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Meaningful exits for founders (2016)

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Re: Meaningful exits for founders (2016)

#81

Post by spaceman_2020 »

ilrwbwrkhv wrote: post #21
clark-kent wrote: post #11

Earlier quoted context omitted.

Thats impressive. Do you mind sharing some tips that helped you scale your bootstrapped business to 4million profit?

I am not a good writer that's why I do not do blogs and stuff but I will try: 2 fundamental ideas: Distribution & Supply Chains Distribution: You need to secure distribution before your company can grow. Which means essentially a lead list or people you can reach in bulk or manually by walking down the street. You need at least 500+ such connections. The goal of the initial distribution is iterating on your core valu…

Thanks for sharing. Very insightful!

Re: Meaningful exits for founders (2016)

#82

Post by tchock23 »

gnicholas wrote: post #39
dabeeeenster wrote: post #34

Earlier quoted context omitted.

Without question the bootstrapper. You almost never hear about them but there are thousands of them out there. They don't have huge PR VC teams behind them, hence you never hear about them.

> Without question the bootstrapper. I think you mean the opposite, given the phrasing of the question. > They don't have huge PR VC teams behind them, hence you never hear about them. This seems like half an argument. I get that PR teams have an incentive to talk about their company, which is why they are in the news sometimes. But it doesn't explain why non-VC backed companies that are swimming in cash would be so…

The reason why you don’t hear these stories is because no one making meaningful money as a bootstrapped founder wants to invite unnecessary competition.

Take a look at any sub-reddit related to entrepreneurship. The minute someone even hints they are making a lot of money in some area you see multiple replies asking about the product, niche, etc. People will clone what works. Why would anyone create that kind of exposure if they didn’t need to?

[Edit: just read the rest of this thread and there are three people asking the $4 million guy how he did it, so I guess point proven?]

Re: Meaningful exits for founders (2016)

#83

Post by onetimeusename »

JamesBarney wrote: post #78
onetimeusename wrote: post #70

Earlier quoted context omitted.

>steer clear of commoditized work can you give more details about this from your own perspective? What does commoditized work mean to you and what should one assume about IT consultancies that tend to dabble in this kind of work? What are the problems with it in your opinion? Is this work even avoidable? I have my own thoughts on this I just don't want to bias your response.

I'm curious to hear your thoughts, and I don't think you'll bias tptacek, he's spent a long time doing it. I spent a lot of time in consultancies and started one myself, I'm not tptacek but here's my two cents. Does the buyer see you as a commodity? How hard is it to find someone else to do what you do?(as defined by the customer not you) Can you differentiate yourself from competitors? I think it really comes down t…

that's an interesting way to put it.

My thoughts are, as someone who worked from the consulting end and not management or sales, that when you hire sales people to bring in consulting work, they inevitably bring in commoditized work because sales people have unique incentives and pressures. If you are at the point where you are trying to get sales people to sell specialized consulting work, you aren't doing it correctly. It more or less has to sell itself with a brand as you say. Sales people don't want to spend the time building relationships or learning specialized information to sell to specific targets. So you can't scale up a small consultancy imo.

From the employee side, it is boring and meaningless work that burns you out. So taking on that kind of work will likely cause a death spiral in your firm. Your more senior employees will leave and you will have to hire more entry level employees and at that point you can only take on commoditized work and your brand reputation is shot.

I've seen big consultancies buy up small boutique consultancies and it always turns out badly. My own thought is if you are an IT consultant and you find yourself doing commoditized work, something has gone wrong.

Re: Meaningful exits for founders (2016)

#84

Post by tptacek »

dublin wrote: post #50
idlewords wrote: post #42

Earlier quoted context omitted.

WeWork was a useful way to make SoftBank subsidize office rentals for freelancers and small businesses; it had high social benefit.

Given what WeWork charged, you can't convince me there was much subsidy there, nor much social benefit. "Cool offices" are something that should never even be talked about by a founding team until they have several spare million sitting in the bank. Until then, rent cheap-ass real estate and buy second-hand office furniture. And that's if you even have offices, which you may not need if you're a software and/or servi…

At its peak, in 2016-2017, WeWork was charging something like $250/mo in Chicago.

Re: Meaningful exits for founders (2016)

#85

Post by tptacek »

dabeeeenster wrote: post #76
tptacek wrote: post #57

Earlier quoted context omitted.

I think you've misconstrued the word "straightforward" to mean "easy". They're subtly different concepts.

This is peak HN

Is it really? Do you want to understand what I'm saying, or are we here to dunk on each other? I think you have the impression I wrote a drive-by comment about building businesses, and, as I said upthread in response to you, before you wrote this "peak HN" barb, I have a little bit of experience here, too.

What's a little annoying here is that I don't even think the parent commenter is building consulting businesses. I was moved to comment at the incredulity people seemed to have about bootstrapping 7-figure businesses. One way to do that, straightforwardly, is to build a consultancy. But there are others.

