> First, it sets the stage for what was to come, and second, while it was unquestionably a success, it was not my success.
I used to think that success was being successful the way I wanted and I was often frustrated because things were working but not because of the way I wanted them to. Turns out, it's doubly difficult to make things not only work but also work the way I want.
I've since tried to be more open-minded and see wins that perhaps I didn't expect or want still as wins and it's made me feel a lot more successful. One might scoff and say I should hold myself to a higher standard, but at the end of the day, success is only an intrinsic feeling anyways. It's not a measurable metric so I might as well feel better about the progress I'm making.
In the context of the article, the author could see these all as failures, but it sounds like some of these were pretty successful. In fact, the author concludes as much, finding happiness in the "failures". It's all an arbitrary label anyways.
Sometimes wins are not necessarily measured with financial success. A company can utterly fail and still represent a win. I had one of those.
I started a self-funded tech company around 1998. This was hard tech, hardware and software. And I was the sole engineer doing all the work. This meant 18 hour days, 7 days per week to get the plane off the runway. Two years later, after booking lots of sales, we finally moved out of the garage and I started to hire people. Yes, I ran this beast entirely on my own for two years. A few years later a large well-known company expressed interest in acquiring the technology. The number being floated was in excess of $30MM.
What happened?
Well, 2008 happened. The economic implosion caused this company to second-guess entry into the market we had pursued --which they intended to do by acquiring us. The deal went from being a couple of meetings away from an acquisition to evaporating in front of my very eyes.
The bad news was that the economic downturn truly hurt us over the next couple of years. I had to shut it down in 2010 and lick my wounds.
This thing went from pouring all of our savings and an incredible amount of very hard work into a crazy idea, executing well enough to get a $30MM+ offer to closing the doors and nearly losing it all in the process.
At the time this felt like an abject failure and a waste of ten years of my life. It took me months to get my head back on straight. Today, looking back, I see it as a success. I took an idea from nothing to close to a massive life-changing exit and did so mostly on my own through hard work, grit and determination. That's a success story nobody can take away from me. I learned a lot along the way and most of those lessons were part of success in future endeavors.
Life can be funny and cruel sometimes. You might think you are going through your darkest hours when, in reality, you are growing a solid backbone that will support the rest of your life.
It’s like anecdotes you hear from religious people during a disaster. “I lost five of my kids. But I’m so thankful that God looked out for me and saved one”
Ugh, I know this feeling too well. I've been pretty successful in life so far by societal standards but have always felt inferior and like I'm failing. Always. I think partly that's responsible for the drive that enabled earlier success, but it gets old. My first defense when those feelings bubble up is to remember we're all playing a game we can't win!
I'm very grateful to have the luxury of not having to play the game (very much). It puts me at odds with the majority of the world. Maybe if I was a success on the scale of our modern day oligarchs my circles would be filled with similar people, but being a salary employee who doesn't work primarily for the pay cheque and could quit for higher morals or values (without risking their family's welfare) is a weird situation. I feel like I'm often on the edge of the bubble and must be missing something.
Yeah, the "success definition" trap is real. For me I was having coffee with a former co-worker who was now a VC because they had been at one of the same companies I had been but had joined "pre-IPO" and so probably had a net worth of 20 - 30 million. They asked what I was looking for and I said "To be successful like you!" and they said, quite seriously, they would prefer to be successful like me. And at that point we talked about the parent's point of how do you define success? This person had money but had lost their their spouse to divorce over 'working too hard' and were now alone. Meanwhile my third kid was on the way and I was doing okay but certainly not "FU money" okay. And yet from their perspective, that was more successful than they felt. That really threw me for a loop.
Without bragging, but I have succeeded in two of my startups and I have always been super lazy. Work life was mixed all the time. But never had stress. Always took time for myself. And maybe worked 3 days effectively a week. Remaining time I spend with my kids and hobbies. I dont believe in this rat race 60 hour a week thing.
Totally feel this. I think all people should desire to be wealthy and to keep from being impoverished, but we should not define wealth and poverty simply in terms of our monetary wealth, or lack thereof.
People who have the love of family and friends, a clear conscience, health, their physical needs met, and thankful hearts, are far wealthier than a majority of people in this world who have a large number in their bank account.
Yet in our consumer world, people are continually thinking of their worth simply in terms of the money they have or the money they make. I’ve known many married working moms, who decided to leave the workforce and be homemakers, who constantly felt like their worth diminished because of the decrease in their wealth, not recognizing that the bond they had with their children, was growing stronger and greater, and didn’t recognize how incredibly valuable that truly was.
Note: I’m not saying working moms can’t have strong bonds with their children, I’m talking about specific situations where for them it was hindering their relationships, and their relationships improved but was at the cost of less money.
I guess my question is can you even go for, "just your slice"? I don't want or need mega millions. I just want to be well off enough. Maybe that is day job? Preferably, it'd been cool to have some success, mic drop, and live a good life. Tom Anderson from Myspace fame seems to have done well. Successful product and off living his life.
Also interesting that it seems like his relatively minor 1 year stint at pre-IPO Google was successful enough to pay for many other endeavors.
It's a great example of the power laws in startups: it's much more lucrative to have a minor role in a major success than a major role in anything minor.
I would go even further, it would have been much better statistically to work at any of the BigTech companies even in the past 10 years than take a chance at a startup.
Seeing the outcome of the startups he listed, it would have been much better to work as an enterprise CRUD developer at a bank, insurance company, etc
I think this is actually not as obvious as it seems as equity is also power-law distributed. An executive founder may have 10-50x the equity of a founding junior employee, who themselves might have 10-20x the equity of a key early employee.
The power laws actually cut both ways. I think the optimal path is not entirely obvious without some particular understanding of whether or not you are a stronger player as a leader or a follower.
I’ve had a lot of coffee breaks with highly placed peers who expressed concern because our boss was sure our success came down to one or two attributes and seemed completely blind to all the ways we saved him from himself. If apathy ever took over the team, we would burst into flames because of all of these details.
There’s a great old aphorism that sounds like sarcasm if you don’t understand this: “Take care of the little things and the big things will take care of themselves.” Any halfway sane team is dominated by people who are all too happy to jump on the Big Things. But for want of a nail, the kingdom can be lost. And if you cannot see his importance, and fire the farrier to hire more knights, then everybody loses.
