>Venture backed companies only have about a 1% chance of reaching a $1B valuation. [...] I’m sorry, but you aren’t the 1. You are the 99 and your startup isn’t going to become a unicorn. [...] Why play a game that has such terrible odds of winning?
Because people have always liked to pursue things that interest them regardless of the odds.
(cue Han Solo's "Don't tell me the odds!")
Why do aspiring writers work on novels with long odds of it ever being a bestseller on NYTimes -- or even being published by a reputable publisher for that matter? Because, writing is what that person wants to do. Telling them it's a "waste of time" isn't going to change their mind if writing is what makes them happy.
Why does the high-school basketball player keep working on his jump shot even though the odds of NCAA players getting picked in one of the 60 slots of the NBA draft is ~1%? It's because playing basketball is what interests him.
Same for aspiring actors pursuing Hollywood fame that probably won't happen, researchers toiling away on scientific breakthoughs that may never materialize, startup founders building elusive unicorns, etc.
Yes, the similar DHH essays promoting "bootstrapping" and "slow growth" are always highly upvoted on HN because VCs are widely perceived as detrimental. However, both your and DHH's philosophy leaves out a crucial detail: What is the entrepreneur interested in working on?
If the interests happens to be a business that can be bootstrapped, then great. Pursue that option. However, if it's a business that requires millions to build out infrastructure (e.g. many consumer-facing websites), somebody with deep pockets (e.g. VCs) is the typical financing option since banks won't provide loans.
There are many ways to bootstrap consumer facing websites and other businesses that require a lot of early capital, you just have to be creative. I'm just trying to get people to think outside the "VC is the way" mindset because it burned me and because the experience wasn't what was promised.
>There are many ways to bootstrap consumer facing websites and other businesses that require a lot of early capital, you just have to be creative.
Yes but other financing options such as crowdsourcing (e.g. Kickstarter, or blockchain initial coin offerings), or charging consumers via subscription payments ... all have their disadvantages compared to VCs.
Another factor that may handicap your business is how your competition is financed. E.g. if your competition has $10 million in VC money but your business sticks to "bootstrapping" out of principle to stay anti-VC, you will be outspent in scaling out and may fail anyway.
Really, the critical advice is to be smart about analyzing the VCs and their financial terms before accepting their money. If VCs don't make sense for your particular business, don't do it.
Because people have always liked to pursue things that interest them regardless of the odds.
(cue Han Solo's "Don't tell me the odds!")
Why do aspiring writers work on novels with long odds of it ever being a bestseller on NYTimes -- or even being published by a reputable publisher for that matter? Because, writing is what that person wants to do. Telling them it's a "waste of time" isn't going to change their mind if writing is what makes them happy.
Why does the high-school basketball player keep working on his jump shot even though the odds of NCAA players getting picked in one of the 60 slots of the NBA draft is ~1%? It's because playing basketball is what interests him.
Same for aspiring actors pursuing Hollywood fame that probably won't happen, researchers toiling away on scientific breakthoughs that may never materialize, startup founders building elusive unicorns, etc.
Yes, the similar DHH essays promoting "bootstrapping" and "slow growth" are always highly upvoted on HN because VCs are widely perceived as detrimental. However, both your and DHH's philosophy leaves out a crucial detail: What is the entrepreneur interested in working on?
If the interests happens to be a business that can be bootstrapped, then great. Pursue that option. However, if it's a business that requires millions to build out infrastructure (e.g. many consumer-facing websites), somebody with deep pockets (e.g. VCs) is the typical financing option since banks won't provide loans.