Back To The Garage
from the Silicon-Valley-with-humility dept
Yesterday I had lunch with a friend of mine who started his own company a few years ago. We were laughing about how far off the mark venture capitalists seem to be, and how many people we know who have started companies that are building real businesses the old fashioned way: bootstrap a product with extremely low costs, and then make money by actually selling that product to real customers. That's the new Silicon Valley plan, it seems. Many entrepreneurs around these parts are still excited about starting companies, they're just doing it in a different way than they were done a few years ago. Companies are being started inside people's homes. Everything is cheap these days, including labor. The get-rich-quick tourists have all gone home. The excitement among startups is how little they spend on expenses, not how much money they've raised. In the end this means counting "honest revenue" - which is real money from real customers paying for real products. It seems like such an obvious concept, and it's happening all over the valley. The venture capitalists, of course, still haven't noticed. That's okay. With this method of building a company, venture capitalists aren't needed.Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
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Growing pains
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Re: Growing pains
It's nice that you feel that way, but I know plenty of high tech entrepreneurs who are doing just fine without the million-dollar loan and growing based on revenue, which kind of disproves your point.
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Re: Growing pains
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Depends on your goals...
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start-ups survive their VCs
The company did not run out of cash, not yet, might have a good chance to survive, but a couple of the VCs I talked to have gone out of business.
That s ironic, people sit by the river awaiting our corpse go by, just to say how stupid is being in the new economy, how we should get real jobs and quit the silly start-up biz etc, and all goes by is VC corpses which they do not notice at all.
the worst part of the whole VC story is that VCs are still around like ghosts in the castle, doing ordinary things as they were alive still. So I spent most of 2002 writing a bizplan after another for them, mostly taking time away from marketing. But they were dead already
That s why I very much like this quotation: "in these highly turbulent markets, the cost of doing the analysis or writing a business plan exceeds the benefits. -The Origin and Evolution of New Business (Oxford University Press 2000) by Amar V. Bhide-
I ve stopped completely dealing with VCs and have discovered that I have plenty of time to relax. Business run almost on its own (the beatiful of the Internet) on extremely low costs, might not become a blockbuster soon, but it s still fun and a good growth option on the future.
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