Question for Paul: if you believe that more people will startup in the future, but success requires lots of hands-on help, coaching, etc, surely you need a way to scale YCombinator, right? How?
I think a sat program would be great. You could have local incubators that take proposals, pick the teams, and fund them but that also 'plug into' yCombinator for connections and such. That would allow the system to scale and allow people who can't move right away the chance to get started and make the right connections.
It's exactly the "connections" part that doesn't scale. Paul can mention 4 startups on his page, and hint two other apps he uses, but if he would list 20, probably no-one would check them.
We often think about that. We could hire assistants, so we didn't have to do everything ourselves. Or we could make YC work more peer-to-peer. Or we could build a robot that would walk around telling everyone "don't make users register," "delete half the text on your frontpage," "face the audience when you're presenting," etc, and I could just hang out in the next room with a book and a cup of tea.
However, I noticed that YC did not ask for my email address, so it was not a painful way of registering. Also, you can read the news without an account.
great article paul. i especially love number 7: produce something specific for yourself. this forces you to notice problems and noticing your own problems and overcoming them with technology is a subset of noticing problems of others and using technology to help them, which is the job of startups and companies... so IMHO, noticing and solving your own problems is a fundamental skill people in startups need to have.
that technique works because most of us have been conditioned to ignore the problems that we encounter daily. when faced with a problem we simply side step, avoid the problem and keep marching. the entrepreneurs are the ones who stop, notice the problem (or opportunity) and help us get things done easier.
This excludes any sort of capital good like an accounting package, or his own example of groupware.
You'd never get most of the good product ideas targeted at businesses without industry experience, which sort of contradicts his advice not to work before starting a company.
I don't understand -- how are accounting packages or groupware examples of goods that don't solve a problem for oneself?
If I need to manage my money and taxes, I can build software for that.
If I need to develop some kind of collaboration tool to help me work better with teams at school, or on an open-source project (both not inherently business domains), I can build software for that.
Business tools are merely extensions of these. Unless I missed it, PG never mentions good product ideas targeted at businesses, so I am unclear as to where there is a contradicition. His mantra is to go for a wide user base, which typically requires mainstream business ideas, i.e., business-to-consumer, not business-to-business.
Excellent. The essay and talk together produced several surprises. The essay cleared up things things that the video obscured (couldn't see the visuals), like the "not-so-smart" / "enterprise software" connection (I was thinking he just meant the competition was dumb so you'd have the one-eyed man / land of the blind advantage).
The big surprise is that YC hasn't seen an order of magnitude increase in applicants from their first round. You'd think this impossible: Paul announced the first YC program only about a week before its deadline and they got something like 250 applications. Now they are all over the tech news and they still haven't cracked 1000? Maybe PG's new speaking approach (memorize, practice, use visuals) is an effort to get more people fired up?
Paul, regarding this new speaking style: you could make yourself into a Steve Jobs dynamo of a speaker, but I think you shouldn't. Your usual wordsmith style is probably better for attracting nerds.
Question: Paul, it sounds like you've mostly swung in the direction of encouraging people to look at their own lives for problems to solve. Whereas in "Why Smart People Have Bad Ideas" you were saying the opposite, like in the two paragraphs starting with "Reading the Wall Street Journal for a week should give anyone ideas... " Trevor says something similar in the footnotes. But it looks like YC has been placing all its bets on the first sort of ideas. There's a good reason: all the huge software successes come from the "build it for you and your friends" model because those are the problems you fully understand. But it's more common to find software companies making solid profits on products they built for others' problems. Am I overlooking YC companies building products designed for other people? Is the problem that there just aren't enough potential founders like the Octopart guys: people deeply involved in some non-computing world who also happen to be good programmers? If so, maybe the richest source of ideas and cofounders would be cruising web forums for the near-programmers (people who build things like MS Access half-solutions to their companies' problems) to listen to what they would like to build if only they knew how. Maybe YC should be recruiting there, too. Thoughts?
I've often wondered whether you could make a lot of progress by bringing together hackers with, for example, doctors or lawyers. These are people who use computers every day but probably don't spend much time thinking about how to hack a solution to their computing problems.
As a scientist I've had a lot of success looking for the simple yet groundbreaking problems that occur at the boundaries between very different disciplines. It can be difficult not to make 'stupid' mistakes in a discipline with which you are unfamiliar...but it's a lot easier than trying to work faster and smarter on the exact same problem as everyone else!
Surely interdisciplinary collaboration could be just as valuable in startups.
Agreed. And yet the founders need to have worked together already, at least a bit. The big problem is that non-programmers can't help out with the programming in the early stages of a startups when that's about all that's happening.
Part of the reason the number of applications isn't that much higher than it was the first time is that we've changed our approach to founders. Initially we pitched YC as a substitute for a summer job for students. Then we realized that we wanted people more committed than that-- that it was actually bad to fund people still in school, in fact, because it's so easy for them to give up.
We will fund people still in school. (The founders of Weebly were.) But they have to be serious about starting a company.
I remember meeting someone during the WFP interviews that was still employed. What constraints do you have on people still working at tech firms like Google or MS?
Great essay, I sure wish my reason was because of #10 (wealthy) and not #9 (family to support), so true, so true.
An alternative to starting a consulting business is to build your stuff on the side. Possibly draining? Yes, but if you're determined, I believe this is better than getting distracted by a consulting business. Time will tell if this is wise though.
If you choose a problem to solve where the customers move slowly, you actually have an advantage over a 23-year-old working 16 hours a day. With infrequent customer feedback, it's hard for the young startup to capitalize on all that free time, and it can burn through its cash waiting for feedback and growth.
