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Comment by msla | Hacker News Reader

> It really isn’t. There’s lots of other reasons to make a company, and making money is the means, not the ends.

If you didn't want money at some level, you wouldn't make a company, you'd make a social club or other hobbyist group.

> Money isn’t even the point of money.

Eh, for some people it is, and for some people bragging rights are the point, which means they want more money so they can brag about having more money than anyone else. Which leads to precisely the same observed behavior, so it doesn't really matter to anyone else.

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> you wouldn't make a company, you'd make a social club or other hobbyist group.

That's one of those "I'm not your lawyer" sort of things. The exact structure for a group depends a great deal on the fine print of both the group and the local legal system.

I've worked with everything from a joint bank account (legally not even an organisation) right through to a holding company operated by a trust to administer a variety of different entities that got together to buy some land. The latter was a PITA but it was necessary to get the various people to actually put their money in.

When your hobby is, say, running a steam railway, you need a bunch of weighty assets starting with a railway line (probably located on some land) and likely also some kind of shed to keep your steam engine in... it's very easy to end up with millions of dollars in assets even if all you really want to do is pull the cord that makes the "whoo whoo" noise.

> If you didn't want money at some level, you wouldn't make a company, you'd make a social club or other hobbyist group.

This is definitely not true. Sometimes companies are the best vehicle for what you're interested in. That's especially true in a society so oriented around business.

As an example, I new a guy who was worth hundreds of millions of dollars. He retired, but was bored. He had an idea for a product, so he put together a small team to build it. In his phrasing, "Profit is permission to continue." He wanted it to be self-sustaining, but he never cared about making money out of it.

Or I used to be part of a bandwidth cooperative; we were a bunch of sysadmins who clubbed together to rent a cabinet for our personal servers. I just did it all on my personal credit card, but in retrospect it would have been much easier just to register a company and mostly treat it that way.

I don't get your last, wouldn't a company be required to register income and not only expense? How would your example work?

Members paid in, money got paid out to vendors. It would have been more convenient to have a separate company with its own legal identity and bank account and not be tangled up in the individual finances of one person. Even though the long-term goal was explicitly not to make money.

> In his phrasing, "Profit is permission to continue." He wanted it to be self-sustaining, but he never cared about making money out of it.

So... money was a requirement to continue. His goal may not have been to acquire personal wealth, but you clearly stated here that money was definitely a company goal. Otherwise, profit would not part of the conversation.

Nope. Money was not a goal. Sustainability was. He wanted it to break even, not make money.

How does one break even without... making money?

I think the point is that some level of income production is necessary to make it possible to do the project, but the purpose of the project is not to make money.

A bit like how everyone needs an income in order to have a roof over their heads and food in their bellies, but for most people, the purpose of their life is not to make money.

It's true that money can get made. That's just not the point of the operation. For example, if it were already breaking even and there were an opportunity to throw off more cash, profit-oriented people would go for the extra cash, but people with other goals could well not.

In particular, a lot of failing companies are failing because the owner wanted control more than they wanted success. No matter how much they protest to the contrary. See also Kitchen Nightmares w/ Gordon Ramsay. People literally invite him in to save their business and then tell him to fuck off.

If we're going to filter out all of the companies that have failed, are failing, or will be failing, you've only got a sample size of about 5% of all companies. At that point you're basically cherry-picking if you discount all of the duds.

> If you didn't want money at some level, you wouldn't make a company, you'd make a social club or other hobbyist group.

In almost every case, there is a better way to make money than whatever any individual is doing. If money were the point, they’d go do something else.

I had this argument with the executive and sales teams at a company 20 years ago. I knew from direct personal experience that there was more money to be made via plumbing contracts for the US Army than our entire software development company was making. Did they want to do plumbing? I assure you they did not.

Money, it turns out, wasn’t the point after all.

> Money, it turns out, wasn’t the point after all.

Not the only point. Asking them if they wanted to do the sales team job without compensation would get you the obvious answer. They wouldn't. Money is the point, it's just not the sole point and it cannot be stretched arbitrarily. "Money for rent", "money for retirement", "money for vacation" and "money for a second home" are not the same.

There's a couple other professions that make more than that. One of the oldest, in fact.

I think you're overlooking folks who saved more money than they can spend (sanely), and who create companies as a means of containerizing the creation of something else.

As an example of this, consider Jennifer Doudna and Emmanuelle Charpentier, Nobel Prize winners in 2020 for Crispr/CAS9, and realize they're entirely financially secure, yet they've taken their science and created multiple startups to bring consequences of their science through regulatory processes to deliver results.

You can't eat money. You can sleep on money, but it won't keep the rain off of you. Money won't fix a broken bone. Doctors do that. If you have all the money in the world but no doctor, you can't convert money into medicine.

