Most startup theory is ex-post, therefore bs
shafyy.com
shafyy.com
To elaborate: I’m convinced that most people viewing this view status as a good or at worse neutral thing, and although they may not approve of tactics they deem immoral (maybe including this one), basically have some admiration for “winning” the game. I view this as a wrong approach. The guy giving advice all the time is blinded by pride and fails to realize even the bounds of his own competence. He’s not winning anything. My opinion is that he looks like a buffoon.
http://www.overcomingbias.com/2015/03/advice-shows-status.ht... : "High-power participants in the study ignored almost two-thirds of the advice they received" - in almost any "game" (or situation that can be modeled by game theory) it may be wise to test the advice of even the best expert you are given. Maybe ignoring advice isn't irrational but actually optimal in order to truly learn or even advance on the current optimal solution to any given situation and maybe the high-powered participants intuitively know this and that's why they're high-powered in the first place.
http://www.overcomingbias.com/2014/01/advice-isnt-about-info... : advice giving and receiving is based on respect but it also builds trust and connection. Why would I build trust with someone who is getting out of the game when I can get advice from any number of people in the game which have similar amounts of wisdom and experience? I get the wisdom and I have a better chance of getting good opportunities from the person in the game whereas I can only get wisdom from the retiree.
There are lots of startup theories that are equally solid, despite being ex-post. I know a startup that didn't pay payroll tax for a couple years, and it ended badly. The resulting advice is pretty obvious.
There are theories about how to hire, how to find customers, how to negotiate deals. These theories might not apply in every single case, but you should definitely start by knowing what worked in the past.
This post picks a couple of unsupported startup theories, but it's sort of like criticizing physics for the 1% of reality it can't explain and ignoring the 99% it can.
There's strong prior reason to believe not paying payroll tax is not going to end well. The theoretical basis is simple, clear, well-reasoned, and supported by strong evidence in adjacent realms (i.e. the IRS takes taxes taxes pretty seriously).
Whereas the prior on the validity of something like "early-stage founders should live with their customers" is much weaker.
Even though the advice for each presented example is based on sample size n=1, the resulting belief can and should be quite different depending on your prior.
The real meta-advice is to be able to understand and evaluate your prior for any given piece of advice you receive. This mostly comes down to thinking rationally, being knowledgeable, and critically considering each piece of advice for whether it's worth heeding or not.
Which is not so far from the author's message I think ("figure everything out yourself", "I don't mean to say don't take any advice").
(Obligatory shout-out to Bayes Theorem)
There's a pretty strong theoretical reason for that as well: startups succeed because they make something customers want; the more time the person making product decisions spends with times with customers, the more information they can gather about what the customers want; and the more the customer trusts and has a rapport with the founder, the more willing they'll be to share candid feedback.
There are some practical problems that make living with your customers a little problematic if you're not Brian Chesky, namely that they may not want another roommate, you may not want a roommate, they or you may already have a family, or you might just get on each others' nerves.
But if you extend the general principle to "spend a lot of time with your users" (and being able to extend to a general principle is a big advantage of having theoretical reasoning), there are a lot of other companies that have found similar success. Facebook was another one where the founder literally lived with his first users. Google, for all intents and purposes, lived with their first users (it's grad school, after all). DropBox, Reddit, and Instacart were their first users. Apple, Stripe, Clerky, Twitch, etc. were in regular contact with their first users.
I mean if all you mean is have even a tiny amount feedback from a few of your customers. That’s going to include almost every company.
I would argue that it's moving to the Apple II (were they suddenly lost this direct feedback because of the vast expansion of their customer base well beyond their reach.
Being simple, clear, and well-reasoned in the realm of people's behavior is not enough to give you very good accuracy.
The kind of priors you get by reasoning in a vacuum just aren't good enough in some realms. Bayesianly combining those priors with anecdotes doesn't really help.
Some ex-post theories are fine but I don't think you've hit upon the way to distinguish them.
This is all argument in favor of a weak prior, not to ignore the existence and utility of a prior completely. Ideally, you have solid (relevant) empirical data that informs your prior but if you're seriously evaluating "advice" then I'd venture to say that you're probably lacking such data.
Imo, the critique to be had of what I said above is that there's no clear general way to form good priors and thus the advice is somewhat empty. But that's just life -- there's no magic bullet algorithm to discover truth and one has to use his/her brain to do the best they can. Many who seem to well in this area tend to like the Bayesian framing of beliefs, and personally I've found it useful to guide my own thinking as well.
Or in other words: Some undescribed system of priors could help, but the system you actually described doesn't help. So "use priors" is a bad answer.