Minor edits: under #4, the second paragraph, "Any in any case..." should be "And...". Also, I personally think that the previous sentence could use a little work, because "you probably are" could mean "you probably are not smart enough".
Feel free to delete this comment after changes are made.
My favorite part is this: "To almost everyone except criminals, it seems an axiom that if you need money, you should get a job." As an entrepreneur, I'm happy to almost be in the same category as a criminal. ;)
I also love the 0% dissatisfaction idea, whether or not the result is a success. The experience of launching your own project just can't be replicated. Any of the points you mentioned, even if the result is complete failure, is well worth the expense of time & risk.
I'm still doubtful about the "Revenue is not important" thing. Maybe right now you can get acquired with no revenues, but that probably won't last. People said revenue didn't matter during the Web 1.0 IPO bubble, and that turned out wrong. To be convinced otherwise I'd have to see the accounting for these web deals showing a return on investment. And if the profits are predicated on web advertising call me skeptical about the sustainability.
To my knowledge the "revenue-less liquidity event" route to riches is new circa 1998, e.g. The Globe and other such IPOs. This route is probably a symptom of the global liquidity bubble rather than a lasting development. We are still in a global liquidity explosion that measurably started around 1995. It has fueled all kinds of bubbles and weird business practices and now it's fueling acquisitions, just like it's fueling Private Equity deals and stock buybacks. We are in financially anomalous times.
There is a distinction between "revenue is not important" and "if lots of users love you, you can probably figure out how to make money out of it (if you arn't acquired first)".
I think another difference is that there are companies absorbing the risk and associated losses. As was noted in another one of Paul's essays, big companies tend to be good at extracting revenue from an existing product but not so good on boldness and innovation.
There are a variety of business models to try once you've made something people want. Sometimes it is ads (myspace) sometimes it is merchandise (homestarrunner) or a combination of the two (penny-arcade). Maybe your content is worth a subscription (hotornot). Maybe you sell books or offer training and advanced services (SysInternals/Winternals).
Another argument for not worrying about the business model, if it is your intent to be acquired, is that your product may wind up more flexible. 3 different companies might use 3 different ways to make money from your product. Again, the distinction is that it's already profitable companies doing the buying, rather than the Stock Market At Large.
Paul, I really liked your point about the change in the business world. I also feel that the current model is shifting into a more favorable situation for individuals.
I think it might be the change in perception. My parents, and people around their age, seem to have a different perspective on what a job means. They see work as a smaller role in their life. "Work just pays the bills". But most younger generations seem to put more of an emphasis on their careers. They see work as the main part of their life. It could be due to the amount of money that we pay for college tuition. I know I don't want to waste my degree and years of my life doing someone else's work. I'd rather have the comfort and responsibility to be left alone to do my own work. Maybe I'm just speaking about my own situation.
There will be more startups over time, but eventually this growth will hit a limit. There are only so many people who can participate in a startup. Eventually the startups grow and merge with big companies and that's where most of the people will spend their life working. Startup will always remain an adventure fit only for the elite.
Question to Paul: First of all I've to tell you I'm a big fan of all your essays. But a lot of things which you say in your essays seem to work really well only if you're developing Web 2.0 sites. Version 1 of any Web 2.0 app can be built with 3 people in 3 months with very less capital needs (especially if the founders are fresh grads, all you need to do is to feed them for the three months). So as an investor, I would assume that you don't have to care much about revenue models, business experience & age of the founders, etc because in the event the startup tumbles, you don't stand to lose a lot?
But what about bigger projects? Projects which need maybe 10 people working for an year? Hardware? Would your views change when you are asked to invest in projects of these kind? The reason I ask is because I'm a final year CS student in Singapore and I've developed a 360 degree video camera along with a couple of my friends and we've been talking to a lot of angel investors here. They all love the idea and are amazed by the demo but most of the time their major cause of concern is that we don't have business experience and we're very young (21). How would you evaluate an idea like this one (hardware+software)? Would you be interested in seeing something like this sent to YC? Or do you prefer sticking to web 2.0 sites?
We do sometimes fund expensive projects. Then the focus is not so much to get something launched in three months but just to build a good demo to take to VCs to raise more.
I'm only partly covered by this list. It's true that I don't really have an immediately viable potential cofounder, but it's also true that if I had one, I still don't think I would start a startup in the near future. My main problem is that I'm most interested in machine learning and robotics, and neither of those seem particularly friendly to starting a startup. (Alexa doesn't run on robots, so I can't bypass the need for revenue, and selling robots to people other than the government has so far been a fairly limited market.) Grad school is much more friendly that way, and that's what I'm planning to do at the moment.
This may change in the next few years, but it doesn't seem like robotics will ever be as low-capital an operation as the Web.
Or, perhaps more to the point, things that people don't yet want, because they're too new and too alpha. Or things that you don't know how long it will take to produce a product with, but which will definitely one day be useful and people will want them. Robots fall into most of these categories at the moment. I don't doubt that one day people will want tons of them, just like what happened with computers, but I don't think the technology is there yet for an Apple-for-robotics to jump in and succeed as a for-profit company. I hope I'm wrong, and if I'm wrong I hope to be part of what proves me wrong, but that's what I think at the moment.
That may be true, but you can work for 5+ years at a problem, fully supported by your university, without having to worry about pleasing anyone in the short term. There is no need to worry about releases or fickle customers. And in the end, success is virtually guaranteed. So I would have to agree that grad school is more "friendly" than starting a startup, where you have to start worrying about the viability of your work within a few months (at least in the YC model).
It's true that you don't have to prove yourself after the first semester of grad school, but there are many "release"-like hoops you have to jump through in those 5+ years. The main one is your thesis proposal. I also had to do a plan of study a couple years before that; nowadays, my school (Northeastern) instead makes you publish a paper (and you're encouraged to publish multiple papers). There's also all the things your advisor asks you to do as his research assistant, which isn't always directly connected to your thesis work.
