> First, it sets the stage for what was to come, and second, while it was unquestionably a success, it was not my success.
I used to think that success was being successful the way I wanted and I was often frustrated because things were working but not because of the way I wanted them to. Turns out, it's doubly difficult to make things not only work but also work the way I want.
I've since tried to be more open-minded and see wins that perhaps I didn't expect or want still as wins and it's made me feel a lot more successful. One might scoff and say I should hold myself to a higher standard, but at the end of the day, success is only an intrinsic feeling anyways. It's not a measurable metric so I might as well feel better about the progress I'm making.
In the context of the article, the author could see these all as failures, but it sounds like some of these were pretty successful. In fact, the author concludes as much, finding happiness in the "failures". It's all an arbitrary label anyways.
Ugh, I know this feeling too well. I've been pretty successful in life so far by societal standards but have always felt inferior and like I'm failing. Always. I think partly that's responsible for the drive that enabled earlier success, but it gets old. My first defense when those feelings bubble up is to remember we're all playing a game we can't win!
I'm very grateful to have the luxury of not having to play the game (very much). It puts me at odds with the majority of the world. Maybe if I was a success on the scale of our modern day oligarchs my circles would be filled with similar people, but being a salary employee who doesn't work primarily for the pay cheque and could quit for higher morals or values (without risking their family's welfare) is a weird situation. I feel like I'm often on the edge of the bubble and must be missing something.
We're all just animals on this floating rock in space, and meaning is what we ascribe to the series of events that comprise our lives. I personally resonate with the notion of shokunin which essentially is about honing a craft, and ultimately yourself - I definitely find joy and satisfaction in continually learning and improving at whatever I do...
When you combine that with wabi-sabi, and just a general appreciation for the present, I find I am able to cope with whatever life throws at me, no matter how bleak it sometimes gets.
Not having to play the game isn’t as expensive as you suggest.
Lots of tech employees, if they don’t let lifestyle inflation take over, hit a point where they could retire early but may not want to. At that point t walking away from a job is much easier.
You may be missing the feeling of being a human being with atonomy over the course of your life. Missing in the sence of absence, definately not in a sense of sadness or regret - be happy to not have to worry about the most existential things in life and being dependent on the whims of a boss / company / ecomomy for them. tl;dr I'm happy for you to not be in the rat race, it's completely not glorious (to be in it).
Yeah, the "success definition" trap is real. For me I was having coffee with a former co-worker who was now a VC because they had been at one of the same companies I had been but had joined "pre-IPO" and so probably had a net worth of 20 - 30 million. They asked what I was looking for and I said "To be successful like you!" and they said, quite seriously, they would prefer to be successful like me. And at that point we talked about the parent's point of how do you define success? This person had money but had lost their their spouse to divorce over 'working too hard' and were now alone. Meanwhile my third kid was on the way and I was doing okay but certainly not "FU money" okay. And yet from their perspective, that was more successful than they felt. That really threw me for a loop.
Totally feel this. I think all people should desire to be wealthy and to keep from being impoverished, but we should not define wealth and poverty simply in terms of our monetary wealth, or lack thereof.
People who have the love of family and friends, a clear conscience, health, their physical needs met, and thankful hearts, are far wealthier than a majority of people in this world who have a large number in their bank account.
Yet in our consumer world, people are continually thinking of their worth simply in terms of the money they have or the money they make. I’ve known many married working moms, who decided to leave the workforce and be homemakers, who constantly felt like their worth diminished because of the decrease in their wealth, not recognizing that the bond they had with their children, was growing stronger and greater, and didn’t recognize how incredibly valuable that truly was.
Note: I’m not saying working moms can’t have strong bonds with their children, I’m talking about specific situations where for them it was hindering their relationships, and their relationships improved but was at the cost of less money.
The social pressure to play the game, even when you don't need to, is so strong. It is way easier to be happy when you have money than when you don't, and it may be something close to necessary (I guess there's happy poor people) but not anywhere near sufficient. A lot of smart, driven people seem to lose sight of this.
Yeah there was a song by silverchair(?) saying ~ “money isn’t everything, but I’d like to see you try to live without it”. When money has been tight for us in the past, that itself brings stress. Though knowing we have great community, who we could rely on to not starve, to be clothed, and have a roof over our heads alleviates a lot.
I think a lot of times those who don’t have great community around them, are often the ones who will really chase money over other things, because the impact of not having it is so much higher for them.
I guess my question is can you even go for, "just your slice"? I don't want or need mega millions. I just want to be well off enough. Maybe that is day job? Preferably, it'd been cool to have some success, mic drop, and live a good life. Tom Anderson from Myspace fame seems to have done well. Successful product and off living his life.
The first "start up" I worked at was Sun Microsystems (I joined the day after they went public :-) so maybe not a startup at that point). But I was (and am) good friends with a number of people who worked there before I did. Pretty consistently a number of people who did well from that got to a point where they had "enough" and didn't need any more so they switched to working on things that spoke to their values rather than places where they could "make a lot of money." I have found that pretty inspiring and a counter balance to what passes for a 'success story' in the press today.
Without bragging, but I have succeeded in two of my startups and I have always been super lazy. Work life was mixed all the time. But never had stress. Always took time for myself. And maybe worked 3 days effectively a week. Remaining time I spend with my kids and hobbies. I dont believe in this rat race 60 hour a week thing.
You are totally bragging, but that's OK. I would hope you recognize the huge amounts of luck and context that go into a success like yours; many people work their asses off and still fail.
>> I dont believe in this rat race 60 hour a week thing.
The question is do you believe you were successful because of, or in spite of this?
Success is never determined by hard work. It's always a combination of many other factors and at best hard work may contribute a little. Otherwise the billions of very hard working people struggling to feed their families would be extremely successful.
But that's not a story that you put on a poster, so people prefer to believe the lie that killing themselves chasing "success" is a good thing.
I like this view. I’m not especially successful (by any of the measures knocking about) but in the midst of a startup again for the last year.
This time I work how I want to work and am actually enjoying myself. The whole 80 hours a week startup thing is padded with a lot of performance art in my experience. I am actively avoiding all that this time around. I find that I solve a lot of things by not doing them or solving them when not actively trying.
We’ve made great progress so far.
Except they could not. You can't buy with money the experience of a good life partner, you cannot buy with money the experience of having kids and raising them.
Those are things you buy with your time, your life clock if you will. You have a limited budget of time and you don't get to spend it twice. And when you get to the point where you feel like you've probably spent half or more of it, you might look at what you spent your time acquiring and be disappointed.
Pretty much everyone I've talked to about 'success' uses the definition of 'the sense of pride in what they have achieved in their life so far.'
If the value of what is a 'good' thing to achieve came from inside of you, then in my experience, you'll be happy with what you've achieved. However, if you adopted someone else's definition of what is 'good' to achieve, you may find that having achieved it you don't feel happy. I expect it is different for everyone.
What this conversation did for me was to show me how one thought about 'success' affected the choices of where you spent your time, that they were different for everyone, and that people using someone else's idea of success could be disappointed or unhappy having achieved 'success'. And that realization helped me make decisions about how I spent my time based on what I valued in my life rather than by an arbitrary "score" like a bank balance.
Also interesting that it seems like his relatively minor 1 year stint at pre-IPO Google was successful enough to pay for many other endeavors.
It's a great example of the power laws in startups: it's much more lucrative to have a minor role in a major success than a major role in anything minor.
I would go even further, it would have been much better statistically to work at any of the BigTech companies even in the past 10 years than take a chance at a startup.
Seeing the outcome of the startups he listed, it would have been much better to work as an enterprise CRUD developer at a bank, insurance company, etc
That really depends upon what you are optimizing. Someone with a PhD who wanted to be a professor, worked in an academic role in a big org, worked at the edge of many technologies; doesn't seem like someone who would be happy at an insurance company.
I will also repeat the obvious (but oft missed) observation: working in a revenue-generating industry, not a cost center. This doesn't need to be a startup, but very few banks or insurance companies generate their massive products within IT.
That’s true. But the author wanted to be a “successful startup founder” and that never happened.
I said in another reply, that I made plenty of mistakes and had plenty of “failures” so I’m not faulting him for that. But where did he say that he learned from his failures and worked on his weaknesses that allowed him to succeed based on his goal of becoming a successful startup founder?
> Seeing tts outcome of the startups he listed, it would have been much better to work as an enterprise CRUD developer at a bank, insurance company, etc
Enterprise CRUD developers don't make that much. I'm confident OP made more over his career than them.
OP would have to speak to his experience, but between a Google IPO and the $10M Virgin acquisition I would be surprised if he didn't average >$200k lifetime.
Throughout this thread, it's clear you have an ax to grind. Startups are obviously not for you, but many enjoy them and benefit.
He wasn’t a “founder” at Google. Google IPO’d in 2004. How many of the $n number of startups founded around the time that Google was founded and it IPO’d were successful and how many disappeared into obscurity?
There are so many people especially on HN who succumb to survivorship bias. Most failed startup founders never admit it. The original author is not one of them and he was willing to be open about it - that’s a compliment by the way.
“Many” may benefit from them. But statistically, most don’t
I think he wrote that he didn't make anything from that. He held onto the equity because he (unfortunately) thought Virgin would turn it into a success.
I think this is actually not as obvious as it seems as equity is also power-law distributed. An executive founder may have 10-50x the equity of a founding junior employee, who themselves might have 10-20x the equity of a key early employee.
The power laws actually cut both ways. I think the optimal path is not entirely obvious without some particular understanding of whether or not you are a stronger player as a leader or a follower.
Sometimes wins are not necessarily measured with financial success. A company can utterly fail and still represent a win. I had one of those.
I started a self-funded tech company around 1998. This was hard tech, hardware and software. And I was the sole engineer doing all the work. This meant 18 hour days, 7 days per week to get the plane off the runway. Two years later, after booking lots of sales, we finally moved out of the garage and I started to hire people. Yes, I ran this beast entirely on my own for two years. A few years later a large well-known company expressed interest in acquiring the technology. The number being floated was in excess of $30MM.
What happened?
Well, 2008 happened. The economic implosion caused this company to second-guess entry into the market we had pursued --which they intended to do by acquiring us. The deal went from being a couple of meetings away from an acquisition to evaporating in front of my very eyes.
The bad news was that the economic downturn truly hurt us over the next couple of years. I had to shut it down in 2010 and lick my wounds.
This thing went from pouring all of our savings and an incredible amount of very hard work into a crazy idea, executing well enough to get a $30MM+ offer to closing the doors and nearly losing it all in the process.
At the time this felt like an abject failure and a waste of ten years of my life. It took me months to get my head back on straight. Today, looking back, I see it as a success. I took an idea from nothing to close to a massive life-changing exit and did so mostly on my own through hard work, grit and determination. That's a success story nobody can take away from me. I learned a lot along the way and most of those lessons were part of success in future endeavors.
Life can be funny and cruel sometimes. You might think you are going through your darkest hours when, in reality, you are growing a solid backbone that will support the rest of your life.
It’s like anecdotes you hear from religious people during a disaster. “I lost five of my kids. But I’m so thankful that God looked out for me and saved one”
Ignoring what might be vapid reddit edge: it doesn't seem like it.
The GP would probably do well to see the endeavor as a success in terms of how they should behave in future. Any necessary adjustment would seem to come from the margins.
If retrospect exists to inform future decisions: getting to the GP's point in his business is a useful success signal.
Whatever it is that you're tracking seems less useful toward any question that isn't "am I rich from this right now?". The answer to which is "no". As-in "no shit". It's not useful.
In that case, that goes back to my argument that he is a “failure” based on his own metrics of his personal success criteria. He failed at his goal of being a successful startup founder.
sports analogy time! people like sports because sports defines rules, bounds and how to determine a fair outcome with a winner. These are all limitations that are not at all clear in real life. Some people say "money is the measure of success in the games of business" and that supports the scarface point of view. Others point to the "journey" and talk about life occurring at the same time, factoring in family and personal emotions. Both are useful, neither are completely true.
Interpreting a difficult event in terms that allow you to move on is not “copium”. we all do it all the time to explain our mistakes and weakness regardless of religion.
I don’t think any of these people are saying “I’m so glad my kids are dead” they are saying they are able to see these unfortunate events in a bigger picture.
What you may be looking for is “sour grapes” - something that was previously desired is now not viewed as highly after failing to obtain it.
And not being willing to admit your mistakes and assess your weaknesses means that you continuously make the same mistakes.
Of course I’m not saying in my original anecdote that people getting killed from a natural disaster was preventable.
In the appropriate threads, I have posted right here what I learned from my many mistakes - marrying the wrong person (since remarried), staying at my second job too long and becoming an “expert beginner” (I’ve done decently for myself since then), failed in real estate around 2008 (since recovered), etc.
You can look at some of my “favorited comments”.
This isn’t bitterness. At 50, I am where I want to be. But if you had asked the 35 year old me - divorced, negative net worth, shitty job with out of date skillset, etc. I wouldn’t have put on a happy face and say I’m not a failure.
>> This isn’t bitterness. At 50, I am where I want to be. But if you had asked the 35 year old me - divorced, negative net worth, shitty job with out of date skillset, etc. I wouldn’t have put on a happy face and say I’m not a failure.
The GP didn't say they thought it was a success at the time; quite the opposite. Aren't you basically saying the same thing, only with a different timeline?
> I grew a lot. And I think my current happiness stems mainly from the fact that I like the person I've become, someone who can fail again and again and again and again and still find a way, for the most part, to be happy.
He didn’t say that his current happiness and success comes from the lessons he learned. It’s more like the lady who lost five kids and kept her faith because it was that God was good to save one not thinking if that were the case was he good for letting the other five die? (see also the biblical story of Job)
Without going into details (again look at my favorited comments if interested, I’m not trying to hide the details), what I learned from my failures is why I think I’m not a failure now - ie I achieved the goals I wanted to achieve - was a direct result of learning from my previous marriage and divorce, doing what is needed to not be an expert beginner - I got my first only and hopefully last job at BigTech at 46 (no longer there) - and was much smarter about my finances.
Hmm.. if anybody feels the blunt force of failure it's them. But they feel it was a success so I believe it must have been. Also they don't need to cope now.
It’s a natural human coping mechanism to make sense of things in a way that allows us to continue growing and finding meaning, even in painful circumstances
Or just realize in the case of my anecdote that shit happens. There is no grand plan or puppeteer behind the scenes.
In the case of the original author, it would be be one thing to redefine success based on changing priorities. But not to pat yourself on the back and give yourself a participation trophy.
Yes success can come out of failure. Failure can also just come repeatedly and then you give up and try something else.
> It’s like anecdotes you hear from religious people during a disaster. “I lost five of my kids. But I’m so thankful that God looked out for me and saved one”
I am glad you edited your comment slightly because it was worse than what remained (which is still terrible and insensitive).
That said, one of my favorite quotes, by Mark Twain is:
"A man holding a cat by the tail learns something he can learn in no other way".
Which is to say that it is impossible for most to align with the mind of someone who loses a business, or much worse, a child, without having held that cat by the tail. And so, your comment, while misplaced, is understandable because you don't have a good frame of reference.
Additionally, in my particular case, well, the 2008 economic implosion caught most everyone by surprise. It was like a nuclear bomb dropped. Few saw it coming. Millions of businesses went down. Millions of people lost their homes and jobs. And, while I not, by any means, perfect and without mistake in my life, I find it hard to interpret such a catastrophic exogenous factor as a personal failure. Sure, it would have been nice to have had $10MM in the bank to survive it. Most non-VC companies do not have this luxury. We had five million dollar sale contracts evaporate overnight when our customers, in turn, had their banks materially reduce or cancel lines of credit. We had customers send truckloads of our products back to help us because they were filing for bankruptcy and the courts would have grabbed hold of our (unpaid) products and they would have been stuck in the hands of a trustee for months, even more than a year. Etc.
Like I said, sometimes you have to hold the cat by the tail to really understand.
I posted that 19 hours ago. I couldn’t have made any recent edits…
> I find it hard to interpret such a catastrophic exogenous factor as a personal failure
I mentioned in another reply that the 2008 crash hurt me too. It was definitely a personal failure that I had five mortgages where I owed a half million dollars, put 0% down on four of them and only 10% down on the fifth and I was only making $70K from my primary job at the time and didn’t know what the hell I was doing.
Your original comment, which I saw before the edit, characterized my comment as copium. Someone else responded to that before your edit.
Anyhow, your 2008 failure was, sorry to say, 100% your fault. Perhaps you were younger and inexperienced. We've all made stupid mistakes due to inexperience. Buying five homes with 0% down payment was an extreme gamble. We live and die by the consequences of such actions.
In my case, we were conducting business as usual and then, out of nowhere, the music just stopped...and there were not chairs. Very few people saw that coming. Those who did were focused on the financial world rather than engaged in running a business. This is why so many businesses got caught unprepared for such an event.
I am sorry you lost it all. That's terrible. I lost a home before due to employment difficulties. My mistake in that case --funny enough, young and stupid-- was to buy it with an adjustable rate loan. When interest rates went from roughly 6% to over 12% my world got turned upside-down in a hurry. Like you, I wasn't making enough money at the time to survive that. I lost the house a couple of years later.
Interestingly enough, that's what pushed me towards entrepreneurship. I had to earn more money. The only way at the time was to start an small electronics manufacturing business while keeping my day job.
So, yes, in that case, really fucking dumb decision on my part. Yet, at the end, it launched my entrepreneurial journey, something I am very happy about today.
> Honestly, that feels like copium.
It’s like anecdotes you hear from religious people during a disaster. “I lost five of my kids. But I’m so thankful that God looked out for me and saved one”
It still says “copium”
> Anyhow, your 2008 failure was, sorry to say, 100% your fault.
Isn’t that what I just said that they were my mistakes?
> And not being willing to admit your mistakes and assess your weaknesses means that you continuously make the same mistakes.
And then I went on to admit my mistakes.
In the very comment that you replied to I said It was definitely a personal failure
> Interestingly enough, that's what pushed me towards entrepreneurship. I had to earn more money
And I decided to upskill and I knew when I signed the offer letter at each job, how much I was going to make without any risk.
> Like you, I wasn't making enough money at the time to survive that. I lost the house a couple of years later.
I didn’t say I couldn’t keep my house. I made more than enough to keep my primary home. It was very much a strategic default. I had another house built and got an FHA loan three years to the day after my last foreclosure. Money is never personal to me
I’ve had a lot of coffee breaks with highly placed peers who expressed concern because our boss was sure our success came down to one or two attributes and seemed completely blind to all the ways we saved him from himself. If apathy ever took over the team, we would burst into flames because of all of these details.
There’s a great old aphorism that sounds like sarcasm if you don’t understand this: “Take care of the little things and the big things will take care of themselves.” Any halfway sane team is dominated by people who are all too happy to jump on the Big Things. But for want of a nail, the kingdom can be lost. And if you cannot see his importance, and fire the farrier to hire more knights, then everybody loses.
When you see a successful boss, look around for his successful reports. They're always the ones cleaning up the boss' messes. The truth is that we all need to be saved from ourselves at some point (sometimes as education, other times as hard lessons), but tech culture certainly pushes that far with the "gifted visionary" mythos. A gifted visionary's much vaunted "Ideas > Details" only works when the detail people are there to make it work.
>> When you see a successful boss, look around for his successful reports.
With a good boss you don't have to look; they hold these people out and highlight their work, those people recursively do the same thing. In true success there's so much to go around.
There is currently a risk asymmetry in startup world that drives away people who could do good work.
Investors know the long odds of success, so they invest in twenty to thirty companies and wait for one to get big.
Founders and employees can't diversify like that, because you only have so many working years. To mitigate this we have decided to award successful founders with huge paydays as a lure to others to throw their hats in the ring. This has some malign effects, namely unsuccessful founders and employees get bupkis. It also attracts the wrong sort of personality to be a founder, selecting for too much risk appetite. (At least what I consider the wrong sort for building a sustainably profitable business.)
I have an idea for how to solve this and I wonder if it's already been tried or if there are holes in it. The idea is to spread the risk of starting a company across something like an accelerator class. If one company in that class gets big, it would be contractually obligated to hire and grant shares from some pool to other members of that class. This would be at the cost of the winning founders' stakes.
The upside for winners would be much lower, but the downside would be lower too. This would attract a different sort of person to this accelerator, and be a differentiator for selecting talent.
This idea comes up here every once in awhile (often in the form of "a batch of startups where some % of the stock is shared across the batch).
I'm not saying it can't work, what do I know, but a challenge you'll have to address here is:
* By the time you're at the first big-money investment, the priced A round, you're dealing with investors who make just a couple investments a year.
* Despite that, the most promising startups are chased by VCs, not the other way around.
