17th level Hacker

Starting Up a Business

I ran across this article at seattlepi.com, and I was kind of surprized by the tone. Take this quote for example:

With capital harder to come by in recent years, some venture capitalists have squeezed entrepreneurs with more stringent liquidation preferences. That has led many small business owners to “bootstrap” their enterprises or turn to friends and family members for money.

That bootstrap in quotes really surprizes me. I thought that bootstraping was the standard way of starting up a business, and that “securing VC funding” should be the quoted exception. I think those who have been around the high stakes tech game for too long tend to forget that most companies are started without getting venture funding. It used to be that someone with an idea and some money (or access to people with some money) would pile together what they had and make the leap on their own. At least that’s how it was told in my high school economics class.

Yes, it takes money to start up a business, but that money doesn’t have to be the millions of dollars put up by fund groups. This radical new “bootstrapping” concept is really the way that almost all entrepreneurial initiatives get started. I thought this was what business planning was about, and at root the reasons for supply chain management and resource planning. We hear about these things from large companies, but they hold just as true for small companies as well. Somewhere people have to enter the playing field. Venture allows them to effectively materialize right in the middle of the game. And that can be a huge advantage, but only certain plays are well adapted to that advantage. For others it’s better to slowly work your way into the field, exploring as you go. That doesn’t mean there’s anything wrong with venture, or with companies. That’s just the nature of the game.