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Comment by pg | Hacker News Reader

I can't say he was mistaken, since he was only saying he disliked it. But I don't think there's anything wrong with selling a company at any stage. Steve's problem with selling seemed to be that you're shirking work by doing it. But that isn't necessarily, or even usually, true. A lot of people who sell startups go on to do other things, and often bigger things. If we were still running Viaweb, we could not have started Y Combinator.

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What he's criticizing is doing a startup specifically so that it could be flipped later. If you are in it to build a real company, you actually go through the hard work that Jobs is talking about.

Did you start viaweb to sell it to someone else later, or did you start it to build an actual sustainable business?

We started it to sell. We were not interested in online stores. Some of the problems were kind of interesting, but neither I nor Robert nor Trevor thought of Viaweb as our life's work.

Incidentally, building a business to sell doesn't mean it can't be sustainable. Viaweb made Yahoo lots of money.

You attacked that sort of thinking a couple of times at Startup School events. In certain ways, it was troublesome, because I like to think that's the sort of person I am, or the business that I want to start. But now hearing you say again (paraphrase) "we did it this way, and we liked some of the problems, but really we thought it was just a great opportunity" is promising. Is what you're trying to say, that the 'best' startups are usually founded by people who have deep emotional ties about the problems they're solving? (say, anybots, facebook, google) but that it can still work with the right people and the right ideas/timing (viaweb, slide, FriendFeed(?)).

IF YCs stance is to pick the former as much as possible (or all the time). What can a valley outsider do to get the later started?

Sorry, this is the type of question I would have loved to ask at startup school, it just took a couple of days to formulate.

I'm not sure what sort of thinking you think I attacked, but I'm not against people starting startups to sell them. I think it's a mistake when people come up with startup ideas by trying to think of startup ideas, instead of looking for real problems that need solving. But you can be working on real problems and still intend to sell the company.

What was in my mind is more like what you describe as "Doodling" in [http://paulgraham.com/ideas.html]. NOT the type thinking that gets you with the next social geofenced daily deal. There is some differentiator between the two that I think instinctively I understand, but quantitatively I haven't been able to describe.

EDIT: First crack at a description: You want an idea that solves a problem, not starts a startup, and sometimes a startup is a decent vehicle for the solution.

One way of looking at it was that the problem Paul was trying to solve was: "How can I stop spending the majority of my waking hours working on things that I don't care about in languages and working environments that are soul-killing? Eureka! I'll condense that uncomfortable period by using the most powerful tools and techniques at my disposal (which I happen to love) and be done with it."

> We were not interested in online stores. Some of the problems were kind of interesting, but neither me nor Robert nor Trevor thought of Viaweb as our life's work.

'How to find your "life's work"' might make a great essay. I think the majority of founders find themselves a few years in working on ideas they aren't crazy about.

In a sense founders get married to ideas too young, realize it's not a perfect fit, and then an "acquisition" is basically a divorce between them and the idea.

http://paulgraham.com/love.html

http://paulgraham.com/hs.html

Well you obviously weren't doing what you love with viaweb if your entire goal was to sell it to turn a profit so that you'd never have to deal with it again. And Steve's assertion is not about work ethic, it's about building a "real company". I don't think Steve would consider you to be a real entrepreneur. In his biography, it's stated several times how he doesn't want to make things just because people want them, which is directly against your beliefs in pandering to the masses.

I'm not sure where you got the idea that I believe in "pandering to the masses," but maybe this will cure that misconception: http://paulgraham.com/usa.html.

"But the just-do-it model does have advantages. It seems the clear winner for generating wealth and technical innovations (which are practically the same thing)."

Today, wealth and technical innovations have separated quite a lot. A great programming language will make less money than the programs built upon it. I don't think this is entirely valid in the world of today, where open-source software is often some of the most innovative.

By wealth I don't mean money. You don't have to get paid for creating wealth: http://paulgraham.com/wealth.html (search for "open source").

Well viaweb would be one example of pandering that you seem to have just admitted.

I don't think Steve Jobs would ever say anything of sorts. Jobs did the exact same thing with NeXT. Does that mean that he didn't consider himself an entrepreneur? Human emotion plays a big role in our decision making and you can't have the same feelings for every project you start.

