Don’t drink the startup Kool-Aid – just find a problem and try to solve it(venturevillage.eu) |
Don’t drink the startup Kool-Aid – just find a problem and try to solve it(venturevillage.eu) |
I believe the overuse of the word startup comes from a certain kind of pretentiousness, a want to associate one's own small-business, small-market, technically trivial, mom-and-pop online business with world leaders like Facebook and Google. Making the linguistic link is good for the founder's ego, and even better for convincing naïve investors to fund barely viable visions.
If you're one of the many non-technical teams who cannot build products yourselves and have an idea with dubious money-making prospects then you can have a great adventure on half a million euro of dumb money, and believe me many founders in Berlin are.
I've lived in Berlin since January and during that time I witnessed a rising hipster startup culture. Unskilled and unexperienced college graduates with big egos raise dumb money, hire programmers to build code they don't understand, then spend their days 'networking' at trendy hotels in down-town, throwing minimal techno parties and going on trips across Europe for 'business and pleasure'. It's a great lifestyle, and I've nothing against people enjoying themselves - it's certainly my priority now. But I find this sort of carry on repugnant when an investor's money is at stake.
Viaweb was founded by PHD students at MIT, one who invented the worm and the other who wrote timeless Common Lisp textbooks. The modern waterfall of self-professed 'startups' are run by guys and girls who watched 'How to Build a Blog in 15 minutes using Rails' then decided they were the next Steve Jobs. Let's get realistic here - building a web app or an Iphone app these days is no more high-tech than a mechanic fixing your broken car.
Drop the ego, drop the pretense - the majority of business now labelled as startups are small online businesses and there's nothing wrong with that.
However, there is a thread of hope. An undercurrent of truth which I have recently started to uncover within the layers of crud. I just read Paul Graham's essay Beating the Averages last night and realized that I have no idea what the hell I'm talking about.
Lately there has been a growing thread of dissatisfaction with Hacker News. It feels as though the original community has become diluted by an influx of folks like myself, eager to make their mark but too naïve to really do anything constructive (and too naïve to realize we’re naïve). But we are learning.
So, Hacker News, thanks for putting up with us noobs! I realize now that I won’t be the next Zuck, but if I keep listening and learning from HN, I just might make a dent in the universe.
About a month ago, I was at a meetup which had nothing to do with technology or the internet but I ran into a guy who was throwing out some buzzwords. The point came early on when he asked me what I do, and I really didn't want to say I worked for a startup (because I sensed what was coming) but I did because I do. Then came the 20 minute monologue throwing out many more buzzwords and how he'd just moved to SV. He was going over how he was just pre-launch and outsourcing the coding, blah blah blah. He was very, very excited about his project (at least there's that). But then he told me what it was (I forget but it had to do with health, it might have been a lifestyle app) and I thought to myself, "but specifically what you're describing is not a startup, that's a small business that happens to be online."
He wanted to keep in touch, almost as if we were two kindred souls braving the unknown and at that point I gave him the (true) line that works really well in certain circumstances such as these. "I'm not searchable on Facebook, sorry, but you can send me an email." In casual settings, no one ever sends the email, by the way. It's FB or nothing.
Being that I have another regular job (that happens to be online), I now say I do that instead of "I work for a startup." Though, believe me, if I had one, I'd have zero shame in saying it.
You saw people denigrating others startups as "lifestyle businesses" and me suggesting that one might pursue product market fit before VC money was laughed at.
Back then the Word of PG was the Word of God, and you could be shot down with a misrepresentaiton of a PG quote. (Did you know PG opposed customer development? I bet he didn't!)
For awhile I though HN was going to become a cult of personality for PG.
I think high-tech folks tend to underestimate what it takes to be a mechanic.
Wasn't it Viaweb? Big difference between Viacom (the media conglomerate) and Viaweb, the online shop software.
But, this is also a perversion of the meaning of the word "startup". A lot of the BS aquihires-in-waiting in the Bay Area are not startps either.
Somehow getting dumb money and being faux "scalable" has become what "a startup" is, with everything else (That is real busiensses, often scalable themselves) termed a "lifestyle business."
A one man SaaS business is scalable if the target market is large enough, and even if it is a nich, PG has advised people to conquer a niche and then move to adjacent markets.
