Entrepreneur Office Hours - Issue #123
Technology changes, but humans don't
Every major new technology gets described as “revolutionary” and “world changing.” I’m not convinced any of them are actually so impactful. From what I can tell, technology doesn’t change the world. Instead, it tends to “same” the world by helping us do what we’ve always done but in more efficient ways.
The reason for this is because, even though technologies change rapidly, humans change slowly. As a result, every new technology helps humans do more of what we already wanted to be doing. For example, the automobile didn’t create human demand for travel… it made traveling faster. And smartphones didn’t create human demand for connectivity… they just made connectivity easier and more efficient.
I bring this up because, in this week’s episode of Web Masters, I had one of my favorite conversations ever, and we discussed the relationship between humans and technology. The guest is an entrepreneur named James Hong who founded HOTorNOT. HOTorNOT was an enormously popular website where people literally rated the attractiveness of other people.
If you haven’t listened to Web Masters in a while (or ever!), give this one a try… especially if you remember HOTorNOT. It’s a great example of how, even as technology advances, people stay the same. By that I mean humans have been judging the attractiveness of other humans since the beginning of humanity, and, even with a “revolutionary” new technology like the Internet, we still ended up using it to check out the hotness of other people.
The same is true for whatever you’re building. Always remember that the technology you’re developing isn’t what matters. What matters are the people you’re serving. They haven’t changed in thousands of years, and whatever you’re building is really just a better way of helping them do something they already wanted to be doing.
Over-eager entrepreneurs have a tendency to do things before they’re necessary. When you do, you risk wasting a lot of time and resources.
The "4 or 5" Who Helped People Figure Out Their Attractiveness
If you want an honest answer about how attractive you are, you can't ask your friends. But you could ask the website HOTorNOT. And that, according to its founder, James Hong, is why it was so popular.
Hear the story on the new episode of Web Masters:
Listen now on:
…or search “Web Masters” wherever you listen to your favorite podcasts.
FROM THE ARCHIVES…
The younger you are, the more you probably avoid using PowerPoint. But don’t! I resisted for a while, but I eventually figured out why it was the perfect tool for startup pitch decks.
Office Hours Q&A
Hello Dr. Aaron!
I really appreciate all of your advice and incredible articles. I am constantly sharing them with lots of people in my entrepreneurship community.
I was wondering whether you would not mind taking a moment to explain for me your perspectives on whether it’s better to be bootstrapping or take investor money.
As someone who has spent most of his career focused on building venture backed startups, I realize I’m wildly biased on this topic, but I 100% would encourage any new entrepreneur to…
Not what you were expecting, huh? Surely I’d be more inclined to fundraise, etc. But that’s definitely not the case. Fundraising is miserable, and having investors creates tons of difficult work, hassles, and expectations.
I’d much rather build my startup my way and on my timeline. This is possible when you leverage customer revenues to grow and scale at a speed that’s inline with your ability to capture market demand.
But here’s the thing… I bet if you asked a struggling, bootstrapping entrepreneur whether he or she thought going the VC route would be easier, that person would probably tell you fundraising and having investors is much better.
In other words, this is one of those “grass is always greener on the other side” scenarios where, when you’ve raised a lot of capital (and everything that comes with it), you long for a world where you’ve bootstrapped and grown on your own. Similarly, if you’re struggling to grow on your own, you dream about having a flush infusion of someone else’s cash.
A VC style company isn’t inherently better or worse than a bootstrapped company. Nor is a bootstrapped company easier or harder. They’re just different ways of building businesses (and, usually, the entrepreneurs building the different types of businesses will have different goals).
Some types of companies require VC. Some types of companies simply don’t make sense for VC. In those cases, the question of whether bootstrapping or fundraising is a better option is an easy question to answer. However, some companies can go either way. If you find yourself building one of these types of companies – a company that could bootstrap or take investor money – the best choice isn’t entirely clear because each strategy has good aspects and bad aspects. For example, when you don’t take investors, you retain control and have bigger upside if your company is successful. However, by not taking investor money, you also have all the risk.
The best advice I’d give here is to figure out which approach to building a company makes the most sense for the type of company you’re trying to create, the resources you have at your disposal, and, most importantly, what you personally value as an entrepreneur.
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!