""What do I actually own" is a question that becomes particularly urgent when you realize that modern software businesses exist in this fascinating paradox. We're building increasingly valuable assets-businesses that generate revenue, grow in value, and can potentially be sold for significant sums-yet we have less direct control over the infrastructure than ever before. We're essentially building castles on rented land, and the implications of this go far deeper than most founders realize."
"It's both something that generates this constant stream-maybe a salary or dividends, or you reinvest the money that the business makes into itself. But in the end, the business itself grows in value. And if you own that value, and if that value is capturable by you, then you effectively get value twice. You get value along the way through operational income, and then you get the expected value over the course of the business running-that's something that people could buy from you."
Modern software businesses create both ongoing operational income and accumulating equity value that can be captured through ownership or sale. Owners receive periodic cash flows while the business's enterprise value increases over time. Many necessary functions—hosting, payments, tax handling, and transaction management—are performed by third-party providers, reducing direct control. Using a merchant-of-record provider offloads taxes, currencies, declined transactions, and card updates, enabling focus on competition and product development. The combination of valuable business assets built atop rented infrastructure forces deliberate decisions about which relationships and systems to own, delegate, or architect to preserve capturable value.
Read at The Bootstrapped Founder
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