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Comment by t222 | Hacker News Reader

Asking the real questions.

> That being said... why did you (or if anyone else can chip in) decide to chase funding when you didn't have a business model?

Biggest mistake IMHO. But is quite common these days. Everybody is chasing the unicorn dream.

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It's important to consider that most businesses that start in new areas/ try re-defining the market don't have business models, as they are too small to build a model from. Sure they can bootstrap from one idea to the next until something takes hold, but unless it's a new paradigm that is on the cusp, you're many years (think 5+) from attaining a scalable model. The funding is to be able to hire people, and iterate quickly to expand the business, and find a scalable business model. Trying to build a business model with out a pre-existing business is like trying to solve for x when the right side of the equation is missing. You'll come up with answers, but they're probably wrong once tested.

Startups should not create new markets. Too risky. Do what amazon/google does, just with a twist.

You dig where the gold is.

That's sad and I disagree - category creation is amazing. Though indeed, I've observed that almost all VC's are indeed against this until it's been handed to them on a silver platter, despite what they may believe about themselves and their firms. So the tricky part is how to fund it over time :)

They're people as well, the good ones use it as a way to test the conviction of the founding team. If they can't take a few verbal licks, why would they be able to acquire enough customers to gain traction? Not a perfect test, but it has proven to be a workable process where the ones with the most conviction always get _something_. Sometimes it's too late, and sometimes it doesn't work out. That's life.

Yes, I agree -- many like to believe they are into deep tech and category creation, but even of those, most punt until a lot has been derisked. For deep tech / category creation, by the time the risk is gone, you are into growth phase. Someone like Lux Capital is on a very short list of exceptions.

So do category creation. Just be in the same categories that are being created by the big 4.

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