Your adviser, committee members, and conference/journal reviewers are all "fickle customers". And these aren't customers who came to you because they want your product, these are more or less assigned to you and you're stuck with them (unless you change departments or schools). It's true that you get a stipend, but I'm not sure that counts as "full support". And while the drop-out rate is obviously lower than the startup failure rate, it's far from zero.
Still, I agree that grad school is less scary than a startup. But don't think it's not all about pleasing others, with many non-trivial deadlines and constraints.
In the end though, is it not all about money? As far as I am concerned, grad school is something you do for fun, and which costs a lot of money. Even if you receive a minimum paycheck, you have to take the opportunity costs into consideratiosn, so five years of grad school cost several 100000$, or am I mistaken? Why then do you worry so much more about starting a startup? The differences in maximum loss seem marginal, except that for grad school the losses are guaranteed, and for startups they are not.
It does not depend on being in grad school or not whether you can do what you want, it depends on having the money - either to pay for grad school, or for toying around with your startup.
I realize I made some oversimplifications, but still...
At least where I go to grad school (Ohio State University), grad school does not cost anything. You either win a Fellowship, you teach a class, you help a professor with his research, or you do grunt work like grading papers and labs. In any case, tuition, fees, and 80% of health insurance is covered, in addition to a $1600-1850 per month stipend. That works out to a respectable $20k/yr.
If you do not get a Fellowship, you are expected to perform 20 hours worth of work per week (which you actually receive credit for), in addition to your time spent on classes and on your own independent research.
In other words, grad school is more like a low-paying job than a cost. You could make the case that you could be working a higher-paying job in that time, but then you are missing out on the flexibility of being a Ph.D., which allows the possibility of being a professor or getting hired for a pretty high income. Additionally, you have the opportunity to leave your mark on the field with your research.
Even more interesting is that Ph.D. work could lead you to your startup idea, as you unveil a new use of existing technology or a new approach altogether which leads to a money-making possibility. Furthermore, if you are exceptionally driven, you may be able to get some work done on your startup idea while attending grad school, because at least so far, I have found grad school to be significantly easier than my undergrad was, because I am taking less "real" classes.
I meant you don't need to make something people genuinely want, as it would solve a problem they have. You have to prove to the committee that you put in a decent amount of effort, but that's about it.
Correction (as above): It's true that you don't have to make something people want at all in many fields (c.f. theoretical math), but many in engineering probably use it to make something people just don't want immediately enough for you to get funding and make a product before said funding runs out.
I was particularly interested in the reversal Paul made with his opinion on working for a company right after school (before founding a startup).
This was something I've always debated myself. I can see how the companies he's funded have shown that working first is probably not necessary. I also understand his argument that trying and failing can teach you more than working for a company would anyway. But I think it really depends on the company. Not all larger tech companies suck. And I'd still argue that working in the corporate environment (even for just a short while) teaches you a lot of valuable lessons.
I guess my view is weigh the options. Some larger companies (mainly the people you work with there) can teach you new and diversive things you simply cant learn on your own. Looking back 10 months to when I just graduated, I definitely feel I've learned a lot about accountability and being responsible from the corporate work environment. It also modivates the hell out of you to break free of the mandatory work hours and start something on your own..
I'm sure I wasn't first, but it's cool nonetheless.
Startup idea: supporting geographically collocated open source projects to help potential partners get to know each other. It might start out similar to http://prehacked.com -- allow people to enter projects they're interested in and their geographic location, and cluster similar interests together to show them potential partners. Allow people to say x is similar to y when the system can't figure it out (I always thought reddit should accept hints like x is related to y or not related to y).
"It's exciting to think we may be on the cusp of another shift like the one from farming to manufacturing."
The biggest reason why startups are so much more feasible now than ever before is because of the plummeting costs of production. Whereas twenty years ago it would have taken millions of dollars to do a startup, today a college kid with a powerbook can do one in his dorm room. Every year the tools of production get exponentially more powerful and less expensive.
To play devil's advocate, these same factors that are currently driving startups may ultimately be their demise as well. Almost every tool can be used for both good and evil. A hammer can be used to drive a nail, or also to harm someone. Governments have taken it on themselves to try to allow the good uses of any given technology while regulating the evil purposes. The problem is that every time they try to regulate away an evil, there is inevitably a little spill over that prevents us from using the technology for good. Every time a powerful new technology is invented, we end up losing little bits of our rights and civil liberties.
As technologies exponentiate in both their power and interconnectedness, it seems as if society (at least ours) will go down the road of increasingly restricting freedoms in order to prevent terrorism and other evils.
It isn't hard to imagine that as the costs of production approach zero, so will the freedoms that enable us to start startups. In many countries, such as Japan and Germany, it is so hard to do anything other than the status quo that it is effectively illegal. In Germany the government subsidizes the wages of students finishing school, which makes it effectively impossible to get a job without graduating. And in Japan it's even worse.
If the past is any indicator, the same forces driving the boom in startups are ultimately going to be drivers in forcing people into more restrictive social structures.
N.B. I don't necessarily believe this, but I think it is a serious argument that has never really been rebutted. Perhaps because the guy who proposed the idea was driven insane by it is currently doing life in prison for killing a bunch of people (Kaczynksi).
It's a little discouraging, after considering PG's idea that we may be on the cusp of another production revolution, to consider some of the ideas that you put forward here. I do think, however, that you are right in saying that it is very hard to rebut the idea that you present.