Re: Meaningful exits for founders (2016)

#86

Post by ilrwbwrkhv »

nathan11 wrote: post #68
ilrwbwrkhv wrote: post #6

It's crazy that a series d exit would net a founder 7 million and yet my bootstrapped business returned a 4 million profit for me last tax year. I think people need to learn more about how to scale a bootstrapped business. Even when I was getting started, I read a ton on VC funded businesses but not a lot on non VC funded businesses. I think there is tremendous amount of money to be made in bootstrapping as well. I t…

I'm really curious about your story. Two years ago your posts were seeking business tips because your efforts weren't working. One year ago you were looking for a way out of web dev. What did your path look like between then and now?

So I had been trying to sell software products that I built for about a decade. 2 years ago things hit rock bottom and I was thinking of switching away from this industry completely. As in most stories I guess when you try and try and hit rock bottom, something changes in your head? Then things started clicking and I hit upon my first offer which worked. Reinvest all profits into social media ads and if your product can be used anywhere it is ridiculous how fast you can grow. I make 3 of those 4 millions in the last 2 months. What is also crazy is how much of a margin there is in a software product. I know of some people who do this in ecommerce but they have profit margins of maybe 20%. I have profit percentages of over 90. But I had to hire more people towards the end of last year and that was a pain and still is. Hiring is not a solved problem.

Re: Meaningful exits for founders (2016)

#87

Post by ilrwbwrkhv »

chubot wrote: post #61
ilrwbwrkhv wrote: post #21

Earlier quoted context omitted.

I am not a good writer that's why I do not do blogs and stuff but I will try: 2 fundamental ideas: Distribution & Supply Chains Distribution: You need to secure distribution before your company can grow. Which means essentially a lead list or people you can reach in bulk or manually by walking down the street. You need at least 500+ such connections. The goal of the initial distribution is iterating on your core valu…

Not to detract from an interesting post, but the last point about programming languages is confusing, and seems to give little information. Use expressive, untyped Ruby or inexpressive, strongly typed Go? Or SBCL ? Most people would put Ruby and Go on pretty opposite sides of the spectrum. Maybe you prototyped in SBCL when you needed extreme flexibility/iteration speed at first, and then switched to Go when maintenan…

I just meant using a language which has a core idea that it pushes really well. Basically the anti java.

I still use SBCl now but all new features are being written in Go due to hiring requirements.

Re: Meaningful exits for founders (2016)

#88

Post by ilrwbwrkhv »

randmeerkat wrote: post #71
ilrwbwrkhv wrote: post #23

Earlier quoted context omitted.

Not a lot that I can find. Essentially businesses are about making bets about what reality will look like in the future. So the better modeling you can do of reality, the more successful you can be. Earnestness is a strong word in my dictionary when it comes to testing ideas these days. I started seeing success when I stopped lying to myself and became earnest after over a decade of failure.

> So the better modeling you can do of reality, the more successful you can be. How do you approach modeling? > Earnestness is a strong word in my dictionary when it comes to testing ideas these days. I started seeing success when I stopped lying to myself and became earnest after over a decade of failure. It sounds like there’s something here, but I’m not sure I understand what you mean. By being earnest do you mean…

Earnestness is basically intellectual honesty but it takes effort. You think you are being intellectually honest but you are not. You need to peel back the layers.

Regarding modeling multiple models overlap is closest that you can get.

Re: Meaningful exits for founders (2016)

#89

Post by Reviving1514 »

tptacek wrote: post #69
Reviving1514 wrote: post #64

Earlier quoted context omitted.

What's the playbook?

Establish yourself. Specialize. Hire someone to increase delivery capacity. Sales capacity improves; ratchet delivery up with it it (get better at recruiting). Raise rates continuously and aggressively. Give it 2-3 years (once you've got your sea legs). Be good at what you're doing and steer clear of commoditized work. You can't scale up a generic IT consultancy this way. Or maybe you can! I've never tried.

Thanks for taking the time to write that out - totally fair take.

Re: Meaningful exits for founders (2016)

#90

Post by gnicholas »

tchock23 wrote: post #82
gnicholas wrote: post #39

Earlier quoted context omitted.

> Without question the bootstrapper. I think you mean the opposite, given the phrasing of the question. > They don't have huge PR VC teams behind them, hence you never hear about them. This seems like half an argument. I get that PR teams have an incentive to talk about their company, which is why they are in the news sometimes. But it doesn't explain why non-VC backed companies that are swimming in cash would be so…

The reason why you don’t hear these stories is because no one making meaningful money as a bootstrapped founder wants to invite unnecessary competition. Take a look at any sub-reddit related to entrepreneurship. The minute someone even hints they are making a lot of money in some area you see multiple replies asking about the product, niche, etc. People will clone what works. Why would anyone create that kind of expo…

Yes, there is curiosity. I'm not sure if that proves the point that one would not want to reveal details about the business, or if it indicates that perhaps the commenter's claim strikes many people as somewhat outlandish, or at least rare. I'm sure there are some folks out there clearing $4M/year with their bootstrapped business. But I'm also sure there are folks out there who tell tall tales on the internet.
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