Years ago I did the funded startup thing.
We had an amazing idea for a project, packed full of privacy-safe machine-learning, and we had some good contacts in the right industry. An investor came along, liked what he saw, and said he would pay for us to build the product and take it to market.
Two years later and we had some incredible technology. We had this fleet of servers, massive databases, lots of machine-learning analysis that I didn't really understand and we'd spent almost £500,000 of the investor's money.
And the product didn't make much in return.
We went to the investor and said "we've only got six grand left in the bank - what do you want us to do?". We were expecting him to sue us. He said "give the six grand to charity, close the company and we'll go our separate ways". We were amazed. He continued "I fund ten companies like this each year and I only expect one of them to make a return".
Almost half a million pounds.
And he could brush it away like it was a grain of sand.
Jonathan Stark tells the story of how (pre-pandemic) he would often fly back to his hometown after speaking at a conference. The airport is 50 miles away from his house and he often arrived late at night. He had a number of options on how to get home.
- Walk. 50 miles. Carrying bags. Not very palatable, but it's free.
- Take the bus. Crowded, inconvenient times, doesn't take him to his door, but cheap.
- Take a taxi. Comfortable, door-to-door service, convenient, but you may get a chatty taxi driver with a body odour issue - and it's not going to be an insignificant amount of money for that time of night and that distance either.
- Hire a car. Comfortable, door-to-door service, convenient, no dodgy driver to deal with, but quite expensive, will have to return the car in the morning and he's already tired after the plane journey.
- Take the helicopter. Really fucking expensive, but what a way to get home.
Jonathan has options. Ranging from free through to "how much"?
We all have it in our heads that people want stuff for free. But actually, would you want to walk all that way?
We all think no-one will ever pay a huge amount just to go 50 miles. But that helicopter company is in business and still has passengers because there are people out there who think nothing of spending that much.
Remember that when you're setting your prices.
It's just a number. What looks like a huge number to you looks like a grain of sand to someone else.