You don't get to just 'decide' if your fledgling business is a potential unicorn or will just be a lifestyle SaaS business. It's a product of your idea/technology, the size of the market, competitive pressures, and your early traction.
It's more like this: You wake up and realize that -- while it's still early -- the thing you started has major potential; but you need a lot of capital to seize the opportunity. So you realize that going the VC route is likely your best bet. And that if you're doing the VC route, getting into YC is the best possible start.
If instead you wake up and realize your TAM is probably <$100M, your tech isn't anything particularly novel, and your path to a 'good life' is fairly clear if you can just organically grow from there - great, don't go the VC route.
But this idea that you're trying to discover treasure in a field or some bullshit is just bad. The better analogy is - you have a patch of land. You can slightly change that patch of land but it's mostly fixed. You could slowly farm that land and make a good living. Or you could risk it all, dig everything up in a search for oil, and maybe strike it big. If you fail, the land is worthless. Now, today you realize you have strong indications and evidence that there is A LOT of oil down there. So you go talk to some money guys, get funding for the exploration, and you're off.
But the guy who has zero evidence of oil, zero reasons for thinking it's down there, and is happy farming anyways - OF COURSE is better off just going the farm route.
Just to continue my metaphor (because - why not?) -
So you suspect you may have oil hiding deep in your property, and while you know your land REALLY well, you're not totally sure how to go about validating that its there; or even if you could validate it, how to proceed best.
You hear there is a very friendly and experienced outfit called YC that will help you (a) quickly figure out if there's oil, and (b) if there might be oil, set you up for success with the bigger money that you'll need to extract the oil. This YC firm is basically geared towards helping someone like you figure this out quickly. And actually, YC will give you $ to explore this very thing. In exchange, they will own part of your land (a small fraction).
If it turns out there isn't oil after all - not the end of the world. You'll go back to farming, and at least you won't be wondering if you should have explored the oil thing more. YC won't care much about you anymore since they are in the business of owning a small % of the land that strikes BIG oil. But they also won't be a nuisance.
If it turns out there IS oil under there, then YC will help you navigate the big oil money people to help you get it out faster.
Metaphors are never perfect but I'm having fun with this one. :)
Ok so let's talk about your land itself. First time entrepreneurs just kind of randomly end up on a plot of land, due to their prior experience or friends or personal challenges they want to solve etc. Maybe that will happen to have oil under it or not. Maybe the oil is plentiful and close to the surface, or maybe it's deep and small anyways. But often the choice of your land is kind of happenstance.
Meanwhile, hype-driven 'founders' hear some piece of dubious folk wisdom -- "land that has coniferous trees on it tend to have oil underneath" (akin to 'blockchain is the future!!!1') and go buy the first patch of land with conifers on it. Then struggle and struggle.
In contrast, seasoned entrepreneurs spend a lot more time deciding which plot of land to buy in the first place. They'll pick one that has good indications of having oil underneath, although they still won't know how close to the surface or how large the patch might be. They'll conduct surveys and other studies prior to really buying the land. Once they feel like the odds are in their favour, they'll buy the land and start the process of proving there's oil.
> You don't get to just 'decide' if your fledgling business is a potential unicorn or will just be a lifestyle SaaS business. It's a product of your idea/technology, the size of the market, competitive pressures, and your early traction.
Sure you do. Of course there are types of businesses that only succeed if they're a unicorn, but for the most part, you can decide how much business you want to do. I know we're talking about software, but I deal with lots of restaurants in my life. Say you start a restaurant, and after the initial opening craziness, you see that's it's a sustainable business with lots of loyal customers that like your food. There are people who are going to tell you to open another location, to franchise it out. You'll need investors to do that. It may or may not make you more money. You might think your product has the potential to be the next big chain. You also get the choice whether you want to do that or not.
If you have a good product that people want to pay for, you more than likely will have the choice to decide whether you want to scale the business up larger.
This is a good analogy to make, but I'd add that in this analogy, the majority of land has oil underneath it, and the majority of that oil can be reached without capital for exploration.
Fintech, bio, etc. are exceptions, but generally if you have a large TAM, you can still choose to take VC funding or not (you bootstrap at the risk of someone else taking funding to grow more quickly and capture the market).
You don't get to just 'decide' if your fledgling business is a potential unicorn or will just be a lifestyle SaaS business. It's a product of your idea/technology, the size of the market, competitive pressures, and your early traction.
It's more like this: You wake up and realize that -- while it's still early -- the thing you started has major potential; but you need a lot of capital to seize the opportunity. So you realize that going the VC route is likely your best bet. And that if you're doing the VC route, getting into YC is the best possible start.
If instead you wake up and realize your TAM is probably <$100M, your tech isn't anything particularly novel, and your path to a 'good life' is fairly clear if you can just organically grow from there - great, don't go the VC route.
But this idea that you're trying to discover treasure in a field or some bullshit is just bad. The better analogy is - you have a patch of land. You can slightly change that patch of land but it's mostly fixed. You could slowly farm that land and make a good living. Or you could risk it all, dig everything up in a search for oil, and maybe strike it big. If you fail, the land is worthless. Now, today you realize you have strong indications and evidence that there is A LOT of oil down there. So you go talk to some money guys, get funding for the exploration, and you're off.
But the guy who has zero evidence of oil, zero reasons for thinking it's down there, and is happy farming anyways - OF COURSE is better off just going the farm route.