The right way to start a company | Hacker News Reader

The right way to start a company

medium.com

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Hmm. My takeaway from this article is that the author simply doesn't have a burning passion to change something in the world or build something that should be in the world, and so a startup has not come to mind. Which is the right course of action: do nothing. Just starting a startup for startup's sake is the worst possible reason. And sometimes the startups that are started are flukes, even obnoxious flukes like Harvard's TheFacebook, and the true business emerges because the founder(s) were smart enough to quickly figure out what was going (and catching) on, how the market was reacting, and they pursued that vigorously and executed brilliantly. I consider all the big widely covered stories, WhatsApp, Facebook, Airbnb, etc., random flukes that executed well with grit and a determination not to give up. But I don't find them very inspiring.

All the startups I founded or co-founded (none located in Silicon Valley) were based on a burning desire to build something that wasn't available to the public but SHOULD be, and I was determined to make it available. Once I decided to go forward, nothing could stop me. Made a thousand mistakes, some in the end costing the respective company. But figuring out what to do as a startup was not typically the hard part. Not having enough good people or funding was. I hope to do another startup but right now I don't have any burning passion to build something that's not yet in the world except for stuff related to improving the way the voting public is informed by media (aka stopping how the public is misinformed by media), sustainable energy, improving health, and making people happier. We'll see if something emerges.

author here– agree with many of your points, except two: 1) I think great ideas are surprisingly rare, and are very difficult to recognize. It's especially hard because of how important execution is for 'uncovering' a great idea. Great idea, badly executed = looks like a bad idea

2) I think "burning passion" oversimplifies things. Many great businesses are built without 'passion' for the solution...just a passion for some part of the business...and sometimes that's just recognition of a great financial opportunity.

> I think great ideas are surprisingly rare, and are very difficult to recognize.

Great ideas are super common. What is exceptional is great execution of those ideas. For every 'great idea' that you see around you go back to the root. Then you'll find many still born or eventually dead companies around that exact same 'great idea' but executed in a half-hearted or wrong way.

> Great ideas are super common. What is exceptional is great execution of those ideas.

I'd like to see this unpacked. What is it about an idea that makes it great? What's the difference between those and the bad ideas? How do you figure out whether your idea is great or whether it sucks?

Is it really that the idea just doesn't matter? That's where I'm leaning. The idea itself as something that's iterated on until you get to some intermediate state between problem-solution fit and finding traction.

Let's just take a few examples:

AltaVista -> Google

Idea: search engine. Execution: AltaVista soso, Google: excellent

Geocities -> MySpace -> FaceBook

Idea: A place where people anchor themselves on the web

Execution: geocities: hobbled by the tech available at that point in time, MySpace: a bit better but still missed the boat, FaceBook: excellent execution, more limited in presentation than the previous two and that became their strength.

And so on. For every one of these the names I've listed there were already relatively successful companies validating the idea. But then a party came along that was excellent in their execution of the idea and they wiped the established competition off the map.

If you go back further you'll find that the search engine was already a concept pioneered by many other companies, ditto the 'social network' or 'personal homepage'.

An example from the physical world:

Car companies, when the car was invented there were 100's of car companies all trying their hardest to get a share of the cake. But the majority of them absolutely sucked at execution. Take the UK brands, super nice to look at, occasionally brilliant ideas but absolutely horrible in quality in spite of having a head start post WW II they still had to have a bunch of guys with hammers at the end the production line to make the doors fit the chassis. In the end they simply could not compete. All the exact same idea: personal transportation.

That's what competition is all about, excellence in execution, if you mess that one up in the long run you will not survive. This is one of the reasons why in spite of the network effects I see Ebay and LinkedIn eventually being replaced.

I think you are oversimplifying "the idea". Google's idea wasn't that "people will want to search online." Google's insightful, interesting idea that was then well-executed was the PageRank algorithm.

Geocities, Myspace and Facebook were all very different ideas. If the first two had executed better, all 3 would probably still co-exist.

> Google's insightful, interesting idea that was then well-executed was the PageRank algorithm.

That doesn't parse but I think I get what you mean. PageRank was not a new idea. Citations in the scientific world form a graph and these had been used before to determine the relevance of a paper. What was new was to apply such a mechanism to the problem of searching the web for relevant content but for the end-user of the service it did not matter much how the results were arrived at, as long as they were relevant and in the case of a switch from one engine to another, more relevant. So even if the basic idea ("people want to search for stuff online") was the same it was the implementation of that idea that mattered. The fact that google was lightning fast helped a lot too and that by itself would have made some people switch (after all, speed matters), and this is a very clear point of execution rather than 'an idea'.

