Why Your Startup Will Fail
gilesbowkett.blogspot.com
gilesbowkett.blogspot.com
-You understand the numbers are against you and realize even if you fail it's worth trying again; you believe it's better to go for 0 for 50 than 0 for 0.
-You provide a utility that is good enough for someone to pay for.
-Your startup saves someone time or make someone's life easier.
-Your costs are so low you're virtually impossible to kill.
-You don't care about material possessions.
-Your startup makes others money.
-You treasure not (or rarely) having meetings.
-You love working for yourself.
-There's very little wasted time and red tape. Your team is lean, mean and aggressive.
-You're patient. Twitter, Kayak, Plenty of Fish and Facebook have been around longer than you think. And two of them aren't even profitable.
-You know IPOs or acquisitions aren't required to make a good living..
-You do instead of talking about doing.
-You realize, in the very early stages, that the worst thing that could happen is you lose a few hundred or thousand dollars and learn something. What do you have to lose?
-When you get lucky or catch a break you're ready for it.
-You believe that success is the amount of your life you control.
-You love what you do. Or at the very least, love your situation.
-You avoid blanket statements like this: All the millionaires were in porn in 2000 and realize that not every "startup rule" or any rule applies. Businesses can be very different from each other.
-You understand that your odds of having an enjoyable job paying 200k are roughly the same as owning a profitable small business.
If the money doesn't follow, you'll still be doing what you love and that's worth more than money. People like being around people who are doing what they love.
But not a lot of people like being around people with a lot of money. Who cares about the money. I give most of mine away because my life is better without it.
If you have a lot of money, people wonder who you screwed to get it. There's a real bias against people with money in the world. They're greedy. They cause the collapse of the world economy. They force the people to enact laws that limit their own freedoms.
People who are motivated by money aren't that fun to be around.
People who want to succeed or accomplish something or make the world a better place or have a grand vision and work hard to implement it -- those are the people /I/ want to be around.
I know a lot of people with a lot of money and a lot of them are pretty boring. They hate their jobs. They complain a lot. They're actually kind of lazy to be honest. You don't have to work hard to make $70k a year and $70k a year is a /lot/ of money, don't scoff. There are people in many parts of America who don't know where their next meal is coming from. They could do a lot with $70k/yr.
Those motivated by new experiences and love of life. Those people are happy, because well.. they love their lives. They make people smile. They laugh. They make the world better.
One of my favorite VP superiors told me a story once, her mother-in-law was born without a dollar to her name and died without a dollar to her name and /still/ has a library named after her.
Do what you love. Forget the money, you'll have more of it than you'll know what to do with. If you love what you do, you won't have time to spend it anyway...
What if you do what you love and money never follows? Will you stop doing it? Will you stop loving it?
I think money should never be part of the equation. This citation needs be to rewritten to "Do what you love and something will follow". You'll never know what will follow and that's the interesting part of the adventure.
The fact that you do care about that is refreshing.
No current economic system can sustain it on a large scale either, because reality itself is against it. Maybe someday, but we need still more productivity first.
As a thought experiment labor costs go up 10fold which jobs stop happening and which ones become more automated. You could dramatically reduce the distance the average trucker drives by using trains. Small farms suck from a labor standpoint. There is little reason a person needs to make the coffee at Starbucks. Romba style machines can clean vacuum. Bathrooms can be designed and built to be automatically cleaned. etc.
IMO, low skilled human labor is still cheep, but a change in the cost of human labor would soon see a huge shift.
We can't quite have robotic truck drivers... but we're actually getting reasonably close. We can't quite automate a gas station... but we are getting reasonably close. We can't quite automate a fast-food joint (one of my personal favorite robotic bellwethers), but we're getting within sight of that possibility.
That's why I left open the possibility that this will change in the future. Right now society still requires us to all work, but we're getting within spitting distance of that not being true. Now, that's going to be an economic disruption on par with the industrial revolution, and I'd say we're actually on the early part of that curve, because the first industries to feel this are the ones most easily Internet-able...
We have automated gas stations 95% of the time I show up pump my gas and go. There was a time when when a guy would pump your gas but that cost more so people where fine without that. As to Oil, and Tire pressure, my car senses them while I am driving. I don't even need directions due to GPS. Other than cleaning the bathrooms what do do we need someone in the gas station for? O yea, the station does not want to add cash machines to each of the pumps. (I suspect this is because when people are waiting to pay for their gas they are more likely to buy something else.)
IMO, we are already at the point in the US where most people's job's are redundant. But, as the need for people to do stuff drops off the cost of human labor also drops. The human greeter at Wallmart is a great example of this as their job could be done by a sign, OK they also cut down on shoplifters.
Some interpolation. Cutting humans out by 50% has a surprisingly small effect because we've got most of the low-hanging fruit there and you end up with other human costs getting in the way.
