Student Entrepreneurs: If Peter Thiel Calls, Hang Up | Hacker News Reader

Student Entrepreneurs: If Peter Thiel Calls, Hang Up

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56 pointsnpalli78 comments

There's a valid point in here about the way the structure of the Thiel program, with its strain of radical individualism, might blind new entrepreneurs to the idea that most of them shouldn't be CEOs. I think more entrepreneurs should try to grok this idea. Even people who are "born leaders" don't necessarily belong in the CEO role, because CEOs need to be more than leaders. They often also need to be moderating influences, level-headed, execution-focused, and accountable. I've been in startups since I was 18 years old, and have started multiple companies, and would not hire me as a CEO.

Unfortunately, the article makes that point by inflating the importance of management theory and by suggesting that college is somewhere you go to pick up a trade. So, someone else should try to write the good article that makes the CEO point.

Yes, this would be a really good article if it made a completely different point.

If I'm mistaken, and it's not trying to make the "CEO argument" I was playing with upthread, you could correct my mistake using evidence. I read the article and I don't think I'm mistaken, but would love to be surprised.

Otherwise, I'm not sure of the point of your comment.

...Says the man who went to school when the opportunity cost wasn't a decade in debt (at the very least).

If you succeed, then you didn't need school. If you fail, then you can always go back to school afterwards. I don't see the downside of the Thiel fellowship, at least on its surface.

Agreed. It's at the least worth a try and if you fail not only can you go back to school but the fact that Peter Thiel, Co-Founder of Paypal believed in you will at least do you some good, reputation wise.

There are plenty of school options that involve much lower debt than that. You don't need to go to a school that costs $50k a year, there are plenty of alternatives.

There are plenty of alternatives, but do they provide the same quality of education for your degree of choice?

With very, very rare exceptions, yes. Most flagship state schools will give you an excellent education at a much, much better value.

Why wouldn't they? It's not like MIT/whatever uses special books that no other uni can use. It's not like prestigious universities follow some special program that makes it so their students gain a much better insight into the subject than people who go to other universities.

The perks of attending a prestigious university typically has nothing to do with your education. It has to do with rubbing shoulders with blue bloods, creating a powerful social network, and being able to woo people with the pedigree associated with the words "MIT graduate" on your resume.

Many do, yes.

...Says the man who went to school when the opportunity cost wasn't a decade in debt (at the very least).

I got a great college education and graduated with a level of debt that I paid off in less than a year, through a mix of need-based grants, merit-based scholarships, working 15 hrs/wk, and a lower overall tuition because it was a public school. (There's also the growing trend of 2&2 programs, which in retrospect seems like an even better choice.)

I'm not necessarily arguing that the value of college outweighs its costs (for me, though, it certainly did), but to say that the opportunity cost is at least a decade in debt is invalid.

Perhaps it has not occurred to you that you were an outlier who was able to qualify for grants and scholarships and also had a (presumably decent-paying) part-time job. Not to mention living in a state with a decent school for your degree of choice.

But, I mean, let's get real. Take a good public school like University of Washington. 4-year tuition comes to $160,000 - if you life with parents [1]. Are you telling me that this is not a crippling amount of debt for a lot of people?

[1]http://admit.washington.edu/Paying/Cost#freshmen-transfer

That's for non-residents. At least look at the in-state number which is less than half the one you quoted.

Most of the resident students live on or around campus, as opposed to with their parents. For them, total cost comes down to around $110,000. That's still a six-digit number.

So it's the non-resident students who live with their parents? That seems impractical. b^)

I agree that college is/can be expensive, but I think that your 4-year figure for tuition actually includes everything. Granted, tuition and fees are pretty fixed, but the other expenses - room/board, books/supplies, transportation, personal expenses - are usually quite variable.

And, if you go a community college, which is considerably cheaper, you can then move on to a 4-year college. In some states, doing well at the community college, almost guarantees you admission to one of the good public 4-year colleges.

I'm not trying to assert that my experience was the standard. But the post to which I replied was asserting that the minimum cost was ten years of debt, which is also not standard.

From a financial standpoint, there's little difference (at least to my knowledge) between attending an out-of-state public school and an out-of-state private school. A more apt comparison would be looking at UW's estimate for Washington Residents who live away from home, which is $12K tuition and $27K estimated total expense ($10K of which comes from room and board. As someone whose alma mater quoted something like $13K for room and board, I can speak anecdotally that those estimates come from on-campus dorms & meal plans, which are awful; you're basically paying $15/meal.)

