The Advantage of No Funding (2011)
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Re: The Advantage of No Funding (2011)
#2> Then they would talk about LOI, ROI, NDAs, IPOs, and all kinds of things that also had nothing to do with actually helping people.
Coming from a bootstrap background, I feel that VC backed companies have a tendency to focus way too much on vanity metrics. KPIs that make the buisness look successful, without measuring real conversions. It's like building a business purely to make a nicer looking pitch deck.
That, plus way too much emphasis on the financial/equity structure of the startup. Founders are carving out employee option pools before making their first dollar. And this focus on equity/investment/reporting becomes the CEO's full time job, when it should have been dedicated to customers.
Re: The Advantage of No Funding (2011)
#3> Never forget that absolutely everything you do is for your customers. Make every decision — even decisions about whether to expand the business, raise money, or promote someone — according to what’s best for your customers.
Right, this isn't really about whether or not you take growth funding. This is about minimalism and focus.
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. Indeed, you're more likely to succeed if you use the funding modestly, with humility, focused on where it can provide the most business growth.
Re: The Advantage of No Funding (2011)
#4> Then they would talk about LOI, ROI, NDAs, IPOs, and all kinds of things that also had nothing to do with actually helping people. Coming from a bootstrap background, I feel that VC backed companies have a tendency to focus way too much on vanity metrics . KPIs that make the buisness look successful, without measuring real conversions. It's like building a business purely to make a nicer looking pitch deck. That, p…
That's because VCs need an exit to make their money. They only care if the business is successful insofar that it can be sold or IPO.
Re: The Advantage of No Funding (2011)
#5(2011)
Re: The Advantage of No Funding (2011)
#6There's also the worry of having TOO MUCH funding- Chip Wilson (LuLuLemon founder) had this problem with his second company Kit and Ace. They didn't have the same edge that they had when they started LuLu.
The confine of having little to no funding forces you to be agile and creative.
Re: The Advantage of No Funding (2011)
#7There's also a disadvantage which is that you worry day to day about finding salary at the end of each month. I found at my startup this made it difficult to concentrate on the bigger picture of developing the product.
Re: The Advantage of No Funding (2011)
#8> Never forget that absolutely everything you do is for your customers. Make every decision — even decisions about whether to expand the business, raise money, or promote someone — according to what’s best for your customers. Right, this isn't really about whether or not you take growth funding. This is about minimalism and focus. The fact that some people who take venture funds see fit to use those funds in a vain w…
> 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.
Re: The Advantage of No Funding (2011)
#9Totally 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, financial markets downturns will bring attention to profitable and bootstrapped companies.
Re: The Advantage of No Funding (2011)
#10> Never forget that absolutely everything you do is for your customers. Make every decision — even decisions about whether to expand the business, raise money, or promote someone — according to what’s best for your customers. Right, this isn't really about whether or not you take growth funding. This is about minimalism and focus. The fact that some people who take venture funds see fit to use those funds in a vain w…
Never forget that absolutely everything you do is for your customers
Hard disagree. I certainly want to keep my customers satisfied and provide them with value, and they (along with employees and partners) are absolutely necessary to the success and continuation of the business.
But the number one consideration in any business are the needs of the owner(s), which may include financial, a desire to grow the business, family considerations, physical health, mental health, and many intangibles related to self worth, discovery, personal growth, creativity, and community.
If you can't find a balance, the business ends or gets sold. Or, the owner suffers damage, sometimes irreparable.