Startup Doesn’t Equal VC

Starting a business has nothing to do with VCs. Startups have everything to do with exploring a product that satisfies a group of underserved customers. Paul Graham wrote an incredibly good essay on the topic of coming up with startup ideas. He never talks about funding in the article. He talks about how to derive the ideas and determine whether any one idea is a good idea. In short, “Live in the future and then build what’s missing.”

This topic is very important to me, especially the part about funding and VCs. Venture capital is just one way of funding a business. So are loans, credit cards, side projects, full-time jobs, and getting customers to pay for stuff before they get the product. The myth that startup and VC is synonymous is propagated by the same people who have a vested interest in making the connection: VCs.

There is nothing wrong with a business that pays the bills. It is not a lifestyle business. It is fraught with the same risks as every other startup and every other company.

It is okay to build a small business. 99% of all companies in this country are small. There is nothing easy about paying the bills with a company you started from scratch. In fact I would argue that you can’t skip that step. Paying the bills from cash flow is the only way to really build a larger company.

And going after just 1% of US citizens is not thinking small. It is thinking big. 1% is 3.1 million people. At $10 per year that’s $31 million in revenue. There is nothing small about that, even if some people want you to think so.

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