Maybe Ive read too many blogs. Maybe its because I watched the class but Im starting to feel like this is the "generic" advice for startups. It doesn't make it any less true or valuable, but everytime I read it I feel somewhat empty; as if there is something critical missing that everyone but me knows but doesn't write down because it feels like common sense. I'm not sure other people feel this way or how to not feel this way. It seems really obvious, almost too obvious that you should work really hard on ideas that other people want. Maybe thats all there is too it; It just feels hollow.
that really is all there is to it. if you've read enough that all of this strikes you as obvious, then you don't need to read anymore--get to work! :)
i wrote this because i think it's useful for people thinking about startups for the first time to have an outline of the advice all in one place--the startup class i did last fall is good but long.
My problem with this isn't that the advice is obvious, but rather obvious _only in hindsight_:
"The best startup ideas are the ones that seem like bad ideas but are good ideas.",
"the fast-growing market is going to be important but others dismiss it as unimportant"
these aren't obvious at all before they happen, not just for first-time startup people but everyone.
Exactly. One could easily come up with a corollary: "The worst startup ideas are the ones that seem like bad ideas and really are." Which is a truism that probably applies to most startup ideas.
""The worst startup ideas are the ones that seem like bad ideas and really are."
Based on the original thought "The best startup ideas are the ones that seem like bad ideas but are good ideas."
That one for sure is culled from a list of outsized successes (because they didn't make sense or had a large amount of barriers to success) but doesn't provide balance in the sense that bad ideas are more typically bad ideas. VC's like to hide behind this type of thinking often but they get around it by making bets on many companies whereas the person starting their own company has more of a reason to worry about the downside of a stupid idea.
I don't think for a second that it makes any sense that "best startup ideas are ones that seem like bad ideas but are good ideas".
Facebook wasn't a bad idea
Linkedin wasn't a bad idea
Amazon wasn't a bad idea (selling books to start)
So how do you define "bad idea"?
Is airbnb a bad idea because "who would want to rent out their apartment to strangers"? Or is it a bad idea because "you will never get regulatory clearance" (ditto for Uber).
Facebook was a bad idea because MySpace had already won.
LinkedIn was a mediocre idea b/c it would be very difficult to get enough user adoption to be valuable.
Amazon was a mediocre idea b/c people want to go to a bookstore and look at a book before they buy it (usually). Also, that business has no moat (anyone could sell books online).
You're right though - ideas that seem bad are more typically bad ideas. I still think Twitter is a bad idea. :-P
Really the corollary to this is that all the obviously good ideas are already being executed by huge corporations with massive resources and its very hard to compete when you are severely outgunned.
Also, it seems like it's important to have an understanding of the domain that is somewhat counterintuitive and contradicts the common understanding that people have about it.
Also, be lucky. Your "understanding" might be insanity.
1) The public, reading about the idea doesn't know the full idea or the future plans.
2) The bad idea can allow a pivot into a good idea, once you have money and resources.
3) Impossible to predict the future and what will happen. Twitter is a good example of this (celebrity mention, mainstream media mention, civil uprisings, etc.)
IMHO, the worst startup ideas are the ones that seem like GOOD ideas, but turn out to be bad. A horrible idea that's clearly bad will never go anywhere. Ideas that seem good end up getting funded, offices are rented, people are hired...
Would you agree that it's simultaneously simple and horribly challenging to start a company? It's more about consistency and determination, than it is strokes of brilliance. In that way, I think this advice is obvious but it's much easier said than done to run your own business.
Absolutely. A few years ago, someone gave me some great advice about marriage: doing the right thing is always simple but that doesn't mean it's easy. That applies to a lot of things. Simple, but not easy.
Thanks for such a concise summary. I've also read this stuff enough times that it's nothing new but having it in one place gives a founder peace of mind. I think we're all resourceful enough to have heard each piece separately & can recognize the applications and misapplications in past startups. What this accomplishes is keeping everything top of mind before making these same mistakes too many times.
P.S. One thing people should note is the gold here regarding the non-technical side of building a product/starting a business.
