Why to Start a Startup in a Bad Economy • Hacker News Board

Re: Why to Start a Startup in a Bad Economy

#131

Post by parenthesis » Fri, Oct 17, 2008, 10:12 PM UTC

mhartl wrote: post #90

robg wrote: post #75

Earlier quoted context omitted.

Can you point to one essay where he uses the phrase "make money" or some variant thereof? More to the point: To me, a startup isn't about money. It's about freedom. That's where I've found much to like in his essays.

In http://www.paulgraham.com/start.html , Paul writes So who should start a startup? Someone who is a good hacker, between about 23 and 38, and who wants to solve the money problem in one shot instead of getting paid gradually over a conventional working life. So writing about startups is always implicitly about making money. (Not that there's anything wrong with that.)

But "solving the money problem" is about gaining the freedom to do what you love, without having to worry about putting food on the table. The problem is really a problem of freedom, which it just so happens can be solved by acquiring a load of dosh. So it's only about making money as a means to the end of freedom.

Re: Why to Start a Startup in a Bad Economy

#132

Post by kikap » Sat, Oct 18, 2008, 12:43 AM UTC

ashr wrote: post #45

akkartik wrote: post #40

"What if you quit your job to start a startup that fails, and you can't find another? Good hackers can always get some kind of job. It might not be your dream job, but you're not going to starve." Hmm, isn't that kind of a low bar? I worry that I'll be 40 before I know it, with no savings to show for my years of work. Isn't opportunity cost a concern? Perhaps PG really is writing for the young.

I sure get the same impression. Start ups are for twenty somethings who are not married. If you are 30+, married and with a mortgage then forget it.

I'm 39, married, have a 7yo daughter, but luckily no mortgage. But I have $425 on a savings account to balance off having no mortgage :-) And I'm throat deep in a startup for 2 years already, it's just a beginning.

Re: Why to Start a Startup in a Bad Economy

#133

Post by velshin » Sat, Oct 18, 2008, 4:55 AM UTC

I searched this comments page for "food" and interestingly, I didn't see any comments pointing out that starting a tech startup is a (temporary) vow of poverty. This is exacerbated in a recession, when it's often more difficult to find investment capital for rapid growth.

A point that seems lost in pg's recent start-the-startup cheerleading is that you need to be able to eat, pay rent, etc. Even if you're in your 20's and have a good chunk of money saved up, how long will it last? A year? Two? What if you don't see a paycheck for that long? Will there really be that many tech jobs available to "fall back on"? Part of the definition of a recession is a contraction of employment. That means tech jobs are less available, too.

These reality checks shouldn't stop anyone, but it'd be nice to see a reminder from Graham once in awhile to do the maths (personal budget etc.) and be realistic. A lot fewer tech workers are in the financial position to start a startup than they realize.

Ramen money indeed!

Re: Why to Start a Startup in a Bad Economy

#134

Post by kikap » Sat, Oct 18, 2008, 4:55 AM UTC

robak wrote: post #94

What about having savings instead of "investor funding" ? If you have developed a great product why in the world would you like to share your company with VCs anyway ? Why you need somebody to invest in your company ? I mean come on people, you can save $10k in vacation as a college student waiting tables and have 100% pie for yourself. I don't understand the logic here. Never did.

Not everything is yet cheap enough to run on 10-50k of savings. Take semiconductors for example. Some software technologies are also quite expensive to develop, not everybody is doing web apps, thanks God :-)

Re: Why to Start a Startup in a Bad Economy

#135

Post by ageremew » Sat, Oct 18, 2008, 5:32 AM UTC

Very good article. I was wondering if this is actually a good time to start some sort of business or not and I stumbled on this article by accident. It is good to be optimistic and on the positive side of what is in the news than being discouraged. I command you for your good advise.