> Geocities, Myspace and Facebook were all very different ideas. If the first two had executed better, all 3 would probably still co-exist.

MySpace still exists, Geocities still exists but not through Yahoo!, there are several mirrors only there won't be page updates. There are also newer re-implementations of Geocities. And yet, FaceBook rules, the network effects they baked in are just too strong and that's a very important part of why I think their execution was excellent. They realized that the other parties had not gotten that aspect of the idea right and by doing that right they more or less locked up the market. FaceBook will be here for a long long time to come.

> And yet, FaceBook rules, the network effects they baked in are just too strong and that's a very important part of why I think their execution was excellent.

Are the network effects really that strong? I've never seen another company even come close to providing the value that Facebook does. I feel like if there were really a social networking idea that was better right now than Facebook, then that company would have already found a way around the network effect. For example, plenty of people have challenged Craigslist first by crawling their site, however illegal that is. None yet have succeeded, but that tells me that CL just provides a better product.

I think the real reason nobody has dethroned Facebook yet is that Facebook meets everybody's needs and hasn't yet gotten complacent. Perhaps they'll make some strategic missteps in the future a la Microsoft and someone else will eat their lunch, but right now, they're still the best available. Ditto Apple, ditto Google.

Examining ideas is important in that it can tell you what not to try to do.

I really think the network effects on FaceBook are what keeps it where it is. I know people that would love leave FB, except for one little detail: all their friends, family and co-workers are on it and they use it for everything from planning birthday parties to holidays and staying in touch. That's a very difficult thing to attack head-on.

Craigslist is another example of such a service, you need the market and the goods, if you have only one (for instance by crawling CL) then you still won't have the market.

That's a really nice example of 'good enough' execution combined with a chicken-and-the-egg situation for any followers.

Of some things there can only be one, something similar happened in NL with the Marktplaats website, when Ebay wanted to gain marketshare here they found they just could not beat it so they ended up buying it.

I think you're taking idea effects and clothing them in the trappings of execution. In order for a business to get really big, it has to provide 10x the value that the current incumbent provides. Microsoft beat out IBM because software had many times the potential that hardware of the time had. Sure, IBM failed horribly on software, but that's because IBM didn't think software was important, not because it couldn't build decent software. The thinking behind the idea gives you the zeal to execute on it.

If the idea is right, meaning it is 10x better than the current best offering, and it's executed properly, then network effects can go screw themselves. Nobody took search seriously before Google did, that gave them a leg up over the competition. (who were they again?) It's just not the right time to start a Facebook or Craigslist challenger. Maybe in a few or ten years the market will change such that most people interact with the Internet differently enough that it's worth building a social network to serve their needs. Right now it would be foolish to do so, because their needs are already being more-or-less perfectly served by Facebook, ditto for CL.

>I've never seen another company even come close to providing the value that Facebook does.

Google provides far more value than Facebook.

I'd argue that there were social-networking platforms that were better than Facebook years before it came out. LiveJournal, for instance, was one of the few online places where you actually make new friends instead of just collating the ones you already had. I just hung out this Thanksgiving with a couple who I met on LJ over a decade ago; they also met doing LJ support, and at their wedding 7 years ago, about 3/4 of the guests were friends from LiveJournal, many of whom had never met in person before. A lot of the features that Google+ has "innovated" with (Circles/friends-groups, Communities) or that have Facebook has recently added (mood icons, threaded commenting) were things that LJ had a decade ago.

Facebook won because the killer feature that distinguishes a social network is who's on it. They started out at the most high-status house on the most high-status college in the most high-status country, and then spread like wildfire from there. By contrast, LJ was popular with fandom and with Russians, neither of which are groups that ordinary, affluent, socially-connected Americans would much like to hang out with.

OK, that doesn't answer my question. You're taking different executions of the same idea. Obviously anybody that's been paying attention during the last twenty years or so knows that execution is more important.

But how do you vet the idea itself against other ideas? How do you know whether spending your time reinventing search is going to be better than building a new productivity app?

You're going to execute the best you can, assuming, again, that you're aware that execution is the biggest factor. How much, if any, effort and validation should go into choosing your idea?

