Notes on Startups
Surprising Changes in the World
The first step is to have an explicit belief in change. People who fall victim to a monotonically increasing confidence in their opinions are implicitly concluding the world is static. If you consciously remind yourself it isn’t, you start to look for change.
In the spirit of building an explicit belief in change, let me note changes that surprised me.
Qubes OS - didn’t think people would go in that direction. (Didn’t think web applications would be a thing either. Nor smartphones.)
Car parking buildings. That’s a pretty cool idea.
Smartphone updates. That’s a pretty cool idea too. May have been around since the Microsoft Windows days. But it’s still fucking cool. It’s a step along the right direction.
Pure functional programming! What an idea!
Ideas that generally fail
Quora - What are some startup ideas that frequently fail? (link)
Autopsy - list of failed startups.
Founder Self-Doubt
The job of a CEO is to pick up a task that nobody’s doing, and do it. You build yourself to a point that you’re really good at it, and then eventually you hire somebody and hand it off to them. So at any given point you’re never really good at anything, because once you are, you’re handing it off to someone else.
– interview with Aarthi Ramamurthy, Lumoid
Startup trends
The grass may be greener on the startup side of the fence, but let’s be realistic: first, most people who play that game well end up as investors rather than founders, because whatever fun there might be in building a business is sucked out by having VCs as your boss, so it’s better to be investor-side than be a “founder” who is really (guess what) a mid-level product manager in the Valley ecosystem; second, most people who are throwing 70-hour weeks after uncertain startups, instead of in jobs like yours ($450k at Google) or in VC firms, are there involuntarily, trying to save their careers by packing on variance (which you don’t want, because you’re so far ahead).
… if you’re not clearly on a fast track after 2-4 years, you’ve been written off
Failure
Apparently, there’s something called FailCon. Check it out.
User Validation
Good validation work would’ve looked something like this:
- Hour-long interviews with professors and TAs diving into what they found most frustrating about teaching.
- Digging and digging until we found a problem we could solve, or even more critically, possibly determining that there were no problems for us to solve.
As engineers who had never done this before, talking to people didn’t seem like real work. Real work was coding. But in reality, 20 hours of great interviews probably would’ve saved us an accrued 18 months of building useless stuff.
List of Startups
YC Winter 2016. See for yourself and learn what the top startups look like.
Become Formidable
Become formidable. Also become tough - the road ahead is going to be painful and make you doubt yourself many, many times.
– Sam Altman, Startup Advice, Briefly
I suspect the way to do that is through boundaries and knowing exactly how committed you are to a particular path and thus how much you’re willing to endure and give up for it.
Relentlessly Resourceful: Ooshma Garg from Gobble
(h/t PG)
This gives us a good exemplar for relentless resourcefulness.
What you’re seeing up there are actually the words from the startup curve that Paul Graham coined. He talks about how most startups have a launch. It’s very exciting! They fall into this trough of sorrow which is oftentimes multi-year slog, then you have these wiggles of, I like to call them hope, but maybe they are wiggles of false hope. Then, if you’re lucky and you have the stamina, maybe you get to the promised land. That was our story, and like Jessica said, it’s not so uncommon.
…
The interesting thing that we saw is that when people were microwaving our food, we had great quality, great portions, and great sourcing, but they would cringe when they microwaved the food. Microwaving was not a great experience for adults to feed their loved ones. We were learning a lot. While we were learning, news came out about the food industry, and this is what they said about Gobble: “Gobble was puttering about on the peninsula with its paltry funding and ever-evolving business model.” How many of you have had something negative said about you in public? This was probably one of the worst public things said about me. Hats off to the writer because she put a knife right in my heart and twisted it. It was a very well done insult. We were making a lot of progress and I didn’t let this phase the team. I said, “Let’s put it in a box. We are the underdog. No one knows what we’re up to, and we are about to come out like a storm.” And that’s what we did.
…
The first is GRIT. How I think about grit is that it’s the thing that comes from your core. It’s this place inside of you when no one believes in you that tells you whether you should keep going or what to do. Another way to think about it is that you should compete with yourself and not with others. You’re the only person in your life every single day and every minute. Staying the path and playing the long game, and trying to make yourself better and your company better and not looking at the other flashy companies that are around right now or may be dying the next day, but staying your course, and listening to your grit and your core, is very important.
