How Not to Die

Look - here's my point sans babble-bot 2.0 software: In ANY new endeavor, you need to have balance. Balance is the pre-requisite to the power you need to make it. The young, naive entrepreneur is supposed to focus on success because this re-weights the equation to give his enthusiasm a higher co-effecient. BUT - this has to be tempered a more mature, wiser presence who builds up your will to overcome and helps you refine your model by discouraging and criticizing you. I know this sounds dysfunctional but it's reality. You don't built muscle by having weights which help you pull them up while writing articles to encourage you to continue. You do so by finding the will to push inside yourself while the weights push against you. If you have a mentor who just blows sunshine and rainbows at you, how will you ever find and develop your entrepreneurial muscles? The other point is that enthusiasm has to be tempered by a cold hard calculation of reality. Not that either is more important - reality is in flux but enthusiasm only goes so far at some moments. Balance. This article just seems to convey a "you think you can do it, we think you can do it, and let's meet every week in a friendly mutual admiration society where everybody thinks they can do it." Cult-like. Aren't you better off in the long run meeting up with people who hate your guts and point out 30 flaws in your idea, so that you can get that much stronger by fixing 20 of them? Sure. It is harsh and brutal. Welcome to the real world of business. The operating motto is, "If you can be discouraged, you should be discouraged." All this article seems to do in my mind is change that to, "If you can be discouraged, well then we'll put you in an artificial environment where you'll receive a lot of outside encouragement at the cost to you of finding ways to develop your own ability to encourage yourself." And it never seems to cover the very real issue of "what if you just don't make it?" You know that venture capital adage of "1 in 10 of our companies go on hit the big time and that's all that matters!"? If that were true, well them we would be awash in thousands of Yahoos and Googles and YouTubes. But we're not. So the odds of making it are at best calculated wrong and at worst lied about. But if you got financing from smart VCs, that means you must have passed many, many prequalifying criteria. So why do you wind up statistically likely to not make it? I'm sure somebody will say, "Well, at YC, OUR criteria is far more clever and wise than any VC, so if you get in YC, your odds of making already are that much greater." In the end, you need an adult to say - go like gang-busters for 6 months, then if you don't see minimum this that and the other goals met, move on. Leaving it open-ended with a "just keep trying" approach only gives you the impression that if you just hang on, maybe next month will be that special one ... or the next month ... or the next one ... how then do you know it's not next year? Or the one after that? Or next decade? There are plenty of entrepreneurs whose idea was a decade ahead of its time. What happens to them after they maxed out 50 credit cards and mortgaged their homes? Nobody knows because in polite entrepreneurial society, it's best not to talk about very real risks. But ignoring them doesn't make them go away and being really, really committed doesn't reduce them very much. I'm not being pessimistic. I applaud you folks. But I find this go-go cheerleader coaching style dangerous. Hitting the weight room and getting up early in the morning, putting your sneakers on and going for a run will prepare you better for the big game. Listening to the cheerleaders tell you how great you are and how much they believe in you is only setting you up for a rude awakening.

I don't think I'm overly optimistic. For one thing, I've both succeeded and failed (http://paulgraham.com/bronze.html). But also there are the 58 startups YC has funded over the past 2 1/2 years. With that amount of data, I think I look at the startup business with a fairly clear eye.

"Leaving it open-ended with a "just keep trying" approach only gives you the impression that if you just hang on, maybe next month will be that special one ... or the next month ... or the next one ... how then do you know it's not next year? Or the one after that? Or next decade? There are plenty of entrepreneurs whose idea was a decade ahead of its time. What happens to them after they maxed out 50 credit cards and mortgaged their homes?"

I don't think YC encourages people to keep trying with an idea that doesn't work. Rather, they encourage them to drop the idea and find another one. Many YC startups have switched their idea even during the initial 3 months.

It's fairly common for a failing idea to still be a failing idea 10 years later. It's fairly uncommon for an entrepreneur to come up with 40 failing ideas in a row. Usually by the 4th or 5th, you've stumbled onto something decent.

