Ask HN: Invest in your own bootstrapped company or in the stock market?
Let's say you are a struggling founder which has been at the startup game for years.
You are trying to get a product business off the ground. It has been an uphill battle due to lack of funding, necessary to scale the business. Can't raise money due to the industry and business not fitting the typical VC blueprint. So you continue to bootstrap.
You are paying the bills with consulting. Maybe you have some rental income. You need to plug the retirement hole.
Do you invest in your product business and continue adding to the risk or do you just buy ETFs and hold?
14 comments
[ 4.5 ms ] story [ 25.3 ms ] threadYou can also "yes and" this. Invest in the startup, by some investments, etc. Multiple streams of returns that are uncorrelated is the holy grail formula for investing [1].
[1] https://www.youtube.com/watch?v=Nu4lHaSh7D4
It sounds like you believe that lack of funding is the root cause of your inability to grow/scale. Almost always, it is something else first and not that.
If you have to ask this question, you probably know the answer already. Go invest in the other stuff and perhaps reconsider what you are doing with this product/business.
In my industry after many years and carefully watching competitors I have come to the conclusion that it's "pay to play". If you want customers to see your product and be aware that you exist and that they can buy from you, you have to pay to build the brand and market the brand. As engineers we are focused on building a product. I've done that a few times over. People like the product once they know it exists and what it can do for them. But they don't know about it because I can't invest in marketing. I don't have that 200-300K to blow. My competitors do. They can afford it. Most of them were succesfull in other industries before they got into this one. Or they come from rich families.
It's easy to dismiss the power of marketing and branding and the importance of investing in that, as pure tech founders.
It is even easier to think that your product is great and the problem is marketing. If the product is great, the marketing is really, really cheap. Your product probably isn't as good as you might think.