Startup to IPO: Part 2: Obstacles(scale.cc)

36 pointsby joannetse17 anni fa10 comments

http://scale.cc/2009/07/15/startup-to-ipo-why-few-companies-make-the-leap-and-what-we-can-learn-from-them-part-2/

4 comments

We'd be out of business now if we had gotten VC in 2005. From the VC-funded companies I've been in before, getting VC seems like getting shot out of a cannon. There are no course corrections that don't involve big splotches of blood and viscera. You better be aimed correctly.

We didn't know enough in '05. We've watched 5 other companies launch the product we were planning to launch. One of them eventually took in over $80MM (!) in funding. The market hasn't panned out. We got to watch that all play out, see what worked and didn't work, and retool, all while building up a profitable line of business.

Just another reason, besides "it makes you work really hard", why not getting VC can be a win.

joannetse17 anni fa

Thanks so much for sharing your experience. I wonder what your competitor did with that $80MM!

tptacek17 anni fa

Presumably:

* Several million dollars in inventory

* A 20 region global direct sales team, likely each consisting of a 130k base account manager and 2 90k-100k SE's

* Several million dollars a year in "marketing", including 20-50k/mo in PR firms (note: we got more press hits over the last 4 years than they did), 100k+ in Gartner subscriptions, magazine ads, and 4-5 $100k+ conference visits a year.

* 4-5 120k+ overhead head count for middle management, like a VP/Marketing, Director/Marketing, and Sr Mgr/Marketing, or 3 layers of engineering management.

* A ridiculously outsized engineering department with 1:1 or worse dev/QA.

I'm sure I'm missing some other ludicrous VC-funded-company expense than a 50+MM funded company goes through (I've been through that firsthand), but all I'll say here is, there's nothing I think they spent that money on that I want for my company now.

paulbaumgart17 anni fa

I'm not really convinced VistaPrint is the best example to learn from. Allegedly, they do some pretty shady things with their customer data[1][2]. Something about signing people up for some useless service with recurring monthly fees without their explicit consent.

I guess that's one way to compensate for not getting outside investment, but it seems pretty shortsighted to me. It certainly was enough to scare me off when I was ordering business cards a little while back...

[1] http://www.etsy.com/forums_thread.php?thread_id=5174090 [2] http://www.consumeraffairs.com/online/vistaprint.html

vincentchan17 anni fa

While I didn't know anything about those useless service, I don't think Vistaprint becomes a $1.9B company just because they do shady things. As an entrepreneur, I would love to learn about how others build their companies but it doesn't mean we have to agree all of their moves.

I don't want to argue about the ethical issues here. But I believe every company has done something in the gray area. Do you think all those Google ads on domain parking pages are click scam? I do.

_b8r017 anni fa

We've been offered angel investment a few times and whilst I can definitely see the benefit in small areas of financing, doing it off your own back with all the blood, sweat and tears that come with it leave you with a pretty awesome set of abilities.

Leaping over tall buildings in a single bound is one of them I don't think I'll get round to, but there are times when the things you do pull off are superhuman by comparison to most people's lives.

dan_the_welder17 anni fa

I have always encouraged people to bootstrap.

Nothing sharpens your financial judgment like limited resources.

BTW I just love your cannon/viscera analogy!

revorad17 anni fa

offtopic: your profile sounds interesting. what's your bike website?

dan_the_welder17 anni fa

Hi, it's at organicengines.com

revorad17 anni fa

Looks awesome! I once built the dutch Juan with a bunch of friends. It was so much fun to build and to ride. Keep up the good work.