Entrepreneurshit
bothsidesofthetable.com
bothsidesofthetable.com
If you want to eat healthy at O'Hare, you can find a salad or sandwich in any terminal. If you really want to blow your calorie budget, go find one of the Goose Island bars in terminal 1 or 3. Have a Matilda. It's fantastic.
Next point: I really dislike working for bosses with a misplaced sense of paternalism. If there are risks or uncertainties facing the business, don't hide them from your employees. Transparency breeds trust, which you'll need if you expect your engineers to put in the kind of hard work that's required when a company is starting up.
Last point: look, if a life of flying around the country and working long hours is your idea of a tortured life only a special breed of men known as "entrepreneurs" can bear, then you need to pull your head out of your ass. That life is stressful and that it takes hard work to get ahead are universal truths. The rest of us aren't just coasting along in a risk-free world.
Double secret bonus last point: why all the cussing?
What I find especially amusing is that it seems to be the entrepreneurs that are doing it with other people's money that complain so much about stress. the "crazy people" that do it with our own money generally don't go in for that kind of chest pounding.
The real problem here, I think, isn't the chest pounding, but the fact that they really believe that depriving themselves of sleep is somehow helping the company, and that sometimes they actually do it.
You can argue all day about the optimal number of work hours, and maybe have a point that some people can effectively work more than the 35-40 hours a week of "real work" that I advocate.
But sleep? Study after study has shown that shorting yourself on sleep does horrible things to your performance, no matter how you measure performance. If your performance really is critical to the performance of the company? the most important thing for you to do is to get adequate sleep each and every night.
If it's all your own money you're gambling with, complaining about the stress might be taken as indicating you bit off more than you can chew : A negative signal for employees.
>If you're gambling with other people's money, it's in your interest to keep complaining about how hard you're working, and how stressed out you are : It's a positive signal to the people funding you.
This assumes that the people who are funding you are primarily evaluating you on how hard you are working, and in this case, that they don't understand the correlation between performance and sleep.
Now, I think, in most cases, you are right.
>If it's all your own money you're gambling with, complaining about the stress might be taken as indicating you bit off more than you can chew : A negative signal for employees.
Hm. I think the "bit off more than you can chew" applies as much to investors as to employees.
Also, I've seen many, many middle managers pretend to work harder in an effort to 'lead from the front' and get underlings to work harder. It works; as they say, "it doesn't matter how early you show up, as long as you show up before the boss. It doesn't matter how late you leave, as long as you leave after the boss."
But this works on metrics that matter, too, not just on but-in-seat time. My experience has been that if you publish any performance metric, your employees will try to come close[1]. It's kindof irritating, sometimes; I mean, if I wanted to do it, I wouldn't have hired you to do it, right? I need you to pick up the slack precisely when I'm falling down. When I'm doing well? you can slack off a bit. But eh, that seems to be how people work.
But those things apply to the people that the workers see as their direct leaders, regardless of ownership structure.
I think the primary difference here is that when you work with someone else's money, the goal is to get big, fast, or to die fast. What do they say? Fail early?
If you are working with your own money, you usually have less to start with, and because of that you usually are playing a much longer game. (I think that most of the problems with having partners also come out in the 'long game' - to the point where I think a solo founder actually has a advantage in the long game, assuming that he or she has the personal earning power to keep the company in business.)
[1]" it was shameful for the chief to be surpassed in valor by his companions; shameful for the companions not to equal the valor of their chief. To survive his fall in battle, was indelible infamy. To protect his person, and to adorn his glory with the trophies of their own exploits, were the most sacred of their duties."
Man, I love Gibbon. I mean, on a conscious level, I'm embarrassed to use sweaty combat metaphors, but I do admit that it calls out to something buried deep within the obsolete portions of my hind brain.
I don't believe that's what's at work most of the time, though. It seems like there is a kind of person who wants to imbue every action, every day, with a kind of Life or Death drama. (Related drama: Everything I Do Is Hugely Important.) Getting the other people's money plays into this sense of self nicely.
I think, perhaps, you interpreted him differently than I did on your other points:
2. I don't think he's talking about paternalism, I think he's talking about dealing with very intense, private insecurity about the state of a company. There is something not quite unlike doom facing company nearly every day, and it's incredibly hard to filter actual uncertainties that companies should account for. It's important to be both transparent and conservative with negativity, but not for paternalistic reasons.