> But how do you vet the idea itself against other ideas?

Apologies for missing the essence of your question (4 am here...)

I don't have a foolproof algorithm for evaluating single ideas but when I look at a number of ideas side-by-side I go through a number of exercises to figure out which one I'll devote my time to. Some of these are formalized, SWOT analysis for instance: https://en.wikipedia.org/wiki/SWOT_analysis which can be useful if not taken religiously, trying to sell others on the idea, simply trying the idea in a limited setting to see if it gains momentum or if I have to push it forward all the time. The better ones tend to stand out.

A really good idea tends to have the 'I can't believe this doesn't exist yet' feel to it, coupled with a word-of-mouth element once it does get implemented, even in the most basic version.

Just in case you haven't seen this show yet:

(1/2) https://www.youtube.com/watch?v=XfB0g_JDIds (2/2) https://www.youtube.com/watch?v=pXA4sab1eKE

I think instead of "idea", we should use the word "market opportunity". Some opportunities make more business sense than others because a lot more ppl experience the pain, but there still needs to be good execution to take advantage of them.

I actually wrote a long post about this exact topic because I am sick of the meme that good ideas are nothing [1]. If anyone has any ideas that hit 10 or more checkpoints on my list let me know so I can steal it from you :)

1. http://www.tillett.info/2015/08/30/ideas-are-not-cheap/

This is the more common meme, and I think it is healthy to keep 'idea folks' away. Even great ideas, without execution, are worthless.

But as you say, a great idea combined with a great execution is where things get really special. Still, I do think great ideas are rare. It depends a bit on how you define what an idea is: is it a social network? is it a social network within a college campus? is it requiring real world identity?

The idea was 'a place that people will call their home online', and in the initial phase of FB my guess is that it was a place where you could find potential mates and a way to get introduced to them.

Do you mean "mates" in the British pub sense or in the David Attenborough sense?

Ideas are super common. Great ideas are not (pretty much by the definition of "great"). Most businesses are built with pretty ordinary ideas.

Completely agree with this point of view. If you don't have an idea, sitting around trying really hard to come up with one sounds like a waste of time (and potentially VC money, but that's probably a lot less important).

Doing your own thing will demand you to be resolute, for most likely longer than you'd like. Struggling to come up with a problem to work on in the first place is not a good sign.

Agree, with a tweak.

Conviction may be a more accurate word than passion. For example, a conviction that a current and large problem can be solved using recent developments in technology.

Passion can improve determination, a nice boost to a person who is already customer focused. But an entrepreneur who is passionate and not customer focused will likely end up in the weeds.

I started with the conviction that I wanted to be the owner of a successful business. I did this at an age where I already had experienced plenty of wonderful ideas. Ideas always come. I never worry about that. What is important is to be in a position to take something and run with it. For those of us who need an income, that means we have to design and build a business that provides for us (and others) while we await the next great idea.

One such way to build a company is to bootstrap a services business and productize. This is a well-worn path to at least modest size. Another way is to create a studio to fire off many ideas and see what sticks. There are more than a few of these right now.

Many companies and businesses are organically conceived and grown over decades. They are complicated. They start with one thing and move into another. They are not neat and pretty. They grow more based on the longevity, character and commitment of the founder than on the inherent brilliance of any one idea. You don't have to have a flash of inspiration which you test and walk away if it doesn't work. Once you employ people and cultivate their loyalty this type of approach is toxic anyway. It may only work in certain little islands like SV.

Many large businesses are built on successive episodes of inspiration, revelation or innovation that occur over decades, with much perspiration in between.

Business growth is like a multi-stage puzzle. Getting to $100k/yr is one stage. Getting to $1m/yr is another. Getting to $10m/yr is yet another. $100m/yr and so on... Business grows as you and your abilities grow.

A creative person figures out how to solve the puzzles, unlock growth and move in new directions.

Everything is possible if you are not beholden to one narrow model of how to start, finance and grow a business. The first key is to know yourself and what you want.

I've kept a list of company ideas for close to probably twenty years. What works best is to not think of it as a startup but a project. Doing a project is less stressful, easier to commit and easier to quit than a startup. Projects have a way of becoming startups pretty quickly when you get customer demand.

