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The Startup Myth

sixmonthmba.com

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Re: The Startup Myth

#11

Post by dbul »

swombat wrote: post #2

Umm, considering the hard attitude the article presents, the actual content is really rather fluffy. I can think of a word in response to this article: straw-man.

He's applying labels which is never good. Startups have a huge range and aren't necessarily just people who are living on ramen hoping to strike it big. I think this is a huge misconception in fact. While there are people out there who are experimenting with new trends, there are also many people (from what I've noticed) who have found a target market and are able to pull in some money. I would be interested to see some statistics on sv startups vs. general entrepreneurs across the US.

Re: The Startup Myth

#14

Post by 10ren »

Entrepreneurship is about turning every dollar of resources spent into something worth more than a dollar.

Including your time. Even if you can live on $100 per week, your time is still worth $100 per hour, so that's how much value you need to create with every hour.

But it doesn't need to be $100 cash, but of value. Warren Buffett doesn't evaluate companies by their current price, but by their likely future worth. A key factor in evaluating worth is their economic moat - their enduring advantage over competing companies. Therefore, creating more than $100 of economic moat in an hour is a good use of your time.

Of course, Buffett doesn't invest in startups or even tech companies like IBM. Tech is too unpredictable: a product that is good + a market that actually wants it. Your success or failure is not predictable from data points - it pretty much is the first data point.

Re: The Startup Myth

#15

Post by joe_the_user »

swombat wrote: post #2

Umm, considering the hard attitude the article presents, the actual content is really rather fluffy. I can think of a word in response to this article: straw-man.

What I find deeply offensive about this article is that he doesn't acknowledge that many, maybe most people who fail at creating "real" companies, fail not because they set out to create "just startups" or because they incompetent or because they lack the secret source, but because they face serious competition.

A minor league play or second string player can look bad compared to the very top of the professional leagues. But they aren't really bad, just not as good. Lots of people who only get to startup level are great, just not great enough to get all the way to successful company level.

And, again like sports, the pressure-cooker, the competition, is what makes the ultimately successful companies so good.

This guy is like the most offensive kind of little-league coach, the one who says "I don't want to hear any excuses for you coming in second" - someone who doesn't credit effort, who doesn't see that not everyone can win and who doesn't see that game itself is worthwhile.

Re: The Startup Myth

#16

Post by PonyGumbo »

I took an eighteen month detour from my own business to go work for another startup. I was broke from trying to get my company to break-even, and they were boomer-aged Microsoft millionaires who told great stories about their product and the funding that was right around the corner. That was in 2006, and they're still telling the same story today. The difference now is that they no longer have any employees, and the CEO is essentially living out of his car.

They obviously didn't eat Ramen (although it's possible they might now), and they weren't 60 days late on the power bill, but they were just as absorbed with the idea of the startup. For them it was about telling the story of their imminent success, and more importantly, getting other people to believe it.

You obviously have to believe in what you're doing, and of course the startup atmosphere can be incredibly thrilling, but the author's note that "we need more people wanting to build companies, not startups" rings particularly true for me. I don't think he's saying that every startup should plan to become a staid, monolithic corporate giant. I think he's saying that you should have a credible plan for organic growth. Even if your end goal is to get funded so you can get out, this will be a thousand times more likely if you can demonstrate multiple consecutive quarters of growth. Then even if you don't get funded, you've at least created a viable business.

Re: The Startup Myth

#17

Post by timbowen »

Is there really a huge faction in our community who isn't in business to make money? When I left my middle class desk jockey job to work for trailbehind.com the chance (however small) to create and own a valuable business was the main motivator.

I think that the author has a fundamental misconception about what a "badge of honor" is. Soldiers don't spend months or years in the trenches with the purpose of earning "badges of honor" they go into the trenches because they have to. The badges are awarded after the fact to recognize the accomplishment of putting everything on the line for some greater purpose.

While we are not soldiers, we do risk big chunks of our life because we believe in our products and businesses. We eat Ramen Noodles and scrimp by because the pursuit of our goals require us to, not because we like it.

I also think that the author has misconstrued the "badges of honor" concept. People get badges of honor as a reward for being in the trenches, they don't go down into the trenches with the main intent of earning a badge of honor. You are in the trenches because you have to be. While

Re: The Startup Myth

#18

Post by trapper »

timbowen wrote: post #17

Is there really a huge faction in our community who isn't in business to make money? When I left my middle class desk jockey job to work for trailbehind.com the chance (however small) to create and own a valuable business was the main motivator. I think that the author has a fundamental misconception about what a "badge of honor" is. Soldiers don't spend months or years in the trenches with the purpose of earning "ba…

There is a difference between being in it to make money and having no plan to make that money. Those that have a plan find it very easy, even in todays climate to make money. Those who don't won't. The future is clear, make money or perish.

I often have to point out to entrepreneurs the difference between an idea, project and a business, regardless of how many "eyeballs" they have.

Re: The Startup Myth

#19

Post by ksvs »

blackguardx wrote: post #7

I thought it was a great article. The author is basically telling people not to create bubble startups. If you want to create a business, create one that has value. Don't just create a startup for some romanticized ideal. It is sound advice, even if it cuts a little too close to the bone for some.

Too close to the bone? Seemed more like too close to trivial to me.

Re: The Startup Myth

#20

Post by triplefox »

johnrob wrote: post #10

... get a billion or die trying! I don't buy the "create big companies to create many jobs" mantra. A one man company creates one job, and leaves one more job available in the market for someone else. That's a contribution in my book.

A one man company can easily create jobs if it hits the right niche and unlocks a sub-market of related goods and services. So no, you definitely don't have to get big.
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