Vanity is the key here. If you are spending on anything that doesn't directly improve your startups potential but makes you feel good then you should rethink your strategy.
Glad vanity metrics is being given a name. I've worked for one which obsessed about user signups long before we even had a product ready. It was ridiculous
"If you’re bootstrapped and have an email list of 1,000 people and want to grow that list, you don’t need a full-time email marketing manager, a writer, a designer and a junior marketer to execute on a content marketing strategy for you...You need a motivated, scrappy content marketer who can do all of those jobs at once."
I agree about the time-wasting meetings, but not about the above, since I'm directly in that situation. You could hope to find one person to fill any two of those jobs, but all you'll get out of a 'scrappy content marketer' is a vacant position and a series of burnouts. That's hard work, where you have to invest resources to reap rewards.
To add to your point: people often make the mistake of trying to replace former team members with people who fit the exact skill profile of the person who left. It's highly improbable you'll find the perfect match.
Instead, identify the bundle of tasks that person did and find people who can take them on separately, and perhaps accomplish other tasks you didn't even realize your team could do.
If you were to identify every task your business needs, then you have the flexibility to direct those tasks to the right people. Further, if you're in a high-growth environment, you can continue to scale by motivating your people to fire themselves from their worst tasks and focus on their best expertise.
If your team continues to evolve in this way while your company keeps sound unit economics, then congratulations! You've solved the scaling problem.
It's hard enough to find a single semi-competent employee by "overpaying". I don't think it's as simple as increasing the salary on the job listing by 20% and watching the super qualified candidates pour in.
I'm not privy to what my employer is advertising for senior DevOps positions, but I can tell you it's not nearly enough: I get resumes where "installed htop" is a prominent bullet point. Literally.
The last two hires have been somewhere between oxygen thief and chair warmer.
TL;DR: If you are getting crappy candidates, you are likely offering too little and could tempt better candidates with a better offer.
I've looked into the market for Sr. DevOps positions lately and unfortunately found exactly that to be the case. No one is willing to offer enough to lure me away from my current gig, where I'm reasonably happy. The employers that don't immediately scoff at the proposed salary tend to give me grief about it, which makes it not worth the time.
When you say "overpaying", what is that number for you? For context, in 2011, Clorox and other established Bay Area companies paid marketing managers with a few years of relevant experience ~$120,000. Visa is starting fresh Economics grads at $70,000 for marketing roles.
If you're not in that neighborhood, good luck. Startups don't seem to value marketing as much as the big companies, and then they wonder why they need 4 people for one job. Offering under $100K for a Director of Marketing (sadly common in startups) is a joke.
Honestly, these salaries seem like a lot as is, from where I come from.
Instead of guessing what's a fair pay wouldn't be better to pay or get paid on results - revenue you bring in. The marketing director or others in the team are close enough (in terms of agency they have on revenue) to revenue generation that this should be possible, no?
It's not quite that easy. Some marketing content, like blog posts, has long-term value that can't be easily measured in the same fiscal period it was created in. A huge task of marketing is to increase the awareness and value of a brand, getting better search result rankings and helping more people find and trust the company. These effects absolutely affect the bottom line, but they can be pretty hard to measure.
Marketing also generally has multiple touch points before a sale actually occurs. Maybe you see a Google paid result that you ignore, then a YouTube pre-roll that you tune out, and then you see their logo on a train ad during your commute. None of those result in a sale, but you finally see the company at a conference, grab some swag, talk to one of their salespeople, and become a customer. In this example, their revenue looks like it was generated by the efforts of the sales department, but in reality marketing had a lot to do with it, too.
If your company has all the right tracking in place, you can determine the path your customers took when they ultimately bought your product, provided that they bought it online. That still ignores their prior exposure to the product that helped convince them during the current session. More importantly, if you were to measure marketing performance based solely on those metrics, your marketers would have little incentive to do all of their other important functions.
I'm not in your situation at all, but it does not pass the smell test that you need more than one person, much less four, to work on growing a 1000 person email list without burnout.
A good marketing manager with a few years under her belt should be able to do this without breaking a sweat. Unfortunately, like a non-tech company hiring programmers, non-marketers seem to be pretty bad at recognizing good marketers.
>You could hope to find one person to fill any two of those jobs, but all you'll get out of a 'scrappy content marketer' is a vacant position and a series of burnouts.
One person can easily manage all of this and more very affordably with freelancers, tools, and a decent process.
Where you go wrong is when the person managing is "figuring it out on the fly."
Use canva or stencil for design, use textbroker or copypress for content at scale, all that is left is building an editorial calendar, planning content promotion, blogger outreach, all of which can be done with tools, etc...
...if you have clarity about what exactly needs to be done from ideation to promotion, its really not that hard for one person with tools and freelancers to execute on.
people have nervous breakdowns and worse from running startups so make sure you're in a good spot financially to even do it
everything u do creates value. that sexy button your designer just spent two days on cost the company $2600 hope it was worth it.
that bug you left unfixed for a few releases now takes a whole weekend to fix and now one of your developer burns out and quits uh oh costs you $50000.
everything has very very exact price tag. add up all the missteps and the successes and get the final outcome
Good article. One quibble: $5k for a conference sponsorship is pretty cheap; try finding any space at CES in that price range!
If the conference audience is a perfect fit, and you feel your company/product is far enough along to leverage the exposure, it could make total sense to pay for a booth/sponsorship.
If you don't have $5k to spend on marketing, or it's too early for it to be effective, that's a different story.
But if you do, then compare spending the same amount on AdWords (or other marketing/lead-gen channel X) and see if the math works out.
I generally love Alex's writing and have learned a ton. This example, and one or two others, stuck out as a little flawed here. If conference sponsorships are a traction channel that proves to be successful for you relative to other channels, then more power to you. To your final point, do what works for your company. This isn't going to come from blog posts – although you may get ideas there. It's going to come from the hard work of developing hypotheses, running experiments, and using benchmarks to start the process anew.
