Waikit Lau: My advice is whether you’re a tech guy or business guy, find your soulmate in some place in business. If you are a business guy, find your counterpart on the tech side. If you’re a tech guy, find your counterpart in business. To me, you just need one other co-founder. This is where your past experience comes into play. Who have you worked well with that you can rely on? That’s really important.
There are two reasons why startups don’t make it. Number one is, they run out of money. Number two, is the founders give up. A lot of times, the root cause of founders giving up is that the founders just don’t get along. That’s really important. You’re going to spend more time with your co-founder than your spouse. It’s non-deterministic. Invest time in going out and networking. Meet people. Spend a few months working with people who excite you and see how that pans out. It’s important to test things out.
Sramana Mitra: I would make one comment. We are seeing a very big uptick in solo founders getting to a million in revenue. It’s typically not the kinds of companies that you described in your portfolio. These are not the fat startups’ style. They tend to be coming from the lean startup area. It’s an unusually prolific time for solo entrepreneurs as well.
With very little money and using a bunch of freelancers, you can actually put together companies these days that will get you to a million a year. One of our case studies that I’ve always loved is a company called Fine Art America. It’s a company that had just three people and they were doing $5 million a year, which is an unbelievable level of scaling.
Waikit Lau: These are my favorite kind of companies. This is why I tell people that raising money shouldn’t be the first choice. The best kind of financing is from your customers. Why do you want to sell pieces of your company if you don’t have to? I’ll give you another example. There are so many open-source offerings today that you can scale and build a lot of stuff with just a limited number of people.
There’s a company called BuiltWith. It’s by a gentleman named Gary Brewer. To me, he’s the extreme classical case. One guy built this business over a period of 10 years. I believe his run rate right now is $12 million. My guess is that his stuff is so automated that he works like four hours a day. To me, once you get a company to that stage, that’s the ideal. Then if you want to raise money, you control the cards. If you want to keep it a lifestyle business that justs spins off cash, you can do that.
Sramana Mitra: In the One Million by One Million program, we are completely inclusive of those companies that want to build and bootstrap getting to $1 million to $5 million range. You don’t have to go from zero to $100 million in five to seven years, which is what VCs are looking for, but you can build successful businesses in other ways. Thank you for your time.