Does anyone else get tired of "What are these people thinking?" comments? Or anyone with an "I have all the answers, everyone else must be crazy or a moron because christ look at what they're doing" attitude?
People use Ruby on Rails and still go after VC funding might just do so because they need it.
Or maybe not! Maybe they want some sort of prestige, or maybe they're scared, or maybe they just want the experience. Who cares?
There is such a loud din on the Internet about the right method to follow, or in this case the right "wheels" and the right "car". Most of these articles do not reference any real supporting research, but instead rely on the author's vague intuition. The author of this article, Giles Bowkett, is talking about people who haven't failed yet - so who's to say if their picking up a serial entrepreneur founder wasn't a wise decision?
My computer chair advice: use your own brain. Precisely identify the problems you need to solve and the questions you need to answer.
For example, one of my problems is that it's difficult for me to focus on side projects in my spare time while doing client work. To solve this problem I'll need seed funding so that I won't have to do client work while I work on the project I really want to do. Thus, I've applied to ycombinator (and have experienced 7 days of stomach churning apprehension hoping I'll be accepted). This doesn't make me illiterate, nor does it mean I have to go memorize Getting Real. It just means I'm relying on my own judgment.
No, it means you haven't saved up enough money. :-)
Good luck with getting YC funding. But there's a huge difference between YC and venture capital. When you start talking to venture capitalists, you'll see.
"What are these people thinking? Why are they going to VCs for venture capital to write social networking sites in Ruby on Rails? The whole point of Ruby on Rails is it gives you the ability to write applications without VC funding! That's what it was invented for!"
I think it's an interesting point, but using Rails doesn't mean you have to structure your business like 37 Signals. I did read Getting Real, but with a grain or two of salt. It had some really good points, but understanding their point and trying to emulate their business structure (as they suggest you should) are different things.
Busting your ass and forming a company with a larger growth potential is still an option. It makes things riskier, but some people are fine with that.
The point of this really should have been that you need to be cognizant of the type company you are creating, realistic about its chances for success and aware that VC funding is only a means to an end.
See, the problem that I think people are missing is that VC funding is no longer a means to an end.
Implicit in your comment is that a company without VC funding cannot grow as fast as a company with VC funding.
That was true ten years ago when a lot of costs were unavoidable: Server hardware ,server software, and you had to build a lot of software infrastructure from scratch.
Now all that is cheap, or free, and what isn't comes with lease terms.
Thus, lacking a big pile of money is not an inhibitor to growing big fast.
I never claimed VC funding is required for quick (or expansive growth). There are obvious examples where that's not the case.
I'm not sure how you can claim that VC funding is not a means to an end. There are clearly cases in which a lot of cash helps. Startups use money for many more things than servers.
If you're pursuing cash for equity for no reason and do not really need it, then yes of course that's a bad idea. If you're preemptively avoiding cash for equity without considering if it can help you get where you want to go, however, that's also a bad idea.
That's true, but I'm assuming that nobody here is working on a startup that's building medical devices, a manufacturing plant, or has a high government regulatory burden.
So, for your basic consumer oriented web startup, you don't need VC funding...
Well, agreed you get along without VC if you actually have a part-time job and which leaves you the necessary time to program on the side . It is also quite true that hardware and stuff are quite cheap by now.
Still, if you don't have any money and not a job then VC seems to be the only way on how to make a living and pay for all the expenses. There are lawyer fees for getting incorporated, trademark-fees, patent-fees and renting a scalable RoR server at JoyEnt costs also 125$ a month. We are now a team of three founders and work fulltime on our project. But programming is only half the things we have to do, we also have to think about the promotion of our product, things have to be designed, the userinterface gets tested a lot and we have to think about strategies how to make our service known. We will probably use GoogleAdWords, create a viral videospot etc. All these things cost money. And it would be really great to have an office where we could program instead of my 13 squaremeter room which leaves me nearly no privacy because when I go to bed someone is programming in my apartment and when I wake up someone else is already there.
Therefore I think that VC still covers a quite basic need of a startup, even if RoR is used and the founders have read Getting Real. Founding a company still costs money, although admittedly less than a few years ago. VC-companies investing in webprojects are not dead, but will have to adapt to the needs of founders and start investing smaller sums.
I like this his post for several reasons. First I'm not the kind of guy who would like to build a business that is built-to-flip, built-to-be-acquired or any of the sort. Call me old school but I still believe that if we work hard enough at our business we can create something lasting and with value to the customer. I've read Getting Real and I too took it with a grain of salt. Granted they have good points in the form of building something customers want and not taking VC funding initially or never at all. THe point I'm driving it is I see alot of great ideas around the web for a business. But sadly I don't see what their economic engine is? nor do I think they have any idea, no sound business model, and little or no added value to the customer. Funny thing is I'm a hacker! just like most of you! I'm not a "business guy" nor will I ever want to be one. Either way I'm just trying to make sense out of all the noise I'm hearing.
"The brand-building idea is all about casino thinking. The theory is, the minute you have a brand, you can cash out. This casino attitude is good for VCs but it's ruinous for programmers, and it's ruinous for normal investors as well. (And it isn't even really that good for VCs.)"
This guy knows what he's talking about.
Getting Real misses the mark in a few areas... the 37signals people are (I am guessing) from a design background and often end up implemting a solution that solves the problem the way they want to solve it, but not generally... and rails suffers because of this. Some other things in the book don't make sense... but it is an excellent book and well worth reading.
Venture Capital is dead. Its deader than microsoft.
"And I'm like, well, how about a reasonable amount of money to work a reasonable amount of the time? And they're like, no. And then I was like, well, how about a tiny amount of money to work hardly ever? And they're like, no."
Alas, salary is rarely a linear function of the hours you work.
People use Ruby on Rails and still go after VC funding might just do so because they need it.
Or maybe not! Maybe they want some sort of prestige, or maybe they're scared, or maybe they just want the experience. Who cares?
There is such a loud din on the Internet about the right method to follow, or in this case the right "wheels" and the right "car". Most of these articles do not reference any real supporting research, but instead rely on the author's vague intuition. The author of this article, Giles Bowkett, is talking about people who haven't failed yet - so who's to say if their picking up a serial entrepreneur founder wasn't a wise decision?
My computer chair advice: use your own brain. Precisely identify the problems you need to solve and the questions you need to answer.
For example, one of my problems is that it's difficult for me to focus on side projects in my spare time while doing client work. To solve this problem I'll need seed funding so that I won't have to do client work while I work on the project I really want to do. Thus, I've applied to ycombinator (and have experienced 7 days of stomach churning apprehension hoping I'll be accepted). This doesn't make me illiterate, nor does it mean I have to go memorize Getting Real. It just means I'm relying on my own judgment.