Now is the time to do a startup
42floors.com
42floors.com
In theory, certainly.
In reality, not very likely.
The 'network effect' is one of those things that is devastatingly obvious when it happens, and so powerful that it can carry something like Facebook, Twitter or Foursquare to amazing heights very quickly, that everyone thinks they can copy it. But, as is so often the case, it's very, very rare. If you think your startup is going to get to revenue (let alone profit) on the back of 'virality', think again. As a marketing strategy the probability of 'going viral' is so small it might as well not exist.
If you don't have marketing knowledge, capital to buy marketing knowledge, or the resources to go for a very long time without marketing, your startup will very likely fail..
It has never been so easy to start a company - the author is right about that. Because of that, however, there have never been so many companies starting. As a result, it has never been so difficult to rise above the noise.
Do you have feet? Do you have a phone? Do you have an email client?
If so you can use all three of these things to establish real relationships with people and sell a product.
With feet you can go directly to your customers and talk to them. A phone can be used to directly call your customers. An email client can be used to contact your customers.
The best part of all of these mediums is that people will usually tell you exactly why they don't want to buy your product, the next best thing is that everyone is wasting their time on social media waiting for their viral post that will make them millions, rather than closing real deals.
I would also say that business in general is an opportunity to solve problems. Startups are a subset in which that opportunity starts with no resources.
The big change over the last few years is that starting with no resources has become less of an obstacle.
Taking his reasoning a step further... Look what companies like Google and Amazon were able to accomplish starting in tougher times. Now it is much easier to start something new.
So, I have an opinion that runs counter to almost everyone on HN, but I disagree with this. I see nothing wrong with wanting to do a startup for the sake of wanting to do a startup. That's a great motivation in itself for many people.
There's no magic or scientific principle that says startup success must be a direct function of the type of motivation of its founders. Perhaps there are some correlations; Paul Graham could perhaps provide more insight into that...
There are many highly motivated, hard-working people who have failed with startup ideas that elegantly solved novel problems, and then there are only somewhat-motivated people who just wanted to create a website that ended up taking off into something. Of course, once it "took off", if they didn't suddenly become motivated, of course their idea would go nowhere, but it's the kind/type of motivation in the initial stages that I think too much value is being placed on.
It's nobel to think that everyone should want to start a company to solve a legitimate problem, but in reality I see absolutely nothing wrong with other motivators being the impetus for starting a company: boredom, money, curiosity. In the end, it's the result, not the motivation that ever mattered.
While if your motivation is to "solve a problem", you will likely solve a problem, and that's what people will pay you for. When startups succeed despite their founders just wanting to "start a startup" (eg. PayPal), it's usually because the founders managed to zero in on a problem they really wanted to solve before they ran out of money. That doesn't always happen.
I think you're imagining more of a dichotomy than really exists. I mean, I don't disagree that you need to solve a real problem, but if your motivation for starting is rooted more in the desire to build a startup, and then you go out and find a problem that you're legitimately passionate about, does it matter that you started from the desire to build a startup, and then navigated to the problem, instead of the other way 'round? I will posit that the answer is "no", and that it does not matter. What matters is that, at some point, by whatever means, you reach a point where you are working on something that you are both legitimately passionate about, AND that solves a real world problem.
Some people just know they are meant for the startup world, and know that they are driven to build a company, before the necessarily know what company they will build. Maybe they just can't stand having a boss, maybe they relish the idea of building a company, maybe they just want to be rich, maybe some combination of all of the above. But I don't see a problem with starting from "I want to start a company" as opposed to "I want to solve problem X" as long as you ultimately arrive at both in the end.
It feels as though the culture is that you're expected to have ambition to create your own startup, thrive to do better, if not the best, and make yourself matter, except in this case, there's always an unmentioned postscript "in startup world"
I don't even want to discuss the Red Queen Effect, but hear me out. I am a recently graduated developer, with little ambition in technical side. I find some stuff very neat, and am working on a side project that has more caveats on writing than technical.
Whenever I find things that bother me in a day-to-day basis, I can whip up an application for myself. Integrating MSN chat logs into Skype logs has been my recent project(ongoing), because I've used MSN auto-logging very extensively. I am content with what I will have and I intend to share to people who'll miss MSN chat logs, and who value them as ostensibly as I do.
Why do I feel like I should be compelled to feel I'm not thriving enough? I've got a decently paying job, I'm learning(SICP is my current project), I'm relatively content doing what I love(writing), and enjoy my free time(gaming, writing and some side short projocts).
Sure, I'm learning but not researching the most important research in my area, I'm content doing what I love but I'm not thriving to achieve the best and make the world better place, I enjoy my free time playing games, but I'm not using the time to better myself.