The problem is when a startup treats a conference as a branding exercise ("we got our name out there... success!"), rather than as a means to acquire highly qualified leads so they can close deals and profit from the experience ("we got a 1000% ROI by closing $50K worth of deals... success!").
This is great advice. YC hammers home hard the point about not "playing" startup. You should be spending most of your time building your product, talking to users, and selling (or some variation thereof depending on your market). If you're not doing one of those three things, you're probably wasting your time.
From the article: "SalesForce, and even much smaller companies, can comfortably spend $5,000 on a trade show booth because it’s a small part of their larger marketing strategy. It makes sense for them, because they can afford to buy booths at every relevant conference and get consistent face-time with their market over the long-term."
SalesForce spent $250K on a party pre-IPO, back in 2000.[1] Four floors of the Regency and the B-52s. Playing startup was much bigger in the first dot-com boom. This time around, everybody is working very hard. Not necessarily on the right stuff, but working hard.
> it makes absolute sense for a B2B entity to be present at trade shows
It may make sense for some B2B entities to be present at trade shows but the article is talking about early-stage companies buying trade show sponsorships. Depending on how you interpret "early-stage", I'd argue that this article is wholly accurate -- there likely is a smarter way to spend that $5,000. However, at some point you cross a line where your product is ready for the next growth stage and that $5,000 is well spent at $X Conference. At that point, $X Conference is part of your larger marketing strategy, also pointed out in the article.
The original article is completely wrong on this point.
Maybe some startups sponsor but don't attend? That would be foolish.
Alternatively, spending any money on marketing before you have anything customers can actually buy or use or trial would be foolish.
But if you've got something even a little bit useful that's ready for people to try, and you plan to attend the conference, that $5,000 is a smoking deal!!!
Hello, founder of a bootstrapped WordPress theme & plugin development business reporting in. Been running a profitable "startup" for 5-7 years (depending on whether you count my first two years as a solo freelancer).
Can confirm that not all startups are like this!
1) Meetings
We have one per week and sometimes cancel that because we feel it's overkill
2) Hiring tons of people
If anything we don't hire enough because we never spend money we haven't yet earned
3) Vanity benchmarks
One benchmark - cash in the bank (if it's too little, tighten the belt, if it's too much, spend it to grow)
4) Meetups
I'm terrible at networking and should do more of these!
5) Sponsoring conferences
HA!
6) Office, business cards and so on
Don't have either... 100% remote has worked since day one... OK, just got an office (sort of, it's shared) in Bangkok but no one works there!
7) Having more conversations with people outside of your market than people in it
I am totally guilty of that one!
Please don't take any of this as a claim that we are better... I can and have leveled a thousand criticisms at how I run things... just saying, "startups" that exist way, way outside of this mold are definitely out there :)
On the other hand, what you describe doesn't sound like a start up from the high-growth/external investment required point of view.
Sure startup is a sexier way to describe a young, small business but semantics aside, this feels like "traditional" business looking for glamour. Of which I am equally guilty, donnt take this as criticism.
If I was looking for glamour I would have raised money, started the type of business described in the blog post, and probably gone on to make many more of the mistakes it lists.
I guess the point I'm trying to make is if you're an aspiring business owner you don't have to go for this high-growth/external investment model. It encourages lax fiscal discipline which is the cause of these mistakes. I sometimes feel people I know who have gone through this could have learned more and earned more by bootstrapping.
Not everyone buys into the redefinition of a startup as a company pursuing massive growth. The word has a broader meaning that encompasses other kinds of strategies for becoming a viable business.
Starting a business is not the same as a startup. Just like having your own business doesn't make you an entrepreneur. Finally, an idea can be great but that doesn't necessarily make it innovation.
> The word has a broader meaning that encompasses other kinds of strategies
Does it really? I don't actually accept that, but around here at least, this is a common enough definition that you should call it out when you're going to deviate from it:
A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of "exit."
The word is a regular English word that has a widely accepted meeting outside this message board, and had that meaning for decades before Paul Graham tried to redefine it. [https://en.oxforddictionaries.com/definition/us/start-up]
Litigating what the correct meaning of "startup" is on HN is not productive, but we should recognize that not everyone agrees with Graham's redefinition, and therefore arguments that cite his essay are begging the question.
> Litigating what the correct meaning of "startup" is on HN is not productive
I disagree. It's really really really hard to build a business and make it grow. Any logical tools we can use to cut down on the space of strategies and goals worth pursuing is worth its weight in gold. Coming to more restrictive definitions of "startup" does exactly that.
More prosaically, if we don't do it ourselves, investors are just going to do it for us and leave us in the dark as to what their real criteria for funding is. We want them to be a part of the conversation because bootstrapping everything sucks. Being needlessly inclusive hurts everybody.
So, let's say you're a would-be entrepreneur looking to start a business and run an enterprise and get rich. How do you know where to begin? If you don't have connections to help, you're stuck with only your own understandings, your own resources, and your success or failure will be mostly attributed to luck.
Cutting down on this luck factor is the problem the startup landscape is trying to solve. We can provide two things to would-be entrepreneurs, information and resources. Information can obviously be free, but resources have to be limited.
It does the industry, the collection of people providing information and resources, the most good if following the information, which they can get for free, leads easily and directly into provisioning of resources. A more transparent process makes it more democratic and a better route for real social change.
So we want to constrain the definition of words like 'startup' so that they better conform to what investors are looking for in ventures to fund. Sure, anybody can use the term any way they want, but for this community, 'everybody starting a venture is a startup' does nothing to help the would-be entrepreneurs to do the right things they need to do to get investment. It's too inclusive, it does not provide a pathway for people that want to join the community to gain real, material help with their venture. It needs to be a useful tool of exclusion.
Even in technology, which is just a slice of all of (say) American enterprise, it's hardly an accepted norm that new business starts must be funded by investors.
What's instead happened is that people who pay attention to message boards like this are afflicted with a kind of snow blindness from all the random businesses that do get funded by third party investors. It is true: if you want to be funded by third parties, you will need to build a certain kind of business, and that business will look a lot like what Paul Graham defines as a startup. There's a lot of debate about whether and why this is, but the math is straightforward: if you want to take a few million dollars of O.P.M. to build a business with, you need to aim at the moon and hit it for those investors to have a viable business model.
