Successful startups turn into big companies (Really successful ones do it more quickly than you expect). If you've worked at a big company in the past, you're going to be more comfortable with that transition.
I would argue you should only start a venture because you think it might succeed, not because you think failing at it will provide you with priceless and invaluable experience.
Well yeah. If you don't think you'll succeed then you're doing it wrong.
With all due respect to the author, I don't think you'll tease anything about the value of different kinds of experience out of a bunch of random stats. You can get great experience at a job, or as a founder, or even not working at all. The value you get is serendipitous—you won't know it until the opportunity strikes, and then you need to seize the opportunity.
Every minute you spend sitting around running numbers to try to maximize the value of your experience is one less minute invested in yourself.
So, this past year, I've tried 3 different business ideas.
Project 1: This was a 4 Hour Work Week idea. I built a contact database for every hospital in the US, I put up for sale on a yahoo store and I pointed Adsense at it. I had done Adsense testing check for demand. It failed. I thought the from my testing I should have been getting 2 to 3 sales at $150 per sale each month while spending $100 a month on Adsense. I didn't get a single sale in 3 months. So, I lost a grand for the whole project. No big deal. I learned a lot.
Project 2: Social cute site. It was a reddit clone for cute pics (cats, dogs, etc...). I shut it down after 3 months, because I couldn't take looking at cute kittens that much. But, I took that code base and what I learned from it to start http://newsley.com .
What I've learned in each one has been invaluable. The argument of whether or not we should try to build a startup to succeed or fail is rather moot, I think. No one builds a startup to fail. But, after having failed at 2 business ideas, I still think it was very worth while. Ultimately whether my success rate ends up being %25 or %29 or even %5. It doesn't really matter to me, because I'm going to keep working at this until I do succeed, and I'm enjoying the process.
Yeah. I did and original Adsense test in October/November. It was a simple 3 page web app. The first was a sales letter, selling a database of hospital contact information. The second was a price sheet ($150 for an address list of all the hospitals in the US and territories) which clicked through to the third page, which was an email signup form, saying the person was interested in buying it.
I spent $100 on Adsense advertising over the course of a month, which got me around two hundred clicks on the front page, 50 or so clicks on the price page, and 6 email addresses. So, after doing that, I scraped the initial hospital contact list from several different sources, and I paid $500 to have a team of people in India verify each address individually. I then threw the address list up on Yahoo stores for a few months in February through May.
I think that a big part of the reason that I didn't make any sales was because of the economy. I don't think that people were buying much of anything this past winter. Why else didn't it work? I'm not sure. But, after 3 months, I decided to stop paying for the upkeep and take everything down.
Another hypothesis is that people interested in something would click through in hope to learn more util you ask them to pay to continue. It would mean adsense demand testing inherently doesn't work (at least for some types of products / testing setups).
Someone could setups the following experiment to test it: after you build the product, split the traffic with most going to the product buy page, but with some percentage going to the original testing page that only collects email addresses. When a person gives you an email, immediately auto-reply with a link to the buy page.
In this way you can compare the effectiveness of demand testing at the cost of some sales (because you make some of your potential customers jump through more hoops). But if I went a couple of months without a sale I would try it just to see if my demand testing worked at all.
I don't see how you can ever get a properly controlled test for this. The power of luck aside, it seems inevitable that the population of people who never get around to a second venture because of the success of a first venture is fundamentally different from the population of second-time founders. I'd bet that all things equal the previous experience does help, but there is just no way of controlling for the differing ability of the two populations.
Multiple ventures does not erase the luck factor. The serial entrepreneur might get better, but luck always plays a role.
I got "lucky" with my first startup and didn't too great with the next two. So, I'm headed the wrong way. On the other hand, it might indicate that once you succeed, you might try to stretch out with a more outlandish idea because you're overconfident, or not quite so desperate as the first time.
I know I learned a ton my first time out (actually second, but first failure :), but only after a year or so of reflection (once the sting wore off and I could see everything clearly and spend time thinking about it).
Unfortunately, my second time out I didn't encounter the same issues (probably because I learned from them) so the new issues we encountered we couldn't draw on what we learned to solve them anyway. Learned a ton that time too, so now I have experience with twice as many reasons for failure. I won't repeat those, but hopefully can draw on some of them when approaching future challenges.
The odds do go up each time. I lucked out and my very first company was successful (9 years and counting), but the next few endeavours weren't, even though the one was gaining traction (costs were rising faster than profits, didn't see the obvious ways of reversing that trend until too late), and the other was technically superior to other solutions out there (weak sales/marketing side, since the other two seemed to gain traction too easily, I took those things for granted that time out).
Now I'm doing my homework big time before leaping into the next venture, and setting more modest goals short term and stretching out my definition of success. Basically, I'm working on a 10-year plan on a music career with milestones along the way. I know it takes time and perseverance in this industry (as with any), but I do have a wealth of previous business experience to draw from and that is already helping in several ways. I don't believe we don't learn because I know I have.
The article begins by distorting a quote from PG (the original passage was about learning in general - or, if anything, about programming - not entrepreneurship), proceeds to contradict itself ("Failed serial entrepreneurs do have a decent second-time success rate"), and ends with pap ("I would argue you should only start a venture because you think it might succeed").
I can think of at least two people - Henry Ford and Walt Disney whose success came after a long string of failures. And that's just the cream of the crop.
