Not a Startup by Szymon Janiak

The post was originally published in Polish on Szymon’s LinkedIn profile. Szymon kindly agreed to republish what we think is of great value to our readers.

‘We are not and we do not want to be a start-up. For us, this culture seems frivolous and superficial. As a young technology company, our goal is to execute contracts and make money, not to constantly solicit funds or run around conferences.’

I heard these words in one conversation, and they stuck in my memory. It’s quite common to see startups looking to grow without investors and distancing themselves from the ‘ecosystem’ and traditional models. Many point out that the startup environment has gone broken, more like a lifestyle than a serious business. They don’t want to identify with the culture of dreamers and focus on achieving profitability instead. They plan to sell the company for good money, but their approach to this goal is different. They are based on bootstrapping, i.e. using their own funds, and if they use debts, they don’t consider investors at the beginning. They want to have full control over their business and assume responsibility for its successes and failures.

For me as an investor, this is curious. The boom of funds in Poland in recent years has given birth to a counterculture that promotes other values. People with such views have not experienced failure with funds, but they are experienced entrepreneurs who can earn money on their own, without the need for external capital. I believe it’s a healthy approach that shows that running a tech company doesn’t require you to reach for VC immediately. One can act differently, and funds should be a tool to be used in justified cases, when the growth of the company requires it.

It is also worth noting that priorities often get lost. Instead of building a solid financial foundation, the image of fun for someone else’s money is created. Social gatherings and other perks can lead to selfishness rather than the actual development of the business. As a result, colossi with weak foundations are created, which is ‘not my world’, as one entrepreneur put it.

Everyone should decide for themselves how they run their own business. External capital is not a must – it is a choice.

The comment section had to add:

Not a counterculture, just a commonsense approach. Most companies don’t carry out missions to Mars and won’t become the next Uber, so the approach is based on:

• Let’s get customers 

• Let’s become profitable 

It gives them an infinite runway and optionality as to the choice of further path. It was the hype that was unleashed by the media and free-flowing funds. After all, we have portals like ‘Mamstartup’ (I have a startup) because ‘I have customers and they pay me’ isn’t as catchy. 

Until now, no one paid attention to those who just did their own thing and achieved results. After all, what kind of session at a conference would it be: ‘We don’t have an office in Q22, but we have revenue’?

– Tomasz Onyszko, CTO at Predica Group

I heard once from WP2 Investments that you don’t always have to look for a unicorn and a cockroach can also be attractive.

– Damian Góral, Founder and CEO at Sales Agency, Professor at Kozminski University

As usual, coffee doesn’t exclude tea. It all depends on the context and situation of the company – that much I can say from practical experience. The way I see it, the discussion is more about an ‘culture of artifice and corruption.’ Perhaps this should be separated from a serious approach to business. Business financing and potential exit strategies are very important and long-term levers, and at the same time very specific to the company/founder and difficult to generalize.

– Łukasz Bystrzynski, Managing International Business Development Partner at CashDirector

I will also add about the argument of quick scaling with external funds. This is a good argument for someone who… wants to scale. In the beginning, it’s often a bit of an ego, isn’t it? 

I have the impression that novice entrepreneurs often want to scale because for them it signifies honor, ego and success. 

After the first time, the perspective changes. 

I had one stage of rapid growth and after this adventure I recently deliberately stopped another stage of rapid growth and rejected good proposals because… I wasn’t ready for it, organizationally and mentally

Scaling and rapid growth, especially for inexperienced people = burning funds like crazy + the beauty of the process is spoiled because the person is under stress + throwing out literally EVERY possible defect of the organization. If something didn’t work well before and you couldn’t see it, then with super growth it will bring you to a car crash in a week. 

Fast growth has no mercy and it is a rollercoaster ride: you risk getting left with growth, unprofitability, and upset nerves. 

– Klaudyna Hebda, Business Owner at Klaudyna Hebda Nature

Bootstrapping is probably the most sensible approach today. With our technological capabilities, we can roll out a tech product in MVP within 24-48-72 hours, because we have no-code, to prove that it works and gain several customers. It has 10x the value of acquiring VC capital.

– Bartlomiej Kubik, Founder and CEO at Dysyzyt