This is a fact and don't think this is what the author is trying to say. I guess he's more focused on the kind of theories which people throw around as some sort of self-evident truth, when in fact it's a personal truth which they learned through trial and error.
But I guess there's a point in learning from some of these "self-evident" truths (this is more rare though)
You wouldn't use avocadoes when a recipe asks for flour but in the start-up world, everyone seems to think that what works for the well-known successes will automatically work for them.
What really frustrates me (rant, rant... :)) is the notion that if I build, they will come. So so many of the start-ups I work with think that. What happened to people understanding basic business theory? Basic marketing theory would be useful but I don't hold out much hope for that!
My purpose in life is to serve as an example of what not to do.
But you have a paradox.
Do you demonstrate one big thing to not do and go out with a bang, winning a Darwin Award, or demonstrate many smaller (less lethal) things to not do? Which generates more net benefit for the world?
Always these career choices, and what kind of advice is there on that?
In the title, the author is seemingly making the claim that all ex-post startup advice is BS. The commenter is debunking that claim by providing sound ex-post advice.
This common-sense interpretation of BS agrees with epistemologists’ definitions of “knowledge”—they invariably define it in such a way that a belief must not only be true, but also true for the right kinds of reasons, to count as knowledge (though there is a lot of disagreement about what those right sorts of reasons are). See for instance the “justified true belief” definition and its critics: https://plato.stanford.edu/entries/knowledge-analysis/
(1) Most startup theory is ex-post, therefore bs.
(2) All ex-post startup theory is bullshit.
Those claims may or may not be true, but there's no contradiction between the two. The title does indeed seem to implicitly claim (2), in the form of the following (implied) syllogism:
Most startup theory is ex-post.
All ex-post startup theory is bullshit.
Therefore, most startup theory is bullshit.
Or, more concisely: most startup theory is ex-post, therefore bs.
The parent comment is criticizing the article for "cherry picking". That in itself is not a fallacy.
Ask the people who work for them why the team was successful. They'll probably have very different opinions.
The guy I said did have it figured out? I'd like to retract that. He wanted to think of the process of moving stories from the backlog to done as a physics problem. As managers go he was fairly emotionally sophisticated, but that was his big blindspot.
Some of the others had elements of 'mushroom management' (keep them in the dark and feed them bullshit), and a lot of quick fix-feeling techniques. Those can be helpful in small doses, as long as someone else is beating a drum for technical excellence (not perfectionism, but get stuff done, keep it done, and keep getting stuff done).
It's survivor bias bullshit wrapped up in feel-good propaganda and people eat it up every time. Study successful people and emulate them. Of course! How could we go wrong?
Nevermind that the successful people are more likely to just be lucky or even just plain wrong about the reasons for their success.
I attribute my success to hard work, getting up early, making steady progress every day, picking great people to work with, and staying ahead of the curve. Sounds great, right? But to really know if any of that matters, we have to study a large number of people who also profess to do exactly those things and see if they're way more successful than average. If they're not...well then I'm just wrong about the reasons for my own success and other factors are more important.
It doesn't sell books though when your message is "in order to be successful you have to be naturally smart, tall, and attractive, work about as hard as everyone else, and be well-connected and lucky."
in order to be successful you have to be naturally smart, tall, and attractive, work about as hard as everyone else, and be well-connected and lucky."
Some of their results: - changing direction as a result of customer feedback (very, very good, one of the best predictors of success) - having an accountant (good) - having one parent born overseas (helpful for some reason) - making use of Australia's research and development tax concession (very good) - knowing the name of your lawyer (bad) - accessing government services designed to help startups (very bad) - writing a business plan and sticking to it (bad) - founders having experience working in enterprises (neither good nor bad, but it slowed the process down a lot)
My favourite gems that they discovered... in the Australian startup community, it appears that investors are no better at picking successes than random chance. Externally-funded companies had no difference in outcome compared to bootstrapped ones; the only difference is that they got to success or failure faster.
To be fair though, that's a big difference. Wasting time on an idea that didn't work is one of my biggest regrets about my first startup. I'd like it to have failed much earlier.
Now that I'm almost in my forties, I realize everything I wrote back then was bullshit. Earnest, but bullshit nonetheless.
I'm much more cynical, but I'm also much more likely to just do what seems right and figure out the rest as I go. I don't read "best practices" or advice articles anymore.
This is not to say that there is nothing to be gained from such sources; just that the likelihood of it being useful or accurate given my particular context is small.
In this, my attitude is much closer to where it was in my teens and childhood, where I just had to figure everything out on my own.
