I was a $200K VC, now I’m a $0 entrepreneur – first thoughts
tryingtohackit.tumblr.com
tryingtohackit.tumblr.com
One alarming thing IMO in the post is the focus on getting funded vs. validating (or even selling) a product
Funding is just an ingredient (not even required always) in the recipe. The final product is the cake.
Bootstrap if you can -- build something people want (sorry for the trite startup advice) and charge for it.[1]
Don't mean to be pedantic. I just find the narrative on getting funding as a pre-req for success which has become the norm to be a bit overblown.[2]
Notes:
[1] I'm a co-founder of a bootstrapped 7-figure recurring revenue SaaS business in NYC.
[2] 2/3 of last year's tech exits were not institutionally funded -- http://www.cbinsights.com/blog/trends/global-tech-exits-repo...
The good VCs realize that they're just a minor part in helping an already successful business expand rapidly. These are the kinds of VCs who end up funding companies like WhatsApp.
- Bill Gates and Paul Allen's first venture was Traf-O-Data, attempting to process traffic data. They built machines as part of this. On their "demo day", their machines didn't work. Eventually, Washington State obviated their business and they moved on to form Microsoft
- RH Macy failed seven times before founding the biggest department store in the world (I wish the number 7 was included in the response)
- Akio Morita's first product was a rice cooker, which was a self-described "memorable failure", selling less than 100 units. He then partnered with Masaru Ibuka to form Sony
That's the thing about success. You know its there, you just don't know how many tries it would take you to get there.
You don't have to go for funding. You seem to be psyching yourself out. I don't know the details, but given your previous job, well-managed expenses should readily allow for bootstrapping.
I know I'm being a little cynical here, but you should be working on your startup, not attending parties.
If you're going to sacrifice to do something, go all in.
I went through a similar process: I left a well paying engineering job to be a technical co-founder at a startup, with a 6x decrease in salary.
I had exactly $30k in savings, not including retirement, but was lucky to make an income of $24k right off the bat.
I cut my expenses to the bone--short-sold my house and moved into low-income housing, took my clothes to a seamstress to repair, bought from second hand stores, racked up credit card debt, did a couple side gigs to get a free gym membership, basically everything to conserve my cash.
It was great to get my expenses down, but it was not fun having to make tough decisions.
Ultimately, I ended up parting ways with the startup, and rejoined the workforce as a dev, but not after whittling my savings down to nothing, and racking up $10k in debt.
And
I would do it all again in a heartbeat, because it was one of the best experiences of my life (also being a part of TechStars helped).
to all readers: this grumpy cat judgemental attitude is not mandatory and i don't think it should be encouraged. please get a grip on reality, this world you live in filled with other people. you're allowed to go to parties and enjoy the company of other people if you are running a startup. a startup is a lot of things, but it's not a prison sentence. if it feels that way, you're doing it wrong. maybe you just suck at business.
i run a successful, profitable 7-figure revenue startup with no external funding and all of my cofounders and critical employees have always gone out to parties, both work-related and not. that doesn't mean i'm rich. that means i have a business that is expanding, which is what entrepreneurs all trying to achieve.
"partying" is not blowing 10k on a weekend in vegas or getting expensive bottle service at nightclubs, although you can certainly do that if you want to, because who am i to judge you? partying is hanging out with your coworkers at the bar, going to a birthday bbq, or celebrating someone's engagement.
i also never had to do stuff like sell my belongings and rack up credit card debt or cut my income to 1/6th of what it was. all this says to me is that you refused to get better at sales. which isn't exactly a shocker if you are on the internet extolling the virtues of shunning social interaction.
The advice not to be judgmental, then in the same comment being judgmental makes you a hypocrite.
You're allowed to do whatever you want, it's your life, and your time to spend however you wish. But if you're running a company and trying to get it off the ground, I believe that every minute should be spent getting it off the ground until it is.
It means making the tough decision to miss a friend's wedding because you have an important customer demo on Monday that you have to build. It means backing on a romantic getaway with your girlfriend because an investor wants to meet you that Saturday.
Do you need down time, sure, but startups are hard work, and are going to fail, and unless you're willing to do whatever it takes to make it succeed, then what business do you have running a company.
http://blog.startupcompass.co/73-percent-of-startup-founders...
Not all founders have the benefit of keeping a good salary, a sizable savings account, or other means of maintaining their current life style.
At $24k, it didn't make sense to keep a $3k a month mortgage, so I sold my house, and was committed to extending my personal runway for as long as possible.
Living off of limited resources has nothing to do with "sucking" at sales. In our first year, we got damn close to being revenue neutral with large fortune 50 companies as customers, part of TechStars, raised a sizable seed round, and had some other very good success indicators (given that all three of us were first time founders, and this we were only 1-year old).
Since you want to "get a grip on reality"--most startups require some amount of sacrifice. That you didn't have to, is great, but certainly not the status quo.
Perhaps you've found the true path to startup success, and as such you should write a book, create a startup accelerator and make more than 7-figures in revenue.
This is ridiculous. Devoting every waking moment to your job is a quick road to burnout and permanent failure. You need personal time to relax and blow off steam, whether that's going to parties or quietly reading in your living room.
I agree.
But a startup is more than a job. The mentality I had as an employee is much different than what I had as a founder.
Some start-ups are like rocket ships, and they just take off and wildly successful.
More often than not, most startups don't have that amazing trajectory right off the bat. My personal belief is that taking that extra hour to perfect a feature, or refine a pitch, or do customer outreach, or test your product, is what separates the rest of the startups--ones that make it to the next level, with those that don't.
