7 ms·

Are you VC-funded? No, we're profitable

98 points by jabo 2y ago

blacktits69 2y ago
[flagged]
nisten69 2y ago
Gotta love the feeling of having infinite runway.
paxys 2y ago
VC-funded startups go out of business. Bootstrapped startups go out of business. While there is a large gap in the two models in terms of finances, operations and everything else, trying to argue that customers should pick your company purely because you haven't raised money shows that you are either deliberately being insincere or know nothing about the industry, neither of which are great selling points. If you want to compete, do it on the basis of features and value.
- recursive 2y ago
  As a customer, I might be interested to know if a vendor can continue to exist if they achieve only moderate success.
  - plorkyeran 2y ago
    Yeah, if a non-VC-funded vendor is making a small profit while paying everyone's salaries they're pretty likely to still be around in a few years. A VC funded vendor that's making a small profit but not growing won't be.
    - uhhhhhhh 2y ago
      This I believe is the root of enshittification. VC/private equity requires growth levels that are unsustainable and the focus on that destroys the long term prospects of a lot of companies that otherwise would provide great value and support themselves. So the ones that game marketing for revenue (badly developed or designed features, overselling, etc) win over those that provide real value.
- cthor 2y ago
  It's a signal whether you like it or not. Saying "well shucks anything could go out of business" is meaningless. What partners and customers want to know is the liklihood of that happening. Moreover, going out of business isn't the only risk to consider but also pivoting into another business entirely.
- sethaurus 2y ago
  VC-funded startups go out of business because they are unable to grow fast enough. Bootstrapped startups go out of business because they are not profitable. As a customer, knowing that a vendor is already profitable and sustainable is a big green light.
jascination 2y ago
It's a cute quote, but it seems about 5 years out of date. There was a golden period for a while there that indie hackers and self-funded devs could create a useful product and grow it themselves and could 'beat' VCs. But now you can create some AI generated slop in a day that used to take months. Being an indie hacker used to be a sort of badge of honour, now it's where everyone starts. I think the VC-backed companies who have budgets to do actual marketing, actual sales, actual outreach beyond "I have a good following on X, I'm gonna sell them stuff" will win in the end. As a customer, for me I don't care whether the company is profitable, I care about whether it works, whether it's in my budget, whether the company will be around in 2 years regardless of if the founder loses their passion for it.
- nullderef 2y ago
  I've recently started an indie hacker journey and cannot emphasize how much work it takes. It's incredibly hard to develop the technical side, listen to feedback to improve the product/UX, do SEO, viral marketing, and more. Hiring more people seems necessary to stay sane -- at least for my project. But you need money for that, which you won't have for a long time. Even tools for all these aspects (Claude, Revid.ai, ahrefs, etc) stack up in subscription costs. Maybe this is just because I'm getting started, though.
- mikigraf 2y ago
  100%. We tried to compete with a few VC-funded startups and they all have been able to outgrow us while we struggled to get enough money for SOC2.
- nozzlegear 2y ago
  I tend to be wary of AI slop products as well, but I don't think indie developers are particularly more prone to creating AI slop than VC-backed devs. It seems to me that AI has lowered the barrier to entry for creating slop products for indie devs. On the other end of the spectrum, the number of VC-backed SaaS products out there that haven't completely pivoted to becoming some kind of AI wrapper is approximately zero. Regarding the topic at hand, I'm more likely to purchase something that's not VC-backed, and does not mention AI at all these days.
guywithahat 2y ago
It’s cool seeing a Houston startup too; I feel like the only ones I’ve ever seen have been self-funded
light_triad 2y ago
It's a bit of a non sequitur: having a profitable business is ideal but if a startup can grow fast with VC money it can be acquired for 40x (Wiz) - 1000x (WhatsApp) revenue even if not profitable
- altairprime 2y ago
  A startup that doesn’t care about making money is a startup that will ignore negative customer feedback if addressing the concerns raised would slow the unicorn’s growing phase. If you’re a stable business, that’s the sort of firm you definitely do not want to hire for key services; the VC involvement is too high an instability to permit. (Advertising is not a key service.)
- epolanski 2y ago
  Why does it always have to be about maximizing exits at all costs? There's people that simply enjoy their company and working in it, they only luck to sell when they are old and there are no great heirs to the business. And that's true for billion dollar companies too.
  - soup10 2y ago
    many businesses are boring or a grind by their nature and would not exist without financial incentive and an exit plan
  - tmpz22 2y ago
    Bootstrap = chance of failure, more work because you can't hire a team to do significant amount of work for you VC-funded = Full Salary early, network for future jobs if company fails, shortcuts like joining an incubator and selling to your cohort for early sales figures (which can then be used to get more money)
    - billllll 2y ago
      VC funding is for sure less personal risk, but I don't think the other points are universally true. 1. Re: hiring, you're probably not going to hire your first FTE right after raising money. You're probably going to do so after getting a bit of traction. I hear most investors especially today will push you to be lean and do more yourself. Either way, bootstrap or VC funding, you're going to bust ass, no way around it. 2. Re: salary, yes, some investors will encourage you to pay yourself, but you're probably not paying yourself a "full" salary right away. 3. Re: selling to cohorts is a bit overrated I think. The fact of the matter is, they're probably all early-stage tech startups, which means if you don't have a product that specifically targets early-stage tech startups, you're probably not going to sell to them. I don't think it's as cut and dried as X is better than Y. It really is all about how much risk you want to take on, if VC funding is even an option.
kylecazar 2y ago
"Now the same question seems to be coming from a position of customers trying to determine how much of a risk they're willing tolerate when doing business with VC-funded companies." To be fair, this was one customer's question, not necessarily a trend. The merits of taking VC are debatable. But I don't think we're at a point where potential customers broadly are skeptical of a funded startup. If nothing else, it means someone, somewhere has vetted you and thinks you can deliver.
- penguin_booze 1y ago
  There are merits, but one way to look at VC is as a predatory lending firm.
- Yoric 1y ago
  As a nuance: the VC thinks you can deliver to them. It's not necessarily the same thing as delivering to your clients.
MortyWaves 2y ago
I’m expecting this post to vanish from the home page any time now
twinofpoolg 2y ago
[dead]
deleted 2y ago
[deleted]
CyberMacGyver 2y ago
Where do people find good Indie hacking solopreneur support ?