What people who don't build businesses on O.P.M. object to is the notion that O.P.M. is the only way to start a viable company.
So: sure. If you want to educate people who plan on building VC-funded companies, you're right. It's a good idea not to delude them into thinking they can take a few $MM and grow organically. They should probably follow most of the Paul Graham playbook.
But more companies should reflect about whether they want to take a few $MM to begin with. Many people would be happier if they didn't. A lot --- most, in fact --- of the companies who do take the money have fooled themselves, and are frittering away the single most valuable resource they have (their time) on companies that have less than a crap-shot chance at success. Craps works extremely well for investors. It's not so great for founders.
You're the only one litigating the meaning of words. Anytime you find yourself providing a link to a dictionary, you should consider that you're being pedantic and have no point. That's certainly what it looks like to me.
I'm not providing a link to a PG essay because it coincidentally agrees with my position -- there's a big orange "Y" at the top of this page, and it's not there arbitrarily. If you're having a conversation on HN about startups, there's an underlying culture which you need to be aware of. Demanding people justify a shared understanding of a term's meaning by challenging whether or not it doesn't mean something else is arrogant -- have you considered that you are ignorant of the basic terms of the discussion, as it occurs on HN?
There are other conversations where your definition might be right. That has nothing to do with this conversation.
I realize that I'm defending vinegar-based sauces on a BBQ discussion board that is committed to tomato-based sauces, and run by a powerful tomato conglomerate.
But I've been here a long time (just like you), and my account predates Paul Graham's fatwa about startups. If he chooses to redefine other words in future essays, I reserve the right to link to the dictionary again.
My goal is not to be obnoxious, but to keep the terms of debate open for people who have a more expansive view of what online businesses can look like, and what values might be important to their founders.
What is your definition of a startup? I have a hard time thinking of my local pizzeria as a "startup" even though they are undoubtably a small business.
Ultimately, I think PG's definition defines a useful category of businesses to think about and litigating the label we use for that category doesn't help anyone.
Ask someone who's lived for any serious amount of time in Ann Arbor whether a local pizzeria could be a "startup". Domino's started as a single crappy pizza place in Ypsi. It's an 8 billion dollar company today that will almost definitely outlast Twitter and Yahoo.
For reasons I don't quite fathom, discussions about business on HN seem all to be born without the part of their brains that understands business fundamentals. Almost every business can be made to scale (ironically, the more high-status the business, the trickier it is to scale, which is why you'd be better off investing in a crappy pizzeria than in Grant Achatz). You can build a billion dollar plumbing company. You can build a billion dollar accounting firm. Someone out there --- god, I hope it's actually a housecleaner --- is going to build a billion dollar housecleaning company. Do you really need the mechanics of how this works? Do the work. Get good. Hire people to do the work for you. Get good at managing them. Hire people to manage the people you hire to do the work. Repeat.
Nobody disputes whether the category of businesses Paul Graham describes is useful. It clearly is. If you plan on building a business on other people's money, it's vitally important that you understand almost everything he has to say.
What is in dispute is whether that category of business is so important that it should annex the term "startup". Plenty of businesses you would describe as startups don't obey Graham's rules at all, because they scaled up on a different schedule than A16Z wants businesses to, and did it without a single wire transfer from A16Z.
I think you're being excessively patronizing, which is insulting because I usually like your comments. I'm well-aware of "business fundamentals."
I'm not saying high-growth startups are better than other kinds of businesses. Heck, I'd very willingly advocate the view that other kinds of small businesses have better business fundamentals than tech startups.
Just because one pizzeria managed to scale doesn't change the fact that the vast majority of small businesses are not built to scale. Most small business owners think about how to grow 10-20% in the next year, not 100-200%. Heck, in my experience a lot of them are terrified of the concept of rapid growth.
Like I said in my comment, I don't really care if we use the term "startup" to refer to high-growth businesses or not. We should just all agree on a consistent set of terms and stick to that.
Otherwise you get unhelpful comments. Like I could talk about how my "startup" has reached profitability and 6 figures of revenue with only a single employee. Except this startup is my consulting business and has no business being lumped in with high-growth VC-funded companies.
The vast majority of tech companies aren't built to scale either, and the entire VC model is built around the assumption that in a portfolio of 10 companies, 5-6 of them will fail as well.
I think "VC-backed startup" captures the thing Paul Graham is talking about, and I think the modifier "VC-backed" is particularly important because you want to follow the Graham playbook if you're VC-backed, but not otherwise.
You probably don't want to get me started on the growth and return potential of a consulting shop doing a regular 6 figures of revenue.
> The vast majority of tech companies aren't built to scale either, and the entire VC model is built around the assumption that in a portfolio of 10 companies, 5-6 of them will fail as well.
The latter isn't good evidence for the former. VC-backed startups are explicitly designed to either fail fast or grow quickly. So they simultaneously have a higher failure rate than standard small businesses and a higher rate of becoming $100M+ companies.
> I think "VC-backed startup" captures the thing Paul Graham is talking about
That's fine (and I agree that it's a more thorough definition), but I don't think it's useful to require a redefinition of a word that most people in the community already understand to mean high-growth VC-backed companies.
> You probably don't want to get me started on the growth and return potential of a consulting shop doing a regular 6 figures of revenue.
Honestly, I really really do. :) To be clear, I've had lots of success selling my time (either as a developer or, occasionally, managing a small team of contractors) but not at scaling myself.
The GP's point is that definitions are important and litigating the definition of the word startup has been tried before and doesn't end up benefiting anyone.
The logic flows as such:
1. People making judgements about startups
2. Not everyone can agree what the definition of a startup is (even if the benevolent dictator has stated their opinion on the matter)
3. Therefore it's incredibly difficult to agree or disagree about judgements of startups because the underlying definition is not clear
You may claim that #3 should be pg's definition "because its HN/YC", but not all HN members agree.