I started to get the same sense, and remembering a couple of the following things have helped me keep my bearings:
-Startup advice, especially from this corner of the world, applies to a very specific way of creating a software company through venture capital, and subsequently, aggressive growth. It is also built to take advantage of a highly optimistic financial environment that, to me, seems to be temporary (look at VC's performance as an asset class).
-The main purveyors of "startup canon", if you will, just so happen to directly benefit from more people taking their advice and entering the startup pool. In the most jaded view, Graham and the like's advice/essays/mantras are propaganda that, if more people listen to, directly improves their portfolio. I don't go quite that far as a lot of the advice is sensible and experience based, but it's really important to remember that their advice isn't philanthropic.
-Finally, startups are just businesses. The entrance of venture capital into the equation suspends the normal rules of business for a while, but eventually they do return. And while the way software allows people/companies with little to no capital attack large markets is unique, I feel like a lot of founders would do well to broaden their perspective beyond the relatively brief history of silicon valley when looking for insight on guiding their businesses.
I definitely believe there are more cynical motives in SV than many wish to believe. There's a reason VCs and incubators overwhelmingly target naive college kids. Most of their programs are structured such that any participation by less-naive persons is impractical.
The VC line on this is simply that "college kids are just super innovative, pure, unadultered". Ignoring the fact that this is basically an optimistic list of synonyms for "naive", if you believe that line of horse hockey you are likely one of the naive college kids being taken advantage of (or wish you were).
It's a real shame because startups could benefit greatly from the mature leadership available out in big bad "corporate America". Not talking multi-million dollar CEOs here, just regular experienced folks who have mortgages and families to support because they're older than 20 and would like at least a market-competitive salary.
Instead, VC firms hoard this maturity and experience for themselves, and leave their founders locked in apartments, surviving off a stipend that has room only for ramen to the exclusion of both fair treatment and personal dignity.
There is undoubtedly an insidious element in this. There's no way experienced investors are looking at these companies and sincerely saying "Oh yeah, those two 23-year-olds definitely have a handle on this."
The simple truth is that for many investors, it's an entertaining, [relatively] cheap, and profitable lottery. And they want to keep it cheap.
It's encouraging that others also see this. I don't know what workable solutions to this problem would look like, but recognizing it's a problem is a good first step.
> - working overtime is no substitute for bad planning
I feel like I know what you mean, but this one feels off to me. I think you mean, "working overtime is no substitute for good planning." As in, working overtime is a consequence of bad planning (not always, but an indicator at least).
Exactly. It seems to bump against the warning against eating up your buffer. Whether that's physical space, time, or money. We all need some wiggle room to deal with the unexpected, don't run to the edge with everything or one small mistake will ruin everything.
Except that financed companies seeking high growth may for a while abide by "cash creates cash flow", "deals that don't make money can still make you grow", and "spend on growth fast, so you'll be bigger than the next crisis".
Extremely risky, but those seem to be the norm on companies that get huge.
With the risk of sounding ignorant I'm going to go out on a limb and say one of the biggest missing pieces for most people is financial security - or at least the availability of a safety net.
Based on my experience there are four scenarios where someone could start a company:
- You have financial support from someone (whether you're in college or have a spouse that makes a good income - probably the most common)
- You have money yourself (perhaps from a previous company you started, etc. - fairly common)
- You relied on outside financial support while you saved up enough money to start your startup (this is most likely a scenario where a parent paid for ones college so they were able to save right after graduating - fairly common)
- You built a company that can sustain you and your employees from day one (very uncommon)
There are probably other obvious scenarios out there but these are based on my experience reading articles and speaking with founders.
Once you have that financial security it becomes much easier to put those actions into motion, and they become less hollow. You see them as tasks now because you actually have the time and resources to execute on them.
i'd thought about adding something about this but decided it's worth a full post.
i don't think you need very much of a cushion--i.e., 6 months of living expenses saved up is more than most founders have. but saving up a bit of money before starting a startup is definitely a great thing to do, and if you're an engineer willing to live cheaply, shouldn't take very long.
that said, startups are not the way to optimize for financial stability and not the right choice for everyone. if i had little money saved up and a family that depended on me, i'd choose being an engineer at a big company instead of starting a company until i felt i had some safety net in place.