98 points by jabo 2y ago

blacktits69 2y ago

[flagged]

nisten69 2y ago

Gotta love the feeling of having infinite runway.

paxys 2y ago

VC-funded startups go out of business. Bootstrapped startups go out of business. While there is a large gap in the two models in terms of finances, operations and everything else, trying to argue that customers should pick your company purely because you haven't raised money shows that you are either deliberately being insincere or know nothing about the industry, neither of which are great selling points. If you want to compete, do it on the basis of features and value.

recursive 2y ago
As a customer, I might be interested to know if a vendor can continue to exist if they achieve only moderate success.
- plorkyeran 2y ago
  Yeah, if a non-VC-funded vendor is making a small profit while paying everyone's salaries they're pretty likely to still be around in a few years. A VC funded vendor that's making a small profit but not growing won't be.
  - uhhhhhhh 2y ago
    This I believe is the root of enshittification. VC/private equity requires growth levels that are unsustainable and the focus on that destroys the long term prospects of a lot of companies that otherwise would provide great value and support themselves. So the ones that game marketing for revenue (badly developed or designed features, overselling, etc) win over those that provide real value.
cthor 2y ago
It's a signal whether you like it or not. Saying "well shucks anything could go out of business" is meaningless. What partners and customers want to know is the liklihood of that happening. Moreover, going out of business isn't the only risk to consider but also pivoting into another business entirely.
sethaurus 2y ago
VC-funded startups go out of business because they are unable to grow fast enough. Bootstrapped startups go out of business because they are not profitable. As a customer, knowing that a vendor is already profitable and sustainable is a big green light.

jascination 2y ago

It's a cute quote, but it seems about 5 years out of date. There was a golden period for a while there that indie hackers and self-funded devs could create a useful product and grow it themselves and could 'beat' VCs. But now you can create some AI generated slop in a day that used to take months. Being an indie hacker used to be a sort of badge of honour, now it's where everyone starts. I think the VC-backed companies who have budgets to do actual marketing, actual sales, actual outreach beyond "I have a good following on X, I'm gonna sell them stuff" will win in the end. As a customer, for me I don't care whether the company is profitable, I care about whether it works, whether it's in my budget, whether the company will be around in 2 years regardless of if the founder loses their passion for it.

