Aaah, the world of startups. Angels, unicorns, and people pivoting. While I’m a big fan of pivoting, I’ve always been a skeptic when it comes to building businesses by the classic silicon valley startup formula. That is: Create business idea – Get VC funding – Fuck around – Fail.
Hardly any startups ever make it. Their products suck. I mean, I understand that it’s part of the game. Lots of little losers and a few big winners. From a VC standpoint I totally get it. But I don’t understand why an entrepreneur (whatever that means) would want to build a business this way.
I try to make decisions based on data, especially when it comes to building something that is used by many people. A business decision that’s not backed by data or experience is almost always a gamble. Thus, considering a business or product successful before having generated any data is somewhat irrational. Which brings me back to the rate of failing vs. successful startups.
It seems to me that most startups fail because they are built based on theory. Not data. Not experience. Not organic growth. A successful pitch to a VC doesn’t validate an idea. Throwing money at an early stage idea doesn’t make it more feasible in practice. At the same time, it seems that raising capital and spending it creates the illusion of validity. Yet, the underlying economics don’t change. As long as there is no data, any decision will automatically lack reason. Instead, it will be based on hope.
Bootstrapping a business is different. You don’t have any money. You don’t have any believers. You don’t have any fake validation. Nobody cares about you. In fact, many people will look down at you. And that’s exactly what I like about bootstrapping. Building a business in a hostile environment like this makes you strong. You’re not being pampered. Nobody tells you what to do. You’re forced to focus on what really matters to make your product more successful.
And the only thing that matters is data.