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This is also something Paul Hawken touches on in "Growing a Business", along with a suggestion (IIRC) not to pay sales staff a commission:

https://www.amazon.com/Growing-Business-Paul-Hawken/dp/06716...

Growing a Business [1] is the book you're talking about it. I picked it up on a whim from a book sale a couple years ago and it was an interesting read. Like this one, some things are fairly outdated (talks a fair bit about catalog sales), but overall pretty sound advice for building a sustainable business.

[1] http://www.amazon.com/Growing-Business-Paul-Hawken/dp/067167...

A few years ago I was reading "Growing a Business" by Paul Hawken[1], in which he shares his experiences in entrepreneurship (which are quite dated, but interesting). One thing that stuck out to me was that in his first business, he used $1000 to get up and started, and in the latest one at the time of writing, had used over $100,000. He said in the first he would have felt uncomfortable with more than a grand in the first experience and uncomfortable with less than a hundred grand in the last example.

I took away the point that the amount of funding needed to start a business is variable, and so are the needs of the founders. Founders shouldn't deal with more or less than they are comfortable with. Personally, I lean more in the direction you do, wanting a business to be cash flow positive before I took any outside capital. But that would be extremely difficult in many situations, and limiting yourself to having a product that is very small profitable now may limit your ability to build a product that is hugely profitable in the future. My thinking is that a founder needs to take time and evaluate carefully whether they should seek investment or bootstrap.

[1] http://www.amazon.com/Growing-Business-Paul-Hawken/dp/067167...

⬐ bmelton

I agree with everything you've said, but want to add that for new entrepreneurs, it's wise to start your earlier ventures with the minimal amount of money and grass-roots types of efforts. From this, you grow to understand your strengths and weaknesses. A good entrepreneur may not learn great marketing techniques as a result of doing self-marketing, but may learn that he is not a good marketeer, which is just as valuable.

Serial entrepreneurs like to start with more money because, in part, I think they already know what types of endeavors it makes sense to pay somebody else to do.

I agree about Jim "Business Guru" Collins: his books seem a bit like "empty calories" to me. I was left without much of a sense of any practical takeaways.

My favorite business book, I think, is "Growing a Business" by Paul Hawken. Pretty down to earth and he says a lot of things you'll see by people like 37 signals, except he said them back in the 80ies: http://www.amazon.com/dp/0671671642?tag=dedasys-20

Books by Paul Hawken, like "Growing a Business"

http://www.amazon.com/Growing-Business-Paul-Hawken/dp/067167...

"Growing a Business" by Paul Hawken - hands down one of the best books on starting a business I have read. Don't let yourself be scared away by the release date 1988, the advice in there is timeless. Lots of the author's advice can still be found in other books on that topic. http://www.amazon.com/Growing-Business-Paul-Hawken/dp/067167...

You might also think the title sounds "treehuggerish", I found the book not to be like that at all but very inspiring and useful.

I would be more inclined to do this if the book is non-technical. When you commit to reading a technical book, you're committing yourself to more than just the time spent reading: you're committing yourself to the time spent applying and fully understanding what you read -- installing tools, tinkering with syntax, coding, and so on. I've got enough of that now.

With non-technical books (literature, history, quality-of-life), most of the time will be invested into actual reading, with a bit of pondering and maybe discussing. We can have a conversation right away, and there's still knowledge and insight to be gained.

Here are some non-technical books I'd like to read:

* How to Read a Book - http://amazon.com/dp/0671212095

* Influence: The Psychology of Persuasion - http://amazon.com/dp/006124189X

* Liar's Poker - http://amazon.com/dp/0140143459

* Growing a Business - http://amazon.com/dp/0671671642

⬐ gruseom

Those last three are great suggestions (I don't know #1). #2 is a classic, but I've read it a couple of times. #3 I've been meaning to read for years. #4 I'm actually in the middle of right now (I think because tptacek recommended it here) and unlike the vast majority of business books, it's superb. It's also older (pre-internet) which is actually a good thing as it focuses one's attention on fundamentals.