You've got to drop them to 0 to really matter.
"We have automated gas stations 95% of the time I show up pump my gas and go."
But there's a guy in the store, and it's going to take a lot of work to get him/her out. The rest of the stuff you mentioned is low-hanging fruit long plucked, and getting the rest of the way there takes a lot of stuff.
"The human greeter at Wallmart is a great example of this as their job could be done by a sign, OK they also cut down on shoplifters."
Cutting down on shoplifting is their primary job; greeters are secondary. Also, to the extent that greeters make people feel more at home and more likely to spend, that's something nothing but a human is going to accomplish.
It may not be obvious why hiring a cashier to run your gas station is better than buying a credit card reader and a vending machine, but the reason is there somewhere.
There's a continuing search for cost effective replacements for human labor, and when we figure one out, it gets used.
We had several fully automated no-attendant gas stations in my town a few years ago. They're all shut down now.
But I agree with you, I can't stand the people that want money for the status or what have you...such philistines.
Then, your love will lead to enough hard work to make the business plan succeed.
Actually there are plenty of jobs that, no matter how much you love them, just aren't going to make you wealthy. To pick a simple example, "elementary school teacher". Important to society, probably rewarding for many people, but not something that will make you rich.
> you'll still be doing what you love and that's worth more than money.
Yeah, but money helps too.
So I have to work for money like the greedy bastard I am, to make the world a better place for me.
Let me quote one of Ireland's most successful businessman, Michael O'Leary, CEO of Ryanair, on "doing what you love":
"I am not a cloud bunny. I am not an aerosexual. I don't like aeroplanes. I never wanted to be a pilot like those other goons who populate the air industry"
If a business out there is willing to pay 10 people to sit in a cube and do something all day, and it isn't all day, most of the time, cubers are getting coffee or chatting with coworkers and not really working and they get paid /bank/ to do it. If someone will pay you to sit in a cube and do something -- and you are /really/ good at it, then 10 other companies will pay you just as much to do it for them and you'll make a lot of money. Don't be lazy!
How about "Work /hard/ doing what you /love/ and the money will come." The focus here is on working hard at doing what you love, forget about the money. Just forget that money exists. If you're paying the rent or you can pay the rent for a year, quit your job and figure out what you love. Then get another job doing that thing. Why are you arguing with me when you know I'm right? It's not even I who am right, lots of people smarter than I am have been saying the same thing for many years. It's true and it works. Don't be a hater!
You said, "to make the world a better place for me."
I know. I know. Look, here's the deal. You can make the world a better place for you by making the world a better place for everyone. I mean, if the world is better for everyone and you are in that world and you are a subset of everyone, then the world is better for you too.
I'm not being naive, this rational.
I'm not saying you have to love your job every day. I love my job /almost/ every day, but sometimes a lazy customer calls and wants me to do /their/ job for them like I don't have my own work to do and I do it anyway to make the customer happy and I think to myself, "Man... why do I do that crap?" and I beat myself up and then I find a silver lining like, "Okay, if it was hard for that customer it is hard for other customers, so I'm going to make it easier!" And then I do and I have a better product and the world gets better for everyone, including myself.
That's the kind of thing I'm talking about. If the product I build is better for /me/ then it's better for a lot of other people too. If I make it better for /them/ then it gets better for /me/ too!
Man, I hope my tone doesn't scare people off. It sounds like i haven't really thought this stuff out, but I have. I've gone though all the arguments against it and I still believe it. I /believe/ it.
You don't have to believe it a lot of people don't believe it. A lot of people do things they hate their whole entire lives and then get fired, laid off, their pension plans get sucked away by some greedy bastard like you (jk, i'm playin, i'm playin, you seem like a nice guy) or cancer and die and they regret it. I don't want to be like that.
If I do what I love every day and it's honorable and honest and good, then I'll die a happy person and people will look at me like, "That guy never made a dime but he was always smiling and happy, except when he was exhausted from working so hard." Like Boxer in Animal Farm, except smarter and hopefully the bad guys won't turn me into glue for some booze.
Anyway, it'd be a nice life until the dead part. I'd like to live that life. Work hard. Love life. Die happy.
I've had lots of money and I've had no money and right now I have almost no money and I'm so happy. I'm working harder than when I had lots of money. I'm spending that money on my company and it's fun and I love what I do and I don't know, I don't think I'm special or different. I'm just like everyone else and if it can work for me, it can work for other people and if it does and they get happy, i'll be happier too!
In 15 years, if all this is a total failure, it is possible that I could look back and think, "Wow, I was so dumb, I shouldn't have listened to myself." That very well may happen, but I don't think it will. I don't believe it will. It's in the future, so by definition it is an opinion and it could be wrong, but I'm listening to myself right now, myself right now is saying, keep typing, keep telling the world the TRUTH and keep saying it!