Hi! Five years as an undergrad! No debt!

I appreciate the article and the point of view but I have to disagree completely with his recommendation that you spend your years working for someone else before you launch your own business.

He talks about working for a company after finishing college to learn about how they operate and do business. You know what I learned in the five years after college I worked for a company as a dev? A whole lot about software development. Nothing about hiring (beyond what I gleaned while interviewing), basics of management and nothing about marketing or sales. You know what I learned in the first few months of trying and failing to launch a business? A heck of a lot about everything, including a lot more about software development.

Working in my trade for a few years out of school made me very good at what I do but it certainly did not make me a very good entrepreneur.

I'm the exact opposite. I started in a tech support role and learned the value of proper customer service, then transferred to a sales engineering role and learned how to analyze a customer's needs and match them with the correct product offering. From a management side, just by looking at how my company is managed, I learned how not to manage a company. Every time a coworker got treated like crap, I told myself I would never treat my employees like that when I have my own company.

What would have happened if I had started a business straight out of college? Presumably, I'd have made a whole bunch of dumb mistakes, some of which could have cost me the business. I would have failed a bunch of times and learned things the hard way. Most importantly, I might have become demotivated and given up entirely. Which is actually what happens to most people.

I'd say that the past five years I've worked for a company (my first one out of college) have allowed me to find myself in terms of confidence, skills and purpose. I feel like I'm a much better, much more stable place for starting something on my own.

Agreed. Being elsewhere for a few years, finishing school before that, doesn't guarantee you'll learn the managerial skills required to be a CEO.

No doubt it depends on the company - did you ask to be trained in management?

I know at my employer some people don't aspire to cease being developers and start being managers (which is fine) so they don't get trained to be managers (which is also fine).

I agree that working for another company doesn't always make you a good entrepreneur. But I do think that, depending on the size of the company, the dynamics and your role within the company you can learn, for free, a lot about what not to do, particularly regarding the basics of management. And regarding hiring, you can learn, what you actually want/value during the interview and in an employee vs. what you think you want.

If Peter Thiel calls you, it might make sense to at least hear him out. Slamming doors is rarely a good approach to life.

And school will always be there to go back to.

I don't think it's really worth going back to school. I dropped out to join the military. (Later left that too) 10 years later, every time I think about going back I think, "why?". I've already got a job, and I make decent money. I'd learn much more, faster, by taking on more responsibilities here than I would in some sandbox environment. Unless I went to, like, Harvard or something.

... which is actually an argument for staying in school in the first place. Once you're out, the realities of life make it very difficult to go back.

I dropped out because I didn't feel I was learning enough to justify the expense. I can educate myself on my own time. I'd make the same decision today, only I'd be more certain about it, what with skyrocketing tuition costs and all.

Of course, not everyone's like me. But for people in the same socio-economic position I was in back then, I don't think college offers the solid pathway to middle class comfort everyone seems to think it does. You might get lucky, you might also get saddled with a $30+K piece of paper and no marketable skills, in which case you'd have been no better off working as a waiter/tress or whatever and working towards something better on your own terms.

Is it? That argument assumes that school is worthwhile in the first place. If you assume your conclusion, it seems an awful lot like begging the question.

If you don't go to school, live your life, and find out everything is just hunky-dory without it - what exactly have you missed out on? Maybe you were right in the first place, and can congratulate yourself on making wise decisions that turned out to be vindicated in the end?

The OP said he has thought about going back multiple times. Obviously it has some value to him.

...and then decided against it every time, so obviously it has less value to him than other things he could be doing with his life.

...a life which is much, much more complicated after leaving school, serving in the military, having a career, starting a family, etc. If school has any value to you at all, the utility of finishing school vs dropping out is higher earlier in life than later. Maybe for some people it makes sense to drop out (Bill Gates and Mark Zuckerberg being canonical examples). But for most people the decision isn't so clear-cut, and going back becomes tremendously more difficult as time goes by.

There seems to be a consensus here that all big corporations are inept and the all that you can learn from them is what not to do. Only ~5% of startups are successful while 100% of big corporations were at one point. If you can't learn anything from Big Corp you aren't trying.

Yeah, I encourage people to go work for one for a year or two to learn all the stupid things they do and the ways they are vulnerable. Also to understand why you should love what you are doing now.

Agreed - hell, if they are inept, you can learn how you went from "Successful Industry Leader" to "Cumbersome, Lumbering Dinosaur" - and avoid that same path with your startup.

Also, yes, hiring is difficult. Do you really think you are learning how to do it properly by working at Big Corp first?

