So over the last couple weeks, I’ve been talking to VCs and founders who have and haven’t taken VC to learn whether it makes sense for Kinopio. I don’t think it does.
I’m open to the idea of selling ~5-10% equity in Kinopio for 💰 to live a smoother life right now. But the relatively-easy money of VCs has a cost – once you get on the VC ferris wheel 🎡, the primary goal of a business changes:
Before “lets make a great product and sell it to people who love it”
After 🎡 “we need fast growth to raise ever-higher rounds of investment until the company gets acquired, so I never have to work again”
This really clicked for me during a chat with someone who recently took VC:
I like what I’m building, and if it dies it’ll be a shame. But it won’t kill me like it’s killing my baby that I would’ve loved to work on for the next 10+ yrs.
Maybe that’s the healthy approach, almost certainly the smart one – but it’s not mine. I want to work on Kinopio for at least a lifetime.
Built to Die, and Secretive About It
Funding models explain why it’s so hard to rely on software services long-term. Not because of technical problems like crashes, but because they’re often built to die.
Interesting, cool, and nice-to-use tools and platforms come out all the time. But it’s annoying to invest the time in learning and relying on something new only for it to get acquired and sunset, or become crappy in the 🎡 pursuit of growth-at-all-costs.
I’ve found that the best way to predict whether software is made to die is to look at how it’s funded. What’s the company’s business model? How will they make money?
It seems like more and more people are explicitly or intuitively becoming more aware of this. But it’s still rare for businesses to share how they’re funded. Advice I got from multiple founders is that if you raise VC, wait 2-3 years to announce it.
On the other-hand, it’s also not that common for self-sufficient businesses to share their business model either. Maybe they’re afraid of looking small, or maybe they think that people don’t care.
Kind of Like Farming
Two different kinds of farms can grow vegetables. One is a factory farm built for scale, and the other takes the time to grow more expensive but healthier plants without pesticides.
Will everyone appreciate the difference? Of course not, but the latter plants are labelled ‘organic’ to give us the information and the choice, so that those of us who do care can make better decisions.
So maybe we should have ‘organic’ software as well, made by companies that:
- Are not funded in such a way where the primary obligation of the company is to 🎡 chase funding rounds or get acquired (so bootstrapping, crowdfunding, grants, and angel investment are okay)
- Have a clear pricing page
- Disclose their sources of funding and sources of revenue
And, if you are making organic software, please proudly tell the world because we want to know you’re making something we can rely on.
p.s. I know that software terms like bootstrapped and indie also exist. But these are vaguely defined (is angel investment okay? is having staff okay?), and predominantly speak to founders, instead of to why regular people should care.
p.p.s Thanks to everyone who graciously took the time to talk to me about funding. And special thanks to Aneesha for editing this.