I don't really think, though, that what you present are the precise beliefs of Kaczynski. In your comment, you seem to have the idea that decreasing costs of production (which is largely due to improvements in technology) is a good thing, while the decrease in freedom is the thing that is bad. It seems to me that anarcho-primitivists actually believe that technology itself is the bad thing, because it departs from the pure, hierarchy-less society of hunter-gatherers.
It is truly an interesting endeavor to consider where the boundary exists between what is good about where we are headed and what is bad. I think that all of us accept the idea that those who have greater drive and motivation to succeed should be rewarded for their efforts, and it's also hard to deny PG's contention that people now are living more luxurious lifestyles than kings of yesterday (heated houses year 'round). We may also argue that if people are content with their station in life (i.e. doing nothing to change it), then what is the problem?
On the other hand, I think that nearly all of us would agree that a situation like that in the Matrix would be a bad thing; even though the people believe they are living well, it is all a facade. Additionally, we are perfectly okay with improving the lives of friends and family members who have been less driven than we, presumably because we love them.
I guess if you consider the implications of that train of thought, if we loved humanity, we would be perfectly fine with sharing everything equally, regardless of the amount of work the individual does, and we thereby arrive back where we started, with hunter-gatherer cultures that have gift societies. We can even see evidence of this model working in the open source movement today.
I'm not really trying to make any points here, I'm just pointing out some interesting questions that your post (and my readings on Kaczynski) brought up in my mind which made me question what I had previously considered to be unquestionable truths. Perhaps it's not necessary for the entrepreneur's reward to be directly proportional to the amount of wealth the he or she has created, especially considering that with the current state of social stratification, opportunity is certainly not equal.
"technology exacerbates the effects of crowding because it puts increased disruptive powers in people's hands. For example, a variety of noise-making devices: power mowers, radios, motorcycles, etc. If the use of these devices is unrestricted, people who want peace and quiet are frustrated by the noise. If their use is restricted, people who use the devices are frustrated by the regulations... But if these machines had never been invented there would have been no conflict and no frustration generated by them."
"It is a chronic complaint of small-business persons and entrepreneurs that their hands are tied by excessive government regulation. Some of these regulations are doubtless unnecessary, but for the most part government regulations are essential and inevitable parts of our extremely complex society."
I take it that what he is saying is that technology creates social complexity, both good and bad, which then inevitably leads to the loss of liberty. I know Bill Joy, who co-founded Sun, wrote a good article in Wired a while back about reconciling Kaczynski's ideas with Kurzweil's.
"But if these machines had never been invented there would have been no conflict and no frustration generated by them."
That is the quote that stands out to me, and what it tells me is that he believes technology itself to be the bad thing, because it breeds the conflict and resulting regulations.
Regardless of this minor issue, I think that we are both thinking along the same lines.
As a young startup founder myself, the one point that really drove me to uproot was the monotony of the day to day life in cubeville. I lasted a little over a year - told myself "what the hell" - and two weeks later.. I quit and started my own company.
The primary reasons I left corporate are already iterated in the essay.
1. I'm only two years out of college and fairly young, My living expenses are fairly low.
2. I was bored out of mind. I now know the real meaning of corporate drone and can relate to the movie 'Office Space'.
3. As each day of work passed by, I swear the work made me a little dumber.
4. Nothing to loose. Last straw was when the company got bought out, and the CEO jumped ship with his golden parachute.
5. I don't want to be remembered as a person who was a [insert job title] at Big Company A.
Paul, your essays inspired me to quit my job even though I was looking forward to a nice promotion. A couple of years was enough. I'm two weeks into my startup, which I'm basing on a Paul Graham/Joel Spolsky hybrid model. I'm building up capital by taking on some small- to medium-sized projects while prototyping my real idea behind the scenes with a few collaborators.
While my work struggles to find my replacement, I have no problems finding people that A) want to work for me on contract projects, and B) want me to work on their projects (right now there is a queue). I actually work longer now than I did in the office. But I'm not tired. In fact, I have more energy. Additionally, if you normalize my work hours, I am even more productive working on my own. I just generally feel better about myself and am only experiencing "good" stress these days. I encourage anyone who finds themselves agreeing with Paul Graham in his essays more often than not to make the leap.
I fundamentally agree with Paul Graham about the change we are seeing. In fact, my little prototype bets the farm on the premise that this change is indeed happening.
I'm sufficiently capitalized having had a couple of years out of school to make some money that Y Combinator's funding is, quite frankly, an unattractive proposition. Plus, I'm in Toronto and I love the city. I live/work downtown right near the university. I would not want to move. All this said, is there any chance that you will do a talk up here in Canada?
I've been going the consulting + startup route, and I already feel the way about "real jobs" as Paul described-- serfs, or slaves. I feel a certain pity for them.
A sad thing about life is that after squandering ten years on playing in bands and stuff (point 11), if you eventually do get your act together and go to university and then (point 16) take the default route to a job in a big company, happy to make a living at all; after a while, if you have half a mind, you'll end up realizing that you're getting dumber by the year (point 14), but by then you've also stumbled into a family, and a start-up is no longer a realistic option (point 9, 13, and maybe even point 12 has kicked in). But then it's just 25 years to go until you're retired, just clench a fist in the pocket, produce a smile and keep coding for a salary.
Sorry.
Or alternatively you spend 8 years in the military, 4 years in a big national Telco and then you're 33, with a family, and even PG saying you shouldn't start a startup.
What is your reason for working on hard AI problems at Google?
Not a rhetorical question.
One reason to worry about how my site renders in Safari is that I know people use Safari and if my site doesn't work for them they won't use my site. There's a thrill that comes when people enthusiastically approve of your work. Also I know my site will be higher quality and more valuable if it renders in safari. The more valuable my site is, the more likely I will be able to make money off of it.
