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Fear of money is definitely a big problem, especially among developers. But the situation is more complicated.

There are two important things to understand here, which I've learnt the hard way.

1. The entire business model, not just the exit strategy, of almost all VC-funded startups is selling the company. They start with selling little chunks of the company to investors, culminating in the exit, when they sell the whole thing to BigCo. IPOs are black swan events in this respect.

There's no fear of money here. When you can get millions selling chunks of your company, purely based on "engagement", why would you break your head trying to sell product?

Founders who are well aware that this is their business model are very good at talking big and using visionary rhetoric. They avoid talking about mundane business details and use phrases like "passionate about X" and "ripe for disruption".

Founders who are actually interested in building a product-based company and running it for the long-term are rare. Drew Houston is a great example, and I respect him a lot for it.

2. If you do not intend to raise venture capital, then following the business tactics of VC-funded startups can mean death. Free and freemium have unfortunately become the default for all software now - even apps built by bootstrapped solo founders. This is a huge mistake.

If you are not actively working the market to sell your company, to investors in chunks or to an eventual acquirer in bulk, you're digging your own grave by giving away your product for free.

Better start actively working the market to sell your product for hard cash instead.




Bingo. Why bother coming up with a business model for your ahem business when you're hoping to get a hiring bonus when Facebook buys you - I mean, selling your company.


Everyone is hoping that they will be Facebook, not that they will be acquihired by Facebook. Acquihire is Plan B.




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