* If you're one of those promising startups, what would motivate you to take money from the investor structured the way you propose?
Most returns in startup investment come from a small fraction of breakout successes. Even if you got, like, 25% of startups to join this kind of funding compact --- which would be a huge, a momentous achievement on the same scale as the creation of YC --- the math here might not work out to where the shared-fate component of the deal was meaningful for any of the failed startups.
Well, having been in an accelerator there were folks (startups) in my class who shouldn't have been there. i.e. their startups failed but it was blatantly clear why -- mainly immaturity and not listening to advice.
I think your idea would only work if there were rigorous selection process, but also some mechanism to "fire" founders who aren't contributing or insist to make terrible decisions.
I'm not really sure I would feel comfortable investing in an accelerator class concept like this. Seems like it would suffer heavily from adverse selection.
Maybe if the terms were really good, like 20% of the company for $10,000 or something.
"Failing for generating a return" makes it sound like a skill issue, when it was probably mostly bad luck with the business model you tried out. Negative results can be as valuable as positive results in science, why not in business?
Greedy optimization can also get you stuck in local minima. Why does any investor participate in VC? As an asset class it underperforms. There's something more that motivates people than return. Cool factor, bragging rights, and also I think a concern for growth and the macro outlook.
In my model the reserved pool of shares for failed founders would come out of the winning founders' pool. It's spreading risk across founders, not diminishing the stake of investors.
It doesn't matter whether it's a skill issue or not. They're investors. They are voluntarily offering money in exchange for a chance at a return. When you buy two shares of Tesla for $1000, you don't expect to pay them if they're driven out of business.
In the main, VC LPs put money into VC firms because they have portfolio allocation constraints for decorrelated investments, is how I understand it. It's definitely not out of charity.
2. You’re not creating the correct incentive system. It creates the opposite incentive you want - it rewards those people who do nothing and let others do all the work. You could easily get in a situation where all people in this co-op do nothing, under hopes someone else hits it big.
My main lesson from running a startup: don't. And if you do, quit when the going gets tough. Perseverance does not pay off.
Obviously it doesn't always end badly. But we get a massively skewed view from survivor bias.
My life turned out pretty damn well once I got a plain ordinary job working for someone else. But I don't kid myself: when it comes to starting a startup, I did fail. The main lesson I learned was that I was always going to.
I hear this a lot and I think it is good advice because the only person who should actually start a startup is the one who sees this but still does it.
Yup, it takes people who think they can't fail to be truly successful. Very similar to an athlete's mindset. You have to have the skill and innate talent but you also have to believe your shit doesn't stink
I dont understand why starting an enterprise has become such a scary thing in the tech world. So many people start businesses, so many mom and pop shops etc. IMHO startups have become scary to start because we jump too quickly into starting them or have too grand expectations from outset.
The way friends approached startups in the .com era seemed to be more like “hey, [friend]… we know how to write code, and we think we can address [thing] in [some market] better than [incumbent], so let’s spend nights and weekends hacking together a working proof of concept.
It might not be representative, but the people I’ve known that wanted to start tech businesses in the past 15/20 years approached it the way people start restaurants. You can’t slowly ramp up most restaurant concepts with a DIY budget— you need to invest a lot upfront, and you need a lot of existing expertise for even pretty trivial concepts. (And before people say food trucks and catering and private chef and the like— catering and private cheffing are totally different businesses with very different processes and institutional knowledge, and in most places, food trucks aren’t dramatically cheaper than opening a small restaurant.) Folks seem eager to start acting like a CEO and delegating things to people paid with investor money rather than making something themselves and getting it off the ground. Maybe that’s what the business requires? Maybe in software markets, customers aren’t interested in scrappy small players anymore, perhaps worried about lack of support, shitty UX, them going out of business or whatever.
Just speculation. Not even going to pretend I’ve got broad non-anecdotal knowledge on this.
I think the problem with that approach, in today's market, comes when you try to hire.
Junior engineers didn't cost more than any other recent graduate, and as you could get away with a few rough edges in production for quite a while, you could put together an adequately balanced team for not much money.
The tooling was much worse, but the compliance burden was much less.
Did your friends in the .com era talk about "doing a startup" or "starting a business"? I feel like that's changed a bit, people are more calculated and cynical about how the game is to be played with respect to rounds, exit strategies and so on. The "startup" model specifically means something a bit different to "starting a business", around ambition, scale, investment model etc. All businesses need to be started, but not all businesses are startups.
I don’t think the idea of starting a business in tech these days commonly exists independently of the modern tech conception of “doing a startup.” And with the hiring part, the idea was that you’d do the work yourselves and only hire anyone at all when you couldn’t do the work anymore, or you got a big enough contract/sale/etc that you could pay them. The fact that the exit strategy/investment/initial expensive hiring messiness exists is the symptom, not the cause. What I don’t really get is the cause, and I suspect it’s cultural rather than logistical. Not doing something unless you can ramp it fast enough to start worrying about paying anyone other than the people that decided to do it is a deliberate choice. In a restaurant, it’s not. You literally can’t do it without the initial investment. My dad was a mechanical engineer in a startup making industrial paper handling equipment in the 90s— one of the first hires after the handful of founders worked themselves to design and fabricate the first machines securing them the contracts to afford more employees.
That's partly because of growth based valuations, and fast-acting network effects. The whole model is predicated on "get there fast, get the monopoly". Which you can't either with a traditional, non-scalable business (restaurants) or even a scalable industrial business (cars) - yes you get economy of scale, but they benefit relatively little from network effects of other people owning them. Goods like fashion which don't need a service ecosystem, even less so.
Total scalability & strong network effect points toward a "get the monopoly, now" business model. Which, IDK, might suit some things but definitely isn't the right fit for all things tech.
Right — I totally understand why things are the way they are using the tech industry startup model. But using that model is relatively new, and adopting it not a prerequisite to starting a tech business, even if that’s the only way people do it these days, generally. Becoming a monopoly immediately in some market is the goal of someone that wants to become the monopoly immediately in some market. It’s neither a requirement of, nor mutually exclusive of having a good idea that you want to turn into a business. That business goal might be easier in technical businesses, but it doesn’t seem to make better or more sustainable companies. “That’s the way it is done” is usually the worst reason for doing something. It doesn’t mean it’s bad, per se, but it definitely doesn’t mean it’s good.
>Folks seem eager to start acting like a CEO and delegating things to people paid with investor money rather than making something themselves and getting it off the ground.
This, but also it's a bit like gambling, this is the high risk / high reward way to do startups. The slower way is more stable, but you don't get to have fun with other people's money while you're building the business.
Sure. What strikes me as strange, however, is the attitude that this is the only possible path to starting your own business in tech. Sure you’re not going to start up your own social network, but maybe you’ve got a great idea for some kind of QoL thing that helps people work with these big inflexible systems? Many of these startups seem to be shit at providing expertly personalized or customized services because they’re trying to be a big at-scale corporation from day one. Maybe you devise a way to semi-automate customized solutions for some common enterprise thing too sticky for at-scale services to address specifically so companies have to do it in—house? It seems like there are problems that would be easier to address with a small business like that which could organically grow into something sustainable. Definitely not sexy, and I think people making tech startups currently are often more interested in sexy than anything else.
I think compared to 15 years ago there's (1) more capital (2) more founders [enabled by better tooling and well-known implementation patterns] (3) less low hanging fruit on the product side. Any given opportunity is more likely to have other, well-resourced, folks chasing it hard.
> less low hanging fruit on the product side. Any given opportunity is more likely to have other, well-resourced, folks chasing it hard.
I think this is the biggest factor that actually affects the fundamentals of selling tech. To my eye, every other aspect is some form of Gordon Gecko business insanity and/or VC people looking to stoke egos by making people with good ideas feel like big shot executives while figuring out how soon they can throw it all in a juicer and extract a bunch of cash.
A mom and pop restaurant can compete with Burger King and Starbucks. It's not quite the same with tech, as they can pay the $300k salaries for people to do the same thing you do, and they can buy out your market. Basically everything that can be done with money is stacked against you, and all you have as a startup is more grit than all these straight A students who graduated from ivy leagues.
because tech people don't want to start a lifestyle or low-growth business. they are reading about giga rounds, unicorns and hockey-sticks as well as the VC/PG propaganda on hackernews etc all day and think that this is the only way to do it.
they eat ramen for 10 years, often even believing in someone else's dream without substantional equity to match the risk/reward profile. meanwhile, the plumber next door who started his own plumbing business is driving a ferrari on weekends.
Funny how things change over time on Hacker News, an ostensibly startup forum that now more and more seems to be just another tech forum, and any relationship to YC and startups is now merely incidental, it seems.
Worse than not trying is trying and experiencing burnout and/or destitution.
When you fail, it can be due to many things. Not everything in the world is controllable. This is one of the reasons why expecting zero ”What ifs” at the end of your post-mortem is unreasonable.
I don't think there's any absolute rule here. I'm pretty convinced that a startup would be healthier for me rather than my safe day job. The amount of churn and nascent burn out due to chasing tech debt and tickets surrounded by demotivated people is really bad.
I guess being aware of what you need and can afford is key.
It depends. Why do you want to start something? Do you really believe in it? I mean there's got to be a certain set of "hell yes" questions that need to be answered in the affirmative.
Otherwise you're not missing much. Work for something that pays well, solve interesting problems, spend time at home with your family and friends. The problem is when you're wanting to start something because someone else did it and don't have the implementation or execution perseverance (or just don't believe in it strongly).
Most people don’t want to start a business. They might fantasize but it’s not something they would enjoy doing. It’s fine to realize you have other goals and to work on them instead.
This (very popular) sentiment you have can basically be abstracted into the “fear of missing out” meme. It's an unnecessary predicate, it's founded on presupposition and bias, and it's really detrimental to all serious long term analyses.
There's no proof that this personal feeling should be listened to or given behavioral authority, especially when it suspiciously conforms to the aesthetic that is widely shared by many who end up having only achieved a mundane life, despite “noble” projects launched because of arrogant egos. This social phenomenon which sponsors the freedom and agency of people fit only to be busy drones is wasting global resources on bourgeois affairs. Elon Musk and his eventual epic failure at super-industrialism is a great example of this harmful sinful pride.
The “what if” has only served to help overvalue ordinary potential, when that capability should have been limited to simple tasks, industries, and affairs. It's a mind virus riding on the waves of language and the beastly body of rationality, a false reality having been successfully disguised as a legitimate object to perceive within the cognitive sphere of humanity. It is deviation that surely has contributed to the collapse of the great liberal humanism project, the real goal of democracy and its encompassing civilization having been the quiet and stable enslavement of a massive surplus of dull brains and basic bodies. A mass of uninteresting genetic carriers who would do well to never worry about what is outside the scope of their common destinies.
The dialectic that there can be morbid peace if you would just test out the hypothesis that you can become a great man is an incomprehensibly devised thinking trap that can filter out men who don't know what the fuck is going on in the grand universe.
But God (or simply nature) works in mysterious ways and I'm glad that hubris was created to serve as an instrument for learning what not to ever do. And to materially benefit from, salvaging from the failures of future past technologies being a huge possibility to leverage. Your supposed tragedy is my informed opportunity, to paraphrase Jeff Bezos.
EDIT: If you ever invent warp drive or faster than light travel or functional nuclear fusion, I'll be looking forward to the blueprints of such treasures and strategic advantages ;)
I'm starting to think you really need to be well connected or at least come from an upper class background to win here.
Steve Jobs is sort of an exception here, not only was he adopted , but he was adopted by a very middle-class family .
I find myself really good at developing small apps, but very bad when it comes to the business side. I would love to find someone to work with who's good with business. But so far I've just been time scammed a few times by morons who come up with insanely impractical ideas .
And they never want to let you in for a full cut, they want to give you like 1% of the company in the event that you're able to build the entire thing out from scratch. If you discuss modest technical limitations they'll berate you for corrupting their vision.
> I'm starting to think you really need to be well connected or at least come from an upper class background to win here.
In my local startup community there are a lot of entrepreneurs and small startups founded by MBA students and recent college grads who clearly come from wealthy backgrounds. Nearly all of them either fail quickly or continue for years without getting any traction beyond their parents’ connections’ businesses.
The other side of being wealthy and well connected is that it’s really tempting to fall back on a job with your family connections or to play startup for a few years while burning through “seed” money from the family without the real pressure of needing your startup to succeed.
> And they never want to let you in for a full cut, they want to give you like 1% of the company in the event that you're able to build the entire thing out from scratch.
There are a lot of wannabe entrepreneurs who need a cofounder but don’t want to give cofounder equity.
The majority of successful founders and founding engineers I know had past working experience together. There are exceptions, but most of the time when someone goes searching for a cofounder or founding engineers because they don’t have anyone in their network, it doesn’t work out. It can work and does sometimes, but it’s so rare that I’m very surprised to hear success stories.
There are just too many people in the startup community looking to “hustle” their way into an MVP without giving anything up in the process. Also a lot of people who want to be “cofounders” and get 50% of your company in exchange for doing as little work as they can.
I was in a startup Slack for a while. Every other week someone would come in asking for advice about how to evict a deadbeat “cofounder” from their company who had secured 1/2 or 1/3 of the equity but wasn’t contributing anywhere near the other cofounders.
If my normal billable rate is 70$ an hour I might offer a discount if your project is really neat.
But I've never seen that, I've seen people wanting to me to sign contracts would say I will donate time, and these are never people who are realistic about what their chances are. You get all this hype where they claim someone offered them 100K just for the idea, but when you ask for $100 a month to host the server they don't have it .
I was part of a group that did something like this. We used a crypto token system where if you joined the group you got X number of tokens and you could use that to get other people in the network to help with various tasks.
Then the network would take a small percentage of equity in the companies of all the members.
You left out the most interesting part: why _were_ you a part of it. Did it not work out, why not, or did you leave because of reasons not related to the (un)succes of this system?
Jobs got his start in a tiny industry (tech was decently big already, but PCs were not) poised on the edge of massive growth as technology got to the point where you could build machines people would actually buy. And there was a huge moat, as the necessary talent was rare. And even within that rare talent, Jobs had the unique advantage of being able to partner with Woz.
Nothing you can do today with a typical HN skill set will come even close to that. There are thousands (at least) of people with those skills. They can build it too, whatever it is. You’re not Woz and you don’t know a Woz. Likely there is no Woz today; everything computing is so much more specialized and complicated and layered and just plain big. You may be able to find success in this world, but it won’t be replicating the Jobs story.
Steve Jobs was connected: By being raised in Silicon Valley at just the right time. He even had a story (who knows how true it is) of him as a kid looking up Bill Hewlett in the phone book and asking about electronics parts (a frequency counter IIRC) and Bill not only got him the part, but gave him a summer job.
As for business, many successful tech entrepreneurs “learn” it either as they go or by bringing on business experts, but not giving them full control. For larger examples of the latter, see Eric Schmidt as the “adult in the room” for Google, Sheryl Sandberg for Facebook.
By that logic any entrepreneur can just scrape together a few bucks and ride a bus straight to San Francisco.
I find it easier to just consider Steve Jobs to be exceptional here. He's the definition of not letting the circumstances of your birth dictate anything.
That's true. It feels like every other ladder-climbing wannabe out there is also trying to attract powerful people's attention on Twitter et al these days, so I imagine it's much harder to stand out than it was for a kid in the 1970s. But you're not wrong.
I agree it probably was easier once you knew where to find them. Almost every celebrity is accessible through the internet if your megaphone is loud enough.
I also don’t claim to make such effort. I just want to clarify that networking is a conscious skill and not always a result of family connections.
Yes, the social aspect is significant. It's not so much about innovating and strategizing as much as it is about playing politics with rich people and hope that they let you build a successful product. Let's face it, rich people make all the decisions. If you're not rich, it's all about socializing and luck for you. It's hard to find a rich person who will let you implement your vision and actually control your destiny. It's demoralizing TBH.
I think there are upsides and downsides to starting young. On the one hand, you don't have much to lose, so failure is softer. On the other hand, you're missing some experience that would be useful.
I worked for a startup whose founder was a super young guy who had never had a job before being CEO. He was missing experiences like "what do I hate when my boss does" and so needed to repeat all the same mistakes. This resulted in things like... postmortem reviews with action items like "we should dock people's pay if installs are done incorrectly" instead of "we should ensure that the install crews have the tools they need to do the install correctly". (That action item was one of the few battles there that I won. We gave every installer a toolbox containing the tools to do the job. This improved the success of installs greatly. But who needs a meeting to come up with an "idea" like this?)
At least if young you got the energy, time, usually fewer family obligations, maybe even naive enough to do something others won't (as a good thing) and ... you know if that's the lifestyle you want.
But I hear you starting at zero life experience, that is bad. I would find it pretty painful to work at a start up and have to talk to the founder "bro let's talk about the basics of picking your battles" and do it ... well.
I think having an entrepreneur's mindset and starting young can work. But you will end up like every billionaire we know. Elon, Bill Gates, Zuckerberg, etc. They all started young as CEOs and didn't think twice about stepping on everyone and anyone around them to get the top. Now after years of this you have people that are very powerful and have no idea how the common person lives or how it feels like to work for someone.
It’s still not worth it. If you can get into a well paying BigTech company, save aggressively and let the time value of money be your friend, it statistically will make much more sense to do that.
Whether the founders are looking for a big pay day or not, unless they are self funded “lifestyle company”, their investors are definitely looking for outsized gains in their portfolio.
Outside investors aren’t looking for slow growth companies or those that may one day throw off a little money. If that were the case, they could just invest their money in the stock market and call it day.
On that note: Warren Buffett made a 1 million dollar bet with some hedge fund managers that he could beat their returns just by putting money in an index fund over 10 years - he won the bet.
It is. It’s better to have made enough to save $300K when you’re 25 and put it in the stock market and let it grow than make $300K when your 50. $300K is worth more when you’re 25 and retiring at 65, than it is when you’re 55.
“The time value of money (TVM) is a financial principle that states that money in the present is worth more than the same amount in the future.”
Money is worth more NOW so you can spend it to acquire skills, resources, and goods. If you wait then you are living life without those things. And delaying early strategic wins.
Passive investing is renting out that optionality to other people, like starting a 401k early.
Money is worth more now because it can be invested and grow in the future instead of getting more money in the future that is worth less because you have to take into account either inflation or what the money could have made even if you are just looking at the risk free returns - ie discounted cash flows
The same amount of money is worth less in the future than it is in the present because it can grow even at a risk free rate.
Yes, I need some of my money now to pay my expenses. But if you had 200K extra to invest in 2010 and chose to invest it and instead chose to work somewhere paying $200K less than you could have thinking I can make $200K more in 14 years. You would have lost out on 605% returns.
What do you think you are doing when you “invest” in the stock market?
Yes I know when you buy stocks aside from the IPO or secondary offering you’re buying from other people and the company doesn’t get the money directly.
The value of the money to you or the business is worth more now than 10 years from now. Meaning just like I said, it makes more sense for you as an individual to have made $300K and live off $100K and invest it in 2010 than to wallow in obscurity at failing startups and then start saving at 35.
This is the textbook definition of the time value of money - as quoted from Investopedia.
I have one other way to describe this line of reasoning:
- money is more valuable now because you can start earning interest
- but why are others willing to pay interest?
- because the money is more valuable to them now
It's totally cool if you want to argue what you're arguing about the value of investing early to unlock long term compounding gains but... don't call it the time value of money. Time value of money means something different than what you're arguing.
The time value of money (TVM) surmises that money is worth more now than at a future date based on its earning potential. Because money can grow when invested, any delay is a lost opportunity for growth. The time value of money is a core financial principle known as the present discounted value.
I asked ChatGPT to explain why money has time value without referring to making other money (circular).
I think this is a good description which represents my view. Notice that these are true regardless of the existence of central banking:
Opportunity Costs of Waiting: Money available now can be used to address immediate needs or desires—buying goods, accessing services, or achieving goals. If that money is delayed, those opportunities may be lost, diminished, or deferred, reducing its practical utility.
Uncertainty Over Time: The future is uncertain, and there is a risk that the purchasing power or usefulness of money might change due to factors like inflation, changes in circumstances, or unforeseen events. Money available now provides a guarantee of utility that might not exist in the future.
Personal Preference for Timing: People often value immediate access to money because it aligns with their current priorities. For example, having money now could allow someone to travel, invest in education, or address urgent health needs—opportunities that may not hold the same relevance or availability later.
Personally I think it's about perseverance, but mostly with an emphasis on learning and growing. You iterate, you learn and you eventually build up a skillset that is hard to stop even if things don't go your way.
It's not for everyone though. Bar is super high, risk is high, long work weeks with little balance are the entry ticket.
