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Napkin Entrepreneurs

steveblank.com

48 pointsharscoat32 comments

I don't like the sniffy tone in the conclusion:

> But it’s important to note what these napkin projects/test are not. They are not a company, nor are they are a startup. Running them doesn’t make you a founder. And while they are entrepreneurial experiments, until you actually commit to them by choosing one idea, quitting your day job and committing yourself 24/7 it’s not clear that the word “founder or entrepreneur” even applies.

I think he's right, but it comes across as a bit uncharitable somehow; pointing out the obvious, I guess. I suppose it'd be like a professional cyclist writing about how someone like myself is "merely an amateur". True, but we both know it, and it's not really necessary to point it out unless you feel like demeaning someone.

You could phrase the thing in a different way to convey the same message:

"I think it's great that we live in a time when so many people can experiment so easily, and look forward to some of these experiments blossoming into full-on startups, which I believe happens at the point when the founders quit their day jobs to work on them full-time".

Or something to that effect.

Perhaps it's true that such projects aren't companies, but so what? It doesn't make them of any less value. In my opinion, producing something that people love and use is valuable whether it's done as a company or a side-project.

Is it true that such projects aren't companies? He lists "run it as a part-time business" as an option but isn't that already happening when "users can visit, use and even pay for" the project? Or is it not a company until a user pays and then it becomes ok to call yourself a founder?

What's "sniffy" about it? Is Blank not praising the napkin projects effusively enough? It certainly looks like praise to me.

Read the sentence in context. He's trying to explain where all the startups are. We are awash in napkin experiments; why aren't we similarly flooded with startups? Well, because there's a significant risk barrier between one and the other.

And, yes, he doesn't downplay that risk barrier. That seems fair. It doesn't do your audience any favors to elide the significant difference between a napkin experimenter and an actual founder. People can and do go bankrupt over that difference.

I also have a problem with the "tone" of the article. Steve seems to be saying that unless you commit full time, you're not a business. If I start a "napkin experiment" website in my spare time and provide a simple service and people pay me for it and I turn a profit, is that not an entrepreneurial venture? Isn't it a business? Come tax time, the IRS will sure think it is.

Using the "go full time or go home" metric to decide whether or not something is a startup or a business seems unnecessarily arbitrary to me.

+1 to this.

I don't work full time on my lifestyle business but the IRS will be taking a hefty chunk this year. I wish they read HN more so they could scoff at my lack of entrepreneurship and spurn my meager revenues.

> What's "sniffy" about it?

It just felt condescending to me, somehow. "Those people are not entrepreneurs or founders" just doesn't sit quite right for me, even though I think his distinction is basically correct. Maybe I read it wrong or maybe he dashed it off quickly or something - I generally like his essays a lot.

Paul Graham wrote an essay related to this: http://www.paulgraham.com/discover.html

I think this is a tired argument. It's a startup if it has "limited operations history". You are a founder if you started it.

What if somebody jots down an idea on a napkin, spends the next few months of nights and weekends creating a first version, gets ramen profitable, quits their day job, hires a dozen workers, and sells to Google for $20 million.

Looking back, was it not a startup until they quit their day job? Of course not, it was a startup the day they put pen to napkin and started coding.

Not saying there aren't a ton of poorly run startups led by founders who aren't truly committed to them. But let them call themselves and their "projects" whatever they want.

> What if somebody jots down an idea on a napkin, spends the next few months of nights and weekends creating a first version, gets ramen profitable, quits their day job, hires a dozen workers, and sells to Google for $20 million.

Then they've got -- at the very least -- $20mm and experience running a 12-person company. This includes paying salaries, making sure the books are kept properly, and all the other jazz that comes with running a company. These are experiences you likely don't get if your business is selling ads on a blog.

> Looking back, was it not a startup until they quit their day job? Of course not, it was a startup the day they put pen to napkin and started coding.

No, it was a startup business they day they started accepting money for a service. Before that it was just someone's project.

> Not saying there aren't a ton of poorly run startups led by founders who aren't truly committed to them. But let them call themselves and their "projects" whatever they want.

How about "projects"?

Are you accepting money and providing a service? Congratulations, you've got a business. This can be by selling ads on your new video game blog, accepting VC to fund your crack team, or selling subscriptions to your SaaS product. You can be dedicated enough to devote everything to your business, or you can be content with keeping a day job and running your thing on the side. Some folks aim for millions, some folks are fine with a little boost to their income. Some folks learn how to manage teams and hustle, some don't.

Getting paid is when it becomes a real business, IMO.

> No, it was a startup business they day they started accepting money for a service

under this logic, Twitter wasn't a startup until recently, since they were not charging anything from anyone.

Near the end I mention that taking VC absolutely counts under "accepting money for a service."

What about a company that is funded by the owner. Isn't that a startup just because of the origin of the money?

The only complaint I have with that comment is that 'putting pen to napkin' and 'starting coding' are two entirely separate tasks, and I think that the argument here is that there is too much of the one, and not enough of the other.

