While I don't agree with all the points, the best advice in here is:
"But for all that is good and holy, don’t join a startup for the fucking money."
If you're joining or starting a company because you think you're going to buy a yacht and a small island, stop it! Recently I've seen some Founders tweeting things that make me shake my head every day. You're not going to be rich unless you have that once in a lifetime solution no one else is building. That's why it's called, "winning the startup lottery." It's still a fucking lottery. :)
There are thousands of small, private technology businesses worth millions or tens of millions of dollars across the US, that have taken little to no venture capital, and in which the founders have very large equity stakes in their own business.
It does not require the equivalent to winning the lottery to get rich with a technology business. The odds are several magnitudes greater that you'll get rich creating a technology business than playing the powerball.
Being worth $4 million, and having a small business that generates $650,000 per year in profit, is rich.
Getting rich with a start-up in Silicon Valley, given the approach used there, is like playing the lottery. The start-up lottery you're referring to only exists in SV / SF. Nearly everywhere else, the fundamentals of having an operating business still rule - in that world, a lot of people get rich running smaller technology businesses. $50 million or $500 million rich? Nope, $5 million rich. Silicon Valley is mostly all or nothing, and that's what makes good outcomes so relatively rare.
Exactly what I tell my startup friends. I know people who run design consulting firms and pull in $300-500k/year in profits. Some run SEO/SEM marketing agencies and do similar figures. They give themselves generous salaries and own nearly 80-90% of their businesses which, on paper, are worth $4-5M.
That's definitely very, very well-off, if not F-U rich. And it's very "safe", unless your $1M in revenue hinges entirely on one or two clients
It's safe but it's also exponentially more difficult than starting a startup.
The amount of connections one would need to start a business tomorrow generating $500k in annual profits is insurmountable.
Being a successful consulting agency or freelancer is attainable in two ways:
1. Know a lot of people at a lot of very large companies that are willing to throw you a bunch of work.
2. Build up clientele for a very long time making no money until you hit critical mass.
When I was freelancing it was one of the worst experiences of my life, so of course I'm bias. But I want readers to know that there are 2 sides to every coin.
Exponentially more difficult than starting a startup? No shit, all you have to do to start a startup is say you started one and give a vague semblance of the idea.
Thanks for sharing. I've heard numbers like these quoted before with respect to other small or medium sized businesses like franchising a fast-food chain and a question just occurred to me. For the people you know, are the owners' salaries taken before the profits as part of the operating expenses or do the salaries come out of the 300-500k of profits?
Also many successful startup were not the one that came up with original idea, they mostly improved on existing products or better marketed themselves.
Here's what I believe: startups are for "fun" money. For "real" money, you'll do far better doing a traditional business where you're guaranteed a return on investment.
I'm talking about consulting, franchises, etc. You won't hit it out of the ballpark and TechCrunch won't feature you, but you sure as hell will have money in the bank.
What I've realised is that most startups are just traditional businesses, but done with a bit more digital marketing. Selling product, selling services, b2b, etc.
It's only a few startups that are purley technology startups, the majority are actually traditional.
Yes, this is something that makes me scratch my head too. People tend to confuse tech companies with tech-assisted companies.
Microsoft is a tech company; it's business is making and selling technology.
The small eCommerce store that does about $0.5M in revenue using wooCommerce? That's not so much a tech startup as it is a tech-assisted startup. Yet, people continue to confuse the two.
The thinking that you are going to get rich via a startup is a very concrete sign that you are in a bubble. Create a startup because you want to do something that can’t be done in a big company, or because you think it will be fun, but don’t do it for the money.
"But for all that is good and holy, don’t join a startup for the fucking money."
If you're joining or starting a company because you think you're going to buy a yacht and a small island, stop it! Recently I've seen some Founders tweeting things that make me shake my head every day. You're not going to be rich unless you have that once in a lifetime solution no one else is building. That's why it's called, "winning the startup lottery." It's still a fucking lottery. :)