Entrepreneurship's Dirty Little Secret • Hacker News Board

Re: Entrepreneurship's Dirty Little Secret

#41

Post by srconstantin » Tue, Apr 17, 2012, 4:27 PM UTC

I'm so relieved to hear this from someone else.

About two years ago I read an article by Peter Thiel and it was kind of my "ask what you can do for your country" moment. That was when I realized that I didn't want to be an academic, that I believed people who built technology in the private sector were actually doing more good in the world. So I thought "I want to be an entrepreneur."

I've had to scale back a little as I did a couple of start-ups and learned how ignorant I was. I'm not ready to be CEO of anything. I'm not even sure I want to be; I want to write algorithms more than I want to manage a company. Honestly, right now, I want to work with people smarter than I am, and get better at what I do.

I'm done with the notion that you should always start a company right away in your early twenties, that you shouldn't have to take any time to pay your dues or build mastery. I don't want to work at a silly, unsuccessful start-up just for the sake of "being an entrepreneur." I want to get as good as I can at what I do. I want to work somewhere where I'm not the only one who's heard of an inner product. I want to do something substantive, and I'd rather do something substantive at 35 than something crappy at 23.

Re: Entrepreneurship's Dirty Little Secret

#42

Post by AznHisoka » Tue, Apr 17, 2012, 4:29 PM UTC

dkrich wrote: post #35

evanwillms wrote: post #21

Earlier quoted context omitted.

Both Eric Ries and Steve Blank are actual entrepreneurs who have tried on multiple occasions and have both success and failure in their experience. Eric Ries founded CatalystRecruiting as an undergrad, worked as an engineer for a few years, and then co-founded and was CTO of IMVU, which had a string of internal failures followed by perseverance and success. His experience there seems to have formed the core of the Le…

Who said I wrote them off? I am writing off the author of this article. This article is about 5% substance, 30% quotes from other people, and the rest is a mixture of vague personal opinions and forewarnings about the realities of the odds against entrepreneurs from a guy who, from what I can tell, has never had the guts to start a business. I personally don't find much value in Eric Ries advice and think he capitali…

I agree. Seth Godin made Squidoo, which is considered to be a content farm. Guy Kawasaki.. what has he even made lately? AllTop? Both of them are examples of good personal branding, but not entrepreneurs you want to imitate.

Re: Entrepreneurship's Dirty Little Secret

#43

Post by rendezvouscp » Tue, Apr 17, 2012, 4:33 PM UTC

nirvana wrote: post #8

One thing I see is a lot of people stressing about starting a company when they are in college or just out of college. If you're struck dead by the idea for a business in college and is so compelling the idea of working for someone else is absolutely laughable-- then by all means, start a business. But if an entrepreneur is what you "Want to be" but you're "not quite sure how to get there", or even if you're like me-…

I wish I would have done this. I started working on Iron Money[1] during my first year of college, and I even took a year off so I could make it profitable. I don’t regret what I’ve done, but I wish that I had worked for other companies to get experience before starting my own venture.

In the same way that new companies should be an improvement to what is already offered by others, I think there is a lot to be said for learning the successes and failures of how other companies run before starting your own.

[1] https://IronMoney.com/

Re: Entrepreneurship's Dirty Little Secret

#44

Post by srconstantin » Tue, Apr 17, 2012, 4:35 PM UTC

jonnathanson wrote: post #7

Even beyond this core point (not everyone is cut out for entrpreneurship) lies a more important point: society doesn't need everyone to be an entrepreneur. If we assume that there are roughly 150 million Americans in the workforce, we're not better off with 150 million startups than we are with, say, 1 million startups and 149 million workers. We're not even better off with a substantially larger ratio of small to la…

I'm not sure that it would be bad if the average size/age of businesses decreased. It seems to me that in larger businesses, while you do get advantages of scale, you also have problems related to size (bureaucracy, knowledge problems, etc.)

Re: Entrepreneurship's Dirty Little Secret

#45

Post by ScottBurson » Tue, Apr 17, 2012, 4:45 PM UTC

I started a business, with three cofounders, right out of college. The year was 1980, and we had all just graduated from MIT. Here are some things I wish we had known:

() A market is defined by people's understanding of the function of a product.

() Most markets are winner-take-all. Sometimes two or three products can coexist in the same space for some reason, but usually not.

() So to be successful, you should seek to define a market niche you can own. You get to pick what that is, but of course you don't know until you try whether it's large enough to sustain your business.

() Also, you will need to communicate the definition of your niche to the market. This may be easy or hard. If you're in a crowded space, for example, or if (as happened to us) the space started out fairly open but then better-funded competitors showed up, you may need to redefine your niche as a specific smaller part of what is hopefully now a larger market. This is called "product differentiation".

() The better you understand the needs of your target market, the better you will be able to understand the potential functions for which your product can be used. This will help you in both choosing a niche and in communicating your definition of that niche to the market.

I could go on, but I think that's a decent summary of the basics. Of course, there's a lot more to marketing if you really get into it (chasm phenomena etc.), but I think if we had just understood that much, we might have been a lot more successful.

Re: Entrepreneurship's Dirty Little Secret

#46

Post by its_so_on » Tue, Apr 17, 2012, 4:58 PM UTC

wpietri wrote: post #40

its_so_on wrote: post #31

Earlier quoted context omitted.

I've added clarifications, let me know if there is anything left unclear. (I didn't want to explain every comment, thought it would be condescending or unnecessary, but I've explained anything I thought was unclear in an edit, and can add more if anything is still unclear.

