Startup to IPO: Part 2: Obstacles | Hacker News Reader

Startup to IPO: Part 2: Obstacles

scale.cc

36 pointsjoannetse10 comments

We'd be out of business now if we had gotten VC in 2005. From the VC-funded companies I've been in before, getting VC seems like getting shot out of a cannon. There are no course corrections that don't involve big splotches of blood and viscera. You better be aimed correctly.

We didn't know enough in '05. We've watched 5 other companies launch the product we were planning to launch. One of them eventually took in over $80MM (!) in funding. The market hasn't panned out. We got to watch that all play out, see what worked and didn't work, and retool, all while building up a profitable line of business.

Just another reason, besides "it makes you work really hard", why not getting VC can be a win.

Thanks so much for sharing your experience. I wonder what your competitor did with that $80MM!

Presumably:

* Several million dollars in inventory

* A 20 region global direct sales team, likely each consisting of a 130k base account manager and 2 90k-100k SE's

* Several million dollars a year in "marketing", including 20-50k/mo in PR firms (note: we got more press hits over the last 4 years than they did), 100k+ in Gartner subscriptions, magazine ads, and 4-5 $100k+ conference visits a year.

* 4-5 120k+ overhead head count for middle management, like a VP/Marketing, Director/Marketing, and Sr Mgr/Marketing, or 3 layers of engineering management.

* A ridiculously outsized engineering department with 1:1 or worse dev/QA.

I'm sure I'm missing some other ludicrous VC-funded-company expense than a 50+MM funded company goes through (I've been through that firsthand), but all I'll say here is, there's nothing I think they spent that money on that I want for my company now.

I'm not really convinced VistaPrint is the best example to learn from. Allegedly, they do some pretty shady things with their customer data[1][2]. Something about signing people up for some useless service with recurring monthly fees without their explicit consent.

I guess that's one way to compensate for not getting outside investment, but it seems pretty shortsighted to me. It certainly was enough to scare me off when I was ordering business cards a little while back...

[1] http://www.etsy.com/forums_thread.php?thread_id=5174090 [2] http://www.consumeraffairs.com/online/vistaprint.html

While I didn't know anything about those useless service, I don't think Vistaprint becomes a $1.9B company just because they do shady things. As an entrepreneur, I would love to learn about how others build their companies but it doesn't mean we have to agree all of their moves.

I don't want to argue about the ethical issues here. But I believe every company has done something in the gray area. Do you think all those Google ads on domain parking pages are click scam? I do.

We've been offered angel investment a few times and whilst I can definitely see the benefit in small areas of financing, doing it off your own back with all the blood, sweat and tears that come with it leave you with a pretty awesome set of abilities.

Leaping over tall buildings in a single bound is one of them I don't think I'll get round to, but there are times when the things you do pull off are superhuman by comparison to most people's lives.

I have always encouraged people to bootstrap.

Nothing sharpens your financial judgment like limited resources.

BTW I just love your cannon/viscera analogy!

offtopic: your profile sounds interesting. what's your bike website?

Hi, it's at organicengines.com

Looks awesome! I once built the dutch Juan with a bunch of friends. It was so much fun to build and to ride. Keep up the good work.

Reply on news.ycombinator.com