Comment by adventured | Hacker News Reader

Comment by adventured | Hacker News Reader

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There are thousands of small, private technology businesses worth millions or tens of millions of dollars across the US, that have taken little to no venture capital, and in which the founders have very large equity stakes in their own business.

It does not require the equivalent to winning the lottery to get rich with a technology business. The odds are several magnitudes greater that you'll get rich creating a technology business than playing the powerball.

Being worth $4 million, and having a small business that generates $650,000 per year in profit, is rich.

Getting rich with a start-up in Silicon Valley, given the approach used there, is like playing the lottery. The start-up lottery you're referring to only exists in SV / SF. Nearly everywhere else, the fundamentals of having an operating business still rule - in that world, a lot of people get rich running smaller technology businesses. $50 million or $500 million rich? Nope, $5 million rich. Silicon Valley is mostly all or nothing, and that's what makes good outcomes so relatively rare.

Exactly what I tell my startup friends. I know people who run design consulting firms and pull in $300-500k/year in profits. Some run SEO/SEM marketing agencies and do similar figures. They give themselves generous salaries and own nearly 80-90% of their businesses which, on paper, are worth $4-5M.

That's definitely very, very well-off, if not F-U rich. And it's very "safe", unless your $1M in revenue hinges entirely on one or two clients

It's safe but it's also exponentially more difficult than starting a startup.

The amount of connections one would need to start a business tomorrow generating $500k in annual profits is insurmountable.

Being a successful consulting agency or freelancer is attainable in two ways:

1. Know a lot of people at a lot of very large companies that are willing to throw you a bunch of work.

2. Build up clientele for a very long time making no money until you hit critical mass.

When I was freelancing it was one of the worst experiences of my life, so of course I'm bias. But I want readers to know that there are 2 sides to every coin.

Exponentially more difficult than starting a startup? No shit, all you have to do to start a startup is say you started one and give a vague semblance of the idea.

You need a Bootstrap website too.

In more concrete terms; I'd say it's harder to gross $100k as a freelancer than it is to raise a $6 m+ Series A.

Thanks for sharing. I've heard numbers like these quoted before with respect to other small or medium sized businesses like franchising a fast-food chain and a question just occurred to me. For the people you know, are the owners' salaries taken before the profits as part of the operating expenses or do the salaries come out of the 300-500k of profits?

You have basically described me minus being in the USA. It is not easy or fast, but it is worth it.

> The odds are several magnitudes greater that you'll get rich creating a technology business than playing the powerball.

This, of course, depends on the individual. Many people are completely inept at running a business and would do much better at powerball.

Also many successful startup were not the one that came up with original idea, they mostly improved on existing products or better marketed themselves.

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