I agree. Toughing it out usually doesn't pay. I was at a startup from "birth" (first employee and lead engineer) to "death" (acquisition for pennies on the dollar.) The first couple years were exciting, super fun. We built a great team, had an interesting product that solved a niche problem, several early customers. But the business model just didn't work out. It wasn't enough to sustain a real company. The downward spiral began...
Always baffled me how little commercial sense HNers had when I was growing up and reading this forum.
It's as if no one taught them -- or they just don't have the sense for it? -- that a startup is just a vehicle to make money. There's nothing special about it. You can make lots of money without a "startup." You can make lots of money doing many different things even without a business entity. It's just an abstraction for linguistic convenience.
My biggest wakeup was finding people much less educated and much less intellectually gifted and much less socioeconmically privileged making a lot more money than what could be considered their betters in more prestigious and, on the surface, well remunerated professions.
If you don't want to make money, don't go into business. Stay at your job and grind a career out. If you have the desire to make money, your senses will naturally sharpen as you use them more to achieve that end. Otherwise, if you go and "build a startup" for any other reason than making money you will fail barring extraneous circumstances.
Baffling that this isn't common sense, really. But my fault. I keep forgetting a professional forum is just a proverbial water cooler, where you get to see a wide mix of people in your profession -- and all the different backgrounds, values, ideas, and ways of seeing the world -- most of which are continuous works in progress that culminate only at death.
> Always baffled me how little commercial sense HNers had when I was growing up and reading this forum.
How long have you been reading HN? How have you felt the "HNers" w.r.t. nose-for-commerciality (and along whatever other dimension you think is relevant) change over time?
That is what's taught in many start up schools, for good reason. A startup can't ignore money without great luck.
However, it's not actually true. Lots of people start companies to make things better in some way, rather than to make bank. Some of them make bank regardless. Many businesses just tick along, but don't care about 'success' as determined by yacht size/botox per square inch/'status'.
> if you go and "build a startup" for any other reason than making money you will fail barring extraneous circumstances.
The idea that motivating people by money is the only or even best option is a major propaganda point in the class war (and quite silly if you think about it).
It’s just not true. Maybe a unicorn yeah. But to create a a decent software business that pays the bills is well within anyone’s reach in this world. And yeah actually perserverance is one of the main keys to success. In most markets there are players making a good income, if you are not there is just something you are missing
.
You don't ever have to worry about survivor bias from me. Because I know not to esteem highly those men who believe that family formation and a business enterprise building commitment can both exist at the same time.
Either you devote your entire being to the invasive alien job that is learning how to extract value from civilization's economically receptive citizens or you pack up your bags and head back home on the plane that can depart from the place where great men are selected and trained. Being a startup founder is much, much more intense than some special forces soldier life. You learn better values and habits than some punk that will have peaked at the earning of the title of U.S. Marine, to use a stark contrasting example. Or a black ops Delta Force guy who just has to navigate a huge forest in the dark on the dangerous way back to friendly territory, while the compared startup founder needs to develop an entire science for the navigation of profitable markets that no human has ever seen before, let alone taken advantage of before. A nerd like Richard Feynman can be much more tougher than someone that can do a thousand pushups without stopping and shoot an M4 carbine at a target 900 meters away.
Is Elon Musk even a good example of a successful startup founder or businessman, despite his billionaire status? Logical skepticism says no. And the brainwashing that popular ideology does says yes.
After all, didn't Elon Musk fuck and impregnate some bitches during his rise to a big bank account? He could have been using that time and energy to colonize Mars before this twenty-first century ends. He's not serious about what he says he wants. A terrible role model to look up to.
> But we couldn't figure out a way to procure drivers.
I briefly worked for Grab the company, which was another SE Asia "Uber". Among other things, at one point they procured drivers in Saigon by giving the wives/families free chicken meat. This way, they could prepare the drivers meals to take while they were out on the road all day long.
When going through crazy stuff as a founder, I always thing "this is going to make for a very intersting story some day". Looking back I doubt I'll remember them all and, while keeping things in full throttle, I wonder if I'll ever get to write about anything...
My conclusion is that most interesting stories remain burried and we're lucky to see anythign real (as in true stories) surfacing, because people that are crazy enough to enjoy these pains, hardly have any time to write about them.
Meanwhile we're presented with a somewhat skewed reality that's both less interesting, less real and overly biased towards glamor. The title of a somewhat :) unrelated book keeps popping in my head "Reality is not what it seems".
I wonder if someone like YC or a16z could manage to hire a journalist or anthropologist to make an honest chronicle of what happens at startups and not turn it into a propaganda piece.
Having to explain yourself helps clarify what you’re doing. The time “lost” keeping said person updated might even pay for itself.
I found the “Startup” podcast to be interesting when they documented real time the founding of Gimlet media, pivoted to other companies and then went back to document their acquisition by Spotify
Related to many interesting/crazy things being lost to history because the observer/actor is too busy to record them, and the things that do get reported consequently not representing reality... (And maybe a little relevant to the somber news events on this Monday.)
Many major religions prohibit making a show of good deeds. You're supposed to do it secretly, so that your intentions are pure.
But other people only see when a good deed is reported, so we're getting a distorted version of reality.
Some of these are reported for good reasons. But the worst form would be what social media kids are bombarded with: things like the clinically oblivious "influencers" who make videos of themselves exploiting a homeless person with a "charity" stunt.
One way to do good, while also letting people be inspired, is to do it anonymously. For example, the donation in a large crowd of them, or the anonymous rich-person's donation to a good cause (not a vanity university department named after yourself!), or any of the countless ways that one person quietly helps someone else.
You'll never know most of the times someone else helped you out, and most of the times you helped out someone else will also never be known. That's OK.
If you ever have the occasion to jump into an icy lake, to save a busload of photogenic schoolchildren and puppies, then you must try to get out of there right after, before anyone's phone dries out. Then the story will be about people simply doing the right thing, even an amazing thing, and fading back into the crowd. It'll be one of the best stories ever.
There’s an old xkcd joke about how some grand problem in information theory has probably been solved on some mundane business task without the author even knowing what they’ve done.
lol - thaught about this so many times in the past two years as I read thousands of papers and realizing that a poor engineer may have to deal with 2-3 discoveries a day without having the time (nor the math background) to deal with their deeper meaning and every time they see the "grand picture" it gets burried in the backlog maybe even stoned as NIH syndrome..
I always find it funny when some FP programmer ridicules others for not understanding monads, when in fact, those riduculed may have more extensive experience using them without knowing they are called monads.
After spending a little more time on both history and philosophy of science, I realized this is generally the rule rather than the exception, across all fields and functions
I was thinking just today that Squarespace should contact me and I'll do a commercial for them based on my experiences of creating a webapp and turning it into a business because I was too picky to use a prebuilt CMS etc. I have eight years of nonstop pain and stories to tell.
the thing with startups as founder / founding teams is that most days are actually good stories - so yes, the best way is to write as you go.
the thing is perhaps this is in fact the best way to motivate (or demotivate) the startup craft - you end up learning by drinking from the firehose daily. I believe there are few other types of activities that have such a forcing factor to learn and most are generally some sort of crisis (war, etc.) and so entrepreneurship is likely the least damaging one (at least for everyone else than the team haha)
I'm always struck by the sheer serendipity of these stories. It appears that everything after Google was possible because of the safety net created by Google's IPO, and the author's time at Google itself ultimately came about because he and Urs hit it off over Lisp and Smalltalk. What would hace happened if the author had been allergic to dogs and had ended up at JPL because of their Fortran skills?
>Failure #5: “One by one, every bank that had initially responded positively changed their minds. Worse, not a single one of them would tell me why.[…] I never got a straight answer from any of the banks about why they changed their minds.”
Is anybody around with enough insight in that business to make an educated guess as to what happened?
Since around the start of the Internet, there has been a steady decline in the number of banks and credit unions in the US. [1] They have mostly consolidated with other financial institutions. The shrinkage seems attributable to customers moving their banking online and no longer depending on tellers, buildings, or geographical location in general.
Most banks are seeing this happening and acting as conservatively as they can. They are avoiding change because they don't want to be the next victim of the financial industry crisis. It's not a shadowy cabal; it's really just the fear of going out of business.
A few key banks, OTOH, are embracing change and innovating. Having strong relationships with them is key to making progress. It takes a very long time; 6 years sounds too short. I'm not sure the startup timeline could ever stomach the length of time it takes to build those relationships.
So my guess is that the author didn't have as strong a relationship as what he actually needed. My company has also worked with enthusiastic executives who turned out not to have as much weight in the company decisions as they hoped.
> It's not a shadowy cabal; it's really just the fear of going out of business.
Thanks for the insight, I was wondering about this point.
I generally tend to try and attribute what _feels_ like coordinated cabal behaviour to general incompetence or lack of control. This feels like one of those situations.
I've worked around banks and this erratic behaviour is pretty common, and mostly due to short term personal motivations, and lack of coordination rather than an excess of coordination (i.e. collusion - which is not to say that banks aren't guilty on this point, but I think mostly not the case)
- Bank operators responding to queries have no idea why a decision was made
- Banks rely on algorithms to determine credit worthiness, these are run centrally so a bank manager at a branch may say positive things but the system generates a report independently.
- The algorithms also can raise flags for other risks, such as anti money laundering. The bank will not disclose anything if a flag has been raised as a regulatory requirement.
My bet will be on core banking software provider issues. I think they did try to talk to theirs and got a response like, "We can do it in 5 years, and you will have to pay XXX million to us to do it".
There was a large-ish scandal in the late 2010s when some core banking providers were delaying Zelle integrations for smaller FIs, and they started complaining as customers were demanding it and leaving the larger competitors with it.
Another option can be as simple as this - they fear tech as most don't understand it. When I was working on a corporate charge card startup, my co-founder and I faced this issue many times. The craziest experience was when the bank was ok to be issuing bank for us but requested our clients to go to their branches to sign paperwork (the bank literally has maybe 5 branches in the whole USA).
> Why don't the banks care? Because they treat the cost of fraud as just another cost of doing business, and they pass it along to you, the consumer. And they do it in a diabolical, stealthy way that you don't notice. But that's another story.
The answer is simpler: it's not that big of a problem to the people that would need to solve it (visa, banks)
Yes, it' billions of dollars per year, but that's on a denominator of trillions.
> In 2022, global payment card transaction volume surpassed $40 trillion, with the U.S. accounting for over $9.5 trillion 1 . If we consider the $5 billion in unauthorized purchases reported by Security.org 2 , the percentage of fraudulent transactions in the U.S. would be approximately 0.05%.
> it's not that big of a problem to the people that would need to solve it
That's not wrong, but it misses the point. It's not worth the bank's time to solve it, but for me it would produce a pretty damn good ROI. All I needed was one entry point into the system, but I couldn't find it.
In the past, my knee-jerk reaction would have been "Yes, exactly!" Then I heard patio11's podcast on debanking[1]. It gave me some interesting views into fraud and compliance and $STUFF. Highly recommended.
Most things that are new but not working can be solved by "I should try this again later" after the landscape has changed a little, whether that's supporting technologies, how receptive your market is, if your market even exists yet.
That was a good read. What impressive perseverance, and also a positive outlook. But, reading it made my FOMO worse. I guess one has to experience it fully to apply it. Or maybe not.
I quit my job a year ago to pursue my own ideas. Like the author, I had made some money from a IPO. The post-IPO environment with heavy bureaucracy killed the vibe and I quit. Note that it wasn’t a Google tier company, but I made enough money that I could take a risk for some years without income.
For me it has only been a year. But I feel like a huge loser at times. In no scenario will I give up until I’m utterly defeated or captured the castle - I’m not a quitter. But this feeling gnaws at my soul.
I have failed to find a co-founder. Most of my friends are not interested in startups. So, I have had to look elsewhere. Between people who screwed me over equity, people who didn’t want to do the work, and my own imposter syndrome (I’m from a low ranked state college, and people I meet in SF are elites), I feel horrible and alone. I tried and even successfully built some projects over the past year, but ultimately nothing worked out.
Now, I’ve decided screw it. All the advice about sell first and get a co-founder - sounds great on paper. And I have some doubts around that whole belief but that’s not important.
I know actual pain points I’ve faced in my decade long career. I’ve done both highly technical and highly functional work. I’ve talked to enough people and validated my idea. I wish this thing existed and that I’d worked on it sooner instead of trying something different with randoms.
So, I’m just going to go and build it. I like building things, and I’ve gotten enough recommendations and performance reviews that point out that I’m good at delivering value for the customer and making sure my team succeeds.
So I’m building a product. I am able to dogfood my own product as I build it which is great. It’s a somewhat complex, b2b AI enterprise product, and having built multi-billion dollar enterprise software and delivered multiple multi-million dollar implementation projects, I feel that there is really no rush. Most enterprise software and organization processes are awful and not well engineered nor well thought out.
If this fails, whatever. I tried. If it works, amazing. I like building good things and have a track record of doing so, albeit for others.
But I fear I will keep feeling like a failure until it is successful. On the other hand, it would be very cool to build a solo founded enterprise product and deliver actual success.
Anyway, thought I’d share my thoughts it feels good to type it out. Thanks to the author of the article for sharing.
The one thing I have learned on my journey through 6-7 startups is never start something without a sales person onboard. When we do we end up building something interesting with no customers. I am sure you can be your own sales person, but I don’t have it in me to do both.
I did hundreds of cold calls for someone else. Honestly the most intimidating thing I've done but ended up learning to enjoy it.
I also enjoyed meeting our customers at our conference at previous job and it was a fun experience talking to people and showing off what we'd been working on or understanding what we could improve.
I am not an extroverted person, so it definitely does not come naturally to me - I'm suppressing butterflies if I'm being completely honest.
You're definitely not a failure, but maybe startups aren't your thing. There's no shame in that. I know I would never be able to start my own startup. You tried 6 times and every time it has failed, and it's clear that things like living close to the beach is a very high priority for you (I wish I could pull that off). Maybe it's just the universe telling you to get a good paying job and give your family some stability until you retire?
To everybody reading this and having doubts about starting your own venture: DO IT!
Yes it's a lot of risk, yes most startups fail, and yes you could make more money at FANG. However, this is one of the most exciting times to build a startup, thanks to AI.
The big winners of the all the AI advancements (especially OS) are devs and AI startups:
- No more vendor lock-in
- Instead of just wrapping proprietary API endpoints, developers can now integrate AI deeply into their products in a very cost-effective and performant way
- Price race to the bottom with near-instant LLM responses at very low prices are on the horizon
It's as if your product automatically becomes better, cheaper, and more scalable with every major AI advancement. This leads to a powerful flywheel effect: AI improves product -> better product attracts more users -> users generate more data
Besides the product perspective, AI also allows you to operate your startup a lot more efficiently.
Will we see a single-person unicorn soon? Very likely not.
Will we see very successful small and bootstrapped startups? Yes, already the case.
Thanks for the encouragement, but I just turned 60. Running a company is too demanding for me to try it again. My ambition now is to be a writer and find an audience that wants learn the easy way things that I had to learn the hard way.
Hey Ron. I've enjoyed following your blogging since we crossed paths 20 years ago at Indiebuyer/Zerolag. I'm happy to hear you're doing well, and wish you the best for the next 20 years.
Mostly very insightful article, except for one thing: the reference to the early 1990s recession as ‘the first Bush recession.’ Ancient peoples would sacrifice their kings when there was a drought or a bad harvest, and we are not much better. Presidents do not actually control the economy, and neither do governments in general. Granted, they have more effect on the economy than ancient kings did upon the weather. Still, economic cycles move mostly on their own.
And of course that 1990s recession ended in March 1991, in roughly the middle of Mr. Bush’s term (he left office in late January 1993): one might just as well refer to ‘the first Bush recovery.’ Neither moniker is really accurate: ‘early 1990s recession’ is best.
Very interesting story. Especially the bit about impostor syndrome.. to most people he had already secured enough skills and experience for a lifetime of confidence.. but turns out we all have our own measure of skills and success.
there seems to be a common theme around not believing in the idea/product/people too deeply, thus leading to faulty or mis-step execution. would it be right to say that? a contrast to others who are not a "failure"?
mad respect to you for being open. thanks for sharing.
Smart Charter. I think that might still be a viable business even today, though I have not really kept up with the industry so I don't know.
Ironically, today I have a part-time consulting gig at a company designing network switches, and I see them wrestling with the exact same problems we were tackling 30 years ago. So FlowNet would be a very close second.
I personally know of one ongoing effort whose founders think it's very much still viable. Well done uncovering and acting on it back in the day, Ron. Too bad about the outcome. I'm grateful you spent the time to write these stories. Thank you as well for being a public champion of lisp, for which I owe a great deal of my own undeserved success.
>> Smart Charter. I think that might still be a viable business even today,
I'm less convinced. Although to be fair, I'm really not the target market.
I think the root fail of this kind of business is that it's a Venn diagram of two circles, with very tiny overlap.
Firstly, flying commercial is "simple". You want to go from A to B at some point in the future. You want to buy a ticket, show up, and fly.
Sure, I get the TSA crap and so on, but it's fundamentally reliable. Not to mention cheap.
Private travel bypasses TSA, and sure there's glamor, and a bigger seat. But unreliable is built in also.
Or put another way, the jet owner goes wherever and whenever they like. The pay a lot for perfect convenience. But it makes that "empty return leg" unreliable. And of course, the further ahead you plan, the less reliable it is.
So there's one circle of people who can afford their own (whole or partial) jet. There's one circle who just want reliable A to B.
What you're left with is people who have enough to make it a business, but not enough to charter a plane themselves.
So your market are price insensitive enough to be preparedto pay more, but also don't really plan their travel, or don't need to travel reliably. Which just seems like a vanishingly small group.
In other words, what you are selling is worse than commercial (planing and reliability) coupled with worse than private (no control over where or when).
Which leaves such a tiny sliver of a market, where brokers practically outnumber customers.
> the jet owner goes wherever and whenever they like
You'd think that, but it turns out not to be true. There are a lot of constraints even on the owner: weather, mechanical failure, crew members getting sick. And it's even worse for them because when something goes wrong it can be a lot harder to recover. When you're flying commercial, or even chartering, the worst-case scenario is a delay.
The only real benefit to owning a plane is that you can keep some of your stuff on board.
> a tiny sliver of a market, where brokers practically outnumber customers.
It depends. If you measure the market size in terms of customers that's probably true. If you measure it in terms of dollars, it's not. It's a question of: all else being equal, would you rather pay less than more? Most people say yes no matter how fundamentally price-insensitive they are.
> there seems to be a common theme around not believing in the idea/product/people too deeply, thus leading to faulty or mis-step execution. would it be right to say that?
Not sure whether you're asking whether that sentiment exists or if it's correct. But either way, there's no easy answer to that. If you don't believe that's not helpful, but on the other hand, if your beliefs don't align with reality that's not helpful either. It's possible to succeed without strong convictions, and it's possible to succeed with convictions that don't align with reality, but if you have to choose one or the other, believing in yourself is a better than believing in reality if your goal is material success. (Look at Donald Trump.)
I encourage you to expand on "In the real world, research is not a Platonic quest for objective truth" maybe by writing another article or linking what others wrote on a similar subject.
This is an incredibly common pitfall that people fall into time and again. Hell, even I am getting these vibes with all that recent hype about deep learning - despite I am no stranger to academia (in another area and some years back).
I don't know that I have all that much to say about it. Research is (at least to date) a human activity and so it is necessarily beset with human foibles. It requires resources, so it necessarily involves economics, which necessarily involves politics. It's not rocket science. Anyone who thinks about it for even a moment can figure this out without my help.
> recent hype about deep learning
Does anyone really look at contemporary AI as a Platonic quest for objective truth? It seems to me that there is pretty widespread clarity about the fact that this is mostly a commercial endeavor. If you want to talk about Platonic quests for objective truth we should talk about, say, mathematics or fundamental physics.
> Does anyone really look at contemporary AI as a Platonic quest for objective truth?
I realize I have a tendency to romanticize some of the papers I read even if I fully understand intellectually it is a wrong thing to do. Probably I should try concsiously train myself not to do it or something along these lines.
My experience tells me if I have a question or an issue it's very unlikely to be unique to myself. And (re-)reading an honest or even cynical account about something typically helps e.g. ribbonfarm on corporate hierarchies/politics.
Because I'm not a bizdev guy, so when my partner, who was the bizdev guy, had to quit, and we had no customers, the odds of success seemed too low for me to deem it worth the effort to continue.
When you suddenly have a big financial windfall, all kinds of people crawl out of the woodwork and find you. One of those people introduced me to this VC. And BTW, I ended up losing well over a million dollars through him. It turned out that he was more of a VC wannabe than a real VC. He had never actually raised a real VC fund. He had just made some money of his own and used it to get himself a fancy office on the Third Street Promenade, and then he used that to get a few rich suckers (including me) to write him some checks. He wasn't a fraud -- all of the investments were legit. He just didn't have good deal flow because he didn't have the right connections. He was hewing to the fake-it-till-you-make-it philosophy. But he never made it.