3. There's not a special type of person that handles stress better, exactly, there's a special type of stress that comes with trying to start/run a company. And it's not really worth it if you're thinking in pure outcome based terms. As an example, I picked my family up (we have 4 kids) and moved them cross country in August because it seemed like the best decision for my company. It was an excruciating choice in a way that a normal, career based moves haven't been. I suspect anyone could have handled that flavor of stress since I'm not uniquely stress resilient.
x. I think intense word choice can occasionally reflect the intensity of what you're talking about in a way that forced mildness undermines. So why not?
"Early on in my first company I had an employee ask if it was a good time to buy a home. We had less than 6 months’ cash in the bank. I was pretty sure we were going to raise another round of capital. But not sure, sure. I mean you never know if your investors are REALLY going to keep backing you. And you can’t go around telling all of your employees your deepest insecurities about it or you’ll soon have no more of said employees."
He never actually completes the thought (what did he actually tell the guy?), but this isn't some vague insecurity we're talking about. If the runway ends in 6 months without more funding, you owe it to your employees to be honest about it. It sounds to me like he witheld the information because he was worried his employees would leave if he didn't.
3. I think there's a lot of substance and humility in what you've said and I appreciate that. What I meant is more that the OP just smacks of self-congratulations. "Look at me. Look at all this bullshit I put up with. Be like me... if you dare."
x. I think it makes him sound childish rather than intense.
I was in that situation, as the employee. Had a bonus contractually promised to me and a jump in salary, bought the house (luckily it was the house we needed, not the house we wanted). Bonus never materialized, salary bump was less than half of what we had agreed.
Why yes, I am looking.
The definition of what sounds childish and what sounds intense is largely cultural and situational. When you realize that all words are just words, and it's people that ascribe meaning to them, you and your social group can mutually decide exactly what meaning you want to assign to each word.
What makes some words special? Why is it not okay to say some words, but okay to say fun? Truck? Luck? Ship? Brit? Shiitake? Shih Tzu? Witch? Bishop? Custard? Bass? Crass? Aspect? Would you be offended if you heard someone say merde but didn't know what it meant?
The OP may have exhausted his verbal capacity constructing warnings to co-workers about buying houses while depending on any start-up, without suggesting _his_ startup was in any difficulty. Then pondering this additional reminder of how many people depended on him. Maybe while deeply discouraged, still called on to project confidence, reassured only by the knowledge that deep discouragement happens in any project of real uncertainty.
Then he thought about folks like yourself dismissing the stress of working at the confluence of Transparency and Confidence. At which point he started swearing.
You're flaming Mark Suster -- that's what it means when you tell him he has his head up his ass -- because you don't like some of the conclusions he's drawn from his experience. His experience as a successful entrepreneur, investor and mentor.
Essentially, from what I can tell, you have a problem with tone -- the guy uploads his brain and you slam him for his choice of words. He's not telling you that you're stupid or inferior, he just used a tone you didn't like. And for this reason, you're blasting a guy who just dumped a wealth of valuable experience into a coherent, emotionally relatable stream of consciousness. A humble and gracious thing to do, by any standard.
But no, you're totally right -- let's get mad and tell him to fuck off for his style.
Instead of blasting a guy for having an amazing career and sharing life lessons which you find personally inconvenient: go do something amazing and then come back and let us all know how it felt.
The parent poster presented disagreements in a rational, calm manner that facilitates discussion. Everyone is entitled to opinions, and he made his points in a rather respectful manner.
You, on the other hand, exploded like a bomb. Why the need to lash out so violently? You've been around HN for a long time so you should know that this kind of discourse is not really desired.
I think people can and should disagree with opinions, including opinions of someone as well known as Mr. Suster. And you can and should be able to disagree with someone disagreeing with said opinions.
But do it nicely, yeah?
Impertinence is also a common characteristic for a lot of other people, many of whom neither you nor I would like to be compared to.
For some reason I find it very reassuring to read articles that tell about all the downsides of being an entrepreneur. It makes me feel like I know about all the obstacles that are coming my way, but also confident that I could handle/deal with them. Ofcourse this might be terribly naieve. But then comes the article that naivety is an essential founder's trait, and I'm restored in my faith :P
I wouldn't mind if every article submitted to HN was some founder's anecdote, big or small, keep them coming :)
HN is great for finding some gems. For others, you can use the referrals as good start digging spots.
[1] http://www.hnsearch.com/search#request/submissions&q=bot...
The amount of stress comes from the fact that you constantly need to reassure yourself and your stakeholders that your startup is a 10%er and not a 90%er.
I'm not a VC so I don't have all the data, but from my point of view I see no way out of this system.
There's a strong "death or glory" ethic that pervades startup culture, that I think chases out more modest businesses, to all our detriment. Look at the back-and-forth here: http://news.ycombinator.com/item?id=4799163. Ryan Carson writes about going it alone, and PG pushes back with data from the pressure cooker side that co-founders are empirically necessary; Carson, though, was writing just about how a more modest business plan can be successfully executed by a single founder.
