If it costs $40 to acquire a new customer, and you expect a customer to stick around for long enough to spend $90 then it's totally worth doing that, but you need $40 now to make 90$ over some period of time.
Raising massive lump sums of money is about VALUATION. You have been led to believe this is the only way to go about building a software business like this.
It's all a major silkscreen for the colder simpler goal of generating a lot of eventual wealth for a specific cast of people.
Again, no shame or emotion here. It's just how business is done in this world.
This works for some but not all business ventures.
There's a reason corporations were invented in the Age of Sail. If you build 5% of a ship, you can't sail to the New World and bring back 5% of the resources. You just sink in the harbor.
(The moral implications of relating modern VC-invested corporations to rapacious European conquests of the already-inhabited-thank-you-very-much New World is not lost on me.)
I believe there are healthy ways to start up a business that has startup costs too large to bootstrap. I agree with you that VCs are often not it.
The only consumer company that I can think of that went from “initial value proposition” to “not sucking after it went public” is BackBlaze. None of their new offerings has taken away from their initial “unlimited cheap backup” offering.
There's a big reason VC and angels were and largely continue to be only game in town. No one understands or would risk loaning millions of dollars on a high risk business aiming for marginal incremental growth.
VC's and angels wouldn't be interested in that, either.
You are completely missing the point of venture capital here.
Of course, bootstrapping exists, but I can't point to any similar companies to Fly which have achieved standout success in an area like this with a model like that.
> Raising massive lump sums of money is about VALUATION.
Valuation is merely a side effect in pursuit of market dominance or hopefully establishing a niche monopoly.
Who does this allocation?