There's an endlessly looping voice in my head saying, "There are going to be naysayers, don't listen to them. Those people need excuses for their misery. They need justification for not going for it, for not taking a risk, for not trying, for not working hard. They're lazy!"
Don't be lazy! Don't make excuses. WORK HARD. It's sooo much easier to work hard if you love what you are doing.
Here's one more quote and I'll finish with it:
Do what you love and you'll never work a day in your life
Startups and acting both have great variability, but acting also has demand working against it. Being an actor effectively pays you in other ways than money, because it's considered a cool thing to do. So demand pushes up the price in foregone income.
Even founders of consumer startups are way less cool per dollar than actors. I'd guess Larry & Sergey are about as famous to the general public as actors whose net worth is 1000x smaller.
actually, it appears to be a good strong argument. I can't say for sure. it's not totally clear to me as I don't know a damn thing about statistics and as far as I remember a median was a type of average. iirc median represents absolute middle; by average you probably mean mean average.
I really have no idea what you're saying, so I have no answer. unless you're making an argument for becoming a serial entrepreneur, since you'll probably have a startup which succeeds sooner or later, if you start young enough. that must be what you're saying, five fails in a row won't matter if number six is a win, and on average, it probably will be.
that's easy to shoot down, though. first of all you might need a lot more than six to beat the averages. second and more importantly: this post was a response to a specific person and that specific person is very probably still in college. I believe he has not created any startups yet. I could be wrong but I am very confident in this particular hunch. his next startup will very probably be his first, so the chance that it will fail remains very very high, since the averages are currently against him.
So no, I don't think that is my mistake at all. I think the mistake would be on the part of anybody attempting to over-generalize, from my specific answer to a specific person, to learn broader lessons for the startup and aspiring-startup communities. but I didn't post this here. that might have been a mistake, but it wasn't mine.
the specific person I'm responding to, OK - he can say "but my other startup might succeed." he'd have me there, maybe. but my reasons for believing his startup will fail, I think it's fair to assume that means his next startup, which will be his first, and could be his only. so yeah, my logic holds.
boo yah.
I appreciate having to work for that, though.
This is exactly why you can succeed. Instead of making someone else a lot of money and them giving you a $200k cut you can do their job as well and collect all the money generated by your effort.
Being the next Zuckerberg might be a lot like being the next Bruce Willis, but creating a small web software business with the ambition of making a few million over the course of years is not. And the big payout for most small businesses is when they sell to someone who already has money but wants a proven business (to add to their existing business usually).
I don't imagine having to worry about this any time soon, but if anyone described me as "the next Zuckerberg", I'd need three or four strong people on hand to restrain me from getting in a fight.
If it fails, it fails, just go for it!
I hate pessimistic people.
One gains money as a side-effect of being successful at something in demand. You don't become successful by becoming a millionaire.
If becoming a millionaire is the goal of your software startup, you're facing some pretty big problems right off.
All the millionaires were in porn in 2000; all the people
who started startups did it for a different reason.
1. The people who started startups wanted to make money just as badly, they just didn't want to tell mom that they were in the porn business.
2. I'm really lucky I love porn.
I wonder how that's supposed to work because I'd imagine if there's one example for a "saturated market" then it would be porn? You're not only competing against a whole set of major players in each imaginable segment, you're also competing against bittorrent, porntube and the like. I somewhat doubt that one could get a foot down there without some serious warchest.
I disagree that you can't get to the reward if that's all you want. Sales is all about the reward as is investment.
I agree on the article's main point: Entrepeneurship (as opposed to sales or investing) should be about the quality of the business. The employees, the customers, and the talented investors all know that the surest path to success is well-targeted quality.
Don't give up, try it again.
One win is enough.
Every (startup|relationship) you start ever will fail.
Until one doesn't.
So: I've never been married. And I think your statistics are wrong, especially if you only posted this here and not anywhere else.
I'm in a startup. Admittedly, I'm doing it, in part, for the material benefits... but I'm taking the long view, knowing that my short-term fortune is highly uncertain. I realize that I might never see a dime from this particular startup, but I figure that what I'm gaining from the experience, because I'm learning 5x more per unit time than I ever did in a corporate job, will benefit me in the long run. I might never be a millionaire, or even see the "kickass job earning two hundred grand a year" (although I've had average-ish jobs close to that) but I feel like I'll be employable in more interesting roles on account of the knowledge I'm gaining here.
If you are just some poor ass person who is tired of being poor, you will also fail.
The only crowd that will be successful are those who don't have any choice but to strike out on your own. If you really hate working for people, if everyone you know is doing business, etc, then your business is the only path.
All the people who just want to be rich will not be rich. Wanting to be rich is not a skill and it's not a talent.
