Until such a study is made, I will take the "avoid VC money" advice from those who made it work with a grain of salt.
I'm not saying that you're wrong, but you must be eating a lot of salt, because the opposite advice -- "take VC money" -- also suffers from selection bias, despite the eloquent efforts of Philip Greenspun.
This is one of those situations where science lets you down. I guarantee that if you wait around for a real study of any given market, you will forever be ten years behind the curve. (I think people are still just beginning to understand what the dotcom boom of the 90s was really about, for example.)
And when you do finish collecting and collating and interpreting all the data, and you make your Spock-like decision about which path to take... you'll probably be miserable, because it will turn out that the most rational choice is to become an accountant, but you fscking hate tax forms.
Taking VC money is one way to build a company. Angling to be bought by Yahoosoft is another way to build a company. Aiming for independence, small size, and modest profitability is yet another way. All of these strategies fail more often than they succeed. The most important difference between them all is probably which kind of failure will make you happiest. All else being equal, I would probably rather fail to build a modestly profitable Basecamp-like app than fail to win a million-dollar VC dice roll... but all else is never equal, so it depends on the circumstances.
I didn't mean to suggest that I'll wait for this kind of study to come out before deciding which path to take, just that very few data points aren't enough to make a strong case that "avoid VC money" is the best advice to give entrepreneurs. Both independent and VC funded ventures have had many successes and failures, and you need to look at more than just a few cases to get a sense of the right way to go.
IMO, if you think you have an idea for a Basecamp-like app that you can develop quickly with no outside investment and sell enough subscriptions to make it self sustaining, go for it. It's probably a safer strategy than betting on a 100mil exit in VC funded company. However, it's also possible that 37signals has picked a low-hanging fruit the likes of which aren't always easy to find and that the "avoid VC money" advice doesn't work for companies that need a longer runway to profitability.
I'm not saying that you're wrong, but you must be eating a lot of salt, because the opposite advice -- "take VC money" -- also suffers from selection bias, despite the eloquent efforts of Philip Greenspun.
This is one of those situations where science lets you down. I guarantee that if you wait around for a real study of any given market, you will forever be ten years behind the curve. (I think people are still just beginning to understand what the dotcom boom of the 90s was really about, for example.)
And when you do finish collecting and collating and interpreting all the data, and you make your Spock-like decision about which path to take... you'll probably be miserable, because it will turn out that the most rational choice is to become an accountant, but you fscking hate tax forms.
Taking VC money is one way to build a company. Angling to be bought by Yahoosoft is another way to build a company. Aiming for independence, small size, and modest profitability is yet another way. All of these strategies fail more often than they succeed. The most important difference between them all is probably which kind of failure will make you happiest. All else being equal, I would probably rather fail to build a modestly profitable Basecamp-like app than fail to win a million-dollar VC dice roll... but all else is never equal, so it depends on the circumstances.