In the beginning HN was called 'Startup News', if I remember correctly.
It's still going to be a stressful ride but getting a few things like this right early on can basically "de-leverage" your risk profile in starting a company from being (metaphorically) 100x to "merely" 10x.
Athletes, politicians, charity workers, soldiers, scientists and many others work hard even when outcomes are unpredictable. Even people with so-called "normal" jobs may require episodes of such unpredictability and hard work. Why specifically elevate entrepreneurship?
And, frankly, such lifestyle even for an entrepreneur is a choice. I see no point in re-iterating the obvious that doing a startup may be hard if you are aiming to build a huge business. If it were easy, most people would be doing it, no? I fail to see the whole point of the article.
To be fair, I did write about how is it in the life of an entrepreneur (specifically it was about my day): http://paraschopra.com/blog/personal/startup-an-emotional-ro... but my aim there was to document how is the day in life of a founder at a startup that is still in early days and I tried hard to avoid generalizing or glamorizing the hardships. Looking back, I think I should have been more specific and objective in documenting the day (rather than making generalizations on the nature of entrepreneurship and heroism contained in living through such a day).
The other part is "You’re unemployable. You’re an entrepreneur." I am now in the process of meeting lots and lots of companies, big, small, new, old, re-invented and I'm finding that maybe its a case of once you've been a CEO you will always be a CEO. We will see what comes.
"I had to miss a full day with my family, camping in the mountains...to raise $150 million"
Poor guy! This would be more relevant coming from someone who utterly failed.
But when it comes to playing with other peoples' plans, emotions, money and lives; then for "the rush" seems like a thin reason to live every day wearing a game face for employees, creditors, and family.
Glad to have Amy Hoy pointing out that Suster's view of the world is far from the only definition of entrepreneur!
I go to Vegas a couple times a year for conferences (which I could skip, but I enjoy them), and have met with investors and BD partners in Seattle, but if I had to do a business without going more than 10 miles from I-280 in the Bay Area, it could be done. (I'm curious if you could do it without leaving MV/PA/MP!)
(with enterprise or b2b, maybe there's a little bit more call to go to DC, maybe Boston, NYC, maybe a few other cities, but absolutely not for consumer, and if you don't enjoy travel, you could probably get away with no travel.)
Just sayin': you can do better than that.
I don't mean to brag, because I'm sure none of you care about my "little dipshit company," but there are people out there who deserve to know that this kind of adrenaline junkie lifestyle as described in the article is not "entrepreneurship" as a whole but just one type of person's interpretation of it.
We, for example, got back a couple weeks ago from a 2-week trip to Arizona. We (biz owners (my husband + I) plus our employee) went to attend a conference in Scottsdale -- not to demand speaking slots or to impress anyone, just to learn, to experience it.
Because, hey, Arizona is gorgeous in October, we had decided to extend our trip and rent a convertible, and a 4-bedroom house in beautiful Sedona, AZ with a private pool and heated spa tub, for a week. We spent 3 days of that as a company retreat, and then the rest was just my husband & I hanging out.
During the 3 days when we were working, we all used the spa every night to stargaze. In the middle of the days, we'd take a break and go hiking. When our employee went home, we just bummed around a day, then we rented a jeep and went off-roading.
This year, my husband and I decided to draw about $160k of profit out of our biz to pay for a mortgage down payment and various fixings for our new (old) house. Then we bought a nice car, in cash. (Honestly I would have preferred to get a loan, but there was a problem with the fact that we hadn't gotten our PA driver's licenses yet. Long boring story. Patched over, as so often, with money.)
Our finances are secure. Our products may be "boring"… but they are growing very nicely and our customers are happy. Our employee can feel secure about her salary. We own 100% of our company… nobody can tell us what to do, except possibly the government, but they don't seem to care. Certainly we don't have to worry about SEC filings.
This weekend, I co-taught a bootcamp as part of my favorite product, 30x500. It's only on a weekend because that's when the majority of my students can attend. I plan to take the next couple days off, just cuz. I can do that whenever, of course… and often do, because I have a chronic illness which is exacerbated by stress. So I keep stress low and live a very chillaxed kind of life.
I expect that, as a 3- or maybe 4-person company, we'll break $1 million in gross yearly revenue in the next 24 mos… probably more like 12-18. All without begging, nagging, scrambling, fundraising, pitch-decking, obsessive emailing, jockeying, etc.
