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by earle
5234 days ago
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Honestly, this is completely absurd. The majority of startups fail, period. If you analyze the people who execute successful startups, the amount of money or wealth they have is a non-negative factor -- in most cases having money helps. This is why people who are super successful with startups have many repeats. |
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No, it isn't.
And I'm saying that as someone that successfully went head-to-head with a funded start-up targeting the exact same niche.
$30M vs piddly little bits (mostly savings from previous projects). The big guys ended up blowing through the larger part of their investment on fancy offices, very large and expensive servers that they didn't need, lots of employees doing things like human resources, 2 managers per employee that actually did something and so on.
The view I came away with when visiting them in their (admittedly beautiful) offices was that they were living under the impression that their burn rate wasn't something to be worried about because time was on their side and would prove them right. 6 months later the whole thing collapsed and we got the largest boost in growth we'd seen to that point. We'd been profitable since launch and besides the initial outlay the project has always made money (up to and including the present day).
We simply couldn't afford anything else.
I'm pretty sure if they had been poor we'd have been toast, those guys had all the connections that you could dream of and were smack in the middle of the valley, whereas we were working from a dinky little office in IJmuiden, the Netherlands (if you haven't heard of it, it's that hotbed of technology in Europe, two VC's per square kilometer or so ;) ).