I disagree. There is not a one-size-fits all way to start a business. Some businesses need big customers such as the cathedral example. But other businesses -- the ones Paul Graham likes to write about -- productize their service, and the product is an investment. If no one wants the product, the investment was lost, but if you did it right, the cost was minimal. And usually you can re-use what you built and pivot into something else.
The great thing about this industry is that so much is virtual. You can now work from anywhere, at different times, and still get things done, if your tools are good: Skype, Google Docs, Mercurial, Redmine, what have you.
Things can get prototyped quickly on a small budget. You can launch your MVP and iterate until you achieve decent growth through viral channels. You can get advertising to offset your hosting costs, or do something more interesting like freemium. You may license your tech or sell it to bigger players. This is the essence of the free model.
Nothing wrong with this. It's just a bigger risk and bigger reward.
Not to mention that you can now sell on app stores, and make $$$ for your company.
The author isn't saying that you need a big customer, just that you need a customer. Once you identify a possible customer, the boot strap approach should be used to get your product up and running. Just make sure that the customer for your product is more than just you.
The internet also provides a false sense of security, due to the large level of feedback. You may incorrectly associate users with customers, developing a product that meets their demands, but does not meet the demands of the people who actually purchase.
Well, I don't mean to oversubscribe to the whole 'revenue is a feature' spiel by Twitter executives a few years ago, but honestly, if you are OK with taking VC funding, then getting a lot of users who love your product and engage with it on a regular basis is the most important thing. Because if you have millions of dollars to spend and millions of users using your site, you are probably not going to run out of money, and you can try things until you become profitable. At any point, you personally will have shares worth a lot.
David Heisenmeier Hanson (did I spell that right) proposed the opposite -- build your business with a revenue model right from the start, like a brick-and-mortar shop, and there's a lot to that as well. But there is not just One True Way. You can select from winning business strategies from both the free and paid camps.
Actually my personal advice would be to make a simple venture that doesn't fail as your first business, and give away as much equity as you need to investors to make sure your company has the best chance of succeeding. Even if you wind up walking away with 10% of the company in 2 years, plus a few million in cash, you'll have connections, a track record, a reputation, and MONEY. And you will be able to own 100% of your next projects if you so want to. Remember, this isn't your last idea.
Having said that, even though this is my advice, I have not followed it myself. I seem to be executing this big vision for the last couple years, and it's all coming together. I seem to be more along the lines of Steve Jobs in that I am trying to create something of lasting value for the entire world... and the little things just get in the way.
The great thing about this industry is that so much is virtual. You can now work from anywhere, at different times, and still get things done, if your tools are good: Skype, Google Docs, Mercurial, Redmine, what have you.
Things can get prototyped quickly on a small budget. You can launch your MVP and iterate until you achieve decent growth through viral channels. You can get advertising to offset your hosting costs, or do something more interesting like freemium. You may license your tech or sell it to bigger players. This is the essence of the free model.
Nothing wrong with this. It's just a bigger risk and bigger reward.
Not to mention that you can now sell on app stores, and make $$$ for your company.