The latter is usually mentioned offhand in the preface, as the author wants to deliver a fait accompli instead of just some tips and tricks.
That is, could you substitute any other activity that requires you to actually pay attention and be present and get equal progress?
I think there may be a category theory of self improvement. The more I look at the things I've done to improve my situation from health to work to finances, the more they start to look similar (in a nutshell, it's not math, it's not psychology, but it might be both).
― Robert Bringhurst, The Elements of Typographic Style
You end up seeing enough contradicting information said absolutely that you realise no one is ever 100% right.
At this point am convinced that a competent team will complete the same project under formally waterfall, XP or Agile governance with only minor schedule differences.
The argument is not a formal one, but I think still holds a lot of weight:
https://ameyakarve.wordpress.com/2012/07/22/characterizing-p...
Methodology and people are not mutually exclusive. And it’s a lot harder to swap in and out people (though it may be necessary).
This is also something I try to remember when making a tough decision; how substantial is the difference going to be, actually? Usually it's not anywhere near as substantial/irreversible as I thought.
I've stopped fighting a great many work battles for this same reason, as well.
Maybe a good discussion can come on one example startup advice from YC: do things that don't scale.
I think this is really sound in that they're saying "get product-market-fit with some segment of users." i.e. know that there's demand for your product/service even if it's pretty manual to deliver early on. Then see how to automate. Because most product/services aren't materially better than existing options and so you never get product-market-fit even when it's entirely manual and customized to the user.
As a founder I've been guilty of building first because it's fun. I saw what I wanted in user research and built a whole app accordingly. It failed. Would've been better to start with a smaller attack surface (email newsletter) and once we found success to then scale. The interesting thing is I knew of the advice "do things that don't scale" beforehand. But until I failed I didn't know why it mattered and how to apply it.
Net: applying advice is harder than evaluating if the advice is good or bad. You want to have enough time to fail a lot and then appreciate the wisdom of startup advice :-)
Sometimes people will upvote articles not for the quality but for the discussion they will trigger.
"Do things that don't scale" is good advice, I agree. But maybe the reality is more "Do ALSO things that don't scale", and then it becomes much more obvious and irrelevant, doesn't it?
Is this a meaningful category of knowledge?
So, Theranos? (I swear, if I had a quarter for every company that had "good product-market fit", I'd have...a lot of quarters. Possibly all of them.)
Advice isn't terribly useful if you can only evaluate it after you've taken it, or not.
P.S. Think I can get VC funding for my corner fruit cart?
Even healthcare isn't immune from market considerations. Might have been a good idea for regeneron to have done more market research before developing praulent for example.
My go-to ex-post example is FedEx, whose founder took their last month's payroll to Vegas, and won big enough to keep the business going. I was taught about that in business school (as an example of entrepreneurial spirit). Founders who do bad things and lose are convicted of fraud (and gambling with your employees' payroll is definitely fraud). Founders who do bad things and win are hailed as heroes.
1. Elizabeth Holmes concocted a product that defied the laws of chemistry and physics and couldn't actually be built. She refused to relax constraints like size/packaging that may have made it plausible.
2. She engaged in fraud in the hopes that eventually #1 would be solved and created a culture without transparency that further hampered the product from ever working.
This wasn't a case of a gamble that didn't pay off. This was a case of an infeasible idea, poorly executed, and compounding the issue with outright fraud. No startup advice necessary to avoid this.
Success isn't a guarantee of your sins being forgiven at all
I see Uber's problems more as a failure of the board to govern than solely the fault of the founder.
But see https://news.ycombinator.com/item?id=70808 and https://news.ycombinator.com/item?id=70795.
Popper = create hypothesis and falsify
Carnap = see instances and use induction to create hypothesis
Everything else they say about the scientific method is the same.
Herbert Simon, in thinking of sciences of the artificial, used the Carnap method to create a ton of valuable science.
It's not that post-facto is bad - carnap showed otherwise.
It's about the quality of the science and the specificity of the recommendations, that lead to bs.
For instance you can mitigate for survivorship bias by studying the dead as well as the living, and driving deep into the differences. But that's a lot of work!
As a theory, effectuation studies the difference in decision making processes between expert entrepreneurs and corporate CEOs. The result, while similarly post-facto, is delightful. See effectuation.org - Vinod Khosla remarked it was the first useful study on entrepreneurship he had ever read.
I've been running a UI/UX design firm for the last 10 years, working with small unknown bootstrapping founders, up to well funded and awesome companies founded by super stars like Elon Musk and others. Though this was never my intent, over the years we've collected so many datapoints that alongside our design work we tend to advice and steer the companies we work with into directions we think the company should go. All backed by real examples from previous experiences. Being in positions where you work with a lot of companies over a longer period of time, I think, is the best way form thoughtful startup advice.
