Most of your examples have raised large amounts of VC funding. It's debatable whether they "need" the funding to success, but they certainly wanted it enough to eat the dilution.
The $1.2M revenue number looks completely made up by the article submitter. The article makes no mention of this or any other specific monthly revenue number.
I would expect a service like this to have very high churn as people export a list and leave, so the actual recurring revenue is likely much, much lower.
Path's failure is a fitting reminder of the likely outcome of making your key metrics friendships and moments rather than revenue. No doubt this is just one of many overfunded social apps that will fall into the abyss this year.
Isn't the one job of a startup CEO to keep customers happy?
Pandering to VCs to the detriment of customers seems like a surefire can't miss recipe for failure. Compare the biggest exits with the biggest disasters and you'll find that's the main thing that differentiates them.
This seems like it could be a real business with a lot of traction, especially with the death of Rapportive. I wonder why the founders chose to throw it away and get jobs at LinkedIn.
How do you measure founder quality? Most startups have some amount of traction when they raise VC funding. Either hundreds of thousands of users or $1M or more in revenue, especially with the bar for Series A getting consistently higher. That would speak to the quality of founders increasesing over time, not decreasing.
The post makes some valid points, but this reads more like self promotion "content marketing" for her expensive make money online by bootstrapping course than an objective analysis.
Most likely $0. If you don't have any traction or investors, what makes you an attractive acquihire target? If it were so easy to throw together a few friends and make a million dollars via acquihire everyone would be doing it instead of applying for a job.
Acquihire is 30% about getting a team with proven ability to execute and 70% about paying back investors as a favor or a down payment on maintaining a good relationship with them. If your dream is really to get acquihired your best bet is to pull together enough traction to raise seed funding and then invest that money in hiring the best engineers possible before shopping it around to get acquired.
Welcome to the unfortunate reality of most internet businesses. The default outcome of a lifestyle business is a lot closer to this than a patio11 style runaway success. The lifestyle entrepreneur myth is so pervasive on HN that the common mindset of non startup people is "Oh, I don't want to do the startup thing, I'll just build a steady slow growth business and make $10K a month". The reality is that a side project making $10K a month is even less likely than a multi million dollar acquisition of a venture funded startup. The median outcome is not that you'll get 0.01% of a niche market, it's that you'll get 0%
Why do you think CryptoSeal failed? What are some lessons learned from running a YC startup for the past 3 years? It would be very interesting to see a postmortem.
It's not an entirely unreasonable heuristic. The supply of startup pitches is vastly greater than the demand for them. Investors have to filter somehow.
Getting a first meeting with any VC is pretty easy, even for someone with no connections whatsoever. There are hundreds of possible paths you can take to get that intro.
It's not a big stretch to assume that any entrepreneur with a good chance of success should be able to clear that low hurdle.
Building a successful startup is 1,000 times harder than hustling your way into a VC meeting. If you can't do the latter, it's pretty likely you won't be able to do the former.
You're making a very bold claim that being born into wealth and connections is a prerequisite for VC funding. Do you have any hard evidence to back this up?
Please don't take this the wrong way: Your comments seem to reflect your own track record of professional failure rather than some legitimate trends or observations about the industry as a whole.
If every founder, investor, executive you have met has seemed malicious or incompetent, please consider this: the only common denominator is you.
Isn't the entire premise of venture capital that you only make money off the big winners?
Assuming lifestyle businesses fail at similar rates as venture-backed companies, the way to maximize returns is to invest in the companies with the biggest potential upside.
In other words, how many $10/month SaaS companies would it take getting acquired to match the return of your average $300M VC-backed exit?
Don't say 37signals. 37signals is an outlier in the same way Instagram is an outlier. The existence of either of these proves nothing.
By definition a mid-growth business will NEVER generate the returns needed to sustain a venture fund.
I don't think it's fair or the most beneficial to society that VCs only invest in high-risk, high-potential businesses. But that's the only way the math could work. You can't argue with math. The only exception would be funds like YC that can invest very small amounts at very low valuations and make money from acqui-hires.
I think you should definitely consider doing this sooner rather than later.
From reading your comments, it looks like you make the claim that:
1. Most startups are horribly mismanaged and are run incompetently by VCs/MBAs.
2. You have a radically different strategy for running a startup that makes engineers significantly more effective.
If so, this represents a tremendous opportunity for you. A startup run on your model, if your assumptions are correct, would have a massive - possibly several orders of magnitude - competitive advantage, and could have a very meaningful impact on the business world as a whole.
At the very least, I'd be curious to see a startup bring you in for management consulting and see how they do in a few years.
Anyway, kudos for taking the long view. It's rare to see people plan things many years or decades out in our social media addled age.
Serious question: Why aren't you building a startup right now?
You have all of these theories about how a company should be run, you hate managers, you're a top .0001% programmer, etc.
It seems that being a founder is the perfect position for you.
Don't you want to validate your assumptions? If a flat, open-allocation model really is the best way to run a startup, you might be on to something huge here. You're clearly passionate about this...what's stopping you from making it happen?
When you say something is "the ugly truth", you're presenting it as fact, not opinion. I don't mean to be rude, but the prevailing attitude on HN of "successful people are successful because they got lucky" is poisonous to say the least.