to grow fast to how to stay small. We’re not going to stay productive by arguing without data.

>support it besides just anecdotal evidence If it isn't clear, "dang" is one of the longtime moderators and I'm confident he's seen enough quantity of posts over the years to have an accurate pulse of the HN readership. There are virtually zero articles giving the advice to "take VC money and grow grow grow" that made it to the front page. (If you have examples, please post them.) The YC fund emphasizes exponential g…

I couldn't disagree with you more. Everyday, I read articles about VC. How to pitch, how to prepare, how to strategize a startup to ensure future growth, scalability, etc.

Let's just take an article from our own backyard: https://blog.ycombinator.com/ycs-essential-startup-advice/

Almost 800 points on HN: https://news.ycombinator.com/item?id=15331016

Quoting the article, "Growth is always a focus for startups, since a startup without growth is usually a failure." This is article doesn't apply to folks who want to stay small (the discussion of this topic ~ 3 people company).

You could have approached your argument a little less strongly - simply stating your opinions. Authoritative didactic statements require data to back it up otherwise it just sounds abrasive and completely unproductive.

Re: Not raising funds to stay small and happy

#56

Post by collyw »

cperciva wrote: post #48
Mountain_Skies wrote: post #9

I believe it is Bhutan that measures gross national happiness in addition to GDP, realizing growth just for growth's sake doesn't necessarily increase overall happiness. Don't know how well that works for them but good for both the nation and this startup to have it as a goal. My concern in the context of the startup would be that another player would enter the same market segment and use funding to expand aggressive…

Yes, you're thinking of Bhutan. But "gross national happiness" is just a propaganda exercise.

As a Buddhist nation I doubt that is the case. Its seems fairly central to Buddhist philosophy from my understanding of it.

Out of interest having been chasing growth for decades I assume we are at the highest GDP measure ever, but do you assume that we are happier than ever? The opioid crisis in the US would suggest otherwise.

Re: Not raising funds to stay small and happy

#57

Post by jasode »

npgatech wrote: post #55
jasode wrote: post #45

Earlier quoted context omitted.

>support it besides just anecdotal evidence If it isn't clear, "dang" is one of the longtime moderators and I'm confident he's seen enough quantity of posts over the years to have an accurate pulse of the HN readership. There are virtually zero articles giving the advice to "take VC money and grow grow grow" that made it to the front page. (If you have examples, please post them.) The YC fund emphasizes exponential g…

I couldn't disagree with you more. Everyday, I read articles about VC. How to pitch, how to prepare, how to strategize a startup to ensure future growth, scalability, etc. Let's just take an article from our own backyard: https://blog.ycombinator.com/ycs-essential-startup-advice/ Almost 800 points on HN: https://news.ycombinator.com/item?id=15331016 Quoting the article, "Growth is always a focus for startups, since a…

>Everyday, I read articles about VC. How to pitch, how to prepare,

Ok, I see the misunderstanding. I wasn't talking about the existence of any VC startup related articles. Yes those do show up on HN. I wasn't talking about those.

I was talking about a very specific type of startup article that would advise you that "staying small is suboptimal and won't make you happy. Instead, if you want to be happy, you must get big by getting VC firms to invest in you." It's the the type of advice that's the opposite of what this article and DHH's articles are about. There are no such articles giving that type of growth-for-happiness advice on HN's front pages.

The "YC’s Essential Startup Advice" that you cited is meant for people who've already bought into the "startup" mindset and is mostly "build product fit" advice and not "growth=happy" advice. It's not a counterpoint to this article's advice nor counterpoint to the popular DHH articles.

(I see that you participated in that previous thread's discussion so it may seem like YC startup advice dominates here. You wanted tactical advice on starting a small business that wasn't AirBnb or Uber and that article didn't cater to that scenario.)

>Quoting the article, "Growth is always a focus for startups, since a startup without growth is usually a failure."

Yes, that quote about "startup=growth" is relevant to YC's and Paul Graham's definition of "startup" so it's their tautological statement in the context of their blog post. It's not advising that entrepreneurs of small businesses will find happiness by chasing growth. Yes, a small bootstrapped business that stays small is another definition of "startup" but that's not the "startup" YC/PG are talking about.

To restate the context of my comment, the gp (onassar) wrote, "I think it's great/important for an article/concept like this to be given some reach."

... which he is agreeing with the advice of the article to avoid VC money to stay "happy". He framed it as if that "happy=small" idea was some "lone voice in the woods" that everybody on HN needs to be reminded of. My point is that onassar must have some false impression because that's already the overwhelming sentiment on HN.

>it just sounds abrasive

Did you also find Daniel Gackle's (dang) comment abrasive?

Re: Not raising funds to stay small and happy

#58

Post by dgudkov »

ig1 wrote: post #11

Building a small boot-strapped company vs a funded company is in a large part dictated by market and product rather than by individual intention. If you try to build a funded company in a space that can't sustain one you will struggle, likewise if you try to build a small bootstrapped company in a space that can you will similarly struggle. If your direct competitors have a much better product then you (because they…

>a professional sales org, marketing machine, etc.

All this costs money. We have a competitor, a big VC-funded company. They have very aggressive marketing and lots of sales people. But it all comes at a price. They spend 75-80% of their revenue on sales and marketing. We don't and it lets us keep our prices 8-10 times lower. For a similar (although, a bit more lightweight) product! We beat their product hands down every time we directly compete with them. So my point is -- it's not all black and white. It is possible to survive on a market with big VC-funded companies.

Re: Not raising funds to stay small and happy

#59

Post by tluyben2 »

WhyNotHugo wrote: post #52

What worries me the most about freelancing, or being a small 3-person shop, is retirement. A 3-person shop might not be sustainable if me (1/3) decides to retire and has to pay someone to keep it afloat. And that is, if I find such a person. I also have to make sure that whatever service I provide, will keep making sense in ~30 years. Saving might work in countries with stable economies, but you still have to set asi…

Why do you want to retire? It is a question out of interest as I do not know many people (many of retirement age or above) that want to retire (anymore). Most who did retire in my circles (including me) found it not very inspiring and went back to (more than full time) work.

Re: Not raising funds to stay small and happy

#60

Post by edshiro »

soneca wrote: post #10
edshiro wrote: post #8

I also identify with the author. Tried the startup game on two occasions and got burned 2 times (one as senior engineer the other as CTO) - somehow both companies managed to sell but not at a price that made my shares worth it. I then swore I would never be an employee again and decided to join an accelerator but crashed out. Now I am freelancing and building a bootstrapped business on the side: much less headaches,…

May I ask what is your bootstrapped business? I am about to start one myself and I am curious about how and why experienced devs choose their ambitious side projects

I am building a B2B platform for logistics and taxi companies to store dash cam footage and easily retrieve and annotate them (for accidents, training, etc.).

We already have one interested customer, so trying to finish the MVP by January!

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