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I don't agree, even as a founder who bootstrapped two companies.

Nowadays, software companies are capital intensive. They don't start in a garage like in the 70s, 80s, or 90s. Are there exceptions? Sure, but they are outliers.

Marketing is one of the components that make your service or product capital intensive. Another is the level of details your product need to be in the market. In the past you were competing in the functionality now you are competing in the UX, multiplatform support, integratuon with other systems, etc.



The garage stage is usually the seed round, just like YC helps make it a formal process. Get a working provable prototype up and iterate quickly on your idea to something that works and can turn a profit. Then off you go to find customers till you show demand. That's when you evaluate whether a VC fund makes sense for your business.

Even back when SJ and Woz were in "the garage" stage building Apple 1s, they were seeded by their previous Blue Box profits and then after clear demand was proven they had Mike Markkula fund them to get Apple 2s built.

Companies will always have been and always will be capital intensive, nothing has changed there. Insurance, employees, real-estate, legal, just basic company things have always required significant capital.


If you look at the capital burnt by "unicorns" (e.g. Uber, Rappi) you will find that they are more capital intensive than in the 70s, 80s since they don't need to be cashflow positive for an undefined time and their product and marketing is much more complex and detailed. A clear example of this is computer games, in the 70s and 80s consumers were happy with a few "pixels moving" and now a game require a lot of people. That makes impossible to launch a new game from the garage except for rare indy outliers.

Who will win Lyft with ~$ 5b in investment, or Uber with ~24b? Those numbers are independent of the app being built.


My friend worked with Travis back when Uber was just a proof of concept in San Francisco. They used private limos and a basic app to connect the two. It worked, was cheap to build, and they proved demand rather quickly. I would call that garage/seed stage.

Airbnb was built and rebuilt several times with a few engineers in Brian Chesky’s apartment. They didn’t even have an official office for years at the beginning.

Your example is gaming, but all game startups use Kickstarter now as a way to fund the project upfront. It’s not really the same type of business and games are usually one-off finishes products.




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