Okay, here's the other thing though -- unless you use the definition I'm providing, the article linked to here about "playing startup" doesn't make any sense. Unless someone genuinely doesn't understand that startup is being used in a narrower sense, there's no reason to raise this objection.
It's like objecting to a discussion about angels (the investors) because the word typically refers to angelic beings, or the baseball team.
The very fact that you're having this conversation indicates that not everyone here agrees with your definition of startup. If you want Hacker News to be a Silicon Valley only / Paul Graham acolyte space, I think it's a battle you've lost already.
The point zdkl was making was that you're not running what people describe as a startup - that is, a high growth, early stage business. And that if you're not running a startup then it is only logical that you are much less likely to 'play startups'. Do you see what he means?
Also, you talk about raising money like it's a bad thing. Don't forget that plenty of fiscally responsible high growth companies have raised angel & VC rounds. Just because you take on less responsibility doesn't make you more responsible, as a founder & business owner.
You'll find that outside HN and the Bay area the definition of "startup" tends to be broader than simply "high growth, high risk".
It actually feels like there are two conflicting definitions.
In tech you often hear people describe companies like AirBnB, Facebook and even Google described as "startups" although they're no longer "early stage" by any means and often have already peaked their growth and surpassed investment needs (though there may still be additional investments happening).
Outside it often feels like the label applies to any small service or tech company that was recently founded, period. This is certainly what a lot of "startup" events cater to. And of course there are plenty of companies that would be "startups" in the Bay area sense but failed to find investors and instead ended up bootstrapping and becoming profitable.
I'm interested actually as an engineer who do some side gigs and lives in Bangkok currently. Where is this shared office and how much do you pay for it?
We have one per week and sometimes cancel that because we feel it's overkill
Needing to have meetings isn't necessarily a bad thing. If you're making things that don't need many decisions to be made, and everyone agrees on the best approach, then meetings are completely pointless, but if everyone agrees then you're probably not pushing any limits. People have differing opinions at the edges, not about the boring well-trodden middle.
Are you confusing bootstrapped business with a startup? Would you call a bootstrapped fast food shop a startup since the owner dream of making it up to a McDonald like chain?
ok, but the article was about signs that a startup is doing the wrong thing. it didn't for a minute claim that all startups are doing the wrong things. only that some of them are, and that these are typical warning signs.
8) "We are doing it for passion, creating value, vision, future, entrepreneurship, making clients' lives easier, etc.. and NOT FOR THE MONEY OR POWER AT ALL"
I really cringe on statement like this. Since startups are not non-profit organizations I tend to cringe when I hear all this "making the world a better place" mantra. I understand that many startup founders have values and vision but as soon as funding comes I think it gets more complicated that.
Curious why you make the distinction between for-profit and non-profit organizations. All organizations face the challenge of their vision of "making the world a better place" not necessarily lining up with the vision of the folks for whom they want to make it better. For-profit companies at least have the signal of "someone is willing to pay me for this" as a concrete guide to whether they align with anyone.
Watsi's founder talked a fair bit about this in his Startup School presentation (which is excellent, BTW):
Entrepreneurship is just a goal for the sake of itself, if you're engineer/tech and you are aware you are just a "slave" who does all the work for almost nothing/a little while the so called "entrepreneurs" do almost nothing and get everything, why don't you become a master (i.e. entrepreneur) yourself, and employ another fool to do the real work for you while you grow a fortune doing almost nothing.
Sorry for my English.
If I can make money by making the world a better place or by not making it better or by actively making it worse ... I'll choose the making it better option.
Fortunately as an engineer in the SF Bay Area I have a lot of choice in the matter. Have fired myself from clients whose biggest client was Monsanto[1] and its ilk. Not my cup of tea.
[1] I oppose their business and patent practices, I'm fine with gmos. In case anyone wanted to reply with something silly and start a flamewar.
Sys-Bit Digital Solutions. Integrating Open Data Spaces. Yeah. Tech-Bit Data Solution Systems. Creating unique cross platform technology. Technologies. Techno-Jeeeesus. OH FUCK! Infatroid. Cloud based disruptive platforms. Disrupting the cloud of ... I said cloud twice, shit. Making the world a better place through cross platform business facing cloud -- SHIT there's that cloud again. Infatrode. Infatrode? What the fuck is infatrode? What is that? It's all just fucking meaningless words! Ok, no no no no no no no. Making the world a better place. Making the world a better place. Making the world a better place. Making the world a better place. Making the world a better place. Making the world a better place. Goodbye. Making the world a better place. Making the world a better place. Making the world a better place. Making the world a better place. Making the world a better place. Making the world a better place...
KNOCKKNOCKKNOCKKNOCK -- Sir, are you OK in there?He's been in there all night. I should call the sherif.
It seems like the culprit here is easy money. We've had twelve years now of ample funding for startups, and a whole generation of coders who have not seen lean times in their entire career. In such circumstances, you would expect people to get profligate.
Has it really been 12 years of ample funding? My recollection is that the downturn in 08-09 was really steep, with Sequoia sending out warnings to all their portfolio companies, mass layoffs at most Bay Area tech companies (my roommate when I moved out here went through 4 rounds at EMC, and was doing the work of 3 people by the end of it), dramatic rent decreases, and the almost total extinction of the Web 2.0 startup craze (remember that?). It recovered in late 2010 with the mobile boom - that's when companies like Uber, Instagram, SnapChat, Parse, etc. were founded. And those companies that managed to survive the downturn (DropBox, AirBnB, KickStarter, Whatsapp, Evernote) emerged quite strong, and were ready to take on massive amounts of funding afterwards.
I was out of the US then, so I may well be wrong. My recollection (working remotely as a consultant) was that people panicked for a month or two, and after that working in tech was like a magical oasis from the chaos.
In Seattle there were mass layoffs, people lost homes, the economy spent a few years in a form of stasis. Relative to what I saw happen in other parts of the country though, we were minorly scathed.