Yeah, I usually hurry home w/ my napkin and get coding straight away.

We spend far too much time in the industry debating on what to name things. Naming things, or preventing things from being improperly named, does not build stuff or sell stuff to customers.

> "Naming things, or preventing things from being improperly named, does not build stuff or sell stuff to customers"

I'm not so sure about that. Politicians and marketers have long known that the name that we assign to a thing can be more influential than the qualities or substance of the thing being named.

Naming things properly is essential in getting things built and sold.

You said that we spend far too much time on deciding what to name things. In fact, I think most engineer-types don't spend enough time doing this.

The name is a step in the funnel and causes X% dropout at its stage, just like everything else. If BCC were named Bingo Card Spewer or AR were named Appointment Annoyer, X would be higher for each. If Facebook were named CreepyStalkerHaven... you get the idea.

It may still be true that reducing X to a negligible level is close to trivial and comes in far behind other activities on time and money ROI. Can a product or business name be A/B tested?

Also see #18: http://www.paulgraham.com/startupmistakes.html

Statistically, if you want to avoid failure, it would seem like the most important thing is to quit your day job. Most founders of failed startups don't quit their day jobs, and most founders of successful ones do. If startup failure were a disease, the CDC would be issuing bulletins warning people to avoid day jobs.

...

Most startups fail because they don't make something people want, and the reason most don't is that they don't try hard enough.

I agree with the second statement, but I actually disagree with PG on the first one. Trying hard doesn't necessarily mean quitting your day job.

It can mean doing a day job to support your family whilst working on your project in your spare time.

Using the reverse logic, most people that produce something that people want will be earning enough from their project to quit their day job. PG's observation doesn't imply for me that quitting the day job has to come first.

In the above quoted passage, PG is not talking about issues such as supporting family (which he does acknowledge as an important issue elsewhere). It's just about the correlation between commitment, effort and success.

Actually who cares what they should call it? If I can make it to a point where people will pay me to use my products I'll consider it as an accomplishment. Is it a startup, company or whatever, I don't care.

Its also possible to quit your job and still only build a half-baked company. At least you can call yourself a startup by this standard.

This smacks strongly of someone who is fostering elitism.

Too much has already been written about how easy it is to get some sort of MVP out there, but the real gem in steveblank's article is this:

"until you actually commit to them by choosing one idea, quitting your day job and committing yourself 24/7 it’s not clear that the word “founder or entrepreneur” even applies"

Many hackers fail because they spread themselves too thin, firing at multiple projects until finally realizing that they're performing suboptimally for all of them.

Ah, I can get outside the building without leaving my computer! I still think talking to actual people is more informing, because they'll often indicate secondary or even completely irrelevant information that is more important. An experiment will mainly either confirm or disprove an existing hypothesis (though you may still get some info by asking for feedback etc - just much less, and less often, than from a live conversation). In summary: personal contact helps (said to be a comparative advantage of SV).

Can people really lauch several mini-webapps over lunch? I guess if you have rails hosting setup and know your way round a domain name registrar, and practice this a few times, you really could get that fast (for, of course, simple webapps, like isitdownforeveryoneorjustme, or isitfriday etc). Payment setup might be more hassle... but I guess if you have set up paypal once, it's not hard to repeat. There are also various 3rd party services (like Wufoo/google forms, fax, recurring charges, etc) and APIs. Though you couldn't learn them all and use them several times over lunch, after a little practice you could (maybe just one use is enough).

Who cares what you call yourself? An entrepreneur by any other name etc. It only matters when you have to impress people, in a courtly procotol sense.

Doing something part-time does not mean that that project is a one weekend experiment. If you do something for let's say 2 years 3 hours each day, why cannot you call that thing a startup? For some of us, quitting our day job is not an option (yet). (For example no one would invest into an eastern european guy's vision about user-friendly database access, and his ability to execute on it). But it does not necessarily mean that our projects are child's toys. (Maybe some of us work on even more sophisticated stuff than startups with $40 million funding.)

Great comment by Dave Binetti on the original post:

   "Napkin Entrepreneurs" build products. 
   Founders build business models. 
   Products are part of a business model (the fun part) 
      but are not the whole story.

I like his summary that starting with the napkin is necessary but not sufficient. What muddies the water is that sometimes the "built to flip" approach can sell a napkin.

Anyone in Michigan -- Steve Blank will be speaking in Ann Arbor this evening at Blau auditorium on the University of Michigan campus.

http://www.a2newtech.org/events/16094578/?eventId=16094578&#...

Your status as a business person is defined by customers and revenue, not titles like "founder" or "napkin entrepreneur"

Let others debate on titles and definitions. Focus on making money.

Good point on focusing on revenue, focusing on revenue is how I finally stopped worrying about whether my startup would succeed or not based on something as arbitrary as whether I used .NET or not as the platform (the consensus on HN is decidedly anti-.NET). Platforms and business designations are just distractions from running your business.

I thought steve blank was done blogging? Or he once said he was done publishing things on the web or something along those lines...

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