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Comment by d0mine | Hacker News Reader

What do they say?

My impression: "You should make a product to sell rather than making a company to sell."

I think both are valid business plans. There's not all that much difference apart from the sums involved, and your potential market size.

No, they aren't. The former suppresses competition because it relies on existence of "big gorillas" to come over and buy you, therefore no new gorillas can emerge. Meanwhile, most often than not, big gorillas simply put their new toys on the shelf, thus suppressing innovation.

In that regard, entrepreneurs who build to flip are no different from real estate speculators: they make a few people richer, but in the end you'll end up with the same lot of aging houses.

Not to mention that "build to flip" companies simply suck. Their products are jokes built overnight as parasites on shoulders of open source excellence, and in the end they don't reward financially anyone but investors and (but not always) founders: it's statistically stupid decision to work long hours as a regular programmer for a startup whose goal is to sell out for $50M after 3 rounds of funding.

I like Paul a lot, but his patronage and encouragement (!) of build-and-flip projects is the worst part of "PG culture" that I have the biggest problem with. Especially when he blames VCs for not funding the "next Google". The Google wouldn't has happened if S&L landed on YC.news some day in 99: they'd sell out to Yahoo for $10M instead.

"Not to mention that "build to flip" companies simply suck."

That's a slight generalization. Also you can actually do both - build to be profitable long term, and also build to be attractive in terms of acquisitions.

what if your product is the company to sell?

Basically that they run 37signals in pretty much the opposite way to most startups. Which isn't surprising since 37signals isn't a startup.

Basically that they run 37signals in pretty much the opposite way to most startups.

Huh? They run 37signals exactly like most other startups. Find a market, build a product, sell it, grow, expand.

If you mean the opposite of the "Web 2.0 monetize eyeballs and get acquired" lottery, then yes. But make no mistake about it, this model is definitely not the norm even though we talk about it alot here at hn. I know many millionaires that have happily built what we now call "lifestyle" businesses. Except they never called them that. They just made money they only way they knew how because they never knew when or if an acquirer would ever come along.

Which isn't surprising since 37signals isn't a startup.

Then what is it?

When does a company cease being a startup? Is google a startup? 37signals has been around quite a few years now.

Sure, they've found some product niches which are profitable for them. But I don't see that as being extremely applicable or related to the newer crop of startups. If you want advice on maintaining a software business, then sure.

The impression I get is that most startups work hard and get things done. They pile in new features. They work really hard to grow, make deals, etc etc. That might mean working 7 days a week, maybe a few all nighters. I don't get that impression from 37signals, which is fine. They are not building a company, they are maintaining one.

For me, it's products seem quite minimalistic with the bare bones amount of features, also in my opinion 37signals having ruby on rails is a unique situation. So any advice given that worked for them, may well not work for anyone else.

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