Hi, I’m Louie Bacaj.
I write this newsletter with lessons from my journey into entrepreneurship. And write on lessons from others on this journey.
This newsletter is free.
You’ll get a weekly post from me that includes:
An essay from me
And the occasional curation of the best stuff I found
A lot of the advice and dogma on entrepreneurship, especially for engineers, is to start a Startup and take VC dollars.
It's like that old engineering joke became reality: "If it doesn't scale, then what's the point?"
Somehow, we became convinced that the venture-backed path into entrepreneurship was the ONLY serious path for technical people like us.
They made it all seem so simple: make something people want, get money from VCs, and fulfill your dreams.
But the last decade of this mindset produced anemic companies, most are worth far less years after IPO. Think Uber, think WeWork, and so many more. And some of which are completely gone. And what about all the naive engineers who took super early funding, tied themselves up for years, and never made it?
I am paraphrasing Nicholas Nassim Taleb here in an interview he did with Bloomberg:
The last decade of cheap interest rates and abundant VC dollars encouraged businesses that can be dumped on the average investor. And it exacerbated wealth inequality.
This dogma of doing a startup and scaling it to the moon benefited VCs far more than founders, employees, and average investors.
As Charlie Munger said:
"You've got to rub your nose in your mistakes to learn from them."
Don't worry because I, too, believed this dogma about Startups and sought those venture dollars. I drank the cool-aid. I put on the shackles of a tiny ramen salary, and I took on the many VC bosses. I ate that ramen. All for a chance at the dream. And it was a huge mistake. I’ll be rubbing my own nose in my mistakes in this newsletter.
But think about the businesses and the founders we admire. Many started small in a Garage somewhere and only took venture dollars when the thing was working and if they needed the dollars to go faster.
I blame myself for believing that you start entrepreneurship by getting funded first. And the wasted personal resources early in my journey are what I deserve.
But in a lot of ways, I am lucky.
I stumbled into community of other people not trading everything away, including their freedom, to chase a pipe dream.
I quickly internalized that there is no one-way to succeed in business, and no one truly "knows."
So I am lucky because, unfortunately, many software engineers turned entrepreneurs bang their heads against the wall for years, eating ramen, trading away all their freedom for a tiny shot that will never materialize for the vast majority.
But the sad thing is that software engineers have some of the best odds in the modern era of building things that make money without any early VC money. They can then open new opportunities for themselves, to layer on more wins. Heck, if they do raise money, eventually, they can do it on their own terms, not on ramen (*cough*, slave) terms.
But I changed my ways, and I stopped believing in the dogma. And now, I am making money as an entrepreneur. I made $100k on my own in 2022 and made over $200k in 2023. And I am on track to beat that in 2024. I try to be as transparent with my earnings as I can be in this newsletter.
But most importantly, I think, is that I set myself up to keep placing small bets and keep trying in business. The lesson for me, as an engineer, so far has been that an early venture-backed business is not the only way to be an entrepreneur.
And that is what I will be exploring in this newsletter. My journey and the journey of others into business. We will explore journeys that did not start by raising VC money first.
These are journeys that do not involve trading away all your freedom for years just for a single shot at your dreams. These journeys are worth studying.
Because if going into business can make you enough money for a great lifestyle and give you freedom, who cares if it doesn't scale?
About Me
I am a Software Engineer and former Engineering Leader who recently turned Entrepreneur.
I used to manage many engineering teams. I invest in and operate a few rental properties.
I write. And I teach others to get started with newsletters through the Small Bets Community with my friend Chris Wong.
I still love building software and apps. I am co-owner of https://smallbets.com and I am building that with my business partner, Daniel Vassallo.