Please write a post about financial security as a pre-req to doing a startup. I advise having at least a year's worth of living expenses saved. Because you don't want to be worried at all in the beginning about how you're going to pay your bills. You're going to start worrying when that money is half gone, and it sometimes takes more than 3 months to get traction.
I think many founders pursue funding too soon (and thus give up too much equity to VCs much too soon) because they didn't have enough savings at the start. I would expect VCs to disagree with me about that because it's in their interest to do so. :)
Remember that a startup isn't a small business. Your venture backers want you to be hungry -- financial stability for you lowers the probability of a 50x exit!
This is the biggest mistake that I see startups make. Startups ARE small businesses, they are just supposed to be growing faster than "normal" small businesses. But many people make the mistake of not being a "small" business as a startup, and then they realize that they have no idea what to do when they have a medium size business on their hands (or never create any business at all in spite of products).
Avoid venture backers until you can't - entrepreneurs existed before venture capital, and exist outside of it as well. Venture should fund growth, but not inception.
From what I have seen, yes. Stable = complacent and comfortable in their mind.
On the brink = Will work 100 hrs a week and must succeed to survive.
Makes sense from that narrow perspective, but I think that only works in cases where hustle is the majority of the work. Come to think of it, the majority of investors are only interested in problems which are fairly low tech but require a lot of marketing/hustle.
I think this approach is underrated and can highly recommend it.
If you are an engineer and you keep your living expenses low, you can most likely survive doing consulting/contracting for 1 day per week, leaving you the rest of the week to work on your startup. This minimizes your financial risk and leaves your savings intact, leaving you only with the opportunity costs (but if you are worried about those, you probably shouldn't be doing a startup in the first place).
Additionally this lowers the pressure to find investors quickly (or at all) and gives you the time to build something great.
The issue is that you need to find an idea for a product, wherein 1) the product has the potential to generate tens of millions of dollars of value 2) the first, valuable, version of the product can be built in a couple man years. That is really, really hard to do. There are tens of thousands of smart, competent people searching for such ideas, working on such ideas.
If you want to make millions of dollars, if you want to make much more money than the average smart engineer, you need some secret. You need some idea or skill that happens to be the right thing at the right time. Nobody can tell you what that secret is. If Sam could tell you, it would not be a secret.
So you are right. There is something critical missing. What is missing is the actual secret, the actual idea that you have a unique insight into. But nobody can tell you what that will be.
I don't think the secret is usually the idea. The secret is usually a method of execution that lets you get to the finish line, where everyone else was too slow and ran out of runway.
Which is to say, if you're the right person at the right time, you don't know the secret; you are the secret. Your skillset (or your team's skillset) is the secret.
The tech that just became possible to leverage that nobody else has noticed yet but you're familiar with from its prototype days is the secret. Being able to bring your experience solving problems with 40-year-old systems to analogous problems in modern spaces is the secret. The pitch is not the secret.
As you say, the secret likely is not often the idea per se, as truly original ideas (i.e. potential Nobel prize-worthy ideas) are truly rare, and often difficult to recognize as such. They are much more rare than successful startups.
So, banking on an idea alone as the route to money is not usually as smart move, unless... the idea is really innovative.
The thing about startup advices is that even if you read it a hundred of time, it seems like you need to fuck it up at least once to really understand it.
I agree: Understanding something cognitively doesn't mean you've internalized it and can apply it. Even if you get ex ante insight from others, this can only partially help you because sometimes, you inevitably have to make mistakes yourself and learn only from breaking through your own sticking points.
Making a startup is both an art and a science. The part which is purely "art", the bigger part, you will have to learn through actual doing, but the "science" part, the small part which yields repeatable results in isolated areas of the craft, is something you can also learn from others. Sam did a good job summarizing all of that which is known to YC to be repeatable.
If all of the article rings true and obvious, you're done reading, it's only doing from now on.
If it reads unclear, you should watch and read the supporting material.