And if you don't you'll also rarely do something interesting and new.
It's not as fun to talk about, but most startups will not be particularly impactful and exceedingly few actually change any paradigm. And that's ok too.
I guess I'm saying if you are trying to find general advice based on analysis of outliers, it may not work well.
Elon Musk did his undergrad at Wharton.
I guess the statement might be true if you mean "business school" to strictly mean a graduate MBA program. But Musk definitely took business classes that would have been nearly identical to those taken by MBAs.
Curious why it even matters what is written by the OP given such a glaring and easy to figure out wrong mistake.
What is really strange to me is how HN feasts on blog posts as if they were more special than a simple HN comment. And I do mean 'feast'.
And saying that in reply to you (just read the comments) shows no pride at all in what you are saying ie 'deal with it'.
Wharton is similar in that all undergrad degrees are in "economics" even though students still select a major.
"The term is also used extensively in the history of science to mean historiography that focuses on the successful chain of theories and experiments that led to present-day science, while ignoring failed theories and dead ends."
I'll just leave this here. https://en.m.wikipedia.org/wiki/Survivorship_bias
Physicists have it easy in comparison. One of the basic truths of natural science is that the laws of nature are independent of the observer and time and experiments can be repeated as many times as you like with the same results.
That is not actually true, there is a lot of randomness, and in quantum mechanics the randomness is fundamental. The real secret of the natural sciences is that good physicists never publish if they know they don't know the answer. It took hundreds of years of that policy before the narrowly applicable theories blossomed into the general laws of the universe. If the focus was determining the general laws of the universe from the start no progress could have been made: Newton could have guessed at the laws of motion, but without the specific and painstaking celestial observations preceding him nobody would have known he was right. Economists could enjoy a similar success, but it would be at the expense of 400 years of saying only things that policymakers thought were obvious, while refusing to answer useful questions.
There are plenty of "very true" theories in economics, but they often aren't broad enough to answer the questions about economics that the fate of nations ride on. However 400 years from now those narrow but well-tested theories will be the foundation of the true general economics and all the rest will be forgotten.
If you went back 400 years and demanded that physicists explain my dog's behaviors, you would probably get some answers that sounded OK (kind of like Aristotle's attempts at physics) and maybe even were convincing to people of the time, but they wouldn't have much truth value. Present day economics has a few equivalents to Boyle's gas law, many equivalents to ancient Greek physics, and no equivalents to atomic theory.
The "true market" is like "no true Scotsman" or "a closed system" or "a spherical cow on a frictionless plane". It assumes something that doesn't exist. In economics the influence of the things it assumes wrongly can be very significant. In physics wrong assumptions can also make the results wrong and a lot of work (or rather most work) is done on checking if all the assumptions are sound and ensuring that the influence of the remaining gaps are negligible. That is something that is hard to do in economics when it involves interactions with the global market.
Yes, special theories can be precursors for more general theories.
Come on, what is physics about then? ;)
Even today, systems like my dog are computationally infeasible to predict from the fundamentals, even though everything my dog does is a logical consequence of QED. That's why it is impossible to make progress without assuming a spherical cow and then traveling to every dairy farm in the world in search of the roundest heifer available.
In 400 years economists might still be unable to predict recessions, but I think by then the specific and very true theories of today will have had enough time to evolve into general laws that could predict recessions in principle.
To some extent this is also true for the economy which contains many feedback loops and meta-stable states. Even if we have the perfect theory it might still behave chaotically and might be as unpredictable as the weather.
I was told by a founder that I was a first time founder (I am not) because I didn’t believe this strategy works anymore. He was basically mocking me for being so stupid to not know now growth hacking like this works.
And all the time I was thinking at the back of my head about how dogmatic his thinking was. What works 10 years ago doesn’t mean it still works today.
Copying other people’s strategy is the worst way to run a startup. By the time you have heard it, another 100 people probably heard it too and doing the same thing.
I agree with the post. Think for yourself. And definitely don’t talk down to other founders thinking you know better. Especially if you haven’t succeeded.
Edit: Corrected link
1) Identify problem
2) Come up with, or look up for existing solutions
3) Develop, iterate
4) Identify and get some competitive edge
5) Keep pleasing clients
Of course, there's a ton of things underneath all this, like marketing, funding, or simply being lucky with timing.
The copy-cat method is probably the most legit, and battle-tested method. I.e, simply just copy some existing product or solution, with a known market.
