Startups Compete Against Background Noise | Hacker News Reader

Startups Compete Against Background Noise

diegobasch.com

51 pointsdiego18 comments

I'd phrase the same idea this way: what is the bottleneck?

Are ideas the bottleneck? No. Everyone and their uncle has great ideas. There are blog posts out there giving away almost every possible business idea for free, at least in the broad sense of a business idea.

Is money the bottleneck? No. A lot of money is invested badly, both in terms of returns and social value. If you have a great idea and a team that can execute, you will get funding. (Either VC, or, you know, profit.)

Are people the bottleneck? No. There is talent, and it can't be said it is allocated efficiently. With a decent combination of idea+money you will probably attract the right talent.

So what is the bottleneck? Attention. Inspiring others and catchy enthusiasm. Charisma. Impact. (All in a broad sense) You are essentially on a campaign.

*Now there is a necessary, but not sufficient step prerequisite. And that is the founder having either domain knowledge to attract any of the above, or some of the above to attract domain knowledge.

This reminded me of the idea of the attention economy.

http://sethgodin.typepad.com/seths_blog/2011/07/paying-atten...

I'm not sure it's that simple. If you look at what aspiring entrepreneurs are complaining about it is the difficult of finding a worthwhile idea to pursue (on the one hand) and the difficulty of raising capital to make it happen with (on the other). These complaints are too numerous to just dismiss. I suspect those who are inclined to dismiss them are people who have already cleared those hurdles.

On the topic of ideas, there is a similar phenomenon among aspiring writers. Some beginners complain bitterly about how difficult it is to find with good story ideas. And then professionals come along and tell them that ideas are the easy part; execution is what matters.

I suspect the sad fact is that both sides are right on this one. Some people really do struggle to come up with novel, actionable ideas. Others don't. But the pros are right that a good idea doesn't even begin to guarantee success, and awful lot of hard work must follow to make it happen.

> aspiring entrepreneurs [...] finding a worthwile idea to pursue

Something about that phrase creates a knee-jerk reaction along the lines of "this is what's wrong with SV culture today, people deciding to 'follow a path of entrepreneurship' without an idea, team, experience or the means". I'm not sure it's a valid way of thinking, but I would still struggle to call a person without these things and entrepreneur or even aspiring entrepreneur, no matter how resourceful and smart they are.

I would not say startups are competing against background noise, they are competing for a most limited resource - human attention. There are just so many startups doing fantastic things that it is impossible for them to all succeed no matter how good they are because humans can only look at so many new things per day.

I'm pretty sure this is nothing new, but where is that app/website that allows to skim through startup one-liners that indicate the stage they're at? Say,

  Phonodrone - drone that keeps your phone in front of your nose while you exercise
               Electronics / Hardware prototype (70% complete)

  Meowr      - rate my cat's meowing sound
               Web / Launched (100% complete)

etc. Product Hunt is kind of that, but posting is closed to the public (and it's not an easy task to get there, at least I failed), plus the stage is not included in one-liners.

How would you define a startup as complete? Take Uber as an example: When they cover your city? When they cover your country? When they cover the world?

Geo coverage ≠ completeness in terms of technology. Early stage investors would be more interested in the latter I think. In that regard Uber is 100% complete and long past the early stage.

Yes, startups don't compete based on product quality - Competitive advantage lies almost entirely in the ability to raise funding and generate noise.

A mediocre idea with a mediocre team can go a really long way if you put enough money and fame behind it.

I think most big investors don't even know what a good idea is anymore - Their investment in itself can have such a strong influence on outcomes that it skews their perception of everything and creates self-fulfilling prophecies.

Big investors must think the world is a relatively fair place - Because it looks like this within the confines of their immediate networks.

Competitive advantage lies almost entirely in the ability to raise funding and generate noise.

Wrong. Competitive advantage lies in the ability to 1) acquire users, and 2) monetize them profitably, 3) defend/maintain your position.

Or:

1) acquire users

2) get more funding

3) get bought by a larger company

2 and 3 require funding and noise.

Arguably 1, 2, and 3 require funding and noise.

There are thousands of very profitable businesses that never raised a nickel of VC. Case in point, I never worked for a VC funded company, yet every company I have worked for has been profitable.

Sure, but this discussion isn't about the value of bootstrapped versus funded companies, even though you seem intent on making it about that. This discussion is about startups that are truly trying to do something new (as opposed to a company that is new).

Does innovation require VC funding? Does getting noise require VC funding? I do not see the data.

If your startup has to compete against background noise, you are doing it wrong. If you shoot for the broadest possible audience, yes, you will have to compete against everyone.

If you instead focus on a very narrow and specific audience, it will be much easier to get heard. Make an app for your local city, and it'll be trivial to get press coverage. Or target a specific niche, and you won't even need press coverage. Delight a few users, and expand from there; don't aim for the entire world from day one.

Niching down doesn't eliminate the background noise. You have to convince the users why the localized or targeted version is better than the generalized options, and that's assuming you've already gotten past the hurdle of convincing someone they needed anyone's version of what you're selling.

"For startups, loudness is a virtue."

Love this last sentence. Build what people want and then be loud.

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