UPDATE: Changed the title after realizing I’m referring to a niche within startups.

John Cook, one of my favorite Seattleites, has a post on his blog about yet another home office no money startup that got bought out for a few million. There is a growing realization that getting early funding if you’re a developer building a consumer web application is a very bad idea.

• You don’t need the money (hosting is cheap, your time is free, etc…)
• You don’t need the pat on the back (You’re a genius, OK? Now JUST DO IT!)
• You don’t need to be writing reports every month for a bunch of suits around a table
• You don’t need a business plan (Even Guy Kawasaki agrees it’s just a checkbox)
• You don’t need a big team to create a web app (If Markus Frind, Craig Newmark, James Hong and Scott Rafer can do it then so can you!)
• You don’t need to worry about a bigger company getting more funding and stealing your idea because as James Hong says “taking a zero off the budget is the best thing you can do for creativity”.

The more money a startup raises, the more vulnerable they become to little guys like you:

• Their target market sometimes becomes their investors and not their customer
• Every time they raise money they feel like they’ve achieved something and throw a big party – and work stops for a while
• They need to take huge risks to keep their investor happy because the investor wants to see a home run and $10 million in revenue doesn’t mean anything to them.
• Once they have committed to a business plan and sold it to investors, it becomes very difficult to change direction. You don’t need to have a board meeting or convince anyone. If you want to change direction you can do it in 24 hours.
• They hire people as a reflex action after raising money and more people in a dev team can actually slow things down instead of increase productivity.

So stop doubting yourself, stop having coffee with friends and talking about whether you’re going to go the Angel or VC route. Just sit down at your lonely little desk at home, grab some paper from your printer and sketch out your idea with a pencil. Then go visit serverbeach.com and buy a server for $79/month and start writing code.