DISQUS

Alex Hammer · 1 year ago

Louis is very smart to have such thoughtful individuals contribute to his blog. Great strategy.

robdiana · 1 year ago

Alex, I know I get benefits to this guest posting as well. Louis has a much larger reader base than I do, so I get a little more exposure than normal. Hopefully, everybody wins in the end.

Scott Lockhart · 1 year ago

I think that it is easier to start-up these days as initial costs can be kept fairly low through development. Where bootstrapping really kind of hits the wall is when you are looking to scale and market. For most smaller teams that are working on passion and hopefully a good idea, it is generally speaking unsustainable without additional funds to make it a real business and more than just another website. You get to a point where you need to give full time attention to the project to really make it go somewhere. For some this happens faster than others and depends on the founding team. Luckily I am not at that point right now, however I also see a light at the end of the tunnel - which definitely helps.

robdiana · 1 year ago

Scott, that is a very good point that I was trying to avoid. The process of a startup and when to get funding is an interesting topic. I would agree with you as well, startups will need funding once they really try making it into a business and the full time attention is required. I also doubt that you have much time before you need to make that decision :)

ameyer32 · 1 year ago

Lewis and Rob,

thanks for a very interesting post. It's interesting to me because I just (17 months ago) started a company. You're absolutely right about the use of cloud computing and lower costs. I would add a couple things.

First, I think some of the people starting companies are a little different and a little older. I've been through some startups and having worked awhile, could provide my own seed money. I've used angel groups and talked to VCs for insight, but not funds. At least not to this point.

Second, being a little older, we can blend consulting and SaaS sales to more than cover our costs. While this isn't a blend that's attractive to VCs or Angels, it significantly increases our chances of success. To steal a line from Warren Buffett, its the difference between stepping over seven 1-foot curbs and having to clear one 7-foot high jump.

Third, and possibly most importantly, partnerships and communications tools. My partner owns a small software company in Bulgaria. He has about twenty developers focused around a niche Eastern European product. So the SW environments, training, management etc. are all picked up for free. Within reason, I can also scale developers/testers/support personal as needed. Skype and a few business trips ease the communications.

I'm not sure this setup would be possible to someone just out of school, but for us, it means our fixed costs are almost non-existent and our variable costs increase much more slowly than our revenues.

This doesn't mean we haven't had mistakes, it just means that the cost of those mistakes is much less. It's much less painful to stub your toe when you're walking than it is when you're competing in the 100 yard dash.

What will drive us to VCs and Angels, will probably not be funding, but rather the need to flush out a business with experienced people. I have had several 5 minute conversations with VCs where I've walked away amazed with their insights about where our business is and what we should be considering next. As a first time entrepreneur with revenue, that is more valuable to me than money.

In closing, I think what you're seeing is that I'm not alone in following this route.

Andy
http://alignmentinquiries.blogspot.com/
www.CompanyAlign.com