Comments on: Add logs, pour fuel (VC money), light match (beta release day)

By: Peter Chee

Peter Chee — Fri, 16 Jul 2010 12:33:31 +0000

I'd be happy to share with you what I've been doing. I'd love to hear your feedback. I'll email you later to set up a time to meet for coffee!

By: joe heitzeberg

joe heitzeberg — Wed, 07 Jul 2010 23:51:05 +0000

>>Joe, what's your experience say about this? Have you ever tried to do approach it this way instead of raising money?

I am doing it now for my new venture (boot-strapping, getting cashflow, etc). In my last company, where it was a consumer play (get big or it doesn't matter anyway) we had the following strategy:
- work for up to a year with no pay to validate the concept and market
- raise enough to get traction

Again, it was consumer ad-supported, so that makes it harder.

My new company offers service and set of tools, so it makes money with each customer. I think I can grow it organically without investment (other than my self-funding it in the early going). I haven't had to cross the bridge of the reduced salary / longer term upside equation with employees yet since everyone is part time, but will probably in the next few months....maybe we can have coffee sometime to compare notes.

By: joe heitzeberg

joe heitzeberg — Wed, 07 Jul 2010 23:46:30 +0000

I love your extension! And cloud computing would be the guy driving by on the 4-wheeler selling firewood

By: Evan Jacobs

Evan Jacobs — Wed, 07 Jul 2010 23:15:26 +0000

I like your campfire analogy and I think it works well to illustrate that simply having all the raw materials is not enough but that you also need to apply them in the correct order.

Care to extend this analogy to angels and seed funds? Would they be the friendly boy scout who happens to wander by with a lighter when you don't have any matches?

By: Peter Chee

Peter Chee — Wed, 07 Jul 2010 23:10:53 +0000

I really like how you describe this. This is one of those things that I'm always thinking about. I'm in the midst of trying to grow my business and one thing that I've been going back and forth on is whether or not to get some investors or just continue to bootstrap it. When I think about accelerated growth, it sure would be nice to have some money to pay people to x, y, z. However, I like the second campfire analogy where you gather and arrange kindling, get the early sales, proof points, validation, and then if you really have to grow faster, find some funding.

There's one thing that I'm learning such as how to overcome the salary issues for hiring people and that is make sure you find out what their financial goals are. If you have a real business model where it can generate real profit, then showing a person a clear path on how they can reach their financial goals may allow you to bring that person on without having to give out large salaries. Joe, what's your experience say about this? Have you ever tried to do approach it this way instead of raising money?