When you see a successful boss, look around for his successful reports. They're always the ones cleaning up the boss' messes. The truth is that we all need to be saved from ourselves at some point (sometimes as education, other times as hard lessons), but tech culture certainly pushes that far with the "gifted visionary" mythos. A gifted visionary's much vaunted "Ideas > Details" only works when the detail people are there to make it work.
There is currently a risk asymmetry in startup world that drives away people who could do good work.
Investors know the long odds of success, so they invest in twenty to thirty companies and wait for one to get big.
Founders and employees can't diversify like that, because you only have so many working years. To mitigate this we have decided to award successful founders with huge paydays as a lure to others to throw their hats in the ring. This has some malign effects, namely unsuccessful founders and employees get bupkis. It also attracts the wrong sort of personality to be a founder, selecting for too much risk appetite. (At least what I consider the wrong sort for building a sustainably profitable business.)
I have an idea for how to solve this and I wonder if it's already been tried or if there are holes in it. The idea is to spread the risk of starting a company across something like an accelerator class. If one company in that class gets big, it would be contractually obligated to hire and grant shares from some pool to other members of that class. This would be at the cost of the winning founders' stakes.
The upside for winners would be much lower, but the downside would be lower too. This would attract a different sort of person to this accelerator, and be a differentiator for selecting talent.
This idea comes up here every once in awhile (often in the form of "a batch of startups where some % of the stock is shared across the batch).
I'm not saying it can't work, what do I know, but a challenge you'll have to address here is:
* By the time you're at the first big-money investment, the priced A round, you're dealing with investors who make just a couple investments a year.
* Despite that, the most promising startups are chased by VCs, not the other way around.
* If you're one of those promising startups, what would motivate you to take money from the investor structured the way you propose?
Most returns in startup investment come from a small fraction of breakout successes. Even if you got, like, 25% of startups to join this kind of funding compact --- which would be a huge, a momentous achievement on the same scale as the creation of YC --- the math here might not work out to where the shared-fate component of the deal was meaningful for any of the failed startups.
Well, having been in an accelerator there were folks (startups) in my class who shouldn't have been there. i.e. their startups failed but it was blatantly clear why -- mainly immaturity and not listening to advice.
I think your idea would only work if there were rigorous selection process, but also some mechanism to "fire" founders who aren't contributing or insist to make terrible decisions.
I'm not really sure I would feel comfortable investing in an accelerator class concept like this. Seems like it would suffer heavily from adverse selection.
Maybe if the terms were really good, like 20% of the company for $10,000 or something.
2. You’re not creating the correct incentive system. It creates the opposite incentive you want - it rewards those people who do nothing and let others do all the work. You could easily get in a situation where all people in this co-op do nothing, under hopes someone else hits it big.
My main lesson from running a startup: don't. And if you do, quit when the going gets tough. Perseverance does not pay off.
Obviously it doesn't always end badly. But we get a massively skewed view from survivor bias.
My life turned out pretty damn well once I got a plain ordinary job working for someone else. But I don't kid myself: when it comes to starting a startup, I did fail. The main lesson I learned was that I was always going to.
I hear this a lot and I think it is good advice because the only person who should actually start a startup is the one who sees this but still does it.
Yup, it takes people who think they can't fail to be truly successful. Very similar to an athlete's mindset. You have to have the skill and innate talent but you also have to believe your shit doesn't stink
Always baffled me how little commercial sense HNers had when I was growing up and reading this forum.
It's as if no one taught them -- or they just don't have the sense for it? -- that a startup is just a vehicle to make money. There's nothing special about it. You can make lots of money without a "startup." You can make lots of money doing many different things even without a business entity. It's just an abstraction for linguistic convenience.
My biggest wakeup was finding people much less educated and much less intellectually gifted and much less socioeconmically privileged making a lot more money than what could be considered their betters in more prestigious and, on the surface, well remunerated professions.
If you don't want to make money, don't go into business. Stay at your job and grind a career out. If you have the desire to make money, your senses will naturally sharpen as you use them more to achieve that end. Otherwise, if you go and "build a startup" for any other reason than making money you will fail barring extraneous circumstances.
Baffling that this isn't common sense, really. But my fault. I keep forgetting a professional forum is just a proverbial water cooler, where you get to see a wide mix of people in your profession -- and all the different backgrounds, values, ideas, and ways of seeing the world -- most of which are continuous works in progress that culminate only at death.
That is what's taught in many start up schools, for good reason. A startup can't ignore money without great luck.
However, it's not actually true. Lots of people start companies to make things better in some way, rather than to make bank. Some of them make bank regardless. Many businesses just tick along, but don't care about 'success' as determined by yacht size/botox per square inch/'status'.
> if you go and "build a startup" for any other reason than making money you will fail barring extraneous circumstances.
The idea that motivating people by money is the only or even best option is a major propaganda point in the class war (and quite silly if you think about it).
> Always baffled me how little commercial sense HNers had when I was growing up and reading this forum.
How long have you been reading HN? How have you felt the "HNers" w.r.t. nose-for-commerciality (and along whatever other dimension you think is relevant) change over time?
I dont understand why starting an enterprise has become such a scary thing in the tech world. So many people start businesses, so many mom and pop shops etc. IMHO startups have become scary to start because we jump too quickly into starting them or have too grand expectations from outset.
The way friends approached startups in the .com era seemed to be more like “hey, [friend]… we know how to write code, and we think we can address [thing] in [some market] better than [incumbent], so let’s spend nights and weekends hacking together a working proof of concept.
It might not be representative, but the people I’ve known that wanted to start tech businesses in the past 15/20 years approached it the way people start restaurants. You can’t slowly ramp up most restaurant concepts with a DIY budget— you need to invest a lot upfront, and you need a lot of existing expertise for even pretty trivial concepts. (And before people say food trucks and catering and private chef and the like— catering and private cheffing are totally different businesses with very different processes and institutional knowledge, and in most places, food trucks aren’t dramatically cheaper than opening a small restaurant.) Folks seem eager to start acting like a CEO and delegating things to people paid with investor money rather than making something themselves and getting it off the ground. Maybe that’s what the business requires? Maybe in software markets, customers aren’t interested in scrappy small players anymore, perhaps worried about lack of support, shitty UX, them going out of business or whatever.