Experiences varied wildly. For employees, it was a terrible time. Large companies were laying off left and right, and Sequoia did indeed advise all CEOs to fire their devs if their product was already on the market.
However, since the stock market was doing so badly, it was the beginning of the moment where a _lot_ of money started looking for somewhere else to go. So if you were of the wherewithal to go out and make a startup, it was a great time to be looking for funding.
So it depends a lot on who you ask. I will say, though, that real estate started taking off in ~2011, so it was more than a month of panic, but I would guess that in 2011-2013 or so SF was far and away the strongest local economy in the US.
The weekend before Lehman collapsed, we closed the biggest deal in the history of our company --- with a giant NY investment bank. At the end of the weekend, the deal had vanished.
Other than that, not even a hiccup. At that time, we were in Chicago and NYC, but not in the Bay Area. However, a pretty big chunk of our client base was in SFBA, and I don't remember that part of the business skipping a beat.
After a dozen years in a startup what will most of these Have $$$ wise.
There were no startups in the '80s for an average comp sci grad like me. After a dozen years working at hugeo monopoly I got ~200k (by doing nothing except vest) once departure occurred. Is it more for the current batch of startup workers after 12 years or so?
Gosh this hits close to home. I tried to start a business with a friend beginning of the year. Too many meetings... Too much money on business cards and logos... Too much travelling... I definitely learned a hell of a lot, but I did have this nagging feeling the whole while like "wait, why do I have a business card, I don't even know what I am supposed to be selling here".
What? I can imagine the rate might be as high as 100%. That's hardly "unimaginable".
I am not trying to be merely annoying or pedantic here. I simply want authors to tighten up their writing and exaggerate less. With an exaggeration like that, I stop reading.
> More often than not, meetings are a waste of time, leaned on by people who don’t want to make a difficult decision and would rather punt it to a group.
I have a different experience. Meetings aren't the problem. Getting 2+ people together is important. The problem is how the interaction happens and the costs and benefits involved. No one said that leadership or communication is easy. Building collective will is both an art and a science.
I say this: don't blame meetings. They are necessary. Learn to run better meetings.
A meeting that does not result in 1) a decision 2) action items or 3) information distribution is a waste of time. As a team, meetings are necessary to get "on the same page". It is true, sometimes in a meeting we think, "This could have been done with email". And other times when there is an email thread with 20+ responses, we think "A meeting would have solved this faster" It is not always easy to plumb the depths of a topic to decide beforehand.
Why, cosplay is much more easier and pleasant than the actual thing, especially in the age of social media and role governed behavior - the age of cosplay.
You wouldn't believe how many idiots are cosplaying scientists, leave alone all these hipsters cosplaying intelligence..
In general, it boils down to the social advantage of displaying "success" and "competence" - socially constructed markers.
But there is a beautiful principle in biology - the "signals" must be honest and costly, impossible to cheat - one cannot cosplay parasite resistance, superior foraging ability, or good genes in general. One cannot cosplay youth and health. All these celebrities are ridiculous.
Hipsterism is cheap cosplay of intelligence. Founders cosplay special talents and abilities they does not possess. Nothing to see here.
The company I working for is more then 6 years old but we are still calling ourself a startup.
Sometimes I think it's because of marketing reasons or as an alibi for certain decisions because "that is how they do it in startups". Although we only do the meetings stuff, the benefits we don't have.
So when exactly is a company not a startup anymore ?
I thought that startups are there to try out new business models? So by that definition at some point you're either a business (proven) or a failure (disproven). OR you're sitting on a big bag of other people's money (startup forever, yay).
1. Spending too much time designing an "About" page, a "Who we are" page, an "FAQ" page, to present the startup and what the product will be, rather than actually developing the product.
2. Being very secretive about your very great (but generally vague) startup idea, instead of working on execution.
3. Having a product that is perpetually "almost ready" to launch but never getting around to taking care of that last 80%.
I'd argue point #1 isn't that terrible if you're a B2B company. Having some veil of being a legitimate company isn't the worst thing if you're trying to get a business to commit to using and paying for your product.
That isn't to say those pages need to be grandiose but knowing that the product is supported by more than one person is something you probably want to convey if you're looking for growth.
Sure. Everything on these lists is something that's valuable to some extent. But it shifts into "playing startup" the moment you're doing it because it makes you feel more important, because it makes you look better in the eyes of somebody besides the customers you need to acquire in the next few months.
to 1: The About page is not always targeted towards the customer but it's important for investors and other businesses. You just have to look good, the first impression counts. It also doesn't take a lot of effort to create it, so why not?
But I get what you are saying. If the website, videos, and social media posts look awesome and the startup has more swag to offer than real progress, they obviously spend their money and time at the wrong end.
Well said re: secrecy. If you aren't testing your ideas in the marketplace, you run a huge risk of keeping your business's best iteration a total secret from yourself.
>Soon, you’ll begin spending more time sharing stories with other founders to learn about their journeys than you spend talking to your customers and your prospects to learn about their needs.
Is it even still possible to use the word "journey" in this context without it dripping with snarky ironic reference to "Our Incredible Journey" [1], with the obvious implication that a start-up is doomed to sell out and shut down and screw all their customers? That the actual "journey" being taken is the wild goose chase of the unwitting customers being led down the garden path? [2]
I am pretty sure that's how he intended to use it, considering he is giving an example of what the founders (the ones who are "playing startup") are, or will be, doing (talking about their journeys).
Thanks for the confirmation of my suspicions. For some reason, I didn't think he was allegorically referring to the incredible 250 mile journey through the Canadian wilderness of Luath the Labrador Retriever, Bodger the Bull Terrier, and Tao the Siamese cat. [1]
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[ 3.1 ms ] story [ 214 ms ] threadI agree about the time-wasting meetings, but not about the above, since I'm directly in that situation. You could hope to find one person to fill any two of those jobs, but all you'll get out of a 'scrappy content marketer' is a vacant position and a series of burnouts. That's hard work, where you have to invest resources to reap rewards.