A couple of my deeply respected friends, who I believe without a doubt have a chance of looking at this comments here, keeps telling me that I need to thrive. I want to tell them, please, just to leave me alone.
I know this comment isn't probably the ideal response to the article. It however is my response to why aren't you more like me and improving undertone of which the article deeply suggests.
Perhaps in a decade or two(or in smaller period) I'll come across an idea niche enough that future Me will think would work, and start work on it. I, currently, am too content with what I have and its prospects to think of anything better. I have some ideas but what good are the ideas? The work is the most that matters, and I am not motivated enough to do them yet. Please accept it. "Wanting to do startup" should not be the reason to do it, in my humble opinion.
As for the added piece, I think I've responded it on the other comment in this thread: (https://news.ycombinator.com/item?id=6354885)
It's a simple idea (figuring out what makes you happy is the actual hard part). If you're happy, then you're already thriving; it doesn't make sense to say "I'm happy, but I'm not thriving." What's the point of thriving, after all, if not life satisfaction?
I think your friends have a narrow-minded view of what makes life worth living. I'm not saying they're wrong about their chosen path; they're just generalizing from their experience to everyone else, and that seems foolish. Everyone has to find their own happiness. For some, it's building a company. For others, it's learning, writing, etc. Neither way is objectively "better" than the other.
There was a great Onion article recently that parodied the fallacy of assuming others are failing if they don't share your goals:
http://www.theonion.com/articles/unambitious-loser-with-happ...
Some of my peers in university never liked that I acknowledged blatantly that I've come to CS for better job prospects. Sure, I do find CS very neat and enjoying. I love solving problems, making things from the scratch, but the problem that I will dedicate my life into has already been found, in early stages of my life.
What I don't understand is why my existence in the field with impure intentions infuriate them.
I plan to keep myself educated and learned to keep coding until my retirement. I actually enjoy developing. I don't consider development as boring day job. It's my passion, just not the passion of my life. I'm sick and tired of perspective that views my attitude as impure in the tech world.
Personally I find the average work-life balance to be a little out of whack here.
> It feels as though the culture is that you're expected to have ambition to create your own start-up
Look at the URL of this site. It's Ycombinator, a start-up accelerator.
That's like going to Japan and wondering why everyone speaks Japanese, and why there is so much pressure to learn the language. Maybe you didn't realize it at first, but everyone around you is speaking Japanese because you are in Japan.
If you are living on my couch, eating my food and not kicking anything back to me, then I'm going to talk to you about "thriving." At least you can thrive enough to get a dang job. But in this case, you have a job and you are independent. Good job, that's a position that probably at least the 8% - 10% of the unemployed and looking for work population will envy you for.
The "just quit and do imaginary things" equation changes rapidly when you have a talented engineer giving up $250k/year at google to play fantasy startup land.
As much as we read about up and to the right success, happy luck after moving to The Bay Area, and becoming multi-millionaires after two years (or just six months if you're great at tricking people), it doesn't happen so magically.
At least you're keeping the dream alive?
Unfortunately, the Western world's mindset of house ownership means that most people who want to do something different generally can't do so until their 50s.
Solving that might stimulate innovation and start-up creation.
Imagine an environment where basic accommodation and sustenance was available to everyone. People would have the freedom and opportunity to do exciting, novel things.
Getting locked into debt, whether that be school loans, credit cards, a high priced lifestyle, or a mortgage are certainly barriers to doing a startup. But they're all choices.
If you are single you can probably move in with parents or a friend to save on costs, but that is almost impossible if you have a spouse and kids.
There is a very good reason behind home ownership: After 30 years of mortgage payments, you own a house. After 30 years of rent, you have nothing.
People who rent can sometimes scale down without too much difficulty. Also, people who rent choose a place that meets their current needs. When people buy, they often buy what they think they need/want in the future, so they are usually paying for more house.
You can also regain some flexibility by renting out your home and temporarily staying somewhere cheaper. This probably isn't doable if you've got kids, but getting a cheap apartment and AirBnBing your old place might be what you need to do to keep the house without sinking your financial ship.
That said, if you're going to start a business while buying a house, better to buy a smaller house and have a working spouse who can carry all/most of the payment for a couple of years. I wouldn't probably wouldn't do it unless I had a reliable high-earning spouse willing to share that responsibility.
I'll just say that I ended up renting when all my friends were telling me I was stupid not to buy. Three years later I walked away from my rental after paying $30K total in rent, while my friends ended up losing more than $30K when the price of houses dropped (only 10%). That doesn't even include the mortgage payments they made as well. All in all, they paid twice what I did for a place to live.