Well, you will at least learn how not to do it.

Not true. Rarely do you (a cog) see the hiring process (a different cog) used by your massive company (the machine). Especially when you're just out of college.

Agreed. Ideally, you are an early employee at a startup where the founders had some previous successes. This way you get to see and take part in behind the scene processes as implemented by the experienced founders.

Hmm? I've done interviews for both of my past two employers. The first one was a startup, but the second one is Google.

Do the big companies you work for not have people interview with employees in their particular role? It seems relatively common among my friends for them to be interviewing people just 1-2 years younger than them, either for internships or to fill the position they're about to be promoted out of.

A startup isn't a massive company and Google is notoriously atypical with transparency and inclusiveness with hiring. Even so, just conducting an interview is far from learning about the thought process behind the actual act of hiring.

There's value in learning from how others have screwed up the world. Learn what sins not to repeat. Sometimes you can only see the brokenness from inside the system.

Some people are geniuses and can run billion dollar companies when they are 16. Other people can benefit from learning by doing for a few years. Everybody is different.

More to do with chaos more than anything. Some businesses get lucky, others don't.

There was study that showed that entrepreneurial success has extremely weak correlations with previous experience.

Most successful entrepreneurs that I know were terrible at first and had little experience, but there companies still succeeded.

I know experienced people that started companies, and did things right and failed.

The difference was that things were in the right place at the right time.

“I'm a crotchety old guy. I worry about all these new companies. I'm glad that they're easier to start, but the problem is, they're just as hard to finish as they have always been”

This is a great observation from Mike Olson. I think a lot of people who are dropping off to start on the entrepreneurial path vastly underestimate the difficulty of building a company to a point where they can sell or IPO or get just get a good return. Lot of the startup-lore is built around expectation of success that has vastly diminished in the last few years and we will soon find a lot of people who are thirty-five, have worked through three-four failed startups and nothing to offer to the broader world.

If you look at number of seed accelerators in the US[1], we have about 175. Every year about 3000 companies are formed and a vast number of them fail. Take the top accelerator in the country (perhaps the world). YCombinator. It has funded about 550 companies, pg is rightfully proud of the value created. However, if you took out the top 10 of them I suspect 99% of the value goes away. I remember just AirBnB and Dropbox making 75% of the value. Think about it, even if you came out of YC, you have a 2% chance of success. That means if you even if you join a startup accelerator in Middletown, USA your chance is probably 0.5% and if you don’t even get to join a accelerator it is probably even less (0.1%?)

I suspect a lot of people still think there is a 5% chance you will succeed in a startup. That was the case 15 years back. With a 5% success rate, you could possible iterate to a better than even odd of success if you went through 3-4 startups. If you were told you have a 0.1% chance of success, it is more of a random crapshoot. What is it that you will learn and show after 3-4 attempts?

The other option of going to college, working for a big company and the associated payoff hasn’t changed much. If the startup option is now 50 times riskier, you need to think hard about your choices. Maybe you are an optimist, that’s OK but don’t default to choices.

[1] http://www.seed-db.com/accelerators

This is an important point, but it also shouldn't be overstated. There are many examples of where professional managers lacking passion and personal interest in a business's market have hindered more than helped.

As Thiel often says a variety of ways, copycat behavior is unlikely to produce success in a high risk/reward context like a startup. You need an information advantage, and often that advantage is someone who knows their own itch very well.

I also hate that the meme for this has become "adult supervision." It's such a patronizing and self-aggrandizing description.

In some sense, though, most of these situations do see the founders learning management on someone else's dime.

It's just a segmented capital super-structure, rather than a traditional corporate system.

"Management is a tremendously undervalued skill on the tech startup scene, and that single fact contributes, I believe, to the failure of more companies than any other factor."

Truth.

If a company let's children be managers without any prior experience or training, the company should force all their child prodigies to at a minimum read http://www.amazon.com/Great-Danes-Barrons-Dog-Bibles/dp/0764...

Why?

If you can't learn how to manage a dog, what hope do you have in managing multiple divergent human personalities?

I am allergic to dogs so never learned how to take care of one. I seem able to manage others effectively and of course always more to learn. Honestly, a pretty odd choice for a book. If you really believe that book is a prerequisite, wouldn't it be better for that person to just get a dog?

If you "just get a dog," are you assuming everybody has innate knowledge on how to raise and train a dog?

It takes—looping back to the main point here—education to know the best ways to take care of a dog. Sure, you can just practice by trial and error for a while, or you could use knowledge from people who have done The Right Thing for years and get ahead of many common mistakes you would have made out of "intuition."