Just speculation. Not even going to pretend I’ve got broad non-anecdotal knowledge on this.
A mom and pop restaurant can compete with Burger King and Starbucks. It's not quite the same with tech, as they can pay the $300k salaries for people to do the same thing you do, and they can buy out your market. Basically everything that can be done with money is stacked against you, and all you have as a startup is more grit than all these straight A students who graduated from ivy leagues.
because tech people don't want to start a lifestyle or low-growth business. they are reading about giga rounds, unicorns and hockey-sticks as well as the VC/PG propaganda on hackernews etc all day and think that this is the only way to do it.
they eat ramen for 10 years, often even believing in someone else's dream without substantional equity to match the risk/reward profile. meanwhile, the plumber next door who started his own plumbing business is driving a ferrari on weekends.
Funny how things change over time on Hacker News, an ostensibly startup forum that now more and more seems to be just another tech forum, and any relationship to YC and startups is now merely incidental, it seems.
Worse than not trying is trying and experiencing burnout and/or destitution.
When you fail, it can be due to many things. Not everything in the world is controllable. This is one of the reasons why expecting zero ”What ifs” at the end of your post-mortem is unreasonable.
It depends. Why do you want to start something? Do you really believe in it? I mean there's got to be a certain set of "hell yes" questions that need to be answered in the affirmative.
Otherwise you're not missing much. Work for something that pays well, solve interesting problems, spend time at home with your family and friends. The problem is when you're wanting to start something because someone else did it and don't have the implementation or execution perseverance (or just don't believe in it strongly).
Most people don’t want to start a business. They might fantasize but it’s not something they would enjoy doing. It’s fine to realize you have other goals and to work on them instead.
This (very popular) sentiment you have can basically be abstracted into the “fear of missing out” meme. It's an unnecessary predicate, it's founded on presupposition and bias, and it's really detrimental to all serious long term analyses.
There's no proof that this personal feeling should be listened to or given behavioral authority, especially when it suspiciously conforms to the aesthetic that is widely shared by many who end up having only achieved a mundane life, despite “noble” projects launched because of arrogant egos. This social phenomenon which sponsors the freedom and agency of people fit only to be busy drones is wasting global resources on bourgeois affairs. Elon Musk and his eventual epic failure at super-industrialism is a great example of this harmful sinful pride.
The “what if” has only served to help overvalue ordinary potential, when that capability should have been limited to simple tasks, industries, and affairs. It's a mind virus riding on the waves of language and the beastly body of rationality, a false reality having been successfully disguised as a legitimate object to perceive within the cognitive sphere of humanity. It is deviation that surely has contributed to the collapse of the great liberal humanism project, the real goal of democracy and its encompassing civilization having been the quiet and stable enslavement of a massive surplus of dull brains and basic bodies. A mass of uninteresting genetic carriers who would do well to never worry about what is outside the scope of their common destinies.
The dialectic that there can be morbid peace if you would just test out the hypothesis that you can become a great man is an incomprehensibly devised thinking trap that can filter out men who don't know what the fuck is going on in the grand universe.
But God (or simply nature) works in mysterious ways and I'm glad that hubris was created to serve as an instrument for learning what not to ever do. And to materially benefit from, salvaging from the failures of future past technologies being a huge possibility to leverage. Your supposed tragedy is my informed opportunity, to paraphrase Jeff Bezos.
EDIT: If you ever invent warp drive or faster than light travel or functional nuclear fusion, I'll be looking forward to the blueprints of such treasures and strategic advantages ;)
I'm starting to think you really need to be well connected or at least come from an upper class background to win here.
Steve Jobs is sort of an exception here, not only was he adopted , but he was adopted by a very middle-class family .
I find myself really good at developing small apps, but very bad when it comes to the business side. I would love to find someone to work with who's good with business. But so far I've just been time scammed a few times by morons who come up with insanely impractical ideas .
And they never want to let you in for a full cut, they want to give you like 1% of the company in the event that you're able to build the entire thing out from scratch. If you discuss modest technical limitations they'll berate you for corrupting their vision.
> I'm starting to think you really need to be well connected or at least come from an upper class background to win here.
In my local startup community there are a lot of entrepreneurs and small startups founded by MBA students and recent college grads who clearly come from wealthy backgrounds. Nearly all of them either fail quickly or continue for years without getting any traction beyond their parents’ connections’ businesses.
The other side of being wealthy and well connected is that it’s really tempting to fall back on a job with your family connections or to play startup for a few years while burning through “seed” money from the family without the real pressure of needing your startup to succeed.
> And they never want to let you in for a full cut, they want to give you like 1% of the company in the event that you're able to build the entire thing out from scratch.
There are a lot of wannabe entrepreneurs who need a cofounder but don’t want to give cofounder equity.
The majority of successful founders and founding engineers I know had past working experience together. There are exceptions, but most of the time when someone goes searching for a cofounder or founding engineers because they don’t have anyone in their network, it doesn’t work out. It can work and does sometimes, but it’s so rare that I’m very surprised to hear success stories.
There are just too many people in the startup community looking to “hustle” their way into an MVP without giving anything up in the process. Also a lot of people who want to be “cofounders” and get 50% of your company in exchange for doing as little work as they can.
I was in a startup Slack for a while. Every other week someone would come in asking for advice about how to evict a deadbeat “cofounder” from their company who had secured 1/2 or 1/3 of the equity but wasn’t contributing anywhere near the other cofounders.
Yes, the social aspect is significant. It's not so much about innovating and strategizing as much as it is about playing politics with rich people and hope that they let you build a successful product. Let's face it, rich people make all the decisions. If you're not rich, it's all about socializing and luck for you. It's hard to find a rich person who will let you implement your vision and actually control your destiny. It's demoralizing TBH.
Jobs got his start in a tiny industry (tech was decently big already, but PCs were not) poised on the edge of massive growth as technology got to the point where you could build machines people would actually buy. And there was a huge moat, as the necessary talent was rare. And even within that rare talent, Jobs had the unique advantage of being able to partner with Woz.
Nothing you can do today with a typical HN skill set will come even close to that. There are thousands (at least) of people with those skills. They can build it too, whatever it is. You’re not Woz and you don’t know a Woz. Likely there is no Woz today; everything computing is so much more specialized and complicated and layered and just plain big. You may be able to find success in this world, but it won’t be replicating the Jobs story.
