Cash is like the blood running through the veins of a venture. You need it to survive. You also need it to walk and you need more of it to run. There are web businesses that can certainly be entirely bootstrapped, sometimes by a single coder/designer/everything.
On the other hand, most businesses that scale need more people and more resources and more of everything. This is where the "it's just a server in a rack" model breaks down quickly. Scaling means, at the very least, hiring people and providing them with all of the resources they'll need to do their work. You could very easily be at a $50K per month burn rate very quickly after launch, say, thee months. That doesn't account for legal fees and other expenses that might not be obvious on first inspection.
If you have the money and the ability to scale a business and are willing to risk it all, by all means, do it. You don't need external money for this.
Most of the young folks who seem to make-up the HN audience there are lacking three things: money, experience and the business network. All three of these are critical when you need to press on the accelerator and go. Learning while doing is possible but far less than ideal. If a VC can offer smart money this is probably the best bet for young HN'ers. In this context "smart money" means that a VC makes an investment and also contributes experience, guidance and contacts to the process. This can often mean the difference between success and failure.
In many ways this concept of a good vs. a bad idea has to be qualified with a set of variables. Off the top of my head:
Startup cost
Market
Competition
Barrier to entry
Cost of sales
Capital intensity
Regulatory landscape
Technology risk
Intellectual property ownership
Intellectual property minefield
Domain expertise
Funding
Business operating expertise
Marketing expertise
Local labor requirements
I could go on and I could expand on all of the above but that's besides the point which is that a business that isn't a hobby and can scale is far more than a server in a rack.
On the other hand, most businesses that scale need more people and more resources and more of everything. This is where the "it's just a server in a rack" model breaks down quickly. Scaling means, at the very least, hiring people and providing them with all of the resources they'll need to do their work. You could very easily be at a $50K per month burn rate very quickly after launch, say, thee months. That doesn't account for legal fees and other expenses that might not be obvious on first inspection.
If you have the money and the ability to scale a business and are willing to risk it all, by all means, do it. You don't need external money for this.
Most of the young folks who seem to make-up the HN audience there are lacking three things: money, experience and the business network. All three of these are critical when you need to press on the accelerator and go. Learning while doing is possible but far less than ideal. If a VC can offer smart money this is probably the best bet for young HN'ers. In this context "smart money" means that a VC makes an investment and also contributes experience, guidance and contacts to the process. This can often mean the difference between success and failure.
In many ways this concept of a good vs. a bad idea has to be qualified with a set of variables. Off the top of my head:
I could go on and I could expand on all of the above but that's besides the point which is that a business that isn't a hobby and can scale is far more than a server in a rack.