Why You Should NOT Start a Startup as a Programmer

Today I’m going to talk about why you need to stop it with the startup nonsense. And instead, what you need to do if you want to build a business as a programmer is to create a bootstrapped company.

And in this video, I’m going to tell you, you know, what a lot of people aren’t going to tell you which is why it’s a bad idea why it’s not what you should do. #whyshouldyounotstartstartupasaprogrammer #createbootstrapcompany #buildabootstrap

[responsive_video type=’youtube’ hide_related=’0′ hide_logo=’0′ hide_controls=’0′ hide_title=’0′ hide_fullscreen=’0′ autoplay=’0′]https://www.youtube.com/watch?v=WNJOy2QCBeA[/responsive_video]

Transcript Of The Video

John Sonmez: Today, we’re going to be talking about why you need to stop it with the startup nonsense. And instead what you need to do if you want to build a business as a programmer is to create a bootstrapped company. I’m saying this from having made millions of dollars creating a bootstrap company, this company Simple Programmer is one example of them. I have another one called Bulldog Mindset, and in both of those companies, I have made over a million dollars by doing this, whereas a lot of my friends have started startups and they’re still broke.

If you guys are just joining me for the first time, I’m John from simpleprogrammer.com. On this channel, I teach you the soft skills that you need to learn to become a successful programmer and successful in life. It’s the stuff that other people don’t teach you. It’s not the technical stuff. There is plenty of that information out there, but it is the good stuff here. Also make sure you check out my book, “The Complete Software Developer Career Guide.” From time to time, it’s number one bestselling book on Amazon. It’s not right now, so get it up there. Go buy the book if you haven’t already. Trust me, it’s going to be worth it for you for the value here. I also have an audio version. Make sure you click subscribe to join the channel as well.

So, all right. Let’s talk about this, because I get this all the time. I do some pretty high level coaching. My coaching is $1,500 an hour if you want to get coached by me, and my wait list is pretty long and my slots are completely filled up. So just to let you guys know, if you want to get on the wait list, you’ll have to contact me and we can work something out. But when I do coach, a lot of times one of the biggest things that they want help with is how to start their startup. And they have this really good app idea or this really good business idea, and a lot of these ideas are great. I think they would work. I would love to be involved with that idea.

I think it could be extremely successful, except that I know that it won’t. And the reason why I know that it won’t is not because I don’t believe that they’ll work hard enough to actually get it done, although that for the most part is true. Most people will not actually get their ass in gear and do what they need to do. But because the chance of failure of a start up startup is so high. Now let me define what I mean when I say a start up startup. What I mean by this is I mean a company where you are going to go out and you’re going to get investors, and you’re going to raise capital. You’re going to raise money. Maybe some angel investors, or maybe a seed round eventually, and then you’re going to use that money to build up this company, to build that software and hopefully be successful.

So there’s nothing necessarily wrong with that, except that the probability of being successful at that is extremely low because a lot of things are outside of your control. And it also takes a huge amount of time that is time that is not actually effectively used. The reason why I say that is because if you’re going out there and pitching your idea and trying to get money and schmoozing people and doing all the kind of stuff that you have to do as a startup founder, you’re not actually working on the product, and you’re not actually creating any value. You’re just trying to… It’s overhead. It’s maintenance. And so the thing that I found… And again, I’m not against startups per se. I have invested in several startups. But as an investor, the key for me is that I’ve invested in several of them.

So I’m expecting that most of them will fail, but maybe one of them will be successful. And I’m also looking at the criteria from an outside viewpoint of, “Does this look like it’s going to be successful?” But as someone who is creating a startup, there’s a lot of things that are wrong with thinking that you’re going to make money from it. Like I said, first of all, a lot of it is outside of your control. You have to raise funds. And just raising funds is not enough. A lot of really big startup ideas, they need the network effect. So you have to get a lot of users on your platform. You have to get a lot of downloads. Think about a company like Dropbox. Now they were successful. We hear about the successful ones, but they came out of Y Combinator.

And in order to get to the level of success that they’re at, they had to get a lot of people using it because Dropbox is only useful if other people are using it as well, otherwise it doesn’t make nearly as much sense. The whole point of Dropbox is that we can share these files and it’s real easy. You could say on an individual basis that you have your stuff in the cloud, but there’s plenty of competitors there as well. But the ease of Dropbox and the reason why it’s so valuable is because other people are using it. So imagine how hard it is to get a lot of people… You need a lot of money. You’ve got to get people that are going to download this thing. You’ve got to spend a bunch of money on marketing and advertising.