nullderef 2y ago
I've recently started an indie hacker journey and cannot emphasize how much work it takes. It's incredibly hard to develop the technical side, listen to feedback to improve the product/UX, do SEO, viral marketing, and more. Hiring more people seems necessary to stay sane -- at least for my project. But you need money for that, which you won't have for a long time. Even tools for all these aspects (Claude, Revid.ai, ahrefs, etc) stack up in subscription costs. Maybe this is just because I'm getting started, though.
mikigraf 2y ago
100%. We tried to compete with a few VC-funded startups and they all have been able to outgrow us while we struggled to get enough money for SOC2.
nozzlegear 2y ago
I tend to be wary of AI slop products as well, but I don't think indie developers are particularly more prone to creating AI slop than VC-backed devs. It seems to me that AI has lowered the barrier to entry for creating slop products for indie devs. On the other end of the spectrum, the number of VC-backed SaaS products out there that haven't completely pivoted to becoming some kind of AI wrapper is approximately zero. Regarding the topic at hand, I'm more likely to purchase something that's not VC-backed, and does not mention AI at all these days.

guywithahat 2y ago

It’s cool seeing a Houston startup too; I feel like the only ones I’ve ever seen have been self-funded

light_triad 2y ago

It's a bit of a non sequitur: having a profitable business is ideal but if a startup can grow fast with VC money it can be acquired for 40x (Wiz) - 1000x (WhatsApp) revenue even if not profitable

altairprime 2y ago
A startup that doesn’t care about making money is a startup that will ignore negative customer feedback if addressing the concerns raised would slow the unicorn’s growing phase. If you’re a stable business, that’s the sort of firm you definitely do not want to hire for key services; the VC involvement is too high an instability to permit. (Advertising is not a key service.)
epolanski 2y ago
Why does it always have to be about maximizing exits at all costs? There's people that simply enjoy their company and working in it, they only luck to sell when they are old and there are no great heirs to the business. And that's true for billion dollar companies too.
- soup10 2y ago
  many businesses are boring or a grind by their nature and would not exist without financial incentive and an exit plan
- tmpz22 2y ago
  Bootstrap = chance of failure, more work because you can't hire a team to do significant amount of work for you VC-funded = Full Salary early, network for future jobs if company fails, shortcuts like joining an incubator and selling to your cohort for early sales figures (which can then be used to get more money)
  - billllll 2y ago
    VC funding is for sure less personal risk, but I don't think the other points are universally true. 1. Re: hiring, you're probably not going to hire your first FTE right after raising money. You're probably going to do so after getting a bit of traction. I hear most investors especially today will push you to be lean and do more yourself. Either way, bootstrap or VC funding, you're going to bust ass, no way around it. 2. Re: salary, yes, some investors will encourage you to pay yourself, but you're probably not paying yourself a "full" salary right away. 3. Re: selling to cohorts is a bit overrated I think. The fact of the matter is, they're probably all early-stage tech startups, which means if you don't have a product that specifically targets early-stage tech startups, you're probably not going to sell to them. I don't think it's as cut and dried as X is better than Y. It really is all about how much risk you want to take on, if VC funding is even an option.

kylecazar 2y ago

"Now the same question seems to be coming from a position of customers trying to determine how much of a risk they're willing tolerate when doing business with VC-funded companies." To be fair, this was one customer's question, not necessarily a trend. The merits of taking VC are debatable. But I don't think we're at a point where potential customers broadly are skeptical of a funded startup. If nothing else, it means someone, somewhere has vetted you and thinks you can deliver.

penguin_booze 1y ago
There are merits, but one way to look at VC is as a predatory lending firm.
Yoric 1y ago
As a nuance: the VC thinks you can deliver to them. It's not necessarily the same thing as delivering to your clients.

MortyWaves 2y ago

I’m expecting this post to vanish from the home page any time now

twinofpoolg 2y ago

[dead]

deleted 2y ago

[deleted]

CyberMacGyver 2y ago

Where do people find good Indie hacking solopreneur support ?