Money doesn't guarantee your safety, your self-esteem, or happiness. Lots of rich suicides out there, some just more slow than other (self-destructive tendencies).

It's a means to getting most, but not all of these things. It's not the only means, and it doesn't always work. It's the things money can buy that are important, not the money.

> If you didn't want money at some level, you wouldn't make a company, you'd make a social club or other hobbyist group.

If you just made a hobbyist group you'd still need to get a job unrelated to your hobby, which takes up a bunch of time that could be spent doing stuff you're actually interested in instead.

So sure, technically it is about money at some level, but only because we live in a capitalist society and don't have a choice.

Making a company might just be the most straightforward way to maintain a financially sustainable venture. But profit might not be the primary goal of it.

a social club and hobbyist group can't make big world changes without the cycle of capital pumping through it's veins. For that, you need a company. Or a really good non-profit message.

If the cycle of capital is required…. Isn’t making money literally the necessary sustaining part?

Make it yes. Put it in your pocket no

Seems like a whole lot of yak shaving then. Seems pretty dumb? Or self delusional?

It really depends on what you mean by "making money" and the distinction is important. The world is currently setup a certain way, and if you want most peoples' time, a lot of which is required for big impact, you need to pay them $ so that they can shelter and feed themselves. So generally you at least need gross margin from revenue to be able to pay employee costs.

So you can "make money" as in revenue, but as an owner, never take much more than an $80k salary providing for your basics, even over the course of decades. Right now, that's probably the best model to get things done. Even Google and Facebook have only skimmed off a tiny amount of their total profit to some founder real estate and yachts, due to their zero dividend and repeated truckloads of $ dumped back into company reinvestment consisting of employees.

But this is what I’m referring to as self delusion.

Google and Facebook made their founders insanely wealthy. Literally some of the most wealthy individuals on the planet.

Taking on such a large amount of risk and doing such a huge amount of work, with the goal of (legitimately) only paying oneself $80k if successful - which is not a livable wage for most people doing founder work in the Bay Area - doesn’t make sense.

It’s literally stupid if that’s the goal, because it’s self destructive.

It’s literally all risk, no reward.

At a minimum, rewards enough to rebuild reserves and set someone up to not have to worry about daily expenses and be able to take several large future bets without risking bankruptcy seems saner.

Why not? I collect $60k annual in dividend income and live off of it in palo alto building the next version of the web. fuck vc.

Because that is a very, very, VERY narrow and hard to hit target. It's intentionally limiting both the upside AND the downside.

If that's what you end up with, hey that's cool. There are far worse outcomes possible in the world, and that one is pretty decent.

But why not be open to more? Especially when starting and planning.

After all, if things go well enough, you could do the same with $1 of salary.

None of that necessarily requires VC either, just an open mind.

Intentionally saying 'I don't want to make enough money to be wealthy' at a job which is based on building a machine to make money, is intentionally handicapping oneself.

Think of it like setting a required minimum latency for a UI or API that you would intentionally never serve a response faster.

Folks are welcome to do whatever they want of course, and if my competitors prefer to do this, that's cool by me!

If someone doesn't trust themselves with the potential success, I could also understand that. But maybe it would be worth working on that part first. Because that will be a huge problem regardless.

The issue is you can't build a machine to make money if you are trying to invite the next iteration of a web platform. You need the other money making machines to participate. Why would they do that if they fear you will become a bigger money making machine than them (by being the underling platform)? I have an open mind if you have a good answer to this question.

1) why would your long term strategic plan be relevant to them? I don’t know of anyone that CC’s it to vendors, partners, etc.

2) who knows if that long term vision ever would come to fruition! It could easily be wild daydreaming, and once you actually start doing real business you’ll realize it was fantasy. Or the market will shift, and what was a good idea is now a bad one. Then you’d need to look around and figure out a real goal.

3) iterative is important. Meeting the market where it is, is important.

And that is what customers generally care about now.

Not some long term ‘will take over the world’ story, but what utility can you provide them now. And that is what your marketing, sales, etc. needs to be about.

Where it goes long term and what you want it to be eventually is usually tangential to that, day to day, and what it may morph into as you have success, day to day.

But putting that out up front before you have a credible path to it just distracts customers, makes sales harder, and is the cart before the horse.

For an IT project (up to some scale) the primary form of capital needed is time.

With some savings or some other source of income one can have a acceptable lifestyle and time for something which one enjoys.

Linux Torvalds? The FSF? Mastodon? For what might be the next one, Andreas Kling with Serenity/Ladybird? The first graphical web browser was built by a couple of college students. Have none of these had a big impact on the world? One of the unique properties of software is that creating it doesn't have to be a capital intensive affair.

I agree. I was being sarcastic

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