Re: Why to Start a Startup in a Bad Economy

#136

Post by satyajit » Sat, Oct 18, 2008, 6:12 AM UTC

I don't necessarily think PG is all about making money. In fact in a recent London talk (http://dl.getdropbox.com/u/142733/Audio/Lectures/future_of_w...), he talks more about hackers' freedom. Hackers are animals shackled in corporate zoos, and they need to be freed to express/invent! He also goes on to say, you can even pay them less, as long you provide them the freedom to release their energy! PG's mantra is a super powerful one: Make something people want, which also translates to 'Create something, make money while making something you love and your customers love'! That's empowering...

Re: Why to Start a Startup in a Bad Economy

#137

Post by rgrieselhuber » Sat, Oct 18, 2008, 7:40 AM UTC

mhartl wrote: post #90

robg wrote: post #75

Earlier quoted context omitted.

Can you point to one essay where he uses the phrase "make money" or some variant thereof? More to the point: To me, a startup isn't about money. It's about freedom. That's where I've found much to like in his essays.

In http://www.paulgraham.com/start.html , Paul writes So who should start a startup? Someone who is a good hacker, between about 23 and 38, and who wants to solve the money problem in one shot instead of getting paid gradually over a conventional working life. So writing about startups is always implicitly about making money. (Not that there's anything wrong with that.)

To a hacker's mind, solving the money problem is less about money in and of itself and more about making efficient use of our time. Wasting time is the worst of sins.

Re: Why to Start a Startup in a Bad Economy

#138

Post by maxklein » Sat, Oct 18, 2008, 10:48 AM UTC

jpuskarich wrote: post #62

einarvollset wrote: post #52

Totally unrelated: Clicked through to Bountii, and then onto their API TOS, and found this: "[you agree not to] use the Bountii API to operate nuclear facilities, life support, or other mission critical application where human life or property may be at stake. You understand that the Bountii API is not designed for such purposes and that their failure in such cases could lead to death, personal injury, or severe prop…

Sorry for the oversight; we just added "unmanned aircraft" to that list.

What about to build guns which are intended to kill human beings?

Re: Why to Start a Startup in a Bad Economy

#139

Post by bad_user » Sat, Oct 18, 2008, 12:14 PM UTC

axod wrote: post #59

bad_user wrote: post #46

Earlier quoted context omitted.

From my pov those are anomalies, rather than the norm. For every Google, Youtube and Facebook, there are thousands of startups with similar strategies that fail. I think it is safer to go the long route and start small, working your way to the top, charging a price right from the beginning. If your application is useful, users will pay for it.

By doing that you limit your growth rate, and your maximum size. Charging up front puts people off, whereas if you slowly incrementally introduce revenue later, they will probably be hooked by then.

When you're introducing revenue later, you have to provide extra value. This means more features and so you're endangering your core values.

When you're starting to charge for existing features, by limiting the free accounts, you will surely upset your existing users. Google tried to introduce advertising in YouTube videos, and the community was not happy about it ... and imagine a site like YouTube placing a limit on how many videos you can watch. No matter how hooked your users are, you still can lose them, not to mention that popular services like YouTube got cloned and there is competition waiting for those users.

People have been charging money or other goods in exchange for products/services since forever. I don't really understand this trend of releasing products for free. The only viable exit strategy is for your company to be acquired by a big player, but if you want your business model to be sustainable you should question this trend.

Re: Why to Start a Startup in a Bad Economy

#140

Post by morphle2 » Sat, Oct 18, 2008, 12:17 PM UTC

velshin wrote: post #133

I searched this comments page for "food" and interestingly, I didn't see any comments pointing out that starting a tech startup is a (temporary) vow of poverty. This is exacerbated in a recession, when it's often more difficult to find investment capital for rapid growth. A point that seems lost in pg's recent start-the-startup cheerleading is that you need to be able to eat, pay rent, etc. Even if you're in your 20'…

Velshin,

That is reality. But it is also reality that these kind of amounts (if you're careful in what you're spending), can be earned in a few days a month doing something you're good at. Just trust in your own qualities.