Companies play around with their origin stories | Hacker News Reader

Companies play around with their origin stories

wsj.com

117 pointsrayuela53 comments

Decluttered https://read.feedly.com/html?url=https%3A%2F%2Fwww.wsj.com%2...

Why is the font so big on mobile?

I see this weird pattern on Shark Tank (which to be fair is definitely not generally representative of tech startup culture) where the 'Sharks' turn down founders by glibly saying, "Oh you've been working on this for X years without any sales? Pass." It doesn't seem right to me. I get the idea of proving your idea through sales, but a product that's ready right now is a product whether it was made overnight or through tinkering over time...

I've noticed they really don't like to take risks on that show, they want to invest in sure things that already have a proven market and tons of sales. It seems kind of silly, like if you already have all that you probably can easily raise money, so it often becomes a situation where the biggest reason to go on the show is just the publicity from it.

I think a lot of the time the publicity helps a lot. I think the sharks can help sometimes. Like things with fashion and home good I think Lori and Daymond help get them into stores.

However probably the biggest shark tank success story: Ring. Ring didn't get a deal, but it is probably worth more then every other sharktank company combined.

This is it right here. If you watch enough of the show, you'll eventually discover that most of the savvy entrepreneurs are actually on the show pitching to the sharks for the publicity. The sharks know this is a problem, and this is why some of the most watchable scenes are when an entrepreneur gets an offer that matches his ridiculous original ask, but then rejects it. This basically proves they had no intention of actually going in for a deal, and most of the sharks (especially Mark Cuban) fly off the handle over it. Totally fun to watch.

AFAIK they sit through a lot more pitches then they show on tv, so they can probably afford to be picky.

There are 2 things: 1) If you've been doing it for many years without any success - it's a signal for them that you're not willing to go all in or you're not ambitious enough. 2) Sales and/or number of users will be the ONLY way to prove your idea for a majority of investors. They understand that it does not really matter what they think about your idea - what matters more is what the customers think about it.

My favorite quote from an investor what he had learned in 35 years of investing? "It doesn't fucking matter what I think." If the market likes it, that's what matters. "Maybe I'm not the market."

shark tank is not a VC, it's a tv show

The founder's response is: "That would be a mistake, because ..."

> "Oh you've been working on this for X years without any sales? Pass."

NO sales after years, as opposed to a few, is a really big red flag. It generally suggests that the person is enjoying playing and being an entrepreneur and head-wanking about "business", while lacking the mental toughness to put him/herself out in the marketplace.

The whole point of a business is to make money, and it does that through sales. Someone seeing themselves as having a business worth pitching to investors for significant chunks of money, yet without a focus on the most critical validating piece is what prompts the glib response.

"Timing, perseverance, and ten years of trying will eventually make you look like an overnight success.” - Biz Stone

Different strokes for different folks, I guess. I run an asset-management fintech company and a lot of our clients (particularly institutional investors) are looking for a strong track record. For them, seeing we've been around for a few years adds credibility and confidence in management.

Mind sharing the name? I'm curious :)

Since you ask :) https://copower.me/en/

Green infrastructure investments; lowish risk fixed income; licensed dealer in Canada.

We've also actively sought strategic investments from financial institutions (Royal Bank of Canada, a couple others) rather than raising from tech VCs. We've heard from a few clients that our brand-name shareholders made a difference in deciding whether or not to invest with us.

Very well done.

Looks great! So you're selling (up to) 5% coupon clean energy bonds? How is that working out, are you getting a lot of interest from people?

I haven't done too bad investing and have a few ideas myself for a fintech business (there are some opportunities relating to tax deductible pension investments in my home market) yet wonder whether, say, a 5% yield is sufficient for the average person to even bother taking a risk.

Second, if you don't mind, how's profitability? I assume it does need massive scale for the math to work out? How is sourcing users / are advertising fees working out, in terms of cost?

Happy to share some learnings - will reach out to the email in your profile. Don't want to derail the thread :)

Thanks! Looking forward to that.

Hey, not to butt in, but would it be possible to get in on the email discussion? Very curious about all of the above questions as well. No worries if not :)

Will do. Happy to do a Show HN at some point if there's interest.

I'd read a show HN thread.

And me, please!

me too! arthur@collegroup.com

Also me! hi at jenieceprimus.com

I have to think that in the investment industries there are at least a few truisms about not being first.

Hold your horses! Origin stories aren't true??

A company's origin story is simply a "get to know you" story same as at a cocktail party. Everything gets fudged because it's just a marketing statement.

eBay wasn't really started due to Omidyar's girlfriend's desire to sell her Pez dispenser collection, but that story explains the use case very simply and personalizes what (at the time) was a peer-to-peer, or C2C, model.