Steve Jobs was connected: By being raised in Silicon Valley at just the right time. He even had a story (who knows how true it is) of him as a kid looking up Bill Hewlett in the phone book and asking about electronics parts (a frequency counter IIRC) and Bill not only got him the part, but gave him a summer job.
As for business, many successful tech entrepreneurs “learn” it either as they go or by bringing on business experts, but not giving them full control. For larger examples of the latter, see Eric Schmidt as the “adult in the room” for Google, Sheryl Sandberg for Facebook.
I think there are upsides and downsides to starting young. On the one hand, you don't have much to lose, so failure is softer. On the other hand, you're missing some experience that would be useful.
I worked for a startup whose founder was a super young guy who had never had a job before being CEO. He was missing experiences like "what do I hate when my boss does" and so needed to repeat all the same mistakes. This resulted in things like... postmortem reviews with action items like "we should dock people's pay if installs are done incorrectly" instead of "we should ensure that the install crews have the tools they need to do the install correctly". (That action item was one of the few battles there that I won. We gave every installer a toolbox containing the tools to do the job. This improved the success of installs greatly. But who needs a meeting to come up with an "idea" like this?)
It’s still not worth it. If you can get into a well paying BigTech company, save aggressively and let the time value of money be your friend, it statistically will make much more sense to do that.
Personally I think it's about perseverance, but mostly with an emphasis on learning and growing. You iterate, you learn and you eventually build up a skillset that is hard to stop even if things don't go your way.
It's not for everyone though. Bar is super high, risk is high, long work weeks with little balance are the entry ticket.
I agree. Toughing it out usually doesn't pay. I was at a startup from "birth" (first employee and lead engineer) to "death" (acquisition for pennies on the dollar.) The first couple years were exciting, super fun. We built a great team, had an interesting product that solved a niche problem, several early customers. But the business model just didn't work out. It wasn't enough to sustain a real company. The downward spiral began...
It’s just not true. Maybe a unicorn yeah. But to create a a decent software business that pays the bills is well within anyone’s reach in this world. And yeah actually perserverance is one of the main keys to success. In most markets there are players making a good income, if you are not there is just something you are missing
.
You don't ever have to worry about survivor bias from me. Because I know not to esteem highly those men who believe that family formation and a business enterprise building commitment can both exist at the same time.
Either you devote your entire being to the invasive alien job that is learning how to extract value from civilization's economically receptive citizens or you pack up your bags and head back home on the plane that can depart from the place where great men are selected and trained. Being a startup founder is much, much more intense than some special forces soldier life. You learn better values and habits than some punk that will have peaked at the earning of the title of U.S. Marine, to use a stark contrasting example. Or a black ops Delta Force guy who just has to navigate a huge forest in the dark on the dangerous way back to friendly territory, while the compared startup founder needs to develop an entire science for the navigation of profitable markets that no human has ever seen before, let alone taken advantage of before. A nerd like Richard Feynman can be much more tougher than someone that can do a thousand pushups without stopping and shoot an M4 carbine at a target 900 meters away.
Is Elon Musk even a good example of a successful startup founder or businessman, despite his billionaire status? Logical skepticism says no. And the brainwashing that popular ideology does says yes.
After all, didn't Elon Musk fuck and impregnate some bitches during his rise to a big bank account? He could have been using that time and energy to colonize Mars before this twenty-first century ends. He's not serious about what he says he wants. A terrible role model to look up to.
> But we couldn't figure out a way to procure drivers.
I briefly worked for Grab the company, which was another SE Asia "Uber". Among other things, at one point they procured drivers in Saigon by giving the wives/families free chicken meat. This way, they could prepare the drivers meals to take while they were out on the road all day long.
When going through crazy stuff as a founder, I always thing "this is going to make for a very intersting story some day". Looking back I doubt I'll remember them all and, while keeping things in full throttle, I wonder if I'll ever get to write about anything...
My conclusion is that most interesting stories remain burried and we're lucky to see anythign real (as in true stories) surfacing, because people that are crazy enough to enjoy these pains, hardly have any time to write about them.
Meanwhile we're presented with a somewhat skewed reality that's both less interesting, less real and overly biased towards glamor. The title of a somewhat :) unrelated book keeps popping in my head "Reality is not what it seems".
I wonder if someone like YC or a16z could manage to hire a journalist or anthropologist to make an honest chronicle of what happens at startups and not turn it into a propaganda piece.
Having to explain yourself helps clarify what you’re doing. The time “lost” keeping said person updated might even pay for itself.
I found the “Startup” podcast to be interesting when they documented real time the founding of Gimlet media, pivoted to other companies and then went back to document their acquisition by Spotify
the thing with startups as founder / founding teams is that most days are actually good stories - so yes, the best way is to write as you go.
the thing is perhaps this is in fact the best way to motivate (or demotivate) the startup craft - you end up learning by drinking from the firehose daily. I believe there are few other types of activities that have such a forcing factor to learn and most are generally some sort of crisis (war, etc.) and so entrepreneurship is likely the least damaging one (at least for everyone else than the team haha)
Related to many interesting/crazy things being lost to history because the observer/actor is too busy to record them, and the things that do get reported consequently not representing reality... (And maybe a little relevant to the somber news events on this Monday.)
Many major religions prohibit making a show of good deeds. You're supposed to do it secretly, so that your intentions are pure.
But other people only see when a good deed is reported, so we're getting a distorted version of reality.
Some of these are reported for good reasons. But the worst form would be what social media kids are bombarded with: things like the clinically oblivious "influencers" who make videos of themselves exploiting a homeless person with a "charity" stunt.
One way to do good, while also letting people be inspired, is to do it anonymously. For example, the donation in a large crowd of them, or the anonymous rich-person's donation to a good cause (not a vanity university department named after yourself!), or any of the countless ways that one person quietly helps someone else.
You'll never know most of the times someone else helped you out, and most of the times you helped out someone else will also never be known. That's OK.
If you ever have the occasion to jump into an icy lake, to save a busload of photogenic schoolchildren and puppies, then you must try to get out of there right after, before anyone's phone dries out. Then the story will be about people simply doing the right thing, even an amazing thing, and fading back into the crowd. It'll be one of the best stories ever.