So you’ve got to do a lot just to become successful. And majority of startups are not going to become successful. You hear about the ones that are successful, but most startup founders, they end up spending four or five, even 10 years of their life trying to build this company and then trying to get bought out by someone. And then it either fails, or even if they do take a buyout, they had to give up so much equity that it’s not as big of a payday. So basically if you go down this road trying to become a startup founder, what you can expect is that you’re probably going to throw away five to 10 years of your life and you might have a one in 10 chance of actually getting the big payday. What’s better though instead, and what I usually advise most of my coaching clients to do is to bootstrap a company.

So it takes Simple Programmer, this company. It was my personal blog. I started the blog, and I didn’t actually intend to make a business at first, but what I did was I kept on writing blog posts. I started getting some traffic. I started getting some opportunities to speak on podcasts. I created my own podcast. I eventually created this YouTube channel. I did all this work. I created courses. I started selling the courses. I wrote books, this book. I’ve done other books, “Soft Skills: The Software Developer’s Life Manual.” And what happened was that I ended up making not as much money as if I cash out in a startup. If I cash out on a startup, maybe I could have made a $10 million, $15 million payday, but I ended up making millions of dollars. And now, I have a business that is paying me that doesn’t require a lot of work from me.

So Simple Programmer at this point, it can almost run without me. I started another company called Bulldog Mindset, and that company is now doing even better than Simple Programmer. I do about $50,000 a month of income in there. I do coaching, and then I’ve got a membership program, and I learned the skills to actually build these companies, and to market them myself, and they didn’t have to give away any equity. I own both those companies a hundred percent. Now the reason why that’s such a better path is because anyone can do it. I can almost guarantee you if you’re willing to put in the work and willing to build up the brand, that within four or five years, you’re going to have a company that is going to be somewhat successful. You’re going to make a pretty good amount of money.

You might not make millions of dollars, but you’re probably going to make at least enough money to live off of. And you have the opportunity to grow that company to be large. It’s a much higher probability move than doing the startup thing. Of the people that I’ve coached that have helped them build businesses that are bootstrapped, probably nine out of 10 of them are successful. They end up being successful in the terms of making a good amount of money, a lot of times enough money to quit their job, and sometimes a lot more than that. Whereas with startups and the guys that I know that have been in the startup game, maybe one out of 10 are successful. In fact, I don’t really even know anyone that has actually taken a full exit, aside from a few people like Dan Martell and a few friends that I met after their exits.

But I don’t know anyone that I’ve watched them go through that process. And maybe you do, but like I said, it’s a very high risk thing. So if you’re sitting there and you’re like, “As a programmer, how can I use my skillset? How can I make money?” The thing that I would suggest is that you actually bootstrap a business. So I’ve got a course on how to create a blog to boost your career. Check that out. That’s a good place to start. Just a programming blog or starting a YouTube channel is a great place to start our podcast. Some people create businesses off of Instagram now, and you build up an audience. And once you build up that audience, then you can sell them products, and there’s a lot of ways to make money with that.

But the key here is that it’s something that is much more in your control. You are in control of what happens. Not in a hundred percent control, there still requires some amount of luck. There’s still things that can go wrong, but you can affect your future a lot better, and you have a much higher probability of being successful. So if you’re deciding, “Should I do a startup?” You have this really great app idea, or, “Should I start a bootstrap business?” My advice you would be to start a bootstrap business. Even if you did a SAS business, that would be fine as well if you build some software, just don’t require that software to work at a large scale. Don’t require it to have the network effect. Don’t try and create the next Facebook. Instead, start off by creating something smaller.

All right. And then here’s the other thing that you can do. All right, let’s say that you really want to do a startup someday. That’s fine. Build a bootstrap business first. Spend maybe three to five years building that up to the point where you can quit your job, work on automating it. There’s a really good book by Michael Michalowicz I believe, called “Clockwork” that will tell you how to automate the business. Also read Michael Gerber’s book, “The E-Myth Revisited.” And learn how to make it so that your business is generating passive income, like my businesses mostly do. And then when you have that time and you have that money, now you can play the startup game and you’re not risking your whole life and career. The big reason why I’m against it is because I hate to see people throw away five, 10 years of their life and have nothing to show for it.

I guarantee you, if you do a bootstrap business and you… If you even create a blog or YouTube channel, and you grow that, that you’re going to have something to show for it at the end of five years. It’d be really difficult for you to put in the work and not have something to show for it. It’s almost guaranteed that you’re going to be successful, at least at some level. Maybe not the level you want to, but it’s going to be a much better path.

So anyway, guys, that’s it. Make sure you click the subscribe button and watch some of the other videos on the channel. Go check out the Simple Programmer website. And I’ve got a couple of courses and products on there if you’re interested in learning things quickly. I’ve got a course on that, on how to market yourself as a software developer. Like I said, I’ve got a free course on how to create a blog to boost your career. And then I’ve actually got a real estate investing course that’s still on there that if you’ve already made some money and you’re looking to really get to the point of having passive income and retire, you’re definitely going to want to check that out as well. I’ll see you next week.