No. That's another long story. I think bitcoin is basically a scam. (That's another essay I should probably write.)
This is not to say you can't make money at it. People make money on scams all the time. One might argue that it's a foundational element of the American economy. But when it comes to bitcoin, I understand the technology and its attendant risks too well for me to want to play that game.
At the risk of digressing - do you think there's a baby in that bathwater?
I agree completely that BTC is basically a scam at this point, as are most of the top coins by market cap.
However, there are a few interesting cryptocurrency projects out there which are quietly getting better and better (ie, Nano). Do you have any interest in the potential of the field, or has BTC soured you on the whole thing?
That's a very hard question to answer because it depends on what you consider "that bathwater." I think using digital signatures is a win. But mining is a BIG lose IMHO. It is vastly better in every possible respect to rely on trusted third-parties. Even with bitcoin most people rely on TTPs because managing your own keys is fraught with all manner of peril.
> However, there are a few interesting cryptocurrency projects out there which are quietly getting better and better (ie, Nano). Do you have any interest in the potential of the field, or has BTC soured you on the whole thing?
I don't know anything about Nano. But the fact of the matter is that BTC is pretty much synonymous with crypto nowadays, and everything else (AFAICT) is riding on its coattails. No one would be taking any of it seriously if not for the fact that 1 BTC fetches USD100k or whatever it is nowadays.
> In the real world, research is not a Platonic quest for objective truth. It is, first and foremost, a human endeavor, deeply intertwined with human ambitions and foibles, including my own.
Such a painful thing to realize, this is also the reason why I never attempted to do a PhD.
Those with no failures never tried. Now I'm the complete opposite of someone who would usually say that but I believe it to be true. Failure at things is ok, it's just part of doing stuff. Just like death is an outcome of life. Anyone who tells you they have never failed either hasn't ever tried anything or is a liar and protecting their ego. It's ok to admit you made mistakes or failed or that you don't know something.
I thought this was a very powerful meta learning, something that abstracts across all the experiences.
> And I think my current happiness stems mainly from the fact that I like the person I've become, someone who can fail again and again and again and again and still find a way, for the most part, to be happy.
Curious if you have any other learnings that are less specific to a particular endeavour but hold tru/derive from your experiences across all of them
It’s important to think not in terms of success or failure, but in terms of philosophy and mistakes. If you’re focused on the outcome there isn’t much you can improve on, the reasons for failure are many. Mistakes on the other hand stem from flaws in your philosophy, which you can readily revise. In a lot of the cases presented here, the mistake that stands out is working with the wrong people.
Multiple "diabolical" (his word, not mine) plans to fool people about what the business really is (an attempt to get in the door with one pitch, then pivot to the real plan and steal their lunch) did not work out. Sorry about that, but putting out this post won't help this guy execute on similar plans in the future.
I'm genuinely curious as to what gave you the impression that he intends to try again. I read this as a brief little memoir of a man who has since moved on to bigger and better things.
Competition is fine. Deception, though, is more problematic, and if multiple pitches depend on it (like market a service to brokers to get their info but don't tell them the plan is to eliminate their jobs), people will be on to you if you aren't a very good sociopath. Perhaps look for more win/win opportunities.
I suppose a truer test of character would have been if I had not had one big win fall into my lap that offset all the non-wins. But one of the messages I was hoping to convey is that one's life trajectory includes a lot of randomness. The best you can hope to do through volitional action is slightly tilt the odds in your favor. But that might be enough.
One point in your story that I think is worthy of kudos is that you left Google. I’m not sure how certain the riches were at that point, but presumably you could have chosen to just ride that wave longer. That’s a really hard thing to do.
Thanks, but my motives for leaving were a lot less kudo-worthy than you might think. When I left in October 2001, success was far from certain. If I knew then what I know now I probably would have stayed, and I probably would have put a lot more effort into climbing the (very steep!) learning curve.
Thanks for writing this, I enjoyed every one of these. Something that jumped out at me from these attempts is the lesson that when you want to take on an entrenched business model, you need to do it in a way that isn’t directly at odds with the existing model. Secondly, you seemed to learn that and apply it brilliantly. I would love to know what went on behind the scenes of those banks deciding to pull the pin on your idea for startup forge.
I learned one of the most important lessons from six (and a half) failed startup attempts:
Brilliant ideas are not enough.
You also need a brilliant mindset, vision and execution.
And the help of a sensible co-founder if needed along the way.
Do people that create startups have debt in their own name after the startups fail? Or does the debt go down with the company and does the founder walk away debt free?
Depends on how you set up the company. Usually most startups are done with a limited liability company which usually causes the debt to go down with the company while keeping your personal finances safe.
> The owners of the LLC, called members, are protected from some or all liability for acts and debts of the LLC, depending on state shield laws.
But to start a company you need some cash injection, that can come from your personal finances. Now you could get a personal loan to then inject into your company, which would make you personally liable for said loan. Personal loans are easier to get than company loans (because you can't default on them as easily), but I never heard anyone do that.
Usually you are only personally liable if you commit some sort of crime like fraud.
Great article. We hear so much about the unicorns of the world that we sometimes forget about the countless other failed ventures. In these cases, it doesn't mean that the idea was bad, or that the founders weren't good enough. Sometimes it's just that luck wasn't on-side.
The difference between a failure and a success when starting a business is if you can afford (monetarily) to fail. if you can afford it just keep failing till something sticks. If you're not well off, well, too bad.
Isn’t that the whole idea of a business? To make money.
(Sounds like I’m kidding but I’m not really. Many of the richest people were very poor at some point. For example, Andrew Carnegie or Levi Strauss. Also Arnold Schwarzenegger started from nothing in the US.)
The point being made though is that business success is greatly influenced by existing wealth, since it gives you the luxury of being able to absorb the costs and risks involved. People like to give a few rare exceptions to the rule as somehow evidence that this isn't true.
The best analogy I've seen is that starting a business is like playing a game at a carnival. The more tickets you buy, the more attempts you have to win the prize. Meanwhile most folks are the carnival workers, never being able to get a chance to play the game in the first place.
I can also make the counterargument that people who grew up in hardship are more likely to become relentless businessmen. Most of the top richest people in America are immigrants.
Most people don’t start a business because they tell themselves that it won’t work. It’s the hard truth that most people don’t want to hear.
If you read about most founders they don’t become rich due to luck or background or whatever. No most of the time they set themselves a goal and then do EVERYTHING to get there. They don’t care whether their parents had money or not. Or whether the market timing is right. They just do whatever they need to do.
Damn it was that easy to obviate financial obligations? Guess the bank also won't care if we stop paying our mortgages?
To give credit to your position, over in Europe they've a generous welfare state yet very few successful startups so there's definitely a huge grindset factor but you're still cashing in on incredible luck or a comfortable economic position to be able to try enough times to score.
This is why the standard issue techbro advice from semi-wealthy "hustlers" who failed upwards on the backs of a few H1B 'founding' engineers is not actionable, I can at least respect the ones who don't bother with the facade.
Many of the richest people also come from places where they COULD afford to fail. Let's be honest, looking at patterns to become wildly wealthy is all survivorship bias, although, if you're well off to begin with, you're more likely to actually survive, and that makes you more willing to give it a shot.
There are many reasons to do a startup, but people should only call it a business when the goal is either a tax deduction mitigation and or rapid entry into profit traction.
1. Don't use some clever or hard to remember name with a weird spelling. While easier to Trademark, the users and customers won't differentiate your site from the sea of attention grabbing garbage.
2. If people have zero paying customers, and zero revenue... than the hard fact is they were never in business, and should have founded a nonprofit instead (common for opensource support service entities.)
3. Often copyright and patents are infeasible for small business, and people simply can't build or defend things like a large firm. Thus, initially design products/services to last maybe a year or simply be disposable... When 270 desperate cloners show up to dilute the market sector... people quickly understand why they can't rely on Android, Steam, or Apple ecosystems to protect their bottom line.
4. There is zero loyalty without treasure. The only people that care if your firm goes into the red is you, and maybe the small-time shareholders. Most people can't take the constant adversarial posture with problematic staff, opinionated shareholders, and high-demand customers.
Everyone thinks a CEO is lame till you become a CEO for a year or two... Every conversation from that point on is about money or marketing, and most people keen on building things tend to burn out of the role eventually due to social isolation.
5. No company lasts forever, if the operation is a projected liability it is your job to respond accordingly. Even if that means executing an exit strategy, and firing the entire problematic division.
6. Ask business people about their memorable experiences, and not about their money source. The superficial apparent function of a business is usually very different from the actual revenue model.
There is one other way in which you are not a failure, and I am sure that I am not alone in thinking about it: I have been reading your words for 15 years, from the time I was a baby CS major. That's really true, e.g., here[1] is a comment from 11 years ago where I mentioned that a lisp you wrote for the Apple //e informed a lisp for the Apple //e that I wrote.
Especially in my college years (2009-2013, ish), the world seemed smaller, and to me, a lot of what you wrote was like looking through a keyhole into the real world. Grown-ups can apparently write lisp at JPL[2]! Google was chaotic[3][4][5][6] to work in 2000, especially if you commuted from Burbank. A name change[7]. And, variously, surveillance, more lisp stuff, etc. Now I'm an adult and I still haven't professionally written lisp, but I'm glad to have read about it anyway.
Anyway, it might surprise you to learn that when I think of your writing, though, I think of your HN comments first. There is a kind of influence that you can only get with a steady, unthanked build-up of seemingly-small contributions over a long period of time. In the right place they compound. I probably cite you to other engineers once a month or so.
> To this day I'm pretty sure that plan would have worked if we had actually executed it. It was a brilliant plan if I do say so myself. In fact, it was so brilliant that it convinced Richard Branson to acquire the company before we launched for $10M. We started the company as Smart Charter, but we launched as Virgin Charter.
It's noteworthy that he's portraying selling before launch as a failure, and while ultimately the acquirer didn't follow his vision and the business didn't pan out (and perhaps the author never even got to liquidate his shares), it's still arguably more of a success than Loopt (raised $39M, sold for $43.4M), which Sam Altman and his backers had no reservations about portraying as a huge success that springboarded him to YC president and later to AI kingmaker.
Also remember that your fail state might be someone else’s success state. Like being part of an IPO that lets you spend the majority of the rest of your career working in your own ideas.
Failure here too I guess but my downfall per my experiences in dealing with many who made it to the biggest names in tech is my morality. I can't lie/cheat/steamroll over ppl to get to the top.
I've heard from top investors that the best companies usually get immediate and rapid traction. Sometimes theres a figma story where it takes a while, but thats usually BS. Generally either the product is right, or its not, and you know very quickly.
They usually dont want to tell founders this, they want them to struggle through in the off chance it works
In this thread are numerous nuanced disagreements with people sharing pros and cons of difficult life choices they made. I would suggest reading and reconciling these comments with your own life experience and values, in the best possible faith.
If you have zero interest in startups. These threads and this forum might not be of interest to you.
> Growing up, I had two major life ambitions: to become a tenured university professor, and to found a successful startup company.
why the hell those two?
I eventually - into my thirties- worked out that i wanted to be a good computer programmer, and a good photographer. managed the first, but not the tatter - two bored.
What I mean, is why did you have those ambitions growing up. I don't think most normal young people really can't think what they want to do until later in their lives.
Good question. I could probably write an entire essay about that but the TL;DR is that I thought that tenure and financial independence were the roads to freedom, which is what I really wanted. I also really liked (and still do) the college vibe, being surrounded by interesting people thinking and talking about interesting and weird stuff.
Guess my question is did you have any plans what to do with that freedom? Or did the vision just stop with freedom?
Must be I was less ambitious than you. I too started out with goal of tenure and financial independence. 3 years in on tenure track I figured it was easier just to get financial independence and give myself tenure than to play someone's game.
One I reached financial independence (probably a much lower threshold than your), I didn't have any trouble find trouble finding things to fill my days with fulfilling activities that I had long put off. Always fun stuff to learn.
So interested to learn if it was that you still had something you felt you had to prove? Just plan inertia?
Can really put my finger on it, but what if in "I am (not) a failure" essay in addition "Lesson Learned" for each attempt, you had a "Joy Experienced" (perhaps too corny) section as well.
> did you have any plans what to do with that freedom?
Yes. I was going to solve really hard problems without any pointy-haired bosses standing in my way. I was specifically going to solve AI.
> So interested to learn if it was that you still had something you felt you had to prove?
It started out that way, but now I've ended up feeling like I gave it my best shot, and so I failed because I discovered my own limitations rather than any external circumstances (with the notable exception of Smart Charter). And I'm OK with that.
> what if ... you had a "Joy Experienced" (perhaps too corny) section as well.
What I find has given me the biggest dopamine rush over the years is getting something to work, especially after beating on it for a long time. And that includes small wins like fixing a bug in personal code that no one is ever going to see, or fixing something around the house, or getting something I've written on the front page of HN and seeing it well-received. The best way I can think of to characterize it is that I like to feel useful. I don't think I'm alone in that.
The activity is just what people find interesting and the metric is what you strive toward. Imposing the idea that the only reason you pursue originality is so that they can't get sacked is a very wild take.
That's a weird take, he's talking about youthful ambitions. Tenured professor is a pretty standard bar for academic success, and startup us shorthand for building a scalable tech company from scratch. These seem like perfectly cromulent ambitions to me, not sure how insecurity enters into it or why I would care if it did.
This line in the article resonated with me:
> First, it sets the stage for what was to come, and second, while it was unquestionably a success, it was not my success.
I used to think that success was being successful the way I wanted and I was often frustrated because things were working but not because of the way I wanted them to. Turns out, it's doubly difficult to make things not only work but also work the way I want.
I've since tried to be more open-minded and see wins that perhaps I didn't expect or want still as wins and it's made me feel a lot more successful. One might scoff and say I should hold myself to a higher standard, but at the end of the day, success is only an intrinsic feeling anyways. It's not a measurable metric so I might as well feel better about the progress I'm making.
In the context of the article, the author could see these all as failures, but it sounds like some of these were pretty successful. In fact, the author concludes as much, finding happiness in the "failures". It's all an arbitrary label anyways.
Ugh, I know this feeling too well. I've been pretty successful in life so far by societal standards but have always felt inferior and like I'm failing. Always. I think partly that's responsible for the drive that enabled earlier success, but it gets old. My first defense when those feelings bubble up is to remember we're all playing a game we can't win!
I'm very grateful to have the luxury of not having to play the game (very much). It puts me at odds with the majority of the world. Maybe if I was a success on the scale of our modern day oligarchs my circles would be filled with similar people, but being a salary employee who doesn't work primarily for the pay cheque and could quit for higher morals or values (without risking their family's welfare) is a weird situation. I feel like I'm often on the edge of the bubble and must be missing something.
We're all just animals on this floating rock in space, and meaning is what we ascribe to the series of events that comprise our lives. I personally resonate with the notion of shokunin which essentially is about honing a craft, and ultimately yourself - I definitely find joy and satisfaction in continually learning and improving at whatever I do...
When you combine that with wabi-sabi, and just a general appreciation for the present, I find I am able to cope with whatever life throws at me, no matter how bleak it sometimes gets.
Real question: Comparing your social life before and after having money, what changed the most? Or do you hide it, so your friends have no idea?
Not having to play the game isn’t as expensive as you suggest.
Lots of tech employees, if they don’t let lifestyle inflation take over, hit a point where they could retire early but may not want to. At that point t walking away from a job is much easier.
You may be missing the feeling of being a human being with atonomy over the course of your life. Missing in the sence of absence, definately not in a sense of sadness or regret - be happy to not have to worry about the most existential things in life and being dependent on the whims of a boss / company / ecomomy for them. tl;dr I'm happy for you to not be in the rat race, it's completely not glorious (to be in it).
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Yeah, the "success definition" trap is real. For me I was having coffee with a former co-worker who was now a VC because they had been at one of the same companies I had been but had joined "pre-IPO" and so probably had a net worth of 20 - 30 million. They asked what I was looking for and I said "To be successful like you!" and they said, quite seriously, they would prefer to be successful like me. And at that point we talked about the parent's point of how do you define success? This person had money but had lost their their spouse to divorce over 'working too hard' and were now alone. Meanwhile my third kid was on the way and I was doing okay but certainly not "FU money" okay. And yet from their perspective, that was more successful than they felt. That really threw me for a loop.
Totally feel this. I think all people should desire to be wealthy and to keep from being impoverished, but we should not define wealth and poverty simply in terms of our monetary wealth, or lack thereof. People who have the love of family and friends, a clear conscience, health, their physical needs met, and thankful hearts, are far wealthier than a majority of people in this world who have a large number in their bank account.
Yet in our consumer world, people are continually thinking of their worth simply in terms of the money they have or the money they make. I’ve known many married working moms, who decided to leave the workforce and be homemakers, who constantly felt like their worth diminished because of the decrease in their wealth, not recognizing that the bond they had with their children, was growing stronger and greater, and didn’t recognize how incredibly valuable that truly was.
Note: I’m not saying working moms can’t have strong bonds with their children, I’m talking about specific situations where for them it was hindering their relationships, and their relationships improved but was at the cost of less money.
The social pressure to play the game, even when you don't need to, is so strong. It is way easier to be happy when you have money than when you don't, and it may be something close to necessary (I guess there's happy poor people) but not anywhere near sufficient. A lot of smart, driven people seem to lose sight of this.
Yeah there was a song by silverchair(?) saying ~ “money isn’t everything, but I’d like to see you try to live without it”. When money has been tight for us in the past, that itself brings stress. Though knowing we have great community, who we could rely on to not starve, to be clothed, and have a roof over our heads alleviates a lot.
I think a lot of times those who don’t have great community around them, are often the ones who will really chase money over other things, because the impact of not having it is so much higher for them.
> Yeah there was a song by silverchair(?) saying ~ “money isn’t everything, but I’d like to see you try to live without it”.
Tomorrow. What a banger.
Next lines are:
You think you can keep on goin’, livin’ like a king Ooh, babe, but I strongly doubt it
I guess my question is can you even go for, "just your slice"? I don't want or need mega millions. I just want to be well off enough. Maybe that is day job? Preferably, it'd been cool to have some success, mic drop, and live a good life. Tom Anderson from Myspace fame seems to have done well. Successful product and off living his life.
The first "start up" I worked at was Sun Microsystems (I joined the day after they went public :-) so maybe not a startup at that point). But I was (and am) good friends with a number of people who worked there before I did. Pretty consistently a number of people who did well from that got to a point where they had "enough" and didn't need any more so they switched to working on things that spoke to their values rather than places where they could "make a lot of money." I have found that pretty inspiring and a counter balance to what passes for a 'success story' in the press today.
Without bragging, but I have succeeded in two of my startups and I have always been super lazy. Work life was mixed all the time. But never had stress. Always took time for myself. And maybe worked 3 days effectively a week. Remaining time I spend with my kids and hobbies. I dont believe in this rat race 60 hour a week thing.
You are totally bragging, but that's OK. I would hope you recognize the huge amounts of luck and context that go into a success like yours; many people work their asses off and still fail.
>> I dont believe in this rat race 60 hour a week thing.
The question is do you believe you were successful because of, or in spite of this?
Neither.
Success is never determined by hard work. It's always a combination of many other factors and at best hard work may contribute a little. Otherwise the billions of very hard working people struggling to feed their families would be extremely successful.
But that's not a story that you put on a poster, so people prefer to believe the lie that killing themselves chasing "success" is a good thing.
Hard work is preferred by employers over slacking off (for obvious reasons), so that's what gets promoted as the way to success.
I like this view. I’m not especially successful (by any of the measures knocking about) but in the midst of a startup again for the last year. This time I work how I want to work and am actually enjoying myself. The whole 80 hours a week startup thing is padded with a lot of performance art in my experience. I am actively avoiding all that this time around. I find that I solve a lot of things by not doing them or solving them when not actively trying. We’ve made great progress so far.
It’s so easy to get caught up in comparing ourselves to others
> and they said, quite seriously, they would prefer to be successful like me.
The different between you two though is that they have millions and can still have your lifestyle within a couple of years.
Except they could not. You can't buy with money the experience of a good life partner, you cannot buy with money the experience of having kids and raising them.
Those are things you buy with your time, your life clock if you will. You have a limited budget of time and you don't get to spend it twice. And when you get to the point where you feel like you've probably spent half or more of it, you might look at what you spent your time acquiring and be disappointed.
Pretty much everyone I've talked to about 'success' uses the definition of 'the sense of pride in what they have achieved in their life so far.'
