

Event industry loses an innovator - benwerd
http://blog.crowdvine.com/2010/02/06/event-industry-loses-an-innovator/

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fnid2
I can relate to this post quite a bit. During the dot com boom, I worked as a
consultant to quite a few startups. All of them have since disappeared, but
all were great ideas that would have survived had they not need to be
immensely popular immediately. One example was a movie streaming service that
would right now be way ahead of netflix, which wasn't even a thought at the
time, but there just weren't enough people with broadband then.

Compare that to now. I'm running a bootstrapped startup that has time to wait
on customers. We have the patience to work with existing customers and nurture
them and make them very happy. We are cash flow positive and there's really no
reason we won't keep growing forever.

We got started several years ago and are in a market that sees newcomers come
and go within the span of 6 months. I've watched the industry leader crash and
burn -- it was venture backed by SAP Ventures and many big names in silicon
valley, but it was too soon. Not enough customers and the vc's closed the
doors.

Some of our competitors do what they do precisely _because_ they don't have a
long term vision. They have the short term vision that wants to pop! Get big
fast or die. But not all technology gets big fast. Sometimes a patient slow
growth of customers is the way to go. That's the traditional way businesses
get started, grow and succeed, but today, it seems the majority of tech
entrepreneurs think the only way to go is the vc path to spectacular growth,
but old style businesses still work in technology too.

Lesson is, take your time. Get profitable enough to quit your job and
concentrate on the business and own all of it for yourself. Slowly grow your
revenue like you would a salary or something else. You don't need a million
dollars a year to be happy, if you're making $100k or even $40k on your own
with a product you've developed, you can easily live off that and have all the
freedom and luxury that comes with being your own boss -- or well, having
customers who are your own boss. But with even 10 customers, it becomes a lot
easier to say no to the wrong direction and focus on the path forward.

On the other hand, it's almost impossible to say no to an employer or a
venture capitalist that pays your rent and they can easily steer you in a
direction that isn't in your long term best interst, which is and should
always be happiness.

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bensummers
Have done one investor funded startup (not a huge success) and now three years
into a bootstrapped startup (slowly beginning to be successful), I can see the
attractions of both models.

However, it's very apparent that investors have very different motivations to
founders. Averaged over their work, investors need to have a few big successes
and don't mind if most fail. But a founder only works at one company, so their
expected return is less in this "go for broke" model.

Taking funding gives you the resources to do more. Bootstrapping gives you the
time do it right.

Time will tell which model is best for me. I suppose it's whether you take a
short or long term view of your career, and your desire for size of success.

~~~
tonystubblebine
I talked to a lot of people at the Business of Software conference (basically
a conference by and for boot strappers) and a huge number of them had five
hard years followed by easy street. I know for myself, the three years we've
been going have been as much about learning new skill sets as they have about
building customers and product. Three years in, things are opening up a tiny
bit, but I definitely feel like we're on a five year plan.

~~~
bensummers
So, only two more years to go!

That timetable makes sense. There's just so much to do and learn, and the
number of people involved is inherently limited by the resources available.
Three years is probably the time needed to build something wonderful and learn
about the environment within which it exists, and then you've got two years to
learn how to sell it!

~~~
mattwdelong
You should know how to sell it from day 1.

~~~
bensummers
"No plan survives contact with the enemy." ~ Field Marshal Helmuth von Moltke

Of course, one always 'knows' how to sell the product from day 1. It's just
that the more you do, the more you know about how to actually sell it. I've
found that being in a startup is a continual learning process, where you
mainly learn how little you know!

If you've been successful in your startup with the same sales plan that you
had at the very beginning, then I'd be somewhat shocked.

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grellas
It is interesting to see how one competitor assesses the demise of another but
the author does not really offer much to show that "VC is a competitive
disadvantage" or that it really was instrumental in EventVue's failure in this
instance.

The EventVue post explaining the failure (linked in the post) identifies
several key mistakes involving flawed execution but not suggesting that the
company had overextended itself on account of its funding. The money raised
was apparently a small angel round, with a somewhat larger follow-on round,
one would assume from the same angels. At some point, they determined that
there was no good market worth pursuing and shut it down.

I don't see anything here to implicate VC funding as the culprit. In saying
that, I would add that I love bootstrap companies and believe that, in
general, they represent the wave of the future for the startup world. I just
don't think anything in this piece supports the idea that VC funding kills
companies (VC funding, whatever its shortcomings, is and always will be an
integral, and major, part of the startup world and, indeed, of its premier
segment).

A prime strategy of many of the bootstrap companies I work with is to use
bootstrapping, coupled with angel funding, to build valuation while
_deferring_ any attempt at VC funding and, then, once initial goals are met,
to approach VCs from a position of comparative strength and high valuation so
as to get good terms. Others, of course, seek to bootstrap their way toward an
acquisition. I would say only a minority plan to build for the long-term in
the way the author of this piece discusses (this path can be treacherous in
fast-changing tech markets).

The post itself is a good one. I just think the author assumes rather than
proves his point about the effect of VC funding on a startup.

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trevelyan
Classy post. And I'm glad the bootstrapper is still around.

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adrianwaj
_our first competitor.. are shutting down.. this is bad for the event
industry.. they blame themselves.. I blame venture capital._

Yet still a very happy and self-satisfied blog-post.