There’s an old xkcd joke about how some grand problem in information theory has probably been solved on some mundane business task without the author even knowing what they’ve done.
I was thinking just today that Squarespace should contact me and I'll do a commercial for them based on my experiences of creating a webapp and turning it into a business because I was too picky to use a prebuilt CMS etc. I have eight years of nonstop pain and stories to tell.
>Failure #5: “One by one, every bank that had initially responded positively changed their minds. Worse, not a single one of them would tell me why.[…] I never got a straight answer from any of the banks about why they changed their minds.”
Is anybody around with enough insight in that business to make an educated guess as to what happened?
Since around the start of the Internet, there has been a steady decline in the number of banks and credit unions in the US. [1] They have mostly consolidated with other financial institutions. The shrinkage seems attributable to customers moving their banking online and no longer depending on tellers, buildings, or geographical location in general.
Most banks are seeing this happening and acting as conservatively as they can. They are avoiding change because they don't want to be the next victim of the financial industry crisis. It's not a shadowy cabal; it's really just the fear of going out of business.
A few key banks, OTOH, are embracing change and innovating. Having strong relationships with them is key to making progress. It takes a very long time; 6 years sounds too short. I'm not sure the startup timeline could ever stomach the length of time it takes to build those relationships.
So my guess is that the author didn't have as strong a relationship as what he actually needed. My company has also worked with enthusiastic executives who turned out not to have as much weight in the company decisions as they hoped.
> It's not a shadowy cabal; it's really just the fear of going out of business.
Thanks for the insight, I was wondering about this point.
I generally tend to try and attribute what _feels_ like coordinated cabal behaviour to general incompetence or lack of control. This feels like one of those situations.
I've worked around banks and this erratic behaviour is pretty common, and mostly due to short term personal motivations, and lack of coordination rather than an excess of coordination (i.e. collusion - which is not to say that banks aren't guilty on this point, but I think mostly not the case)
- Bank operators responding to queries have no idea why a decision was made
- Banks rely on algorithms to determine credit worthiness, these are run centrally so a bank manager at a branch may say positive things but the system generates a report independently.
- The algorithms also can raise flags for other risks, such as anti money laundering. The bank will not disclose anything if a flag has been raised as a regulatory requirement.
My bet will be on core banking software provider issues. I think they did try to talk to theirs and got a response like, "We can do it in 5 years, and you will have to pay XXX million to us to do it".
There was a large-ish scandal in the late 2010s when some core banking providers were delaying Zelle integrations for smaller FIs, and they started complaining as customers were demanding it and leaving the larger competitors with it.
Another option can be as simple as this - they fear tech as most don't understand it. When I was working on a corporate charge card startup, my co-founder and I faced this issue many times. The craziest experience was when the bank was ok to be issuing bank for us but requested our clients to go to their branches to sign paperwork (the bank literally has maybe 5 branches in the whole USA).
There are many reasons to do a startup, but people should only call it a business when the goal is either a tax deduction mitigation and or rapid entry into profit traction.
1. Don't use some clever or hard to remember name with a weird spelling. While easier to Trademark, the users and customers won't differentiate your site from the sea of attention grabbing garbage.
2. If people have zero paying customers, and zero revenue... than the hard fact is they were never in business, and should have founded a nonprofit instead (common for opensource support service entities.)
3. Often copyright and patents are infeasible for small business, and people simply can't build or defend things like a large firm. Thus, initially design products/services to last maybe a year or simply be disposable... When 270 desperate cloners show up to dilute the market sector... people quickly understand why they can't rely on Android, Steam, or Apple ecosystems to protect their bottom line.
4. There is zero loyalty without treasure. The only people that care if your firm goes into the red is you, and maybe the small-time shareholders. Most people can't take the constant adversarial posture with problematic staff, opinionated shareholders, and high-demand customers.
Everyone thinks a CEO is lame till you become a CEO for a year or two... Every conversation from that point on is about money or marketing, and most people keen on building things tend to burn out of the role eventually due to social isolation.
5. No company lasts forever, if the operation is a projected liability it is your job to respond accordingly. Even if that means executing an exit strategy, and firing the entire problematic division.
6. Ask business people about their memorable experiences, and not about their money source. The superficial apparent function of a business is usually very different from the actual revenue model.
Readit News
> First, it sets the stage for what was to come, and second, while it was unquestionably a success, it was not my success.
I used to think that success was being successful the way I wanted and I was often frustrated because things were working but not because of the way I wanted them to. Turns out, it's doubly difficult to make things not only work but also work the way I want.
I've since tried to be more open-minded and see wins that perhaps I didn't expect or want still as wins and it's made me feel a lot more successful. One might scoff and say I should hold myself to a higher standard, but at the end of the day, success is only an intrinsic feeling anyways. It's not a measurable metric so I might as well feel better about the progress I'm making.
In the context of the article, the author could see these all as failures, but it sounds like some of these were pretty successful. In fact, the author concludes as much, finding happiness in the "failures". It's all an arbitrary label anyways.
I started a self-funded tech company around 1998. This was hard tech, hardware and software. And I was the sole engineer doing all the work. This meant 18 hour days, 7 days per week to get the plane off the runway. Two years later, after booking lots of sales, we finally moved out of the garage and I started to hire people. Yes, I ran this beast entirely on my own for two years. A few years later a large well-known company expressed interest in acquiring the technology. The number being floated was in excess of $30MM.
What happened?
Well, 2008 happened. The economic implosion caused this company to second-guess entry into the market we had pursued --which they intended to do by acquiring us. The deal went from being a couple of meetings away from an acquisition to evaporating in front of my very eyes.
The bad news was that the economic downturn truly hurt us over the next couple of years. I had to shut it down in 2010 and lick my wounds.
This thing went from pouring all of our savings and an incredible amount of very hard work into a crazy idea, executing well enough to get a $30MM+ offer to closing the doors and nearly losing it all in the process.
At the time this felt like an abject failure and a waste of ten years of my life. It took me months to get my head back on straight. Today, looking back, I see it as a success. I took an idea from nothing to close to a massive life-changing exit and did so mostly on my own through hard work, grit and determination. That's a success story nobody can take away from me. I learned a lot along the way and most of those lessons were part of success in future endeavors.
Life can be funny and cruel sometimes. You might think you are going through your darkest hours when, in reality, you are growing a solid backbone that will support the rest of your life.