If the value of what is a 'good' thing to achieve came from inside of you, then in my experience, you'll be happy with what you've achieved. However, if you adopted someone else's definition of what is 'good' to achieve, you may find that having achieved it you don't feel happy. I expect it is different for everyone.
What this conversation did for me was to show me how one thought about 'success' affected the choices of where you spent your time, that they were different for everyone, and that people using someone else's idea of success could be disappointed or unhappy having achieved 'success'. And that realization helped me make decisions about how I spent my time based on what I valued in my life rather than by an arbitrary "score" like a bank balance.
Buuuut they might not be able conceive... Or may regret being older then they wanted to be or any number of other things.
Money isn't everything.
Comparison is the thief of joy.
It’s liberating when you realize that the "arbitrary label" of success or failure is often just a narrative we construct around events
Also interesting that it seems like his relatively minor 1 year stint at pre-IPO Google was successful enough to pay for many other endeavors.
It's a great example of the power laws in startups: it's much more lucrative to have a minor role in a major success than a major role in anything minor.
I would go even further, it would have been much better statistically to work at any of the BigTech companies even in the past 10 years than take a chance at a startup.
Seeing the outcome of the startups he listed, it would have been much better to work as an enterprise CRUD developer at a bank, insurance company, etc
That really depends upon what you are optimizing. Someone with a PhD who wanted to be a professor, worked in an academic role in a big org, worked at the edge of many technologies; doesn't seem like someone who would be happy at an insurance company.
I will also repeat the obvious (but oft missed) observation: working in a revenue-generating industry, not a cost center. This doesn't need to be a startup, but very few banks or insurance companies generate their massive products within IT.
That’s true. But the author wanted to be a “successful startup founder” and that never happened.
I said in another reply, that I made plenty of mistakes and had plenty of “failures” so I’m not faulting him for that. But where did he say that he learned from his failures and worked on his weaknesses that allowed him to succeed based on his goal of becoming a successful startup founder?
> Seeing tts outcome of the startups he listed, it would have been much better to work as an enterprise CRUD developer at a bank, insurance company, etc
Enterprise CRUD developers don't make that much. I'm confident OP made more over his career than them.
How much do you think he made at his failed startups that didn’t exit and didn’t make enough to draw a significant salary?
The average CRUD developer working in the US in most major cities can make $130K to $165K within 5 years with aggressive job hopping.
OP would have to speak to his experience, but between a Google IPO and the $10M Virgin acquisition I would be surprised if he didn't average >$200k lifetime.
Throughout this thread, it's clear you have an ax to grind. Startups are obviously not for you, but many enjoy them and benefit.
He wasn’t a “founder” at Google. Google IPO’d in 2004. How many of the $n number of startups founded around the time that Google was founded and it IPO’d were successful and how many disappeared into obscurity?
There are so many people especially on HN who succumb to survivorship bias. Most failed startup founders never admit it. The original author is not one of them and he was willing to be open about it - that’s a compliment by the way.
“Many” may benefit from them. But statistically, most don’t
> the $10M Virgin acquisition
I think he wrote that he didn't make anything from that. He held onto the equity because he (unfortunately) thought Virgin would turn it into a success.
I think this is actually not as obvious as it seems as equity is also power-law distributed. An executive founder may have 10-50x the equity of a founding junior employee, who themselves might have 10-20x the equity of a key early employee.
The power laws actually cut both ways. I think the optimal path is not entirely obvious without some particular understanding of whether or not you are a stronger player as a leader or a follower.
I remember an old Steve Jobs biography titled “the journey is the reward”.
Overtime, I’ve come to appreciate that statement more and more. I think it is an incredibly profound insight about life.
Sometimes wins are not necessarily measured with financial success. A company can utterly fail and still represent a win. I had one of those.
I started a self-funded tech company around 1998. This was hard tech, hardware and software. And I was the sole engineer doing all the work. This meant 18 hour days, 7 days per week to get the plane off the runway. Two years later, after booking lots of sales, we finally moved out of the garage and I started to hire people. Yes, I ran this beast entirely on my own for two years. A few years later a large well-known company expressed interest in acquiring the technology. The number being floated was in excess of $30MM.
What happened?
Well, 2008 happened. The economic implosion caused this company to second-guess entry into the market we had pursued --which they intended to do by acquiring us. The deal went from being a couple of meetings away from an acquisition to evaporating in front of my very eyes.
The bad news was that the economic downturn truly hurt us over the next couple of years. I had to shut it down in 2010 and lick my wounds.
This thing went from pouring all of our savings and an incredible amount of very hard work into a crazy idea, executing well enough to get a $30MM+ offer to closing the doors and nearly losing it all in the process.
At the time this felt like an abject failure and a waste of ten years of my life. It took me months to get my head back on straight. Today, looking back, I see it as a success. I took an idea from nothing to close to a massive life-changing exit and did so mostly on my own through hard work, grit and determination. That's a success story nobody can take away from me. I learned a lot along the way and most of those lessons were part of success in future endeavors.
Life can be funny and cruel sometimes. You might think you are going through your darkest hours when, in reality, you are growing a solid backbone that will support the rest of your life.
Entrepreneurship is hard. Very hard.
Honestly, that feels like copium.
It’s like anecdotes you hear from religious people during a disaster. “I lost five of my kids. But I’m so thankful that God looked out for me and saved one”
Ignoring what might be vapid reddit edge: it doesn't seem like it.
The GP would probably do well to see the endeavor as a success in terms of how they should behave in future. Any necessary adjustment would seem to come from the margins.
But he didn’t end his article with “my next startup after these six failures was a success based on what I learned”
He doesn't need to.
If retrospect exists to inform future decisions: getting to the GP's point in his business is a useful success signal.
Whatever it is that you're tracking seems less useful toward any question that isn't "am I rich from this right now?". The answer to which is "no". As-in "no shit". It's not useful.
In that case, that goes back to my argument that he is a “failure” based on his own metrics of his personal success criteria. He failed at his goal of being a successful startup founder.
How is he not a failure based on his own mission?
sports analogy time! people like sports because sports defines rules, bounds and how to determine a fair outcome with a winner. These are all limitations that are not at all clear in real life. Some people say "money is the measure of success in the games of business" and that supports the scarface point of view. Others point to the "journey" and talk about life occurring at the same time, factoring in family and personal emotions. Both are useful, neither are completely true.
Interpreting a difficult event in terms that allow you to move on is not “copium”. we all do it all the time to explain our mistakes and weakness regardless of religion.
I don’t think any of these people are saying “I’m so glad my kids are dead” they are saying they are able to see these unfortunate events in a bigger picture.
What you may be looking for is “sour grapes” - something that was previously desired is now not viewed as highly after failing to obtain it.
And not being willing to admit your mistakes and assess your weaknesses means that you continuously make the same mistakes.
Of course I’m not saying in my original anecdote that people getting killed from a natural disaster was preventable.
In the appropriate threads, I have posted right here what I learned from my many mistakes - marrying the wrong person (since remarried), staying at my second job too long and becoming an “expert beginner” (I’ve done decently for myself since then), failed in real estate around 2008 (since recovered), etc.
You can look at some of my “favorited comments”.
This isn’t bitterness. At 50, I am where I want to be. But if you had asked the 35 year old me - divorced, negative net worth, shitty job with out of date skillset, etc. I wouldn’t have put on a happy face and say I’m not a failure.
>> This isn’t bitterness. At 50, I am where I want to be. But if you had asked the 35 year old me - divorced, negative net worth, shitty job with out of date skillset, etc. I wouldn’t have put on a happy face and say I’m not a failure.
The GP didn't say they thought it was a success at the time; quite the opposite. Aren't you basically saying the same thing, only with a different timeline?
This is how the submitted author ends his post
> I grew a lot. And I think my current happiness stems mainly from the fact that I like the person I've become, someone who can fail again and again and again and again and still find a way, for the most part, to be happy.
He didn’t say that his current happiness and success comes from the lessons he learned. It’s more like the lady who lost five kids and kept her faith because it was that God was good to save one not thinking if that were the case was he good for letting the other five die? (see also the biblical story of Job)
Without going into details (again look at my favorited comments if interested, I’m not trying to hide the details), what I learned from my failures is why I think I’m not a failure now - ie I achieved the goals I wanted to achieve - was a direct result of learning from my previous marriage and divorce, doing what is needed to not be an expert beginner - I got my first only and hopefully last job at BigTech at 46 (no longer there) - and was much smarter about my finances.
Hmm.. if anybody feels the blunt force of failure it's them. But they feel it was a success so I believe it must have been. Also they don't need to cope now.
It’s a natural human coping mechanism to make sense of things in a way that allows us to continue growing and finding meaning, even in painful circumstances
Or just realize in the case of my anecdote that shit happens. There is no grand plan or puppeteer behind the scenes.
In the case of the original author, it would be be one thing to redefine success based on changing priorities. But not to pat yourself on the back and give yourself a participation trophy.
Yes success can come out of failure. Failure can also just come repeatedly and then you give up and try something else.
> It’s like anecdotes you hear from religious people during a disaster. “I lost five of my kids. But I’m so thankful that God looked out for me and saved one”
I am glad you edited your comment slightly because it was worse than what remained (which is still terrible and insensitive).
That said, one of my favorite quotes, by Mark Twain is:
"A man holding a cat by the tail learns something he can learn in no other way".
Which is to say that it is impossible for most to align with the mind of someone who loses a business, or much worse, a child, without having held that cat by the tail. And so, your comment, while misplaced, is understandable because you don't have a good frame of reference.
Additionally, in my particular case, well, the 2008 economic implosion caught most everyone by surprise. It was like a nuclear bomb dropped. Few saw it coming. Millions of businesses went down. Millions of people lost their homes and jobs. And, while I not, by any means, perfect and without mistake in my life, I find it hard to interpret such a catastrophic exogenous factor as a personal failure. Sure, it would have been nice to have had $10MM in the bank to survive it. Most non-VC companies do not have this luxury. We had five million dollar sale contracts evaporate overnight when our customers, in turn, had their banks materially reduce or cancel lines of credit. We had customers send truckloads of our products back to help us because they were filing for bankruptcy and the courts would have grabbed hold of our (unpaid) products and they would have been stuck in the hands of a trustee for months, even more than a year. Etc.
Like I said, sometimes you have to hold the cat by the tail to really understand.
I posted that 19 hours ago. I couldn’t have made any recent edits…
> I find it hard to interpret such a catastrophic exogenous factor as a personal failure
I mentioned in another reply that the 2008 crash hurt me too. It was definitely a personal failure that I had five mortgages where I owed a half million dollars, put 0% down on four of them and only 10% down on the fifth and I was only making $70K from my primary job at the time and didn’t know what the hell I was doing.
> I couldn’t have made any recent edits…
Your original comment, which I saw before the edit, characterized my comment as copium. Someone else responded to that before your edit.
Anyhow, your 2008 failure was, sorry to say, 100% your fault. Perhaps you were younger and inexperienced. We've all made stupid mistakes due to inexperience. Buying five homes with 0% down payment was an extreme gamble. We live and die by the consequences of such actions.
In my case, we were conducting business as usual and then, out of nowhere, the music just stopped...and there were not chairs. Very few people saw that coming. Those who did were focused on the financial world rather than engaged in running a business. This is why so many businesses got caught unprepared for such an event.
I am sorry you lost it all. That's terrible. I lost a home before due to employment difficulties. My mistake in that case --funny enough, young and stupid-- was to buy it with an adjustable rate loan. When interest rates went from roughly 6% to over 12% my world got turned upside-down in a hurry. Like you, I wasn't making enough money at the time to survive that. I lost the house a couple of years later.
Interestingly enough, that's what pushed me towards entrepreneurship. I had to earn more money. The only way at the time was to start an small electronics manufacturing business while keeping my day job.
So, yes, in that case, really fucking dumb decision on my part. Yet, at the end, it launched my entrepreneurial journey, something I am very happy about today.
I didn’t change that.
https://news.ycombinator.com/item?id=42773763
> Honestly, that feels like copium. It’s like anecdotes you hear from religious people during a disaster. “I lost five of my kids. But I’m so thankful that God looked out for me and saved one”
It still says “copium”
> Anyhow, your 2008 failure was, sorry to say, 100% your fault.
Isn’t that what I just said that they were my mistakes?
https://news.ycombinator.com/item?id=42774270
> And not being willing to admit your mistakes and assess your weaknesses means that you continuously make the same mistakes.
And then I went on to admit my mistakes.
In the very comment that you replied to I said It was definitely a personal failure
> Interestingly enough, that's what pushed me towards entrepreneurship. I had to earn more money
And I decided to upskill and I knew when I signed the offer letter at each job, how much I was going to make without any risk.
> Like you, I wasn't making enough money at the time to survive that. I lost the house a couple of years later.
I didn’t say I couldn’t keep my house. I made more than enough to keep my primary home. It was very much a strategic default. I had another house built and got an FHA loan three years to the day after my last foreclosure. Money is never personal to me
I’ve had a lot of coffee breaks with highly placed peers who expressed concern because our boss was sure our success came down to one or two attributes and seemed completely blind to all the ways we saved him from himself. If apathy ever took over the team, we would burst into flames because of all of these details.
There’s a great old aphorism that sounds like sarcasm if you don’t understand this: “Take care of the little things and the big things will take care of themselves.” Any halfway sane team is dominated by people who are all too happy to jump on the Big Things. But for want of a nail, the kingdom can be lost. And if you cannot see his importance, and fire the farrier to hire more knights, then everybody loses.
When you see a successful boss, look around for his successful reports. They're always the ones cleaning up the boss' messes. The truth is that we all need to be saved from ourselves at some point (sometimes as education, other times as hard lessons), but tech culture certainly pushes that far with the "gifted visionary" mythos. A gifted visionary's much vaunted "Ideas > Details" only works when the detail people are there to make it work.
>> When you see a successful boss, look around for his successful reports.
With a good boss you don't have to look; they hold these people out and highlight their work, those people recursively do the same thing. In true success there's so much to go around.
There is currently a risk asymmetry in startup world that drives away people who could do good work.
Investors know the long odds of success, so they invest in twenty to thirty companies and wait for one to get big.
Founders and employees can't diversify like that, because you only have so many working years. To mitigate this we have decided to award successful founders with huge paydays as a lure to others to throw their hats in the ring. This has some malign effects, namely unsuccessful founders and employees get bupkis. It also attracts the wrong sort of personality to be a founder, selecting for too much risk appetite. (At least what I consider the wrong sort for building a sustainably profitable business.)
I have an idea for how to solve this and I wonder if it's already been tried or if there are holes in it. The idea is to spread the risk of starting a company across something like an accelerator class. If one company in that class gets big, it would be contractually obligated to hire and grant shares from some pool to other members of that class. This would be at the cost of the winning founders' stakes.
The upside for winners would be much lower, but the downside would be lower too. This would attract a different sort of person to this accelerator, and be a differentiator for selecting talent.
This idea comes up here every once in awhile (often in the form of "a batch of startups where some % of the stock is shared across the batch).
I'm not saying it can't work, what do I know, but a challenge you'll have to address here is:
* By the time you're at the first big-money investment, the priced A round, you're dealing with investors who make just a couple investments a year.
* Despite that, the most promising startups are chased by VCs, not the other way around.
* If you're one of those promising startups, what would motivate you to take money from the investor structured the way you propose?
Most returns in startup investment come from a small fraction of breakout successes. Even if you got, like, 25% of startups to join this kind of funding compact --- which would be a huge, a momentous achievement on the same scale as the creation of YC --- the math here might not work out to where the shared-fate component of the deal was meaningful for any of the failed startups.
It has indeed been done: https://founderpool.co/faq
Discussed at the time: https://news.ycombinator.com/item?id=23907342
This looks like it's a bit more flexible than my accelerator idea, while in the spirit of it. Thanks!
https://www.pandopooling.com/blog-posts/why-pooling-income-c...
What if startup founders and employees are paid in shares of the investment fund?
There's your startup idea: communist ycombinator. ;)
Ycommunator
Ycomrade
<3
Diversified ycombinator :+1:
I think you need to try harder finding a good name :D
All41-14All
Well, having been in an accelerator there were folks (startups) in my class who shouldn't have been there. i.e. their startups failed but it was blatantly clear why -- mainly immaturity and not listening to advice.
I think your idea would only work if there were rigorous selection process, but also some mechanism to "fire" founders who aren't contributing or insist to make terrible decisions.
I'm not really sure I would feel comfortable investing in an accelerator class concept like this. Seems like it would suffer heavily from adverse selection.
Maybe if the terms were really good, like 20% of the company for $10,000 or something.
Not having to remunerate failed founders and starting employees for their effort is a cornerstone of the VC business model.
They're investors. Why would they pay you for failing to generate a return?
"Failing for generating a return" makes it sound like a skill issue, when it was probably mostly bad luck with the business model you tried out. Negative results can be as valuable as positive results in science, why not in business?
Greedy optimization can also get you stuck in local minima. Why does any investor participate in VC? As an asset class it underperforms. There's something more that motivates people than return. Cool factor, bragging rights, and also I think a concern for growth and the macro outlook.
In my model the reserved pool of shares for failed founders would come out of the winning founders' pool. It's spreading risk across founders, not diminishing the stake of investors.
It doesn't matter whether it's a skill issue or not. They're investors. They are voluntarily offering money in exchange for a chance at a return. When you buy two shares of Tesla for $1000, you don't expect to pay them if they're driven out of business.
In the main, VC LPs put money into VC firms because they have portfolio allocation constraints for decorrelated investments, is how I understand it. It's definitely not out of charity.
1. This is Socialism
2. You’re not creating the correct incentive system. It creates the opposite incentive you want - it rewards those people who do nothing and let others do all the work. You could easily get in a situation where all people in this co-op do nothing, under hopes someone else hits it big.
It's just portfolio theory applied to entrepreneurship.
1. Cool!
2. Wouldn't the incentive be to abandon your failing startup and go work for one of the more promising ones in your class?
> This is Socialism
No, it is not. Socialism supposing involuntary participation. As long as participation is voluntary for all agents, it is capitalism.
My main lesson from running a startup: don't. And if you do, quit when the going gets tough. Perseverance does not pay off.
Obviously it doesn't always end badly. But we get a massively skewed view from survivor bias.
My life turned out pretty damn well once I got a plain ordinary job working for someone else. But I don't kid myself: when it comes to starting a startup, I did fail. The main lesson I learned was that I was always going to.
> My main lesson from running a startup: don't.
I hear this a lot and I think it is good advice because the only person who should actually start a startup is the one who sees this but still does it.
Yup, it takes people who think they can't fail to be truly successful. Very similar to an athlete's mindset. You have to have the skill and innate talent but you also have to believe your shit doesn't stink
I dont understand why starting an enterprise has become such a scary thing in the tech world. So many people start businesses, so many mom and pop shops etc. IMHO startups have become scary to start because we jump too quickly into starting them or have too grand expectations from outset.
The way friends approached startups in the .com era seemed to be more like “hey, [friend]… we know how to write code, and we think we can address [thing] in [some market] better than [incumbent], so let’s spend nights and weekends hacking together a working proof of concept.
It might not be representative, but the people I’ve known that wanted to start tech businesses in the past 15/20 years approached it the way people start restaurants. You can’t slowly ramp up most restaurant concepts with a DIY budget— you need to invest a lot upfront, and you need a lot of existing expertise for even pretty trivial concepts. (And before people say food trucks and catering and private chef and the like— catering and private cheffing are totally different businesses with very different processes and institutional knowledge, and in most places, food trucks aren’t dramatically cheaper than opening a small restaurant.) Folks seem eager to start acting like a CEO and delegating things to people paid with investor money rather than making something themselves and getting it off the ground. Maybe that’s what the business requires? Maybe in software markets, customers aren’t interested in scrappy small players anymore, perhaps worried about lack of support, shitty UX, them going out of business or whatever.
Just speculation. Not even going to pretend I’ve got broad non-anecdotal knowledge on this.
I think the problem with that approach, in today's market, comes when you try to hire.
Junior engineers didn't cost more than any other recent graduate, and as you could get away with a few rough edges in production for quite a while, you could put together an adequately balanced team for not much money.
The tooling was much worse, but the compliance burden was much less.
Did your friends in the .com era talk about "doing a startup" or "starting a business"? I feel like that's changed a bit, people are more calculated and cynical about how the game is to be played with respect to rounds, exit strategies and so on. The "startup" model specifically means something a bit different to "starting a business", around ambition, scale, investment model etc. All businesses need to be started, but not all businesses are startups.