Come up with a list for the Google job, and see how it compares. For me personally, both sound good.
"AI problems at Google" is just an example. I find hard technical problems interesting. A problem is hard if I don't know in advance whether or not I will be able to solve it. AI is hard. Making a good OS is hard. Startups avoid hard problems, because they have enough things to worry about already.
I'm not saying the job at Google with Peter Norvig (ah) is perfect. I was just pointing out another reason why I'm hesitant to make a startup.
I agree, I love working on hard problems. Sort of. What I've found is that I tend to make decisions for a variety of reasons, and am most decisive when I have a either broad convergence of motivation, or a singularly powerful one.
If you're asking yourself wether to pursue a job at google or starting a startup, you'll want to try enumerating as many reasons as you can for each one. You won't likely get a definitive answer, but the excercise will get you thinking about what other things are important to you. If you're lucky, one will turn up to be the obvious choice.
In my case, I have slid technically to the point that preparing for one is the same as preparing for the other.
That's funny. I work at a place that's supposedly full of hard technical (and creative) problems. But they're always someone else's problems.
And for every hard problem at a "real" job, there's 10 annoying ones. I bet the startup ratio is probably similar, but they're YOUR problems (hard and annoying), not someone elses.
Possible solution: You can develop your startup's product with GWT and not have to worry about Safari (or any other browser) rendering properly.
Then you can focus on the the challenging and rewarding problems without worry of dealing with the mundane. The difference will be that they are problems YOU want to work on, not what Google wants.
This is all supposition, but I'm willing to bet that if such a position is available at Google, it would be necessary to have at least a Master's and preferably a Ph.D., with an emphasis on AI, in order to get such a position. The beauty of startups is that you can start them whenever you have the time and inspiration, and the artificial degree barrier is non-existent if your product is good enough.
Other posters show an inability to engage in a sufficient level of abstraction. Original post is an interesting question that has nothing to do with AI, Google, or Safari.
The point is that at a startup (especially the two guys and a laptop variety) you do absolutely everything yourself, while at a big company you are supported by IT, QA, custodial services, etc, etc.
The interesting question is whether there exist jobs for which that support is worth the money and freedom one gives up working at the large company.
'... The interesting question is whether there exist jobs for which that support is worth the money and freedom one gives up working at the large company ...'
Money, freedom? I say risk.
There is less risk working in someone else`s company. If you take no risk then you will not have the potential to make more than in a startup. You also kiss your freedom away. Freedom. Thats a joke. For all those working for a company, tell me you really have the freedom to work, do what you want, when you want?
So if you want no risk, look forward to structured environments, other people telling you what to do and limit your ability to earn. Go work for the googles of the world [0].
Reference
[0] knowledge @ wharton, University of Pennsylvania, 'Perk Place: The Benefits Offered by Google and Others May Be Grand, but They're All Business'
The Big problem with a Big company: Let's say you're working on a great project and you know what the next step should be to make the project even better. But, management disagrees and pursues a direction that you know will diminish the value of the project. Your options are to suffer and watch your energy go to waste, quit and work for another company (repeat the above), or to start a start-up and do the job the way you know it needs to be done.
There has been nothing more stressful for me than having this scenario happen - I just can't stand by and watch my efforts go to waste. (The Big company context for me was in the Architecture world, but you can substitute any profession you like in the above scenario) The best stress-reduction decision I have ever made was to start my own company. It was very difficult financially at first, but it was completely worth it.
Well you can just start a startup that works on hard problems, instead of one which revolves around your ajax code rendering correctly on various browsers.
You can solve a hard AI problem with a couple of good hacker friends, just as you could do that at Google. True that it'll probably take you more time than building another website around social networking.
I think that it's unrealistic to build a startup around an unsolved fundamentally hard problem. Can anyone think of a counter-example that succeeded? Typically, the problem is solved first, and then the startup is built to implement the solution.
Solving hard problems depends too much on creativity and research. I'm not sure I could do that under the pressure associated with a startup. The Google environment doesn't seem ideal either, come to think of it, but at least, I'm not the one absorbing the huge risk of failure.
Anybots is a startup that solved a hard problem, but it was self-funded, right? Would YC have funded them if it had been proposed by a 25-year-old Trevor Blackwell?
That's exactly what Andy Brice did with PerfectTablePlan.com
Uses some pretty advanced algorithms for planning seating arrangements.
Of course, the real challenge with a consumer product is usability, that intersection b/t your cool product and the folks with the wallets. But, that's where the money is. (Money isn't everything, of course).
Startup work is mundane but still really rewarding because you live and die by your own abilities. Besides, if you make the startup work you can go work on any hard problem you want because you've removed the 'I have to make enough money to pay the bills next month problem. PG did it, they build Viaweb and once they were done he started working on Arc. Nobody pays you to write new programming languages, and I'd bet money the person to make AI real won't be working for Google. The person who solves that problem will do it out of love and determination, not because they wanted to work at the Googleplex.
What if I'd like to accomplish something, like building an operating system or a world wide web, and don't really care about the money. What if I just want to change the world. Should I start a company and if so why?
If you want to change the world, you have two ways to do it:
1) By force - in this case, don't do it. Waste of energy on anti-productivity.
2) By creating something people REALLY REALLY want (like your examples) - in that case, yes. Create a company. Find someone as enthusiastic as you. If you create something people want, money will come.
Email me for details, I'm a gmailer and my nick is SonOfLilit.
