If you are serious about this so am I. I want to go to the Kauffman Foundation to do this. Also a gentleman named Bob Cringely wants to do something like this and started... then stopped. He will hate me for saying this but gentle persuasion might help as of anyone I have ever met he really wants to really democratize the startup process across America. Kauffman foundation has great stats to show that the returns on investing on older people are higher aggregate.
I wanted to leverage my age and experience by not applying and just getting on a building it. But I have a founder who is convinced that you need money first then prototypes.I assured her that there is nothing in her proposition needs any tech that you cannot buy off the self or use bubble.io or something.
It really bemuses me as she has bootstrapped a confectionary business to over $100m. Sadly got trashed by the sociopath late stage growth investors who gave her back nearly nothing. Just like Dee Hock.
In filling in the application it became clear that they want young, "moldable" and want to establish a power relationship with the reader. I became clearly nauseas.
Your co-founder is wrong, or going about it the wrong way. I don't know what your business is, but if she's already successfully bootstrapped a $100m business, why would she think she needs money to start this venture?
If that money is the $500k from YC, how much difference is $500k going to make for your business?
If it's the valuation post-YC, what makes her think you can get there without the money?
BTW, my co-founder has the same attitude towards YC, and he's only in his 30s, but I'm the one pushing for us to apply. It can't hurt the business, but keep progressing as if you're not going to get in, because that is the most likely outcome anyway.
Maybe I'm sadistic, but I like doing the application, and have been doing them for over a decade now without an invite.
“But I have a founder who is convinced that you need money first then prototypes and that nothing in her proposition needs any tech that you cannot buy off the self.”
FWIW, when people get into YCombinator, the first lesson they drive home is to talk to users and ship product.
I agree wholly. But fear is real and understandable.
My playbook used to be:
1) Have an idea
2) Identify any customers, Ideally one who is in a terrible emotional distress that they do not have that solution you have come up with. If you cant find one move on to another idea quickly.
3) Ask them if they want your solution - show storyboards.
4) Ask them to pay costs to build it and feed you ramen.
5) Ensure that the software, since they paid next to nothing for it, is yours. 6) Go sell it like Larry to a few more.
7) Show invetsor types once you start growing and getting longer contracts.
ACTUALLY HUGE KUDOS THANK YOU FOR THAT!!! Yes, exactly what I thought. She would do so well with another person who cares about the retail experience as much as she does. THANK YOU AGAIN!!! :-)
how can you bootstrap a confectionary business to 100m? curious how that was possible at all to pay for marketing/sales in a cutthroat industry like the food business
She raised expansion capital from traditional loans. It was a not for profit and she has a badass MBA. Yeah the margins were rough, distribution deals even rougher.
No it is not and you are right. In the fossil days of startups (1985 - 1995) you bootstrapped or literally built the first solution for a customer who is desperate for the solution. Oracle was launched like that. Larry was a contractor who built software for the CIA. One day Larry writes an RDBMS as defined by Stonebreaker. CIA wants information not software systems. Larry asks "can I go sell this to others, I know you paid for it all". They are like - for sure! Go for it!
After that it's pure conjecture. I think he secretly teamed up with Chuck Norris to form a late 80's Japanese Aesthetics and Cultural Appreciation group. After that he pipped Oprah to the post by giving away cars to people but I think for entireley the wrong reasons.
WebTV was launched on a $5000 cheque from a colleague. Sold 18 months later or something silly for $400m to Microsoft. Oh I will never forget the smile on Steve Perlman's face that day, lol.
But before I get lost in a Raymond Reddington anecdote -> Reframe the low revenue as "We could have had ten times that number of customer if you had funded the inefficiency in the market place and let us own it." It's kind of what Elon Musk did when ALL of his investors wanted to bury him and what they saw as a fast rising embrassment of what was Tesla. At that meeting he pretty much said "fuck it, I'l fund it and take all the upside myself." Next thing you know...no one wants to be that investor who said no.
Yes. Yes. Yes. And I want to say that the next big thing amongst sane new entrepreneurs will be "Grant-strapping". Check out Rupak Doshi at TurboSBIR and AFWERX. Use Google and Linkedin. $250k cheques, equity free. No more incubators taking their cut for doing eff all.
There are SO many companies that have great products that are shut down because they are "zombies". Bullshit. They were sustainable, they had people earning money to grow their families, paying taxes to make the outside world happen.
They made one mistake. They just did not grow to the required venture size to be slaughtered by VC's and served to their friends.
Bury the tech. Bury the service. Drag down progress. I was in a startup that got offered $40m. The Investors said no, they wanted $400 Million. 3 months later. about 90 jobs lost and all that work vaporized. Customers absolutely bemused.
So bootstrapping is in. Will be big again. If folk are interested I have a ton of reading, material and resources I can share. It really is a mind over matter thing. And once you get to the stage to clearly say why you need investor money ( like if you want to do photonic pooling research and need lab equipment etc).
And actually makes more sense.
Bootstrapping forces discipline that the VC's dont want younger leaders to have. They want them to burn through cash and ask for more at a lousier evaluation so they can get more bang for their buck. And yes I witnessed that at first hand after that startup. As a programmer I should recognize patterns. Fail.
VC's are not evil people, they just do their job. Oddly they make your mom's pension funds work in many cases :-)
They should not make out that they are likeable though.
Boot strapping is definitely my preferred route for many reasons including what you mentioned. I'm interested in learning more about how to use an existing userbase to create more products, pricing, and product / market fit. I'm almost done reading Monetizing Innovation and can't wait to try some of the things I've learned in the book. What else do you recommend reading?
Yep, but piepdx has been submitted, this page is specifically to apply for this funding cycle. They extended the deadline because google jumped on board with their backing.