⬐ Herring

"When you commit to reading a technical book, you're committing yourself to more than just the time spent reading: ..."

I wish more hackers took that attitude towards science books. Can't really get much out of a pop-physics book without solving problems.

"Growing a Business" by Paul Hawken? (http://www.amazon.com/o/asin/0671671642/pchristensen-20 )

I haven't read that book but I have read other books by Hawken and I highly recommend his work. GaB is probably just as good (Joel recommends it too).

For those of you interested in growing a business, read Paul Hawken's, "Growing a Business": http://www.amazon.com/dp/0671671642

For those of you arguing for or against, read Joel's Strategy Letter I: Ben and Jerry's vs. Amazon: http://www.joelonsoftware.com/articles/fog0000000056.html

I am with the 37signals guys on this one. DHH's startup school presentation was refreshing.

⬐ davidw

I wholeheartedly concur with the Growing a Business recommendation. It's like reading "Getting Real" but as a real book with an ISBN number and everything, and it was written 20+ years ago, yet is still relevant, which is a good sign. I also added it as a summary at SB, but it's one I think is worth buying:

http://www.squeezedbooks.com/book/show/4/growing-a-business

⬐ Xichekolas

There is no need to 'pick a side' ... this should not be a flame war. Honestly, the 'argument' is over the best way to make millions. That is like arguing over whether it's better to 'have your cake' or 'eat it too'.

⬐ kirubakaran

It is like: A guy is told "hey get a supermodel gf!" and "hey get a friendly gf!", when the poor guy would go out with any girl given she is neither ugly nor psychotic.

⬐ dennykmiu

Correct, usually we go out with whoever says YES.

And that's my own experience with startup. Everyone has a plan until they get into the mud.

⬐ justindz

That's why we need more female tech entrepreneurs. Mud wrestling is hawt.

[with apologies to all women, ever, for making a joke at your expense]

⬐ jamesbritt

We need more talks by people who failed.

I have to believe that many people have done "the same thing" as Paul Graham, 37 Signals, and other successful people, and still gone nowhere.

I'm skeptical that people are really good at recognizing everything that they have done and the influence, good or bad, it had on their success, such that it ports well to other people and situations.

Folks probably cannot do "the same thing" as other people, because these other people cannot themselves accurately tell you what they really did, rather what they ended up deciding in retrospect was important to recall.

⬐ dennykmiu

There is not much that you can learned from people who failed, neither.

I think PB's comment is still the best, "Advice = Limited Life Experience + Overgeneralization".

However, what I learned is that if I accept that there is limitation to other people's advise, I would still like to hear from them in order to help me make my own decision and according to my own circumstances.

My experience with startups is that it always come down to impedance match. Having an academic background in mechanics, what I learned is that condition for perfect impedance match is when system is at resonance. The opposite of resonance is dissonance. In my previous career, I had discovered that dissonance is in fact a resonance, but it is a resonance of a sub-structure when someone has put an artificial constraint on the sensory point (such that there is no signal).

In some way, that's how startups work. Just because you fail doesn't mean that the rest of the world has failed. In fact, they might very well have succeeded but somehow you just weren't part of that success. So our job is make sure that we have as perfect as an impedance match with the rest of the world as possible, so that we are part of the resonance and not part of the dissonance.

This sounds very theoretical. But it is not. It is really about paying attention to others in your eco-system (VC's, customers, co-Founders, channel partners, etc.) and make sure that you are part of their success. Specifically in this conversation thread, we are talking about starting startups with VC money or through bootstrapping. I never felt that it is a religious question. Either way will lead to success and either way can lead to failure.

But as entrepreneurs, our job is to figure what VC's bring to the party and if we take VC money, how we could be part of their success. If we don't take money from VC's, how we could still be successful nevertheless.

I tried to organize my experience and my thoughts in my book-in-progess (http://www.StartupForLess.org).

