Well, I mean, an article entitled "How we started a business" could involve how they raised money. Given that this is HackerNews, it's maybe even more likely than not. The term "bootstrapping" precludes that. And "business" could mean anything from a desktop app to a physical t-shirt factory to a copper-mining concern. "SaaS Startup" means something much more specific. And yes, they could have said "... to enough profitability to cover our living expenses," but "ramen profitable" seems more concise in a context (like HN) where the audience knows what it means.

I'm all for calling out buzzwords, but each word here seems to do a decent job of communicating a lot more than "How we started a business."

He isn't criticizing the title, it's just a hot take on how the nature of starting a business has changed.

For the average person, meaning someone getting a business loan or mortgage, this just isn't true. Take a look at historical bank rates. They're much cheaper now than the 80's.

Correct.

https://www.jpmorganchase.com/corporate/About-JPMC/historica...

The 1980s may have been a time when some borrowers had easier time getting credit at all, but it wasn't a time of “cheap cash”.

My recollection of the 80's and 90's was that almost all businesses required a solid chunk of cash to start.

The idea of bootstrapping is only valid in recent 1-2 decades because it is now possible to start businesses without a chunk of cash, thus "bootstrapping".

I'm not convinced bootstrapping existing under another name in the 80s.

For the pedants, I'm not saying it was impossible to start a business in the 80s and 90s without cash, just saying that such a path was rare enough to not have a common name such as "bootstrapping".

In fact, prior to Amazon ec2, even Internet businesses required typically the cash to buy/house a server in a data centre which was often thousands of dollars, and even that was considered incredibly cheap for access to a global market compared to what it used to cost prior to the web.

The definition of bootstrapping includes saving up ones own money to start a business, generally from a previous or other job. Most companies are started that way. Venture is the exception, not the rule.

And prior to EC2 a lot of people either just rented servers (in someone elses colo), or got a leased line and hosted servers in their office. Both were very, very common in the 90's.

>> The definition of bootstrapping includes saving up ones own money to start a business

Or by working a job on the side. I think the "definition" is rather to not take outside capital.

Totally agreed. I did mention "other job", which meant a job on the side.

Sorry, you are associating aws and ec2 with the advent of non capex intensive web hosting or dedicated servers. Prior to ec2 there were plenty of cost effective hosting options beg rackspace, rackshack, softlayer, digitalnation, verio, theplanet, serverbeach, and many many others.

There was pretty cheap competitive web hosting available from 2000+, not just 2006 when ec2 was released.

You are wrong. Many, many engineering companies started without requiring a solid chunk of cash to start.

In Germany it is quite common to start that way even today. Many startup folks consider this old fashioned. But it is the most engaging and valuable way to start a companies. Because then your about skills and providing real value and not for that fast money with a fast exit. You don't want an exit at all. 3 friends of mine started in the 90s a tools and services companies for the automotive world. They are now all 3 retired and moved to company to a trust fund so that no other company can ever own that, so that this company can exists for ever. Compared to the US. Remember DEC, HP, SUN, Silicon Graphics, and alike? All companies got sold at on time to another and basically disappeared with that.

Yes, "bootstrapping" is the old fashioned way in the old fashioned world to start companies.

> In fact, prior to Amazon ec2, even Internet businesses required typically the cash to buy/house a server in a data centre which was often thousands of dollars

You seem to imply that shared servers (shell or web) did not exist prior to AWS?

For the stuff that I was building, we always needed enough control of the server to need our own. Perhaps people were building "real web applications" on shared PHP/CGI hosts but my impression was that sort of thing was used for lightweight websites with a submission form.

I do recall that there was typically shared PHP hosting.

ec-2 changed the game by making complete control over your own server simple, cheap, software controlled.

Shared hosting existing before but the ec2 formula was the one that worked.

I think you may have missed that you could rent servers online for a long time. Dedicated or shared, full control and much cheaper than EC2.

As far as I know EC2 introduced auto scaling, load balancing and spinning up instances in such a lightweight way. Not a revolution but still nice and necessary steps.

You really think business grows so fast that you need instant servers?

Google ran for many years on piles of commodity boards and they were expanding pretty fast...

The amount of marketing hype around cloud services is insane because all the big tech companies have a vested interest in your renting their platforms. It doesn't allow you to do anything you couldn't 15 years ago, just makes it easy.

Just makes it cheaper to get started and automate. But compared to setting up a server and running something on it, modern cloud platforms are about as complex IMO (to do right at least).