Highly recommend Neal Gabler's biography, "Walt Disney: The Triumph of The American Imagination". Fascinating and underpinned by seven years of exhaustive research.
The first fifth is about his failures. His failed animation and film companies. The entire 633 page book is about one man's obsession (with the biz ops help of his brother) with bringing reality to fantasy and fantasy to reality.
It may not seem to be your typical startup-type book but it's all about entrepreneurship, failure, and pushing the limits of technology and enthusiasm.
"But for all Walt's continuing assurances of improvement, and for all his genuine desire to make outstanding films, the Alice movies, even with Iwerks's contributions, were only slightly better than routine"
p.86
"In creating a world of his own from scratch, Walt Disney demonstrated, more fully and forcefully than ever before in his work, man's potential mastery, which has always been the inherent metaphor of animation."
p. 275
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[ 0.16 ms ] story [ 40.8 ms ] threadWell yeah. If you don't think you'll succeed then you're doing it wrong.
With all due respect to the author, I don't think you'll tease anything about the value of different kinds of experience out of a bunch of random stats. You can get great experience at a job, or as a founder, or even not working at all. The value you get is serendipitous—you won't know it until the opportunity strikes, and then you need to seize the opportunity.
Every minute you spend sitting around running numbers to try to maximize the value of your experience is one less minute invested in yourself.
So, this past year, I've tried 3 different business ideas. Project 1: This was a 4 Hour Work Week idea. I built a contact database for every hospital in the US, I put up for sale on a yahoo store and I pointed Adsense at it. I had done Adsense testing check for demand. It failed. I thought the from my testing I should have been getting 2 to 3 sales at $150 per sale each month while spending $100 a month on Adsense. I didn't get a single sale in 3 months. So, I lost a grand for the whole project. No big deal. I learned a lot.
Project 2: Social cute site. It was a reddit clone for cute pics (cats, dogs, etc...). I shut it down after 3 months, because I couldn't take looking at cute kittens that much. But, I took that code base and what I learned from it to start http://newsley.com .
What I've learned in each one has been invaluable. The argument of whether or not we should try to build a startup to succeed or fail is rather moot, I think. No one builds a startup to fail. But, after having failed at 2 business ideas, I still think it was very worth while. Ultimately whether my success rate ends up being %25 or %29 or even %5. It doesn't really matter to me, because I'm going to keep working at this until I do succeed, and I'm enjoying the process.
I spent $100 on Adsense advertising over the course of a month, which got me around two hundred clicks on the front page, 50 or so clicks on the price page, and 6 email addresses. So, after doing that, I scraped the initial hospital contact list from several different sources, and I paid $500 to have a team of people in India verify each address individually. I then threw the address list up on Yahoo stores for a few months in February through May.
I think that a big part of the reason that I didn't make any sales was because of the economy. I don't think that people were buying much of anything this past winter. Why else didn't it work? I'm not sure. But, after 3 months, I decided to stop paying for the upkeep and take everything down.
Someone could setups the following experiment to test it: after you build the product, split the traffic with most going to the product buy page, but with some percentage going to the original testing page that only collects email addresses. When a person gives you an email, immediately auto-reply with a link to the buy page.
In this way you can compare the effectiveness of demand testing at the cost of some sales (because you make some of your potential customers jump through more hoops). But if I went a couple of months without a sale I would try it just to see if my demand testing worked at all.
I got "lucky" with my first startup and didn't too great with the next two. So, I'm headed the wrong way. On the other hand, it might indicate that once you succeed, you might try to stretch out with a more outlandish idea because you're overconfident, or not quite so desperate as the first time.
Unfortunately, my second time out I didn't encounter the same issues (probably because I learned from them) so the new issues we encountered we couldn't draw on what we learned to solve them anyway. Learned a ton that time too, so now I have experience with twice as many reasons for failure. I won't repeat those, but hopefully can draw on some of them when approaching future challenges.
The odds do go up each time. I lucked out and my very first company was successful (9 years and counting), but the next few endeavours weren't, even though the one was gaining traction (costs were rising faster than profits, didn't see the obvious ways of reversing that trend until too late), and the other was technically superior to other solutions out there (weak sales/marketing side, since the other two seemed to gain traction too easily, I took those things for granted that time out).
Now I'm doing my homework big time before leaping into the next venture, and setting more modest goals short term and stretching out my definition of success. Basically, I'm working on a 10-year plan on a music career with milestones along the way. I know it takes time and perseverance in this industry (as with any), but I do have a wealth of previous business experience to draw from and that is already helping in several ways. I don't believe we don't learn because I know I have.
I can think of at least two people - Henry Ford and Walt Disney whose success came after a long string of failures. And that's just the cream of the crop.
The first fifth is about his failures. His failed animation and film companies. The entire 633 page book is about one man's obsession (with the biz ops help of his brother) with bringing reality to fantasy and fantasy to reality.
It may not seem to be your typical startup-type book but it's all about entrepreneurship, failure, and pushing the limits of technology and enthusiasm.
"But for all Walt's continuing assurances of improvement, and for all his genuine desire to make outstanding films, the Alice movies, even with Iwerks's contributions, were only slightly better than routine" p.86
"In creating a world of his own from scratch, Walt Disney demonstrated, more fully and forcefully than ever before in his work, man's potential mastery, which has always been the inherent metaphor of animation." p. 275