Interesting discussion about making money over at 37 signals.
People alternate between revulsion for and adoration of people who make money. There is currently an enormous reliance on style points in choosing between execration and exaltation. A large swath of the public believes that only money that you appear to get by accident, like gambling winnings; salaries for activities others do for free — like sports; passive income like many Internet websites provide without really doing anything; and the wages of idiot celebrity, including, of course, selling autobiographies even though you’ve never done anything, are the only approved methods of getting rich. No matter what, you have to seem like you’re not interested in making money. Persons think that Steve Jobs is less avaricious than Bill Gates, for instance. Sure he is.
The exploitation of quirks in a system in which you do not fully or willingly participate in is another fave. Enough illegality to seem exciting but not exactly criminal is considered THE piquant style point, of course. See Office Space or Trading Places for amusing examples of the genre.
Our weird ideas about whether or not you’re doing it in the approved hipster fashion mask an underlying problem. Making money as an entrepreneur is hard. But somewhat counterintuitively, the hardest way to make money might be to have it handed to you.
This is one of the reasons I encourage entrepreneurs to bootstrap instead of taking outside money. On day one, a bootstrapped company sets out to make money. They have no choice, really. On day one a funded company sets out to spend money. They hire, they buy, they invest, they spend. Making money isn’t important yet. They practice spending, not making.
Bootstrapping puts you in the right mindset as an entrepreneur. You think of money more as something you make than something you spend. That’s the right lesson, that’s the right habit, the right imprint on your business brain. You’re better off as an entrepreneur if you have more practice making money than spending money. Bootstrapping gives you a head start.
The world is rather a harsh place for true entrepreneurs just now, much more so than for people that are gaming some system for money, which has become the Holy Grail of angel investors. I’ve learned everything in this life the hard way, and the hardest lesson to learn is to only borrow money — which includes accepting capital for a piece of the action — to expand on something that already makes money.
Don’t get me wrong; if your business plan is to fleece investors, by all means, take the money. Billy Ray Valentine would.