True, but it would still take more time/effort/knowledge to spin up your servers on commodity boards.

Plus, the level of resources for configuring EC2-like servers, and Heroku-esque preconfigured servers reduce the barrier to entry pretty significantly.

I think you over estimate how many people were online 20 years ago and what the expectations were.

You could host a reasonably successful web site on a relatively low end server (say, a Sparc 10) off a T1 line (1.5 megabits) and serve a ton of users. They all had crappy connections and were used to waiting.

The percentage of businesses that have explosive growth is very small. Most have gradual growth and can easily be managed by just manual monitoring.

This is just not really true. Shared hosting and leased servers were widely available from dozens of providers and very popular back in 2002 when AWS started. Also, FOSS operating systems were very popular for servers back then as well. Sure, bigger players owned lots of servers they sourced from the bigger vendors, but smaller players and upstarts largely did not (and certainly didn't need to).

You are correct. Somehow my brain transported the launch of EC2 back to around 2000. I _think_ I was conflating it with a similar service that was provided by a company I worked for a the time. Since we were doing on-demand machine provisioning then, I guess over the years my brain has assumed Amazon must have been too. fwiw EC2 wasn't launched as a beta until 2006.

Absolutely not true. I remember getting servers from one of the colo providers in the early 2000's (The Planet, which became EV1 Servers, I think?) This was all available with a credit card, no legal or purchasing department required.

AWS didn't launch until 2006, which was actually pretty late in the internet game. x86 Linux hosting was ubiquitous then. If you're talking Solaris, AIX, and HPUX, you're remembering the late 90's...

You're correct in some ways but, I think, missing a few key points. For roughly 15 years before AWS, inexpensive shared hosting was available.

From a bootstrap perspective, there was little cost difference at the beginning. The main difference was in the middle stage: scaling. After a bit off success it was still possible and practical to scale until you outgrew the ability of a single dedicated server to handle a specific task. Until then, you could grow and scale with little difficulty from a shared server, then dedicated, then shunting functionality to individual dedicated servers, e.g., web sever, database, etc. Yes these cost money, but ig you were bootstrapping then you only got to that point after you'd passed through the nearly free-per-month shared stage and, abd long after revenue flow began.

Scaling beyond that was absolutely way more difficult in terms of tech knowledge and cost. Modern AWS makes that scaling much easier, but the pre-ramen profitable stage was not much if any more expensive.

The key cost that was then and still is the biggest, in my opinion, is opportunity cost. A hundred bucks a month then or now, with or without adjustment for inflation, is nothing compared to the opportunity cost.

As a more general rebuttal of the sentimemt expressed, I'd offer up "started in my garage" businesses of all sorts, then and now. Those whose primary initial input is never cash but sweat equity and grinding out the details and execution of an idea.

Plenty of business started out of a garage in the 80's and earlier, many of them are well known names today like apple. A lot of video game companies grew from bedroom coders. Software could be sold through direct mail order. In the 90's a lot of companies bootstrapped themselves (the term was in existence) by building access apps for businesses or building small bits of custom software for large local business.

If anything it's probably harder to get started today, your competition is worldwide, not just local and customer expect more than a text based terminal app.

Apple wasn't bootstrapped. It had alot of investment dollars.

I'm dumb and wasn't alive in the 80's. Can someone explain this joke to me?

The joke is that "start small and keep expenses low; focus on making enough money to live" was known in the past (and outside of the tech bubble) as simply "starting a business".

The title is a bit buzzword-laden, and GP is calling that out.

That would make sense. Thank you!

I actually couldn't tell if the title was a joke or not.

Not much of a joke that I think.. For some VC's have a stereotype of looking down on ramen profitability because it gets in the way of convincing young people to burn / spitball / "innovate" a decade of their lives away their 20's swinging for low percentage 100x returns in exchange for burn out, etc... The alternative of say, 10x, can be very profitable and stable and enable just as much.

Said differently..

For some, largely on the funded side, everyone's a statistic, and after generally "going hard", they inevitably "go home" because they're told there's no more money from investors, and not enough paying customers.

On the self-funded / lean / boot-strapped / ramen profitable side, you get to earn your keep to stay in business so no one can tell you to go home except your customers who stop paying you.

I'm not sure there was a "joke". Basically GP's saying that the marketing speak laden title is an artifact of our times. Really what does all those words mean that "we built a business" doesn't communicate?