I feel like this needs a "when to give up" section. Like at some point it's obvious right. When is that point. Should you just destroy your entire life and never give up no matter how long since it's been since you've had steady growth? I've seen startups struggle for years with average growth or really slow linear growth where real profitability was years away. Do they just continue? Is that the advice? What about their employees who are being paid less than market value?
> an even bigger problem is that once you have a startup you have to hurry to come up with an idea, and because it’s already an official company the idea can’t be too crazy. You end up with plausible sounding but derivative ideas. This is the danger of pivots.
A great point, that I haven't seen in too many places. I sometimes feel like we're seeing too many people who "want to have a startup" for the supposed fame and fortune, and not enough who are truly passionate about an idea. Believing in an idea will get you through, not dreams of gold coins.
Sam, I noticed you didn't mention watching cash burn or unit economics. Is that a later section you might add? Too many founders don't realize the importance of that until it's too late (speaking from personal experience)
As a counterpoint, the founders of Thumbtack started a startup before they had an idea, picked a very "derivative idea" and still did (and are doing) pretty well. If I had to quantify the motivation of the early team, it was much more about the company being successful than everybody being super passionate about the idea. As long as you can out-execute your competitors and people want your product, it doesn't really matter what your motivation is.
Its not even just passion that should drive a startup/business. Success it not just a matter of gaining X amount of emails and signups on your site. Its also not all about trying to think of the next thing to keep people on.
I think to really succeed at a startup is to make a product that is needed and that can be sustained throughout the years. To do so, you have to think long term.
Its ok to add the "new hotness" to your business as well, but it shouldn't be what the core business is about.
Facebook's success was not because they added photos, IM, pokes, likes, it was because there was a solid platform to find people. Sure those other features helped promote and enhance the product, but without the focus on the #1 goal (making it easier to connect the world) that platform could have easily gone by the wayside.
Ha, it's amazing to see a Leo Strauss reference in a HN thread! I majored in Political Theory at Michigan State, and the department was full of Straussians. Worlds colliding.
That's great. This has been my life, finding the easy wins, and when they stop working, moving on to the next. This is one of the points that characterize me as soft.
> On the other hand, starting a startup is not in fact very risky to your career—if you’re really good at technology, there will be job opportunities if you fail. Most people are very bad at evaluating risk.
It's true that career risk is low, but opportunity cost could be high. If you're well into your career, taking a few years off to work at a startup that might fail could really be a million dollar tradeoff.
So you really gotta believe in your startup.
(Note: I left my comfortable high paying job earlier this year to start a startup)
That is the calculation I used over the course of a few months to switch from being a teacher to going all-in on my office design website.
At the time I was pretty burnt out from teaching, ended up moving to a new city and was doing a few temp jobs to make some extra cash. The risk was low enough at that point that the website was almost a no brainer. I'm pretty confident that had I been in a good spot career-wise at the time, I would likely have either never kept my side project going.
I wish there was a similar level and quality of resources for what I think are called lifestyle businesses. By that, I mean product-based businesses with at most a few million in revenue, a 5ish person team, a solid sustainable market position, and no desire to revolutionize any unicorns.
I know a lot of people attempting this and they mostly seem to be flying under the radar, or at least have nowhere near the cachet of a startup. They are often bootstrapped, frequently for lack of other options.
For those of us who don't want to be in the pressure cooker or are turned off by the hype machine, these businesses are a viable alternative route toward independence and possibly achieving a significant impact. The fact that they have become as attainable as they are is I think also something quite remarkable.
The Basecamp (née 37Signals) folks have been beating this drum for quite some time. DHH posted "Reconsider" to their blog today, actually; it's an entertaining read, if nothing else: https://signalvnoise.com/posts/3972-reconsider
Here in Seattle, there's a great community of small software businesses with meaningful profits and impact. We have ties to the broader Seattle startup and technology community, without being a proper subset.
I don't see it as an either-or proposition. Right funding for the right business, as it were.
Thanks for reposting this, I didn't see it the first time around.
