Re:Amazon is buying Eero
by jwr on Monday February 11, 2019 @06:56PM
(#19139734)
I sometimes explain to my customers that a self-funded long-term stable business is more viable than a VC-funded startup. I run a SaaS app for electronic parts inventory and production (https://partsbox.io/). In discussions, I ask customers to imagine which of the possible outcomes of a VC-funded startup would be good for them as customers (hint: none of the possible outcomes are good for customers, with the possible exception of a rare unicorn IPO).
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The problem with this type of business is that the business is typically in a position where the loss of one or two key people will basically kill it. What if you get board and decide to move on with your life?
The bottom line is that a niche product is always going to be at risk regardless of the structure of the business that produces it.
> The bottom line is that a niche product is always going to be at risk regardless of the structure of the business that produces it.
Isn't venture capital pretty much incompatible with niche product businesses? So, if it turns out to be a truly niche product, avoiding VC funding means the customers at least have a chance that it will be long-lasting.
Re:Amazon is buying Eero
by toomuchtodo on Monday February 11, 2019 @08:57PM
(#19140359)
You escrow your code and your customers get it if the business doesn't work out (built into their paid plan/tier). You get to eat and grow the business, their business doesn't stop if you get bored, die, or run out of money.
That’s assuming the customer is capable of sustaining what they bought, which is almost never the case with consumer products like in this case.
In case of a SaaS, it takes just one.
And that's still just a "plan B" for when just selling the business to someone more interested in continuing it doesn't pan out.
There are many, many solutions to that problem. But in general the risk you describe is still smaller than the nearly certain future of VC-funded businesses, which either a) go bankrupt and get shut down, b) get acqui-hired and get shut down, c) get strategically acquired and get shut down or reoganized completely.
If you think about it, your goals as a customer of a business and the goals of a VC investor in that business are not aligned.