Hacker News Reader

I think it can be even worse than that. What I've often seen is that "failure" isn't even real business failure, but merely your boss having your idea shot down by the boss above him. The risk is mainly emotional. People train themselves to play an elaborate political game to advance their ideas.

The other part being that, in a startup, you'll be rewarded if things go well. In a corporate environment, many times you won't be.

Yes, start-ups die if they are not meritocratic.

Big companies are only prepared to give you X% of your annual salary as a bonus if you're good (with X < 15%). So the bigger the upside of your "innovation", the more you will find the company and its reward model unfair and leave. So big companies lose the best employees and so have to buy back innovation by buying start-ups.

When designing any system that involves people, it's vital to see what behaviours optimise your rewards. Usually there is some general process / overall plan you're supposed to follow:

                      Follow the plan | Don't follow the plan
    Things go well  |    reward       |     unknown
    Things go badly |  no punishment  |    punishment

That is a setup which encourages people to follow the plan even if they think it's not the best one.

Something else which makes this quite difficult is that you never know what would have happened if you'd jumped columns.

Firstly I think humans work on much shorter timescales such that even the imminent collapse of a startup is mid-range planning. But what makes your boss happy today is a much more important concern in your decision making.

And secondly I think I get to see much worse startups and enterprises than Mr Blank.

Most of my day today was re-writing some project mgmt automation to save me from nagging. It's similar code I have written in small startups and large organisations - everyone seems to think project mgmt is a Good Thing despite all evidence. Everyone will, if asked, say I should have spent the time today on those important innovations. But they all want their bug trackers filled out correctly each morning, but analyse the projects every few weeks or months.

The feedback loop needs a tight time cycle for it to have a good effect on human beings.

Even in startups, the time horizon for death of company has been months away. I rarely have come across projects in large or small companies that have a deadline more than a year out and usually six months. Most startups can plan on a runway that long.

I think it is something else, a dedication to engineering quality perhaps, to open and transparent discussion, but somehow innovation happens in both startups and large companies. It's just in large companies it's harder to find amount at all the rest.

All of which suggests one other consideration - the people lamenting the golden age of startups are suffering from a survivorship bias - the startup that grew was successful (else they could not pay Steve blank) but that means it was unusual. It is possible that most startups are also lacking in innovation, it's just the people who can lament this to Mr Blank do not see those startups in action and so think the incidence of innovative culture is more prevalent globally than it really is.

Edit: tidy up a bit

Poverty may be a necessary condition for "startup" success in the somewhat narrow definition of a startup common in our industry, but the idea that it's necessary for BUSINESS success is total nonsense, which is a useful thing to remember when you're feeling artificially burdened by being over 30 and middle class(!) The bulk of new wealth in human history has been created by people who already have some modicum of existing wealth, or access to it.

I keep thinking about why I am not taking as much risks as I should and PG's poverty factor could be the issue.

I am not poor and have a family with a bit of savings cushion. So does that mean I need to freaking blow my savings before I start giving approval to myself to start taking some big bets..

    [Malcom McLean's] net worth in 1955 was $25 million -- the equivalent
    of $180 million in 2004 dollars. Asked later whether he had considered
    ways to shelter some of his wealth from the risks of entering the
    maritime business, his answer was an unequivocal "No." McLean explained:
    "You've got to be totally committed."

( The Box, http://www.amazon.com/dp/0691136408/ )

Probably not. I think panicky entrepreneurs aren't particularly good either.

The worst case for most SV entrepreneurs is "have to go get a job" or "have to move in with family or friends for a while". When you're young and single, that's an ok outcome, especially since you have a level of control that matches your level of risk.

It's a very different calculus with a spouse and kids. There if you blow up, you don't want your family to end up homeless. And you don't want your spouse worrying about ending up homeless, either. Since your spouse doesn't have control over the business outcomes, it can be much more stressful.

I'd encourage you to jointly split your cushion into "can gamble with" and "won't gamble with". Then if you want to do a startup (or join something early enough that they can't pay you properly) the deal you make is that once you've burned through the ok-to-gamble money, you go back and get a real job.

I promise you that watching your bank balance tick down is going to create significant motivation, especially if your #1 investor (that is, your spouse) is getting weekly status reports on the business progress.

I assume your last sentence is facetious, but in case it isn't: Do Not Do This. Bad idea. People suggest it will light a fire under you and be a motivator - but it can also paralyze you with anxiety so that you end up getting nothing done, like the deer frozen with fear in the headlights. It's a horrible place to be, and there's many business problems that can be rapidly solved with cash. (eg Don't waste hours and hours of labour if you can just buy an off-the-shelf software package to do the job faster & more cost-effectively.) Don't take risks, manage risk.

Kids come first. If your kids needs and future are taken care of and reasonably secure, then do what you want. If not, do what you must.

You know, I did exactly this.

Best decision ever.

The Manual (How to Have a Number One the Easy Way), the KLF's step by step guide to achieving a No. 1 single with no money or musical skills, advises:

  “Firstly, you must be skint and on the dole. Anybody with a proper job or tied
  up with full time education will not have the time to devote to see it
  through... Being on the dole gives you a clearer perspective on how much of
  society is run... having no money sharpens the wits. Forces you never to make
  the wrong decision. There is no safety net to catch you when you fall.“

http://en.wikipedia.org/wiki/The_Manual

I thought 'dole' is a a safety net

Dole ( UK slang for Job Seekers' Allowance, JSA ) is very fickle and can be arbitrarily stopped for a number of reasons:

https://www.gov.uk/jobseekers-allowance/further-information

For example, local to me there was some controversy when people refused a zero-salary 'job' working for a chain of discount stores. Their JSA was stopped as punishment, so they had no income.

Not much of a safety net, it's actually now a policy tool to coerce people into menial and undesirable jobs, and to keep them there ( being fired makes resuming JSA difficult ).