I recently said “The competition is never as close as you think.” Apparently, this struck a chord.
The context here was bootstrapping vs. raising angel money. Call me crazy, but it feels to me like there are a whole bunch of “type 3” (don’t really deserve to exist) companies out there who are looking for angel funding*. I would actually slightly modify Brad’s “type 3” by changing “don’t deserve to exist” to “shouldn’t be asking for angel money in the first place.”
The standard reason given for the need for angel funding is that there is an urgent need to get to the market NOW, before somebody else does. But the competition is never as close as you think. They don’t see the solution or the path to getting there in the same way that you do, or with the same unique passion and insights based on their completely different biases, life experiences, and corporate constraints. Quit worrying about that, and start building. Start executing.
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*Now, before everyone goes butt crazy and starts sending me emails relating the fact that not all companies are built to be huge, and just because they can’t reach $20M in annual revenue it doesn’t mean they’re not viable companies, yada, yada…. I just want to say that you have to remember that Brad’s “three types of companies seeking angel funding” are those that are (say it with me) seeking angel funding. And if you’re going to go and ask any kind of professional (non-emotional) investor (angel or VC) to open up his checkbook, you had better be talking about building at least a $20M business. Fact.
Yes, there are great companies that add real meaning in the world and have annual revenues of far less than what I’m talking about. I don’t mean to disparage those companies. They often represent the sweat, blood, and tears of their founders who are rightly very proud of them. These are often what investors refer to as “lifestyle businesses.” They exist primarily to create a better life and work situation for their founders, in most cases.
If you’re building something that you can bootstrap, you’re smart to do it that way. Very smart. In fact, perhaps you’re not so smart if you can bootstrap but you aren’t.
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OK, I’m in Texas today and these people drive like madmen. I don’t mean to take it out on you. Go ahead – comment here or send me that email if you want to. You know I love it.
