Build a Business, Not an Exit Strategy • Hacker News Board

Re: Build a Business, Not an Exit Strategy

#21

Post by olalonde » Sat, Oct 20, 2012, 5:57 AM UTC

dmor wrote: post #11

It seems like each week or so we have an existential crisis on HN by an author who has realized the "go big or go home" mindset/lifestyle might not work for them. There is a HUGE fallacy in all this expected value rationalization for building a lifestyle business. You are going to DIE someday. You don't have unlimited time, and I'd rather take crazy bets toward building something risky and radical than be comfortable…

Yeah, we have this same rant every few weeks on HN (I admit this one is pretty well written and features an interesting back story). The biggest problem I see with the expected value math is that it only factors in the money side of the equation. A lot of entrepreneurs (most entrepreneurs?) are doing a "go big or go home" startup for many reasons, money not necessarily being the primary one. If all Melanie cares about is money (I bet that's not the case), she'd probably have a higher "expected value" at studying medicine and becoming a surgeon.

Anyways, as a Silicon Valley outsider, it's weird to see those blog posts encouraging people not to take VC money. Is there actually so much pressure on taking VC money that people actually feel the need to write posts like this? Seems like a first-"first world" problem to me...

edit: Here's an interesting take on expected value by a statistician: http://simplexify.net/blog/2012/5/6/i-am-a-statistician-and-...

> So why do I still buy lottery tickets? Definitely not for the expected monetary return on investment. I think of it as a discretionary entertainment spend. I get literally hours of enjoyment from fantasizing what I’d do if I won. I happily spend $25 for two hours of entertainment at the movies, and I don’t judge the value of that experience based on its expected return. For me, a lottery ticket for the occasional big draw has just as much entertainment value, or more, than the many other things that I spend money on to entertain myself.

I bet this line of thought applies to a lot of startup founders.

Re: Build a Business, Not an Exit Strategy

#22

Post by seehafer » Sat, Oct 20, 2012, 5:57 AM UTC

dusing wrote: post #17

seehafer wrote: post #13

Earlier quoted context omitted.

Posts like this always essentially boil down to one statement: "The startup (in the pg sense of the term) lifestyle is not for me." And that's ok. For most people, making a dent in the universe is not an existential need.

99.9999% of startups are not denting anything, or really even trying to.

I'd agree that most aren't, but that doesn't mean they're not trying to (laboring under mistaken assumptions and the like)

This also depends on what making a "dent in the universe" means to you.

Re: Build a Business, Not an Exit Strategy

#23

Post by dmor » Sat, Oct 20, 2012, 5:59 AM UTC

oinksoft wrote: post #16

dmor wrote: post #11

It seems like each week or so we have an existential crisis on HN by an author who has realized the "go big or go home" mindset/lifestyle might not work for them. There is a HUGE fallacy in all this expected value rationalization for building a lifestyle business. You are going to DIE someday. You don't have unlimited time, and I'd rather take crazy bets toward building something risky and radical than be comfortable…

It's fine to say that you feel differently from the author and that you have a thirst for glory, a taste for risk. Suggesting that running your own business without ambitions of limitless growth ... that putting in a good work week, maintaining your own serious enterprise, and having a balanced life is akin to "retiring at 19"? I find that offensive and out of touch. I'm not sure what death has to do with all of this…

The expected value of the authors approach is $0 (Why? because the whole expected value argument for a startup is about additional wealth beyond your salary + dent in universe potential), and it is settling to boot. It's offensive and waste of human potential.

People striving to be average shouldn't be offended when they're told the course they've chosen will never make them extraordinary. It is reality.

Re: Build a Business, Not an Exit Strategy

#24

Post by melanie_io » Sat, Oct 20, 2012, 5:59 AM UTC

seehafer wrote: post #13

dmor wrote: post #11

It seems like each week or so we have an existential crisis on HN by an author who has realized the "go big or go home" mindset/lifestyle might not work for them. There is a HUGE fallacy in all this expected value rationalization for building a lifestyle business. You are going to DIE someday. You don't have unlimited time, and I'd rather take crazy bets toward building something risky and radical than be comfortable…

Posts like this always essentially boil down to one statement: "The startup (in the pg sense of the term) lifestyle is not for me." And that's ok. For most people, making a dent in the universe is not an existential need.

OR, most people realize that building a wildly successful photo app / car sharing service / daily deal site does not 'make a dent in the universe.'

Re: Build a Business, Not an Exit Strategy

#25

Post by oinksoft » Sat, Oct 20, 2012, 6:03 AM UTC

dmor wrote: post #23

oinksoft wrote: post #16

Earlier quoted context omitted.

It's fine to say that you feel differently from the author and that you have a thirst for glory, a taste for risk. Suggesting that running your own business without ambitions of limitless growth ... that putting in a good work week, maintaining your own serious enterprise, and having a balanced life is akin to "retiring at 19"? I find that offensive and out of touch. I'm not sure what death has to do with all of this…

The expected value of the authors approach is $0 (Why? because the whole expected value argument for a startup is about additional wealth beyond your salary + dent in universe potential), and it is settling to boot. It's offensive and waste of human potential. People striving to be average shouldn't be offended when they're told the course they've chosen will never make them extraordinary. It is reality.

