Don’t Plan to Get Rich from Your Startup
softwarebyrob.com
softwarebyrob.com
We are not an imitation of any other company out there, we are unique in many ways. We want to build the company up into a large solid company as quickly as possible. An employer people will want to work for, a place where people will be proud to work--and be paid well.
We are going to build the #1 company in the market, and maintain that position over time no matter what.
I'm sorry, but I don't think that mentality is good advice for entrepreneurs. I'd rather reach for the top of Everest and even if I only get halfway there, it would still be better than conquering an anthill.
It's wonderful advice for developers who's existence is inherent to developing software for people who need it.
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Start your startup. Learn the ropes.
Then, whether you succeed or fail, you can swing for the fences. That second time you may just make it.
On another blog post on his site (http://www.softwarebyrob.com/2009/09/22/why-luck-is-a-terrib...), I found this line:
"I know a handful of people – including myself – who have reached for the startup life. Each of us did it for one, maybe two startups (you can only do so many before you burn out). Not surprisingly, none of us “made it.”"
Are you kidding me? Most startups fail, but you have to keep trying. If you stop after 2 startup failures, then I don't think you have real entrepreneur spirit. You need to keep going until you get what you want, even if you have to start 50 startups. And if you keep going, you will eventually get what you want, including riches. Guaranteed.
Luck isn't something that magically falls out of the sky and lands on you. Luck is a combination of opportunity and preparation.
As an entrepreneur, you need to have lofty goals. When you tell your friends and family what your goals are, you better get a response along the lines of "You're crazy, you should aim for something lower." That's a good thing. Aim high. Very high. Even if you don't get to your lofty goals, you will probably get much further than you would aiming for modest goals.
Isn't every startup a small business, by definition, until it gets big?
Different people have different definitions of a "startup." To me and (I think) to many others on HN, a "startup" is a business designed to scale dramatically. It's an innovative company with high-growth potential.
The new corner coffee shop would be a small business but not a startup. The owner just wants to make a decent living.
I'll never get rich, but eventually I'll be free to work solely on my startup without anyone else telling me what to do. No one will envy my car, but many will envy my lifestyle.
I do agree with the article in the sense that you need to have a relatively concrete vision and execute on that, then iterate repeatedly to a more grandiose vision. There are so many kids out here with $ signs in their eyes imagining Facebook or Google success without realizing all the stepping stones along the path.
There are of course more capital-intensive businesses where it's either worth a $100m or nothing at all, but even those have to start with a focused vision. Operationally a $100m biotech startup probably looks a lot like a $5m SaaS startup.
http://www.omnisio.com/startupschool08/david-heinemeier-hans...
If one can't innovate and create something radically new and efficient, then yes, he should probably stick with traditional business models and limit his ambitions to small markets, slow growth and modest returns focusing on efficient execution.
And there's more to it. Good engineers could do much better if they join an existing ambitious startup rather than if they convert to a small software workshop owners.
If we really wanted to, we could make a very nice livelihood doing contract programming/consulting for let's say $100 per hour. That's roughly $200,000 per year. Not bad. Over 40 years, with compound interest, conservative investments, and a reasonable lifestyle, that adds up to, well a lot!
So why would anyone in that position take so much time away from earning to work on a side project, prototype, or startup? There could be many reasons, but the two biggest I can think of are:
- We work on something that pays nothing now because we have to. We don't ever want to wonder what would have been if we didn't.
- We invest time we can never get back in the possibility of a big pay day. That may or may not ever happen, but unlike OP, this is one lottery we're willing to play because it's more than luck; we do have significant influence on the outcome.
In fact, I believe you must want to get rich, and enjoy what you do. If you don't want to get rich you won't have any incentive to get over the point that isn't fun and you won't build a big business.
A lottery is probably a bad analogy. It's probably more like a couple of hands of blackjack.
I think your first point is the winner. See Bezos' Regret Minimization Framework: http://www.youtube.com/watch?v=jwG_qR6XmDQ
As I see it, the reason to swing for the fences isn't to avoid the if only I had... scenario but because we each believe that we posses some innate greatness within ourselves and to not strive to reach that potential is more than just regrettable, it is a failure to live up to our own expectations.
I agree that there is something tragic in never being bold enough to find out what we are each capable of, but the avoidance of that tragedy isn't what should motivate someone, rather it is the desire to see if we have it within ourselves to succeed, to realize our own potential.
Perhaps my disagreement is just a matter of semantics and we are both approaching the same idea from different directions, but I don't think it's an arbitrary distinction irrespective of the context.
Although the author does makes some fine points like learning to run a startup by actually running your first one. This is so true for there are much more ways to fail such as co-founders!
Is this all turning into a joke? I think I'll apply for a job with BP.