Many of the pro-startup stuff I see, in particular this Altman piece, make me subtly uncomfortable, and I couldn't quite put my finger on why. Maybe it's because, while I live in the Valley, I'm a Seattle native. Maybe it's because Sam's younger than I am. Maybe it's because I like the suburbs better than San Francisco proper.
Maybe it's because I'm not an Ideas guy; this isn't targeted at me because I have no interest in starting a company and dedicating every second of my waking life to it.
That's why I was hesitant to comment at all. "Of course you're uncomfortable with it," the reply to my comment would read, "you non-disruptive loser" it would end.
For those who want a unicorn valuation, I'm sure Sam's piece is great. Or maybe it's not, I don't know.
But what I do know is he kept mentioning how competition never kills startups. It's failure to execute. Why balance burnout and cashflow and hiring and funding in some kind of race to become a unicorn if competitors won't actually kill you?
Why not grow at a reasonable pace, running a reasonable business, that makes reasonable money?
Angels? Really? You’ve plucked your self-serving moniker from the parables of a religion that specifically and explicitly had its head honcho throw the money men out of the temple and proclaim a rich man less likely to make it into heaven than a camel through a needle’s eye. Okay then!
How can I find jobs for small software business like that (especially in Seattle!)? I want to work in a smaller environment that's not necessarily trying to be a "unicorn", but those seem to be the only jobs posted here on HN for "Who's hiring?". On other job boards, I mostly just see larger corporations hiring worker drones. I just want to write good software that solves interesting problems and make enough money to get by!
I was surprised that article didn't trigger a bigger response on HN. It is a little over the top, but it leaves a lot to think about. The Unicorn, disruption PR wheel has drowned out the virtues and benefits of other forms of entrepreneurship.
I think what this essay overlooked is that the choice between a "low-risk but small business path" and a "high-risk unicorn path" is not always merely about business-choices and cornering markets simply by using large sums of money. A different "high-risk unicorn path" is going through hard scientific research, which often requires external money to get anything from the ground. And it is this last type of business that, imho, deserves our respect most. But otherwise I agree with that article.
> I wanted a life beyond work. Hobbies, family, and intellectual stimulation and pursuits beyond Hacker News, what the next-next-next JavaScript framework looks like, and how we can optimize our signup funnel.
I am long time thinking and saying, that modern startups have rather poisonous culture around them. It's very refreshing to read who thinks (and writes) about it.
Reading the advice in the handbook, I don't think it's all that different from what you'd need to start a lifestyle business. You still need to start with a business niche that is underserved where you can make a few customers very happy. You still need to focus on improving your product (or service) to the point where people will give you business via referrals - pounding the pavement for every single sale isn't a very desirable lifestyle. You still need to listen carefully to everything your users say, and to focus tightly and improve the product.
The difference, I think, is that a lifestyle business is a startup where you take your foot off the gas once your income meets your personal needs. It doesn't need to be a monopoly - in fact, it's better if it isn't, because if it is some other company will likely monopolize it. And you don't need to deal with the fundraising and hiring parts of the handbook, since you never get that big. Everything else seems to apply, though.
The devil's in the details. The handbook emphasizes Growth Growth Growth. So when your small focused obsessively cohesive product saturates its small niche and your growth is suddenly not-so-exponential, if you're a startup you start to Expand Expand Expand your product, new use cases, new functionalities, until you've reinvented email again.
If you're less growth focused, have your pricing nailed down, and are well positioned in your niche - then you should have enough new users from simple population turnover and you don't need that graph to keep angling so sharply upward to avoid ulcers.
That's my business. 2 partners (me: President and Founder, partner: CEO who I hired), 4 employees, and 2-3 at-will contractors for sporadic work. Revenue barely $1MM but growing, probably to $4-5MM in 3 years. Really love what I do and happy to be out of the BS VC silicon valley groupthink crap.
>* happy to be out of the BS VC silicon valley groupthink crap.*
If you have a 6 man company with titles like "President and Founder" and "CEO", you're buying into the SV groupthink a little.
Outside of SV, in the world of small/medium business (for which I've consulted), I don't think I've ever heard the title "CEO". Meanwhile, I've gone to tech conferences and have seen sole-proprietors refer to themselves as the CEO.