The entrepreneurship scene preaches originality and novel idea to hopeful founders, but to me, it always ends up with a race for who can do something better than their competitor.
I've noticed that in many countries outside US, especially western Europe, some of the largest startups are those that play-by-play copy successful US startups, probably hoping to get acquired once the US startups start expanding to said countries.
Most of the great founders I've encountered are excellent pattern-matching engines who can absorb large quantities of advice and then re-apply it within their personal contexts rather than rejecting it outright, ex post facto or not.
No you probably don't need to live with your users, but yes you should probably spend significant time with them doing the thing your company is trying to help them do better.
Putting advice to work is more than regurgitation... then again, if your company's goal is to normalize short-term living with strangers well then yeah, you probably should live with a few.
”Do you think Brian Chesky of Airbnb heard that strategy from a friend? Hell, do you even think that freeriding off of Craigslist was their reason for success?”
Yes, freeriding off of Craigslist was the reason for their early success, without which their later success was not possible. Having a good model means absolutely nothing without some ability to market it, especially in the marketplace space. Initial momentum is what causes these businesses to either succeed or fail.
The idea of using free ways to get your startup initial momentum is absolutely not BS.
It's a common conceit of Industrialists (or at the very least, American Industrialists) to claim that they hoisted themselves up by their bootstraps and that their success is entirely their own. And then they begrudge paying for the sorts of public works and infrastructure projects that kept them from a lot more adversity. Hell, some won't even mentor or help people the way that people looked after them when they were young and naive.
Agree, and that's also not what I said :-)
The most common terms I've seen that gets used in academic research that is critical of how theories about entrepreneurship are built are 'mythifciation' and 'reification'...
e.g., https://onlinelibrary.wiley.com/doi/abs/10.1111/1467-6486.00...
Maybe not, but that doesn't mean talking to other successful founders isn't extremely helpful. The best founders have multiple great ideas and not enough time to execute on them. If you want to increase your success rate, you should use feedback from other successful founders to decide which great idea to invest your time in.
The part of startup theory most people are interested in "the do's", most of the time doesn't work as they are highly contextual.
I'm pretty sure he heard it from Paul Graham.
Ultimately luck is a large portion of success.
Look how well they did doing that, let's copy them without understanding the context or anything below the surface of the things.
One of the obvious faliures to study is that many great teams with great ideas failed to get any funding because they didn’t walk the startup walk or talk the startup talk with potential investors, which is exactly why you should talk about copying Tesla and about growth hacking.
There's many valid approaches, and often these approaches are radically different. Regardless of whatever approach you choose, if it is to be successful, it must be both reasoned out by—and compatible with—you.
I can't name a single great entrepreneur that didn't have very strong opinions, or that largely relied on outside advice. These things must come from within, and critical thinking is no exception.
1: https://en.m.wikipedia.org/wiki/Survivorship_bias (excuse the mobile link)
Now there's too much information out there. Lots of it is total malarkey to be polite. If I had the choice I'd much rather have too much information than no information. I honestly believe that I would have made fewer mistakes.
IIRC, the book "First, Break all the Rules" actually challenged the "Good to Great" methodology a bit on this point.
(The other point, IIRC, was that first you have to find the right questions, before the right answers can be considered).
And no, we have identified patterns accross many past successful cases so we think we can risk theorizing some formulae and advice.
Top of my mind: - Build something really wanted/needed - The A Team - Timing - Early/easy access to funding
And whether you like it or not: luck!
It doesn't make sense to only copy a working idea without understanding why it's working because your copy will be slightly worse. While you might have some success you won't take the big share. You must find a weakness in the original idea or the execution or the location or anything else. If you have a solid point where you can improve you have a chance. Don't be afraid of stealing ideas and making them better.
Stop following and look for your own magic.
Yeah. Pleny of cookie-cutter knock off wannabe brands and products would benefit from such thoughts.
Many startup founders are basically in that situation for a dozen kinds of relationships. They've never hired, never closed a sale, never rented an office, never tried to collect a late payment, never fired someone, never raised VC money, never hired a marketing firm... Those things aren't rocket science and you can certainly learn to do any of them, but noob mistakes are expensive and you don't have a big cushion of time and money. So it's good to have someone to talk your plans over with first.
A lot of advice does come down to "That's a standard problem, and here's a standard way to solve it that works fine." That's fundamentally conservative advice, but startups seem to do best if they innovate only on the few things that make them unique and just do the standard thing for everything else.
"We listened to the people who gave us advice."
"We didn't listen to the naysayers."
One hears stories of both types.