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Trends to Avoid When Founding a Startup

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Re: Trends to Avoid When Founding a Startup

#61

Post by dahart »

deepnotderp wrote: post #4

I agree a lot with #3 but disagree heavily with #4. There are canonical examples of PhD theses that became successful companies, not to mention the dozens of companies who exited (e.g. CV companies to Qualcomm).

The vast majority of PhD thesis based products fail, and they fail because the thesis solves a deep and narrow technical problem, and not a broad market problem.

The examples of successes is both anecdotal and survivor bias, you have to look at all attempts and weigh all the successes against all the failures.

There will be future successful businesses based on theses, among the many more failures. The advice here is really aimed at people who think that a great technical solution to something automatically makes it marketable, which includes many thesis authors.

Someone who's done their real market due diligence, and knows which thesis to productize or which problem to solve, they have a good business idea. But for most PhDs, the advice is good advice -- don't sink all your time & money into a business based on your idea if you haven't done as much study of the market as you have on your thesis topic.

Re: Trends to Avoid When Founding a Startup

#62

Post by jjeaff »

daveguy wrote: post #59
birken wrote: post #20

I don't want to diminish the success that this company is having being run in their own way, but give me a break with these blog posts. VC is a "trend to avoid"? Avoid "Hypergrowth"? I guess companies like Google, Facebook, Twitter, Amazon, Stripe, Airbnb, Dropbox, Pinterest and a hundred others all really messed up. I mean I could go point by point and give examples that are the opposite of these trends, but that is…

I feel like the expectation after getting VC money is "do it fast" to the detriment of "do it right". We may have had the wrong VCs or CEOs where I have been, or maybe I brought my own bias, but that definitely felt like the push.

Part of the m.o. for many VCs is to push for really high burn rates. Which has two reasons, one is to accelerate growth as you mentioned. Another is to cause you to spend the funds you raised and require more investment sooner. This giving the VC the option to own a larger and larger share of your company by the time that liquidity event hits.

Re: Trends to Avoid When Founding a Startup

#63

Post by matte_black »

sytelus wrote: post #55
matte_black wrote: post #53

Earlier quoted context omitted.

Still, it's nothing unlearnable. You read a couple good books and blogs, do some experiments, and you're about 80% of the way there.

Nothing is unlearnable - it's never question of "if it can be done" but question of "how much effort is needed". Read few blogs, books and take Coursera classes etc are all good but the real thing is working on multiple real and new problems. Anyone who has read books/blogs etc, give them a new problem, for example, predicting pedestrian intent for crossing a road from set of video frames. See how far they get.

So are you saying there are no best practices or patterns that are discovered over time that allows newcomers to progress in the field faster than the early pioneers?

Re: Trends to Avoid When Founding a Startup

#64

Post by Spooky23 »

sytelus wrote: post #55
matte_black wrote: post #53

Earlier quoted context omitted.

Still, it's nothing unlearnable. You read a couple good books and blogs, do some experiments, and you're about 80% of the way there.

Nothing is unlearnable - it's never question of "if it can be done" but question of "how much effort is needed". Read few blogs, books and take Coursera classes etc are all good but the real thing is working on multiple real and new problems. Anyone who has read books/blogs etc, give them a new problem, for example, predicting pedestrian intent for crossing a road from set of video frames. See how far they get.

If you do a decent job at that problem once, you’re easily in the top 25% of people who claim domain knowledge.

Many businesses have problems that an off the rack solution substantially solves it.

Re: Trends to Avoid When Founding a Startup

#65

Post by jjeaff »

birken wrote: post #20

I don't want to diminish the success that this company is having being run in their own way, but give me a break with these blog posts. VC is a "trend to avoid"? Avoid "Hypergrowth"? I guess companies like Google, Facebook, Twitter, Amazon, Stripe, Airbnb, Dropbox, Pinterest and a hundred others all really messed up. I mean I could go point by point and give examples that are the opposite of these trends, but that is…

The problem with VC money is that you are likely taking on powerful investors / co owners that are unlikely to have the same goals that you have (or should have).

VC money comes from those that have already become successful. So they are pushing for a strategy that will cause the majority of companies to fail but with the small chance that one will become the next Google, fb, etc.

Most founders can't afford that methodology. They should be looking to build a good company with good cashflow that can earn them a healthy nest egg and make them wealthy. When was the last time you heard of a VC that wanted good dividends from their portfolio companies?

So yes, if your goal as a founder is to build the next unicorn and you are willing to risk everything on that small chance to make it super big, then you should go the VC route. Problem is, you have one company and one life, so you better hope your company is the one in 10 that have a profitable exit.

Or maybe save yourself some time and just go buy lottery tickets.