By that, I mean product-based businesses with at most a few million in revenue, a 5ish person team, a solid sustainable market position, and no desire to revolutionize any unicorns.
I believe this used to just be called "a small business". Not a terribly new idea, but being rediscovered perhaps by tech people?
A small business is fundamentally different from lifestyle tech business or a bootstrap. There could be hundreds and thousands of small businesses, say in a certain FMCG market in different local ares. A tech market with hundreds or thousands product businesses catering to a same target audience, probably, doesn't exist at all. Product companies tend to either grow or whither. Centralization is the norm.
Building a lifestyle business mostly rules out services as most desired lifestyle business model is some sort of passive income scheme. Content oriented monetization models are being slowly, but surely killed by ad blockers. An innovative product tailored to the needs of a small, well defined audience seems to be a best bet for a lifestyle business and that's very different from a classical SME.
Because they benefit from YC's value prop, it's in Sama's and PG's interest to beat the Big Startup, Fast Growth, VC train, Silicon Valley drum. It's not disingenuous, it's literally what they believe and are committed to. But it's not the only way to be happy as a technologist. I'm not even convinced it's the best way to be happy as a technologist. YC put those materials out 1) as a branding and marketing effort and 2) to be helpful (part of their brand). In order for us to get quality resources like these for doing something small instead of big, we need folks who have a sustained interest and experience in beating that drum as well. Maybe we need a "Slow Tech" movement akin to the Slow Food movement.
Unlike the DHH rant linked above, I'm not condemning the Big Startup / Growth / VC approach. At a societal level, it has managed to spin up many game-changing companies very quickly. I think it's a movement that will go down in the history books for creating a lot of rapid progress in the first half of the 21st century.
But I'm also not convinced that it's the best way to be happy as a technologist. The system produces two things - incredible wealth and power for the few winners and a large amount of (a certain kind of) technological innovation. And it produces a lot of bodies, empty hype, churn and overpriced housing in the process. You can enjoy the innovation without joining up, and if you do join up then statistically speaking you're way more likely to be a body than a winner. I marvel at this machine but I'm aware that my happiness (or that of my loved ones) is not something it's likely to produce.
To his credit, Sama's post hints at this when he says that starting a startup actually "sucks." We should listen to him.
And I would be a card-carrying member of the "slow tech" movement, where do I sign?
Even I kinda feel like this, they make effort to make their name out in the market, but that doesn't mean that their advice is BS, some parts of them obviously will be a little bit too far fetched because they want to serve their purpose, but it is amazing to have free startup advice like the stanford lecture that YC took. Truly amazing content.
I really hate this term. It makes it seem like anything that's not a high growth unicorn startup is somehow a failure. It's like a way to give it a label and somehow look down on it.
(don't mean to aim this at you - just a general remark)
I generally use the term "Bootstrapped" as a shorthand for product/SAAS business started with limited capital and focusing on growth through their own operating profits.
Yeah, I also say it with some distaste. This is the path I'm personally pursuing though, and I'd love to have some better terminology to describe it.
I wouldn't call it a "small business" either because, to me at least, that brings to mind a small consultancy and does nothing to communicate the "sell widely but stay small and focused" approach of the intentionally-small digital B2C business. (Mouthful there, huh?)
I never went to one, I just follow patio11 tweetstorms whenever he is on it and it is full of gems (the tweets, I can only imagine the conference itself).
They have lots of videos on the website, but a "playbook" format would by an awesome resource!
BTW, I work at "trying-to-be-big-with-outside-investment" startup applying to YC, but I see A LOT of value on the advice of these people when I'm daily executing stuff and not daydreaming how to big a "YC startup"
Microconf is the best conference anywhere. Other options if you enjoy that one: Baconbiz and DCBKK (less software focused but much of the content and crowd generalizes).
To the extent bootstrapped SaaS has a playbook, it is Start Small, Stay Small. I'd probably write one eventually but Starfighter is cutting into my writing bandwidth at present.
Along similar lines, it would also be nice to have resources for one (or max two) person businesses, with 100-300K revenue per year (clicky was two man team making 500K/year). That is more than enough to live well and spend some time pursuing interests (not for money).
