

Startups: Poverty is Underrated. Be Glad That You’re Not Rich - edw519
http://techcrunch.com/2010/06/05/startups-poverty-is-underrated-be-glad-that-you%E2%80%99re-not-rich/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29&utm_content=My+Yahoo

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daeken
I know this isn't the point of the article by any means, but the first
sentence ( _Raising millions of dollars from VCs is still the tech
entrepreneurs’ dream._ ) bothers me a bit. I don't know about anyone else, but
my dream is to run a profitable company, and how I get there has no bearing.
Am I in the minority here?

~~~
webwright
99.99% of tech entrepreneurs don't have the resources to build and scale a
technology company to profitability. It's HARD. It's expensive. A very small
number of ideas can be brought to market for free, scaled in your off-time
until the magical day that you can quit your day job. Some ideas require a
team of people, and teams are very hard to get/keep for free.

So yeah, raising money is a dream of a lot of people so that they can set
aside their day job and focus on the company that they want to build. The
deeper motivations might be to build a profitable company, to get to a
liquidity event, to get rich, to change the world, or just to create something
that they want to exist...

One dream does not preclude the other.

~~~
daeken
I agree that in a lot of cases, raising money is the best way to get
somewhere. The problem is that sites like Techcrunch often treat raising money
not as a means to an end, but as an end in itself.

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rmundo
I wouldn't be glad. I'd be anxious and frustrated. But that _would_ motivate
me to work harder. Or to take a hard, honest look to see if what I'm doing
makes sense. Not having much money also means low expectations from others and
mental freedom to do something outrageous.

The Chinese have a saying "fighting with your backs to the river" that
originated from the Battle of Jingxing around 205 B.C.:
<http://en.wikipedia.org/wiki/Battle_of_Jingxing> In that battle the general
Han Xin organized his troops against a river, with no prospect of retreat.
Apparently it focused their fighting abilities immensely.

From the wikipedia article: At the feast after the battle, Han Xin's officers,
still somewhat incredulous at their own good fortune, inquired into the
rationale for the astounding deployments. Han Xin explained that as he was
commanding a ragtag army and he was not a general of high renown, he had to
resort to such drastic measures to force everyone to fight hard. This led to
the saying "You achieve survival by fighting from a position of certain death
(置之死地而後生)"

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erikstarck
Well, not sure it's that black-or-white but at least one should know that
bringing in venture capital takes _a lot_ of time and effort. Scarce resources
that will then not be used to get customers or finish up your product.

One should also know that, even though most VCs say they "invest in the team",
what you're doing is selling a very specific path to profitability, a path
that will be much harder to change once you have investors on board.

So you lose time, effort and flexibility.

Of course you gain a lot too, but it's easy to be blinded by all the money. It
is not free.

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dmm
Whatever you have be glad. It is a rare and precious thing to be born a human
being.

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looprecur
No. Poverty is overrated.

It sounds like his argument for "poverty" is that investors micromanage and
sink companies. The obvious solution is hands-off VC and more trust of
entrepreneurs. In other words, we need to move away from a culture in which
VCs are high priests and entrepreneurs (unless they've "completed an exit")
are seen as unwashed beggars.

Also, investors can be a pain in the ass if you're funded; most people know at
least one entrepreneur who was sunk or scumbagged by a bad investor. They can
also be a pain in the ass if you're not; getting them is a miserable endeavor
I wouldn't wish on anyone, and although someone who hasn't invested in you
can't fire you, obviously, he can black-ball you (investors talk to each
other).

 _And a founder is far more likely to drive a company toward profitability if
he’s is about to lose his life’s savings._

Meh. I don't disagree at a 180-degree tack-- maybe 160. I think "the stick" is
a pretty bad motivator overall, and when people get panicked, they make bad
decisions. Everyone's different, but in the aggregate, people perform better
if the potential personal loss is reduced; that's much of why limited
liability exists. This is true in small as well as large companies. We all
know that small companies tend to be more innovative, but that's in spite of
the small company's insecurity, not because of it.

 _Capital starvation leads to innovation. Slim bank accounts are the best way
to motivate sales people. So don’t worry if you think you don’t have enough
capital. Instead, be grateful for your sense of urgency._

Disagree. Bad financial situations and anxiety lead people to take greater
risks and make decisions that it's harder to make in a "cozy" corporate job,
not because comfort leads to mediocrity but because the corporate strings
often hamstring or extinguish greatness.

Sometimes those risky decisions turn out to produce results that are really
good for the person making them, and for society. Sometimes the results are
terrible. On the whole and for most people, "the stick" is not a very good and
definitely not a very productive thing. Exceptions exist-- final fantasies
that produce something great (actually, _Final Fantasy_ was so-named because
it was produced by, and actually saved, a dying game company)-- but those are
rare.

Don't get me wrong: startups are great, but I think the poverty and urgency
are necessary evils of the game, not benefits. We need startups in this
economy, because what was once accomplished by blue-sky R&D (which doesn't
exist anymore) is now increasingly done by startups, which are acquired if
successful.

Also, don't get me started on _urgency_. Bosses in large companies play the
"urgent" card with artificial deadlines all the time, so a lot of people work
under a state of urgency. Does the OP have an idea how many millions, if not
billions, of lines of absolutely terrible code have been written in the name
of _urgency_?

~~~
kmak
I'm paraphrasing someone, but I can't find the quote right now. Basically:

If a fruit grows in a blight, you don't give credit to the blight.

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jorsh
Wow. Written like somebody who has never actually been poor. How disgusting

