Startups are an act of desperation | Hacker News Reader

Startups are an act of desperation

blog.eladgil.com

78 pointsjustinzollars40 comments

I quit FAANG to do startups this year. I quit because I was completely bored out of my mind, hyper underutilized, there were so many people around me doing the same work as me so zero interesting growth options.

Now that I am in a (very good) startup, I am incredibly happy, learning and innovating nonstop, meeting new people, in a hyper growth market, building a completely new skillset.

I could never go back to these big companies. Not unless I was reporting directly to a CEO.

I am not getting rich but I am filled with joy.

At my previous job, I was so frustrated and the work was so pointless I was literally throwing things in my house. It made me so angry how stupid and useless a waste of time. We were working on a product which was entirely fake and everyone in the team knew it, but it was generally agreed we would all fake it together.

I would rather suck on a gas pipe than go back. It was damaging my mental health.

Say what you want about desperation: You only have time in your life. They were wasting my only resource, my time.

I did the same, except I ended up at two startups which became toxic and stressful and not nearly worth the effort I put into them. Maybe I'm just not good at picking startups.

Anyways, I'm back at a boring but high paying job and trying to focus less on the things I do at work and more on the things I do outside of it.

> trying to focus less on the things I do at work and more on the things I do outside of it

This is an under-recommended but totally solid approach to a happy life. The takeaway I got from Po Bronson's "What Should I Do With My Life?" was that vocations are overrated -- your job might be funding the things that make you happy today and that's just fine. The secret is to be happy today, not to be miserable now because <some story about future happiness>.

I’m currently trapped in FAANG. What you have sounds amazing, but a lot of startups are terrible

Sometimes going from one kind of soul crushing to a different kind of terrible can be nice.

Sometimes working in academia feels like that

Wow, funding must be good...

Don't assume all startups in all stages are like that.

> At my previous job, I was so frustrated and the work was so pointless I was literally throwing things in my house. It made me so angry how stupid and useless a waste of time. We were working on a product which was entirely fake and everyone in the team knew it, but it was generally agreed we would all fake it together.

Sounds like a lot of startups I've contracted for TBH. I'm stumped how people are willing to throw away money at obviously dead end ideas. Not like 1/12 chances of succeeding more like 1/100. And not that great upside if they win either.

I think 1/100 is the order of magnitude of success probability for a YC-backed startup… For others you’d be tending even closer to zero.

The likelihood of a startup being around at 10 years is about 30% for statups generally after the third year. But around 90% don't make it beyond their third birthday.

So, joining a 3+ year old start-up is actually fairly safe. The odds of "success" in terms of your role still being needed 5+ years away is as good, if not better, than it is at any big corp.

Plus your work is way more likely to have a far more immediate and obvious impact on the business and on customers during that time.

> One of the reasons you rarely see a MAMAA (Meta, Alphabet, Microsoft, Apple, Amazon) VP or above start a company is the lack of desperation

Only Facebook/Meta, only VP or higher, only exit-to-founder, only since 2021, and only the ones that I can find in <15 minutes:

- Statsig, Vijaye Raji (VP Entertainment, VP Gaming): https://www.geekwire.com/2021/former-head-facebook-seattle-s...

- Anonym, Graham Mudd (VP Product Marketing/Ads): https://www.adexchanger.com/ad-exchange-news/metas-graham-mu...

- Mori, Cory Ondrejka (VP Engineer): https://www.speakers.co.uk/speakers/cory-ondrejka/

- Detect, Hugo Barra (VP of VR): https://www.bloomberg.com/news/articles/2021-12-15/former-fa...

- Lightspark, David Marcus (Head of fintech unit Novi): https://www.protocol.com/bulletins/david-marcus-lightspark

- Additional Ventures, Mike Schroepfer (ex-CTO; he founded AV two years prior to exit, but left FB to focus on it): https://www.cnbc.com/2022/07/30/facebook-former-cto-mike-sch...

Well it seems like "rarely" was the perfect adjective then.

For each of those you have a hundred thousand that are not from a VP or higher.

That population of VP+ is also significantly smaller, though.

> Of course, through the lens of expected value, these numbers look worse as traditionally there has been a high failure rate to startups.

"worse" here does a lot of heavy lifting here and doesn't begin to convey the magnitude of "worse"

Use YC companies as an example. Acceptance rate around 2%, success rate about 10%. This gives you 0.2% success rate for a typical startup applying to YC.

If you do succeed, unless you bootstrapped, you're going to get diluted. Let's handwave this to keeping 75% of your company (a generous assumption!).

This gives the expected value of $30k, for 2 to 5 years of hard work. Before taxes.

By success, do you mean making it big or staying in business?

If the latter, do you think that the 98% who are rejected by YC all go defunct? I don’t know the numbers and I’m curious.

The set of companies that are rejected from YC can also succeed or fail.