I'm a Paul myself ... :) Y Combinator is an inspiration for me! I think that as Y Combinator incubates more companies successfully, more and more groups will apply. :)
Not necessarily, but building a web app turns out to be a good way to build a product. He wrote about some advantages of doing so here-
http://www.paulgraham.com/road.html
141 comments
[ 3.1 ms ] story [ 206 ms ] threadI think "Let the users see what they're getting into before registering" is a more accurate description.
that technique works because most of us have been conditioned to ignore the problems that we encounter daily. when faced with a problem we simply side step, avoid the problem and keep marching. the entrepreneurs are the ones who stop, notice the problem (or opportunity) and help us get things done easier.
This excludes any sort of capital good like an accounting package, or his own example of groupware.
You'd never get most of the good product ideas targeted at businesses without industry experience, which sort of contradicts his advice not to work before starting a company.
If I need to manage my money and taxes, I can build software for that.
If I need to develop some kind of collaboration tool to help me work better with teams at school, or on an open-source project (both not inherently business domains), I can build software for that.
Business tools are merely extensions of these. Unless I missed it, PG never mentions good product ideas targeted at businesses, so I am unclear as to where there is a contradicition. His mantra is to go for a wide user base, which typically requires mainstream business ideas, i.e., business-to-consumer, not business-to-business.
The big surprise is that YC hasn't seen an order of magnitude increase in applicants from their first round. You'd think this impossible: Paul announced the first YC program only about a week before its deadline and they got something like 250 applications. Now they are all over the tech news and they still haven't cracked 1000? Maybe PG's new speaking approach (memorize, practice, use visuals) is an effort to get more people fired up?
Paul, regarding this new speaking style: you could make yourself into a Steve Jobs dynamo of a speaker, but I think you shouldn't. Your usual wordsmith style is probably better for attracting nerds.
Question: Paul, it sounds like you've mostly swung in the direction of encouraging people to look at their own lives for problems to solve. Whereas in "Why Smart People Have Bad Ideas" you were saying the opposite, like in the two paragraphs starting with "Reading the Wall Street Journal for a week should give anyone ideas... " Trevor says something similar in the footnotes. But it looks like YC has been placing all its bets on the first sort of ideas. There's a good reason: all the huge software successes come from the "build it for you and your friends" model because those are the problems you fully understand. But it's more common to find software companies making solid profits on products they built for others' problems. Am I overlooking YC companies building products designed for other people? Is the problem that there just aren't enough potential founders like the Octopart guys: people deeply involved in some non-computing world who also happen to be good programmers? If so, maybe the richest source of ideas and cofounders would be cruising web forums for the near-programmers (people who build things like MS Access half-solutions to their companies' problems) to listen to what they would like to build if only they knew how. Maybe YC should be recruiting there, too. Thoughts?
As a scientist I've had a lot of success looking for the simple yet groundbreaking problems that occur at the boundaries between very different disciplines. It can be difficult not to make 'stupid' mistakes in a discipline with which you are unfamiliar...but it's a lot easier than trying to work faster and smarter on the exact same problem as everyone else!
Surely interdisciplinary collaboration could be just as valuable in startups.
We will fund people still in school. (The founders of Weebly were.) But they have to be serious about starting a company.
Have you ever had any issues with IP?
An alternative to starting a consulting business is to build your stuff on the side. Possibly draining? Yes, but if you're determined, I believe this is better than getting distracted by a consulting business. Time will tell if this is wise though.
Feel free to delete this comment after changes are made.
I also love the 0% dissatisfaction idea, whether or not the result is a success. The experience of launching your own project just can't be replicated. Any of the points you mentioned, even if the result is complete failure, is well worth the expense of time & risk.
To my knowledge the "revenue-less liquidity event" route to riches is new circa 1998, e.g. The Globe and other such IPOs. This route is probably a symptom of the global liquidity bubble rather than a lasting development. We are still in a global liquidity explosion that measurably started around 1995. It has fueled all kinds of bubbles and weird business practices and now it's fueling acquisitions, just like it's fueling Private Equity deals and stock buybacks. We are in financially anomalous times.
There are a variety of business models to try once you've made something people want. Sometimes it is ads (myspace) sometimes it is merchandise (homestarrunner) or a combination of the two (penny-arcade). Maybe your content is worth a subscription (hotornot). Maybe you sell books or offer training and advanced services (SysInternals/Winternals).
Another argument for not worrying about the business model, if it is your intent to be acquired, is that your product may wind up more flexible. 3 different companies might use 3 different ways to make money from your product. Again, the distinction is that it's already profitable companies doing the buying, rather than the Stock Market At Large.
I think it might be the change in perception. My parents, and people around their age, seem to have a different perspective on what a job means. They see work as a smaller role in their life. "Work just pays the bills". But most younger generations seem to put more of an emphasis on their careers. They see work as the main part of their life. It could be due to the amount of money that we pay for college tuition. I know I don't want to waste my degree and years of my life doing someone else's work. I'd rather have the comfort and responsibility to be left alone to do my own work. Maybe I'm just speaking about my own situation.
But what about bigger projects? Projects which need maybe 10 people working for an year? Hardware? Would your views change when you are asked to invest in projects of these kind? The reason I ask is because I'm a final year CS student in Singapore and I've developed a 360 degree video camera along with a couple of my friends and we've been talking to a lot of angel investors here. They all love the idea and are amazed by the demo but most of the time their major cause of concern is that we don't have business experience and we're very young (21). How would you evaluate an idea like this one (hardware+software)? Would you be interested in seeing something like this sent to YC? Or do you prefer sticking to web 2.0 sites?
This may change in the next few years, but it doesn't seem like robotics will ever be as low-capital an operation as the Web.
Your adviser, committee members, and conference/journal reviewers are all "fickle customers". And these aren't customers who came to you because they want your product, these are more or less assigned to you and you're stuck with them (unless you change departments or schools). It's true that you get a stipend, but I'm not sure that counts as "full support". And while the drop-out rate is obviously lower than the startup failure rate, it's far from zero.