He didn't start NeXT with the intention of selling it. He was trying re-create Apple from scratch. Instead he ended up parlaying it into a take-over of Apple and re-created it from within.

I'm not weighing in on the definition of "entrepreneur" here, just pointing out why NeXT isn't a counter example.

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Steve Jobs did not just get a job at Apple and go back to gruntwork or managing a subsidiary. No, he took back the company and reshaped it.

If he had been unable to direct Apple in the direction he wanted after the reverse takeover, I doubt he would have accepted it.

Awesome.

I think you are successful partly because you got the right people together to make viaweb and sold it. Now you are able to do much more with your life. It's interesting that when one dreams big (as I do), that sometimes gets in the way of making your first startup have a successful exit. We are working on a huge thing and partly creating a new market, and unfortunately had no time to follow my own advice and flip a company first. Wish I did, I think I would have been ahead of where I am today.

What exactly do people view as "wrong" about building a company to sell? Companies are sold because it's in the interest of both parties involved in the transaction, so it must serve some legitimate function in the economy. Perhaps it's a little different if they're bought by a larger company only to eliminate the smaller competitor, but I doubt that's why buyouts usually happen.

It seems really silly to me to criticize someone for wanting a high payoff to labor ratio or not wanting to dedicate their life to everything they do, but I don't know - what's the reasoning?

Would it be less or more worthy of criticism if pg had specifically planned to sell viaweb and start ycombinator?

I would say no, it can be the necessary stepping stone to something else. In that case it can be a stepping stone for both the sellers and the buyers whom did not have the "right" people for the job yet, but by selling got the people who could do it.

I too mostly "hate it when people call THEMSELVES entrepreneurs". But I do love it when people say and prove that they are looking to change the world. If that involves building and selling a company, then why not? By selling Viaweb and then growing YC, pg has done more to change the world than he could have done by staying put.

I think this quotation (which I liked when I read it at the end of the biography, and which made me think of you at the time) strikes a bit of a sore point.

In the end, some things we do for money and others for love. I think Steve Jobs saw himself as someone who almost always did things for love. He saw making money as simply being a way to fund the next project (which is how artists in general feel).

It's interesting that your response to this quotation is:

"Steve's problem with selling seemed to be that you're shirking work by doing it."

I think that's part of it, but the other part is that you're not doing what you're doing with the right frame of mind.

"A lot of people who sell startups go on to do other things, and often bigger things."

Why is "bigger" in this sentence rather than some other word? "Better" for example.

One of my favorite quotations in the book comes from Larry Ellison. He says he was complaining to Steve Jobs that his plan for turning Apple around (the reverse takeover of NeXT) wasn't going to make either of them nearly as much money as his plan (buying Apple and giving Steve 25%) would and Jobs replied (from memory, so it's probably inaccurate): "That's why you need to have me as a friend, Larry. You don't need any more money."

Another example would be Elon Musk who would still be doing Zip2 instead of giving the world PayPal, SpaceX or Tesla Motors.

This is a good point, but begs the question, why is it necessary to start a new company (and depart the previous one) to pursue these ventures?

I'm sure I'm just oblivious to some legal, financial, etc. benefit of building separate company "entities" for each project but personally I prefer the idea of starting the next General Electric than a string of noun-deprived orphan companies.

Keeping your name associated with the trail you leave behind keeps you honest; perhaps this is what Steve was getting at?

And as anyone who runs their own business can tell you, that requires your complete attention. You can't just start a business and check out once things are going well, or they stop going well surprisingly fast.

http://paulgraham.com/prcmc.html

I think it's possible to do this with one company. A good counter example to Elon Musk would be Richard Branson: he did music, mobile service, airlines, and space travel.

Those are not a single company. They are separate entities that license the Virgin brand. Branson will start them up then move on. Its like a franchise model but with a few very large franchisees.

Focus. Some people are able to do more than one company at a time, but I certainly can't.

Separation of concerns? :)

Then the interesting question is: would you be willing to sell YC in the next couple of years if the price is right?

(My hunch is that you're not going to sell YC anytime soon -- even though you probably could sell it -- simply because you're not done yet.)

YC is different. We didn't even think of it as a company at first, just an interesting project. It has turned out to be one of those cases where a side project takes over your life (sort of like Facebook, though much more gradual), but that wasn't planned. We just kept getting more applications and either had to grow or start rejecting people we thought were good.