Re: Trends to Avoid When Founding a Startup

#66

Post by delhanty »

csallen wrote: post #28
birken wrote: post #20

I don't want to diminish the success that this company is having being run in their own way, but give me a break with these blog posts. VC is a "trend to avoid"? Avoid "Hypergrowth"? I guess companies like Google, Facebook, Twitter, Amazon, Stripe, Airbnb, Dropbox, Pinterest and a hundred others all really messed up. I mean I could go point by point and give examples that are the opposite of these trends, but that is…

Counterpoint: Blog posts like this one are useful, because the VC-funded companies you named are so successful at dominating our thoughts, conversations, and news feeds (HN included) that many founders never see any examples of people following an alternative path. It can be inspiring to a lot of people to simply hear about the possibility of building a small, revenue-generating business or side project. I've been ru…

+1

>because the VC-funded companies you named are so successful at dominating our thoughts, conversations, and news feeds (HN included)

Right - HN's corporate sponsor is YC Combinator, so it's kind of inevitable that the VC narrative dominates.

The good thing about Indie Hackers being acquired by Stripe in April [0] (congratulations!) is that, even though you now have a corporate sponsor too, in the short term at least nothing really changes.

You wrote that

>Stripe wants to grow the GDP of the internet

so having 1,000,000 Indie Hackers starting companies is completely aligned with Stripe's corporate interests and that at least provides a counterpoint to HN and YC Combinator.

Further out, if Stripe Atlas grows big enough then we could end up with an Amazon Marketplace situation where small companies are forced to take whatever terms "Darth Vader" (#patio11) offers.

But we're a long way from that point yet.

A 3rd way is not to start a business at all. As Vincent Woo said in his recent podcast with you [1]:

>Right, so readers at home, if you can start a business, do that, but also maybe don't. It's not easy, it's a lot of work and there are a lot of things that valuable in life that have nothing to do with money, that's how I'd put that.

[0] https://www.indiehackers.com/blog/acquired-by-stripe

[1] https://www.indiehackers.com/podcast/041-vincent-woo-of-code...

Re: Trends to Avoid When Founding a Startup

#67

Post by jjeaff »

nikanj wrote: post #40

The common mental model of a fledgling software startup is too large by at least one order of magnitude. For a decent, traction-but-no-rocketship product oriented startup, you need one solid back-end+ops guy, one solid front-end+UX guy, and one programmer for each mobile platform you wish to support. Add a CEO+sales+finances person, to keep the business side of the business compliant. Yes, you won't get a cool contin…

There are startups out there running their whole backend on products like graph.cool and have no need for an ops person.

And they are building their app in react native with one developer (which can then be launched in iOS and Android simultaneously).

Re: Trends to Avoid When Founding a Startup

#68

Post by delhanty »

sytelus wrote: post #47

The catchiest (and wrong) assertion is this: "even for highly technical aspects like deep learning, fast.ai has shown that people with 1-year of coding experience can become world-class deep learning practitioners" Yes, any Joe can train deep network with dozen lines of Keras. Sure, your startup can use off-the self models and tweak it a bit... That doesn't make you "world-class deep learning practitioner". If you ar…

>Startups are (by necessity) filled with generalists; big companies are filled with specialists. People underestimate how effective a generalist can be at things which are done by specialists. People underestimate how deep specialties can run. These are simultaneously true. [0]

For Google etc. it probably makes sense to pay top dollar for lots of ML PhDs (specialists).

A startup looking for opportunities engendered by ML is better off with a smart generalist. E.g. Dawson Whitfield of Logojoy was a designer. [1]

[0] https://twitter.com/patio11/status/936628610474983424?lang=e...

[1] https://www.indiehackers.com/podcast/038-dawson-whitfield-of...

Re: Trends to Avoid When Founding a Startup

#69

Post by dboreham »

nostrademons wrote: post #33
birken wrote: post #20

I don't want to diminish the success that this company is having being run in their own way, but give me a break with these blog posts. VC is a "trend to avoid"? Avoid "Hypergrowth"? I guess companies like Google, Facebook, Twitter, Amazon, Stripe, Airbnb, Dropbox, Pinterest and a hundred others all really messed up. I mean I could go point by point and give examples that are the opposite of these trends, but that is…

It was interesting reading this, because those 5 points basically describe Google to a T. It's an aborted Ph.D thesis that took VC, hired lots of Ph.Ds with a culture "like a family", and then embarked on a hypergrowth trajectory. The irony is that when Google was young, there was a different set of "destructive trends". They still included taking VC, but it was also common knowledge that: 1. You had to sell a physic…

Taking on VC money is ok when you are making money (because you can demand decent terms). Google and Facebook are good examples.
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