My note: relentlessly resourceful simply means “I’ll do whatever it takes to succeed”, which is part of consequentialism. The only difference could be that in the former, you might also do some things that don’t really matter.
Founders at Work
Max Levchin, Paypal
Livingston: Did you feel that way about Peter [Thiel] when you started? Levchin: We hit it off really quickly. I have this IQ bias - anybody really smart, I will figure out a way to deal with.
Steve Wozniak
Steve [Jobs] and I weren’t similar personalities, which was strange, but I’m the sort of person that goes along with anyone that wants to talk technology.
“Look, you can start Apple and go into management and get rich, or you can start Apple and stay an engineer and get rich.” As soon as he said it was OK to do engineering, that really freed me up. My psychological block was really that I didn’t want to start a company. Because I was just afraid.
Joe Kraus, Excite
No, it was never clear that we were on to something huge. You never know anything. The hardest part in a startup is that you wake up one morning, and you feel great about the day, and you think, “We’re kicking ass.” And then you wake up the next morning, and you think “We’re dead.” And literally noth- ing’s changed. You haven’t made some big deal, you haven’t sold something new. Maybe you wrote a few lines of code over the course of that last day. Maybe you had some conversations with people, but nothing’s really moved.
Early on you worry about the ones that don’t matter, because you don’t know any better. Early on, as a search technology company, we worried about Verity, PLS, Open Text. We were too young to realize that existing companies’ biggest problem is legacy. Period. They can’t focus on new businesses because they’ve got to manage their old ones.
Vinod told us this whole story about how he’d gone through a similar situa- tion at Sun in losing a deal, and he just never gave up and won the deal back. He said, “We haven’t lost. Let’s meet with them. Let’s show up in their lobby unannounced.” We did all this stuff; we called them constantly; we just basically acted like the bidding wasn’t over. And made a total pain in the ass of ourselves. It would have been embarrassing if it weren’t so serious.
Then luck struck: MCI couldn’t deliver its service to Netscape on time. Netscape wanted its money and they wanted to have a vendor in that slot, so they came back to us and said, “OK, we’ll take your $3 million and you can be in the NetDirectory play and good luck.” I can tell you that, had we given up, we never would have gotten the deal back. And without that deal I don’t think Excite would have had its run at all.
That was what helped launch the company. It’s so ironic. If you look at the way that a lot of huge companies get built . . . Microsoft built itself off IBM, unwittingly. Excite built itself unwittingly off Netscape. Google built itself unwittingly off Yahoo. I don’t think we would have gotten where we got without the Netscape deal and we certainly wouldn’t have gotten the Netscape deal without a really valuable lesson in persistence.
Dan Bricklin
People who saw it, who needed it, got it. Sorry, no - some of the people who needed it got it. You have to be a person who is able to look at a general- purpose tool and be able to think, “How would I use that to solve my problem?” Most people are not that way. They look for a tool that is being used already for something close to their problem and then understand what it is. Many people who saw the spreadsheet with an example, if the example wasn’t in their field, they couldn’t make the leap. Because they’re not programmers in their mind.
Zenter
Graham loves it when his little chicks take on the big birds. “These guys have written 40,000 lines of code in three months!” he crows. “You never see that in a big company!” The Zenters did it by living a spartan existence, sharing a threadbare apartment a five-minute walk from Y Combinator. This was especially tough for Crosby, who had left his pregnant wife behind in Arizona (the couple kept in touch by video Web chats). Their diet consisted of Lean Cuisine, with the exception of some frozen steaks that Crosby’s father sent them. The Styrofoam box in which the steaks were shipped became their coffee table.
Jessica Livingston on How Not to Fail
Key points: measure your growth rate and maximize it; know whether you’re default alive or dead.
Know Their Pains
Understanding the technology is one thing. Understanding the business is completely different.
To understand the business, you need to have a firm grasp on at least the following:
The pains. Yes, I mean all of the pains in the space you are in. Multiple pains lead to multiple solutions, which lead to integration of solutions, and you have to understand not just the pain you solve, but how you fit (or do not fit) in to all the other related solutions the customer has.
– John A De Goes, 10 Lessons I Learned from Doing My First Real Startup
Crowded Market or Low Margins
Example of a startup in (what was) a crowded market: Google. Example of a startup with low margins: Amazon.
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