Starter Story - R.I.P. good times

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Here are this week's stories, enjoy!

R.I.P. good times

This week the renowned accelerator Y Combinator sent a letter to startup founders, and its message is rather pessimistic: fundraising is going to be hard. Similar to the one published by the VC firm Sequoia in 2008.

With tech stocks plummeting, hedge funds and venture capital firms will minimize the risk in their investments. Moving away from high-risk bets like Web3, crypto, and deep tech; embracing safer investments.

These times of crisis in the markets will lead to even more crisis for startups that need to raise money to stay alive... but there is a silver lining: bootstrapped companies will survive!

If you’re planning on bootstrapping, then a recession is arguably the best time to be building a business. You’ll have less competition, more access to cheaper talent, and you won’t be distracted by your competitors raising millions (and have a worse product).

What they don’t tell you: Raising funds is not necessary to build a successful company. Apple didn’t need money from investors! Jobs sold his car and Wozniak a computer to buy supplies.

Most of the businesses we cover never raised any funds. Like these brothers (21 and 15 years old) who built a $200K/year business (95% profits) with zero marketing spent. 

And there are more:

• This $12M/year online store
• These $180K/year online greeting cards
• This $60M/year payroll solution
• This $1.5M/year business that flips websites
• This $1.8M/year UX testing platform
•  

By the numbers:

• 0.05% -> of startups raise money from venture capital
• 1/3 -> of small businesses start with less than $5,000
• 250+ -> case studies of successful bootstrapped businesses

Our take:

With almost 100% of startup news dedicated to investment deals, it’s important to emphasize that raising millions is the exception, not the norm. 

Most businesses get started with whatever funds the founders can put together. It really doesn’t need to be a huge amount, there are lots of business ideas you can start with less than $1,000.

If you can’t raise funds, don’t get discouraged. Be creative. There are always cheaper solutions that will help you take the first steps and start generating revenue.

Quick hitters

(1) This founder makes $100K/year cuddling people. This proves that no business idea is a bad idea. You just need to find a target market and provide a valuable solution. 

Unconventional businesses can be very lucrative (and they often have lower competition): This sleep coach makes $120K/year, this axe-throwing business generates $840K/year, and this $200K/year knife-sharpening service.

(2) This solo founder pockets $192K/year. One of the greatest things about internet businesses is that you can generate a lot of revenue with a small number of employees - or even zero.

More solo founders have built huge businesses by themselves: a $300K/year swimsuits brand, a $102K/year website, or this founder that makes $500K/year creating content.

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The life-changing industry of tidying up

This founder makes $96K/year organizing closets and pantries.

The business of decluttering lifes is a $12 billion industry. Definitely on the rise as a trendy business opportunity.

Even Netflix has produced several reality shows following professional organizers.

I love an industry that has such weirdly specific opportunities as making $8K/month setting up CRM for professional organizers.

Overall, I’d say if you’re a person obsessed with organizing, there is a world of business opportunities for you.

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One last thing...

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P.S. Again, a huge thank you to Klaviyo - our sponsor at Starter Story. Try Klaviyo!