Still, I agree that grad school is less scary than a startup. But don't think it's not all about pleasing others, with many non-trivial deadlines and constraints.
It does not depend on being in grad school or not whether you can do what you want, it depends on having the money - either to pay for grad school, or for toying around with your startup.
I realize I made some oversimplifications, but still...
If you do not get a Fellowship, you are expected to perform 20 hours worth of work per week (which you actually receive credit for), in addition to your time spent on classes and on your own independent research.
In other words, grad school is more like a low-paying job than a cost. You could make the case that you could be working a higher-paying job in that time, but then you are missing out on the flexibility of being a Ph.D., which allows the possibility of being a professor or getting hired for a pretty high income. Additionally, you have the opportunity to leave your mark on the field with your research.
Even more interesting is that Ph.D. work could lead you to your startup idea, as you unveil a new use of existing technology or a new approach altogether which leads to a money-making possibility. Furthermore, if you are exceptionally driven, you may be able to get some work done on your startup idea while attending grad school, because at least so far, I have found grad school to be significantly easier than my undergrad was, because I am taking less "real" classes.
This was something I've always debated myself. I can see how the companies he's funded have shown that working first is probably not necessary. I also understand his argument that trying and failing can teach you more than working for a company would anyway. But I think it really depends on the company. Not all larger tech companies suck. And I'd still argue that working in the corporate environment (even for just a short while) teaches you a lot of valuable lessons.
I guess my view is weigh the options. Some larger companies (mainly the people you work with there) can teach you new and diversive things you simply cant learn on your own. Looking back 10 months to when I just graduated, I definitely feel I've learned a lot about accountability and being responsible from the corporate work environment. It also modivates the hell out of you to break free of the mandatory work hours and start something on your own..
I'm sure I wasn't first, but it's cool nonetheless.
Startup idea: supporting geographically collocated open source projects to help potential partners get to know each other. It might start out similar to http://prehacked.com -- allow people to enter projects they're interested in and their geographic location, and cluster similar interests together to show them potential partners. Allow people to say x is similar to y when the system can't figure it out (I always thought reddit should accept hints like x is related to y or not related to y).
The biggest reason why startups are so much more feasible now than ever before is because of the plummeting costs of production. Whereas twenty years ago it would have taken millions of dollars to do a startup, today a college kid with a powerbook can do one in his dorm room. Every year the tools of production get exponentially more powerful and less expensive.
To play devil's advocate, these same factors that are currently driving startups may ultimately be their demise as well. Almost every tool can be used for both good and evil. A hammer can be used to drive a nail, or also to harm someone. Governments have taken it on themselves to try to allow the good uses of any given technology while regulating the evil purposes. The problem is that every time they try to regulate away an evil, there is inevitably a little spill over that prevents us from using the technology for good. Every time a powerful new technology is invented, we end up losing little bits of our rights and civil liberties.
As technologies exponentiate in both their power and interconnectedness, it seems as if society (at least ours) will go down the road of increasingly restricting freedoms in order to prevent terrorism and other evils.
It isn't hard to imagine that as the costs of production approach zero, so will the freedoms that enable us to start startups. In many countries, such as Japan and Germany, it is so hard to do anything other than the status quo that it is effectively illegal. In Germany the government subsidizes the wages of students finishing school, which makes it effectively impossible to get a job without graduating. And in Japan it's even worse.
If the past is any indicator, the same forces driving the boom in startups are ultimately going to be drivers in forcing people into more restrictive social structures.
N.B. I don't necessarily believe this, but I think it is a serious argument that has never really been rebutted. Perhaps because the guy who proposed the idea was driven insane by it is currently doing life in prison for killing a bunch of people (Kaczynksi).
I don't really think, though, that what you present are the precise beliefs of Kaczynski. In your comment, you seem to have the idea that decreasing costs of production (which is largely due to improvements in technology) is a good thing, while the decrease in freedom is the thing that is bad. It seems to me that anarcho-primitivists actually believe that technology itself is the bad thing, because it departs from the pure, hierarchy-less society of hunter-gatherers.
It is truly an interesting endeavor to consider where the boundary exists between what is good about where we are headed and what is bad. I think that all of us accept the idea that those who have greater drive and motivation to succeed should be rewarded for their efforts, and it's also hard to deny PG's contention that people now are living more luxurious lifestyles than kings of yesterday (heated houses year 'round). We may also argue that if people are content with their station in life (i.e. doing nothing to change it), then what is the problem?
On the other hand, I think that nearly all of us would agree that a situation like that in the Matrix would be a bad thing; even though the people believe they are living well, it is all a facade. Additionally, we are perfectly okay with improving the lives of friends and family members who have been less driven than we, presumably because we love them.
I guess if you consider the implications of that train of thought, if we loved humanity, we would be perfectly fine with sharing everything equally, regardless of the amount of work the individual does, and we thereby arrive back where we started, with hunter-gatherer cultures that have gift societies. We can even see evidence of this model working in the open source movement today.
I'm not really trying to make any points here, I'm just pointing out some interesting questions that your post (and my readings on Kaczynski) brought up in my mind which made me question what I had previously considered to be unquestionable truths. Perhaps it's not necessary for the entrepreneur's reward to be directly proportional to the amount of wealth the he or she has created, especially considering that with the current state of social stratification, opportunity is certainly not equal.
"technology exacerbates the effects of crowding because it puts increased disruptive powers in people's hands. For example, a variety of noise-making devices: power mowers, radios, motorcycles, etc. If the use of these devices is unrestricted, people who want peace and quiet are frustrated by the noise. If their use is restricted, people who use the devices are frustrated by the regulations... But if these machines had never been invented there would have been no conflict and no frustration generated by them."