My biggest stress this year is about how to reinvest another six figures into our biz so we pay less taxes (and changing bookkeepers). I don't like paying taxes more than we have to, but honestly I'm not sure what to spend it on after we max out our 401(k)s.
I expect downvotes for this. Probably because it sounds like I'm bragging. Probably because the reason the above article is so popular is because people like it when authors "get real" about the "harsh realities" of running a business. Deep inside, they believe that if it doesn't hurt horribly, it must not be worth it. So this kind of "truth" is appealing, and what I say will be labeled as some kind of crazy outlier, I got lucky, I'm famous, etc, etc., surely nobody could really make this kind of money off time tracking so I must be embroidering the truth, etc.
But if you want to create a business -- as opposed to a drama-filled life -- there truly is a less painful way:
Create a small product for small business which creates value, then charge money for it.
It's stupid simple. It's not easy, but then again, it's not all that hard, either. And it works, over and over and over again.
Yes, our first year building the product income streams while consulting kinda sucked… but it didn't suck at THIS level described by the post author. The main suckitude came from the fact that the more we worked on our real products, the less we wanted to consult… we still never had to travel away from our families, stump, beg, wheedle, or go without money. And we don't have to convince somebody else to buy us, fund us, love us, millions of people to use what we made, to make that short & minor sacrifice pay off.
Sometimes pain is meaningful and necessary. But sometimes it's just pain.
I upvoted, but I think this is an important point:
Mark Suster is a VC, and so his perspective will of course have to reinforce a view of the world that justifies the kind of entrepreneurship which requires large financing rounds -- unless he is a very honest individual who can accept that he does a job which is based on principles which he personally cannot endorse (I doubt this).
Conversely, you have a business that revolves around the idea that small(er) ideas can be scaled to large profits -- relative to lower expectations than VC financing, and relative to effort. What I mean is, from what I can tell: as a business, 30x500 forwards the idea that ~$0.5M/yr going into your own pocket for ~40 hrs/wk on a predictable basis is a preferable outcome to the proposition of applying a massive effort toward a very small chance for a single $10M-$100M+ payout.
This is a valid viewpoint as well, but it should be noted that you have an interest in forwarding this kind of a story as a valuable model of entrepreneurship.
I hope you understand that I'm not passing judgment on your model of entrepreneurship, i.e. I'm not saying you have a "little dipshit company." I don't have a preference to either.
I was pulling a 500k per year in income from a web business I founded AND got a $10M+ exit. It depends a lot on the business model and multiples.
My advice would be to continue to build the business and balance income and reinvestment until someone makes you an offer that allows you to retire.
Btw, my definition of "allows you to retire" is $250k/yr after tax, drawing no more than 2% of your portfolio indefinitely with a 95% chance of portfolio survival at age 95 assuming below avg market return of 4% and above avg volatility of 10%. If you're in your 30's, that's probably going to be around $20M. It goes down as you get older.
If you look at the amount of yearly income you want/need, and then look at products vs built-to-sell startups, it's pretty clear how easy it is to achieve that income on a paid product and how hard it is to achieve it from a liquidity event.
After selling my last company, I'm back looking to create another business in the same vein as what you guys teach people to create.
And you summarized my approach pretty well -- that it's a lot better to have $500k/yr nice and steady and 'easy' than a tiny sliver of the tiniest chance at a $10-100M payout.
There's just one thing which you missed about that: in most cases, a Liquidity Event doesn't lead to $500k/yr for more than a few years, much less freedom, because of lock-in, and dilution, and taxation. A $100m sale is vanishingly unlikely, and most importantly, to get there you will have to have taken on lots of funding, so it's not like that's your $100m sale.
Then what? You have to start over again.
What I really promote is also an investment model, an self-investment in yourself instead of hoping to receive investment from someone else. Assets are the gift that keep on giving. In the long run, most talented people can make far more from my kind of business than they could from an exit (even assuming they could have a fairly good-sized exit!).
Re: "it should be noted that you have an interest in forwarding this kind of a story as a valuable model of entrepreneurship…"
A lot less financially vested than you might think. My class always sells out, with barely lifting a finger… I don't have to be here to stump for the traditional way of doing business in order to make my living. Emotionally, I'm very vested, because I'm tired of watching people suffer simply because they didn't know there was a viable alternative (because the folks who write about entrepreneurship almost all come from the same exact root stock).
I think this is largely because software is effectively invisible. Everything software does happens more or less without our ability to directly perceive it, it's just electrons shuffling around in silicon, and it's very hard to get a sense of the scale of anything because even at the high end of the scale where banks of computers are running, it's still just banks of computers humming along invisibly computing, there aren't tons of Earth being moved or ships crossing across oceans and so forth.
