Hacker News Reader

Comment by bakuninsbart | Hacker News Reader

I think this is the key issue here. There are a lot of VC funded start ups that have a good product and a solid market fit, but they were never supposed to become 500+ employee companies.

If you have a product that works and makes a good profit, and you can maintain it with 10 people and extend it with 5 more, sometimes that just is the company.

In this context I think it is important to note that Ycombinator was founded in 2005. For the majority of its existence, and the general hype of tech startups, money was incredibly cheap. Now that the gears are switching, a lot of the advice given to startup founders does not work as well anymore.

View on HN

If you have a product that works and makes a good profit, and you can maintain it with 10 people and extend it with 5 more, sometimes that just is the company.

Amen. I call this business model “tiny unicorn”. Been riding mine 25 years now.

What would be the caveats of that approach?

You’ve go to know your unicorn. If it’s tiny, it’s tiny, and no use dreaming of a majestic stallion rampant when its natural environment is scuttling under the clover.

Great answer! I shall ride this pony until the wheels fall off then.

This is super-important. Sometimes the grass is greener on this side of the fence.

VCs want to get you to grow rapidly because the only way to move the needle on their returns is to blow the roof off. However as a founder, this is proof you can have a great business and a great quality of life by keeping costs relatively low, the team relatively small, just cranking out code and having fun.

As a founder you probably don’t get wealthy either and a lot aren’t really satisfied with a $150k/yr total comp/benefits for their successful lifestyle business.

It was pretty nice to exit my startup for hundreds of millions of dollars. Yeah, I don’t think I’d like to settle for $150k. YMMV, but I suppose a lot of folks are taking a calculated risk and swinging for the fences.

More power to em, if you prefer software be a certain way write it yourself.

Agreed, sure I fucked over my customers after my startup was bought by Google, but I didn't really care because I was able to afford three yachts. I didn't even bother writing the shutdown message myself, I paid some dude on Fiverr to do it. Maybe 150k is fine if you're willing to settle for an above-ground pool in some shithole state in the Midwest, but if you want to spend your time where the true work happens, and collaborate with other innovators and founders in the only place that matters (bay area) you have to set your sights a bit higher.

Humans have agency. If you enter into an agreement for software at a particular price (especially $0) that’s on you.

Imagine not being "satisfied" with a ~85th percentile wage[1]. Anyone who earns more than $150k/yr should be forced to spend 6 months every 5 years working a minimum wage retail job. They can keep earning their normal salary in escrow until they're done with their "get some damn perspective" temp job.

[1] https://dqydj.com/average-median-top-household-income-percen...

I think most of the founders on HN are far above the 85th percentile in intelligence (let's not get into the philosophical arguments about it), so why would they be satisfied with that?

Because, being over 85th percentile in intelligence, they would be more likely than average to realize that the marginal impact of income on experienced utility declines sharply the higher you go on the income distribution. (Especially if they’ve experienced life at a variety of income levels, including some near the 85th percentile.)

Marginal impact decreases, but the absolute impact is still positive... And the marginal impact is still quite high at the 85th percentile of income because the income distribution is very skewed (the absolute dollar difference from 85th percentile to 99th percentile, where most HN / YC founders probably are on the intelligence scale, is probably much greater than the absolute dollar difference from 15th to 29th percentile, as an example).

I assume someone running a very successful lifestyle business of this sort 1) Probably had a pretty good chance of making nothing at all or even lost money and 2) Could make more money with benefits etc. if they just took a job at a big company.

So, yes, they’ve done pretty well but they took a risk and still probably didn’t come close to maximizing comp even they had a rather good outcome.

And I just threw out the $150k number because it’s a very good outcome. Could just as easily be something a lot lower including negative.

While I do agree it would be good for those who haven't experienced poverty to get a taste of it, it's not realistic to expect people to feel satisfied simply because they are more fortunate than some other group. Success is always perceived relative to your surroundings and the possibilities available.

> Imagine not being "satisfied" with a ~85th percentile wage.

In aggregates: Household income > individual income > wage/salary; you've confused the first with the last.

$150K is beyond 90th percentile individual income. [0] I can’t find wage/salary percentiles separately, but its probably even further beyond 90th percentile there.

https://dqydj.com/average-median-top-individual-income-perce...

As a co-founder, I'd say you can get wealthy or at least comfortable.

But, we started with two people. At some point we needed funding. That put us on a track of angel investors, VC's, and a cycle acquisition, buyback, funding, acquisition, buyback, etc.

As the techie guy, I found that tiring and distracting. When we changed from software as a product to SAAS, it got a lot less fun. When we grew to 2000 employees (mostly non-tech), the company was a pain.

So after 20 years (to the day), we sold it and moved on.

It's really nice to hear something like that from someone who experienced it.

If you were back to two people with a promising idea, how would you do it this time?

You can make A LOT more money than that as the owner of a small company. If a VC firm wants to invest, it's because the company has the potential to make an absolute killing.

I'd like to agree with you, but the issue then becomes this smaller company is competing with a much larger company, which then has a larger marketing budget. The smaller company's offering becomes just another set of features the larger company offers.

It's not fair because the larger company continues to get VC funding which allows it to subsidize features or even give them away for free. Remember, all these companies are effectively racing to become monopolies and part of that process is "price dumping" to kill of smaller competitors. Again, this sucks, but those are the incentives VCs provides and companies have to oblige or get swallowed up by bigger fish.

> If you have a product that works and makes a good profit, and you can maintain it with 10 people and extend it with 5 more, sometimes that just is the company.

C'mon now. With that attitude, how are you ever going to get imploded on top of the Titanic, or buy a social media company so you can smash it against the wall like a toddler with a toy truck? You want to live a comfortable, happy life, with happy employees and customers? No way! This is capitalism, baby! Fuck your customers and your employees, it's your right to throw them into a vat of acid so you can blow millions of their dollars to spend 30 minutes in the stratosphere wearing a cowboy hat! If you don't do it, someone else will!

Yeah! I feel like I'm reading a script of an episode of the TV show, "Silicon Valley"! (ANY episode, lol!) * Pied Piper FOREVER! *

Reply on news.ycombinator.com