Disclaimer: I am currently building my first product and have no idea how any of this works.
In this day and age where almost every service you’ll ever need in tech offers a free tier and is reasonably affordable for scale, why do startups need funding?
For example, I am a relatively talented full-stack dev, if I were to build a website/app I can do it all by myself in a reasonable amount of time. I do understand that this is not the case for everyone, but for those that it is, why can’t they do this:
Build a product -> get a few users -> (make money from those sales ->) put that money into marketing -> get more users -> more money -> bigger marketing -> repeat
I’m more surprised when I read that a SaaS received funding because they usually don’t need a huge research and development team that a company like OpenAI would need nor do they depend on ad revenue which pays cents.
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I’ve never raised funds and I’ve bootstrapped something up recently. So I have some thoughts on this.
I believe it is Michael Seibel who said “Raise funds when you don’t need it.”. I suppose that’s because you get better terms, and are more confident with getting no’s because it doesn’t really matter to you.
Wishing you the best of luck on your startup journey
You can do it faster and your window might be closed in few years.
How can u do it faster?
Yes. You just need people. Having money just mean you can have more people. But there is other ways to get people to join you.
Figuring out what to build is just as hard as knowing how to build imo
I want to thank all of you for your responses! My view on funding has definitely changed, for the better, I suppose.
While bootstrapping is a viable path to success, it is slower, the upside being you keep the equity.
Getting investments accelerates your growth, equity being the expense.
I don’t think I have the experience to run this alone, so I am considering accelerators that can give me guidance because all I understand is how to program really well, I could learn the rest from the books, videos, etc, but nothing beats good old experience I guess.
If you’d ask me this a few years back, I’d say unlikely. But now, you have got a ton of ways to get initial kickstarter capital that even without getting funding you can get money.
If I could, there’s a good talk by Jason Cohen talking about bootstrapping WP Engine.
https://www.youtube.com/watch?v=otbnC2zE2rw
The reason I like this one is that they actually are externally funded now but they didn’t take funding until they were a well established, multi-million dollar revenue company.
So if you’re ever worried, just remember it’s not black and white. You can bootstrap until you die, bootstrap then take funding once you’re more established, or try for funding from day 1.
I’ll check it out, thanks!
How do we measure the success of a startup? Despite not having raised funds, Vue.js, in my opinion, has achieved considerable success.
Of course! You can bootstrap your startup. It’s another game. Timing, expectation, team size, and so on. But it is really worth it.