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Startup vs business  

The Working Software blog posts this article responding to Mark Suster's original post yesterday, as well as to Mark Ingram's reply, which essentially made the same point I did at the time (i.e. you can grow into the role, you don't have to be there from day one).

Quite rightly, they point out that a great way to fund your startup ideas is through a services business, with product development being done N days a week, whatever you can afford. "Fund yourself through invoices, not investments."

There's this term in the startup world, "runway". It refers to how much time you have before you run out of money, ie. how much time you have in which to build your product and make it profitable.

Well guess what: if you have a services business you can structure your billing so that you have 2 days out of every week to work on your product.

Of course, it will then take 2.5 times longer to build your product than it would have if you'd been focusing on it full time. Say you had initially planned to launch an MVP in 3 months. That means that, instead, you'll be launching in 7.5 months. BIG DEAL!

All interesting points, but they are over-simplifications. There are many factors that go into deciding the right kind of financial structure for a new company. In many cases, selling services is a great way to fund yourself. In many others, it is a death toll that will kill your product. Yes, sometimes the extra few months is a big deal. Sometimes the extra distraction is a big deal. And it also depends on who is working on the product. Some people can only focus properly in a sink-or-swim situation.

Buyer beware. The advice presented in Working Software's article lacks context. Be sure to think about the specifics of your situation, and ask for advice from more experienced entrepreneurs, before deciding on whether to fund your idea through services or otherwise.

Update: The guys at Decal have posted a response, with more context.

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