So, if patio11 keeps his business at the size that he can run it by himself, that's fine, that's a choice, but I disagree with the idea that there's some magical "scalability" that those who live in the Bay Area and get funded by VCs have, compared to living in Japan and not taking investment.
When you have no engineering background and your primary skill is BS, then its really easy to morph your "business" into whatever investors want and get that dumb money.
But if you really want to build a business- then follow Running Lean, Steve Blank, and build that business.
Chasing investor money seems to be a waste of time-- Investors would rather fund these hipsters than Viaweb.
We are making it hard on ourselves to be successful because of the ideas and types of businesses we are drawn to create.
We jump into crazy ideas with no provable business model or customer when we could experiment and apply customer validation to our potential product. Jumping in like a crazy person is glorified in our community because we love watching others do wild things and hope it will help us be more wild.
I want this to change. More people should be running successful businesses, though they might not be instagrams. I want to see your unique touch on so many tired products and ideas.
Now I skip past them like I skip tabloid and gossip "articles".
Useful voices: 37signals folks, Eris Reiss, HBR, anyone here, etc.
Not useful voices: Inc.com, Forbes.com, Random dude running on investment alone, linkbait like "<insert superlative> <noun> for <insert phrase about startups or entrepreneurship>".
Only time I ever felt like giving up on my latest venture[1] was when I started trying to view it as a "startup" and thereby compared it to other "startups". I got really depressed for a week or so trying to be a "startup guy", which thankfully I didn't become. It was like the goals of the business (provide a killer service in order to fund my continuing education and frugal lifestyle) got replaced by the "be the coolest thing ever" startup vibe, which sucked.
This article reminds me again that it's not a startup... it's a site that makes a little money by solving a common problem for developers like me, better than other people, and will hopefully make a little more money, once I've done some good marketing and solved that problem even better!
Anyone who tracks startups knows these two conflicting facts:
1. Ideas are not everything – execution is key 2. It is extremely important to solve a problem that people would find value in, and therefore pay for.
Summary: It is of course important to execute well and solve the problem, but the starting point is to know if the problem is worth getting solved.
Now look at our education system through this new prism the flaw comes out very, very clearly the system today teaches problem solving, applying theory to practice etc but there is little to no emphasis on identifying problems. Think about your own school / college days for a second in how many instances were you given a situation, and were asked to identify problems to solve?
The problem to be solved was always STATED nobody ever asked us to come up with a set of difficult problems to solve.
Over time, this lack of practice in identifying problems translates into difficulties in spotting profitable opportunities. Even if we do, there is a lack of conviction and we end up pivoting multiple times.
Our education system cultivates employees, not employers – to be one, you need to be trained not to solve a problem, but to identify one.
For some reason HN would not allow me to submit the link for the above, it kept killing the post and any related query. Am trying to be reborn as a new guy on HN now.
cheap to scale > scale per se > scale potential
You're either patio11[1], a "nobody" building a "lifestyle business" or you're making the next Instagram.
Consequently we have a cargo cult mentality that has evolved. Lets compare these two:
Location:
"Obviously you need to be in Silicon Valley. This is where all the wannabe startup hipsters move to!"
I mean, you can't go to a coffeeshop without hearing a harvard MBA who think's he's a programmer because he made an excel macro work once, talking about how he's going to disrupt multiple paradigms with his massive SoLoMo app they're building. "This is where it's all happening, man!"[5]
"Japan? There's no startup scene in Japan. Hell, that's a 12 hour flight. You think VCs are going to fly 12 hours for a board meeting?"
Business model:
"Dude, if you charge money, like %90 of the people aren't going to use your product! But if you're free, and you've gamified your appointment calendar, people will share it! If you can get your virality factor to 2, you'll have a billion customers in 5 months!"
"Oh, there will be a way to make money later, somehow, just look at google, twitter and Facebook!" [2]
Funding:
"If you're going to be scalable, you need bank, man! The VCS are in silicon valley, the VCs are critical to having a business. They'll give you great advice, connect you up with the other movers and shakers so you can have Cock-Tails Man!" (Yeah, I can't make myself sound like a startup hipster, I know.)