Anyway, our industry is one of the most diverse in the history of industry. It spans scales across factors of not just billions but trillions. And it ranges in complexity and seriousness across similar scales.
Imagine the "container" industry, which spans all the way from someone making wicker baskets in their spare time and selling them on ebay all the way up to perhaps the fuel tanks of orbital launch vehicles or the steel reinforced concrete containment vessel of a nuclear fission reactor. Or consider vehicles, which can be anything from a plastic tricycle all the way up to an aircraft carrier. Nobody would imagine that those industries are monolithic or that the way to run a tricycle factory is necessarily the same as the way you'd run a shipyard.
Yet here we are in 2012 and people who should know better still insist that running a "software company" is a singly story with a single set of best practices and a universal set of advice that applies equally well to every variant. In reality a "software company" is one of hundreds of different types of enormously different endeavors.
It probably doesn't help that the main "watering hole" for industry professionals is run by an investment firm. People tend to think of HN as simply "the place entrepreneurs go," but that too is a (facilely) monolithic thing! Like attracts like.
I have unsuccessfully attempted to build an company like yours ... and it was stressful.
But then, like the mortgage, the healthcare and hiring/firing was over and life went back to normal. We didn't have to keep up "a good front" so people wouldn't jump ship, or worry about whether we could make salary, or any of those things. Nobody was breathing down our neck to do any of this, either -- we did them because we chose to. And we were able to make decisions on our own, without having to consult or sell anybody, to change the way we did these things so it wouldn't be stressful next time. For example, shutting down a product which would require us to hire too many people to run effectively, rather than take that on.
That's the power of ownership -- the bad shit passes, and you have the power to avoid it altogether in the future.
Now if you're not making any money, that is another kind of stress, but because we served a hungry market with a product that delivers value (and did a good job of marketing it), we didn't have that problem.
I appreciate your perspective on things - it's refreshing.
However, it's important to note that an either/or "our way or their way" mentality limits one's options.
And there seems to be two worldviews (your terminology by the way ;)) - two cultural camps and people in various communities are basically being asked to choose.
"Either you're with us or them!"
Lifestyle business owners have a mental equation where: Wealth = Net (passive) Income
others view it :
Wealth = Net Income + Asset Value.
The greatest asset an entrepreneur will create isn't its income producing products - it's the sum of the whole - the BUSINESS itself (where there's a multiplier affect involved).
By business I mean the system of 7-8 interconnected parts (hat tip to E-Myth) that combined, create the profitable products and services of the company.
Just like learning how to create a software product or a training product is a learned skill - so too is creating a sellable company (a mentor, John Warrillow of Built to Sell speaks quite well on this....only approx. 1 in 100 businesses are sellable http://www.builttosell.com/blog/)
The either/or mentality can be dangerous. Either you're with us (VC funded startups) or you are with "them" (the lifestylers).
There's a happy medium - Jason Cohen is a voice in the wilderness when it comes to this perspective - http://blog.asmartbear.com/rich-vs-king-sold-company.html.
How about more of a push from influencers in the lifestyle tech business community to help entrepreneurs understand the wisdom of building a business they can sell one day?
What about influencers in the VC-funded startup community standing up and saying "wow, making a profit is actually...a good thing!"
Learning to create a company that is profitable makes sense. Learning to create a company that is customer-funded, just makes sense.
Learning how to create a company that attracts investors-as-trusted advisors and that is sellable also makes sense.
Creating a business that sells profitable products is a different skill set from creating a business that one can sell at a profit.
That said, Dixon gets my respect when he said, "the best source of capital is customers. The next best is the founders (cash or forgone salaries), or investors who are less aggressive about returns than VCs. Every startup has its natural source of financing. Venture capital is the natural source of financing for only a small fraction of startups, despite what the press might lead you to believe." http://cdixon.org/2012/07/19/shoehorning-startups-into-the-v...
I suspect there are more people here than you realize who appreciate the value of what a Dale Carnegie, Gary Halbert, Eugene Schwartz or Kennedy (or you!) have to say about "shutting up and letting people pay you" as much as they do about what a Ben Horowitz, Graham or Suster has to say about the funding game.
Reminds me of what one of the most creative business minds of the past 100 years once said (Olgivy) David Ogilvy: We Sell or Else: http://www.youtube.com/watch?v=Br2KSsaTzUc
It seems that in every kind of business, including criminal, those who are capable to produce have very few troubles, while the second group, the wast majority, have much more suffering, just because, well, no one really need them.
So, before thinking about entrepreneurship, become good at something first. Then you will be able to create and notice opportunities. It doesn't not work in opposite direction - one cannot create an opportunity being of no good in any other field.