Entrepreneurship is hard. Very hard.
It’s like anecdotes you hear from religious people during a disaster. “I lost five of my kids. But I’m so thankful that God looked out for me and saved one”
Yet in our consumer world, people are continually thinking of their worth simply in terms of the money they have or the money they make. I’ve known many married working moms, who decided to leave the workforce and be homemakers, who constantly felt like their worth diminished because of the decrease in their wealth, not recognizing that the bond they had with their children, was growing stronger and greater, and didn’t recognize how incredibly valuable that truly was.
Note: I’m not saying working moms can’t have strong bonds with their children, I’m talking about specific situations where for them it was hindering their relationships, and their relationships improved but was at the cost of less money.
The different between you two though is that they have millions and can still have your lifestyle within a couple of years.
It's a great example of the power laws in startups: it's much more lucrative to have a minor role in a major success than a major role in anything minor.
Seeing the outcome of the startups he listed, it would have been much better to work as an enterprise CRUD developer at a bank, insurance company, etc
The power laws actually cut both ways. I think the optimal path is not entirely obvious without some particular understanding of whether or not you are a stronger player as a leader or a follower.
Overtime, I’ve come to appreciate that statement more and more. I think it is an incredibly profound insight about life.
There’s a great old aphorism that sounds like sarcasm if you don’t understand this: “Take care of the little things and the big things will take care of themselves.” Any halfway sane team is dominated by people who are all too happy to jump on the Big Things. But for want of a nail, the kingdom can be lost. And if you cannot see his importance, and fire the farrier to hire more knights, then everybody loses.
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Investors know the long odds of success, so they invest in twenty to thirty companies and wait for one to get big.
Founders and employees can't diversify like that, because you only have so many working years. To mitigate this we have decided to award successful founders with huge paydays as a lure to others to throw their hats in the ring. This has some malign effects, namely unsuccessful founders and employees get bupkis. It also attracts the wrong sort of personality to be a founder, selecting for too much risk appetite. (At least what I consider the wrong sort for building a sustainably profitable business.)
I have an idea for how to solve this and I wonder if it's already been tried or if there are holes in it. The idea is to spread the risk of starting a company across something like an accelerator class. If one company in that class gets big, it would be contractually obligated to hire and grant shares from some pool to other members of that class. This would be at the cost of the winning founders' stakes.
The upside for winners would be much lower, but the downside would be lower too. This would attract a different sort of person to this accelerator, and be a differentiator for selecting talent.
I'm not saying it can't work, what do I know, but a challenge you'll have to address here is:
* By the time you're at the first big-money investment, the priced A round, you're dealing with investors who make just a couple investments a year.
* Despite that, the most promising startups are chased by VCs, not the other way around.
* If you're one of those promising startups, what would motivate you to take money from the investor structured the way you propose?
Most returns in startup investment come from a small fraction of breakout successes. Even if you got, like, 25% of startups to join this kind of funding compact --- which would be a huge, a momentous achievement on the same scale as the creation of YC --- the math here might not work out to where the shared-fate component of the deal was meaningful for any of the failed startups.
Discussed at the time: https://news.ycombinator.com/item?id=23907342
I think your idea would only work if there were rigorous selection process, but also some mechanism to "fire" founders who aren't contributing or insist to make terrible decisions.
Maybe if the terms were really good, like 20% of the company for $10,000 or something.
2. You’re not creating the correct incentive system. It creates the opposite incentive you want - it rewards those people who do nothing and let others do all the work. You could easily get in a situation where all people in this co-op do nothing, under hopes someone else hits it big.
2. Wouldn't the incentive be to abandon your failing startup and go work for one of the more promising ones in your class?
No, it is not. Socialism supposing involuntary participation. As long as participation is voluntary for all agents, it is capitalism.
Obviously it doesn't always end badly. But we get a massively skewed view from survivor bias.
My life turned out pretty damn well once I got a plain ordinary job working for someone else. But I don't kid myself: when it comes to starting a startup, I did fail. The main lesson I learned was that I was always going to.
I hear this a lot and I think it is good advice because the only person who should actually start a startup is the one who sees this but still does it.
It's as if no one taught them -- or they just don't have the sense for it? -- that a startup is just a vehicle to make money. There's nothing special about it. You can make lots of money without a "startup." You can make lots of money doing many different things even without a business entity. It's just an abstraction for linguistic convenience.
My biggest wakeup was finding people much less educated and much less intellectually gifted and much less socioeconmically privileged making a lot more money than what could be considered their betters in more prestigious and, on the surface, well remunerated professions.
If you don't want to make money, don't go into business. Stay at your job and grind a career out. If you have the desire to make money, your senses will naturally sharpen as you use them more to achieve that end. Otherwise, if you go and "build a startup" for any other reason than making money you will fail barring extraneous circumstances.
Baffling that this isn't common sense, really. But my fault. I keep forgetting a professional forum is just a proverbial water cooler, where you get to see a wide mix of people in your profession -- and all the different backgrounds, values, ideas, and ways of seeing the world -- most of which are continuous works in progress that culminate only at death.
That is what's taught in many start up schools, for good reason. A startup can't ignore money without great luck.
However, it's not actually true. Lots of people start companies to make things better in some way, rather than to make bank. Some of them make bank regardless. Many businesses just tick along, but don't care about 'success' as determined by yacht size/botox per square inch/'status'.
> if you go and "build a startup" for any other reason than making money you will fail barring extraneous circumstances.
The idea that motivating people by money is the only or even best option is a major propaganda point in the class war (and quite silly if you think about it).
> Always baffled me how little commercial sense HNers had when I was growing up and reading this forum.
How long have you been reading HN? How have you felt the "HNers" w.r.t. nose-for-commerciality (and along whatever other dimension you think is relevant) change over time?
It might not be representative, but the people I’ve known that wanted to start tech businesses in the past 15/20 years approached it the way people start restaurants. You can’t slowly ramp up most restaurant concepts with a DIY budget— you need to invest a lot upfront, and you need a lot of existing expertise for even pretty trivial concepts. (And before people say food trucks and catering and private chef and the like— catering and private cheffing are totally different businesses with very different processes and institutional knowledge, and in most places, food trucks aren’t dramatically cheaper than opening a small restaurant.) Folks seem eager to start acting like a CEO and delegating things to people paid with investor money rather than making something themselves and getting it off the ground. Maybe that’s what the business requires? Maybe in software markets, customers aren’t interested in scrappy small players anymore, perhaps worried about lack of support, shitty UX, them going out of business or whatever.
