
Bootstrap finance and the cost of other people's money [pdf] - sturza
http://library.cust.edu.pk/teacher_resources/Cases&Articles/Entrepreneurship/BootstrapFinance-TheArtofStart-Ups.pdf
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jalopy
Now that venture funding is much more widespread and entrepreneurship more
celebrated (and I would argue more sophisticated), I wonder how much this
advice applies.

Wouldn't a smart competitor wait to see what's working from a bootstrapped
pioneer then pass them by with tons of VC cash as rocket fuel?

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odyssey7
I don’t know from personal experience, but my impression is that it’s hard to
know which startups are going to be high-profile before they’ve found
exponential growth —- and once the bootstrapped company has that, the would-be
copycat would be playing catch-up to a no-longer-bootstrapped company. Plus,
as many copycat services as there are, it looks like the hard-to-copy team
specifics make a big difference on the outcome.

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JumpCrisscross
> _once the bootstrapped company has that, the would-be copycat would be
> playing catch-up to a no-longer-bootstrapped company_

This counts on the bootstrapped company tapping outside capital once they hit
their stride.

If it refuses to do so, it would be trivial to copycat and flank them in
markets they haven’t yet captured, thereby boxing them in and reversing the
first mover advantage with a scale advantage. The only protections against
this are IP and true, technological moats.

~~~
JoshTriplett
> This counts on the bootstrapped company tapping outside capital once they
> hit their stride.

No, it doesn't; if a bootstrapped startup hits exponential growth, they can be
revenue funded and still hard to catch up to by just copying them.

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JumpCrisscross
> _they can be revenue funded and still hard to catch up to by just copying
> them_

Capital financing can provide five to twenty years’ operational cash flows in
a single go. It takes deep moats to outgrow someone copying you and
simultaneously expanding into every market you would have taken the coming
decade.

This is a standard scale playbook by the way. When your competitor can scale
faster, but refuses to for political (control) or ideological reasons, it
leaves a strategic opening.

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znpy
On one hand the webpage returns a 404.

On the other hand I can see it's running apache:

"Apache/2.2.17 (Win32) mod_ssl/2.2.17 OpenSSL/0.9.8o PHP/5.3.4 mod_perl/2.0.4
Perl/v5.10.1"

Not sure what I can do with this information.

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ceilingcorner
FYI this is from 1992.

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sturza
Not providing value anymore?

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ceilingcorner
No but the data set is from 1989, long before VC really became as widespread
as it is today.

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sturza
I found it interesting on the bootstrapping topic and the: start fast with
what you have and embrace uncertainty methodology. But sure, data is 30 years
old.

~~~
ceilingcorner
Sure, I didn’t mean to imply that it is useless or uninteresting. Just a bit
outdated.

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nknealk
> "It's often easier to raise $5 million than $1 million... but then you have
> $4 million that you don't need but spend anyhow"

I feel like that quote is more relevant today than ever.

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ChicagoDave
If you live in Chicago, the rules are very simple. Either use your own money,
friends and family...or have traction. There is no in-between.

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zupa-hu
Why is the comment from godsplan1 downvoted to death?

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DanBC
Their account was banned. dang explains why they were banned in a reply to a
previous comment.

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zupa-hu
I had to figure out what previous comment you mean; for anyone similarly lost,
see the account's previous comments, there is only one other.

Interesting, I would have expected to show the commenter an [you are banned]
error or similar instead of just not showing the comment to others.

Edit: Thanks for explaining!

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sturza
The comment is gone. What was it about?

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mkl
Dead comments can be resurrected by people vouching for them. If you think a
comment from a banned account is something that should be shown, click on its
timestamp and then click "vouch". I usually look at the user's other comments
first, to see who I'm vouching for.

More info here: [https://github.com/minimaxir/hacker-news-
undocumented](https://github.com/minimaxir/hacker-news-undocumented)

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godsplan1
The article is from
[https://bhide.net/index.php/about/bio/](https://bhide.net/index.php/about/bio/)
published in 1992.

Link from HBR : [https://hbr.org/1992/11/bootstrap-finance-the-art-of-
start-u...](https://hbr.org/1992/11/bootstrap-finance-the-art-of-start-ups)