Instead, identify the bundle of tasks that person did and find people who can take them on separately, and perhaps accomplish other tasks you didn't even realize your team could do.
If you were to identify every task your business needs, then you have the flexibility to direct those tasks to the right people. Further, if you're in a high-growth environment, you can continue to scale by motivating your people to fire themselves from their worst tasks and focus on their best expertise.
If your team continues to evolve in this way while your company keeps sound unit economics, then congratulations! You've solved the scaling problem.
I don't think it's unusual for an email list to be managed by one dude at an early stage tech startup.
(Which seems to be a definite truism in my observation of which businesses and teams succeed and fail).
The last two hires have been somewhere between oxygen thief and chair warmer.
TL;DR: If you are getting crappy candidates, you are likely offering too little and could tempt better candidates with a better offer.
You should checkout what competitors are paying in your location
If you're not in that neighborhood, good luck. Startups don't seem to value marketing as much as the big companies, and then they wonder why they need 4 people for one job. Offering under $100K for a Director of Marketing (sadly common in startups) is a joke.
Instead of guessing what's a fair pay wouldn't be better to pay or get paid on results - revenue you bring in. The marketing director or others in the team are close enough (in terms of agency they have on revenue) to revenue generation that this should be possible, no?
Marketing also generally has multiple touch points before a sale actually occurs. Maybe you see a Google paid result that you ignore, then a YouTube pre-roll that you tune out, and then you see their logo on a train ad during your commute. None of those result in a sale, but you finally see the company at a conference, grab some swag, talk to one of their salespeople, and become a customer. In this example, their revenue looks like it was generated by the efforts of the sales department, but in reality marketing had a lot to do with it, too.
If your company has all the right tracking in place, you can determine the path your customers took when they ultimately bought your product, provided that they bought it online. That still ignores their prior exposure to the product that helped convince them during the current session. More importantly, if you were to measure marketing performance based solely on those metrics, your marketers would have little incentive to do all of their other important functions.
One person can easily manage all of this and more very affordably with freelancers, tools, and a decent process.
Where you go wrong is when the person managing is "figuring it out on the fly."
Use canva or stencil for design, use textbroker or copypress for content at scale, all that is left is building an editorial calendar, planning content promotion, blogger outreach, all of which can be done with tools, etc...
...if you have clarity about what exactly needs to be done from ideation to promotion, its really not that hard for one person with tools and freelancers to execute on.
people have nervous breakdowns and worse from running startups so make sure you're in a good spot financially to even do it
everything u do creates value. that sexy button your designer just spent two days on cost the company $2600 hope it was worth it.
that bug you left unfixed for a few releases now takes a whole weekend to fix and now one of your developer burns out and quits uh oh costs you $50000.
everything has very very exact price tag. add up all the missteps and the successes and get the final outcome
If the conference audience is a perfect fit, and you feel your company/product is far enough along to leverage the exposure, it could make total sense to pay for a booth/sponsorship.
If you don't have $5k to spend on marketing, or it's too early for it to be effective, that's a different story.
But if you do, then compare spending the same amount on AdWords (or other marketing/lead-gen channel X) and see if the math works out.
We've been coding for a few months now and don't even have a website. Business cards? hahaha.
Product + market fit comes first, everything else next.
I've done the bootstrapped startup. I'd change that line, simplify it.
Sales comes first, everything else next.
SalesForce spent $250K on a party pre-IPO, back in 2000.[1] Four floors of the Regency and the B-52s. Playing startup was much bigger in the first dot-com boom. This time around, everybody is working very hard. Not necessarily on the right stuff, but working hard.
[1] http://www.sfgirl.com/webtrash.html
5000 for a booth is a bargain even for really obscure trade shows, and it makes absolute sense for a B2B entity to be present at trade shows.
It may make sense for some B2B entities to be present at trade shows but the article is talking about early-stage companies buying trade show sponsorships. Depending on how you interpret "early-stage", I'd argue that this article is wholly accurate -- there likely is a smarter way to spend that $5,000. However, at some point you cross a line where your product is ready for the next growth stage and that $5,000 is well spent at $X Conference. At that point, $X Conference is part of your larger marketing strategy, also pointed out in the article.
Maybe some startups sponsor but don't attend? That would be foolish.
Alternatively, spending any money on marketing before you have anything customers can actually buy or use or trial would be foolish.
But if you've got something even a little bit useful that's ready for people to try, and you plan to attend the conference, that $5,000 is a smoking deal!!!
Can confirm that not all startups are like this!
1) Meetings
We have one per week and sometimes cancel that because we feel it's overkill
2) Hiring tons of people
If anything we don't hire enough because we never spend money we haven't yet earned
3) Vanity benchmarks
One benchmark - cash in the bank (if it's too little, tighten the belt, if it's too much, spend it to grow)
4) Meetups
I'm terrible at networking and should do more of these!
5) Sponsoring conferences
HA!
6) Office, business cards and so on
Don't have either... 100% remote has worked since day one... OK, just got an office (sort of, it's shared) in Bangkok but no one works there!
7) Having more conversations with people outside of your market than people in it
I am totally guilty of that one!
Please don't take any of this as a claim that we are better... I can and have leveled a thousand criticisms at how I run things... just saying, "startups" that exist way, way outside of this mold are definitely out there :)
Sure startup is a sexier way to describe a young, small business but semantics aside, this feels like "traditional" business looking for glamour. Of which I am equally guilty, donnt take this as criticism.
I guess the point I'm trying to make is if you're an aspiring business owner you don't have to go for this high-growth/external investment model. It encourages lax fiscal discipline which is the cause of these mistakes. I sometimes feel people I know who have gone through this could have learned more and earned more by bootstrapping.
Where's the confusion?
...
http://www.merriam-webster.com/dictionary/entrepreneur
Does it really? I don't actually accept that, but around here at least, this is a common enough definition that you should call it out when you're going to deviate from it:
A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of "exit."
~ http://www.paulgraham.com/growth.html
Litigating what the correct meaning of "startup" is on HN is not productive, but we should recognize that not everyone agrees with Graham's redefinition, and therefore arguments that cite his essay are begging the question.