I don’t think the idea of starting a business in tech these days commonly exists independently of the modern tech conception of “doing a startup.” And with the hiring part, the idea was that you’d do the work yourselves and only hire anyone at all when you couldn’t do the work anymore, or you got a big enough contract/sale/etc that you could pay them. The fact that the exit strategy/investment/initial expensive hiring messiness exists is the symptom, not the cause. What I don’t really get is the cause, and I suspect it’s cultural rather than logistical. Not doing something unless you can ramp it fast enough to start worrying about paying anyone other than the people that decided to do it is a deliberate choice. In a restaurant, it’s not. You literally can’t do it without the initial investment. My dad was a mechanical engineer in a startup making industrial paper handling equipment in the 90s— one of the first hires after the handful of founders worked themselves to design and fabricate the first machines securing them the contracts to afford more employees.
That's partly because of growth based valuations, and fast-acting network effects. The whole model is predicated on "get there fast, get the monopoly". Which you can't either with a traditional, non-scalable business (restaurants) or even a scalable industrial business (cars) - yes you get economy of scale, but they benefit relatively little from network effects of other people owning them. Goods like fashion which don't need a service ecosystem, even less so.
Total scalability & strong network effect points toward a "get the monopoly, now" business model. Which, IDK, might suit some things but definitely isn't the right fit for all things tech.
Right — I totally understand why things are the way they are using the tech industry startup model. But using that model is relatively new, and adopting it not a prerequisite to starting a tech business, even if that’s the only way people do it these days, generally. Becoming a monopoly immediately in some market is the goal of someone that wants to become the monopoly immediately in some market. It’s neither a requirement of, nor mutually exclusive of having a good idea that you want to turn into a business. That business goal might be easier in technical businesses, but it doesn’t seem to make better or more sustainable companies. “That’s the way it is done” is usually the worst reason for doing something. It doesn’t mean it’s bad, per se, but it definitely doesn’t mean it’s good.
Agreed, but it distorts the heck out of it for everyone in tech trying to do anything else. Salaries is just the most obvious way.
>Folks seem eager to start acting like a CEO and delegating things to people paid with investor money rather than making something themselves and getting it off the ground.
This, but also it's a bit like gambling, this is the high risk / high reward way to do startups. The slower way is more stable, but you don't get to have fun with other people's money while you're building the business.
Sure. What strikes me as strange, however, is the attitude that this is the only possible path to starting your own business in tech. Sure you’re not going to start up your own social network, but maybe you’ve got a great idea for some kind of QoL thing that helps people work with these big inflexible systems? Many of these startups seem to be shit at providing expertly personalized or customized services because they’re trying to be a big at-scale corporation from day one. Maybe you devise a way to semi-automate customized solutions for some common enterprise thing too sticky for at-scale services to address specifically so companies have to do it in—house? It seems like there are problems that would be easier to address with a small business like that which could organically grow into something sustainable. Definitely not sexy, and I think people making tech startups currently are often more interested in sexy than anything else.
I think compared to 15 years ago there's (1) more capital (2) more founders [enabled by better tooling and well-known implementation patterns] (3) less low hanging fruit on the product side. Any given opportunity is more likely to have other, well-resourced, folks chasing it hard.
> less low hanging fruit on the product side. Any given opportunity is more likely to have other, well-resourced, folks chasing it hard.
I think this is the biggest factor that actually affects the fundamentals of selling tech. To my eye, every other aspect is some form of Gordon Gecko business insanity and/or VC people looking to stoke egos by making people with good ideas feel like big shot executives while figuring out how soon they can throw it all in a juicer and extract a bunch of cash.
A mom and pop restaurant can compete with Burger King and Starbucks. It's not quite the same with tech, as they can pay the $300k salaries for people to do the same thing you do, and they can buy out your market. Basically everything that can be done with money is stacked against you, and all you have as a startup is more grit than all these straight A students who graduated from ivy leagues.
because tech people don't want to start a lifestyle or low-growth business. they are reading about giga rounds, unicorns and hockey-sticks as well as the VC/PG propaganda on hackernews etc all day and think that this is the only way to do it.
they eat ramen for 10 years, often even believing in someone else's dream without substantional equity to match the risk/reward profile. meanwhile, the plumber next door who started his own plumbing business is driving a ferrari on weekends.
Do you have a good resource for starting lifestyle businesses?
Funny how things change over time on Hacker News, an ostensibly startup forum that now more and more seems to be just another tech forum, and any relationship to YC and startups is now merely incidental, it seems.
> My main lesson from running a startup: don't.
Worse than failing is not trying.
You will live your life always wondering “what if”.
When you fail, you will have an answer to the above question and can live in peace.
Worse than not trying is trying and experiencing burnout and/or destitution.
When you fail, it can be due to many things. Not everything in the world is controllable. This is one of the reasons why expecting zero ”What ifs” at the end of your post-mortem is unreasonable.
I don't think there's any absolute rule here. I'm pretty convinced that a startup would be healthier for me rather than my safe day job. The amount of churn and nascent burn out due to chasing tech debt and tickets surrounded by demotivated people is really bad.
I guess being aware of what you need and can afford is key.
It depends. Why do you want to start something? Do you really believe in it? I mean there's got to be a certain set of "hell yes" questions that need to be answered in the affirmative.
Otherwise you're not missing much. Work for something that pays well, solve interesting problems, spend time at home with your family and friends. The problem is when you're wanting to start something because someone else did it and don't have the implementation or execution perseverance (or just don't believe in it strongly).
Yea, wondering “what if” is totally worse than being dead in a gutter.
Most people don’t want to start a business. They might fantasize but it’s not something they would enjoy doing. It’s fine to realize you have other goals and to work on them instead.
This (very popular) sentiment you have can basically be abstracted into the “fear of missing out” meme. It's an unnecessary predicate, it's founded on presupposition and bias, and it's really detrimental to all serious long term analyses.
There's no proof that this personal feeling should be listened to or given behavioral authority, especially when it suspiciously conforms to the aesthetic that is widely shared by many who end up having only achieved a mundane life, despite “noble” projects launched because of arrogant egos. This social phenomenon which sponsors the freedom and agency of people fit only to be busy drones is wasting global resources on bourgeois affairs. Elon Musk and his eventual epic failure at super-industrialism is a great example of this harmful sinful pride.
The “what if” has only served to help overvalue ordinary potential, when that capability should have been limited to simple tasks, industries, and affairs. It's a mind virus riding on the waves of language and the beastly body of rationality, a false reality having been successfully disguised as a legitimate object to perceive within the cognitive sphere of humanity. It is deviation that surely has contributed to the collapse of the great liberal humanism project, the real goal of democracy and its encompassing civilization having been the quiet and stable enslavement of a massive surplus of dull brains and basic bodies. A mass of uninteresting genetic carriers who would do well to never worry about what is outside the scope of their common destinies.
The dialectic that there can be morbid peace if you would just test out the hypothesis that you can become a great man is an incomprehensibly devised thinking trap that can filter out men who don't know what the fuck is going on in the grand universe.
But God (or simply nature) works in mysterious ways and I'm glad that hubris was created to serve as an instrument for learning what not to ever do. And to materially benefit from, salvaging from the failures of future past technologies being a huge possibility to leverage. Your supposed tragedy is my informed opportunity, to paraphrase Jeff Bezos.
EDIT: If you ever invent warp drive or faster than light travel or functional nuclear fusion, I'll be looking forward to the blueprints of such treasures and strategic advantages ;)
Assuming that the process of failing doesn’t cost you your peace — which is certainly a risk.
Nope. I never lived one minute wanting to either start a business or be an early employee at one - I’m 50.
I'm starting to think you really need to be well connected or at least come from an upper class background to win here.
Steve Jobs is sort of an exception here, not only was he adopted , but he was adopted by a very middle-class family .
I find myself really good at developing small apps, but very bad when it comes to the business side. I would love to find someone to work with who's good with business. But so far I've just been time scammed a few times by morons who come up with insanely impractical ideas .
And they never want to let you in for a full cut, they want to give you like 1% of the company in the event that you're able to build the entire thing out from scratch. If you discuss modest technical limitations they'll berate you for corrupting their vision.
> I'm starting to think you really need to be well connected or at least come from an upper class background to win here.
In my local startup community there are a lot of entrepreneurs and small startups founded by MBA students and recent college grads who clearly come from wealthy backgrounds. Nearly all of them either fail quickly or continue for years without getting any traction beyond their parents’ connections’ businesses.
The other side of being wealthy and well connected is that it’s really tempting to fall back on a job with your family connections or to play startup for a few years while burning through “seed” money from the family without the real pressure of needing your startup to succeed.
> And they never want to let you in for a full cut, they want to give you like 1% of the company in the event that you're able to build the entire thing out from scratch.
There are a lot of wannabe entrepreneurs who need a cofounder but don’t want to give cofounder equity.
The majority of successful founders and founding engineers I know had past working experience together. There are exceptions, but most of the time when someone goes searching for a cofounder or founding engineers because they don’t have anyone in their network, it doesn’t work out. It can work and does sometimes, but it’s so rare that I’m very surprised to hear success stories.
There are just too many people in the startup community looking to “hustle” their way into an MVP without giving anything up in the process. Also a lot of people who want to be “cofounders” and get 50% of your company in exchange for doing as little work as they can.
I was in a startup Slack for a while. Every other week someone would come in asking for advice about how to evict a deadbeat “cofounder” from their company who had secured 1/2 or 1/3 of the equity but wasn’t contributing anywhere near the other cofounders.
I wonder if there’s a market for “work swapping” where founders of two separate companies will trade work without trading equity.
At that point just pay me.
If my normal billable rate is 70$ an hour I might offer a discount if your project is really neat.
But I've never seen that, I've seen people wanting to me to sign contracts would say I will donate time, and these are never people who are realistic about what their chances are. You get all this hype where they claim someone offered them 100K just for the idea, but when you ask for $100 a month to host the server they don't have it .
I was part of a group that did something like this. We used a crypto token system where if you joined the group you got X number of tokens and you could use that to get other people in the network to help with various tasks.
Then the network would take a small percentage of equity in the companies of all the members.
You left out the most interesting part: why _were_ you a part of it. Did it not work out, why not, or did you leave because of reasons not related to the (un)succes of this system?
Jobs got his start in a tiny industry (tech was decently big already, but PCs were not) poised on the edge of massive growth as technology got to the point where you could build machines people would actually buy. And there was a huge moat, as the necessary talent was rare. And even within that rare talent, Jobs had the unique advantage of being able to partner with Woz.
Nothing you can do today with a typical HN skill set will come even close to that. There are thousands (at least) of people with those skills. They can build it too, whatever it is. You’re not Woz and you don’t know a Woz. Likely there is no Woz today; everything computing is so much more specialized and complicated and layered and just plain big. You may be able to find success in this world, but it won’t be replicating the Jobs story.
Steve Jobs was connected: By being raised in Silicon Valley at just the right time. He even had a story (who knows how true it is) of him as a kid looking up Bill Hewlett in the phone book and asking about electronics parts (a frequency counter IIRC) and Bill not only got him the part, but gave him a summer job.
As for business, many successful tech entrepreneurs “learn” it either as they go or by bringing on business experts, but not giving them full control. For larger examples of the latter, see Eric Schmidt as the “adult in the room” for Google, Sheryl Sandberg for Facebook.
If you had to look up someone in the phone book you by definition aren't connected.
Connected is when your Mom knows the chairman of IBM. Like with Gates.
To add: most people didn't dare to just do that. Cold calling is a real skill, the biggest factor of being good at it is: having the courage to do it.
Yeah, I know there’s a difference. It’s not the same as Bill Gates, but proximity is a connection all its own.
By that logic any entrepreneur can just scrape together a few bucks and ride a bus straight to San Francisco.
I find it easier to just consider Steve Jobs to be exceptional here. He's the definition of not letting the circumstances of your birth dictate anything.
You have the agency to try to contact powerful people too, but you don’t.
That's true. It feels like every other ladder-climbing wannabe out there is also trying to attract powerful people's attention on Twitter et al these days, so I imagine it's much harder to stand out than it was for a kid in the 1970s. But you're not wrong.
I agree it probably was easier once you knew where to find them. Almost every celebrity is accessible through the internet if your megaphone is loud enough.
I also don’t claim to make such effort. I just want to clarify that networking is a conscious skill and not always a result of family connections.
Yes, the social aspect is significant. It's not so much about innovating and strategizing as much as it is about playing politics with rich people and hope that they let you build a successful product. Let's face it, rich people make all the decisions. If you're not rich, it's all about socializing and luck for you. It's hard to find a rich person who will let you implement your vision and actually control your destiny. It's demoralizing TBH.
Even he failed twice before he made it big.
I'm on the ordinary working job track. I like it.
But if you're young, got the time ... I think it's worth a shot, or two, or more.
I think there are upsides and downsides to starting young. On the one hand, you don't have much to lose, so failure is softer. On the other hand, you're missing some experience that would be useful.
I worked for a startup whose founder was a super young guy who had never had a job before being CEO. He was missing experiences like "what do I hate when my boss does" and so needed to repeat all the same mistakes. This resulted in things like... postmortem reviews with action items like "we should dock people's pay if installs are done incorrectly" instead of "we should ensure that the install crews have the tools they need to do the install correctly". (That action item was one of the few battles there that I won. We gave every installer a toolbox containing the tools to do the job. This improved the success of installs greatly. But who needs a meeting to come up with an "idea" like this?)
At least if young you got the energy, time, usually fewer family obligations, maybe even naive enough to do something others won't (as a good thing) and ... you know if that's the lifestyle you want.
But I hear you starting at zero life experience, that is bad. I would find it pretty painful to work at a start up and have to talk to the founder "bro let's talk about the basics of picking your battles" and do it ... well.
I think having an entrepreneur's mindset and starting young can work. But you will end up like every billionaire we know. Elon, Bill Gates, Zuckerberg, etc. They all started young as CEOs and didn't think twice about stepping on everyone and anyone around them to get the top. Now after years of this you have people that are very powerful and have no idea how the common person lives or how it feels like to work for someone.
It’s still not worth it. If you can get into a well paying BigTech company, save aggressively and let the time value of money be your friend, it statistically will make much more sense to do that.
If that’s what you’re looking for, you weren’t looking to run a start up anyway…
You’re talking about prioritizing a different lifestyle.
Whether the founders are looking for a big pay day or not, unless they are self funded “lifestyle company”, their investors are definitely looking for outsized gains in their portfolio.
I think a lot of them want to be in charge and run their own business / venture with their ideas.
That also doesn’t happen once they start taking outside investors…
Depends.
Outside investors aren’t looking for slow growth companies or those that may one day throw off a little money. If that were the case, they could just invest their money in the stock market and call it day.
On that note: Warren Buffett made a 1 million dollar bet with some hedge fund managers that he could beat their returns just by putting money in an index fund over 10 years - he won the bet.
Minor irritation: That’s not what time value of money means.
It is. It’s better to have made enough to save $300K when you’re 25 and put it in the stock market and let it grow than make $300K when your 50. $300K is worth more when you’re 25 and retiring at 65, than it is when you’re 55.
“The time value of money (TVM) is a financial principle that states that money in the present is worth more than the same amount in the future.”
It’s a subtle point, but it’s backwards.
Money is worth more NOW so you can spend it to acquire skills, resources, and goods. If you wait then you are living life without those things. And delaying early strategic wins.
Passive investing is renting out that optionality to other people, like starting a 401k early.
Money is worth more now because it can be invested and grow in the future instead of getting more money in the future that is worth less because you have to take into account either inflation or what the money could have made even if you are just looking at the risk free returns - ie discounted cash flows
> Money is worth more now because it can be invested and grow in the future
This is circular. Why would money magically get more valuable in the future?
Money is valuable for its uses, not intrinsically.
The reason why you can get interest on money is because people and businesses need it NOW to do productive things, more badly than in the future.
This is the entire principle behind discounting cash flows.
The same amount of money is worth less in the future than it is in the present because it can grow even at a risk free rate.
Yes, I need some of my money now to pay my expenses. But if you had 200K extra to invest in 2010 and chose to invest it and instead chose to work somewhere paying $200K less than you could have thinking I can make $200K more in 14 years. You would have lost out on 605% returns.
Ill repeat:
> Money is valuable for its uses, not intrinsically.
Investing in it’s truest form is consuming money to make entirely new goods and services.
To put it one more way. If the treasury was paying zero percent forever. Would there still be time value of money? Absolutely.
https://www.investopedia.com/terms/t/timevalueofmoney.asp
What do you think you are doing when you “invest” in the stock market?
Yes I know when you buy stocks aside from the IPO or secondary offering you’re buying from other people and the company doesn’t get the money directly.
What do you think the business is doing with your money when you buy stocks and bonds?
They spend it to accomplish a goal. The ability to accomplish that goal now is more valuable than the cash.
Just want to note I appreciate how patient and civil you've been in this discourse.
The culture of HN is certainly still alive
Also a note, it seems wikipedia agrees with investopedia here —- and the equations of TVM include interest rates and compounding.
You have a point on the WHY, but I think TVM may just take that as an assumption.
And?
The value of the money to you or the business is worth more now than 10 years from now. Meaning just like I said, it makes more sense for you as an individual to have made $300K and live off $100K and invest it in 2010 than to wallow in obscurity at failing startups and then start saving at 35.
This is the textbook definition of the time value of money - as quoted from Investopedia.
I have one other way to describe this line of reasoning:
- money is more valuable now because you can start earning interest - but why are others willing to pay interest? - because the money is more valuable to them now
It's totally cool if you want to argue what you're arguing about the value of investing early to unlock long term compounding gains but... don't call it the time value of money. Time value of money means something different than what you're arguing.
https://www.investopedia.com/terms/t/timevalueofmoney.asp
The time value of money (TVM) surmises that money is worth more now than at a future date based on its earning potential. Because money can grow when invested, any delay is a lost opportunity for growth. The time value of money is a core financial principle known as the present discounted value.
I asked ChatGPT to explain why money has time value without referring to making other money (circular).
I think this is a good description which represents my view. Notice that these are true regardless of the existence of central banking:
Opportunity Costs of Waiting: Money available now can be used to address immediate needs or desires—buying goods, accessing services, or achieving goals. If that money is delayed, those opportunities may be lost, diminished, or deferred, reducing its practical utility.
Uncertainty Over Time: The future is uncertain, and there is a risk that the purchasing power or usefulness of money might change due to factors like inflation, changes in circumstances, or unforeseen events. Money available now provides a guarantee of utility that might not exist in the future.
Personal Preference for Timing: People often value immediate access to money because it aligns with their current priorities. For example, having money now could allow someone to travel, invest in education, or address urgent health needs—opportunities that may not hold the same relevance or availability later.
And even if you ask it straight out. It jibes with my definition as well as does the investopedia.
https://chatgpt.com/share/678ee649-6e30-8010-b16b-d152ac228d...
Personally I think it's about perseverance, but mostly with an emphasis on learning and growing. You iterate, you learn and you eventually build up a skillset that is hard to stop even if things don't go your way.
It's not for everyone though. Bar is super high, risk is high, long work weeks with little balance are the entry ticket.
The narrative around startups is so often shaped by the success stories that get the most attention, but those stories are the exception
I agree. Toughing it out usually doesn't pay. I was at a startup from "birth" (first employee and lead engineer) to "death" (acquisition for pennies on the dollar.) The first couple years were exciting, super fun. We built a great team, had an interesting product that solved a niche problem, several early customers. But the business model just didn't work out. It wasn't enough to sustain a real company. The downward spiral began...
What happened to Hacker News man
Always baffled me how little commercial sense HNers had when I was growing up and reading this forum.
It's as if no one taught them -- or they just don't have the sense for it? -- that a startup is just a vehicle to make money. There's nothing special about it. You can make lots of money without a "startup." You can make lots of money doing many different things even without a business entity. It's just an abstraction for linguistic convenience.
My biggest wakeup was finding people much less educated and much less intellectually gifted and much less socioeconmically privileged making a lot more money than what could be considered their betters in more prestigious and, on the surface, well remunerated professions.
If you don't want to make money, don't go into business. Stay at your job and grind a career out. If you have the desire to make money, your senses will naturally sharpen as you use them more to achieve that end. Otherwise, if you go and "build a startup" for any other reason than making money you will fail barring extraneous circumstances.
Baffling that this isn't common sense, really. But my fault. I keep forgetting a professional forum is just a proverbial water cooler, where you get to see a wide mix of people in your profession -- and all the different backgrounds, values, ideas, and ways of seeing the world -- most of which are continuous works in progress that culminate only at death.
Very :+1:
> Always baffled me how little commercial sense HNers had when I was growing up and reading this forum.
How long have you been reading HN? How have you felt the "HNers" w.r.t. nose-for-commerciality (and along whatever other dimension you think is relevant) change over time?
> a startup is just a vehicle to make money
That is what's taught in many start up schools, for good reason. A startup can't ignore money without great luck.