If it all rings hollow and devoid of substance, you will, too, have to start doing. Eventually you will come to similar conclusions under your own power (which is why I called it "repeatable" - it repeats quite often), and then your reading history will make it easier for you to come to terms with your own experience.
Lots of startup advice seems obvious once you have heard or read it a few times. But you only understand the value of such advice when you fail to follow it.. For example, I read the fantastic list "57 startup lessons" by Slava Akhmechet when it was published. But only after I personally failed in many of these, I really understood how hard it is to follow even simple, obvious advice. When I read this same list after my startup failure, the deep wisdom of this list really stung hard.
As a startup founder, you should go through this kind of list regularly to keep yourself in check.
- I'm probably too blue collar for these airy advice musings... but I really turn my nose up when a business man tells me to "work hard". Never do these manifestos acknowledge the basic truth that all entrepreneurs are escaping professions, trades, and "jobs". Scoff this terse anonymous message away all you like, the entrepreneur redefines work, then audaciously proclaims himself the hardest worker.
Sometimes, inventing something "people want" is the most wildly selfish thing a person can do. The sheepish, holier than thou advice post that admits this will have my ear.
Work: activity involving mental or physical effort done in order to achieve a purpose or result.
I'm not sure what definition you are using or how "the entrepreneur redefines work", but if you think that 'real' work must include lifting heavy things, then you are selling humanity short.
I think he's saying that for some people, entrepreneurship is more about indulgence than discipline, and that discipline is pre-requisite for something to qualify as "actual work".
In the terms of your definition, he's referring to entrepreneurs that are not directing their effort to "achieve a purpose or result" in a disciplined, effective manner. On paper, of course, they all have a purpose or result, but that doesn't mean the entrepreneur is actually working toward it, at least not very hard.
He seems to be expressing the sentiment that many entrepreneurs are of this slacker variety and use entrepreneurship to escape the demands placed on other, "normal" people for their maintenance, not to drive new results or purposes.
It seems that way until you find yourself in a situation where none of this advice is being followed. The opposite of doing these things doesn't look terribly sinister, just has poor results. A founder/CEO that pressures the engineers to cut corners on the product to get a few more customers before the next fund-raising round is an easy trap to fall in to. The investors will often be providing this pressure directly. (E.g. "I'd invest if you were showing a little more growth.") It all seems very reasonable when you're in the middle of it.
why would you feel that this is un-reasonable. If getting a less than perfect MVP out can help the company meet certain important deadlines, what's wrong with that?
This is YC advice boiled down to its essential and most generalizable terms. Because it's general (applies to almost all their founders) it's also generic - the patterns matched across hundreds of humans. It leaves out the human toil, mistakes and doubt - but most importantly the emotions. It doesn't tell you why you should follow this advice. It doesn't show you what happened to the folks that did. It takes for granted its assumptions about what's valuable. Same for success.
It's the Cliff's notes for the YC ideology. So it could be the Cliff's notes part you find hollow, or it could be the YC ideology part you find hollow.
A lot of YC's advice was not considered obvious when they started out (nearly ten years ago!).
If some of it seems generic and obvious now, that's because they've succeeded - more than anyone else - in discovering and sharing some actually repeatable strategies for building startups.
Maybe it's just about who it's obvious to. YC is run by technical people, and most VC firms aren't. When PG got into the game and started making good picks because he actually knew what he was talking about and had direct experience, unlike the finance guys dicking around with macro-scale projections pulled out of thin air, he wrote down the obvious from his perspective and was immediately copied (poorly, in general) by the people that saw the success knowing what you're talking about can bring.
I think it needs to keep being synthesized and summarized and codified only because there's always a generation of founders that haven't seen it. I feel the same way you do, but it's a good reminder to read it and it's good for new founders to have it freshly in front of them.
You're joking, right? If so, sorry for not being sure. If not, the answer is that lots of people do try writing books with startup advice, but there's no one with the power to wave a magic wand and make a book "definitive", have everyone agree that it's definitive, and make everyone new to the field realize that it's definitive and they should grab a copy.
