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.
I think the problem with that approach, in today's market, comes when you try to hire.
Junior engineers didn't cost more than any other recent graduate, and as you could get away with a few rough edges in production for quite a while, you could put together an adequately balanced team for not much money.
The tooling was much worse, but the compliance burden was much less.
Did your friends in the .com era talk about "doing a startup" or "starting a business"? I feel like that's changed a bit, people are more calculated and cynical about how the game is to be played with respect to rounds, exit strategies and so on. The "startup" model specifically means something a bit different to "starting a business", around ambition, scale, investment model etc. All businesses need to be started, but not all businesses are startups.
I don’t think the idea of starting a business in tech these days commonly exists independently of the modern tech conception of “doing a startup.” And with the hiring part, the idea was that you’d do the work yourselves and only hire anyone at all when you couldn’t do the work anymore, or you got a big enough contract/sale/etc that you could pay them. The fact that the exit strategy/investment/initial expensive hiring messiness exists is the symptom, not the cause. What I don’t really get is the cause, and I suspect it’s cultural rather than logistical. Not doing something unless you can ramp it fast enough to start worrying about paying anyone other than the people that decided to do it is a deliberate choice. In a restaurant, it’s not. You literally can’t do it without the initial investment. My dad was a mechanical engineer in a startup making industrial paper handling equipment in the 90s— one of the first hires after the handful of founders worked themselves to design and fabricate the first machines securing them the contracts to afford more employees.
That's partly because of growth based valuations, and fast-acting network effects. The whole model is predicated on "get there fast, get the monopoly". Which you can't either with a traditional, non-scalable business (restaurants) or even a scalable industrial business (cars) - yes you get economy of scale, but they benefit relatively little from network effects of other people owning them. Goods like fashion which don't need a service ecosystem, even less so.
Total scalability & strong network effect points toward a "get the monopoly, now" business model. Which, IDK, might suit some things but definitely isn't the right fit for all things tech.
Right — I totally understand why things are the way they are using the tech industry startup model. But using that model is relatively new, and adopting it not a prerequisite to starting a tech business, even if that’s the only way people do it these days, generally. Becoming a monopoly immediately in some market is the goal of someone that wants to become the monopoly immediately in some market. It’s neither a requirement of, nor mutually exclusive of having a good idea that you want to turn into a business. That business goal might be easier in technical businesses, but it doesn’t seem to make better or more sustainable companies. “That’s the way it is done” is usually the worst reason for doing something. It doesn’t mean it’s bad, per se, but it definitely doesn’t mean it’s good.
The pendulum is swinging back it seems. More and more people that I know are now interested in starting bootstrapped businesses, growing them to $10k MRR or more then continuing them along or selling. Sites like Indie Hackers have popularized this model this decade than the 2010s which seemed laden with venture capital, most likely because it was the age of ZIRP.
>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.
This, but also it's a bit like gambling, this is the high risk / high reward way to do startups. The slower way is more stable, but you don't get to have fun with other people's money while you're building the business.
Sure. What strikes me as strange, however, is the attitude that this is the only possible path to starting your own business in tech. Sure you’re not going to start up your own social network, but maybe you’ve got a great idea for some kind of QoL thing that helps people work with these big inflexible systems? Many of these startups seem to be shit at providing expertly personalized or customized services because they’re trying to be a big at-scale corporation from day one. Maybe you devise a way to semi-automate customized solutions for some common enterprise thing too sticky for at-scale services to address specifically so companies have to do it in—house? It seems like there are problems that would be easier to address with a small business like that which could organically grow into something sustainable. Definitely not sexy, and I think people making tech startups currently are often more interested in sexy than anything else.
I think compared to 15 years ago there's (1) more capital (2) more founders [enabled by better tooling and well-known implementation patterns] (3) less low hanging fruit on the product side. Any given opportunity is more likely to have other, well-resourced, folks chasing it hard.
> less low hanging fruit on the product side. Any given opportunity is more likely to have other, well-resourced, folks chasing it hard.
I think this is the biggest factor that actually affects the fundamentals of selling tech. To my eye, every other aspect is some form of Gordon Gecko business insanity and/or VC people looking to stoke egos by making people with good ideas feel like big shot executives while figuring out how soon they can throw it all in a juicer and extract a bunch of cash.
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.
I don't think there's any absolute rule here. I'm pretty convinced that a startup would be healthier for me rather than my safe day job. The amount of churn and nascent burn out due to chasing tech debt and tickets surrounded by demotivated people is really bad.
I guess being aware of what you need and can afford is key.
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.
If my normal billable rate is 70$ an hour I might offer a discount if your project is really neat.
But I've never seen that, I've seen people wanting to me to sign contracts would say I will donate time, and these are never people who are realistic about what their chances are. You get all this hype where they claim someone offered them 100K just for the idea, but when you ask for $100 a month to host the server they don't have it .
I was part of a group that did something like this. We used a crypto token system where if you joined the group you got X number of tokens and you could use that to get other people in the network to help with various tasks.
Then the network would take a small percentage of equity in the companies of all the members.
You left out the most interesting part: why _were_ you a part of it. Did it not work out, why not, or did you leave because of reasons not related to the (un)succes of this system?
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.