However, it's not actually true. Lots of people start companies to make things better in some way, rather than to make bank. Some of them make bank regardless. Many businesses just tick along, but don't care about 'success' as determined by yacht size/botox per square inch/'status'.
> if you go and "build a startup" for any other reason than making money you will fail barring extraneous circumstances.
The idea that motivating people by money is the only or even best option is a major propaganda point in the class war (and quite silly if you think about it).
>And if you do, quit when the going gets tough. Perseverance does not pay off.
Rare, wise words. (in a world, where 'follow thy dreams' philosophy is venerated).
It’s just not true. Maybe a unicorn yeah. But to create a a decent software business that pays the bills is well within anyone’s reach in this world. And yeah actually perserverance is one of the main keys to success. In most markets there are players making a good income, if you are not there is just something you are missing .
So “anyone” can build a business that nets as much as a “senior” enterprise CRUD developer in a major city in the US? That’s around $150K.
Would you feel the same way if you had effectively infinite money? (e.g. you were Bill Gates' secret daughter he sends a million to each month).
You don't ever have to worry about survivor bias from me. Because I know not to esteem highly those men who believe that family formation and a business enterprise building commitment can both exist at the same time.
Either you devote your entire being to the invasive alien job that is learning how to extract value from civilization's economically receptive citizens or you pack up your bags and head back home on the plane that can depart from the place where great men are selected and trained. Being a startup founder is much, much more intense than some special forces soldier life. You learn better values and habits than some punk that will have peaked at the earning of the title of U.S. Marine, to use a stark contrasting example. Or a black ops Delta Force guy who just has to navigate a huge forest in the dark on the dangerous way back to friendly territory, while the compared startup founder needs to develop an entire science for the navigation of profitable markets that no human has ever seen before, let alone taken advantage of before. A nerd like Richard Feynman can be much more tougher than someone that can do a thousand pushups without stopping and shoot an M4 carbine at a target 900 meters away.
Is Elon Musk even a good example of a successful startup founder or businessman, despite his billionaire status? Logical skepticism says no. And the brainwashing that popular ideology does says yes.
After all, didn't Elon Musk fuck and impregnate some bitches during his rise to a big bank account? He could have been using that time and energy to colonize Mars before this twenty-first century ends. He's not serious about what he says he wants. A terrible role model to look up to.
> But we couldn't figure out a way to procure drivers.
I briefly worked for Grab the company, which was another SE Asia "Uber". Among other things, at one point they procured drivers in Saigon by giving the wives/families free chicken meat. This way, they could prepare the drivers meals to take while they were out on the road all day long.
Kind of a local spin on tech workers free meals.
Of course you're not a failure. You still put food on the table, provide for your loved ones, and have a roof over your head.
You've got battle scars, and stories that are worth their weight in gold. Your experience is probably extremely useful for the right startup.
When going through crazy stuff as a founder, I always thing "this is going to make for a very intersting story some day". Looking back I doubt I'll remember them all and, while keeping things in full throttle, I wonder if I'll ever get to write about anything...
My conclusion is that most interesting stories remain burried and we're lucky to see anythign real (as in true stories) surfacing, because people that are crazy enough to enjoy these pains, hardly have any time to write about them.
Meanwhile we're presented with a somewhat skewed reality that's both less interesting, less real and overly biased towards glamor. The title of a somewhat :) unrelated book keeps popping in my head "Reality is not what it seems".
I wonder if someone like YC or a16z could manage to hire a journalist or anthropologist to make an honest chronicle of what happens at startups and not turn it into a propaganda piece.
Having to explain yourself helps clarify what you’re doing. The time “lost” keeping said person updated might even pay for itself.
+1 on the Gimlet media.
Also reading Scott Belsky's "The messy middle" let me match a lot of my experience.
I tried to read "Eating Glass: The Inner Journey Through Failure and Renewal" but didn't have the energy/stomach.
Re a16z - "The hard thing about hard things" is not bad either.
However I think a frequent series short stories over a large period of time, would make for much better content.
I found the “Startup” podcast to be interesting when they documented real time the founding of Gimlet media, pivoted to other companies and then went back to document their acquisition by Spotify
Related to many interesting/crazy things being lost to history because the observer/actor is too busy to record them, and the things that do get reported consequently not representing reality... (And maybe a little relevant to the somber news events on this Monday.)
Many major religions prohibit making a show of good deeds. You're supposed to do it secretly, so that your intentions are pure.
But other people only see when a good deed is reported, so we're getting a distorted version of reality.
Some of these are reported for good reasons. But the worst form would be what social media kids are bombarded with: things like the clinically oblivious "influencers" who make videos of themselves exploiting a homeless person with a "charity" stunt.
One way to do good, while also letting people be inspired, is to do it anonymously. For example, the donation in a large crowd of them, or the anonymous rich-person's donation to a good cause (not a vanity university department named after yourself!), or any of the countless ways that one person quietly helps someone else.
You'll never know most of the times someone else helped you out, and most of the times you helped out someone else will also never be known. That's OK.
If you ever have the occasion to jump into an icy lake, to save a busload of photogenic schoolchildren and puppies, then you must try to get out of there right after, before anyone's phone dries out. Then the story will be about people simply doing the right thing, even an amazing thing, and fading back into the crowd. It'll be one of the best stories ever.
There’s an old xkcd joke about how some grand problem in information theory has probably been solved on some mundane business task without the author even knowing what they’ve done.
lol - thaught about this so many times in the past two years as I read thousands of papers and realizing that a poor engineer may have to deal with 2-3 discoveries a day without having the time (nor the math background) to deal with their deeper meaning and every time they see the "grand picture" it gets burried in the backlog maybe even stoned as NIH syndrome..
I always find it funny when some FP programmer ridicules others for not understanding monads, when in fact, those riduculed may have more extensive experience using them without knowing they are called monads.
After spending a little more time on both history and philosophy of science, I realized this is generally the rule rather than the exception, across all fields and functions
This one:
https://xkcd.com/664/
(Title text is about some engineer solving P=NP locked up in an eggbeater calibration routine)
Heh “it could be the purpose of your life is to serve as a warning to others” - despair.com
I was thinking just today that Squarespace should contact me and I'll do a commercial for them based on my experiences of creating a webapp and turning it into a business because I was too picky to use a prebuilt CMS etc. I have eight years of nonstop pain and stories to tell.
The right moment to start writing down things you have regretted not to having written down in the past is now.
the thing with startups as founder / founding teams is that most days are actually good stories - so yes, the best way is to write as you go.
the thing is perhaps this is in fact the best way to motivate (or demotivate) the startup craft - you end up learning by drinking from the firehose daily. I believe there are few other types of activities that have such a forcing factor to learn and most are generally some sort of crisis (war, etc.) and so entrepreneurship is likely the least damaging one (at least for everyone else than the team haha)
You’ll recall a surprising number of details if you start trying to write even an outline of stuff down.
Many may not have actually happened, but it’s still worth considering even decades later.
Very entertaining!
I'm always struck by the sheer serendipity of these stories. It appears that everything after Google was possible because of the safety net created by Google's IPO, and the author's time at Google itself ultimately came about because he and Urs hit it off over Lisp and Smalltalk. What would hace happened if the author had been allergic to dogs and had ended up at JPL because of their Fortran skills?
>Failure #5: “One by one, every bank that had initially responded positively changed their minds. Worse, not a single one of them would tell me why.[…] I never got a straight answer from any of the banks about why they changed their minds.”
Is anybody around with enough insight in that business to make an educated guess as to what happened?
Since around the start of the Internet, there has been a steady decline in the number of banks and credit unions in the US. [1] They have mostly consolidated with other financial institutions. The shrinkage seems attributable to customers moving their banking online and no longer depending on tellers, buildings, or geographical location in general.
Most banks are seeing this happening and acting as conservatively as they can. They are avoiding change because they don't want to be the next victim of the financial industry crisis. It's not a shadowy cabal; it's really just the fear of going out of business.
A few key banks, OTOH, are embracing change and innovating. Having strong relationships with them is key to making progress. It takes a very long time; 6 years sounds too short. I'm not sure the startup timeline could ever stomach the length of time it takes to build those relationships.
So my guess is that the author didn't have as strong a relationship as what he actually needed. My company has also worked with enthusiastic executives who turned out not to have as much weight in the company decisions as they hoped.
[1] https://usafacts.org/articles/whats-behind-the-decline-in-us...
> It's not a shadowy cabal; it's really just the fear of going out of business.
Thanks for the insight, I was wondering about this point.
I generally tend to try and attribute what _feels_ like coordinated cabal behaviour to general incompetence or lack of control. This feels like one of those situations.
I've worked around banks and this erratic behaviour is pretty common, and mostly due to short term personal motivations, and lack of coordination rather than an excess of coordination (i.e. collusion - which is not to say that banks aren't guilty on this point, but I think mostly not the case)
Some possibilities
- Bank operators responding to queries have no idea why a decision was made
- Banks rely on algorithms to determine credit worthiness, these are run centrally so a bank manager at a branch may say positive things but the system generates a report independently.
- The algorithms also can raise flags for other risks, such as anti money laundering. The bank will not disclose anything if a flag has been raised as a regulatory requirement.
My bet will be on core banking software provider issues. I think they did try to talk to theirs and got a response like, "We can do it in 5 years, and you will have to pay XXX million to us to do it".
There was a large-ish scandal in the late 2010s when some core banking providers were delaying Zelle integrations for smaller FIs, and they started complaining as customers were demanding it and leaving the larger competitors with it.
Another option can be as simple as this - they fear tech as most don't understand it. When I was working on a corporate charge card startup, my co-founder and I faced this issue many times. The craziest experience was when the bank was ok to be issuing bank for us but requested our clients to go to their branches to sign paperwork (the bank literally has maybe 5 branches in the whole USA).
> Why don't the banks care? Because they treat the cost of fraud as just another cost of doing business, and they pass it along to you, the consumer. And they do it in a diabolical, stealthy way that you don't notice. But that's another story.
Desire to know more intensifies
See https://blog.rongarret.info/2013/02/a-simple-solution-to-cre...
That's actually the start of a multi-part series:
https://blog.rongarret.info/2013/02/a-simple-solution-to-cre...
https://blog.rongarret.info/2013/02/a-simple-solution-to-cre...
https://blog.rongarret.info/2013/02/a-simple-solution-to-cre...
https://blog.rongarret.info/2013/03/cutting-to-chase-repeal-...
https://blog.rongarret.info/2013/03/a-simple-solution-to-cre...
Keep in mind all that was written twelve years ago and the world has changed a lot since then.
> So why hasn't it been done?
The answer is simpler: it's not that big of a problem to the people that would need to solve it (visa, banks)
Yes, it' billions of dollars per year, but that's on a denominator of trillions.
> In 2022, global payment card transaction volume surpassed $40 trillion, with the U.S. accounting for over $9.5 trillion 1 . If we consider the $5 billion in unauthorized purchases reported by Security.org 2 , the percentage of fraudulent transactions in the U.S. would be approximately 0.05%.
1 - https://docs.google.com/document/d/1tudQcmL8lNH49iZZ8wRB88KW...
> it's not that big of a problem to the people that would need to solve it
That's not wrong, but it misses the point. It's not worth the bank's time to solve it, but for me it would produce a pretty damn good ROI. All I needed was one entry point into the system, but I couldn't find it.
why is this surprising? If they didn't pass the cost of fraud along, they'd all go out of business.
The interchange rate on credit cards is high, but "diabolical" is a stretch.
Also, fraud is a very small line item in a credit card P&L. Generally 25bps to 50bps vs credit charge offs which are closer to 3% to 6%.
Source: Ran risk for Bank of America and a credit card fintech.
In the past, my knee-jerk reaction would have been "Yes, exactly!" Then I heard patio11's podcast on debanking[1]. It gave me some interesting views into fraud and compliance and $STUFF. Highly recommended.
[1] https://www.complexsystemspodcast.com/episodes/debanking-pat...
It's been a while since I read this article, but I remembered the title and it seems to imply that it is relevant
https://www.bitsaboutmoney.com/archive/optimal-amount-of-fra...
It's interesting how at least several of the failures were good ideas with bad timing/execution that others have replicated successfully.
iCab: Uber obviously was very successful with this ~same premise
Smart Charter: I assume you can easily book a private jet online now?
Founder's Forge: linking record-keeping and payment is what makes Ramp great; 10 years of fintech innovations made executing this much easier
Spark Innovations: this is basically the premise of Airtable
As they say: ideas are easy, execution is everything.
ideas are cheap. everyone has them. building a succesful business out of ideas is hard. really hard.
It’s honestly both. A good idea that’s actually feasible and has some kind of moat is extremely hard to come by.
Most things that are new but not working can be solved by "I should try this again later" after the landscape has changed a little, whether that's supporting technologies, how receptive your market is, if your market even exists yet.
That was a good read. What impressive perseverance, and also a positive outlook. But, reading it made my FOMO worse. I guess one has to experience it fully to apply it. Or maybe not.
I quit my job a year ago to pursue my own ideas. Like the author, I had made some money from a IPO. The post-IPO environment with heavy bureaucracy killed the vibe and I quit. Note that it wasn’t a Google tier company, but I made enough money that I could take a risk for some years without income.
For me it has only been a year. But I feel like a huge loser at times. In no scenario will I give up until I’m utterly defeated or captured the castle - I’m not a quitter. But this feeling gnaws at my soul.
I have failed to find a co-founder. Most of my friends are not interested in startups. So, I have had to look elsewhere. Between people who screwed me over equity, people who didn’t want to do the work, and my own imposter syndrome (I’m from a low ranked state college, and people I meet in SF are elites), I feel horrible and alone. I tried and even successfully built some projects over the past year, but ultimately nothing worked out.
Now, I’ve decided screw it. All the advice about sell first and get a co-founder - sounds great on paper. And I have some doubts around that whole belief but that’s not important.
I know actual pain points I’ve faced in my decade long career. I’ve done both highly technical and highly functional work. I’ve talked to enough people and validated my idea. I wish this thing existed and that I’d worked on it sooner instead of trying something different with randoms.
So, I’m just going to go and build it. I like building things, and I’ve gotten enough recommendations and performance reviews that point out that I’m good at delivering value for the customer and making sure my team succeeds.
So I’m building a product. I am able to dogfood my own product as I build it which is great. It’s a somewhat complex, b2b AI enterprise product, and having built multi-billion dollar enterprise software and delivered multiple multi-million dollar implementation projects, I feel that there is really no rush. Most enterprise software and organization processes are awful and not well engineered nor well thought out.
If this fails, whatever. I tried. If it works, amazing. I like building good things and have a track record of doing so, albeit for others.
But I fear I will keep feeling like a failure until it is successful. On the other hand, it would be very cool to build a solo founded enterprise product and deliver actual success.
Anyway, thought I’d share my thoughts it feels good to type it out. Thanks to the author of the article for sharing.
The one thing I have learned on my journey through 6-7 startups is never start something without a sales person onboard. When we do we end up building something interesting with no customers. I am sure you can be your own sales person, but I don’t have it in me to do both.
Agree on the sales! Definitely need to do it.
I did hundreds of cold calls for someone else. Honestly the most intimidating thing I've done but ended up learning to enjoy it.
I also enjoyed meeting our customers at our conference at previous job and it was a fun experience talking to people and showing off what we'd been working on or understanding what we could improve.
I am not an extroverted person, so it definitely does not come naturally to me - I'm suppressing butterflies if I'm being completely honest.
You're definitely not a failure, but maybe startups aren't your thing. There's no shame in that. I know I would never be able to start my own startup. You tried 6 times and every time it has failed, and it's clear that things like living close to the beach is a very high priority for you (I wish I could pull that off). Maybe it's just the universe telling you to get a good paying job and give your family some stability until you retire?
To everybody reading this and having doubts about starting your own venture: DO IT!
Yes it's a lot of risk, yes most startups fail, and yes you could make more money at FANG. However, this is one of the most exciting times to build a startup, thanks to AI.
The big winners of the all the AI advancements (especially OS) are devs and AI startups:
- No more vendor lock-in
- Instead of just wrapping proprietary API endpoints, developers can now integrate AI deeply into their products in a very cost-effective and performant way
- Price race to the bottom with near-instant LLM responses at very low prices are on the horizon
It's as if your product automatically becomes better, cheaper, and more scalable with every major AI advancement. This leads to a powerful flywheel effect: AI improves product -> better product attracts more users -> users generate more data
Besides the product perspective, AI also allows you to operate your startup a lot more efficiently.
Will we see a single-person unicorn soon? Very likely not.
Will we see very successful small and bootstrapped startups? Yes, already the case.
And, even if it doesn't work out, at least we made the AI vendors a little more money.
What a fun read. I hope you'll try again!
“If at first you don't succeed, try, try again. Then quit. No use being a damn fool about it.” ― W.C. Fields
> What a fun read.
Thanks!
> I hope you'll try again!
Thanks for the encouragement, but I just turned 60. Running a company is too demanding for me to try it again. My ambition now is to be a writer and find an audience that wants learn the easy way things that I had to learn the hard way.
Hey Ron. I've enjoyed following your blogging since we crossed paths 20 years ago at Indiebuyer/Zerolag. I'm happy to hear you're doing well, and wish you the best for the next 20 years.
Thanks! I miss ZeroLag. You guys were the best.
Despair.com poster:
Quitters never win. Winners never quit. People who never win and never quit are stupid.
Winston Churchill's words, “Success consists of going from failure to failure without loss of enthusiasm.”
Mostly very insightful article, except for one thing: the reference to the early 1990s recession as ‘the first Bush recession.’ Ancient peoples would sacrifice their kings when there was a drought or a bad harvest, and we are not much better. Presidents do not actually control the economy, and neither do governments in general. Granted, they have more effect on the economy than ancient kings did upon the weather. Still, economic cycles move mostly on their own.
And of course that 1990s recession ended in March 1991, in roughly the middle of Mr. Bush’s term (he left office in late January 1993): one might just as well refer to ‘the first Bush recovery.’ Neither moniker is really accurate: ‘early 1990s recession’ is best.
Very interesting story. Especially the bit about impostor syndrome.. to most people he had already secured enough skills and experience for a lifetime of confidence.. but turns out we all have our own measure of skills and success.
Thanks for sharing
Author here. AMA.
there seems to be a common theme around not believing in the idea/product/people too deeply, thus leading to faulty or mis-step execution. would it be right to say that? a contrast to others who are not a "failure"?
mad respect to you for being open. thanks for sharing.
I had the same question reading this. Ron, which was the idea you had highest conviction in?
Smart Charter. I think that might still be a viable business even today, though I have not really kept up with the industry so I don't know.
Ironically, today I have a part-time consulting gig at a company designing network switches, and I see them wrestling with the exact same problems we were tackling 30 years ago. So FlowNet would be a very close second.
I personally know of one ongoing effort whose founders think it's very much still viable. Well done uncovering and acting on it back in the day, Ron. Too bad about the outcome. I'm grateful you spent the time to write these stories. Thank you as well for being a public champion of lisp, for which I owe a great deal of my own undeserved success.
> I personally know of one ongoing effort whose founders think it's very much still viable.
Link?
>> Smart Charter. I think that might still be a viable business even today,
I'm less convinced. Although to be fair, I'm really not the target market.
I think the root fail of this kind of business is that it's a Venn diagram of two circles, with very tiny overlap.
Firstly, flying commercial is "simple". You want to go from A to B at some point in the future. You want to buy a ticket, show up, and fly.
Sure, I get the TSA crap and so on, but it's fundamentally reliable. Not to mention cheap.
Private travel bypasses TSA, and sure there's glamor, and a bigger seat. But unreliable is built in also.
Or put another way, the jet owner goes wherever and whenever they like. The pay a lot for perfect convenience. But it makes that "empty return leg" unreliable. And of course, the further ahead you plan, the less reliable it is.
So there's one circle of people who can afford their own (whole or partial) jet. There's one circle who just want reliable A to B.
What you're left with is people who have enough to make it a business, but not enough to charter a plane themselves.
So your market are price insensitive enough to be preparedto pay more, but also don't really plan their travel, or don't need to travel reliably. Which just seems like a vanishingly small group.
In other words, what you are selling is worse than commercial (planing and reliability) coupled with worse than private (no control over where or when).
Which leaves such a tiny sliver of a market, where brokers practically outnumber customers.
> the jet owner goes wherever and whenever they like
You'd think that, but it turns out not to be true. There are a lot of constraints even on the owner: weather, mechanical failure, crew members getting sick. And it's even worse for them because when something goes wrong it can be a lot harder to recover. When you're flying commercial, or even chartering, the worst-case scenario is a delay.
The only real benefit to owning a plane is that you can keep some of your stuff on board.