>> And del.icio.us, and Flickr, and Reddit, and Digg, and GMail, and JotSpot, and Picasa, and Twitter, and Blogger, and HotOrNot, and LiveJournal, and Scribd, and AddictingGames, and so on.

Talk to me in 5 years when nobody even remembers, let alone uses these things. I know, I know ... you think "impossible - they're so widespread and useful!" Remember something called "GeoCities"?

And by citing these examples, I take it to mean you want something smaller that gets bought out by Big Corp International. Great. So you want to drop out of the system only to "innovate" for the system and put yourself at their mercy when they make an offer. But what if they don't?

>> One of the most annoying things about starting up is that everyone assumes you're doing it because you heard about YouTube or Google and want to be though guys. No. I have no desire to run a $100B company. If I end up building one, it'll be by pure accident, like if my market niche is bigger than I thought and nobody bothers to buy us out.

>> Instead, I'm a startup person because my math teacher founded ClearPoint and sold it for $40M or so. Or because a friend of my dad sold a company for around that amount. Or because the dad of a friend founded Avici and cashed out at the height of the dot-com boom, when it was worth $3B. Or because a friend of a friend started Avid and ended up with a few tens of millions. Or because a coworker was an early employee at Stratus and ended up with a $3M house.

So people who do it for the money are trite ... you on the other hand are evolved and do it from a "monkey see, monkey do" perspective. Ok I hope it works for you. But notice the timing of when your family and friends sold out. Talk to me after you pickup the Financial Times and read something along the lines of "China gets pissed after latest toy recall and dumps 1.3 trillion dollars worth of bearer bond and currency holdings, sending U.S. economy into tailspin from which it may never recover."

>> You probably haven't heard of any of these. That's the point. There's a lot of value-creation that goes on in the economy that isn't reported by the media, either because it's in an unsexy field like memory chips, or because the companies get sold before the media discovers them.

That's my point. How many of these were started in an atmosphere like YC though? Ask these people if it's really true that as long as you keep trying out of fear of shame, like the article suggests, then that's all it takes in the end.

>It does happen, though, and it happens to people who are fairly ordinary. All you need is a unique angle on some problem that nobody else has thought of.

No, you need a lot more than that as Aaron Greenspan and countless others can attest to.

>> (And actually, I'm doing a startup for a bunch of reasons other than "to get rich". When I chose my present job from a bunch of offers, it was because the founder said the company's mission was "to innovate", yet I eventually found that meant "I get to innovate, while you implement my innovations". Startups are really the only place where you can truly innovate, because it gets squashed at nearly all companies.)

So be it. Sounds like you have some career maturity to fall back on if you don't make it until you can recoup and try again. But think of the majority of the people that read this article. Mostly younger and with less experience I would say. And whereas failure is a badge of honor in SV and gets rid of your green-ness, you can explain to you're blue in the face how all entrepreneurs value early failure to others but they'll just dismiss you as a failure.

All I'm saying in the end is that SV is a unique situation. The Dot Com bubble, if you are a fan of history, was just a con-job to remove wealth via the market mechanism to set us up for war-mongering overseas. It happened before WW1, it happened before WWII, and it happened in order to mess up the economy and convince gullible corporations to ship jobs overseas because that's the way it's done in the "new economy." Which doesn't seem to work well. And now you have millions of young people with no options but to join the military. What a coincidence. Don't expect "Dot Com Part II" or even the 'ol "technolgoy maturity curve" of consulting lore. We're living in very, very strange times economically and if you're basing your future on doing your own thing, make sure u know what you're getting into. "Let's have meetings every week and have dinners every week and keep everyone updated." Great - I just saw a midnight screening of Office space at this theater near me. Don't forget to have the right cover fax sheet for those TPS reports too.

I like very much your statistics: 1.- 50 % of YC startups will get success.

 2.- Only 1 of 1000 of startups will get success.

 3.- you can foresee the future of your startups:
     disaster perhaps with one exception, the one
     that thinks by himself.