"Without money, how are you going to build anything? How could you ever scale it? You have to start with money!"
Company culture:
"IF you see the CEO writing code, you've failed. You gotta delegate. I mean, never invest in a company run by a programmer, they'll spend all their time delighting in some technical solution that's super elegant but nobody at any cocktail party is going to give a damn about! I mean, what do customers care about how good you did something? They company has to be run by a people person-- so at the cocktail parties he[3] can network with other people! People's what drives business, and this is what gets business done!"
Do they even have cocktail parties in Japan? Isn't liqueur outlawed or something there?[4]
Advice:
"You see with VCs, its not the money that's valuable, its the advice! They're going to be able to tell you the right moves and you'll be able to grow so much faster!"
I can't contrast this with patio, because I don't know where he gets advice. But in my experience, VCs [can be] beyond clueless[6]. I've seen them force companies to shut down profitable businesses and focus on long shots (which had the nice side effect of making the company more desperate for the investment, and by drawing it all out the VC was able to get much better terms and take the whole thing when the company later sold, shutting out the founders and employees who got nothing.) I've seen VCs force product direction based on fads, and force the use of inappropriate technologies (provided by a company they had a relationship with, naturally) which caused product delay and ultimately a significant reduction in the value of the company on exit.
Much of the investment process seems to be spending time getting investors up to speed so that they even understand what it is you're doing-- which maybe is one of the reasons they'd rather fund instagram than patio11. I mean, they don't know anything about the hair salon industry (his only clients as far as they can tell) but everyone likes to take instamatic pictures!
And if you don't have a business model, you don't have to worry about the business model!
[1] All respect to patio11. I think he's on the right track here, and he seemed to be the best example to use. Nothing derogatory said here about him or his business is meant that way, merely to characterize the people who would see him in a derogatory light. [2] Here's a bonus: Why is google's monetezation strategy significantly better than twitter an facebooks? It might turn out not to be if the latter two find a way to make it work, but right now, it works much better. [3] Always. No such thing as a She CEO, I mean, women just don't have the ruthlessness needed, amirite? [4] I don't think people are this naive about Japan in particular, but I hear them say the strangest stuff. [5] Somehow startup hipsters in the bay area speak with a style that's a cross between "Brah" and San Fran hippy from the 1970s. In my head. [6] This is why YC has had so much success, in part, as PG is not clueless and his vetting and blessing lets VCs outsource dealflow. I think angels are probably a lot less clueless, though I have less experience with them. Looking at Gabriel Weinbergs recent summary of his angel experience you see a very different approach than the mentality I'm laying out here.
Funny, but I've seen BigCo bosses force product direction based on fads, and force the use of inappropriate technologies (provided by a company they had a relationship with, naturally) which caused product delay and ultimately a significant reduction in the value of the product.
Pointy hair is as pointy hair does.
It's not just bosses, either. Here's part of a conversation I just had with someone "knowledgeable about design."
"You've got to change the appearance of that by doing X, Y, and Z."
"Really? Do you know what the functionality of those things are?"
"...No."
Who said there's no startup scene in Japan? On the other hand, it's indeed much harder to get funding for an early stage startup in Tokyo than it is in Silicon Valley. This is not obvious, because Tokyo is home to one of the biggest stock markets in the world, and to a lot of rich people too.
I don't think you're contributing to the discussion by juxtaposing a fairly ridiculous statement with a reasonable (but not obviously true or false) one; unless someone in fact said that.
> I don't think people are this naive about Japan in particular, but I hear them say the strangest stuff.
So why write it? Honestly I don't see the point of making up some quotes and then countering them.
I consider my business to be moving from self-employment mode to start-up mode, but I am not at all sure that I want to be a "start-up" in VC terms because this has a very specific meaning there. The meaning is "this is the stage before acquisition or IPO" and therefore it locks you into the VC exit strategy. I would like to be a start-up in the sense that W. L. Gore and Associates was in 1958....
I don't think I'm too far off the mark in saying a lot of this is just a big circle jerk. Money is just changing hands between VCs, they get paid no matter what, and the founders get to work harder than any person should just for the ego boost that comes with calling yourself a startup founder even when you walk away with nothing.