By that logic any entrepreneur can just scrape together a few bucks and ride a bus straight to San Francisco.
I find it easier to just consider Steve Jobs to be exceptional here. He's the definition of not letting the circumstances of your birth dictate anything.
Steve Jobs was absolutely exceptional, but there's a good chance we'd have never heard of him if he grew up on a farm in the 1960s/70s midwest and never ran into Woz (who also benefited from proximity to electronics), got inside XEROX/PARC, or was exposed to calligraphy in the college he dropped out of.
Jobs has said himself on multiple occasions that he was lucky with timing and proximity to the industry and people, not that it lessens the immense grit that was still needed.
That's true. It feels like every other ladder-climbing wannabe out there is also trying to attract powerful people's attention on Twitter et al these days, so I imagine it's much harder to stand out than it was for a kid in the 1970s. But you're not wrong.
I agree it probably was easier once you knew where to find them. Almost every celebrity is accessible through the internet if your megaphone is loud enough.
I also don’t claim to make such effort. I just want to clarify that networking is a conscious skill and not always a result of family connections.
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?)
At least if young you got the energy, time, usually fewer family obligations, maybe even naive enough to do something others won't (as a good thing) and ... you know if that's the lifestyle you want.
But I hear you starting at zero life experience, that is bad. I would find it pretty painful to work at a start up and have to talk to the founder "bro let's talk about the basics of picking your battles" and do it ... well.
I think having an entrepreneur's mindset and starting young can work. But you will end up like every billionaire we know. Elon, Bill Gates, Zuckerberg, etc. They all started young as CEOs and didn't think twice about stepping on everyone and anyone around them to get the top. Now after years of this you have people that are very powerful and have no idea how the common person lives or how it feels like to work for someone.
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.
Whether the founders are looking for a big pay day or not, unless they are self funded “lifestyle company”, their investors are definitely looking for outsized gains in their portfolio.
Outside investors aren’t looking for slow growth companies or those that may one day throw off a little money. If that were the case, they could just invest their money in the stock market and call it day.
On that note: Warren Buffett made a 1 million dollar bet with some hedge fund managers that he could beat their returns just by putting money in an index fund over 10 years - he won the bet.
It is. It’s better to have made enough to save $300K when you’re 25 and put it in the stock market and let it grow than make $300K when your 50. $300K is worth more when you’re 25 and retiring at 65, than it is when you’re 55.
“The time value of money (TVM) is a financial principle that states that money in the present is worth more than the same amount in the future.”
Money is worth more NOW so you can spend it to acquire skills, resources, and goods. If you wait then you are living life without those things. And delaying early strategic wins.
Passive investing is renting out that optionality to other people, like starting a 401k early.
Money is worth more now because it can be invested and grow in the future instead of getting more money in the future that is worth less because you have to take into account either inflation or what the money could have made even if you are just looking at the risk free returns - ie discounted cash flows
The same amount of money is worth less in the future than it is in the present because it can grow even at a risk free rate.
Yes, I need some of my money now to pay my expenses. But if you had 200K extra to invest in 2010 and chose to invest it and instead chose to work somewhere paying $200K less than you could have thinking I can make $200K more in 14 years. You would have lost out on 605% returns.
What do you think you are doing when you “invest” in the stock market?
Yes I know when you buy stocks aside from the IPO or secondary offering you’re buying from other people and the company doesn’t get the money directly.
The value of the money to you or the business is worth more now than 10 years from now. Meaning just like I said, it makes more sense for you as an individual to have made $300K and live off $100K and invest it in 2010 than to wallow in obscurity at failing startups and then start saving at 35.
This is the textbook definition of the time value of money - as quoted from Investopedia.
I have one other way to describe this line of reasoning:
- money is more valuable now because you can start earning interest
- but why are others willing to pay interest?
- because the money is more valuable to them now
It's totally cool if you want to argue what you're arguing about the value of investing early to unlock long term compounding gains but... don't call it the time value of money. Time value of money means something different than what you're arguing.
The time value of money (TVM) surmises that money is worth more now than at a future date based on its earning potential. Because money can grow when invested, any delay is a lost opportunity for growth. The time value of money is a core financial principle known as the present discounted value.
I asked ChatGPT to explain why money has time value without referring to making other money (circular).
I think this is a good description which represents my view. Notice that these are true regardless of the existence of central banking:
Opportunity Costs of Waiting: Money available now can be used to address immediate needs or desires—buying goods, accessing services, or achieving goals. If that money is delayed, those opportunities may be lost, diminished, or deferred, reducing its practical utility.
Uncertainty Over Time: The future is uncertain, and there is a risk that the purchasing power or usefulness of money might change due to factors like inflation, changes in circumstances, or unforeseen events. Money available now provides a guarantee of utility that might not exist in the future.
Personal Preference for Timing: People often value immediate access to money because it aligns with their current priorities. For example, having money now could allow someone to travel, invest in education, or address urgent health needs—opportunities that may not hold the same relevance or availability later.
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
.
As a developer, that's for sure possible, it might take a few years. Even if you make less in the beginning, you can more easily live in places that are cheaper if your living situation allow you.
There are many opportunities online available. Start with acquisition and build from there.
I did it myself a few times, and have friends who made way more. The biggest secret, sticking to it.
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.
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.