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Comment by MarsAscendant | Hacker News Reader

Is there still a concern about the profit? I'm assuming you're working for a for-profit company, where one of the goals – if not the goal, ultimately – is to make cash. (I don't mean to insinuate any sharply-materialistic outlook on your company: I sincerely don't know how a company thinks about money.)

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That will always be a concern, even for a nonprofit. You need to keep the lights on, and people need to be paid. However, the trouble with VC funding is the expectation of scale. A VC won't be happy with a small organization that makes enough to pay its employees and sustain a small amount of growth. Unfortunately, that business requires large successes. So the founders and the investors can easily have very different goals.

VC funding is required if you want to build something massive, but isn't a great idea if the founders just want to build a sustainable but small business.

I disagree with this view completely.

Companies like MailChimp and Atlassian are great examples of bootstrapped companies that became very successful. There are more.

Money is great to have at any stage of a company, and bootstrapped companies prefer to trade stability and time for the freedom of not having money (and those who only focus on it) control decisions.

You can build a great company with and without investment, but you can fail with either just as well.

And with VCs you have someone breathing down your neck to either grow fast or die fast. With bootstrap, you don’t have that pressure (and instead have the fuck we don’t have money to fund faster growth problem)

Not GP, but in a similar position. No, no concern whatsoever. The owners are not greedy which makes all the difference in the world. Not that the profit is low - it is probably much higher this way, when the whole company pulls toward the goals. I have never worked in an environment with so low amount of office politics.

With the way things look right now for high-tech (or any software development) companies the margins are quite high. But of course, if you are a VC who invests in hundreds of businesses, and expect only a few of them to fly, then those few must fly pretty high to make it worth your while. Which means that being just very profitable is not enough - you need to be extremely profitable. And that comes with compromises (mostly for the workers at such startups).

Platform quality is long term money, platform monetization is short term money.

With VCs who only care that the growth curve is exponential, they go for short term money every time, because yeah you might crash the company, but you've got a 5% chance of becoming a big evil corp.

Yes, exactly this. You have to choose the hand that feeds.

If you start a platform around paying customers you make it one way, if you start it around getting as many users as you can and then monetize the popularity, then you are selling your users, and that's another way entirely.

Yup.

And stock investors often aren't much better.

Focusing on the 5% chance of massive success is the opposite of short term thinking.

It's about having a massive exit, the sooner the better. It's absolutely short-term thinking, with an upper bound around 10 years. Less for smaller investors. Nobody cares what happens after the exit.

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