Indeed, if you view humans as resources (HR!), it's a terrible waste of potential. One less cow in the meat grinder, if you will. I don't measure my value by the thickness of my wallet or the growth of my assets.

And what of the open source technology example? Are those people striving to be average, settling, or wasting their potential? Are they not extraordinary? That's only one of countless world-changing pursuits not focused on growing a business like a tumor, which I've selected because it is quite relevant to this website's users.

Re: Build a Business, Not an Exit Strategy

#26

Post by melanie_io » Sat, Oct 20, 2012, 6:06 AM UTC

dmor wrote: post #23

oinksoft wrote: post #16

Earlier quoted context omitted.

It's fine to say that you feel differently from the author and that you have a thirst for glory, a taste for risk. Suggesting that running your own business without ambitions of limitless growth ... that putting in a good work week, maintaining your own serious enterprise, and having a balanced life is akin to "retiring at 19"? I find that offensive and out of touch. I'm not sure what death has to do with all of this…

The expected value of the authors approach is $0 (Why? because the whole expected value argument for a startup is about additional wealth beyond your salary + dent in universe potential), and it is settling to boot. It's offensive and waste of human potential. People striving to be average shouldn't be offended when they're told the course they've chosen will never make them extraordinary. It is reality.

So, under this reasoning, you are saying all bootstrapped entrepreneurs are average and a waste of life, simply because they choose to go it alone, and not take funding. Hmm, what was that? Something about man, made of out straw...

Re: Build a Business, Not an Exit Strategy

#27

Post by dmor » Sat, Oct 20, 2012, 6:09 AM UTC

oinksoft wrote: post #18

seehafer wrote: post #13

Earlier quoted context omitted.

Posts like this always essentially boil down to one statement: "The startup (in the pg sense of the term) lifestyle is not for me." And that's ok. For most people, making a dent in the universe is not an existential need.

I always forget the name of that startup where Torvalds wrote Linux ... he couldn't have made a dent without a startup, could he?

you don't have to have a startup to make a dent, but if you make your goal "work 30 hours a week with a nice salary" to doubt you will achieve anything close to creating Linux

Re: Build a Business, Not an Exit Strategy

#28

Post by dmor » Sat, Oct 20, 2012, 6:18 AM UTC

melanie_io wrote: post #19

dmor wrote: post #11

It seems like each week or so we have an existential crisis on HN by an author who has realized the "go big or go home" mindset/lifestyle might not work for them. There is a HUGE fallacy in all this expected value rationalization for building a lifestyle business. You are going to DIE someday. You don't have unlimited time, and I'd rather take crazy bets toward building something risky and radical than be comfortable…

I think you either did not read the article, or did not understand it. I am certainly not advocating 'giving up' in any sense. I doubt you would say that DHH or Tim Ferris have 'given up' and 'settled in their twenties.' I even say outright, that my point is to follow your own path, and make your own rules, rather than listen to the hype and tech press. I am advocating for a worldview where getting VC funding is not…

With all respect (and I loved your previous company) I read it and quite frankly it read like this: "I raised $75K and flamed out and this is my rationalization for taking it easy right now". That's fine for you, but I don't think it is good for other entrepreneurs. I also think the expected value argument is poorly reasoned.

Re: Build a Business, Not an Exit Strategy

#29

Post by olalonde » Sat, Oct 20, 2012, 6:19 AM UTC

oinksoft wrote: post #18

seehafer wrote: post #13

Earlier quoted context omitted.

Posts like this always essentially boil down to one statement: "The startup (in the pg sense of the term) lifestyle is not for me." And that's ok. For most people, making a dent in the universe is not an existential need.

I always forget the name of that startup where Torvalds wrote Linux ... he couldn't have made a dent without a startup, could he?

But the same reasoning applies. What was Torvald's "expected value" at the time he wrote Linux? Probably -XXXXX$ if we factor in opportunity cost.

Re: Build a Business, Not an Exit Strategy

#30

Post by dmor » Sat, Oct 20, 2012, 6:19 AM UTC

melanie_io wrote: post #26

dmor wrote: post #23

Earlier quoted context omitted.

The expected value of the authors approach is $0 (Why? because the whole expected value argument for a startup is about additional wealth beyond your salary + dent in universe potential), and it is settling to boot. It's offensive and waste of human potential. People striving to be average shouldn't be offended when they're told the course they've chosen will never make them extraordinary. It is reality.

So, under this reasoning, you are saying all bootstrapped entrepreneurs are average and a waste of life, simply because they choose to go it alone, and not take funding. Hmm, what was that? Something about man, made of out straw...

I'm saying the value will begin to go up as soon as the mindset isn't "30 hours and a good salary". "Expected value" of startups is all about how much money an exit gets you, not the salary you get along the way.

I think its awesome you are self-employed, but as far I am concerned it isn't a startup in the sense I think of them, geared for massive growth.