Hacker News Reader

Comment by petra | Hacker News Reader

OK, but how ? how does a small scale entrepreneur with few resources manages to achieve such difficult feat ?

Author of the post here — I agree that the "how" might be what's missing the most. The point I'm trying to make with the post is really more of a "what" question. I sometimes talk to entrepreneurs who want to outsource their distribution through some creative channels. I'm arguing that one should fight as hard as they can to keep owning that relationship with the end customer, and that this may indeed be close to the only thing that matters in the whole chain.

That also explains why startups that have "just" a bunch of users, and no revenue, are still able to raise at massive valuations. Sure the proximate cause is that they'll be able to monetize that attention at some point — but the deeper insight is that attention is inherently valuable, because it's upstream of everything. Every transaction starts with a person paying attention to something.

You innovate. You deliver a similar solution in a simpler “good enough” way (rebar). Or solve something cumbersome (stripe), or create new markets (invision, Netflix)

Stripe raised $245M. Netflix raised 3.1B. invision too raised significant funds. and rebar isn't about a demand side business, it's a better supply side business.

The ultimate trade-off made between self-funding and raising outside capital is how much you can invest in growth at an accelerated rate. Unless you have a pre-existing brand you can tap into (like Kyle with her cosmetics or Clooney with his Tequila), it's nearly impossible...though some companies have done it. But, even with outside funding, outsized success is still rather difficult to achieve, so it's a matter of personal preference what route you go down at the end of the day.

Check Basecamp’s Bootstrapped Profitable & Proud

Reply on news.ycombinator.com