Is that a question or a quiz? If a quiz, can I have the answer?
Facebook and Twitter, however, are sites people use for socializing, and if they're looking for something, its usually links to news.
Thus, google's traffic is more monetizable. This is not to say that Facebook and Twitter won't grow up to be big businesses with really lucerative monetization... its just that it isn't as clear. I think google found its strategy in adwords a lot faster (2000 is when it was launched) as a result, while facebook ads are there, they've not been as successful and facebook has been around a lot longer than google had when adwords came out.
Found a cool way to get the word out on your product? You've "hacked marketing". Have an increment improvement on an existing concept? You've "hacked" that vertical. Interesting new job posting system? "Hacked recruitment".
I'm pretty sick of this community/field forcibly inventing words for every old thing instead of just calling it like it is - and this includes all of the "growth hacker" crap over the last few days. We're doing the same shit everyone else has been doing for hundreds of years, except we've changed the context to involve technology. These buzzwordy exclusive words we use do not actually describe fundamentally different concepts, they're just opportunities to fall all over ourselves and fawn at ourselves in the mirror.
Another great text on the topic was written by Stallman: http://stallman.org/articles/on-hacking.html
"It didn't become easy—for practical purposes, using two chopsticks is completely superior. But precisely because using three in one hand is hard and ordinarily never thought of, it has 'hack value', as my lunch companions immediately recognized. Playfully doing something difficult, whether useful or not, that is hacking."
Maybe there's a rarefied world of amazing CEOs who spin off amazing ideas every 10 minutes, and then legions of people go do them ... but I doubt it. And you're probably not going to get to that job without a lot of plain old execution first.
I'd say I mean that in the sense that my mind always has put seemingly unrelated concepts together to form a new idea and that I have a daily habit (of at least 7 years) of reading tech news. Put the two together and it's not too difficult to imagine that a lot of my ideas would relate to the subject matter I consume regularly.
But as far as an "ideas guy" in a company whose purpose is just to have ideas, I agree with you.
My advice to "ideas people" is that you need to prove you're creative and useful. Otherwise people think you're bull-shiting them.
I get lots of good ideas because I do stuff. Many of those ideas I will never be able to follow up on and so I share them. After all, if my ideas help someone become successful, that is better than letting them die because I can;t get it done myself. Moreover maybe it helps build relationships with other businesses.
Ideas without hands-on experience invariably suck.
But that's not my job in our startup-- I'm in charge of engineering. My cofounder does design & marketing, and we split a lot of the CEO stuff.
People say ideas are worthless, but that's not always true- I've seen worthless ideas and really valuable ones both.
I think what you're reacting to, and what the parent is acknowledging in a humble way, is that some people have a lot of ideas but aren't yet ready to be "in charge of engineering" or whatever.
When I went to college, I didn't know what I wanted to do with my life. I think ther are a lot of kids[1] today who have the idea they "want to work for a startup" or "found a startup"... but they still don't yet know what they really want to do with their life.
Some are foolish and think that being the "ideas guy" is valuable, some are not (and I think the parent is not.)
[1] in the sense of "younger person, cause I'm old", not in the pejorative sense.
Additionally, I used to think that being the "ideas guy" was valuable... I think there is a general understanding among average people that being first-to-market is THE driving force behind successful brands. After numerous business and entrepreneurship classes at university and reading many case studies of businesses; I have come to the realization that (of course) anybody can have an idea: it's the execution that matters.
I guess what I'm trying to acknowledge or convey is that we know not what we do. Us noobs, who are invading and "hipster"-izing this community.
So please, guide us! Love us, that we may love you back...
But posting articles detesting hipsters won't help, since a hipster never considers themselves a hipster. (and they will just agree with your article "Damn those hipsters!")
But I appreciate your more nuanced interpretation of both the phrase and the parent's intention.
Looking back at the vantage point of my own 10 year old "startup" - oops, I mean "small SaaS software business" - I can certainly point to a couple good ideas that took about 5 years' execution apiece =)
To put it all another way:
If some young person said to me "I'm an ideas guy", that would probably be the end of my taking them seriously
If that same young person said to me "I've got a lot of good ideas - I think - but I'm not sure of my ability to make them happen", then I would respond very differently.