In sailing, don't you want wind from the side? With tailwind, you can't sail faster than the velocity of the wind.
Hard Startups
91–100 of 331 posts
Re: Hard Startups
#92Earlier quoted context omitted.
Oh I am not doing any SEO either. I am still writing emails and making calls, just not the kind that start a 6-month long sales process ending with cigars :-)
Would you mind if we have a short chat about your sales approach? This is something I am still struggling with a little bit!
Same. :) Wish there was a venue/forum/platform to share tips and advice on this type of stuff!
Re: Hard Startups
#93It’s odd (read: motivated by self-interest) that he didn’t make any attempt to establish the failure rate of these startups and the distribution of outcomes for employees. Further, he didn’t even argue for a referendum on equity comp. He’s blatantly peddling the same broken model of “sell them your fugazzi so they can’t tell their talent is being plundered for (founder/investor) economic gain”. It’s downright insulti…
It's shocking how few people understand this, and how good YC is at painting the narrative that this isn't the case.
My roommate, after reading all of pg's essays and learning the YC mantra, came to the conclusion that they don't care about making money, and just want to do good for the world. That is the picture they paint to get smart people to work on problems that are most likely going to fail. YC knows what they are doing.
Re: Hard Startups
#94> Few recruiting messages are as powerful (when true) as “the world needs this, it won’t happen any time soon if we don’t do it, and we are much less likely to succeed if you don’t join.”
This line would work on me if it the founder(s) and I were in the same boat. But when you have 20% and you won't even tell me what percent of the company my X shares are worth, your pitch only makes me thing "I'm less likely to be rich if you don't slave away for a really long time (and I might be a few million if we're modestly successful, and in that scenario you probably won't get anything)". When startup equity distribution becomes more like a pirate ship, where everybody gets X, and the captain gets 2X, then I'll buy into the "we're all in this together" pitch.
Re: Hard Startups
#95Before I started Submotion, I did a fairly thorough analysis of what kind of startup I wanted to create. I decided that I wanted to create something that - was B2B. Consumers are fickle, things can explode but they can also go out of style just as fast. It's more sexy and makes for better smalltalk but my assessment is that they are much more difficult to grow predictably. - targets SME's. I am somewhat extroverted f…
HNCS (Hacker News Comment Section) is turning into AWZ (A WarZone) with these acronyms. Here are some definitions of acronyms: B2B: Business to business. SME: Small and Medium Enterprise? Subject Matter Expert? CRUD: Create Read Update Delete. B2SMB: Business to Small Business? CEO: Chief exec officer, SEO: search engine optimization, they have nothing to do with one another. VC: venture capital I'm not sure what SME…
These are all basic acronyms in the software/business world
Re: Hard Startups
#96Earlier quoted context omitted.
Slowly I having my doubts about that. At least for early stage and angle investment. Investors need a 10x exit. Now imagine an early stage investment of 250k in a small business that grows to 10 million revenue. Healthy, because it is a lifestyle business not geared towards hyper growth. Assuming the company is profitable and cash positive, buying back the investor for 2.5 million through a bank loan is a reasonable…
I think one problem is opportunity cost for the VC. Arguably, they have to spend as much time on diligence for that .25MM investment as for a 10MM one. Put another way, to deploy a $125MM fund, you’d have to do 500 of these microinvestments.
Not just the diligence. Also the time post investment to mentor the founders and deal with various problems that crop up over the year. No startup older than a year or two that hasn't seen at least one major crisis that could have killed the company (and in many cases it does).
Re: Hard Startups
#97In sailing, don't you want wind from the side? With tailwind, you can't sail faster than the velocity of the wind.
Airplanes like tailwinds.
Re: Hard Startups
#98Earlier quoted context omitted.
Former fusion startup founder here. This is a very good point. My startup took 6 years to fail and much of our competition at the time is still at it 20 years later. There are a number of things which are also impedance mismatches between the typical SV startup mode and hard startups. One of these is the failure path. When an adtech startup fails, the founders just go get well-paying jobs at a FAANG, or at least that…
How do you maintain momentum at these kinds of time scales? When I ran engineering at a startup, I tried to structure things such that we deliver something worthwhile at some kind of predictable cadence. It's the best set-up for everyone: the employees feel like they've accomplished someting, the investors feel like there's progress being made. With software this is pretty easy to do (and even so, people often fail t…
That's a good question. My first thought was, "We didn't". But that's really just pessimistic memories speaking. My second thought was, "A perpetual state of stress and fear!". Also pessimistic memories, but closer to the truth.
In reality, we had initial seed funding for about a year. We had a number of goals we had established, including vacuum chamber, getting the ion source running, first beam, first neutrons. We fell way behind in the first six months because I made the stupid decision to try to build a duoplasmatron ion source to save money. This cost us about 4 months to make a shitty ion source that was full of leaks and barely usable. Luckily the experienced electrical engineer came up with an RF ion source bought used that did the job well enough. We actually ended up meeting all of our 1st year goals in just over a year if I recall correctly.
By that time the money was running out, so DFJ basically extended the funding by issuing us convertible debt in 3 month increments. Every three months we would have a set of goals mutually agreed upon by the board, which was two of us and Tim Draper. This was pretty stressful for us, as we were living paycheck to paycheck and we had no idea if we didn't meet a goal if Draper would pull the plug. Tim was never anything but supportive but we understood the point of milestones. That is also when things got technically difficult, as everything we had done before was using existing techniques but when we went off-the-map things slowed down a lot.
That went on for about 3 years. Basically the same dynamic as software guys tend to see in the classic death-march sprint. I blame leadership (myself).
Eventually we ran up against some hard limits that wouldn't work with our design. We faced a choice between making an expensive bet on a supersized ion source (an inelegant brute force solution, which I know now would not have worked) or a new risky design (which also would not have worked). Tim was in favor of the brute force design, because he saw that as money being the barrier. I had my doubts about the brute force design, and I didn't want to waste the money on something that would only fix one of the 3 major problems we faced. I tried building the long-shot design. Then a piece of plastic got into the main turbopump and it ate itself. The 2000 market crash happened. Everything fell apart.
Re: Hard Startups
#99The problem with startups building hard tech is it takes a long time to fail. Failures that take decades doesn't work in the startup model. Image working on a fusion reactor. It might take 25 years to fail. The failure may not be that your idea doesn't work, but because some other kind of reactor comes along that is a better business (ie, cheaper). At this point, you are now a world class expert at a technology that…
Right. Which is why government research is probably a better model for these world-changing basic technologies than Silicon Valley. Ugh, can you imagine how bad TCP/IP would have sucked if it had been developed by venture capital funding?
Is that true though?
Nobody -- public, private, international -- has had any luck in fusion. I think that has more to do with the problem itself.
But consider "world-changing" technologies like electric cars. The SV model doesn't see so terrible, does it?
(Yes, I know about government grants. It's still a primarily private industry play.)
Re: Hard Startups
#100> The most counterintuitive secret about startups is that it’s often easier to succeed with a hard startup than an easy one. For white male founders, yes. For a lot of others, they don't believe you can do something hard. Speaking from numerous fundraising experiences in which I got continually asked crappy "how do I believe you can do this" and even "what would you do if I do [bad thing]" type questions instead of g…
What about indian male founders? As a W/M, I feel like I know more of them that were successful than W/M founders.