Designing the Ideal Bootstrapped Business
mtlynch.io
mtlynch.io
Example: Server hosting"
A few lines later...
"Good Market: Not real-time
A non-real time business is one where it’s not a disaster if your product is down for a few hours"
Later on it describes hosting, image editors, and time-tracking software as examples of "finished" businesses that don't need to worry about dealing with feature competition.
This is a joke. This is the equivalent of a rag magazine's "Top 10 ways to get RICH!" article.
"No picking up pennies"
His example as to why this is bad was Kickstarter which was not bootstrapped, but a VC funded business. He also makes a point of saying Kickstarter is the 'best example' of this business model, and they still are losing money - but I'd argue that payment processing companies like Stripe are a successful example of this.
Also, since this talk was given Patreon has become ubiquitous. I don't know their financials (if they are profitable), but they are a "picking up the pennies" company and I know they make a lot of money. If a software company is bringing in hundreds of millions in net income a year and is still unprofitable, it's either because you've grown headcount/expenses without regard to income in an attempt to quickly scale to some high multiple or your business model does not work on a fundamental level (costs increase linearly with income) or you took on too much debt and all profit goes to servicing the debt.
I am pretty sure it's one or the other, right? If someone can think of another scenario I would like to hear it.
>Example: Server hosting" A few lines later... "Good Market: Not real-time
>A non-real time business is one where it’s not a disaster if your product is down for a few hours"
This is on me for summarizing poorly, but Cohen wasn't advocating server hosting as a good market. He explicitly said WPEngine was a counter-example because it was hard for them to do real-time support.
He mentioned server hosting as an example of a business where customers understand that you have ongoing costs, so it makes sense that you bill them as an ongoing basis, but he didn't say server hosting is a good market for bootstrappers.
>Later on it describes hosting, image editors, and time-tracking software as examples of "finished" businesses that don't need to worry about dealing with feature competition.
This still seems true to me. What's the objection to this point?