[esteth]

Sometimes funding is necessary to grow income enough to sustain the business or hire more engineers or whatever you want to do.

If it costs $40 to acquire a new customer, and you expect a customer to stick around for long enough to spend $90 then it's totally worth doing that, but you need $40 now to make 90$ over some period of time.

[Solvency]

There is an entirely possible and alternative funding model that perpetually allocates a responsible amount of incremental funds for the purposes of novel R&D. It's trivial to imagine how a responsible incremental funding approach could create a better, more transparent, more estimable, more reportable, more mappable, more rigorously trackable innovation process.

Raising massive lump sums of money is about VALUATION. You have been led to believe this is the only way to go about building a software business like this.

It's all a major silkscreen for the colder simpler goal of generating a lot of eventual wealth for a specific cast of people.

Again, no shame or emotion here. It's just how business is done in this world.

[munificent]

> There is an entirely possible and alternative funding model that perpetually allocates a responsible amount of incremental funds for the purposes of novel R&D.

This works for some but not all business ventures.

There's a reason corporations were invented in the Age of Sail. If you build 5% of a ship, you can't sail to the New World and bring back 5% of the resources. You just sink in the harbor.

(The moral implications of relating modern VC-invested corporations to rapacious European conquests of the already-inhabited-thank-you-very-much New World is not lost on me.)

I believe there are healthy ways to start up a business that has startup costs too large to bootstrap. I agree with you that VCs are often not it.

[mordae]

Or maybe 20 customers who believe that having a shared ship might form a join stock company to take care of their respective 5%... and when the venture proves itself, they might convert it to a publicly traded company and let it scale up with demand.

[tonymillion]

that's literally an angel investor financed startup

[munificent]

> Or maybe 20 customers who believe that having a shared ship

You might describe these people as "capitalizing a venture", in fact, or "venture capitalists".

[ZiiS]

You can build a small ship and a track record of profitable trade with the next port, then the next country over before undertaking an ocean crossing.

[munificent]

But you can't incrementally upgrade that ship to become a large ship.

At some point, you need the capital investment to build a big ship, and the return on that investment is zero unless you build the whole ship.

[tonymillion]

And by the time you've done that 97.3% of all shipping from the new world is being handled by a small handful of companies with gigantic cargo ships.

But congratulations, you've successfully created a small "local" business with a decent number of customers who are reasonably loyal. You should be happy with what you have and possibly invest in future generations who want to colonize the moon or something (assuming you want to expand your wealth)

[scarface_74]

Real world example: was DropBox a better or worse product when they were a simple syncing app before they started “innovating”.

The only consumer company that I can think of that went from “initial value proposition” to “not sucking after it went public” is BackBlaze. None of their new offerings has taken away from their initial “unlimited cheap backup” offering.

[dmix]

I'm curious have you ever tried to raise money for a tech business before?

There's a big reason VC and angels were and largely continue to be only game in town. No one understands or would risk loaning millions of dollars on a high risk business aiming for marginal incremental growth.

[superq]

> marginal incremental growth

VC's and angels wouldn't be interested in that, either.

[dmix]

Yes that's my point, I was paraphrasing OPs pitch

[nradov]

That alternative only works in the absence of competitors who raise capital to pursue more rapid growth. It is an arms race to an extent, but if you don't play the game then you may get locked out.

[nirvdrum]

Particularly when that rapid growth involves price dumping. I've bootstrapped businesses before. It's really difficult to compete with free offerings when you have to pay the bills. Your competitors can burn a pile of cash to flush out the competition. They don't even need a better product... people love getting stuff for free. Invariably, those services either go bust or don't remain free since it's often unsustainable. But, it means in the short-term you often need to raise money if you're competing with a VC-backed business.

[tedmiston]

> There is an entirely possible and alternative funding model that perpetually allocates a responsible amount of incremental funds for the purposes of novel R&D.

You are completely missing the point of venture capital here.

Of course, bootstrapping exists, but I can't point to any similar companies to Fly which have achieved standout success in an area like this with a model like that.

> Raising massive lump sums of money is about VALUATION.

Valuation is merely a side effect in pursuit of market dominance or hopefully establishing a niche monopoly.

[throw10920]

> perpetually allocates a responsible amount of incremental funds

Who does this allocation?

[akiselev]

That’s what's so great about five year projections! Somehow it’s always worth it until reality comes knocking after the money’s been raised. Then it’s a mad scramble for ROI that debases everything that built the business.