Tesla wasn't actually started by Musk but by saying so on their web site it drives home that the original founders are long gone and that Musk wants to be seen as the singular genius.

GE no longer says anything about Edison since saying so wouldn't add to its credibility.

A company age can be a first clue to whether they know what they are doing or not. But only a first clue.

It makes perfect sense that they would want to show some kind of saleable momentum. Isn't the rule of thumb that investors want out and want their money back within a certain number of years, and they're not going to lend money to companies they think will take too long to show returns? (I use the term "lend" loosely, btw, since many of the investment term sheets carry terms that make the investment closer to a loan than a string-free donation of funds.)

I'm sure the counterpoint is that that's a short-sighted view of industries that have long lead times to even develop a working product (or service, what have you), but it doesn't seem all that surprising.

Not peculiar to SV.

I lived in London UK from 2008 through 2013, and worked at two self-described start-ups.

One had been operating since 2006 (so ~5 years when I was with them), and the other had been a struggling (sans profit) business for just over 15 years. The MD of the latter would occasionally try to tidy up the truth by saying things like 'we're starting up a new exciting branch of the business', but mostly just used the s-word outright at recruitment fairs and in job ads.

I'm not entirely sure the practice worked in anyone's favour.

I thought this article was going to be about Slack and it wasn't even mentioned.

This is everything that's wrong about Silicon Valley: we perpetuate the false virtue of overnight success, a flash of brilliance and youthful vision when, in reality, it comes down to years of slogging along, many nights of crying dry tears and adapting to the changing environment continuously.

It's sad because every operator I know knows this yet succumbs to the myth-making "hack" because that's how you tell a "good story" that attracts much needed attention among media and the investment community. Traction, hockey stick curve, growth and all that jazz.

And to be fair, it's not entirely VCs's fault either. They have to deliver on their investment promises within a certain timeline. What's really terrible is that there's not enough discussion about this in the VC-backed entrepreneurship community to accept that this is the "game" that everyone has to play.

I wish the game was talked about more. It became painfully clear to me during my first round of pitches to traditional VCs. We ended up going with a strategic investor whose goals were actually aligned with ours.

I disagree. Overnight success means good market traction, which eliminates one of the biggest questions in a startups lifetime.

"Overnight success" is virtually always a bullshit lie.

And in the very few cases where it's not, it's worthless as an example and incredibly dangerous to chase.

Put your head down, do the work, and enjoy the "overnight success" stories in a decade, if ever.

Overnight success is a misnomer because it's impossible to demonstrate true success overnight (or in a few years) as it relates to a business. Just the headline of this article should make a good argument to be wary of startups that appear to be doing too much in too little time.

If you invest a startup that claims to have been founded only 2 years ago and says to have already acquired so and so number of users, you might assume a certain velocity of growth for that company. If it turns out that the founders had unofficially invested 5 years of labor rather than 2, you just lost 60% value in your investment assuming the company valuation was somewhat proportional to their "traction."

The biggest question in a startups lifetime is "will they be profitable?" not "have they spent enough on Google AdWords to make it look like usership is going up?"

no subscription mirror: http://www.cetusnews.com/life/Forever-Young--Tech-Startups--...

Fudge your age or fudge your company age? The headline is misleading.

Company age.

Arguably, you're committing no wrongdoing by changing the date your startup is founded. After all, the date itself is rather ambiguous. Is it the first time you get a user? Push a line of code? Etc.

FWIW, if I learn of any attempt to mislead, I'm out. An example would be that I'd invest in someone with a storied past, unless they tried to hide it.

I agree. We replaced the title above with (hopefully) representative language from the subtitle.

Are the same companies also discriminating new hires by age? Is that more or less consistent with lying about their own age?

Are there any non-paywalled options available? Web link no longer works for WSJ.

Just use the magic WSJ paywall skipping bookmarklet...

  javascript:window.location.href='https://m.facebook.com/l.php?u='+encodeURIComponent(window.location.href);

Well that's nifty. Kind of a shame that referrer matters to them.

That's pro! You should make a chrome plugin out of it.

ty!

I've found that searching for the article's title on Twitter works well;

https://twitter.com/search?f=tweets&q=The%20Secret%20to%20St...

Then just click through via one of the links that shows up.

Pass the URL to outline.com for the full article without ads. Result: https://outline.com/BS9jX2

I just tried that for a different WSJ article and it did indeed work. How is that site getting access to these articles that require registration?

making the same request with headers that match a signed in account?

Here's a static version: https://pastebin.com/D34nLhu4

Use the Bypass Paywalls add-on.

Firefox: https://addons.mozilla.org/en-US/firefox/addon/bypasspaywall...

Chromium-based browsers: http://bypasspaywalls.weebly.com/ Used to be on the store but Google took it down.

Reply on news.ycombinator.com