How to win as a first time founder - a Drew Houston Manifesto | Hacker News Reader

How to win as a first time founder - a Drew Houston Manifesto

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While I think it is much more useful to learn from others' success than others' failure (lessons from your own failures are invaluable), let's not forget selection bias. A lot of startup success is luck--or, in other words, factors outside of the control of the founders or their advisors.

Many, if not most, founders aren't even aware of these factors, don't appreciate them fully, or won't acknowledge them out of ego. In many cases the advice should be "work hard, be smart, and buy the winning lottery ticket."

My advice is to attempt startups in the center of a confluence of macrotrends; that will tilt the odds more in your favor.

"My advice is to attempt startups in the center of a confluence of macrotrends"

My advice is to solve a problem you yourself have.

My advice is to solve a problem you yourself have.

This is a subset of "solve a problem someone has".

(Someone = You) is often a sufficient, but not necessary, condition.

(Someone = Someone Else) is an equally sufficient condition, especially for those with subject matter knowledge and industry connections.

Either way, solve a problem.

So what if my biggest problem is determining a valid problem to solve?

then it must be great to be you

That problem can be a business, just like any other. Reference: Eric Ries.

My advice is just to pick something and start. You'll probably end up someplace completely different, but you need to start to get there.

Yeah well an answer would be to solve problems entrepreneurs have, or "selling shovels" as some might like to say. But it's an interesting conundrum, I don't have any deep or special knowledge of some other field that would allow me to see problems faced in that industry, so going by the advice of solving my own problems translates to solve the problems of starting a business.

Why is that your biggest problem? Why do you need to start a company? I can almost guarantee that the reasons you come up with can be solved with alternatives much easier than starting a company.

I want to build something people value from the ground up and don't foresee myself being happy working for another company any longer.

Being a consultant is the first thing that comes to mind. You pick your projects, set your price, and customers tend to appreciate you more than a boss would his employees (outlying companies aside).

I actually agree and thought this originally. But I think it would involve more politics than what I'd feel like putting up with. However I think consulting is a really good business to transition into organically, from simply helping out multiple different organizations then just end up building a career out of it. Plus I think having founded a successful company or two (that's more innovative than not) is a good prerequisite.

I think there's a really good business in that.

Agree! It is the outliers like snapchat @3billion and instagram @1billion that were not created to solve problems but to start a startup, which are covered 90% of the time and influences developers to follow the same path.We hardly hear of companies like indeed.com sold for $1billion, climate corporation $930 million and solve real problems.

I actually think it is easier to enter an existing market, with an existing problem and competitors.

>> It is the outliers like snapchat @3billion and instagram @1billion that were not created to solve problems but to start a startup.

That's not why either were started. Both were started as just cool little projects by guys who wanted the product. They may have rapidly shifted into growth at all costs, but that's not why they were initially created.

I do agree that they weren't created to solve a problem in the way DropBox was, just to scratch an itch of the founders. Which makes growth hacks like Dropbox's referrals much more difficult. Dropbox could survive on people loving the product no matter how many others used it. Snapchat and Instagram value to users craters without a critical mass of users.

I disagree, snapchat was made with a purpose of being a startup, this is documented in the leaked deposition videos where they discussed who came up with the idea. Instagram, which morphed from a location app was created with the intention to create a startup, see the Stanford ecorner video. Now, craigslist was created without the intention of being a startup, it morphed from an email list when the founder realized how popular it was.

>> snapchat was made with a purpose of being a startup, this is documented in the leaked deposition videos where they discussed who came up with the idea.

Good point about Instagram. You're right, Burbn was started as a startup, it was the photo filter and sharing part that they kept that was Systrom's piece that he just wanted (since he claims to have been square cropping and filtering his photo's for years).

With Snapchat, however, that's not the whole story told by people who knew Speigel at Stanford (my brother was his year). The argument came after they'd already built the app and run around campus showing off how cool their app was. They did, however, very quickly realized that what they built was a company. It's also extremely likely that they had all intended to start a company and that SnapChat immediately became the company once they figured out what they were doing.

I am curious how this advice applies (if at all) to Viaweb? If it sounds like I am presuming, I honestly would not be surprised to hear Viaweb was solving multiple problems you may have encountered at the time.

