Paul Graham’s essay on Ramen Profitable

This being the last week on the year 2011, I am pretty much in a GTD mode – read most of what my “Instapaper” account and Google reader have as notes and bookmarked items; publish more than half a dozen half baked posts across 3 blogs; list down the 3 resolutions (I am closing in on 2, almost, already), etc.

While I was reading an interesting essay by Paul Graham, I was deeply touched by these 2 insights;

At any given time there tends to be one problem that’s the most urgent for a startup. This is what you think about as you fall asleep at night and when you take a shower in the morning. And when you start raising money, that becomes the problem you think about. You only take one shower in the morning, and if you’re thinking about investors during it, then you’re not thinking about the product.

Whereas if you can choose when you raise money, you can pick a time when you’re not in the middle of something else, and you can probably also insist that the round close fast. You may even be able to avoid having the round occupy your thoughts, if you don’t care whether it closes.

Is there a downside to ramen profitability? Probably the biggest danger is that it might turn you into a consulting firm. Startups have to be product companies, in the sense of making a single thing that everyone uses. The defining quality of startups is that they grow fast, and consulting just can’t scale the way a product can. But it’s pretty easy to make $3000 a month consulting; in fact, that would be a low rate for contract programming. So there could be a temptation to slide into consulting, and telling yourselves you’re a ramen profitable startup, when in fact you’re not a startup at all.

If you’re a startupper or wish to be one, I am sure this would strike some chords. Do shout back!




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