> They are often bootstrapped, frequently for lack of other options.
The key thing that people don't understand is that investors only make money if you're trying to "revolutionize unicorns." In other words, so many company fails, that in order for your fund to have positive returns, you need to have an investment return 10,000x. Otherwise, you're losing money.
Companies that don't intend to become massive business are fine; but they are not candidates for venture funding. It's not about being un-sexy, it's that the economics just don't work for venture funding. It's not enough to return the investment. It's not enough to 10x. It's not even enough to 100x.
The vast majority of businesses are not going to fit any of this playbook. The problem is this playbook covers a niche. If you don't want to play that niche game, that's totally fine. However, like me, you will have to look elsewhere to decide what game you DO want to play, and what rules you'll have to live by. Sometimes that's customer focus, sometime's that is volume focus, or diversifying, or a 12 month profitability plan (sometimes longer, like maybe a restaurant).
There's no rules in business but the laws of the land. Pretending that there's one definition of success is very limiting to both focus and opportunity for all of us.
For smaller business, my rule is that you need to be great at one of these things and other things do not matter so much.
Do not try to do everything: like have a "great idea", "great team", "great product", "great execution", etc. Think as company as product: if you try to make everything "great" then everything will be actually "half-ass".
If you are great at two or more things: you are unicorn.
For example, if you are great at customer acquisition / SEO then you can just make something very very simple and ask people for money. No need to have "great product" at all.
I would recommend the book Small Giants by Bo Burlingham where the stories of 1 person companies to few hundred people companies are told and these companies have been around for many many years. They did not attempt to be not unicorns and are content
I have a really hard time buying a lot of this about how novelty and monopoly are keys to a successful company. If you look at the really successful startups, especially unicorns, almost none of them are actually monopolies or new ideas. The vast, vast majority are old products done right, and almost all of them have very substantial competition. This attitude is, in fact, encompassed in the near footnote-like section entitled "Competition." That section sums it all up: success is determined with obsessively improving the company. Competition isn't what kills, it is failure to keep on improving.
There is the list of current Unicorns. I can't think of one of them that doesn't have very, very substantial competition or is a genuinely novel product. All of them ventured into highly competitive, well-worn fields and what set them apart was quality of service, ease of use, and responsivity. Very few of them made conceptual leaps in the underlying product - they mostly made leaps in lowering activity energy to use products or solving associated logistical problems.
Sorry Sam, I have to politely disagree with you on this one. Lord knows you are the one with the resume and authority on this, but I am a startup lawyer and work with clients on this stuff all day, so I am not totally unqualified. I do defer to your judgment, obviously, on companies that you want to fund, and your track record more than speaks for itself. However, what I want to know is if there isn't some disconnect between the companies you do fund and the attitude that is expressed in this post. I would love to hear your insights or opinions on whether you feel that I have this wrong, and if you think that the next generation of unicorns are going to be novel monopolies, or that maybe I am misreading the characteristics of current successful startups.
Novel does not mean no competition--there's always competition, even for breakthrough technologies. Even the telephone had to compete with telegraphs or snail mail. The novelty comes in the way an existing need is met. From your list, Uber competes against taxis to transport people short distances. Airbnb competes against hotels to provide short term housing to travelers. Dropbox competed against flash drive to transfer data between machines. These companies have a novel approach to enter and thrive in a competitive market.
A monopoly simply has to have significant influence on supply of a good. In the UK that can be as low as a 30% market share. Qualify a market enough and any company can be a monopoly (I'm sure there's some geography where Lyft or good ol taxis represent a monopoly), so it's important to determine the size and importance of a market (a monopoly over food in a small town is still problematic). So while I cannot say these companies are monopolies--we have the Department of Justice for that--many companies on your list would make a compelling case, were they to abuse their market power.
You make a fair point, and I also do appreciate the definition used by Sam in his post, which was (the site is now down) about network effects compounding the bigger you get, and creative a positive feedback loop. I buy that definition, sure, and I get your comment. However, what I take issue with is funneling tons of smart minds into a quest for green-field or blue-ocean opportunities. There are tons of huge opportunities in existing businesses. I guess I don't understand how we got from "disruption" to "find a business with no competition."
