Startup Winter: Hacker News Lost Its Faith

I'm a little older than probably the average HN visitor, but I bet my experience matches a lot of peoples:

Mid 90's startup: Sold company, proceeds company covered debt, basically. I learned a ton on those 2.5 years, but had to have a part time job to make ends meet (and I was not living a lavish lifestyle).

Late 90's - Mid- 00's: Partner in consultancy that made generational wealth for at least one client, worked to burnout multiple times, never able to use the consultancy to develop a product with ARR. Made good profit share and salary the years prior to dotcom bust. Company was sold for basically the debt on the line of credit.

Mid-00's - Mid twenty-teens: Joined a "startup" that was really a consultancy. Spearheaded substantial growth, Shareholders just increased the dividend amount every time company grew year over year. Unable to negotiate an equity position that aligned incentives (me giving up my life and energy to further build the business) so I left. I was forced to surrender the equity in another startup when I quit the first one. The other start up is limping along, I think losing a (manageable) amount of money annually. I never valued this equity because the shareholder group was the same as the parent company, so this one had the same issues.

So I guess in a 25 year period I had something like 2-3 exits. I worked more than full time between 1998-2015.

I'm now a firm believer in that a successful exit takes knowing the right people and getting lucky.

> Per capita Swedish entrepreneurship is like 7x the rest of the euro zone

That sounds worthy of deeper investigation, but healthcare is unlikely to be the factor?

Bureaucracy is real. There are often ways of surmounting that, but that takes yet another, different set of skills.

> to markets that exists instead of trying to create markets for something no-one has ever used before

Tried this quite a few times to know that competition is a good thing to have. The screen is a blank canvas, but the real world isn't.

DON'T DO IT should be the generic advice to anyone wanting to found/join a startup. You should only engage with startups if you have a good reason to. Just like you should only become a SoundCloud rapper if you fundamentally enjoy that life on a day-to-day basis, not because your goal is to throw champagne parties on yachts because you think all rappers get to do that as a payoff for the grind.

I’ve worked for 10 startups, 3 with successful exits, but only 1 of which made me a tangible financial boost; in true startup fashion this last success has more than paid for the rest. 2 of these startups were bootstrapped with cofounders that I later had a falling out with. This was a deeply horrible experience, at a time when I had no financial safety net. This made my self-esteem during key strategic decisions disorienting low. I had peers also founding startups during this time I was regularly in touch with, and they managed to be so much more level-headed than me, while I kept taking crazy risks or being too risk-averse. Years later, I realized most of the the "peer" cofounders I was comparing myself to had generational wealth. To them, founding a startup was more like a gap year. This was the roughest period of my life, and I actually have more spotty memory of this time than before or afterwards; literal brain damage.

I’ve ended up in startups so often because they enable you to tackle interesting problems holistically. I’m happier and more useful in this mode of work, rather than at an established company where you end up having to use existing, out-of-date models in team roles that are relatively silo'd. As an early startup employee, you can get an incredible amount of latitude you wouldn't otherwise. Founders should be leaning into this as part of the employment offer - you can't pay as much as a big company, but if your employee wants every Wednesday off because they do a weekly silent yoga retreat, you can say yes to that, while a big company wouldn't. The worst times I've had working for founders are when:

1. They treat the startup like their baby, and try to micromanage it like it's still only 2-3 people when the team has grown to a few dozen.

2. They think of the startup like it's their gap year, and don't actually care about product success. They want to continue with their original on-a-pedestal hypothesis for 2-3 years without attempting pivoting into potential traction. They run out of investor's money, and then get upper-level management jobs at large companies. I'm not offended at the waste of VC money, but rather the waste of human effort; we could have potentially found user value. If we aren't going to do aggressively pursue that, at least let me mess around with my own nonsense instead of insisting I stick to the product roadmap we all know isn't going to go anywhere useful.

Our primary model for creating new value is VC-backed startups, where the payoff is huge if you win, but unsustainable and demoralizing for anything else. This incentivizes startups and their investors to shoot for the moon and miss rather than seek lifestyle businesses which could have been a great contribution to the infrastructure of society. I wish the other R&D models got more attention: think tanks, government grant-based orgs, etc. I've done R&D work in academia, but I've found unfortunately that people are so ephemeral, so while most of the work is intelligent, it's quality is fragile and isn't reusable engineering. One exception would be some of the university-backed open data institutions https://www.birds.cornell.edu/home/us-state-level-conservati...

All that being said, I am currently bootstrapping a startup now! This time, I have a long personal runway, and I am quite happy. I am working with 1 part-time contractor, and at the stage where I'm discussing a raise with a few angels to hire a full-time team. However, if this raise doesn't work out, the path forward for the next ~2 years is the same, just more gradual.