IMHO, and I'm just about starting on this journey myself, there is one way to test the importance or 'bigness' of the idea and whether you should commit to spending time working on it - does the problem affect a large swath of people (at least a 1M+ people?) and are the incumbent players missing out on an angle/aspect of it that you think you can do (significantly) better? The rest is your execution.

There are plenty of business ideas that work very well without affecting 1M+ people. Has RED sold cameras to 1M+ people? Limiting yourself to those ideas is not a good idea.

I agree that an idea needs to be big enough to be viable but 1M+ is arbitrary. If overall margins are very thin it may take a huge customer base to support a business.

It also depends on the amount of operating income required. One guy in his basement should be trying to solve a simpler problem than a well funded, VC backed startup.

Being unemployable also helps. When your back is against the wall there is no turning back.

The namedropping at the beginning of the article is annoying. What's it about? "Hey look, I'm awesome and even I am confused!" ???

hey, author here! certainly didn't mean it that way at all– was telling a personal story and used specific examples from my experience to illustrate

This medium post is great! It touches on a lot of points and thoughts that I feel all founders go through at various stages in startup life.

Not quite feeling it, eh?

Stanford's abundance and enabling of ambitions and optimism not enough?

Watching from inside a sand hill money machine didn't work out?

Does it sometimes feel like it has to be Steve Jobs or nothing? And anything less just doesn't stir that inner light and soul?

Just meh?

Yeah, I feel you. I used to get that often.

Maybe this will help, once I asked Steve Jobs how do I earn my own Apple.

He looked at me, sized me up, then said: "either you do or you don't."

I didn't know what to do with that, just took it and mangled it about in my head the past eight years, flipping it every which way to find meaning in every nook and cranny.

Oh, wait, one more thing.

He caveated his statement by finishing with: "the trick is to accept, accept, accept."

Maybe that'll be helpful.

I spent the last sixteen years in the backwaters of Cupertino wanting, dreaming, yearning to start my own company.

I have no money, we ate from the bagged groceries the church handed out on Sundays growing up, my mom doesn't speak english and only three years ago I was able to teach her to drive herself to Marina, I didn't go to college, couldn't afford it, had problem reading books sometimes too.

Worst sin of all, here in silicon valley, I'm pretty dumb.

Give me a calculus problem and I wouldn't know how to solve it. Don't know how to pump out regressions on a spreadsheet. Still don't know how term sheets work. I'm pretty sure every room I have ever been in I was the dumbest one there. Most days I can't even grammar. Or even muster up courage to talk to someone without my right foot involuntarily stomps.

Don't tell me about my limits, I know my limits and replay failures better than anyone else. I've had a whole life time of people telling me about my limits but all I know is this: I want a better life. I want to give better things to those near me. I want to help those around me. I want better, better things, better ways, better options, better choices, better solutions. I want it so bad I'm willing to kill myself to try.

I want to earn my own apple, I want to be a founder, a CEO, and lead so I went everywhere I could, that would have me, and soaked up everything.

Rejected five times from YC, oh well, keep going. Don't know anyone in the valley, be a tech writer, still failed to make any lasting connections, oh well, keep going. Don't know marketing or sales so work for tech startup in SF to learn and try my best, get fired, they then go and get acquired the day after I get asked to sign away my options, oh well, keep going. Taught myself hiding in conference rooms at nights and weekends after work in Mountain View, still get fired, oh well, keep going. Grinded out in Berkeley sixteen hour days, six days weeks, fifteen months in, gave it my absolute all to build, launch, promote, sell, support, maintain a creation and still watched it burn and fail. Oh well, keep going.

One step at a time, right foot, left foot, one at a time.

The tao isn't about being focused on the far distant peaks so much it hurts, nor is it to sit, ponder too long and waste. It's merely just walk the path.

Yesterday you said tomorrow. Tomorrow may never come. Someday is better than one day but any day isn't any better than today.

Either you do make it or you don't.

Maybe you get lucky, maybe you don't.

No one can promise you everything will be okay. My friends have long gone, in the dark of night I'm the only reassuring myself.

After sixteen years things fades away. The stories, the names, the after actions, everything fades away. I learned now it's not that knowing everything will be okay if you have all the cards lined up, advantages stacked in your favor, or have a killer idea, you just have to be okay with whatever happen.

Don't stop helping others. Others will help you.

Build a home for the misfits and the misfits will find ways to fix the fittings.

Don't give up, give in, give out. Then very last thing you see before dying is success.

Thanks for sharing this

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