This is a small nitpick, but I'd say Dropbox competes against sysadmins setting up a corporate network share or FTP server (or even email attachments) for storing documents. They basically automated the sysadmin's job, with a slick interface that was easy to set up and easy to pay for.
Same with Slack. They took the concept of IRC, which many companies use internally, and made it dead simple to set up and use.
In essence, I'd say the competition arising these days is all about UX design. Startups are taking these existing services and making them easier and smoother to use.
>A monopoly simply has to have significant influence on supply of a good. In the UK that can be as low as a 30% market share.
A monopoly has economic control of the supply of a good or service, no competition and hence pricing power.
Having "significant market share" and zero pricing power in an intensely competitive market is not a monopoly, regardless of how SV has decided to co-opt the word.
look at Microsoft and apple both of their real winners were after the fact. Office and the ipod/iphone. Also, I think anything that makes money is a win. Not just unicorns. If YC wants export to the rest of the country it needs to shoot for more base hits. I think in SV people have already self selected to follow cray ideas. but the rest of the country if you want to get the best candidate show them something with the best odds of not failing.
Office was not the first word processor, Mac OS was inspired almost wholesale from Xerox Parc, the iPod was absolutely not the first mp3 player, and the iPhone was absolutely not the first --iPhone-- edit: smartphone (what a freudian slip!). These are all perfect examples of my point: these were all examples of these products that due to their incrementally better and thoughtful design, which included ease of integration into larger digital ecosystems, compatibility with other products, availability and cost won out in the market. Not a single one of those, however, was a first in kind, nor was it a monopoly. What drove those all to success was the absolute obsession of their developers and designers with making products that were a joy to use and fit seamlessly into larger operating ecosystems.
Most of them have a high friction associated with them. Ditching your benefit provider is a major pain in the ass if you're Zenefits. If you're a paying customer, ditching Dropbox is tough too.
A resource like this is terrific. Would be great to see it in github so you can solicit the occasional outside contribution.
I've always found that even the best teams still need to constantly explore and add new tools in the toolbox in order to execute effectively and achieve success.
(In fact, it's not that even the best teams need to still do this, the best teams actively go out and do this, which likely contributes to them being a high-performing team.)
Readit News
A great point, that I haven't seen in too many places. I sometimes feel like we're seeing too many people who "want to have a startup" for the supposed fame and fortune, and not enough who are truly passionate about an idea. Believing in an idea will get you through, not dreams of gold coins.
Sam, I noticed you didn't mention watching cash burn or unit economics. Is that a later section you might add? Too many founders don't realize the importance of that until it's too late (speaking from personal experience)
I think to really succeed at a startup is to make a product that is needed and that can be sustained throughout the years. To do so, you have to think long term.
Its ok to add the "new hotness" to your business as well, but it shouldn't be what the core business is about.
Facebook's success was not because they added photos, IM, pokes, likes, it was because there was a solid platform to find people. Sure those other features helped promote and enhance the product, but without the focus on the #1 goal (making it easier to connect the world) that platform could have easily gone by the wayside.
Awesome thesis, hidden in the middle of the text. In some ways, this is a great single sentence answer to the question, "What is a startup, really?"
"So this is the third counterintuitive thing to remember about startups: starting a startup is where gaming the system stops working."
http://www.paulgraham.com/before.html
It's true that career risk is low, but opportunity cost could be high. If you're well into your career, taking a few years off to work at a startup that might fail could really be a million dollar tradeoff.
So you really gotta believe in your startup.
(Note: I left my comfortable high paying job earlier this year to start a startup)
At the time I was pretty burnt out from teaching, ended up moving to a new city and was doing a few temp jobs to make some extra cash. The risk was low enough at that point that the website was almost a no brainer. I'm pretty confident that had I been in a good spot career-wise at the time, I would likely have either never kept my side project going.
I know a lot of people attempting this and they mostly seem to be flying under the radar, or at least have nowhere near the cachet of a startup. They are often bootstrapped, frequently for lack of other options.