Sorry but that's a pretty outlandish statement. dogs may occasionally act like people, and they may require management, but they are not people. It doesn't follow that if you can't/haven't managed dogs you have no hope with people. I've done both and it's a different ball game.

I've worked under multiple managers who: gave no positive feedback, set no expectations, and provided no treats.

That's really the minimum you should do with dogs or people.

Have you told your employees that you're managing them based on techniques you learned from a dog training book? How did they react?

"gave no positive feedback" "provided no treats"

Seriously? If you try to control people pain and reward system, most people see through it and hate you for it.

You want them to have a innate feeling of accomplishment. You completed something difficult? And that felt good. You don't need cookies from a master for that.

The number one thing you need to do, is set something up which they can measure themselves against. 90% of the time people will enjoy improving it, without any input.

The world isn't full of self-involved creatives who just want to create to create. Most people like being rewarded (money), promoted (power), and growing in their positions (knowledge).

That's just plain offensive. If you start trying to command people like you command dogs, people are just going to disrespect you. You will have no power.

People don't react to pain/rewards like dogs do. They see through it instantly.

They see through it instantly.

You vastly overestimate the competency of people.

It's more that if you treat people like dogs, only the people who already think of themselves like dogs will be willing to hang around with you. They do, after all, have freedom of association. So if you find that you're surrounded by idiots, it's not that the world is full of idiots, it's that the way you treat people ensures that only idiots will hang out with you.

Most companies fail without hiring a single non-founder! How can management be a factor in these failures?

I would suspect that poor management is a contributor to high-profile failures. But only a minor factor for startups in general. Not making something people want, and giving up too early, are far more critical problems for early-stage companies than mismanagement, and there are a lot more early-stage companies than later stage ones.

"Most companies fail without hiring a single non-founder! How can management be a factor in these failures?"

Most young startups fail because of founder disputes. Working closely with another person is a skill gained with time and experience, and has a lot in common with management.

Well, that's true, but it's also a skill that has a lot in common with dating, being in a relationship, maintaining friendships, or having a good relationship with your parents. Should we recommend founders do that too? (Actually, maybe we should.)

I think management is important. I think interpersonal skills are important. I don't think that either of them are the most important reason that startups fail. I think that market is.

When I look at the many projects I've worked on, led, or had firsthand experience with, working at a big company, the biggest common denominator was that all the successes were things worth doing. And the failures, barring some glaringly mis-managed ones, were things not worth doing. When you're working on something worth doing, a pressing problem for the company or your users, all the wind is at your back. You naturally find lots of other talented people willing to work with you; they forgive your little screwups and move on; and you don't have trouble getting more resources once you can demonstrate some minor successes.

By contrast, I've known some incredibly talented managers - we're talking folks who have sold companies to Google, who have worked on products with userbases in the billions, who have managed hundreds of people successfully before - that crashed and burned because the project they were working on fundamentally did not need to be done. Good management makes a good project go more smoothly; it cannot transform a bad project into a good project.

That's probably the biggest thing I've taken away from my big-company experience, and the one that (should I choose to start a startup again) alters my thinking the most. With my last startup, I thought "Well, the idea isn't quite all the way there yet, but solid engineering and raw talent can take it across the finish line." This time, I'd be much more likely to insist on verifying it with real users and making sure that they really, really want it before getting other people (beyond a cofounder) involved or taking it to investors.

Seeing how successful companies work is extremely valuable. No company is perfect so you get to see what works and what does not. If your idea is something highly technical, then the degree (or equivalent experience) is very important. Name one highly successful company whose product is highly technical where the founder was not also technical? I cannot think of one myself.

apple?

Woz was/is extremely technical. Steve also knew how to build computers although not great at it.

This is good advice, because the right sort of person to be a Thiel fellow would read this and scoff anyway.

He reduces the entire situation to two options. What I've learned from being in a startup? There are never just two options. His article does students a massive disservice by creating just an A or B scenario.

You can gain more "experience" before you try to do your own thing, however the more experience you gain, the worse you become at creating the next billion dollar startup. For every year that you don´t start your own business, your capability to think large and taking risks and your resourcefulness dramatically declines.

That´s the reason why none of the four horsemen in tech, Google, Apple, Amazon or Facebook were founded by founders over 30.

Looking at all the other billion dollar startups Microsoft, Dropbox, Airbnb, Twitter, Instagram, Waze, Paypal, Tumblr none of their founders were over 30. See a pattern? There are probably billion startups who were founded by founders older than 30, but there are very few.

