I' now view venture-funded vs. bootstrapped as just as important a distinction as proprietary vs FOSS.
VCs invest in companies that they think will either 1) fail or 2) as 10× as big. No one can grow 10× by organically growing their current user base with a good product—they have to change *something*. And those changes frequently harm/abuse current users.
h/t @schlink re: Wire
@codesections @schlink I've been through 3 VC backed startups (all of which failed) - and hmm; so yes VC does have some problems (especially having to chase just enough success to survive till the next round); but hey it funded these 3 companies for ~10 years and I got paid, and even though they failed the people involved learnt a lot, stuff was developed - its' very difficult to get that level of funding needed from a bootstrap.
@codesections I've only been an employee; not a founder - so I don't have direct experience of the funding battles; only seeing what happens as you run from one round to the next.
You can grow stuff dynamically like that if your business only has costs proportional to clients - it doesn't work if you need to spend a lot up front to develop some complex thing that you need to get right before you can get a client - e.g. one of the startups was a chip company; cost many $M to make the chip.
> [slow growth] doesn't work if you need to spend a lot up front to develop some complex thing that you need to get right before you can get a client - e.g. one of the startups was a chip company; cost many $M to make the chip
Yeah, I agreed—I'm much less suspicious of VC funding when the business has clear capital requirements like that.
But (imo) running a small Internet software business *should* be low-capital. And VC funding without capital needs is (again, imo) a yellow flag
@codesections Well take gitlab; I bet it must have taken them a year or two of a bunch fo engineers to get it to the point of being usable - who pays for that dev time? Then they've got to get to serious IT management stuff for the amount of data they're storing and resilience.
> Well take gitlab; I bet it must have taken them a year or two of a bunch fo engineers to get it to the point of being usable - who pays for that dev time?
Hmm, @sir's experience with st.ht makes me think it's possible for one/a few engineers to build something competitive with GitHub (though I recognize the project goals are different)
Similarly, Mastodon was/is able to compete with Twitter even though Twitter has 1,000s of employees and Mastodon has a handful of core folks
> who pays for that dev time?
Also, I may have misspoken by using the word "bootstrapped". I'm not *really* talking about bootstrapped vs not, but about whether any investors expect VC-like returns.
Outside investors might play a (key!) role in giving a company more "runway", but I'm suspicious when they're looking for world-beating returns rather than 10% or whatever.
That doesn't mean a strict bootstrap, though
@codesections Remember the reason VCs are looking for good returns is because a lot of the companies fail and they lose everything - the overall returns by VCs is actually pretty small.
> Remember the reason VCs are looking for good returns is because a lot of the companies fail and they lose everything - the overall returns by VCs is actually pretty small.
Yeah, I know—and, sometimes, a company is trying to do something so inherently risky that VC money really is the only funding that makes sense.
But *sometime* a company is in a fundamentally boring/safe business (rent commercial real estate and subdivide it (WeWork)) and a VC pushes them to be more risky
I might be coming across as far more anti-VC than I mean to/actually feel. I recognize that VC money is *sometimes* helpful in growing businesses that can eventually be self-sustaining. I don't want VCs to go away any more than I want to delete all non-FOSS software.
But I also feel that too many people default to "startup" when they should be a "small business" and assume that VC-backed growth is the only viable path when it's just one option
> Mastodon has hundreds (thousands?) of instance admins and moderators as volunteers so it's not quite comparable.
I definitely don't want to undervalue the contributions of volunteer admins/mods—especially since I am one!
But Mastodon *as a software project* is much smaller than the community of people who use that software as admins/mods
General purpose mastodon instance