[tiedieconderoga]

Simple: capex and economies of scale.

Suppose that I have an idea for a widget which market research indicates could sell for $20/, but probably not $50/.

I can hit the $50/ target with small contract runs, which would cost about as much as a down payment on a house.

Or I can make it in volume for less than $10/, but I need a large minimum order, space, equipment, logistics. Now we're looking at 7-8 figures.

If you aren't independently wealthy, neither option is really feasible, and the former option will almost certainly end in tears if you try to stretch and bootstrap with your own money.

[brigadier132]

> I can hit the $50/ target with small contract runs, which would cost about as much as a down payment on a house.

I wasn't thinking of this from the perspective of a hardware startup but a software startup which doesn't require either of those things. I should qualify my original post with that. You don't need to be independently wealthy to launch a software business on your own provided you have the ability to build it yourself.

[groby_b]

Kind reminder that starting a software business still requires you to, you know, live and stuff :)

Even if you can build it all by yourself, for most people runway is limited by savings. And that means that with a few exceptions, it's hard to stretch beyond a couple of months (or maybe one-two years) before you need to think about shutting down.

If you can get to profit before that, awesome, your business might be a good idea. (You'll still have depleted a good chunk of your savings, and it's not like the world comes with profit guarantees)

Investment buys runway, opex, and scale. Some businesses need that, some don't. Software work reduces the opex load (for many attempts), but scale and runway might still be necessary.

[s1artibartfast]

You can often found it as you go from a primary job and or a spouse's job. I have a friend who drops about 100K into his startup a year hoping for a big exit. Pretty much all startups or small businesses involve risk. Your other putting in time or money or both. The Only Exception is if you find deep pocket feces that are willing to pay you a good salary to work on your own project, which is especially rare

[groby_b]

Sure, but that's still usually limited runway compared to getting funding. Yes, there are cases of spouses supporting a decade of work to get something off the ground. Yes, some people make enough to afford dumping it all into a startup (and a good chunk into a lawyer making sure they don't violate constraints from the existing job). But all these are several std.devs outside the normal "start a business" crowd.

Either way, the risk you can take without VC is limited by your wealth. Large bets without VC require independent wealth. We can quibble about what amount constitutes "independent wealth", but the fact doesn't change - VC allows you to dream bigger. (And I say that as a fierce critic of VC culture, but that is the upside of it)

[boondoggle16]

If someone has 100k to drop on a startup annually, I'm sorry, but they are totally out of touch with normal people. That is not normal.

[s1artibartfast]

That depends on what you mean by "having it to drop" . That's less than a median income in San Francisco. If you put 100% of your income into a startup, are you out of touch or do you just have skin in the game?

I don't think it's particularly in touch to dismiss someone who works 50 hours a week to make an income and then Works another 50 hours a week on a startup that spends that income

[ke88y]

> That's less than a median income in San Francisco. If you put 100% of your income into a startup, are you out of touch or do you just have skin in the game?

If your trust fund pays for rent and living expenses in San Francisco, and you don't even think of it as abnormal that your ENTIRE INCOME can be allocated to business bets, then yes -- you are indeed wildly out of touch.

[anileated]

If you put 100% of income—remaining after paying life costs (how much is that? I hope you do not rent!)—into work, it means you: do not travel, do not go to any events that cost money, do not dine out much, do not have any other hobbies that cost money (sports? music? photography? LEGO? DIY?), do not date, do not need to support a family, do not have emergencies for which you pay out of pocket, etc.

Are there people who just do not need any of those things? Maybe, but I would question it. (Too often what you think you need could be different from what you actually need.) Personally, even as someone who enjoys software engineering and would do it as a hobby, I think I would be quite miserable.

Here is what I think is reasonable: Someone would have an idea that is attractive for YC et al., raise money, and be able to comfortably afford all those things while working on a company. That is, I think, the promise of the leading quote in TFA. Unfortunately, the quote is phrased as if they are out there to help people start companies, while in reality it is about starting businesses with specific potential for explosive growth that are attractive to VC.

[adrianN]

Nobody works 100 hours a week.

[Domenic_S]

If you're really sure, you do that first run and lose money, then show a bank/investor the explosive popularity and get money for manufacturing at scale. Relatively speaking it's close to the easiest type of funding you can get.