As a side, the most financially successful side project I started (not calling it a start-up out of respect for your definition) was a vampire themed energy drink - it did not solve a problem for me or anyone else but took advantage of a market created by the entertainment industry. The side project I am most proud of having co-started is a $20/month primary health care network for uninsured/under-insured which was the result of a personal problem - I was uninsured.

http://paulgraham.com/organic.html

If 1,000 CS grads found startups attempting to solve a problem they each have, are they guaranteed success? Or will there be five outliers which exit for billions and then tell everyone all they need to do is to solve their own problems?

Telling others to solve a problem they have seems more like an algorithm to generate at least some successes by guaranteeing diversity. This million monkeys approach is a strength of capitalism, but I wonder if it's the method which maximizes expected value for a would be founder. It seems more of a method to guarantee a minimum return for a VC.

Certainly not. Only a fraction of them will have the determination and intelligence required to turn a problem into a startup. And some of those will be unlucky. But more of the 1000 will succeed starting from that rule than any other.

This is not one of those cases where founders and investors' interests are opposed.

It may well maximise expected value for a would-be founder, but that may not map to the founder's implicit utility function. Imagine you have two options:

Option A: 100% chance of receiving $1 billion

Option B: 50% chance of receiving $0; 50% chance of receiving $4 billion

The expected value of A is $1bn. The expected value of B is $2bn. However, most people I know would choose option A, although it has the lower expected value.

A lot of startup success is luck--or, in other words, factors outside of the control of the founders or their advisors.

Yup. I hope everyone here has read the fantastic Fooled By Randomness.

Which is not to say that Drew Houston isn't awesome - by all accounts he is. But it's easy to give way too much credence to advice from a big success whose specific situation differs from our own. (And everyone's specific situation differs from our own.)

> A lot of startup success is luck--or, in other words, factors outside of the control of the founders or their advisors.

Success is very much luck, but a lot of failure is predictable. There are a large number of startups that simply can't succeed because they have a contrived idea that ticks the boxes on some VC's checklist but that excites no potential customer.

> "My advice is to attempt startups in the center of a confluence of macrotrends"

That's basically like saying "buy the winning lottery ticket" in my opinion. There are lots of eyes watching for macrotrends, and lots of people trying to capitalize on that. Identifying the trend is part of success, sure, but that's the easy part - the hard part is separating yourself somehow. Luck isn't the whole reason for that separation, but it's a significant part of it.

I do agree that many founders don't recognize their luck. To their credit though, I think they often emphasize the "work hard, be smart" part instead of saying "I knew I was better than all my competitors because..."

I'd say "my advice is to attempt startups where the center of a confluence of macrotrends would be in the near future".

Optimal "near future" distance is the time needed to develop a working version 1.0 (not exactly a prototype) plus some (let's say 20%).

Sounds like a ticket indeed :-)

DropBox is one of the most useful products to come out in the last decade.

I still remember seeing the original 5 minute demo (1).

My jaw was on the floor, I instantly needed it.

And it's still the best, even at a premium price (marked in cost of GB of storage).

The article has several interesting points, but the takeaway for me remains "[Solve] a worthy problem."

(1) https://www.youtube.com/watch?v=7QmCUDHpNzE

If only they'd give users the option for 1-click encryption before uploading/syncing. It could work especially well with Dropbox since it has only native apps anyway. We already know they are "next" on NSA's list for companies to target (at least in an official manner, they've probably targeted them for a long time unofficially).

I belive that might not have been initially viable since part of their service is the mirroring of files that are already uploaded. If you and I both have the same mp3 in our dropboxes, only one of us have to upload it initially, then the second person to add it would only have it 'synced' in their dropbox since the file checksum matches. If we both locally encrypted it with our own keys then the resulting file on the server would be different. It'd require more storage space and more bandwidth — more operating $. Maybe not though :-)

I think the key reason is it would be significantly slower for the end user rather than the incremental increase in storage cost. Bandwidth remains the same since Amazon doesn't charge for incoming and de-duping doesn't affect outgoing.

The key thing I noted when I visited the home page of DropBox is that I instantly understood what they do.

I compared DropBox to the Box website. After wandering around several pages, I left without being 100% sure if they could do what I wanted.

The ability to offer a clear, concise message should not be undervalued.

Its what stood out to me too.

That said, even as a techie who has worked on and with dropbox products, ive come this far without ever really relying on it. And I dont see that need increasing over time.

I love dropbox, but im a bear on it long term.

