I give the guy credit for being upfront about it, but an upside in being an entrepreneur is being able to step away from the nitty-gritty details of the day to day stuff. If you believe in your idea, you should be concentrating on growing your business and more often than not that requires bringing someone else on board.
Well, the easiest way to grow profits is to grow the business. You'll never be able to create new products to sell to new customers if you spend all your time doing customer support. The revenue:profit ratio might decrease but the pie is much bigger.
There are cases in which you would not want your audience to know that you are running your operation from your apartment let alone that it is a one-man-show. Twitpic is a free service geared towards consumers. So the founder can do whatever pleases him and does not have to act big. But if you were to sell SAAS to small businesses you had better design an enterprise like website and imply (however you can) that you have hundreds of customers, dozens of employees etc...
This seems very true to me as well. I'm working on a business that fits directly into this category (SaaS that sells to businesses) and so I'm very interested to know if there are any facts, studies, etc. to prove it is actually the case that you need to look big. Or, at least bigger than a 1-man-show.
Doesn't the objection of the b2b market to a one-man (or woman) band implicitly register a practical problem with such a set-up - namely that if the operator falls ill, the service will come to a halt. This is also a pretty big pitfall for more consumer-facing startups, as it's a major reason not to return.
I think it depends how well you know your customers. I've did SaaS some years ago to business and they put trust in the brand that was us, more than our "business". That is the 3 of us were very much in contact with our customers, in person, over chat, etc.
If you have a self-serve model over the internet then that is much less true, and having the appearance of grandness is extremely useful.
I was thinking about this very thing earlier today. Everyone is talking about business models and funding when it came to Twitter, Facebook and more recently Digg. What's wrong with staring up a big web service just because you want to do it?
Heresy! First you start with self-funding single-founder startups and next you'll be talking crazy things like "charging users money" and "making profits" and then where would the world be!?
I think everyone has to go through that cycle at least once.
At one point, I had 12 servers in our study. Eventually the wife decided that the ungodly humming and tangle of wires had to go. Haven't hosted "in-house" since.
I went through that cycle too. I had a couple of profitable websites hosted in my garage in a rack cabinet. They had a UPS.
I went on holiday which was a 6 hour drive away. On the way out, I got word on my mobile that the sites were down. It was too late to turn back with the kids in the car etc.
That night I drove 6 hours home, reset our houses power switch which had tripped for some reason, and spent another 6 hours driving back. (This time I left a key with a neighbor). I got back to the holiday house just in time for the kids to wake up...
2 weeks later when we returned from holiday I got a dedicated server at a hosting co.
The new coolness -- or, rather a completion of the cycle -- is to convince everyone you're just a two-bit operation. In a time of firings and recession that's real geek cred.