I disagree. It's really really really hard to build a business and make it grow. Any logical tools we can use to cut down on the space of strategies and goals worth pursuing is worth its weight in gold. Coming to more restrictive definitions of "startup" does exactly that.
More prosaically, if we don't do it ourselves, investors are just going to do it for us and leave us in the dark as to what their real criteria for funding is. We want them to be a part of the conversation because bootstrapping everything sucks. Being needlessly inclusive hurts everybody.
Cutting down on this luck factor is the problem the startup landscape is trying to solve. We can provide two things to would-be entrepreneurs, information and resources. Information can obviously be free, but resources have to be limited.
It does the industry, the collection of people providing information and resources, the most good if following the information, which they can get for free, leads easily and directly into provisioning of resources. A more transparent process makes it more democratic and a better route for real social change.
So we want to constrain the definition of words like 'startup' so that they better conform to what investors are looking for in ventures to fund. Sure, anybody can use the term any way they want, but for this community, 'everybody starting a venture is a startup' does nothing to help the would-be entrepreneurs to do the right things they need to do to get investment. It's too inclusive, it does not provide a pathway for people that want to join the community to gain real, material help with their venture. It needs to be a useful tool of exclusion.
What's instead happened is that people who pay attention to message boards like this are afflicted with a kind of snow blindness from all the random businesses that do get funded by third party investors. It is true: if you want to be funded by third parties, you will need to build a certain kind of business, and that business will look a lot like what Paul Graham defines as a startup. There's a lot of debate about whether and why this is, but the math is straightforward: if you want to take a few million dollars of O.P.M. to build a business with, you need to aim at the moon and hit it for those investors to have a viable business model.
What people who don't build businesses on O.P.M. object to is the notion that O.P.M. is the only way to start a viable company.
So: sure. If you want to educate people who plan on building VC-funded companies, you're right. It's a good idea not to delude them into thinking they can take a few $MM and grow organically. They should probably follow most of the Paul Graham playbook.
But more companies should reflect about whether they want to take a few $MM to begin with. Many people would be happier if they didn't. A lot --- most, in fact --- of the companies who do take the money have fooled themselves, and are frittering away the single most valuable resource they have (their time) on companies that have less than a crap-shot chance at success. Craps works extremely well for investors. It's not so great for founders.
I'm not providing a link to a PG essay because it coincidentally agrees with my position -- there's a big orange "Y" at the top of this page, and it's not there arbitrarily. If you're having a conversation on HN about startups, there's an underlying culture which you need to be aware of. Demanding people justify a shared understanding of a term's meaning by challenging whether or not it doesn't mean something else is arrogant -- have you considered that you are ignorant of the basic terms of the discussion, as it occurs on HN?
There are other conversations where your definition might be right. That has nothing to do with this conversation.
But I've been here a long time (just like you), and my account predates Paul Graham's fatwa about startups. If he chooses to redefine other words in future essays, I reserve the right to link to the dictionary again.
My goal is not to be obnoxious, but to keep the terms of debate open for people who have a more expansive view of what online businesses can look like, and what values might be important to their founders.
Ultimately, I think PG's definition defines a useful category of businesses to think about and litigating the label we use for that category doesn't help anyone.
For reasons I don't quite fathom, discussions about business on HN seem all to be born without the part of their brains that understands business fundamentals. Almost every business can be made to scale (ironically, the more high-status the business, the trickier it is to scale, which is why you'd be better off investing in a crappy pizzeria than in Grant Achatz). You can build a billion dollar plumbing company. You can build a billion dollar accounting firm. Someone out there --- god, I hope it's actually a housecleaner --- is going to build a billion dollar housecleaning company. Do you really need the mechanics of how this works? Do the work. Get good. Hire people to do the work for you. Get good at managing them. Hire people to manage the people you hire to do the work. Repeat.
Nobody disputes whether the category of businesses Paul Graham describes is useful. It clearly is. If you plan on building a business on other people's money, it's vitally important that you understand almost everything he has to say.
What is in dispute is whether that category of business is so important that it should annex the term "startup". Plenty of businesses you would describe as startups don't obey Graham's rules at all, because they scaled up on a different schedule than A16Z wants businesses to, and did it without a single wire transfer from A16Z.
I'm not saying high-growth startups are better than other kinds of businesses. Heck, I'd very willingly advocate the view that other kinds of small businesses have better business fundamentals than tech startups.
Just because one pizzeria managed to scale doesn't change the fact that the vast majority of small businesses are not built to scale. Most small business owners think about how to grow 10-20% in the next year, not 100-200%. Heck, in my experience a lot of them are terrified of the concept of rapid growth.
Like I said in my comment, I don't really care if we use the term "startup" to refer to high-growth businesses or not. We should just all agree on a consistent set of terms and stick to that.
Otherwise you get unhelpful comments. Like I could talk about how my "startup" has reached profitability and 6 figures of revenue with only a single employee. Except this startup is my consulting business and has no business being lumped in with high-growth VC-funded companies.
I think "VC-backed startup" captures the thing Paul Graham is talking about, and I think the modifier "VC-backed" is particularly important because you want to follow the Graham playbook if you're VC-backed, but not otherwise.
You probably don't want to get me started on the growth and return potential of a consulting shop doing a regular 6 figures of revenue.
The latter isn't good evidence for the former. VC-backed startups are explicitly designed to either fail fast or grow quickly. So they simultaneously have a higher failure rate than standard small businesses and a higher rate of becoming $100M+ companies.
> I think "VC-backed startup" captures the thing Paul Graham is talking about
That's fine (and I agree that it's a more thorough definition), but I don't think it's useful to require a redefinition of a word that most people in the community already understand to mean high-growth VC-backed companies.
> You probably don't want to get me started on the growth and return potential of a consulting shop doing a regular 6 figures of revenue.
Honestly, I really really do. :) To be clear, I've had lots of success selling my time (either as a developer or, occasionally, managing a small team of contractors) but not at scaling myself.
