I went off and did a bit of consulting, freelancing, etc. And five years ago, I helped out a friend who was working on a bootstrapped company that I liked. And we kind of had complementary skills (not repeating my first mistake). It was the beginning of the lockdowns. I had nothing better to do having just come out of a lucrative project that got cancelled because of the lockdowns (and probably because it was doomed anyway). I had built up a bit of reserves over the past two years. My friend had just come out of an intense year of juggling projects for a big consultancy firm. And he had his own startup past. In short, we hit the sweet spot of being old, wise, and experienced enough to maybe pull this off and we weren't looking for pizza money.
An important lesson I learned in my pre-startup corporate career is that making teams smaller makes them go faster. I once had a gridlocked team that wasn't getting anything done. We split the team and immediately things moved faster. Less meetings and debating. And infighting. And stress. More coding. I applied that in startup #2 and while we ultimately failed, I re-affirmed that losing team members can actually accelerate development. The team was down to just 2 people (me and the CEO) by the time we had to pull the plug. But not for a lack of trying. We were crazily productive. We both did the work of 2-3 people and stepped way out of our comfort zones for the last two years of the company.
The lesson I took from the second startup is that investor money makes you lazy and that you don't need it if you can step up and do stuff yourself instead of being lazy and hiring too many people. Money removes urgency and tricks you into not focusing and postponing key work that needs doing, over-staffing, and losing focus. Having stared at having to abandon my third startup because we have been running on fumes continuously for the last five years has kept us laser focused on fixing our huge looming financial problem. For us that meant confronting the elephant in the room: getting customers to understand what it is we are selling. This took us years.
The tech didn't change much (though it got better of course). It flipped around a year ago after lots of failed experiments with getting others to sell our tech. Founder sales is the way to go. It requires founders that can build and that can sell. You need both skills in the team and preferably in all founders.
We've flirted with investors of course. But for about two years they struggled to understand what we are trying to do and in the last few years we proved that we were onto something by generating revenue without them. In an alternate universe we might have gotten invested in but at this point we don't need them and they don't want us for that reason.
Things are genuinely looking like we might hit the hockey stick curve soonish now. We have some very serious leads for multi-million euro deals. We're completely bootstrapped. We did everything with a small and lean team. We're down to three people and it's great. We might start expanding soon. But we're going to be super picky about who gets to join next. We don't want to derail our company with the wrong hire.
It could all still fail. That's the nature of any startup. But we've vastly improved our odds through hard work. I'm more confident than ever it will work out. And yet the reality remains that many startups don't make it. What can I say; I'm an optimist. Pessimists don't build successful companies.
Marc Andreessen has made statements that align with the idea that abundant capital can lead to poor decision-making or a lack of discipline among founders. The core of his perspective emphasizes the importance of resourcefulness, persistence, and an intense focus on building the business over optimizing for fundraising.
"Too much capital breeds sloppy execution": While this specific quote might be from another source, it reflects a sentiment consistent with Andreessen's philosophy, which values the discipline forced by resource constraints (bootstrapping) in the early stages of a startup.
Wasn't there a whole movement of Lean startups? What happened to that?
Ps: and I’m very pessimistic; the scary thing is it’s all random as shit
You create options for success through hard work. You need luck and inspiration to stumble upon the right options, and you need experience and wisdom to recognize it when you do. And you can do everything right and never get there. But without putting in the hours you likely don't create the options nor gain the wisdom to judge them correctly when you do. Don Reinertsen coined a notion of option value in his books and presentations on Lean 2.0. It's something that resonates with me. Lots of startups practice Lean 1.0 which is more like throwing out the baby with the bathwater.
> And not to piss in your cereal but having leads for $bigcorp means nothing until a deal is inked.
Very aware of that, obviously.
I'm gonna dispute this. We're currently profitable, and to do so our growth is just "good" (80-100% yoy). We're also raising a smaller amount because we want to return to profitable as soon as possible, and repeat the cycle. Being profitable hasn't been a big selling point in our discussions.
Either our growth is not high enough, or our round is not big enough, as they are so used to seeing ridiculously inflated projections from the last decade.
Furthermore being profitable also removes a lot of leverage from investors. That might make them shy away from a discussion because they know they can't twist out arm as easily.
I agree tho, I wouldn't want to build our company any other way than being profitable. Just saying that being profitable is not something investors seem to like as much as we thought.