171–180 of 243 posts
I wish there was a similar level and quality of resources for what I think are called lifestyle businesses. By that, I mean product-based businesses with at most a few million in revenue, a 5ish person team, a solid sustainable market position, and no desire to revolutionize any unicorns. I know a lot of people attempting this and they mostly seem to be flying under the radar, or at least have nowhere near the cachet…
Earlier quoted context omitted.
I think "unicorn" is strictly reserved for the Ubers and the AirBNBs of the world. Anyone who calls the company that gets fusion energy working a "unicorn" will probably be laughed out of the room.
It seems like Aileen Lee was one of the first people to popularize unicorns. in his article around 2013[0] he defines them as > We found 39 companies belong to what we call the “Unicorn Club” (by our definition, U.S.-based software companies started since 2003 and valued at over $1 billion by public or private market investors). That’s about .07 percent of venture-backed consumer and enterprise software startups. Tha…
Aileen is a woman.
Earlier quoted context omitted.
There's plenty of room for both models. Lifestyle businesses are awesome. 100% great. But we wouldn't have society-level upgrades like Uber, Twitter or Apple without venture capital. They just don't work any other way.
I disagree strongly. We have the web because Tim Berners-Lee didn't raise an angel round, so he didn't ask 'how do I monetize' and built an amazing open system. Before him we had CompuServe and other VC backed trash. VC businesses like Twitter and Uber create centralized points of stagnation that seem great at first, but can't innovate the way open systems can. If Twitter was open we wouldn't be wondering if they'll…
Maybe it's not VCs, but you can't bootstrap everything. Or maybe you can, but it will probably take a lot longer.
"We once tried an experiment where we funded a bunch of promising founding teams with no ideas in the hopes they would land on a promising idea after we funded them. All of them failed." I was under the impression Reddit fell within this category. I recall a PG quote that went something like "we [Y combinator] hate your idea, but we like you [Alexis and Steve]" in reference to reddit's initial YC funding. I know Redd…
He's referring to a YC batch in which founders were specifically offered the option of applying with no idea (that's not what Reddit's founders did).
Earlier quoted context omitted.
The Basecamp (née 37Signals) folks have been beating this drum for quite some time. DHH posted "Reconsider" to their blog today, actually; it's an entertaining read, if nothing else: https://signalvnoise.com/posts/3972-reconsider Here in Seattle, there's a great community of small software businesses with meaningful profits and impact. We have ties to the broader Seattle startup and technology community, without bein…
How can I find jobs for small software business like that (especially in Seattle!)? I want to work in a smaller environment that's not necessarily trying to be a "unicorn", but those seem to be the only jobs posted here on HN for "Who's hiring?". On other job boards, I mostly just see larger corporations hiring worker drones. I just want to write good software that solves interesting problems and make enough money to…
> You want to start with something very simple—as little surface area as possible—and launch it sooner than you’d think Honest question: does this model apply when your product can't at any point be, for lack of a better word, half-baked? Say you're making a security product or working on control code for rocket thrusters.
Small and simple doesn't have to mean janky and shitty. You reduce scope, not reduce quality.
To carry on with your two examples, I'll make up a security product and a product related to control code for rocket thrusters.
For the security product, let's do a "secure storage on Dropbox" product. Version 1, you do as much as you can with with existing libraries and pieces. Use OpenSSL to handle the crypto bits. The UI has two options: the passphrase for the encrypted storage, and the path to the encrypted directory (and a system tray icon).
Right away, I can think of all kinds of features that would be cool to add to this product, but DON'T build them out for V1. Eventually, you can add PKI so that you can have different keys on different devices and selectively revoke them. And build out the mobile app so that you can access your encrypted stuff on the go. And bake in crypto libraries so that you're not just calling out to openssl.exe. Etc etc. That's V2, V3, V4...
For rocket thruster control code... You're going to need a way to test it. Start with a thruster simulator. You're going to probably need a FEA model and a numeric solver. It's not going to be "simple" as in "I banged it out in a week", but it's way less scope than building and testing thruster control code. Once you've got the simulator built out and working reliably, start selling the simulator while you build out your own control code.
Hell, if you want to keep it super simple, start out by only simulating solid fuel model rocket engines. You can use that to bootstrap the verification process (compare simulation results against measured results for a couple bucks/launch)
Scope:
The essay seems aimed mostly at current Silicon Valley (SV) style, mostly consumer, information technology startups. Okay, but that's not all of business or even all of startups. Yes, YC is pursuing much more, e.g., some shoe company in Pakistan, still, the essay is SV style and there, mostly Web and mobile. Fine with me, because that's what I'm doing, be we should understand this point about scope. And, as below, we should understand this scope and style because IMHO it's time for SV style of consumer Internet to borrow from some of the rest of technology and business.
Broad Point:
As we all can see, all heard from Mark Andreessen, etc., and see from Sam,
" ... investors’ returns are dominated by the big successes, ... "
The Exceptional:
So, from this Broad Point, the goal is something exceptional. From that, we have to suspect that we won't always be following the common and ordinary, some extensive experience and observations from the past, or even "big successes" from the past, and, instead, should be willing to consider some exceptions in order to be exceptional.
Users' Love:
> "Your goal as a startup is to make something users love."
Yup.