Also, home owners often forget to include the cost of their down payment. If you put $100K down and your house appreciate 2% per year (which is pretty decent) you're out the extra 3-4% the renter made by keeping that money invested in the market.
I think we can agree that owning a house sometimes is a good thing, but it certainly isn't the best financial move for everyone.
Rent tends to increase exponentially at around 2-3% per year. The difference is that generally homes are a store of money in relation to inflation and rent is not. On a fixed 30-year mortgage, that $800/month will only fluctuate with the cost of utilities and taxes.
The obvious tradeoff is that it's easier for a renter to become mobile to follow jobs and presumably increased pay, but really it's a lifestyle choice.
Here, the NY Times made this all into a graphic awhile back.
http://www.nytimes.com/interactive/business/buy-rent-calcula...
1) Landlords often delay rent increases to keep good tenants. Of the apartments I've rented over the last 15 years, this has been the case.
2) Even hot markets have down periods in terms of rents. SF saw decreasing rents in 2009.
You also haven't spent 30 years landscaping the yard, paying for plumbing, appliances, carpet, 2 asphalt roofs, new windows, a furnace or three, a septic tank...
A house can be a very, very expensive asset to maintain. And if your neighborhood goes downhill or the market in your area goes down you can lose a lot of money quickly.
Seconded. I've have owned a 3 bed/2.5 bath condo in Mountain View for 14 years. Right now my total monthly cost is about the same as a 2 bed/1 bath apartment in one of the major apartment complexes in M.V.
The thing about mortgages is that ideally the way it should work is that you buy something that fits within your budget, and your payment remains mostly stable while your salary increases due to inflation and/or promotions. The first few years I owned my condo, my finances were indeed tight, but eventually that eased.
The idea that a mortgage is incompatible with being a startup founder seems to be based in the misconception that because a new mortgage is expensive and burdensome today, it will be expensive and burdensome forever. When in reality, after a few years the equation can change quite dramatically.
Of course, everyone's experience is different, and one can make choices that indeed keep a mortgage expensive and burdensome. But you can do that with renting, too. The question in both cases is simply "can I cover my housing costs for a year or two without a salary?".
Personally, when I contemplate becoming a first-time founder (and yeah, I'm in my 40s), the fact that I own rather than rent isn't a big consideration.
It is; it's just most of humanity is confused about needs vs. wants.
Excuse Number 6: Health Insurance. I've saved enough to cover my mortgage & living expenses for a year. What I haven't saved for is an insurance plan that will not bankrupt my family if one of us has the unfortunate timing of getting in a car accident or gets cancer while I'm trying to start a business.
Individual plans often have so many hidden loopholes and exceptions that when you actually get sick, they're totally useless. It's nasty to discover that your insurance company is going to drop you for some bureaucratic detail ("you had acne once? Oh, you didn't tell us that on the application. We're not going to cover your heart surgery.") the first time you really need the coverage.
I don't want to destroy my life, relationship, and peace of mind by devoting multiple years of 4-6 hours extra a day on top of my current job to squeezing a stone until blood runneth forth.
Then quitting my job on the basis of that tiny flow of blood to devote 16 hours a day to squeezing that stone even harder until the flow turns into a river, at any point from zero to money I might be sued or the market might evaporate, or the federal government might decide to step on me. If you don't have a safety net, any of these things can ruin your life.
Starting a business, even in tech where the barriers to entry are effectively limited to time, is still the exclusive province of the well-heeled. If you can throw three to five years of your life away and have nothing to show for it, you are either well-heeled or extremely driven.
So as it gets easier to implement, the quality bar of what you have to implement is going up and up, some markets are saturated with startups, there's a high noise to signal.
It's becoming simpler, not easier. After lots of people chanting "do it" over and over today, tomorrow you'll be faced with the same cold, hard reality.
Don't just do it, think carefully, double check your idea, don't collectively waste your life savings on heating cloud infrastructure for 18 months before getting back on with your life.
Unless the idea is good, of course 8-).
I agree that a lot of the grunt work has been streamlined, but I think the outcome is influenced more by resource competition than by operational hurdles (e.g. processing credit cards or allowing users to share with friends).
UPDATE: I should admit that, while there have been better (less crowded) periods to start companies in the past, there's no guarantee that we'll ever have less crowded times than now.
These sorts of articles start to annoy me after a while. It's a lot of noise and very little signal. Everyone has 15 bullet-pointed list articles for 10 ways you can start your startup, but they're all just platitudes that don't suggest any real, actionable information.