Every time, that's all it ever comes down to. Every one of you who ever disagrees with me. You either don't understand how to use what I'm saying, or you don't understand what I'm saying itself in the first place. Sorry to skip it, but it's boring as hell.
Anyway, here's the one thing I wanted to add: PLENTY OF MOTHERFUCKING FISH. In 2000 the millionaires were in porn and the crazy fuckers who do shit that doesn't work were in startups. Some of you remember this. Others of you will have to just trust that we old-timers remember what happened and are not in fact hallucinating or making things up.
In 2009, it's not about porn. Today if you want to be a millionaire, you still don't get in a car and drive down Sandhell Road. But you don't hire a bunch of emo girls from Hawaii to take their clothes off, either. You study strategy constantly, you spend less than four hours working per week, and you put cash in the bank by the truckload.
Boom. You're done.
I haven't made it work for myself yet, but I had Warcraft characters who were living it. It's a great economics sandbox. Everybody thought my characters were twinks because they had crazy gold at low levels. No twinking, just a system. And of course Plenty Of Fish and Tim Ferriss have made it happen in reality in at least two cases. I think the millionaires are paying more attention to that than to VC.
I even see blog posts by monkey motherfuckers who say they believe that the four-hour work week works, but they want to spend more time than that working, because they're passionate about what they do. That's the stupidest goddamn thing anyone could say. The whole point of the four hour work week is it only takes four hours. Take four hours a week out of your busy schedule to do something that actually works, put the money in the bank, and get on with your day. That day, and that busy schedule, can include anything you want it to, including working your ass off on a startup.
OK, come to think of it, if you disagreed with me because of this reason - if you're that particular idiot - then you don't need to study strategy or re-read my post. You need to learn the fundamentals of logic. Discover the difference between necessary connections and incidental connections.
Come to think of it, I encounter that one all the time too, so if you're that particular idiot, sorry for missing your case in the above condescending blanket dismissal. Here's a special condescending blanket dismissal of your very own: go study logic, you idiot.
And fallentimes, it was hard to skip your post because it was at the top of the page. You would have made it a lot easier to respond to if you had numbered your reasons. However, your reasons mostly aren't worth responding to. They don't represent a cogent response to my specific argument; you're mostly just sticking your fingers in your ears and going "lalalala I'm not listening." Your response is a filibuster.
You do have a few specific responses, however, so I'll answer them.
"You understand that your odds of having an enjoyable job paying 200k are roughly the same as owning a profitable small business."
I'm fairly certain that's factually inaccurate, but I can't prove it, and I'm not going to stick around for your answer, so I'll let it go. What I can nail you on is that this is a comparison on uneven criteria: for 200K to win, you have to enjoy it; for a small business to win, it has to turn a profit. Technically a prostitute has a profitable small business, so in this uneven comparison, a prostitute pulls ahead of anyone making 200K, even if they do enjoy it, since you say their chances are equal. You need to set up even comparisons to be fair. I think we can throw out this part of your filibuster, or at least require you to come back with an even comparison.
"You know IPOs or acquisitions aren't required to make a good living.."
and
"You avoid blanket statements like this: All the millionaires were in porn in 2000 and realize that not every "startup rule" or any rule applies. Businesses can be very different from each other."
I think it's obvious I'm only talking about VC-funded startups here. You appear to be suggesting that the way your startup can succeed is by being a different type of startup than the type of startup I'm talking about. That's not refuting my argument. That's merely changing the subject. I apologize for not making it clear that we were only discussing VC-funded startups. However, since this was an answer to a specific person, and a continuation of a specific conversation, let me tell you, as it happens, that's what the conversation was about.
The blanket statement thing is a legitimate dis. You've got me there. But rephrase it: the majority of millionaires were in porn. The core of my argument remains unchallenged. There were people doing a simple thing that worked. If your goal is to be a millionaire, it makes a lot more sense to do something that many millionaires do, which often works, than to do something that few millionaires do, which often fails.
That's why I made the analogy with acting. If you're going to work very hard and the odds are against you, you need to have something which fuels that, and if the only thing that fuels it is a desire for money, that won't be enough to take you to the finish line. Actors come and go in Los Angeles all the time because they think it's going to be easy. I don't get close enough to startups to say this with the confidence of fact, but my intuition is that this is very true of startup founders as well. You need to believe in the technology, or the way you'll change the world, or the corporate culture even. If you set out to become a millionaire using a strategy that very infrequently makes anyone a millionaire, you're going to give up the minute your common sense kicks in.
"You don't care about material possessions."
Again, you're changing the subject. This is a response to a guy who was interested in VC because he wanted to become a millionaire. Obviously, if you're putting forward that somebody who cares about something more than the money might have a better chance, well yeah, that's my point.
Sorry everybody else if there was some devastating, incisive refutation somewhere else on this page. I just don't have the patience, the even-handed temper, or the time.
Ah... now your post makes sense!