Just speculation. Not even going to pretend I’ve got broad non-anecdotal knowledge on this.
they eat ramen for 10 years, often even believing in someone else's dream without substantional equity to match the risk/reward profile. meanwhile, the plumber next door who started his own plumbing business is driving a ferrari on weekends.
Worse than failing is not trying.
You will live your life always wondering “what if”.
When you fail, you will have an answer to the above question and can live in peace.
When you fail, it can be due to many things. Not everything in the world is controllable. This is one of the reasons why expecting zero ”What ifs” at the end of your post-mortem is unreasonable.
Otherwise you're not missing much. Work for something that pays well, solve interesting problems, spend time at home with your family and friends. The problem is when you're wanting to start something because someone else did it and don't have the implementation or execution perseverance (or just don't believe in it strongly).
There's no proof that this personal feeling should be listened to or given behavioral authority, especially when it suspiciously conforms to the aesthetic that is widely shared by many who end up having only achieved a mundane life, despite “noble” projects launched because of arrogant egos. This social phenomenon which sponsors the freedom and agency of people fit only to be busy drones is wasting global resources on bourgeois affairs. Elon Musk and his eventual epic failure at super-industrialism is a great example of this harmful sinful pride.
The “what if” has only served to help overvalue ordinary potential, when that capability should have been limited to simple tasks, industries, and affairs. It's a mind virus riding on the waves of language and the beastly body of rationality, a false reality having been successfully disguised as a legitimate object to perceive within the cognitive sphere of humanity. It is deviation that surely has contributed to the collapse of the great liberal humanism project, the real goal of democracy and its encompassing civilization having been the quiet and stable enslavement of a massive surplus of dull brains and basic bodies. A mass of uninteresting genetic carriers who would do well to never worry about what is outside the scope of their common destinies.
The dialectic that there can be morbid peace if you would just test out the hypothesis that you can become a great man is an incomprehensibly devised thinking trap that can filter out men who don't know what the fuck is going on in the grand universe.
But God (or simply nature) works in mysterious ways and I'm glad that hubris was created to serve as an instrument for learning what not to ever do. And to materially benefit from, salvaging from the failures of future past technologies being a huge possibility to leverage. Your supposed tragedy is my informed opportunity, to paraphrase Jeff Bezos.
EDIT: If you ever invent warp drive or faster than light travel or functional nuclear fusion, I'll be looking forward to the blueprints of such treasures and strategic advantages ;)
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Steve Jobs is sort of an exception here, not only was he adopted , but he was adopted by a very middle-class family .
I find myself really good at developing small apps, but very bad when it comes to the business side. I would love to find someone to work with who's good with business. But so far I've just been time scammed a few times by morons who come up with insanely impractical ideas .
And they never want to let you in for a full cut, they want to give you like 1% of the company in the event that you're able to build the entire thing out from scratch. If you discuss modest technical limitations they'll berate you for corrupting their vision.
In my local startup community there are a lot of entrepreneurs and small startups founded by MBA students and recent college grads who clearly come from wealthy backgrounds. Nearly all of them either fail quickly or continue for years without getting any traction beyond their parents’ connections’ businesses.
The other side of being wealthy and well connected is that it’s really tempting to fall back on a job with your family connections or to play startup for a few years while burning through “seed” money from the family without the real pressure of needing your startup to succeed.
> And they never want to let you in for a full cut, they want to give you like 1% of the company in the event that you're able to build the entire thing out from scratch.
There are a lot of wannabe entrepreneurs who need a cofounder but don’t want to give cofounder equity.
The majority of successful founders and founding engineers I know had past working experience together. There are exceptions, but most of the time when someone goes searching for a cofounder or founding engineers because they don’t have anyone in their network, it doesn’t work out. It can work and does sometimes, but it’s so rare that I’m very surprised to hear success stories.
There are just too many people in the startup community looking to “hustle” their way into an MVP without giving anything up in the process. Also a lot of people who want to be “cofounders” and get 50% of your company in exchange for doing as little work as they can.
I was in a startup Slack for a while. Every other week someone would come in asking for advice about how to evict a deadbeat “cofounder” from their company who had secured 1/2 or 1/3 of the equity but wasn’t contributing anywhere near the other cofounders.
Nothing you can do today with a typical HN skill set will come even close to that. There are thousands (at least) of people with those skills. They can build it too, whatever it is. You’re not Woz and you don’t know a Woz. Likely there is no Woz today; everything computing is so much more specialized and complicated and layered and just plain big. You may be able to find success in this world, but it won’t be replicating the Jobs story.
As for business, many successful tech entrepreneurs “learn” it either as they go or by bringing on business experts, but not giving them full control. For larger examples of the latter, see Eric Schmidt as the “adult in the room” for Google, Sheryl Sandberg for Facebook.
But if you're young, got the time ... I think it's worth a shot, or two, or more.
I worked for a startup whose founder was a super young guy who had never had a job before being CEO. He was missing experiences like "what do I hate when my boss does" and so needed to repeat all the same mistakes. This resulted in things like... postmortem reviews with action items like "we should dock people's pay if installs are done incorrectly" instead of "we should ensure that the install crews have the tools they need to do the install correctly". (That action item was one of the few battles there that I won. We gave every installer a toolbox containing the tools to do the job. This improved the success of installs greatly. But who needs a meeting to come up with an "idea" like this?)
It's not for everyone though. Bar is super high, risk is high, long work weeks with little balance are the entry ticket.
Rare, wise words. (in a world, where 'follow thy dreams' philosophy is venerated).
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Either you devote your entire being to the invasive alien job that is learning how to extract value from civilization's economically receptive citizens or you pack up your bags and head back home on the plane that can depart from the place where great men are selected and trained. Being a startup founder is much, much more intense than some special forces soldier life. You learn better values and habits than some punk that will have peaked at the earning of the title of U.S. Marine, to use a stark contrasting example. Or a black ops Delta Force guy who just has to navigate a huge forest in the dark on the dangerous way back to friendly territory, while the compared startup founder needs to develop an entire science for the navigation of profitable markets that no human has ever seen before, let alone taken advantage of before. A nerd like Richard Feynman can be much more tougher than someone that can do a thousand pushups without stopping and shoot an M4 carbine at a target 900 meters away.