> a tiny sliver of a market, where brokers practically outnumber customers.
It depends. If you measure the market size in terms of customers that's probably true. If you measure it in terms of dollars, it's not. It's a question of: all else being equal, would you rather pay less than more? Most people say yes no matter how fundamentally price-insensitive they are.
solve problem people care about, and charge from day 1
> there seems to be a common theme around not believing in the idea/product/people too deeply, thus leading to faulty or mis-step execution. would it be right to say that?
Not sure whether you're asking whether that sentiment exists or if it's correct. But either way, there's no easy answer to that. If you don't believe that's not helpful, but on the other hand, if your beliefs don't align with reality that's not helpful either. It's possible to succeed without strong convictions, and it's possible to succeed with convictions that don't align with reality, but if you have to choose one or the other, believing in yourself is a better than believing in reality if your goal is material success. (Look at Donald Trump.)
I encourage you to expand on "In the real world, research is not a Platonic quest for objective truth" maybe by writing another article or linking what others wrote on a similar subject.
This is an incredibly common pitfall that people fall into time and again. Hell, even I am getting these vibes with all that recent hype about deep learning - despite I am no stranger to academia (in another area and some years back).
I don't know that I have all that much to say about it. Research is (at least to date) a human activity and so it is necessarily beset with human foibles. It requires resources, so it necessarily involves economics, which necessarily involves politics. It's not rocket science. Anyone who thinks about it for even a moment can figure this out without my help.
> recent hype about deep learning
Does anyone really look at contemporary AI as a Platonic quest for objective truth? It seems to me that there is pretty widespread clarity about the fact that this is mostly a commercial endeavor. If you want to talk about Platonic quests for objective truth we should talk about, say, mathematics or fundamental physics.
> Does anyone really look at contemporary AI as a Platonic quest for objective truth?
I realize I have a tendency to romanticize some of the papers I read even if I fully understand intellectually it is a wrong thing to do. Probably I should try concsiously train myself not to do it or something along these lines.
My experience tells me if I have a question or an issue it's very unlikely to be unique to myself. And (re-)reading an honest or even cynical account about something typically helps e.g. ribbonfarm on corporate hierarchies/politics.
BTW I really enjoyed your recent open letter
https://blog.rongarret.info/2025/01/an-open-letter-to-democr...
Thanks!
I'd be pretty curious to get patio11's opinion on why #5 happened.
The last startup was based on a great idea, with obviously high potential (see airtable). So why did you stop following that idea so early?
Because I'm not a bizdev guy, so when my partner, who was the bizdev guy, had to quit, and we had no customers, the odds of success seemed too low for me to deem it worth the effort to continue.
How does someone just end up hanging out around the local VC office? Did you know someone that worked there?
When you suddenly have a big financial windfall, all kinds of people crawl out of the woodwork and find you. One of those people introduced me to this VC. And BTW, I ended up losing well over a million dollars through him. It turned out that he was more of a VC wannabe than a real VC. He had never actually raised a real VC fund. He had just made some money of his own and used it to get himself a fancy office on the Third Street Promenade, and then he used that to get a few rich suckers (including me) to write him some checks. He wasn't a fraud -- all of the investments were legit. He just didn't have good deal flow because he didn't have the right connections. He was hewing to the fake-it-till-you-make-it philosophy. But he never made it.
Did you buy any Bitcoin for long term investment?
No. That's another long story. I think bitcoin is basically a scam. (That's another essay I should probably write.)
This is not to say you can't make money at it. People make money on scams all the time. One might argue that it's a foundational element of the American economy. But when it comes to bitcoin, I understand the technology and its attendant risks too well for me to want to play that game.
What makes Bitcoin a scam?
https://blog.rongarret.info/2023/04/a-systematic-critique-of...
At the risk of digressing - do you think there's a baby in that bathwater?
I agree completely that BTC is basically a scam at this point, as are most of the top coins by market cap.
However, there are a few interesting cryptocurrency projects out there which are quietly getting better and better (ie, Nano). Do you have any interest in the potential of the field, or has BTC soured you on the whole thing?
> do you think there's a baby in that bathwater?
That's a very hard question to answer because it depends on what you consider "that bathwater." I think using digital signatures is a win. But mining is a BIG lose IMHO. It is vastly better in every possible respect to rely on trusted third-parties. Even with bitcoin most people rely on TTPs because managing your own keys is fraught with all manner of peril.
> However, there are a few interesting cryptocurrency projects out there which are quietly getting better and better (ie, Nano). Do you have any interest in the potential of the field, or has BTC soured you on the whole thing?
I don't know anything about Nano. But the fact of the matter is that BTC is pretty much synonymous with crypto nowadays, and everything else (AFAICT) is riding on its coattails. No one would be taking any of it seriously if not for the fact that 1 BTC fetches USD100k or whatever it is nowadays.
> In the real world, research is not a Platonic quest for objective truth. It is, first and foremost, a human endeavor, deeply intertwined with human ambitions and foibles, including my own.
Such a painful thing to realize, this is also the reason why I never attempted to do a PhD.
Those with no failures never tried. Now I'm the complete opposite of someone who would usually say that but I believe it to be true. Failure at things is ok, it's just part of doing stuff. Just like death is an outcome of life. Anyone who tells you they have never failed either hasn't ever tried anything or is a liar and protecting their ego. It's ok to admit you made mistakes or failed or that you don't know something.
I thought this was a very powerful meta learning, something that abstracts across all the experiences.
> And I think my current happiness stems mainly from the fact that I like the person I've become, someone who can fail again and again and again and again and still find a way, for the most part, to be happy.
Curious if you have any other learnings that are less specific to a particular endeavour but hold tru/derive from your experiences across all of them
It’s important to think not in terms of success or failure, but in terms of philosophy and mistakes. If you’re focused on the outcome there isn’t much you can improve on, the reasons for failure are many. Mistakes on the other hand stem from flaws in your philosophy, which you can readily revise. In a lot of the cases presented here, the mistake that stands out is working with the wrong people.
Multiple "diabolical" (his word, not mine) plans to fool people about what the business really is (an attempt to get in the door with one pitch, then pivot to the real plan and steal their lunch) did not work out. Sorry about that, but putting out this post won't help this guy execute on similar plans in the future.
I'm genuinely curious as to what gave you the impression that he intends to try again. I read this as a brief little memoir of a man who has since moved on to bigger and better things.
What are you talking about? I don't see any deceptive companies. Most didn't get to the point of having customers to deceive.
Startups changing their plan is normal and expected. The investors have board seats and leverage if they don't like the pivot.
That's just business. I can't think of any business that's not set out to displace some other business, whether by competition or simply elimination.
Competition is fine. Deception, though, is more problematic, and if multiple pitches depend on it (like market a service to brokers to get their info but don't tell them the plan is to eliminate their jobs), people will be on to you if you aren't a very good sociopath. Perhaps look for more win/win opportunities.
-I failed six startups attempts, (btw I'm multi-millionaire)
Americans are weird :)
If he didn't say or imply that, his advice would be discounted as that of a (probable) loser.
I suppose a truer test of character would have been if I had not had one big win fall into my lap that offset all the non-wins. But one of the messages I was hoping to convey is that one's life trajectory includes a lot of randomness. The best you can hope to do through volitional action is slightly tilt the odds in your favor. But that might be enough.
One point in your story that I think is worthy of kudos is that you left Google. I’m not sure how certain the riches were at that point, but presumably you could have chosen to just ride that wave longer. That’s a really hard thing to do.
Thanks, but my motives for leaving were a lot less kudo-worthy than you might think. When I left in October 2001, success was far from certain. If I knew then what I know now I probably would have stayed, and I probably would have put a lot more effort into climbing the (very steep!) learning curve.
Gotta build stuff bro
Thanks for writing this, I enjoyed every one of these. Something that jumped out at me from these attempts is the lesson that when you want to take on an entrenched business model, you need to do it in a way that isn’t directly at odds with the existing model. Secondly, you seemed to learn that and apply it brilliantly. I would love to know what went on behind the scenes of those banks deciding to pull the pin on your idea for startup forge.
I learned one of the most important lessons from six (and a half) failed startup attempts:
Brilliant ideas are not enough. You also need a brilliant mindset, vision and execution. And the help of a sensible co-founder if needed along the way.
Do people that create startups have debt in their own name after the startups fail? Or does the debt go down with the company and does the founder walk away debt free?
Depends on how you set up the company. Usually most startups are done with a limited liability company which usually causes the debt to go down with the company while keeping your personal finances safe.
https://en.wikipedia.org/wiki/Limited_liability_company
> The owners of the LLC, called members, are protected from some or all liability for acts and debts of the LLC, depending on state shield laws.
But to start a company you need some cash injection, that can come from your personal finances. Now you could get a personal loan to then inject into your company, which would make you personally liable for said loan. Personal loans are easier to get than company loans (because you can't default on them as easily), but I never heard anyone do that.
Usually you are only personally liable if you commit some sort of crime like fraud.
Great article. We hear so much about the unicorns of the world that we sometimes forget about the countless other failed ventures. In these cases, it doesn't mean that the idea was bad, or that the founders weren't good enough. Sometimes it's just that luck wasn't on-side.
The difference between a failure and a success when starting a business is if you can afford (monetarily) to fail. if you can afford it just keep failing till something sticks. If you're not well off, well, too bad.
> if you can afford it just keep failing till something sticks.
In the sense that infinite monkeys will eventually put out Shakespeare. In reality, money and time are both limited ;-)
They may be limited, but most folks can't even afford to enter the startup founder game to begin with.
Isn’t that the whole idea of a business? To make money.
(Sounds like I’m kidding but I’m not really. Many of the richest people were very poor at some point. For example, Andrew Carnegie or Levi Strauss. Also Arnold Schwarzenegger started from nothing in the US.)
The point being made though is that business success is greatly influenced by existing wealth, since it gives you the luxury of being able to absorb the costs and risks involved. People like to give a few rare exceptions to the rule as somehow evidence that this isn't true.
The best analogy I've seen is that starting a business is like playing a game at a carnival. The more tickets you buy, the more attempts you have to win the prize. Meanwhile most folks are the carnival workers, never being able to get a chance to play the game in the first place.
I can also make the counterargument that people who grew up in hardship are more likely to become relentless businessmen. Most of the top richest people in America are immigrants.
Most people don’t start a business because they tell themselves that it won’t work. It’s the hard truth that most people don’t want to hear.
If you read about most founders they don’t become rich due to luck or background or whatever. No most of the time they set themselves a goal and then do EVERYTHING to get there. They don’t care whether their parents had money or not. Or whether the market timing is right. They just do whatever they need to do.
Damn it was that easy to obviate financial obligations? Guess the bank also won't care if we stop paying our mortgages?
To give credit to your position, over in Europe they've a generous welfare state yet very few successful startups so there's definitely a huge grindset factor but you're still cashing in on incredible luck or a comfortable economic position to be able to try enough times to score.
This is why the standard issue techbro advice from semi-wealthy "hustlers" who failed upwards on the backs of a few H1B 'founding' engineers is not actionable, I can at least respect the ones who don't bother with the facade.
> Most of the top richest people in America are immigrants.
....because there isn't enough wealth where they're from to absorb a lot of failures.
Hence they come to the land of opportunity where there are gamblers with money to gamble.
Many of the richest people also come from places where they COULD afford to fail. Let's be honest, looking at patterns to become wildly wealthy is all survivorship bias, although, if you're well off to begin with, you're more likely to actually survive, and that makes you more willing to give it a shot.
There are a lot more people with the idea of making money than there are people making money.
Also, there are a lot more poor people than startup founders.
Hm, there must be more to it.
Genuine question: what role did testosterone (added) play in Schwarzenegger’s outsized ambition?
why go all in at first?
Damn, one year at google and the author was basically set for life.
Thanks for the interesting read! How did you support yourself through all of the failed startups?
I’d say what actually made his ventures fail is his Google shares.
Having a fallback scenario doesn’t allow for the complete focus and ruthlessness to succeed at company building.
Weirdly I know the SVP Eng at that Virgin charter company.
The great thing about this article is that they talk about startups dying before they even really start …
I think this is the common case that’s never talked about.
There are many reasons to do a startup, but people should only call it a business when the goal is either a tax deduction mitigation and or rapid entry into profit traction.
1. Don't use some clever or hard to remember name with a weird spelling. While easier to Trademark, the users and customers won't differentiate your site from the sea of attention grabbing garbage.
2. If people have zero paying customers, and zero revenue... than the hard fact is they were never in business, and should have founded a nonprofit instead (common for opensource support service entities.)
3. Often copyright and patents are infeasible for small business, and people simply can't build or defend things like a large firm. Thus, initially design products/services to last maybe a year or simply be disposable... When 270 desperate cloners show up to dilute the market sector... people quickly understand why they can't rely on Android, Steam, or Apple ecosystems to protect their bottom line.
4. There is zero loyalty without treasure. The only people that care if your firm goes into the red is you, and maybe the small-time shareholders. Most people can't take the constant adversarial posture with problematic staff, opinionated shareholders, and high-demand customers. Everyone thinks a CEO is lame till you become a CEO for a year or two... Every conversation from that point on is about money or marketing, and most people keen on building things tend to burn out of the role eventually due to social isolation.
5. No company lasts forever, if the operation is a projected liability it is your job to respond accordingly. Even if that means executing an exit strategy, and firing the entire problematic division.
6. Ask business people about their memorable experiences, and not about their money source. The superficial apparent function of a business is usually very different from the actual revenue model.
Best of luck, =3
> ...even a long string of failures in specific endeavors doesn't necessarily translate to failure in life.
I needed to hear that!
One of the failures is selling a business to Richard Branson for $10 million.
> Spark Innovations
As I understand it, the competitor in this space is Anaplan.
There is one other way in which you are not a failure, and I am sure that I am not alone in thinking about it: I have been reading your words for 15 years, from the time I was a baby CS major. That's really true, e.g., here[1] is a comment from 11 years ago where I mentioned that a lisp you wrote for the Apple //e informed a lisp for the Apple //e that I wrote.
Especially in my college years (2009-2013, ish), the world seemed smaller, and to me, a lot of what you wrote was like looking through a keyhole into the real world. Grown-ups can apparently write lisp at JPL[2]! Google was chaotic[3][4][5][6] to work in 2000, especially if you commuted from Burbank. A name change[7]. And, variously, surveillance, more lisp stuff, etc. Now I'm an adult and I still haven't professionally written lisp, but I'm glad to have read about it anyway.
Anyway, it might surprise you to learn that when I think of your writing, though, I think of your HN comments first. There is a kind of influence that you can only get with a steady, unthanked build-up of seemingly-small contributions over a long period of time. In the right place they compound. I probably cite you to other engineers once a month or so.
[1]: https://news.ycombinator.com/item?id=6199857#6200414 [2]: https://flownet.com/gat/jpl-lisp.html [3]: https://web.archive.org/web/20080212170839/https://xooglers.... [4]: https://web.archive.org/web/20090408003924/http://xooglers.b... [5]: https://web.archive.org/web/20090408013612/http://xooglers.b... [6]: https://web.archive.org/web/20090408003913/http://xooglers.b... [7]: https://flownet.com/ron/eg-rg-faq.html
> To this day I'm pretty sure that plan would have worked if we had actually executed it. It was a brilliant plan if I do say so myself. In fact, it was so brilliant that it convinced Richard Branson to acquire the company before we launched for $10M. We started the company as Smart Charter, but we launched as Virgin Charter.
It's noteworthy that he's portraying selling before launch as a failure, and while ultimately the acquirer didn't follow his vision and the business didn't pan out (and perhaps the author never even got to liquidate his shares), it's still arguably more of a success than Loopt (raised $39M, sold for $43.4M), which Sam Altman and his backers had no reservations about portraying as a huge success that springboarded him to YC president and later to AI kingmaker.
You only fail when you don't learn from your mistakes.
seems his problem is mainly marketing and finding product market fit. I suffer from the same syndrome
you can be a failure depending the time interval used.
building a business is much more than having a great idea. Its a different skill by itself. Skills PhD's don't prepare you for.
This author has never seen failure. Well, their only glaring failure is their lack of self-awareness.
Also remember that your fail state might be someone else’s success state. Like being part of an IPO that lets you spend the majority of the rest of your career working in your own ideas.
So few…..
lol - are we going to see a larger echo post? :)
That would take some courage.
(n+1)th time’s the charm
Failure here too I guess but my downfall per my experiences in dealing with many who made it to the biggest names in tech is my morality. I can't lie/cheat/steamroll over ppl to get to the top.
With 6 failures and no successes I don't want to k ow what they think, its like some kind brain virus.
I've heard from top investors that the best companies usually get immediate and rapid traction. Sometimes theres a figma story where it takes a while, but thats usually BS. Generally either the product is right, or its not, and you know very quickly.
They usually dont want to tell founders this, they want them to struggle through in the off chance it works
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How are any of these not failures?
The author is saying that he is not a failure, despite his business ventures failing.
Consider the only thing he mentioned as part of his priority stack is wanting to have a successful startup, how is he not a failure?
Every negative and uninsightful comment in this thread is coming from the same person
It’s not “insightful” because I don’t drink the “startup” think happy thoughts kool aid?
I assume the purpose of the startup is to make money and hopefully make more than the alternative of just getting a job.
If my priority stack is “be a successful founder” over all else and I fail at doing so, how am I not a failure based on my own criteria?
Nobody is asking you to drink kool aid.
In this thread are numerous nuanced disagreements with people sharing pros and cons of difficult life choices they made. I would suggest reading and reconciling these comments with your own life experience and values, in the best possible faith.
If you have zero interest in startups. These threads and this forum might not be of interest to you.
> If you have zero interest in startups. These threads and this forum might not be of interest to you.
Looking at the 30 submissions on the front page of HN right now, only 2 are related to startups. This one and a submissions by YC itself…
> Growing up, I had two major life ambitions: to become a tenured university professor, and to found a successful startup company.
why the hell those two?
I eventually - into my thirties- worked out that i wanted to be a good computer programmer, and a good photographer. managed the first, but not the tatter - two bored.
What I mean, is why did you have those ambitions growing up. I don't think most normal young people really can't think what they want to do until later in their lives.
> why the hell those two?
Good question. I could probably write an entire essay about that but the TL;DR is that I thought that tenure and financial independence were the roads to freedom, which is what I really wanted. I also really liked (and still do) the college vibe, being surrounded by interesting people thinking and talking about interesting and weird stuff.
I do hope you write the entire entire essay.
Guess my question is did you have any plans what to do with that freedom? Or did the vision just stop with freedom?
Must be I was less ambitious than you. I too started out with goal of tenure and financial independence. 3 years in on tenure track I figured it was easier just to get financial independence and give myself tenure than to play someone's game.
One I reached financial independence (probably a much lower threshold than your), I didn't have any trouble find trouble finding things to fill my days with fulfilling activities that I had long put off. Always fun stuff to learn.
So interested to learn if it was that you still had something you felt you had to prove? Just plan inertia?
Can really put my finger on it, but what if in "I am (not) a failure" essay in addition "Lesson Learned" for each attempt, you had a "Joy Experienced" (perhaps too corny) section as well.
> did you have any plans what to do with that freedom?
Yes. I was going to solve really hard problems without any pointy-haired bosses standing in my way. I was specifically going to solve AI.
> So interested to learn if it was that you still had something you felt you had to prove?
It started out that way, but now I've ended up feeling like I gave it my best shot, and so I failed because I discovered my own limitations rather than any external circumstances (with the notable exception of Smart Charter). And I'm OK with that.
> what if ... you had a "Joy Experienced" (perhaps too corny) section as well.
What I find has given me the biggest dopamine rush over the years is getting something to work, especially after beating on it for a long time. And that includes small wins like fixing a bug in personal code that no one is ever going to see, or fixing something around the house, or getting something I've written on the front page of HN and seeing it well-received. The best way I can think of to characterize it is that I like to feel useful. I don't think I'm alone in that.
> why the hell those two?
I would guess to be free to pursue interesting ideas, and then make money off them.
why tenured? (I can't be sacked?). why startup? (well, why at all, but also cannot easily be sacked, should the startup actually work).
just my opinion, and not to badmouth, but this sounds like a somewhat insecure person.
It's just a success metric + an activity
Tenured (metric) + professor (activity).
He defined his, same as you did:
Good (metric) + programmer (activity)
The activity is just what people find interesting and the metric is what you strive toward. Imposing the idea that the only reason you pursue originality is so that they can't get sacked is a very wild take.
That's a weird take, he's talking about youthful ambitions. Tenured professor is a pretty standard bar for academic success, and startup us shorthand for building a scalable tech company from scratch. These seem like perfectly cromulent ambitions to me, not sure how insecurity enters into it or why I would care if it did.