Joel Spolsky On How To Bootstrap a Business

Meredith writes "This is a great interview with Joel Spolsky of Fog Creek Software. Joel talks about the negatives of taking money from venture capitalists, and how the entrepreneurs that don't take money become 'super entrepreneurs,' learning how to make something significant out of nothing. This is a very popular interview among tech entrepreneurs and provides really valuable information for startups."

Confused

[Anonymous Coward]

I am seriously confused. I learned the golden rule as a teenager: He who has the gold, makes the rules.

If your parents are paying for your food and shelter, you do what they say.
If you pay for your own food and shelter, you do whatever you want.

In business, if you get venture capital; the investors have equity in the business.
If your equity capital comes from your own pocket, you take all the risks and reap all the rewards.

In politics, public campaign financing lets all viable candidates compete on equal footing with no ulterior motives.
Without public campaign financing, candidates rely on "donations" (read: bribes), tell you they are interested in alternative energy, yet provide oil companies with record profits and state-sponsored corporate welfare.

In those famous words: "Show me the money!"
Why is it that so many people seem ignorant of this basic premise of how every "civilized" human society operates?

Read something from someone more successful

[Animats]

I'd be more impressed if this were from someone who started up a company that grew. This guy has a little software company with one product, and he's had a little company with one product for, what, ten years now?

For comparison, read The Autodesk File [fourmilab.ch]. Autodesk was started with $60K from the founders, never accepted any venture capital, and had revenue of $1.8 billion last year.

Re:Read something from someone more successful

[Anonymous Coward]

Wishing for mod points. Joel has one piece of poorly written software. And he takes this as license to spout off his mouth like God.

Re:Read something from someone more successful

[jjohnson]

The reason you might want to imitate Spolsky is the nature of his success. He hasn't got a growth company, he's got a massively successful boutique ISV. They've got several products, none of which is particularly hot; but collectively, they sell more than enough, at a high enough price, for him to maintain an office in Manhattan that an architect redesigns every year. He also pays really high salaries and retains all the dot-com benefits so he can hire one or two rockstars (his term) a year, run an internship program, blog, and just generally be the IT celebrity that he wants to be. The company funds largely useless world tours for the launch of his software, which is just a business deductible junket for him. And I bet the code for all his products is *exactly* the way he likes it.

No one will ever use his name in the same sentence as Torvalds or Jobs or Gates. But he's got a pretty sweet lifestyle, and I bet most here would trade their left nut for it.

Re:Read something from someone more successful

[Anonymous Coward]

I guess that was a good troll, because it made it to +5, but it seems kind of weak to me.

One product? Offhand, I can name three [fogcreek.com] separate [fogcreek.com] products [copilot.com] which FogCreek ships.

Doubly so because you're comparing it to AutoDesk, which has ... well, there's AutoCAD. I don't know any others. According to the Wikipedia, the first non-AutoCAD product of mention is Revit, which they bought in 2002, after the company was 20 years old.

FogCreek is only 8 years old. Even AutoDesk wasn't paying $133 million for other companies when they were only 8 years old.

I'm not seeing anything particularly useful in "The Autodesk File". Could you point out what parts of it might be of use to us budding CEOs? I like the parts about how they're stocking up on 8" floppy disks [fourmilab.ch] and looking at porting to C for the 8086 and 68000 [fourmilab.ch]. It's a regular blast from the past, but I don't see anything here that's very useful in building my own company.

Re:Read something from someone more successful

[jjohnson]

Spolsky made enough from Microsoft and Juno that he doesn't need to work. Fog Creek is what he wants to do. I imagine that comes from his non-open-source career--his dream is having his own perfect ISV, rather than contributing to research or open source.

Transcript?

[djcapelis]

I'm really disliking this trend of posting interviews in a video format. Just because you can doesn't mean you should... come on folks.

Anyways, anyone know if this thing has a text version or transcript of some sort with it? :-\

Re:Read something from someone more successful

[Anonymous Coward]

He used to provide a lot of insightful posting on the software industry. These were not, whatsoever, based on his own insights but rather how Microsoft worked internally. As Microsoft was unique in how well it worked and was still the pinical of the industry, it provided a lot of good information for others to copy. If you read his essays about Microsoft now, they seem like good ideas already widely adopted. But back then, they were true gems.

However, if you look at Joel's actual achievements, there's not much to be wow'd by. In fact, he seems less than stellar and ignorable. Thus, his popularity has steadily decreased as he has less to offer. For the last few years, his entries have mostly been advertisements.

Re:Confused

[shenanigans]

I agree. And as a lot of people are now finding out, if you go to the bank to pay for your house, then it's not really your house at all.

Everyone is ignorant until taught otherwise. That is why basic financial sense and responsibility should be taught in school, along with a great deal of other things that are missing. Unfortunately, western schools (it's the same here in Europe) are still geared towards creating industry workers in countries that hardly have any industrial production left.

Re:tradeoff

[coolGuyZak]

The main concern with venture capital isn't losing capital, it's losing control. VCs invest large sums of money into a company, they appreciate large returns on that money. The agreements an entrepreneur enters are usually rather draconian. The preferred stock VC's request include limitations such as veto-power on board decisions, "first dibs" on liquidation funds, multiple seats on the board, etc. VC's also hold a "predatory" mindset; often, they wholly replace your executive staff within the first year of acquisition. Their influence can impose "corporate" values on your company, to the detriment of the environment an entrepreneur previously established. For some businesses, VC is the only way to finance a fledgeling business.

If you're business doesn't need this kind of capital, there are many other options available to you. Loans, angel investors, hedge funds (almost VC for the east coast), family investment, and "winging it". Often, these methods require about the same amount of as attracting VC. The upside: more control. The downside: less capital.

Re:The company you want, vs the most profitable

[eison]

Summary of your post:
Companies with a better image have more people using their software. You spend no money on marketing and enjoy a collegiate atmosphere. Your next step is to get a better image. You're going to get VC and scrap the collegiate atmosphere to do it.

So:
Why do you need the VC to have a marketing budget and a better image? Why not just spend some money on marketing and have somebody (yourself in a suit, an imported gray hair, whatever why should it matter who your customers think is in charge if it makes them happy?) present a polished look to the world so that you can get more customers and write more software?

Nothing particularly magical about the VC money. They might have connections, and can probably recommend a respectable looking gray haired new CEO, but you can find those things without them too.