10 Million Funding vs An Organically Grown Company

All over LinkedIn and the general internet I see posts about how companies receive millions in funding. New companies with no product, no clients, and no business experience. Instead they possess a handful of hope and a bank full of millions of dollars to burn through.

These hopeful business owners, in particular in the software industry, aspire to create a unicorn software businesses. They dream to create a piece of software that people use globally. A subscription based SaaS model where customers pay monthly for sub-par services while business owners sit on a beach in Mexico lapping up the sun.

I picture a company like a tree. Every tree starts as a seed. Then it grows organically with the right level of nurture, water, sunlight, favourable weather, and optimal location.

From a seed to a seedling, from a seedling to a sapling, from a sapling to tree, and from a tree to a mature and established tree.

No, it’s not impossible to grow a software business organically, I myself started my software business from the ground up. Zero clients, zero word of mouth, zero funding, zero software, zero everything.

With a slow organic growth it provides the opportunity to learn every facet of the business. Skills that over time a business owner may hire an employee to fulfil. The skills I learnt include sales, negotiating, law, bookkeeping, human resources, accounting, marketing, and more.

Organic growth means a company earned every dollar, dollar for dollar. It forces a business owner to either improve and learn or walk away and quit.

Instead, a rag tag team from prestigious software companies such as Uber, Facebook, Google, and others leave their jobs, start an AI company, receive 10 million dollars from venture capitalists, and call themselves business owners.

No struggle, dollar for dollar. No seed to seedling crap, instead straight to the mature tree. No multidisciplinary skills learnt. Better yet, they pay themselves their top wage with the millions from others.

Would you back the mature tree that grew from a seed over several long enduring years or the mature tree that appeared yesterday?

My favourite author Nassim Taleb popularised in his books a concept called the Lindy Effect. Nassim gives the example that the longer a book remains in publication, the longer it will remain in publication. In other words, the lifetime of something dictates its robustness.

Shortcuts always come with consequences.