Now, can we, please, have some more guidance on just how the heck to do that? And, please, don't ask me to draw from Snapchat or Homejoy. And I'm concerned about
http://koltai.co/notebook/the-risky-business-of-entrepreneur...
with:
"However, these statistics also reveal a grimmer reality: 93 percent of the 511 companies accepted by Y-Combinator have failed. Even more alarming, only 3 to 5 percent of the companies that apply to Y-Combinator are even accepted, meaning that only one in every 200 companies that applies to Y.C. eventually succeeds."
And, I'm concerned about the low ROI of venture capital as in
http://www.avc.com/a_vc/2013/02/venture-capital-returns.html...
and
http://www.kauffman.org/newsroom/2012/07/institutional-limit...
Instead, for history with some good examples, there have been many amazing projects, some astoundingly innovative, that worked the first time with high probability, e.g., for a picture:
http://iliketowastemytime.com/sites/default/files/sr71_black...
IMHO, here is a better approach:
(1) Find a problem that huge number of potential users/customers believe or can come to believe is really important to have solved. E.g., want, say, 1+ billion people with Internet access, if only from a smartphone.
(2) Find a solution that is much better than anything else and difficult to duplicate or equal.
(3) Make sure that for the target customers right away or soon the solution will be seen as a must have and not just a nice to have. Want no doubts here; do not want to have to depend on gossip and fads from notoriously flighty teenage girls. One of the best examples would be a single pill, safe, effective, cheap, to cure any cancer.
(4) Deliver the product, easy to use at a very attractive price.
(5) Make sure the revenue covers all expenses and yields a fantastic margin, e.g., pre-tax margin 90%.
(6) For that solution, do some good original research with powerful, valuable results in the STEM fields.
(7) Offer the solution as a Web site, i.e., exploit software, Moore's law, and the Internet.
(8) Be a solo founder until at least $10 million a year in after tax earnings.
Difficulty:
> "A word of warning about choosing to start a startup: It sucks! One of the most consistent pieces of feedback we get from YC founders is it’s harder than they could have ever imagined, because they didn’t have a framework for the sort of work and intensity a startup entails."
There's something wrong here: All across the US, east to west, north to south, cross roads to the largest cities, millions of sole proprietors do startups and are successful enough to buy houses, support families, and get the children through college.
All the larger bodies of water in and around the US have boats and yachts, and nearly all the owners are just such entrepreneurs. Maybe they own 10 fast food restaurants, are big in asphalt paving, are a manufacturer's representative for some great lines, run five new car dealerships, own and manage 2000 units of rental property, have a private label line of industrial floor cleaning supplies in a mid-size Midwestern state, did a rollup of dry cleaning stores, are the main beer distributor for half of a state, are a leader in design and construction of custom tanks on truck frames for hauling liquids, etc.
But, a startup that exploits information technology, software, Moore's law, and the Internet should have some advantages and generally be less difficult.
Idea:
> "Remember that at least a thousand people have every great idea."
Maybe true with SV style, but more generally, no, and a thousand times no.
Instead, since so many startups fail, we want some advantages and definitely can get a lot of advantage from having a genuinely new idea. People who wrote a Ph.D. dissertation that was supposed to be "an original contribution to knowledge worthy of publication" and "new, correct, and significant" will quickly appreciate the importance of a unique idea and a lot about how to construct such. Here SV style is seriously lacking and, as above, needs to borrow from outside.
As in Sam's
> "Remember that at least a thousand people have every great idea."
I believe that SV style nearly trivializes the idea and, to raise the success rate, very much needs to go much deeper into the idea and associated considerations of user need, market size, meeting the user need, and new, proprietary technology to meet the user need especially well with a product difficult to duplicate or equal, and protected intellectual property that supplies a barrier to entry. In some places such unique intellectual property is taken very seriously, with laws, contracts, national security classification, etc. For higher success rates, SV style needs to do better with such intellectual property.
Several good examples of a such intellectual property and its power are in the picture
http://iliketowastemytime.com/sites/default/files/sr71_black...
This is another case of where SV style needs to borrow from outside.
Team:
Once again, over again, one more time, yet again, we come to the issue of team. Again we learn that it's tough to get a good co-founder; co-founder disputes are a major cause of startup failure; it's tough to hire good staff; it's difficult to keep the staff well involved; being a good leader and manager and learning to do so is a lot of work, and BoD members rarely know much about the details of the business, likely much less if some new, unique, powerful, valuable crucial, core technology is key to the business.
So, with all those clear dangers to the startup, we begin to conclude: Be a solo founder, get to earnings ASAP, grow organically, well into very good profitability hire no one, and from the start carefully plan never but never to accept equity funding or report to a BoD. Or, follow the example of Markus Frind and his romantic match making Web site Plenty of Fish, initially, just one guy, two old Dell servers, ads just from Google, $10 million a year in revenue, and recently sold for $575 million in cash.
Understand the Users:
> "... it’s critical you understand your users ..."
Right. And for making, say, really nice seat cushions for the driver's seats of Rolls Dropheads with owners in the Chablis and Brie set in the Hamptons, sure.
But in consumer Internet, for a big success, there will millions, maybe billions of users, and about all that can be said about those users is that they are a not very special cross section of humanity. So, really just have to understand the pair of the product and the ordinary man on the street.