I agree that "venture-backed startup" is a useful mental category. Pretending that it's the only category is what bugs me.
The GP's point is that definitions are important and litigating the definition of the word startup has been tried before and doesn't end up benefiting anyone.
The logic flows as such:
1. People making judgements about startups
2. Not everyone can agree what the definition of a startup is (even if the benevolent dictator has stated their opinion on the matter)
3. Therefore it's incredibly difficult to agree or disagree about judgements of startups because the underlying definition is not clear
You may claim that #3 should be pg's definition "because its HN/YC", but not all HN members agree.
It's like objecting to a discussion about angels (the investors) because the word typically refers to angelic beings, or the baseball team.
Also, you talk about raising money like it's a bad thing. Don't forget that plenty of fiscally responsible high growth companies have raised angel & VC rounds. Just because you take on less responsibility doesn't make you more responsible, as a founder & business owner.
The redefinition (a useful one for many discussions) was by pg to clarify his points in several essays - not by the Wordpress community.
It actually feels like there are two conflicting definitions.
In tech you often hear people describe companies like AirBnB, Facebook and even Google described as "startups" although they're no longer "early stage" by any means and often have already peaked their growth and surpassed investment needs (though there may still be additional investments happening).
Outside it often feels like the label applies to any small service or tech company that was recently founded, period. This is certainly what a lot of "startup" events cater to. And of course there are plenty of companies that would be "startups" in the Bay area sense but failed to find investors and instead ended up bootstrapping and becoming profitable.
I'm a little curious about this, what do you mean? It sounds like you run pretty lean; why get an office if nobody works there?
We have one per week and sometimes cancel that because we feel it's overkill
Needing to have meetings isn't necessarily a bad thing. If you're making things that don't need many decisions to be made, and everyone agrees on the best approach, then meetings are completely pointless, but if everyone agrees then you're probably not pushing any limits. People have differing opinions at the edges, not about the boring well-trodden middle.
People literally do in SF/SV... Remember 'The Melt'
Watsi's founder talked a fair bit about this in his Startup School presentation (which is excellent, BTW):
https://www.youtube.com/watch?v=WlT3UhC7NwQ#t=490
and non-profit companies have the signal of "someone is willing to donate money to pay me to do this for someone else"
Fortunately as an engineer in the SF Bay Area I have a lot of choice in the matter. Have fired myself from clients whose biggest client was Monsanto[1] and its ilk. Not my cup of tea.
[1] I oppose their business and patent practices, I'm fine with gmos. In case anyone wanted to reply with something silly and start a flamewar.
KNOCK KNOCK KNOCK KNOCK -- Sir, are you OK in there? He's been in there all night. I should call the sherif.
https://www.youtube.com/watch?v=hsr-QfgFRh8
What was other people's experience like?
However, since the stock market was doing so badly, it was the beginning of the moment where a _lot_ of money started looking for somewhere else to go. So if you were of the wherewithal to go out and make a startup, it was a great time to be looking for funding.
So it depends a lot on who you ask. I will say, though, that real estate started taking off in ~2011, so it was more than a month of panic, but I would guess that in 2011-2013 or so SF was far and away the strongest local economy in the US.
Other than that, not even a hiccup. At that time, we were in Chicago and NYC, but not in the Bay Area. However, a pretty big chunk of our client base was in SFBA, and I don't remember that part of the business skipping a beat.
After a dozen years in a startup what will most of these Have $$$ wise.
There were no startups in the '80s for an average comp sci grad like me. After a dozen years working at hugeo monopoly I got ~200k (by doing nothing except vest) once departure occurred. Is it more for the current batch of startup workers after 12 years or so?
What? I can imagine the rate might be as high as 100%. That's hardly "unimaginable".
I am not trying to be merely annoying or pedantic here. I simply want authors to tighten up their writing and exaggerate less. With an exaggeration like that, I stop reading.
I think you just saved me time reading the article and further HN comments. In fact, I feel so much time was saved, I used some of it to write this.
I'm serious.
I have a different experience. Meetings aren't the problem. Getting 2+ people together is important. The problem is how the interaction happens and the costs and benefits involved. No one said that leadership or communication is easy. Building collective will is both an art and a science.
I say this: don't blame meetings. They are necessary. Learn to run better meetings.
You wouldn't believe how many idiots are cosplaying scientists, leave alone all these hipsters cosplaying intelligence..
In general, it boils down to the social advantage of displaying "success" and "competence" - socially constructed markers.
But there is a beautiful principle in biology - the "signals" must be honest and costly, impossible to cheat - one cannot cosplay parasite resistance, superior foraging ability, or good genes in general. One cannot cosplay youth and health. All these celebrities are ridiculous.
Hipsterism is cheap cosplay of intelligence. Founders cosplay special talents and abilities they does not possess. Nothing to see here.
That article and these comments were written by a bot. It's all spam.
Sometimes I think it's because of marketing reasons or as an alibi for certain decisions because "that is how they do it in startups". Although we only do the meetings stuff, the benefits we don't have.
So when exactly is a company not a startup anymore ?
1. Spending too much time designing an "About" page, a "Who we are" page, an "FAQ" page, to present the startup and what the product will be, rather than actually developing the product.
2. Being very secretive about your very great (but generally vague) startup idea, instead of working on execution.
3. Having a product that is perpetually "almost ready" to launch but never getting around to taking care of that last 80%.
That isn't to say those pages need to be grandiose but knowing that the product is supported by more than one person is something you probably want to convey if you're looking for growth.
Is it even still possible to use the word "journey" in this context without it dripping with snarky ironic reference to "Our Incredible Journey" [1], with the obvious implication that a start-up is doomed to sell out and shut down and screw all their customers? That the actual "journey" being taken is the wild goose chase of the unwitting customers being led down the garden path? [2]
[1] https://ourincrediblejourney.tumblr.com
[2] http://www.gyford.com/phil/writing/2013/02/27/our-incredible...
[1] https://en.wikipedia.org/wiki/The_Incredible_Journey_(film)