For those of us who don't want to be in the pressure cooker or are turned off by the hype machine, these businesses are a viable alternative route toward independence and possibly achieving a significant impact. The fact that they have become as attainable as they are is I think also something quite remarkable.
Here in Seattle, there's a great community of small software businesses with meaningful profits and impact. We have ties to the broader Seattle startup and technology community, without being a proper subset.
I don't see it as an either-or proposition. Right funding for the right business, as it were.
DHH's "Reconsider": "Our definition of winning didn’t even include establishing that hallowed sanctity of the natural monopoly!"
Sam's "Playbook": "We also ask how the company will one day be a monopoly."
(1)https://news.ycombinator.com/item?id=10506422
(2)https://news.ycombinator.com/item?id=10508269
For those who want a unicorn valuation, I'm sure Sam's piece is great. Or maybe it's not, I don't know.
But what I do know is he kept mentioning how competition never kills startups. It's failure to execute. Why balance burnout and cashflow and hiring and funding in some kind of race to become a unicorn if competitors won't actually kill you?
Why not grow at a reasonable pace, running a reasonable business, that makes reasonable money?
Angels? Really? You’ve plucked your self-serving moniker from the parables of a religion that specifically and explicitly had its head honcho throw the money men out of the temple and proclaim a rich man less likely to make it into heaven than a camel through a needle’s eye. Okay then!
> and pursuits beyond Hacker News
What foreign language is this?
I am long time thinking and saying, that modern startups have rather poisonous culture around them. It's very refreshing to read who thinks (and writes) about it.
The difference, I think, is that a lifestyle business is a startup where you take your foot off the gas once your income meets your personal needs. It doesn't need to be a monopoly - in fact, it's better if it isn't, because if it is some other company will likely monopolize it. And you don't need to deal with the fundraising and hiring parts of the handbook, since you never get that big. Everything else seems to apply, though.
If you're less growth focused, have your pricing nailed down, and are well positioned in your niche - then you should have enough new users from simple population turnover and you don't need that graph to keep angling so sharply upward to avoid ulcers.
If you have a 6 man company with titles like "President and Founder" and "CEO", you're buying into the SV groupthink a little.
Outside of SV, in the world of small/medium business (for which I've consulted), I don't think I've ever heard the title "CEO". Meanwhile, I've gone to tech conferences and have seen sole-proprietors refer to themselves as the CEO.
Building a lifestyle business mostly rules out services as most desired lifestyle business model is some sort of passive income scheme. Content oriented monetization models are being slowly, but surely killed by ad blockers. An innovative product tailored to the needs of a small, well defined audience seems to be a best bet for a lifestyle business and that's very different from a classical SME.
1. http://www.tillett.info/2014/11/24/lets-kill-the-term-lifest...
But I'm also not convinced that it's the best way to be happy as a technologist. The system produces two things - incredible wealth and power for the few winners and a large amount of (a certain kind of) technological innovation. And it produces a lot of bodies, empty hype, churn and overpriced housing in the process. You can enjoy the innovation without joining up, and if you do join up then statistically speaking you're way more likely to be a body than a winner. I marvel at this machine but I'm aware that my happiness (or that of my loved ones) is not something it's likely to produce.
To his credit, Sama's post hints at this when he says that starting a startup actually "sucks." We should listen to him.
And I would be a card-carrying member of the "slow tech" movement, where do I sign?
http://www.amazon.com/Start-Small-Stay-Developers-Launching/...
I really hate this term. It makes it seem like anything that's not a high growth unicorn startup is somehow a failure. It's like a way to give it a label and somehow look down on it.
(don't mean to aim this at you - just a general remark)
I wouldn't call it a "small business" either because, to me at least, that brings to mind a small consultancy and does nothing to communicate the "sell widely but stay small and focused" approach of the intentionally-small digital B2C business. (Mouthful there, huh?)
In truth, you gotta bust your ass at a small shop to get your work out there and make $$ from it.
I never went to one, I just follow patio11 tweetstorms whenever he is on it and it is full of gems (the tweets, I can only imagine the conference itself).
