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Projects and Companies

blog.samaltman.com

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Re: Projects and Companies

#41

Post by w1ntermute »

eloff wrote: post #38
w1ntermute wrote: post #26

> The best companies start out with ideas that don’t sound very good. They start out as projects, and in fact sometimes they sound so inconsequential the founders wouldn't let themselves work on them if they had to defend them as a company. Isn't this just cherry-picking of examples that validate a preconception? What about Uber? Dropbox? Amazon? Xiaomi? Theranos: > In the fall of 2003, Elizabeth Holmes, a 19-year-ol…

DropBox fit that category. It was a solved problem for the people on HackerNews. "Oh we already have rsync for that". They had a very critical reaction here, most people thought the idea didn't have any value, but now look at where they are. I also think that back when Amazon started, a lot of people laughed at the idea of selling books online. In fact for many, many years with Amazon making huge losses people predic…

> In fact for many, many years with Amazon making huge losses people predicted they would fail.

Amazon has been making huge losses for many years because they were reinvesting in expansion, which is very expensive for them. Amazon's investors understand and support these efforts.

That's different from something like Dropbox, where they can't get the majority of users to pay for the service: http://www.businessinsider.com/dropbox-ceo-drew-houston-grow...

The reason nobody else founded Dropbox was because they didn't have the luxury of running a lossmaking business for years on end.

Re: Projects and Companies

#42

Post by cossatot »

pbreit wrote: post #31

"Companies" seem like terrible vehicles to work on "projects". Is there a better answer? The dreaded incubator?

Labs?

(Although most real lab rats will admit that they can't always experiment like they want to because reagents and instrument time are often expensive and samples are often irreplaceable. Enter: computer modeling.)

Re: Projects and Companies

#43

Post by kijin »

cossatot wrote: post #13

I like the long-standing definitions of the words: the company is the entity composed of the workers in their official capacity as well as its other resources, legal rights and so forth, and the project is the work the company has undertaken, and you are a beautiful if monomaniacal human being. >It’s far better to be thought of—and to think of yourself—as a project than a company for as long as possible. 'You' are ne…

I agree wholeheartedly.

The point of incorporating a company in the first place is to create a fictional persona that is independent from the person(s) who manage it and/or work for it. To conflate a company with its owner(s) completely undermines the purpose of a company, both legally and psychologically. If you're willing to die with your company, you might as well just register as a sole proprietor.

Equating yourself with your project with your company is one of those grossly irresponsible things that self-made people tend to boast about and romanticize, along with pulling 18-hour workdays and subsisting on ramen. It's a shame that we as a society are complicit in this kind of romanticization. We should treat them as symptoms of a problem, not glorify them as rites of passage.

Re: Projects and Companies

#46

Post by rdlecler1 »

While Sam may ultimately be correct, in practice this is only great advice if your a nth time entrepreneur who has made VCs a lot of money. The problem here is that most entrepreneurs don't fall into this category and most investors don't want to invest in projects. Unless you have an extremely compelling mission driven project you also won't be able to attract talent in this market.

Re: Projects and Companies

#47

Post by coryl »

rdlecler1 wrote: post #46

While Sam may ultimately be correct, in practice this is only great advice if your a nth time entrepreneur who has made VCs a lot of money. The problem here is that most entrepreneurs don't fall into this category and most investors don't want to invest in projects. Unless you have an extremely compelling mission driven project you also won't be able to attract talent in this market.

Most projects will never get to that phase. If its successful and gets traction, then it can become a company. If its not, then you move on to something else. Its a mental hack to keep you flexible and creative, rather than being locked into the pressures of running a "company".

Re: Projects and Companies

#48

Post by jacquesm »

ianstormtaylor wrote: post #24
cossatot wrote: post #13

I like the long-standing definitions of the words: the company is the entity composed of the workers in their official capacity as well as its other resources, legal rights and so forth, and the project is the work the company has undertaken, and you are a beautiful if monomaniacal human being. >It’s far better to be thought of—and to think of yourself—as a project than a company for as long as possible. 'You' are ne…

I also agree with Sam's thesis, and I also strongly agree with your addition. It's very easy for startup culture to fall into the trap of equating the people with the project/company they're working on, resulting in unhealthy consequences when things don't go perfectly. It's a tricky thing to come to terms with, because in the early days that overlapping identity—while never healthy—is probably critical to having the…

> resulting in unhealthy consequences when things don't go perfectly.

These companies can be quite unhealthy even when things do go well.

Re: Projects and Companies

#49

Post by danieltillett »

w1ntermute wrote: post #41
eloff wrote: post #38

Earlier quoted context omitted.

DropBox fit that category. It was a solved problem for the people on HackerNews. "Oh we already have rsync for that". They had a very critical reaction here, most people thought the idea didn't have any value, but now look at where they are. I also think that back when Amazon started, a lot of people laughed at the idea of selling books online. In fact for many, many years with Amazon making huge losses people predic…

> In fact for many, many years with Amazon making huge losses people predicted they would fail. Amazon has been making huge losses for many years because they were reinvesting in expansion, which is very expensive for them. Amazon's investors understand and support these efforts. That's different from something like Dropbox, where they can't get the majority of users to pay for the service: http://www.businessinsider…

Yes having to make a profit limits your business model options.

Re: Projects and Companies

#50

Post by danieltillett »

mtberatwork wrote: post #17
malanj wrote: post #12

Earlier quoted context omitted.

Starting a company when there are already established and strong competitors probably counts as "looks like a bad idea". I think the point is that the company (or project) seemed like a bad idea, not necessarily the market as a whole. Google and Facebook are both often used as examples exactly because they were "late" to the party. That seemed like a bad idea, but they both had a secret (as Peter Thiel likes to say),…

When Google came about I don't recall anyone thinking that it (indexing the web, page rank, etc) was a bad idea. Everyone knew search was horrible at the time and many established players were simply directories with thin search layers. Yes, there were established competitors, but none of them were really strong aside from a tiny minority (altavista for example). I don't recall anyone considering Facebook a bad idea…

I agree that when Google came out it was far better than its competitors.

Facebook is a bit different in that the market they went after was the right one not that their product was that much better. Zuck may have been lucky at the start, but he soon realised that he was on the right path and stuck to it.

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