The entire startup process is about managing risk-
The classic programmer with a sketch on a napkin has a Lot of risk. There may be assumptions that never pan out, and he may never be able to write what he's said he would.
Once there's a prototype, it moves the slider further to the "Less Risk" category. Things are moving, it CAN be written, now the risk lies more in growth and marketing.
Traction solves that problem as well- Now it shows that the code works, the marketing works, and the team really can pull things off. The slider is firmly over on the "Rather safe, as things go" category.
Here's the problem- Entrepreneurs see the slider too.
By the time I'm over in the "Hey, this thing is actually gonna work" category, the need for angels, particularly the micro angels like Gabriel, has diminished.
At that point in the process you're actually making money, and you can look at the slider, see that things look likely to succeed. This is in part, what is responsible for the increasing number of startups bootstrapping. By the time they get a working version, decent marketing, and some traction, they start to realize that they have a good shot at being able to do this on their own, and keep the equity.
The classic programmer with a sketch on a napkin has a Lot of risk. There may be assumptions that never pan out, and he may never be able to write what he's said he would.
Once there's a prototype, it moves the slider further to the "Less Risk" category. Things are moving, it CAN be written, now the risk lies more in growth and marketing.
Traction solves that problem as well- Now it shows that the code works, the marketing works, and the team really can pull things off. The slider is firmly over on the "Rather safe, as things go" category.
Here's the problem- Entrepreneurs see the slider too. By the time I'm over in the "Hey, this thing is actually gonna work" category, the need for angels, particularly the micro angels like Gabriel, has diminished.
At that point in the process you're actually making money, and you can look at the slider, see that things look likely to succeed. This is in part, what is responsible for the increasing number of startups bootstrapping. By the time they get a working version, decent marketing, and some traction, they start to realize that they have a good shot at being able to do this on their own, and keep the equity.