"It is a chronic complaint of small-business persons and entrepreneurs that their hands are tied by excessive government regulation. Some of these regulations are doubtless unnecessary, but for the most part government regulations are essential and inevitable parts of our extremely complex society."
I take it that what he is saying is that technology creates social complexity, both good and bad, which then inevitably leads to the loss of liberty. I know Bill Joy, who co-founded Sun, wrote a good article in Wired a while back about reconciling Kaczynski's ideas with Kurzweil's.
That is the quote that stands out to me, and what it tells me is that he believes technology itself to be the bad thing, because it breeds the conflict and resulting regulations.
Regardless of this minor issue, I think that we are both thinking along the same lines.
The primary reasons I left corporate are already iterated in the essay.
1. I'm only two years out of college and fairly young, My living expenses are fairly low.
2. I was bored out of mind. I now know the real meaning of corporate drone and can relate to the movie 'Office Space'.
3. As each day of work passed by, I swear the work made me a little dumber.
4. Nothing to loose. Last straw was when the company got bought out, and the CEO jumped ship with his golden parachute.
5. I don't want to be remembered as a person who was a [insert job title] at Big Company A.
While my work struggles to find my replacement, I have no problems finding people that A) want to work for me on contract projects, and B) want me to work on their projects (right now there is a queue). I actually work longer now than I did in the office. But I'm not tired. In fact, I have more energy. Additionally, if you normalize my work hours, I am even more productive working on my own. I just generally feel better about myself and am only experiencing "good" stress these days. I encourage anyone who finds themselves agreeing with Paul Graham in his essays more often than not to make the leap.
I fundamentally agree with Paul Graham about the change we are seeing. In fact, my little prototype bets the farm on the premise that this change is indeed happening.
I'm sufficiently capitalized having had a couple of years out of school to make some money that Y Combinator's funding is, quite frankly, an unattractive proposition. Plus, I'm in Toronto and I love the city. I live/work downtown right near the university. I would not want to move. All this said, is there any chance that you will do a talk up here in Canada?
What do you think? I haven't tried either, but working on cool problems ought to be worth something. Most startup work seems rather mundane.
Not a rhetorical question.
One reason to worry about how my site renders in Safari is that I know people use Safari and if my site doesn't work for them they won't use my site. There's a thrill that comes when people enthusiastically approve of your work. Also I know my site will be higher quality and more valuable if it renders in safari. The more valuable my site is, the more likely I will be able to make money off of it.
Come up with a list for the Google job, and see how it compares. For me personally, both sound good.
I'm not saying the job at Google with Peter Norvig (ah) is perfect. I was just pointing out another reason why I'm hesitant to make a startup.
If you're asking yourself wether to pursue a job at google or starting a startup, you'll want to try enumerating as many reasons as you can for each one. You won't likely get a definitive answer, but the excercise will get you thinking about what other things are important to you. If you're lucky, one will turn up to be the obvious choice.
In my case, I have slid technically to the point that preparing for one is the same as preparing for the other.
And for every hard problem at a "real" job, there's 10 annoying ones. I bet the startup ratio is probably similar, but they're YOUR problems (hard and annoying), not someone elses.
Then you can focus on the the challenging and rewarding problems without worry of dealing with the mundane. The difference will be that they are problems YOU want to work on, not what Google wants.
The point is that at a startup (especially the two guys and a laptop variety) you do absolutely everything yourself, while at a big company you are supported by IT, QA, custodial services, etc, etc.
The interesting question is whether there exist jobs for which that support is worth the money and freedom one gives up working at the large company.
By enumerating what you want and comparing that with the support and restriction a steady job offers.
Money, freedom? I say risk.
There is less risk working in someone else`s company. If you take no risk then you will not have the potential to make more than in a startup. You also kiss your freedom away. Freedom. Thats a joke. For all those working for a company, tell me you really have the freedom to work, do what you want, when you want?
So if you want no risk, look forward to structured environments, other people telling you what to do and limit your ability to earn. Go work for the googles of the world [0].
Reference
[0] knowledge @ wharton, University of Pennsylvania, 'Perk Place: The Benefits Offered by Google and Others May Be Grand, but They're All Business'
http://tinyurl.com/3bgglh
There has been nothing more stressful for me than having this scenario happen - I just can't stand by and watch my efforts go to waste. (The Big company context for me was in the Architecture world, but you can substitute any profession you like in the above scenario) The best stress-reduction decision I have ever made was to start my own company. It was very difficult financially at first, but it was completely worth it.
Solving hard problems depends too much on creativity and research. I'm not sure I could do that under the pressure associated with a startup. The Google environment doesn't seem ideal either, come to think of it, but at least, I'm not the one absorbing the huge risk of failure.
Anybots is a startup that solved a hard problem, but it was self-funded, right? Would YC have funded them if it had been proposed by a 25-year-old Trevor Blackwell?
Uses some pretty advanced algorithms for planning seating arrangements.
Of course, the real challenge with a consumer product is usability, that intersection b/t your cool product and the folks with the wallets. But, that's where the money is. (Money isn't everything, of course).
If you want to change the world, you have two ways to do it:
1) By force - in this case, don't do it. Waste of energy on anti-productivity.
2) By creating something people REALLY REALLY want (like your examples) - in that case, yes. Create a company. Find someone as enthusiastic as you. If you create something people want, money will come.
Email me for details, I'm a gmailer and my nick is SonOfLilit.
I'm a Paul myself ... :) Y Combinator is an inspiration for me! I think that as Y Combinator incubates more companies successfully, more and more groups will apply. :)
But I have the impression that PG means "to start starup is to launch a web application". right?