There is some element of luck and skill involved, but it's that championship drive that is required.
Do you need time to ensure you don't crash and burn-yeah, I'm totally with that. Perhaps the poster's way to let off steam is to go to parties, which seems doubtful--though I suspect he probably doesn't really go to a lot of parties, and that it was more of a figure of speech.
> TLDR: being a pre-funded entrepreneur SUCKS in a lot of ways, but I’m pretty sure if I ever “make it”
This guy needs to get his head out of the funding bubble. He sounds like the only goal and metric of success for his startup is to get funding. Getting funding won't make you successful; running a startup with funding that isn't growing sucks even more. In fact it will escalate the pressure and your work/life balance may get worse.
Still.. good luck. Coming from that background it might be a bucket-of-cold-water awakening of what it actually takes to get a startup off the ground.
HN has absolutely nothing to go on to show that this isn't completely made up fiction and not worth the time to comment on anymore than if someone wrote "hey I wonder what it would be like if a VC left a 200k job and decided to do a startup".
Separately if this really was a former VC [2] earning 200k would seem that the publicity value of actually giving your real name would be well worth the hit on your ego.
[1] Sorry can't find a link to support because this is from memory of way back (not that way back I'm not that old..)
[2] Hey look it could be but it wouldn't surprise me at all to hear that this is complete fiction.
One minor nit that I mention because it's a pointer to a broad problem in the industry. The writer refers to themself as "a pre-funded entrepreneur". A lot of people act as if professional investor funding is the only option. As somebody who has started businesses both with and without investor money, I strongly encourage entrepreneurs to at least keep an open mind. Be a "pre-revenue entrepreneur" or a "pre-profit entrepreneur". A culture of treating investment as a success proxy is useful for VCs, but dangerous for entrepreneurs.
First I kind of felt sorry for the guy, then I quickly realized there are much worse perdicaments to be in.
I was living in Louisiana as a college dropout who had sold one company and (fairly easily) making about 200k/year between one full time job and some side work.
In Louisiana that is good money, like REALLY good money, I could've easily lived for a very long time and saved a lot on that, my mortgage there is only about 1k month with all the utilities paid too.
But several months ago, I quit my job, stopped consulting and moved across the country to CA to work on my next startup.
after about 5 months I started to get very nervous, my accounts were seemingly dwindling and reveue still seemed a ways off for the startup.
So naturally we started looking for funding only coming to realize noone wants to fund a startup simply because they need the money.
Then I realized something far more important.
I have skills. I consistently made very good money before. I was capable of this again. I put a few feelers out and quickly got to help build out an awesome new product for a really great guy with deep connections.
Fast forward a few months and our little startup now has strong revenues, things are looking up on several fronts and that little consulting gig I took let me earn several thousand dollars, pay off bills and build a great relationship with someone who is sure to be a very successful first time entrepreneur (he's already had a successful career in finance).
All that to say if this guy was making 200k/year before chances are he has a good skill or set of skills and he should be looking to that to dig him out of this hole not to investors for funding for what sounds like a failing endeavor.
Most people aren't as fortunate as I was or as it sounds like this guy is. Many people in a similar situation to mine would not have had the skillset or network to pull of what I was able to and they would have likely had to get a regular job somewhere or move in with friends etc. When you have a skillset that allows you to generate large amounts of income your life just is not that hard.
Sorry for the rant, but someone should tell this guy to get over himself just a bit. Whether he believes it or not, he's a pretty lucky guy
200k is really good money everywhere.
But yeah, with the cost of living in LA, 200k/yr REALLY goes a long way.
Even if you fail you will look back at these days as some of the best times you ever had.
$200K a year? That's the new definition of "starting from the bottom?"
It's certainly not "the bottom" if he has any appreciable amount of savings -- or if he's kept in the good graces of his now-former VC colleagues, whom he can call upon when the time comes to raise a round. But I don't think he meant to suggest that a $200k salary is "the bottom."
So, he has either A) fallen on extremely hard times, in which case he should go take a job, even if only for a few months while he builds up enough money for Wifi at home and at least a month-to-month apartment or B) is being overdramatic. In this case, I'm guessing it's B. That's bad, because it discourages entrepreneurship when people mistake difficulty in starting any business for poor planning or a flair for the dramatic on the part of a specific individual.
However, as a recent parent living in a small flat who enjoys collaborating, I can note that there are many reasons not to work at home, no matter how fly my wifi.
Now, what this has to do with the article, or why he decides to work at a coffee shop, instead of a home office, I don't know.
This entire article makes no sense to me. So he left his job, and is now going to begin on a startup? That's worthy of news? No information on his startup, his plan, his goals, etc.
'I also know exactly how long my bank account will be greater than $0, unless I get funding.'
So, is he 1 week, or 1 decade from going broke? Why is he so obsessed with getting funding in the first place, and why does he say 'being a pre-funded entrepreneur SUCKS in a lot of ways'? I make a living off my recent startup, I have zero interest in funding, and enjoy my life.
Also, please stop using the term pre-funded entrepreneur. It sounds derogatory, and funding isn't a measure of success, or the end goal for everyone.
Yikes, you guys can be so harsh.
Some people don't like to work at home all the time.
Nowhere do they say they plans to work from the cafe forever or the plan is to keep going until the bank account actually reaches zero. And if that is the plan, so what? The reality is there's always risk and there's no right/wrong way to start and grow a successful company.
What is important is that they're chasing something and documenting the experience from the very beginning so that others can learn from it. That's encouraging and deserves some credit.