The credo of a tycoon of old (think JPMorgan or Vanderbilt) was to build an empire. His own empire, in his lifetime.
Tycoons of today have build their own empires (Microsoft, Google, Apple, Oracle etc.), same principle, same philosophy.
When and why did it happen that flippers took over this market's mindshare? A young entrepreneur today dreams of selling out to Yahoo/Google/Microsoft as soon as possible. Quite often even before his business is profitable.
Hey, if you have a growing business that is profitable, you should keep it for yourself. Many people with money I know (so-called 'professional investors') dream of having such a business in their possession. Such business is not listed, so you cannot buy it on the market. What you can buy on the market (what is listed) normally grows slower and is over-researched and over-valued.
But of course, if you focus on building the cash flow for yourself, and keeping the option of striking it very big at some time in the future for yourself, then the whole industry of undervalued option-buyers (VCs, angels etc.) will be left without work. So the propaganda is put to work... When is my next funding round?.. A round of what? When is your next client subscribing to your app - that should be the question.
DHH thrives on being controversial, but the point he makes here is simply a well forgotten truth about entrepreneurship. Building your business slow and taking full credit for it for yourself used to be the norm before the flipper ethics kicked-in.
Times change, and America is much more corporate than it used to be. When a market becomes saturated innovative people will look elsewhere to make their mark.
I don't want to spend my life managing a business. I want to make some money and do something else. I have no doubt that I would make a fitting CEO. But the hours are long and the work is unappealing. There aren't any CEOs I want to be like. Apple's CEO, maybe, but what price does he pay to do what he does?
I really get the feeling that anyone ('anyone') could be a CEO these days. I feel like the CEO is a reward that keeps everyone else on the corporate pyramid. Maybe I'm wrong. I could be. But I haven't seen the argument that debunks that idea. (And I have seen a lot of instances of CEOs who didn't deserve what they received.)
The money is a silly motivation. What am I going to do with $6 billion that I couldn't do with $6 million? Spend conspicuously? Raise a family of layabouts?
I would much rather become financially independent and begin doing the work I want to, when and where I want to. I like to make things, and I like to talk to creative people. I like to do small things really, really well. And I don't like to spend my time dealing with red tape. I feel like I have an obligation to society, but that I don't have to fulfill it by spending my time managing a large corporation. There a lots of other less flashy positions desperate for someone to do a really great job. I want to do something small perfectly, not something huge good enough. Does that make sense?
I have created a good growing company that leaves me financially independent anyway - on a monthly basis at least - and I can continue to do other things also. I think this attitude of short-term gain misses out that success is a journey and not a destination. Your motivation still IS money - most of the successful people I know achieved the money because they loved what they are doing and the by-product was a financial reward
Because I'm interested in startups, in commerce and not everyone can run a company. I provide employment to people and a social responsibility via my own and my companies actions. That's just for starters!
right, but those are your interests. mine, for example, are completely opposite -- i want to stay home and play with theories
i agree that if you have nothing better to do, and you want to be one of those famous CEO's, then selling out early doesn't sound right. but some people do, in their definitions, have something better to do
it was a rhetorical question, it didn't occur to me that it would pertain directly to who i was responding to
my point is not everyone wants to accomplish the same things in life, but everyone needs money to be able to accomplish them (at minimum to pay the bills)
why would someone want to just get some money and be done with all the company stuff? because they have something better to do. maybe they want to visit every city in the world. maybe they want to raise their children full time and homeschool them. having money, they have those options
if you don't have something better to do (in your definition of 'something better',) then you are already doing what you think is best, and more power levels to you. may your hair glow yellow or gold at some point
Another route is to find a place where the cost of living is much lower for a comparable standard of living. According to my research, some more underdeveloped countries seem to be such the place:
Of course you might say the cost of living won't always stay so low, but if it goes up, then that means the underdeveloped countries are becoming more productive, and the world economy is becoming better. If your interest comes from investments in the world economy, then that means you should be earning more from your investments.
This is a good discussion. The flipper mindset is probably localized to software tech, and maybe that mindset is required. The reason is the constant change of technology, the shifting attention span of web users, and the maturity of the field make it harder to build a "normal" sustainable business. So, most people take the path with less friction: build something that gets enough attention to sell, profits optional. Lack of technical depth and, hence, barriers to competition are factors, too.
I don't think the flipper mindset is unique to software. Day traders flip stocks, sometimes in seconds, and a lot of people in Miami (and elsewhere) just took a bath trying to flip condos (buying them in big blocks and then trying to unload them on out-of-towners for ridiculous prices). The general get-rich-quick scheme exists in every business.
I think the best software is built by people who are not looking to flip. Linus has been with his baby for over a decade. Richard Stallman even longer. Bill Gates had a lot of trouble giving up his software products, and Marc Andreessen said yesterday that his favorite part was building out the company... being a startup was just how he got to build companies. I think people looking to pump and dump will just do the minimum it takes to get by, and it shows.
"Flipper ethics"? Yikes. There is a special flavor of bile that comes from bootstrapping types. I wonder if it's caused by dread of their own lack of connections to investors, or of their lack of expertise in this area, or what.
There are actually very good reasons for why "flipping" is good for everyone. It's obviously good for the founders (notwithstanding DHH's puzzling story of a guy who was forced to switch from a mac to a PC after his startup was acquired). And the acquirers take a rational risk by purchasing a startup. At the point of acquisition, a startup may only have a 1/100 chance of being the next Facebook, but it will be acquired for 1/1000th the price of Facebook. 100 of those acquisitions, if you're Google, and what you have is a Facebook for tenth of the price (and a whole pile of other good stuff).
In fact, if you don't want to take too much risk, going for acquisition is better than going for revenue on the scale of 37signals. It even seems dishonest that he compares the 37signals way and the IPO way in terms of risk, completely ignoring the acquisition way.
Also, I don't think the average hacker wants to be a "tycoon". He probably just wants to solve the money problem once and for all.
Tycoons of today have build their own empires (Microsoft, Google, Apple, Oracle etc.), same principle, same philosophy.
When and why did it happen that flippers took over this market's mindshare? A young entrepreneur today dreams of selling out to Yahoo/Google/Microsoft as soon as possible. Quite often even before his business is profitable.
Hey, if you have a growing business that is profitable, you should keep it for yourself. Many people with money I know (so-called 'professional investors') dream of having such a business in their possession. Such business is not listed, so you cannot buy it on the market. What you can buy on the market (what is listed) normally grows slower and is over-researched and over-valued.
But of course, if you focus on building the cash flow for yourself, and keeping the option of striking it very big at some time in the future for yourself, then the whole industry of undervalued option-buyers (VCs, angels etc.) will be left without work. So the propaganda is put to work... When is my next funding round?.. A round of what? When is your next client subscribing to your app - that should be the question.
DHH thrives on being controversial, but the point he makes here is simply a well forgotten truth about entrepreneurship. Building your business slow and taking full credit for it for yourself used to be the norm before the flipper ethics kicked-in.