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The Fatal Pinch

paulgraham.com

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Re: The Fatal Pinch

#11

Post by michaelhoffman »

TheBiv wrote: post #3
carsongross wrote: post #2

One way to avoid the fatal pinch is the Dickens approach: Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery. In a world with AWS and pay-as-you go services, it's more and more possible.

(Zero sarcasm) can you possibly explain, in different words, what this means?

The numbers refer to pre-decimalization British currency. To convert to modern currency:

  £19 19s 6d = £19.975
  £20  0s 6d = £20.025

Re: The Fatal Pinch

#12

Post by [deleted] »

TheBiv wrote: post #3
carsongross wrote: post #2

One way to avoid the fatal pinch is the Dickens approach: Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery. In a world with AWS and pay-as-you go services, it's more and more possible.

(Zero sarcasm) can you possibly explain, in different words, what this means?

[deleted]

Re: The Fatal Pinch

#13

Post by super_sloth »

paul wrote: post #10
joshu wrote: post #6

This is why I hate investing in startups raising $500k or less. You won't be able to raise again unless you have significant upwards progress.

Several of my best investments have been from startups raising less than $500k. Justin.tv/Twitch returned 97x my original investment, and Weebly will likely be even more.

Presumably those were a while back?

Do you think the climate has changed since then to make it much harder?

Re: The Fatal Pinch

#14

Post by jplahn »

super_sloth wrote: post #8

"Although your product may not be very appealing yet, if you're a startup your programmers will often be way better than the ones your customers have or can hire." Is this really true? I'm very sceptical. Does anyone have any evidence to back this up?

I think, by and large, it likely is true. That's not to say that it always holds true and it might be swayed by the strength of programmers in YC, but I think it's definitely correct more often than not.

It may also be based on the premise that if you're doing consultingish work, you're probably not doing it for one of the top tech companies, but more likely for a smaller company that doesn't have dedicated developers.

From prior experience working at a consulting startup, this tended to be the case more often than not. Obviously, YMMV.

Re: The Fatal Pinch

#15

Post by netcan »

super_sloth wrote: post #8

"Although your product may not be very appealing yet, if you're a startup your programmers will often be way better than the ones your customers have or can hire." Is this really true? I'm very sceptical. Does anyone have any evidence to back this up?

Depends o the customers, but yes generally.

This also assumes your customers are the kind that pay for custom code and have coders, which obviously only applies to a subset of startups.

Re: The Fatal Pinch

#16

Post by paul »

super_sloth wrote: post #13
paul wrote: post #10

Earlier quoted context omitted.

Several of my best investments have been from startups raising less than $500k. Justin.tv/Twitch returned 97x my original investment, and Weebly will likely be even more.

Presumably those were a while back? Do you think the climate has changed since then to make it much harder?

The climate has changed in that it's easier for startups to raise more, but even those that do not can still be very successful. Justin.tv or Weebly would not require any more money to start today than they did six years ago -- if anything it's gotten cheaper.

Re: The Fatal Pinch

#17

Post by tptacek »

super_sloth wrote: post #8

"Although your product may not be very appealing yet, if you're a startup your programmers will often be way better than the ones your customers have or can hire." Is this really true? I'm very sceptical. Does anyone have any evidence to back this up?

Even if your customers are software companies, it's often the case that your programmers are better than the programmers that they can deploy to solve the kinds of problems you work on.

For instance, if you have a clever solution to sales funnel optimization, chances are that even your savviest software customers aren't in a good position to deploy strong engineers on that problem; they're too busy making the things your customer wants to sell.

This is true of a lot of business functions: marketing, sales, recruiting, integration testing, devops, project management, bug tracking, log management, reporting, email. Basically take every product anyone ever sold successfully to tech companies and there's a list of things tech companies aren't good at effectively deploying in-house talent on.

Re: The Fatal Pinch

#18

Post by Natsu »

super_sloth wrote: post #8

"Although your product may not be very appealing yet, if you're a startup your programmers will often be way better than the ones your customers have or can hire." Is this really true? I'm very sceptical. Does anyone have any evidence to back this up?

From what I've seen, "better than average" is a pretty low hurdle to clear. I've seen too much code in production that scares me.

For example, have you ever seen someone statically allocate a million element array to hold ~1-2000 6-digit numbers? Did I mention the program had significant memory usage problems? Then again, after looking at that particular mass of 30-year-old goto-loving, copypasta C, maybe I should have been grateful they never once used malloc.

Re: The Fatal Pinch

#19

Post by mamcx »

super_sloth wrote: post #8

"Although your product may not be very appealing yet, if you're a startup your programmers will often be way better than the ones your customers have or can hire." Is this really true? I'm very sceptical. Does anyone have any evidence to back this up?

In the worst case? A startup already have developers, now. Don't forget how hard is to hire.

Plus, a lot of custom work in software is not sophisticated. Customer mainly have basic needs (from the POV of software development) but many of them, in disorder.

Working for them, is more about have patience ("pls move this 1cm to the left, not right, can you also do X?, no we decide after all don't do that" etc) than the kind of "raw skills" of a uber-developer.

Re: The Fatal Pinch

#20

Post by mamcx »

super_sloth wrote: post #8

"Although your product may not be very appealing yet, if you're a startup your programmers will often be way better than the ones your customers have or can hire." Is this really true? I'm very sceptical. Does anyone have any evidence to back this up?

In the worst case? A startup already have developers, now. Don't forget how hard is to hire.

Plus, a lot of custom work in software is not sophisticated. Customer mainly have basic needs (from the POV of software development) but many of them, in disorder.

Working for them, is more about have patience ("pls move this 1cm to the left, not right, can you also do X?, no we decide after all don't do that" etc) than the kind of "raw skills" of a uber-developer.

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