⬐ dhs

<blockquote>"[O]ur job is make sure that we have as perfect as an impedance match with the rest of the world as possible, so that we are part of the resonance and not part of the dissonance."</blockquote>

As a starting point, this analogy seems useful to me, but I believe that when probing further, more complexity often shows up. Various stakeholders might have different impedances; e.g. your investors might resonate with you on a different frequency than your customers do. There can be many mismatches like that, and I don't see how I could possibly foresee them all while I'm building in order to prevent them upfront.

Another aspect: paradigm shifts in Thomas Kuhn's sense seem to <i>require</i> dissonance. After all, how can you make a radically innovative product if you're in perfect resonance with "the rest of the world"?

To some engineers, "Make something people want" might seem like a less precise directive than "Match impedances", but it might actually be more useful when getting up in the morning thinking of what to do today.

⬐ dennykmiu

Recently, I talked about how "Entrepreneurship is a deep desire to create and destroy at the same time." So clearly we have to be in dissonance with some and resonance with others.

http://foundread.com/2008/04/18/why-you-must-embrace-rejecti...

But more importantly, to follow up on your comment. The question really is about "making something people want". We all know that this is a necessary condition but is it also sufficient. In the old days, it would take a lot more than that to succeed (so it was not sufficient). But time has changed. I believe today under certain constraints, it can actually be both. In the following, I talked about "narrowcasting" and "entre-sumers" which are the corner stones for such paradigm shift.

http://foundread.com/2008/04/11/to-yc-or-to-vc-that-is-my-qu...

⬐ None

None

⬐ hugh

Exactly. My favourite slide that I saw at Startup School was Paul Bucheit's one that said "Advice = Limited Life Experience + Overgeneralization", since it was a great antidote to all the other talks.

If you listen to the 37signals guys, they're going to tell you the best way to get rich is to do pretty much what they're doing. If you listen to PG, he's going to tell you the best way to get rich is to do pretty much what he did. Both business models are valid, and they both work. If you're thinking of starting a business, you should keep both models (and several others) in mind and pick the one that best suits your situation, your needs, your ambitions, your available funding and your product.

Of course, that doesn't mean that it's useless to sit around and discuss the upsides and downsides of various business models -- that's actually a very useful discussion. But it is silly to argue that one is better overall.

⬐ ojbyrne

Having a fairly unhealthy obsession with entrepreneurship, and having actually read some of the research, rather than generalizing from my own experience, there is one basic reason why VC funding works better than bootstrapping. That is that small companies (less than roughly a million $ in revenue) are much more likely to be hurt by random events - key employees leaving, acts of god, macroeconomic events, etc. Getting big isn't just about making millions, it's about increasing the chances of survival. And when you hear a bootstrapped company talking about their path as the only way to go, just repeat the words "survivorship bias" to yourself.

⬐ dennykmiu

I agree. My only input is that I believe entrepreneurship is about wealth creation.

One can make the argument that if we make money for VC's, then we make money for ourselves. I think there are plenty of examples (especially in the Silicon Valley) where this is true. That's the "a small slice of a large pie" school of thoughts. The other side of the same argument is that if you bootstrap your company, then you are on your own and the world conspires against you. So at best you have "a large slice of a small pie".

I think these are false choices. My own experience (I had two startups, one of each) is that bootstrapping is not a lifestyle but a tactic in wealth creation.

I believe the speakers at Startup School are all in agreement that the world has changed and that it is possible to build a meaningful company with sustainable revenues by bootstrapping. But bootstrapping does not mean that you don't take VC money, just not for R&D.

When you have a working product and a workable business model, then you can go out for VC money, but now as "working" capital. And if you can take it further and actually become profitable, trust me, VC's will be kicking down your doors wanting to buy a piece of the action.

I enjoyed the Startup School presentations very much, especially that of PG, PB & DHH and the following is my takeaway ...

“Make something people want … don’t ignore but try to understand [people’s] advise … listen [mainly] to yourself … don’t worry too much about money … the secret to making money online … is to ask for it.”

I believe they are arguing that the optimal solution might be "a medium slice of a medium pie". As one of the commenter has stated, "getting the bus back in the middle of the road where it belongs".