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Before the Startup

paulgraham.com

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Re: Before the Startup

#111

Post by melvinmt »

TeMPOraL wrote: post #60
akassover wrote: post #35

I like the term "playing house". Seems like there are a lot of similar activities. I don't make it to many "startup" type events, but when I do, I always wonder why everyone there is spending so much time hanging out with each other instead of going to the events their customers go to.

From my observations as a participant of such events, people actually working on startups don't frequent them. The composition of people attending your typical bi-weekly unmeeting is: few people with money, lots of people who would like some of that money, few random CEOs who look for free employers, and the rest that just wants to hang out with "startup guys" because it's cool (and maybe they get to see some new toy…

This is spot on (especially for the "Hackers & Founders" kind of meetups) but there are a subset of (technical) events that are full of smart people and less bullshitters.

None of them will probably be your real customers but most of the people you'll meet are extremely interested in startups and new ideas. It's a crowd of early adopters, willing to try anything. This is worth something, at least while you're starting out and need to validate your ideas.

Compare that with pitching your startup idea to random people in a Walmart, that's way harder than it sounds :)

Re: Before the Startup

#113

Post by schmidtc »

lmartel wrote: post #11
kinkora wrote: post #6

Well written article. I think PGs advice doesn't just apply to startups but to nearly everything in life. Learning (or as PG puts it, "Just Learn") is huge part of the equation if one wants to advance. You'll be surprise how this attitude is not very prevalent to the general population of adults. Want to get earn more money? Just learn how. Want that promotion? Just learn what you need to achieve. Not an expert on a…

This is the sort of advice that, imo, sounds great (especially to HN readers and PG fans) but isn't actually helpful or correct. Learning is important but life isn't that simple--earning money is mostly leverage and negotiation, promotions are mostly politics, and so on. You can choose not to participate and "just learn" but you'll be at a disadvantage unless you are a truly exceptional learner.

The general idea of the essay is, i think, spot on. However, like you say it's a bit idealistic. In practice the mountain of student debt facing your average college grad changes the nature of the discussion.

Re: Before the Startup

#114

Post by mentos »

What are the examples of successful startups that were created deliberately to 'start a startup'?

I'd imagine the majority of successful startups never set out with any aspiration of becoming one. I think having that goal is poison and leads people to "playing house" and going through the motions of a successful startup without achieving the key ingredient: a product users need.

Re: Before the Startup

#115

Post by j45 »

johnward wrote: post #91
IsaacL wrote: post #47

So this is the third counterintuitive thing to remember about startups: starting a startup is where gaming the system stops working. Gaming the system may continue to work if you go to work for a big company. Depending on how broken the company is, you can succeed by sucking up to the right people, giving the impression of productivity, and so on. [2] But that doesn't work with startups. There is no boss to trick, on…

I don't really remember those two talking about startups being gameable in the way that PG is talking about megacorps. Most of the reasons they prefer bootstrapping vs startups are around the idea that bootstrapping has a predicable model for success. Where as your chances of a successful exit in a startup are like winning the powerball. Even PG notes that one good exit covers the losses of hundreds of other investme…

Bootstrapping is not excluded from being a startup. 98% of all startups in Canada, for example (tech included) are self-funded.

There ultimately is little freedom from bosses. Either your VC's are, or paying customers are.

Re: Before the Startup

#116

Post by strlen »

rokhayakebe wrote: post #101
strlen wrote: post #52

Earlier quoted context omitted.

How do you bootstrap a company that requires significant R&D before an MVP can be shipped? Or for that matter one that has initial infrastructure costs, or one would only be affordable if there's an economy of scale? This is armchair quarterbacking, of course, I'm not an entrepreneur and do not pretend to be one. Patio11 has a lot of interesting and relevant things to say, but I would hate to live in a world where en…

Are you under the impression that most interesting R&D is done at venture-backed startups? What about universities and government funded projects? Are you also under the impression that most interesting R&D need significant funding?

Getting university and government grants requires a great deal of gaming the system. I'd say governments and academia also attract gamers of the system moreso than startup world (indeed, that is a point that pg makes).

I can't speak of "most interesting", I can only speak of what I've worked on :-)

Re: Before the Startup

#117

Post by strlen »

gizmo wrote: post #65
strlen wrote: post #52

Earlier quoted context omitted.

How do you bootstrap a company that requires significant R&D before an MVP can be shipped? Or for that matter one that has initial infrastructure costs, or one would only be affordable if there's an economy of scale? This is armchair quarterbacking, of course, I'm not an entrepreneur and do not pretend to be one. Patio11 has a lot of interesting and relevant things to say, but I would hate to live in a world where en…

> How do you bootstrap a company that requires significant R&D before an MVP can be shipped? First you bootstrap something less ambitious. Then you can use that money to start more R&D heavy companies.

That circles back to the same problem, then, doesn't it? One would is now essentially looking for less ambitious, bootstrap-able ideas, as opposed to doing interesting things and seeing what comes out -- whether or not it's bootstrap-able or not.

Of course many natural-going ideas are also amenable to being bootstrapped (software development tools/services would probably be a good example), but key here is ideas that naturally arise from your area of expertise.

Re: Before the Startup

#118

Post by soundlab »

IsaacL wrote: post #47

So this is the third counterintuitive thing to remember about startups: starting a startup is where gaming the system stops working. Gaming the system may continue to work if you go to work for a big company. Depending on how broken the company is, you can succeed by sucking up to the right people, giving the impression of productivity, and so on. [2] But that doesn't work with startups. There is no boss to trick, on…

I think one of the distinctions is that for bootstrapping you can start with something (very) small and end with something big over a long period of time. Whereas when you take on venture capital the expectation is to build something very big very fast.

The latter requires more capital to expedite the ROI for the VC whereas the former is typically a much slower, organic process that may not reach an equivalent scale for 10+ years. I'm a firm proponent of bootstrapping and organic growth. After a few years of positive cashflow and growth you can walk into a commercial bank (gasp!) and setup revolving lines of credit or expansion capital to fund more growth.

Re: Before the Startup

#119

Post by tptacek »

AznHisoka wrote: post #109
patio11 wrote: post #105

Earlier quoted context omitted.

I think you may be attributing to me some things which I don't recall having written.

can we pretend you wrote them though? It would make me think even more highly of you :P

That thought pattern doesn't alarm you a little bit?

Re: Before the Startup

#120

Post by strlen »

adrianhoward wrote: post #56
strlen wrote: post #52

Earlier quoted context omitted.

How do you bootstrap a company that requires significant R&D before an MVP can be shipped? Or for that matter one that has initial infrastructure costs, or one would only be affordable if there's an economy of scale? This is armchair quarterbacking, of course, I'm not an entrepreneur and do not pretend to be one. Patio11 has a lot of interesting and relevant things to say, but I would hate to live in a world where en…

"How do you bootstrap a company that requires significant R&D before an MVP can be shipped? Or for that matter one that has initial infrastructure costs, or one would only be affordable if there's an economy of scale?" You can't — obviously. And folk like Amy Hoy @patio11 freely admit that. The key word there though is "requires". I've encountered lots of companies that have spent silly amounts of money, often their…

Interesting answer, thank you for writing it.

As an armchair quarterback I'm a bit surprised about what you've said about "folks with a dev background" (if I didn't focus on distributed systems, I'd likely focus on development tools/services -- and there are tons of bootstrapped companies in that area), but I'll take your word for it.

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