I guess you've worked your way up from incoherence to confused but apparently baseless allegations. You appear to suggest that Zynga is typical. It isn't. Indeed, it's gotten so much press because it is very different than the Silicon Valley norms. From the exits I've seen, early employees generally do well when founders do well. The only financial games I've heard of are ones that VC investors play with founders. E.…

I have to say that 90% of what I said applies to the vast majority of startups today, rather than the occassional one that succeeds big. Google is characteristic of a different era and philosophy; I doubt very much that it would be possible for Google to have become Google in today's ethos, and if it did, it would not have created more than a handful of truly rich people.

Re: Entrepreneurship's Dirty Little Secret

#47

Post by Achshar » Tue, Apr 17, 2012, 5:23 PM UTC

nirvana wrote: post #39

Achshar wrote: post #14

>We need to discourage those who aren’t fit to start their own business. I request you to define "fit". How can one know if one is "fit". The line is very blurry I believe, unless there is something that I am missing here. Not unlike many others here, I aspire to be an entrepreneur too. But after reading this article I am left undecided on what side I "fit" in. Am I not supposed to be doing this? How am I (or others…

Here's one objective way to measure fit: If you let a half assed article from someone who (I suspect) has never started a business dissuade you from being an entrepreneur, then you don't fit. The skill to have (and it is easy for me, but it may not be for everyone) is to know what's right and what you're going to do, while at the same time separating the signal from the noise out there and integrating what the signal…

What you say makes sense but I just wanted to point out that i never said that I question my decision. I said "The more I think, the more likely I am to be confused". But other than that, I would like if you appreciate that it is not the easiest thing to tell the noise from the signal when you are new. Everyone seems to be right in their place and have valid points. I believe it takes experience.

Re: Entrepreneurship's Dirty Little Secret

#48

Post by wpietri » Tue, Apr 17, 2012, 5:30 PM UTC

its_so_on wrote: post #46

wpietri wrote: post #40

Earlier quoted context omitted.

I guess you've worked your way up from incoherence to confused but apparently baseless allegations. You appear to suggest that Zynga is typical. It isn't. Indeed, it's gotten so much press because it is very different than the Silicon Valley norms. From the exits I've seen, early employees generally do well when founders do well. The only financial games I've heard of are ones that VC investors play with founders. E.…

I have to say that 90% of what I said applies to the vast majority of startups today, rather than the occassional one that succeeds big. Google is characteristic of a different era and philosophy; I doubt very much that it would be possible for Google to have become Google in today's ethos, and if it did, it would not have created more than a handful of truly rich people.

And what's your basis for saying you have insight into the vast majority of startups today? Because an assertion from an anonymous, semi-coherent commenter isn't doing it for me.

As another counterexample, I just checked the YouTube purchase. They started much later than Google. When they sold for $1.6 billion, about 140 million ended up in the hands of the 20 non-founder employees with enough equity to list in the SEC filing:

http://www.secinfo.com/d14D5a.uM1t.htm#10gr

That includes these titles: Senior User Interface Designer, Director for Networking at YouTube, Senior Engineer, Engineering Manager; Vice President of Content at YouTube, Director of Product Development, Director of Customer Support, Systems Architect and Office Manager.

Re: Entrepreneurship's Dirty Little Secret

#49

Post by markest1973 » Tue, Apr 17, 2012, 6:09 PM UTC

wpietri wrote: post #26

markest1973 wrote: post #16

"we need to push back on the growing belief that they can eschew writing a business plan when they are too busy 'doing'" How many startups change their business model when they realize something is not working? Most? I suppose the only valid thing coming from a business plan is the recognition that you're not hitting your goals, you're running out of runway, and you better adjust course. Other than that, guessing wha…

I think it depends a lot on your kind of business. For the kind of internet businesses VCs like, business plans were always BS. That's because the pivoting and the hockey-stick growth curves make mush out of them. But I've watched friends start more normal businesses: 1-10 person service or manufacturing businesses. For them the business plan has been really useful in that it has forced them to think through the deta…

That's true. My post assumed a software-centric view of the world, where costs are very low and all that matters is a great product.

In most other businesses, it would be very important to know how many widgets you need to sell at what price to float the loan payments for production or to know all your overhead costs before taking on a consulting/service contract. Neither of those require long range planning, though, which I think are still guesses. The immediate budget and plan, however, is important.

Re: Entrepreneurship's Dirty Little Secret

#50

Post by aniijbod » Tue, Apr 17, 2012, 8:56 PM UTC

This article is based on the current rose-tinted view of employment as 'the safe option' which says 'if you don't want to be a founder or co-founder of a startup, don't worry, with the right skills there'll always be a nice safe, steady job for you with one of those big reliable old operations who are all so great at innovation that they'll always be around'. Alan, you're right, entrepreneurship does have a dirty little secret: failure. But unlike big established employers, a determined serial startup founder can even be bankrupt and still get together with a mate and start another. Failure is good for the fledgling entrepreneur, because it releases the hardest-won experience back into the startup ecosystem. It's the big guys whose failures will leave employees with skills which will be less likely to be transferable in any future downturn. The days when the likelihood of failure was a good excuse for not starting a startup were over the moment that it became possible to try it at zero cost, before or after getting a job, or even being on the dole. Get out there. Do a startup. Fail fast, fail cheap, get the bug, pass it on, share what you learn. If you succeed, become an Angel. If you don’t, become a mentor. Failed first-timers who retain enthusiasm and commitment can make inspiring mentors.