The less experience you have, the more likely you are to create the next billion dollar company. If you start your startup after 30, it's very unlikely that you will be able to make it into a $1B startup.

This is abhorrent ageism, and completely wrong.

Peter Thiel, 31, Paypal, 37, Palintar. Larry Elison, 33, Oracle. Reid Hoffman, 35, Linked In. Evan Williams, 35, Twitter. Mark Pincus, 41, Zynga. Arianna Huffington, 54, Huffington Post.

Can we stop making things up? Maybe five minutes of research would be good? You know, there is a place they teach these things.

Founders that had had successful startups before don't count.

That's why I was referring to "experience BEFORE you try to do your own thing."

And yes there are a few startup founders that were older than 30, I give you Larry Ellison.

However none of the 4 horsemen had founders >30, plus the other founders except for Peter Thiel had already sold their previous startups.

Regarding Palantir, they had Peter Thiel as a cofounder, I don't give you that one.

Again, you may want to do some research. Many of those I listed are first time founders. Your attitude mirrors the also incorrect idea that scientists must make their name before 30. That too, was studied and found to be completely wrong.

I can only assume that this attitude comes from arrogant young people who want to think they are special.

I don't want to be ageist or anything, I just like discovering facts.

Except for Peter Thiel who was 31, 1 year above, only Larry Ellison is a first time founder, all the other ones where very successful before.

Huffington Post is not a billion dollar company, since it was acquired for US$315 million by AOL 2 years ago.

I'm not sure if you are intentionally lying, or just didn't bother, again, to do any research.

Reid Hoffman started his first company at 30. Mark Pincus at 29 (just one year shy!). Excluding Huffington simply because it didn't meet your arbitrarily set profitability threshold is unfair.

Hell, even Google had Eric Schmidt help run the company at the start. Eric was 46 at the time, though surely you claim "but he's not a founder!"

Data is somewhat hard to collect for this topic, but see:

http://techcrunch.com/2011/05/28/peak-age-entrepreneurship/

> The research shows that an older age is actually a better predictor of entrepreneurial success, and that three other traits also correlate strongly to success: strong fluid intelligence, high openness, and moderate agreeableness.

Good point but it could also that very talented people are so bored with their 9-to-5 job and they will be bored to death if they are forced to wait till their 30s to start their own company.

On the other hand, not so talented people (like me) might need a little of learning before jumping into entrepreneurship.

The trick is that when you are in 20s you might be either stupid or super intelligent but you will not know that.

You don't need experience to start a startup, you get the experience by doing a startup.

And you don't get the BS experience in big companies, you get it in its purest form from the market itself, not compromised by any company politics BS.

Additional data points:

Jeff Bezos over 30 when he started Amazon

Marc Benioff 34 when he started Salesforce.com

Peter Thiel was 32 when he took over Paypal (his first startup)

Adobe founders were over 40

Cisco founder was over 30

Intel founders were close to 40 when they started the company

All are huge companies worth tens if not hundreds of billions of dollars.

Even Apple first iteration was 90 days from bankruptcy when Steve Jobs (aged 42) took over. At this point, his startup NEXT was not very successful.

You seem to think $1B is some gigantic amount in the grand scheme of things. If you step beside tech, there are hundreds of examples. Take the example of Chobani yogurt. Started by a 33-year-old Turkish immigrant in 2005, the founder is a billionaire today. Companies started by founders older than 30 is the norm and will become so in tech too. Only in tech this foolish idea keeps persisting that only people under 30 do big things.

The best way to learn, anything, is by trying, failing and iterating. This is true (for me at least) in programming and otherwise. I generally believe you should stay in school, and more importantly stay learning technical stuff (whether undergrad, grad school or in a technically challenging job). It's the best way to get ideas, and more importantly find people to work with (if you want to start a company). So I do harbor doubts about the Thiel Fellowship (though I happen to know quite a few talented kids in the program, and think it's working well for most of them).

However, you will not learn how to be a Founder/CEO without being a Founder/CEO. Some have a natural ability at this, but 99% of even the best CEOs probably just have the ability to learn quickly on their feet. By the time their mistakes might be noticed, they've already learned and corrected them.

The only thing you'll learn by working your way up the corporate ladder is how to work your way up the corporate ladder. The stuff about learning how to work hard is BS. If you want to do a startup and hope things will happen for you, you probably believe in an all-powerful being that has a plan for you.

Wow, what a de-empowering article. Good luck guys.

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