They have lots of videos on the website, but a "playbook" format would by an awesome resource!
BTW, I work at "trying-to-be-big-with-outside-investment" startup applying to YC, but I see A LOT of value on the advice of these people when I'm daily executing stuff and not daydreaming how to big a "YC startup"
To the extent bootstrapped SaaS has a playbook, it is Start Small, Stay Small. I'd probably write one eventually but Starfighter is cutting into my writing bandwidth at present.
But I highly recommend anything DHH says (as mentioned before) and also the 4 hour workweek book.
The key thing that people don't understand is that investors only make money if you're trying to "revolutionize unicorns." In other words, so many company fails, that in order for your fund to have positive returns, you need to have an investment return 10,000x. Otherwise, you're losing money.
Companies that don't intend to become massive business are fine; but they are not candidates for venture funding. It's not about being un-sexy, it's that the economics just don't work for venture funding. It's not enough to return the investment. It's not enough to 10x. It's not even enough to 100x.
There's no rules in business but the laws of the land. Pretending that there's one definition of success is very limiting to both focus and opportunity for all of us.
Do not try to do everything: like have a "great idea", "great team", "great product", "great execution", etc. Think as company as product: if you try to make everything "great" then everything will be actually "half-ass".
If you are great at two or more things: you are unicorn.
For example, if you are great at customer acquisition / SEO then you can just make something very very simple and ask people for money. No need to have "great product" at all.
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http://www.appsumo.com/monthly1k/?rf=brws
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https://www.cbinsights.com/research-unicorn-companies
There is the list of current Unicorns. I can't think of one of them that doesn't have very, very substantial competition or is a genuinely novel product. All of them ventured into highly competitive, well-worn fields and what set them apart was quality of service, ease of use, and responsivity. Very few of them made conceptual leaps in the underlying product - they mostly made leaps in lowering activity energy to use products or solving associated logistical problems.
Sorry Sam, I have to politely disagree with you on this one. Lord knows you are the one with the resume and authority on this, but I am a startup lawyer and work with clients on this stuff all day, so I am not totally unqualified. I do defer to your judgment, obviously, on companies that you want to fund, and your track record more than speaks for itself. However, what I want to know is if there isn't some disconnect between the companies you do fund and the attitude that is expressed in this post. I would love to hear your insights or opinions on whether you feel that I have this wrong, and if you think that the next generation of unicorns are going to be novel monopolies, or that maybe I am misreading the characteristics of current successful startups.
A monopoly simply has to have significant influence on supply of a good. In the UK that can be as low as a 30% market share. Qualify a market enough and any company can be a monopoly (I'm sure there's some geography where Lyft or good ol taxis represent a monopoly), so it's important to determine the size and importance of a market (a monopoly over food in a small town is still problematic). So while I cannot say these companies are monopolies--we have the Department of Justice for that--many companies on your list would make a compelling case, were they to abuse their market power.
Same with Slack. They took the concept of IRC, which many companies use internally, and made it dead simple to set up and use.
In essence, I'd say the competition arising these days is all about UX design. Startups are taking these existing services and making them easier and smoother to use.
A monopoly has economic control of the supply of a good or service, no competition and hence pricing power.
Having "significant market share" and zero pricing power in an intensely competitive market is not a monopoly, regardless of how SV has decided to co-opt the word.
Most of them have a high friction associated with them. Ditching your benefit provider is a major pain in the ass if you're Zenefits. If you're a paying customer, ditching Dropbox is tough too.
And BTW, thanks for all the info YC has been putting out there for free.
> Founders and employees that are burn out nearly always work at startups without momentum. It’s hard to overstate how demoralizing it is.
s/are //
Just wondering because it sounds like this is the collective wisdom of all the partners (even if you're the one that wrote it).
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I just improved usability on the site by like 100% for mobile users. In two lines of code. HN, please get on it.
I've always found that even the best teams still need to constantly explore and add new tools in the toolbox in order to execute effectively and achieve success.
(In fact, it's not that even the best teams need to still do this, the best teams actively go out and do this, which likely contributes to them being a high-performing team.)