All luck aside, i wonder how much being an MIT graduate played a role in successfully getting DropBox off the ground. I always get the thought that walking out of a reputable school opens a lot of opportunities like this, which is why i read articles like this with a grain of salt.

There is an advantage, but perhaps not the one you think. The advantage is not the brand, but that you know lots of smart people you can recruit to join you. Which Drew did, starting with Arash.

The brand is only an advantage in public perception (which usually means nothing in terms of company success at the startup stage), and maybe some level of increased respect from investors (which, as you have pointed out, really doesn't mean much, since they act as sheep. A great company is the way to get investors).

Completely agree that the major value of great schools is better schools attract smarter people, who often make better founders.

Agree with this. Brand is a big advantage in public perception and it's easier for top-school grads to get coveted meetings/intros since they are part of the "family." But at the end of the day, all that matters is the quality of the work. And there are tons of people who never attended MIT/Stanford/Harvard/etc. that are extremely successful at what they do and have built.

Like you said, great schools attract smarter people (not all of them!) and that makes for a more competitive environment, which in turn churns out more driven/analytical kids.

I know a TON of idiots who went to Stanford and Berkeley. And I know a dozen or so extremely successful entrepreneurs who never went to college.

You know a ton of idiots who went to Stanford and Cal (and aren't including Cal athletes, had to, UCLA grad)?

But if you are interviewing a team and realize that the quality of their 3 first hired engineers will be critical to their success, then you consider that being on MIT, Stanford or Harvard might help them recruit this talent among their social circles, which is always easier and more effective when you are not a hit yet.

There it is, you are taking the brand in account, even if it is not completely fetichism, because it's experience based. If you count on this advantage before it happened, than it is brand.

We don't though. It's rounding error compared to things like the characteristics of the founders, and what they're working on.

Seconded. I went to a High School that consistently has the second highest SAT scores in the country, and was able to get in because I lived in an area that has trouble filling their allocated slots at the school. It has been a tremendous advantage in my endeavors that my social group and network contains so many people so much smarter than me.

To be fair, Houston had already dropped out of school from a year to start an SAT prep company, so he's not entirely a first time founder. [0]

[0] https://www.linkedin.com/in/drewhouston

I was going to mention the same thing, Drew wasn't quite a first time founder when he started Dropbox, just as Mark Zuckerberg was not a first time founder when he started Facebook

Kudos to Drew.

Dropbox is simply a great product and that's why it's such a great success.

I've tried so many different cloud-based storage services throughout the years and nothing really comes close in terms of ease-of-use, accessibility, sharing, speed, etc. Sure, DB has a few flaws here and there but nothing is perfect.

I remember being bombarded with marketing emails from the AeroFS team two weeks ago when I tried their products and while they were great in asking how they "could help" me, their software was broken. It wasn't working properly, crashing on colleagues' systems, etc. Worst part: emailing support four times never got me a reply. And to me, that's just an awful product (aside from it being super buggy). But I digress.

Great little read from Drew, someone who has created a simple product that we all need and use daily.

Good article - there's a lot to take away from this.

However, if I ever read that Gladwell 10,000 hours quote again I think I'm going to go postal!

Incredibly informative article.. But the second I closed this, I saw the article about how BitTorrent is growing at a faster rate than Dropbox did. [1]

It made me wonder how Drew/Dropbox is going to respond to such a competitor

[1] - http://thenextweb.com/insider/2013/12/05/bittorrent-doubles-...

I bet quite a lot of that growth is down to the NSA news. I switched to Dropbox sync because of it. The NSA is really hurting US based SaaS businesses.

That 5 minutes long presentation movie from 2007 really explains why Dropbox is such a success. He just simply tell us about what his product does, what problem it solves, and how he has a good solution to "the file syncing problem". The presentation is so good that even my dad understands it.

This is much more about "how to win" than it is about "how to win as a first time founder".

The only real "as a first time founder" material is his story about how he scrambled to find a cofounder for YC.

great and inspiring read! find ourselves in the same spot as when drew started - when he walked in to YC unprepared. Well we blew our YC 2014 application, it was so poorly written. So with a common starting point looking forward to cracking the code to success by - solving a problem that we have ourselves, and improving on things that are already around!

There is also a hidden factor: white male in his early 20s attending ivy league schools like Stanford and MIT

Stanford and MIT are both not Ivy League schools... But your point is noted.

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