[replicatorblog]

Exactly.

DHH is confusing a life of relaxation with the security that comes with a big payday. It's less about sipping mojitos and more the ability to pay for college, mortgage, retirement, and relieving the stress all those things bring.

The tradeoff he proposes is a straw man: "Pull a few million from revenue each year or take a lump sum". Is this realistic in most cases? If Mint turned down Intuit, they could have bought Wesabe and reduced the value of Mint significantly. Given Mint's light revenue, how long would it have taken to achieve the same financial outcome? Would a VC ok salaries of millions per year in the near future?

I know the 37 Signals guys are anti-VC, but it is a real, lucrative, and demonstrable way to create wealth. I get that they dislike it, but I don't see the boot strapped software business being a real competitor. They do it, Craigslist does it, but not sure if there is the same portfolio of success in that system as in the VC system.

[tjogin]

> I know the 37 Signals guys are anti-VC, but it is a real, lucrative, and demonstrable way to create wealth.

I think their point is exactly that it isn't. DHH gave a talk at Startup School 08 (http://www.omnisio.com/startupschool08/david-heinemeier-hans...) wherein he likened that kind of big exit to winning the lottery.

I think this is the point they're trying to make: you're much better off trying to build a business than to try to win the lottery.

[replicatorblog]

By demonstrable I mean we can point to 100-200 companies in a ten year period that took VC and had respectable exits. There are probably more than that, but there is a good sample size.

I agree that it is improbable, but still better than the lottery. My point was that there are lots of well known examples from the VC route, but fewer success stories in the 37 Signals mold. It also might just be that they are lesser known, but instead of berating the VC industry maybe they could turn their spotlight on exemplars in their model? 37S, Craigslist, Plenty of Fish, are there a couple hundred bootstraped web startups that they could point to?

[tjogin]

100-200 companies in ten years doesn't sound like a lot. How many people won the lottery during the same timeframe?

I think DHH has a point. While hoping for the big exit isn't exactly like hoping to win the lottery, I'd say he's right that you stand a much better chance of being able to build a profitable business.

I think there's probably a lot more than 100-200 web companies that have built a profitable business that they're earning a very nice living from.

[mseebach]

> The tradeoff he proposes is a straw man: "Pull a few million from revenue each year or take a lump sum".

I agree. It's probably more like "pizza+beer+nice car+nice summer holiday"-profitable vs. a $2m-$5m payday -- i.e. the "we can do better, let's do this for a year or two more and see who has the last laugh"-passion.