I never considered what I'd do if someone wanted to buy YC, because companies like YC aren't buyable. But even if someone wanted to buy it I could not imagine selling it, because I don't need the money and it wouldn't be worth the risk that the acquirer would ruin it.

I think those are the exact arguments Steve used about Apple (and Mark about Facebook). It was an interesting project; didn't plan it; it took over his life; other people would ruin it; the money was't an important factor.

Interesting. Thanks.

This, in my opinion, is how one manages to do what they love.

"because I don't need the money and it wouldn't be worth the risk that the acquirer would ruin it."

last night i watched the movie "meet joe black" and that sentence reminded me of a quote that "william parish" said when he realized he was going to die.

"I don't want anybody buying up my life's work! Turning it into something it wasn't meant to be. A man wants to leave something behind. And he wants it left behind the way he made it. He wants it to be run the way he run it, with a sense of honor, of dedication, of truth. Okay? "

i'm not saying it's the same thing, but, it did remind me of the movie.

I think Steve would now consider you an entrepreneur.

I don't think YC can be sold. Too much of what makes YC special is tied up in pg and interpersonal connections with angels and other investors in SV. I don't think you could just hand off the process to a VC firm or something and expect to get the same level of applicants.

Maybe someday that won't be true, and maybe I'm wrong today, but my hunch says that once it's sold, it will begin to decline, and everyone who might consider buying it knows that.

The quote is taken from the biography. In that paragraph Jobs is not talking about whether or not he thinks people are shirking by selling. He is saying that real entrepreneurs make companies that last and have a "legacy".

I do find it surprising though that you tell people to do what they love but then in these comments you admit you didn't like doing viaweb. In your essay you wrote, "The test of whether people love what they do is whether they'd do it even if they weren't paid for it." And it seems that you only did that startup because you were going to get money, which I suspect is true for the vast majority of y-combinator start-ups.

I found that like Steve, I tend to dream big. But at the same time I don't have any big connections.

My advice to entrepreneurs would be to get the right people involved your first venture, even if it means giving up way over 50% of your company. Because it's better to exit a successful venture, with money, connections and a track record, than own close to 100% of your first venture and spending years growing it. Chances are, this isn't your last idea and you will want to start other companies in the future. When you do, you'll have more money, resources, connections, and people willing to fund you (if you want) as a serial entrepreneur.

That said, I was never able to do it myself. My first project out of the gate is super ambitious and aims to change the face of the social internet, help people accomplish things in the real world, and improve privacy for everyone.

It's coming along and we have over 30k daily users. http://qbix.com

But it took a long time to get here. And now I am thinking that we might just be able to make it on our own steam.

So in a way, I am kind of pursuing my dream, and never had the time to start and exit a successful, but ultimately temporary, venture.

My guess is that he's talking about this problem: http://blog.wilshipley.com/2011/04/success-and-farming-vs-mi...

"Founders and angel investors usually don’t particularly care if the companies they created live or die after they sell out, because they’ve gotten their money and moved on. There’s no stigma to having a company you founded fail after you leave it. In fact, again, it's a badge of honor: “Bob Smith founded Flopper.com, sold it for $46MM, then got out before it tanked! Genius!”"

It seems to me a silly assumption that selling is somehow a form of giving up: if you stay forever with one thing you might miss an opportunity to do something even more powerful; for Steve I suppose Apple is the exception to that rule, but even so he had influence with NeXT and Pixar while absent from it, albeit a forced absence.

Indeed selling might just be the necessary antecedent to the next big thing.

Probably depends on if the idea is your one true dream, or just something you found interesting enough to invest the time/take the risk. That would have a huge impact on if the money is worth giving up being in control of the company/product's destiny.

I remember a quote from Startup School which went something along the lines of,

"Don't pick an idea for the sole reason that it will allow you to do a start up. Find a problem that you're truly passionate about solving, and things will take care of themselves"

I didn't catch the stream but I mostly agree with that advice.

I do find myself wondering if it's worth doing any idea to build up capital for something else if you feel an idea has potential but you aren't sure you can sell it to investors without putting in a lot of time and money into it first to show the true potential.

Your writing was a much bigger deal than ViaWeb.

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