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Comment by jll29 | Hacker News Reader

I would say whether PG is right or not depends on how much initial funding the founders have and what they're trying to build.

If you have not a lot of savings to live from, and your runway is therefore short, you'd be stupid to quid your day job and launch your startup: your small savings will quickly be used up and that'll be the end, because you won't be able to raise a round.

If, however, you have substantial savings to deploy so that you can get far enough to afford to pivot 1-2 times until you find product-market fit, then PG is right and taking the plunge is the right thing, regardless of business environment.

If your plan relies on customers, then it also depends on whether your product or service is aimed at reducing customer cost or has value in a different way.

To exemplify the above: I claim "You can/should start something like AirBnb in a bad economy, but not Google."

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> I claim "You can/should start something like AirBnb in a bad economy, but not Google."

Yet AirBnB was born into a good economy (that, in fairness, was on the cusp of going quite bad), while Google was born into an economy that was just starting to recover from being bad. Not when you start but when your product is ready to ship may be more significant. By the time Google was ready for prime time we were in a good economy. When AirBnB was ready for prime time, we were in a bad economy.

Skate where the puck is going, as they say.

> while Google was born into an economy that was just starting to recover from being bad.

Huh? Google was started in the mid to late 90s (incorporated 1998 but started earlier at Stanford). It was quite literally during the peak years of the dot com bubble and the US economy was doing fantastically well. The Clinton administration was even trying to draw up plans for what to do if the national debt was paid off...

Are you thinking about when Google went public in 2004?

Work on Google started in 1996. While things weren't bad per se, we were still working through recovery from the early 90s recession. It wasn't bad but it wasn't good either. By 1998, when Google was ready to ship, things were quite good.

If, in an alternate universe, work on Google had started in 1998 when the economy was strong and didn't ship until 2000, things could have been quite different. It was no doubt important that they were ready to ship when the economy was at its peak. That means starting when things aren't so good.

Using unemployment as a reasonable signal, I don't think 1996 is that connected to the 1991 recession.

https://fred.stlouisfed.org/graph/?g=YUZM

Sure, it was still above 5% in 96 nationally. But strongly down from the summer of 92 peak.

Additionally, Netscape's IPO was in August 1995. I wouldn't call that a bad environment for starting an internet company.

96 is when I got into the industry. There was definitely money and buzz in the air, but it wasn't anything like 99/'00, or other booms that have followed. It was really just the prelude leading up to that, where some infrastructure was being put in place. Online commerce, credit card processing, etc. online was still quite rare. Even in '95, '96 running banner advertising on web sites was still kind of a faux-pas. Media beyond fairly crappy images was non-existent, because bandwidth wasn't there. Actual profitable business models hadn't been proved.

People building Internet infrastructure (Cisco, Sun, etc.) were making some decent money, but actual Internet businesses? Not really.

In fact even by 98, 99, '00, Google itself had no real viable business model. Despite becoming a household name already.

All that's true enough, but do you agree with the original statement:

> Google was born into an economy that was just starting to recover from being bad.

I don't think being grad students at Stanford and then incorporating in 1998 counts as "just starting to recover". The economy in 1996 wasn't bad. 1998 definitely wasn't.

It was explicitly said that the economy wasn't bad in 1996, just not good either. There is little doubt that the economy was good in 1998.

> so that you can get far enough to afford to pivot 1-2 times until you find product-market fit,

This line of reasoning has always felt so bizarre to me: try to start a business doing something you think is important and when you find it doesn’t work, try some other business until it does. I understand it as a response to things not working out as expected, but people go into business with this as a strategy.

I guess I’m just not that type of person.

I think its a distinction between the type of person that says "I want to build a business, I think building product X sounds like a good way to do so" and the type that thinks "I want to build product X, I think building a business sounds like a good way to do so"

What’s interesting to me is that Amazon appears to be the former. Bezos wanted to start an Internet business, and he thought that books were a good way to do it. He was much more interested in the business model than anything to do with books specifically.

Apple and google seem to be more of the latter

Great insight.

For me, I just wanted to learn React/Node and picked the context of Electron.

Since I was a hardware/software integrator… I thought: what is the best common hardware with the worst software? Label printers!

Now, after 4 years of pure software I’m launching a new brand of 300 dpi label printers.

The value I’m offering Mac users is a blue ocean strategy: creating huge value at low cost whereas my windows version is more purple ocean (some blood in the water)… since I’m disrupting incumbents on the lower/middle sized end.

> people go into business with this as a strategy

Very very few truly do as you state at face value. Most people go in with a plan and rarely want to hard pivot.

But, starting a business is a test and the outcomes of the test shows whether it's working for you or not. Many times its fundamental business problems (homejoy) other times it's you (friendster vs fb).

There's no right/wrong way to decide what is the correct move because whatever example someone provides, there's plenty of counter examples.

But, firing as many bullets as possible helps reveal what potentially works and to double down on. Sometimes what is showing signs of life is an aspect of the business that's not directly related to your current core, but pivoting there means survival. That is the hard pivot (segment.io).

Failure isn't a strategy but it's a very likely outcome that you have to plan for. A startup fails to raise each successive round something like 67% of the time. [1] Of course you have to work on something you care about, but I think 'something you care about' can be a meaningful business that creates value to customers. Once you have traction you'll start to love it - or you won't.

You only fail when you stop trying.

[1] https://medium.com/journal-of-empirical-entrepreneurship/dis...

I assume the idea is that the initial impulse was in the right area, but the first attempt itself isn’t quite correct.

So you learned a bunch and therefore aren’t starting from scratch with the 2nd try.

I.e. you make some environmental tool and try to sell it to the government. You learn that the government is a byzantine mess. You then sell the tool as part of a service to the corporations causing the mess to prevent future lawsuits. You pivoted, but the tool itself still had value.

is that not just describing the process of finding customers?

What happens if you don't find a customer, even after some several iterations/searchings? How do you know the tool has value in that case, other than personal conviction?

More like “try to start a business doing something you think is important, but accept that you won’t build it right the first time”.

> If, however, you have substantial savings to deploy so that you can get far enough to afford to pivot 1-2 times until you find product-market fit, then PG is right and taking the plunge is the right thing, regardless of business environment. [snip] I claim "You can/should start something like AirBnb in a bad economy, but not Google."

Q: How many times did AirBnb and/or Google have to pivot to find product-market fit?

Google pivoted from “ads ruin search engines” to one of the world’s biggest advertising companies. That’s a pretty big pivot

PMF is tricky. Google's first product was a hit, but it wasn't a market fit because nobody was paying for it so there was no market. They were attempting to sell an enterprise version (the search appliance). They pivoted pretty fast to AdWords.

Like, is there PMF if no money is changing hands. I saw Docker be described as having extreme PMF but they went down because they had a product, but giving away cool stuff does not create a market.

I can get product market fit right now giving out cash on a street corner. It doesn't mean anything, and that obviously can't be what PMF means.

If it's not profitable, it's not PMF.

Some startups do, some don't.

> Some startups do, some don't

I'm not sold on pivoting, and I'm not the only one. See:

Too Many Pivots, Too Little Passion https://hbr.org/2012/09/too-many-pivots-too-little-passion

> I would say whether PG is right or not depends on how much initial funding the founders have and what they're trying to build.

I think PG is fairly criticized for some things, but on this topic I trust that he knows what he's talking about.

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