
You Only Need to Build a $3 Million Company (Part 1) - transburgh
http://www.gobignetwork.com/wil/2007/5/29/you-only-need-to-build-a-3-million-company-part-1/10160/view.aspx
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ed
Anyone else think this article is purely masturbatory? Yes, 1MM/yr is nice --
but I don't need a blog post to tell me that.

Let's bring every 20-something reading this article down to earth for a bit:
creating the sort of wealth discussed in this entry IS NOT EASY. It's damn
near impossible, in fact. We're raised in a culture that teaches us life will
be handed over on a platter and I think it's seriously wrong to fuel those
ideals with fictional "what-if" scenarios.

~~~
natrius
I'd say it's easy compared to building a company that will get acquired by
$LARGE_TECH_COMPANY. There are plenty of people going down the route the
article describes. They just don't get written about on Techcrunch because the
target audiences are usually smaller and there's no huge round of funding to
announce.

Anyway, most of the stuff discussed on this site doesn't fall within the realm
of possibilities that could be described as down to earth. Everyone here is a
little crazy. In a good way.

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staunch
You can live that kind of lifestyle on a very high salary working in the
financial industry. What that kind of money doesn't buy you is total financial
independence for life. That's the biggest prize in my book.

~~~
natrius
The chances of becoming financially independent from the sale/IPO of one
startup are very low. First of all, most startups fail because they run out of
money. If you're trying to work within the traditional VC world, there will be
pressure to grow at an insane rate that may or may not be the best thing for
your company. The more people you have working for you, the higher your burn
rate, and the more beholden you are to the desires of your VCs.

If you shoot for a sustainable business instead, you can work for less than 10
years in 1-2 companies you found and be pretty well off. Most people don't get
filthy rich from a couple of years of work. Shooting for sustainability gives
you a higher chance of success than being forced to grow your company to a
size where it'll get your VCs the return they want (or doing so of your own
volition).

I agree that financial independence is the goal to shoot for, but I think the
method the author describes can get there at least as often as the traditional
VC route.

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kingnothing
$1M a year is a good bit, but it's still not fuck you money. That's what I'm
aiming for.

Worst case, I'll fall short and still do well.

~~~
ced
Or end up with Friendster.com

~~~
nostrademons
I'd rather end up with Friendster.com than spend the 2-3 years he spent on it
at a day job. At least he had his year of fame and (hopefully) learned some
valuable lessons with his dot-bomb.

It's better to do _something_ than do _nothing_ \- if you happen to get rich
doing something, that's just gravy.

~~~
ced
Sure. My point was that the "worst case" might be worst than selling right
now. Holding out for fuck you money is sometimes a bad decision.

I _wish_ I had built Friendster, of course.

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ced
Oy, is that really the ideal we're supposed to aspire to? The American Dream?

Think about how many people in need one could help with 1 million per year...

~~~
SwellJoe
You must be new here. You see, this is a site about starting businesses.
People start businesses to make money. Businesses that make a lot of money are
generally better to start than businesses that don't.

~~~
ced
Sure. What does that have to do with what I said?

Maybe I come off as morally smug, or something... I should be more careful
about it. I meant to say that I feel much more motivated by reading rms's
dream to cure HIV ( <http://news.ycombinator.com/comments?id=9736> ) than some
guy's dream of owning a Mercedes.

~~~
SwellJoe
Yes, you came off as morally smug. Most of the folks I know who start
businesses (and I know a lot of them these days) aren't grading themselves on
"number of fancy items owned". In fact, people who start businesses seem to be
less impressed by the trappings of wealth than most. pg rolls in a Mazda 3,
and I don't recall ever seeing any particularly expensive cars in the YC lot,
even when Joe Kraus, Evan Williams, Ron Conway, etc. were there (though I may
not have been paying attention).

When you run a business revenues are a measure of how much you're building
something good, so you want high revenues because you want to know you're
building something good. It has nothing to do with what you plan to buy with
the money.

~~~
ced
Yes, but the article is specifically about what one could do with all that
money. And his answer is, more or less: buy a Mercedes.

I'm not even arguing _against_ that. I mean, most companies make money by
providing a useful service to people, so more power to him if he is successful
with that. And if the dream of owning a big car keeps him going, great. I just
find, personally, that aiming to spend "only" a million per year is not at all
the kind of target that I want to set in front of me.

I wanted to know if I'm not alone in that frame of mind. I said it awkwardly.
Sorry.

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zach
Wow, an article about startup goals that's written from the point of view of
an annual profit rather than of a buyout jackpot.

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menloparkbum
It would be more interesting if the author provided some examples of
successful 1 person shops bringing in $3M per year.

~~~
NickDouglas
Yeah, wake me when part 2 is up.

~~~
transburgh
wake up...part 2 is up <http://www.gobignetwork.com/wil/2007/6/1/you-only-
need-to-build-a-3-million-company-part-2/10162/view.aspx>

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ladyada
33% margin? sounds rather optimistic as most people struggle for
profitability...

~~~
nostrademons
Depends on the industry. 33% margins are not unusual in software. Take a look
at some tech companies on Yahoo Finance. Microsoft has about 40% operating
margins, Google about 33%, Akamai about 20%. Among smaller startups, margins
are even higher. PlentyOfFish.com has roughly 99% margins: $5M in revenue on
roughly $50k in expenses.