You're twisting those numbers quite a bit. Anyone can apply to YC, like half are an idea. I'd wager most of the rejected are not following through with 2-5 years of hard work on it. You're also acting like a reject from YC means 0 EV, even when many successful startups have like 3 applications to YC, if they even were accepted at all. That $30k EV number is useless and not in any way the actual EV of 2-5 years hard work on a startup.

This logic is faulty for one reason: it's not a casino with randomly distributed chances. The number of FANG employees is low compared to the entire population, yet some of the students are almost guaranteed to make it there, because of their apparent smarts and mindset, while others have about zero chances. So it's a lottery, but the tickets aren't sold to everyone. The same is true for startup founders: some of them are obviously going to make it one day, while others don't even need to apply.

Statistically, the last reason you should join a startup is to get rich. Most fail and even those that “succeed” most only do so for the VCs.

Yeah, startup bros typically plan on exploiting the fuck out of a few naive coders to get rich quick. That's why all the real startups have programmers as central figures, they can actually produce and stopped themselves from getting scammed.

If you're reading this and thinking about working for an early startup, don't. Best case, you make some douchey boss a few million dollars and worst case you lose years of your life making vaporware. Find a real job with stability.

I keep getting “offers” of 10% equity to literally program the whole product that doesn’t even exist yet. Startup bros want 90% to send emails. The crazy thing is people do take those offers.

The only programmers taking these offers are at the bottom of the barrel in either skill or self-confidence, I’m afraid.

Ironically, the programming is the easy part. It’s figuring out what to program that is hard.

The business bros offering 10% to their CTO are probably also lousy product managers too, and know very little about what to build anyway.

> Startup bros want 90% to send emails.

While 10% is obviously low for what amounts to being a cofounder, I invite you to start a startup with just a product and see how far it goes. You might change your mind on the “just sending email” part.

Yes that is a bad take. Biz dev, product management and fundraising are arguably more important than engineering in a startup - except in a few edge cases, the latter is the most commoditized function, as critical as it is.

I think 10% could be a decent share for a CTO even at ~seed if the CEO brings great access to capital and users, and outstanding product management instincts. The problem is that this is seldom the case. What I see most often at pre-seed is a CEO that brings a product idea that is all in their own head (and not in the users’), zero idea or instincts on real product management and little else.

I donno I made a bunch of money off an early startup, totally depends on the team

I agree that most startups fail. Only a small handful of companies at a given moment are the "breakouts" that are clearly working, and those are the most derisked to join (although not risk free for certain).

I think the entire industry forgot about startup risk during COVID, and unfortunately it is coming rushing back now with the changing environment....

Which startups are “clearly working” if you define “clearly working” as “making a sustainable profit”.

Statistically there is almost no chance of becoming a professional athlete, but it is much easier to measure if someone should go down that road because athleticism is easy to measure.

How do you measure if you are good at ideation, coding, architecture, and the myriad other skills required to run a startup? Unless you are implying that a startups success has little to do with the founders.

All indications are that a startups success has to do a lot with pattern matching (does the founder look like Zuckerberg) and VCs don’t have a good track record of picking successes. They can lose money on nine out of 10 investments. They are well diversified. As an employee, you can waste years of your life at one of the other ten.

And coding and architecture has little to do with a startups success - and I say this as a “coder” for 25+ years and an “architect” who gets paid decent money at BigTech working with other companies helping them design their cloud architecture.

People make websites to solve their own problems

"Startup people" often want to "make a startup"

I don't think so because desperation refers to lack of hope (literally; check out the eymology). If you have no hope, why would you embark on a startup. Startups are an expression of hope.

Perhaps something like “hunger” might be a better term

Startups get desperate when they are failing: running out of funding runway without the business taking off. But long before that, there is a lot of excitement and optimism.

I am not sure desperation is the right word here. He used it to list out a bunch of unrelated motivations, but most of them I wouldn’t consider desperate.

I definitely agree motivations for starting a company are mixed, and vary a lot from person to person. For the most successful companies I have seen, the motivations have largely collapsed to the ones I listed - with different mix of motivation by founder.

Finding the right word was definitely a struggle, but I think you need to lack alternatives in order to start a company. So "desperation" seemed to fit.

Open to other ideas/suggestions on a better word?

>> you need to lack alternatives

People don't talk about this much. Some brilliant people I know won't start (or stay with) a company because they have too many high paying, interesting alternatives.

>> you need to lack alternatives

I dont believe this. Went through YC this year and many of the founders had great alternatives. You could say that none of the alternatives were as attractive... but thats how all decisions are made

Reaching for an "extreme" label is the issue here. What you've described in the blog post is lower opportunity costs. That is compatible with but doesn't imply desperation or a lack of alternatives: neither applies to the "revenge" founders or the folks foregoing $200k+ salaries, for example. In fact, both are able to take the risk because of solid-but-not-extravagant alternatives (wealth from prior exit and highly-compensated jobs, respectively). That's what separates both from the VPs pulling down million-dollar comp, who face much higher opportunity costs for the exact same potential reward.

Reply on news.ycombinator.com