Why to Start a Startup in a Bad Economy (2008)
paulgraham.com
paulgraham.com
What is more likely to create a company built to last? 1) A firm starved for cash, but with boadloads of the best talent or 2) A firm starved for talent, but with boatloads of cash
In situation 1, a great leader can create gold. In situation 2, all a leader can do is line their pockets.
In 2002 and 2008 there were fantastic people that were unemployed through no fault of their own. People who just aren't visible in normal times. In many cases, these top performers already have money, so they can take a risk. Better to invest sweat in the dark days than cash in the bright ones.
I am going to graduate with a bachelor's in EE in less than a year, and had been planning on going to grad school for CS. Is this a bad idea?
I have a BSEE and went to grad school for EE after a two year break. I forgot how much I loved software over my break and wish I had majored in CS for grad school. I dropped out of an MSEE program after one year, got a job writing software and haven't looked back.
As far as the "grad school" or "startup" question, I'd think it involves several things. Where is your startup now? If it's moving along, maybe you should stay with it. Where is your heart at? If it's not in grad school, or the work you might do after, then why stay? My heart wasn't in my master's program. What grad school are you in? If I got accepted into <insert prestigious school's name here> and had funding, I'd consider giving it a shot. But that's just me.
The other poster said it right, consider your reasons for attending in the first place.
The final point that PG makes is investing in your own startup. If you have a solid team and execution skills, then by giving up on grad school and investing your youth and energy into your startup could yield better returns relative to "investing" later when the market is hot.
I don't see how I can fit startup employment or even creation into the path I chose 4 years ago. If only I could talk to myself 4 years ago.
Since you're in EE, I'm sure you have have the basics of coding down. Even if you're kinda shaky now and don't know any of the hot stuff a lot of startups are using (Ruby/Python/etc), you can absolutely get to the point that startups would want you in a year of playing around on the side. Once you know the basics of coding, it's not all that hard.
I'm not sure what the market will be like in a year, but right now everyone is desperate for talent. You don't know how to seek out such employment? HN has a jobs section. Almost every startup you use has a jobs link in their footer, and they're all hiring. Check out GitHub jobs, StackOverflow jobs, 37signals job board, etc. Get yourself a little bit of exposure via open source contributions, blogging about technical things, Hacker News, etc. and they'll come to you.
As for student loans, though startups pay less, they still pay pretty high salaries, especially now when all the companies have cash and competition for talent is insane. As long as you keep living fairly cheaply (which can still be a couple steps up from a dorm, but may involve sharing housing, especially if you end up somewhere expensive like the Bay Area), I'm sure you can get an offer that would allow you to live and pay your loan payments. And then you're actually decreasing how much you owe instead of just pushing it off.
If you really want to go to grad school, go to grad school, but if you want to work for a startup but feel like you "can't", take steps to make sure you can.
So although I sounded pessimistic in my post above, I am trying to turn myself into someone desirable to startups. But I still have the feeling it is too little too late. Here's to hoping I am wrong though.
In the current context talk about a recession isn't due to any sort of tech bubble. Talk about a recession is due to issues with the financial system and debt.
A small recession caused by a tech bubble would honestly be more desirable (in my mind anyway) than what issues with the financial system and debt could produce.
Also, a downturn in the tech industry now wouldn't necessarily be because of a tech bubble, but rather due to lack of confidence in the financial system as a whole.
I'm not sure if I'm reading this into the essay, or it was intentional, but it seems to be that a good quality for a founder is the focus on the business they want to create should be strong enough that external factors like the macro-economic situation become essentially background noise.
Or, maybe I'm just pig-headed!
I do always wonder, when investors talk about how important the team is, how they judge the strength of a team. Recruiters can't judge programmers very well, so, how does the average investor? PG has an advantage, being a programmer himself. I'm assuming most investors are not technical people.
If you want to start a business, start a business and forget about waiting for the "perfect moment." The situation will never be exactly right. You work with what you have, not what you wish you had.