The nature of tech startups and product launches
Tags: startup, vc, solopreneur, product
Published: 2023-11-24 06:24:29


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## You pretty much have two options

You can either bootstrap a project together in true Indie Hacker fashion, or you can raise money and grow and monetize later. Each have their own drawbacks, and I intend to weigh in on my experience with the two.

## Could be good, could be bad

I am here to say that companies in the same industry can be run very differently and my experience with VC funded tech startups is not all encompassing; it is, however, highlighting of what can go wrong if incentives are misaligned. 

Take us back to August 2021, and crypto is sitting high. VC's are backing anybody with some smart contract code, and the demand for engineers in the crypto space was high. That was my ticket in, and little old me dropped out thinking this was it. I had made it, a real life software engineer. I was working on a small team building out an NFT based social application, and it was one of the most fun times of my career so far. But once the investors didn't see a way they were going to make their money back quickly, we were forced to pivot, launch features that didn't really make sense, and subsequently lose a good chunk of our user base because proper communication channels didn't exist between product team and investors to establish a vision. 6 months later, the company that had hired me seized to be, along with everyone's crypto gains. 

Now, this example had other factors playing a role in the company's demise, not just the fact that it was VC backed. But it was a learning lesson for me; Don't work at a small company where the operational leaders vision and the investors vision don't align. It's just not going to work out in the long run. This led me into my next phase of product engineering.

## Bootstrapping, Indie Hacking, Solopreneur 

I feel like this had been a thing for a little while, but honestly since AI and the availability of AI tooling to the general population, the scope of what you can build has expanded greatly. The benefits of this are large in that, especially if you are a solopreneur, you can direct the company or product however you'd like. The trade-off is that you learn to wear many hats. You can become decent at a lot of things; copywriting, basic logo design, color palettes, typography, back end dev skills, terms and conditions, basic photo editing, social media marketing, and the list goes on. You extend yourself in different directions and it takes a certain type of human to be able to manage this effectively to produce results.

The problem we ran into earlier won't take place in this scenario. You don't have investors, you prioritize profit first, and you get an MVP shipped as quickly and cheaply as possible. Iterate based on user feedback and pivot as needed. If you are actively involved in the community on IndieHackers and Twitter, then you should have a good pulse on the market. This allows iteration cycles to be frequent and user centric, it's key to the product lifecycle after intial launch. With investors CAN come beaurocracy, and that slows down innovation. This all leads me into my next point: 

## What are your goals?

What's your North Star? What are you looking to accomplish? How do you want to live your life?

Life at a fast paced startup with access to capital is dramatically different than life as a solopreneur doing 10k in MRR. It's dramatically the same, but what and who you have to deal with during those times changes. You probably wear many hats in both situations, but who do you need to appease?

Is it just your users? Is it just make enough money to support yourself? Or do you now need to keep your investors happy?

The first two I find are pretty frictionless to deal with. If I am launching a product, then my user base is my lifeline and I am happy to appease them. They also work synergistically in that by making my user base happy, I tend to make enough money to support myself. These two goals align themselves, and therefore with me.

Needing to appease investors is a different story. That could look like launching features you do not want to or are not ready, which means added pressure to build things you might not want to, which can lead to a deterioration of the original vision. 

To sum it all up, if you want to be part of a fast growing startup that has access to capital and is looking to grow and scale before reaching profitability, then VC funded startups are great.

If you are looking to maximize your life for freedom of choice, then go the indie hacker route. I can say that I have been exposed to both worlds and although my solopreneur journey has just started, the mindset shift and mobility that comes along with it has been freeing. 

## Choose Wisely

Once you sign an agreement, it's done. If someone else now owns 30% of your company, your less free to do whatever it is you would like to do. 

With that being said, it's better to own 70% of something then 100% of nothing. Their are times where raising money for growth purposes makes a ton of sense. Sure you might be profitable and can wait 10 months until you have enough cash stacked away to invest into scaling, but what will change in that 10 months? What does the market look like? What have your competitors been up to? Raising money can give you the ability to scale today.

Bootstrapping is also a great way to work your way up to the point of needing to raise money. Creating an MVP, getting it out to users, and having some sort of market validation can not only help you get the attention of investors, but also gives you more room for negotiations in retaining equity. 

At the end of the day, find what works for you. Figure out which structure allows you to feel fulfilled with your work, and embrace it.