The best one in this particular bunch is the "I can't quit my job" one. There are many ways in which a person could quit their job and still get by to be able to work their project, but nobody ever bothers to say what that is. And actually, the point is meaningless if you never ship. You can have all the runway in the world and you'll still go nowhere if you don't know how to release a product.
And releasing is not easy. It's not as simple as just saying "put something out there." That's another platitude that these sorts of articles talk about. You don't just go from A to B without obstacles in the middle. The whole idea of the weekend hackathon release of a minimal viable product first rests on knowing exactly what you're building and the tools with which you're building it. If it were as easy as opening a kit labeled "startup snax", then everyone would do it.
My advice: don't start a startup, not yet. If you don't know how to make it happen, then you're not ready. Do start a project, though. Do whatever you can in a particular field.
If you're not technical, find an open source project to try to advertise, market, grow mindshare. Get involved with your local independent arts scene and work on film projects that want to Kickstarter their projects. You have to find ways to prove to YOURself that you can do what needs to be done, in ways that aren't going to destroy you like quitting your job. You'll meet people who are capable of making things from raw materials this way. Make those people your friends (real friends, not acquaintances you hope to exploit one day). Pay attention to what they are working on, and apply your skills to maximize their reach. Converse with them about your ideas, and maybe one of them has had a similar idea and you can be off to the races together. If you don't know how to make things, you cannot just hope they will show up. You have to actively find these people.
If you're technical, the necessary skill that you will need to learn that will be hardest for you is giving up. Giving up if the project is too hard to go focus on something easier so you don't stagnate. Giving up on enhancing the current project so you can release it. Giving up on trying to be the be-all, end-all of your project and letting other people in. Yes, you can market your project on your own, but it's a lot of fucking work and you have other work to do. Go meet people in the world and find a guy who gets as jazzed about social media as you get about code. If you don't know how to market things, you cannot just hope people will find it. It just doesn't happen. The secret is that you have to steal other people's traffic for your own. Or share, whatever you want to call it, point is that everyone's internet attention is currently saturated, so you need to find a way to make them more efficient about absorbing data to be able to include YOU in their stream, or you need to replace something else in their stream. There are socially acceptable ways to do this and there are ways that are not socially acceptable. The easiest way to ensure that your project is not tarnished by bush-league tactics is to find someone who knows the game already that you can trust to keep everything above the board.
Keep everything you've ever worked on. Keep a diary of your work on your projects. I have a private GitHub repo that is specifically for storing all of my project ideas that aren't developed in any way yet, it's just for note taking and it's only private because they just aren't fleshed out for human consumption yet. Any project that I've ever worked on that is in some semblance of working I have as a public GitHub repo. The importance is more the backup than it is the sharing, but there is a certain charity to it as well: if I'm not going to get value out of it, maybe, just maybe someone else will. I would switch to GitHub pages to publish things but I do a lot of art, too, and I have a growing followership on Tumblr right now. But publish, publish, publish, and keep, keep, keep. Because in a year I want you to go back over everything and see how far you've come. I look over my projects and I think about what I could do better now that I have a year of experience under my belt.
I have one particular project that I have been working on for 7 years. It's small, it's simple, and I've probably only put a total of 3 months of work into it over the last 7 years. It doesn't even solve a unique problem, there is tons of work in this space already. But it is actually extremely useful for me and because I know it intimately, it makes me extremely productive. It is a culmination of my knowledge of programming, and I have a rule that only 20% of my time on it is for adding features, the other 80% of the time is to refine it, simplify it. If I had known it would take 7 years to get it to where it is, I probably would have never started on it. But I never had a preconception of where it was going to go, and the latest features were only possible because I had laid the ground work so many years ago. Because I've just kept at it, reviewed, refined, and let it be what it was going to be. In another 3 years, it might actually be a viable product. Who knows, the only way I will find out is if I don't give up on it.
Then, at some point you'll wake up and realize you have a lot of skills on your hands, you have a lot of people who are very skillful at your disposal, you're NOT deeply in debt because you didn't quit your job, and you have the startings of 3 or 4 products on your hands that you would have never imagined you'd even want to work on 5 years ago. That is when you get your friends together, quit your job, and put out your own shingle.
Because otherwise, this talk of "you don't need a whatever-you're-not cofounder right away, you'll just find them," that is all get-rich-quick scheming.
Now I just have to figure out how to meet these marketing magicians.
The push off the cliff is as valuable as the plan for learning how to fly on the way down.
As for blogging. It's core to who I am. I did it before 42Floors, and I'll continue to do it for as long as it brings me meaning. I've long since understood not everyone appreciates it. But I do.
The 4 reasons you listed were the exact reasons I was waiting to take the leap. I've finally found enough ways to mitigate the "risk" of starting.
Let me know if you can chat some more.