Is Elon Musk even a good example of a successful startup founder or businessman, despite his billionaire status? Logical skepticism says no. And the brainwashing that popular ideology does says yes.
After all, didn't Elon Musk fuck and impregnate some bitches during his rise to a big bank account? He could have been using that time and energy to colonize Mars before this twenty-first century ends. He's not serious about what he says he wants. A terrible role model to look up to.
I briefly worked for Grab the company, which was another SE Asia "Uber". Among other things, at one point they procured drivers in Saigon by giving the wives/families free chicken meat. This way, they could prepare the drivers meals to take while they were out on the road all day long.
Kind of a local spin on tech workers free meals.
You've got battle scars, and stories that are worth their weight in gold. Your experience is probably extremely useful for the right startup.
My conclusion is that most interesting stories remain burried and we're lucky to see anythign real (as in true stories) surfacing, because people that are crazy enough to enjoy these pains, hardly have any time to write about them.
Meanwhile we're presented with a somewhat skewed reality that's both less interesting, less real and overly biased towards glamor. The title of a somewhat :) unrelated book keeps popping in my head "Reality is not what it seems".
Having to explain yourself helps clarify what you’re doing. The time “lost” keeping said person updated might even pay for itself.
Also reading Scott Belsky's "The messy middle" let me match a lot of my experience.
I tried to read "Eating Glass: The Inner Journey Through Failure and Renewal" but didn't have the energy/stomach.
Re a16z - "The hard thing about hard things" is not bad either.
However I think a frequent series short stories over a large period of time, would make for much better content.
the thing is perhaps this is in fact the best way to motivate (or demotivate) the startup craft - you end up learning by drinking from the firehose daily. I believe there are few other types of activities that have such a forcing factor to learn and most are generally some sort of crisis (war, etc.) and so entrepreneurship is likely the least damaging one (at least for everyone else than the team haha)
Many major religions prohibit making a show of good deeds. You're supposed to do it secretly, so that your intentions are pure.
But other people only see when a good deed is reported, so we're getting a distorted version of reality.
Some of these are reported for good reasons. But the worst form would be what social media kids are bombarded with: things like the clinically oblivious "influencers" who make videos of themselves exploiting a homeless person with a "charity" stunt.
One way to do good, while also letting people be inspired, is to do it anonymously. For example, the donation in a large crowd of them, or the anonymous rich-person's donation to a good cause (not a vanity university department named after yourself!), or any of the countless ways that one person quietly helps someone else.
You'll never know most of the times someone else helped you out, and most of the times you helped out someone else will also never be known. That's OK.
If you ever have the occasion to jump into an icy lake, to save a busload of photogenic schoolchildren and puppies, then you must try to get out of there right after, before anyone's phone dries out. Then the story will be about people simply doing the right thing, even an amazing thing, and fading back into the crowd. It'll be one of the best stories ever.
Many may not have actually happened, but it’s still worth considering even decades later.
Is anybody around with enough insight in that business to make an educated guess as to what happened?
Most banks are seeing this happening and acting as conservatively as they can. They are avoiding change because they don't want to be the next victim of the financial industry crisis. It's not a shadowy cabal; it's really just the fear of going out of business.
A few key banks, OTOH, are embracing change and innovating. Having strong relationships with them is key to making progress. It takes a very long time; 6 years sounds too short. I'm not sure the startup timeline could ever stomach the length of time it takes to build those relationships.
So my guess is that the author didn't have as strong a relationship as what he actually needed. My company has also worked with enthusiastic executives who turned out not to have as much weight in the company decisions as they hoped.
[1] https://usafacts.org/articles/whats-behind-the-decline-in-us...
Thanks for the insight, I was wondering about this point.
I generally tend to try and attribute what _feels_ like coordinated cabal behaviour to general incompetence or lack of control. This feels like one of those situations.
I've worked around banks and this erratic behaviour is pretty common, and mostly due to short term personal motivations, and lack of coordination rather than an excess of coordination (i.e. collusion - which is not to say that banks aren't guilty on this point, but I think mostly not the case)
- Bank operators responding to queries have no idea why a decision was made
- Banks rely on algorithms to determine credit worthiness, these are run centrally so a bank manager at a branch may say positive things but the system generates a report independently.
- The algorithms also can raise flags for other risks, such as anti money laundering. The bank will not disclose anything if a flag has been raised as a regulatory requirement.
There was a large-ish scandal in the late 2010s when some core banking providers were delaying Zelle integrations for smaller FIs, and they started complaining as customers were demanding it and leaving the larger competitors with it.
Another option can be as simple as this - they fear tech as most don't understand it. When I was working on a corporate charge card startup, my co-founder and I faced this issue many times. The craziest experience was when the bank was ok to be issuing bank for us but requested our clients to go to their branches to sign paperwork (the bank literally has maybe 5 branches in the whole USA).
1. Don't use some clever or hard to remember name with a weird spelling. While easier to Trademark, the users and customers won't differentiate your site from the sea of attention grabbing garbage.
2. If people have zero paying customers, and zero revenue... than the hard fact is they were never in business, and should have founded a nonprofit instead (common for opensource support service entities.)
3. Often copyright and patents are infeasible for small business, and people simply can't build or defend things like a large firm. Thus, initially design products/services to last maybe a year or simply be disposable... When 270 desperate cloners show up to dilute the market sector... people quickly understand why they can't rely on Android, Steam, or Apple ecosystems to protect their bottom line.
4. There is zero loyalty without treasure. The only people that care if your firm goes into the red is you, and maybe the small-time shareholders. Most people can't take the constant adversarial posture with problematic staff, opinionated shareholders, and high-demand customers. Everyone thinks a CEO is lame till you become a CEO for a year or two... Every conversation from that point on is about money or marketing, and most people keen on building things tend to burn out of the role eventually due to social isolation.
5. No company lasts forever, if the operation is a projected liability it is your job to respond accordingly. Even if that means executing an exit strategy, and firing the entire problematic division.
6. Ask business people about their memorable experiences, and not about their money source. The superficial apparent function of a business is usually very different from the actual revenue model.
Best of luck, =3