[HN Gopher] A student's guide to startups (2006)
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A student's guide to startups (2006)
Author : simonebrunozzi
Score : 58 points
Date : 2023-03-27 05:57 UTC (1 days ago)
(HTM) web link (www.paulgraham.com)
(TXT) w3m dump (www.paulgraham.com)
| themanmaran wrote:
| > Recent grads can live on practically nothing, and this gives
| you an edge over older founders
|
| Seems like this was every other startup in the 2020-2021 period.
| Zero experience founders raising a ton of money. I wonder if this
| is shifting a bit with the financial markets tightening up.
| simonebrunozzi wrote:
| I actually disagree with PG on this one.
|
| Yes, younger founders are low maintenance, but older founders
| usually have a large network to tap into for fundraising.
| gabereiser wrote:
| it's not apples to apples. Older founders usually have a
| network they can tap into, yes, but also usually have a
| lifestyle that requires a bit more than the average college
| grad. One thing I've told folks who ask "how do I start a
| startup with little money?" "You start with what you got".
| Sometimes selling things off to reduce your expenses to be
| able to give your startup more runway. Or not take any money
| at all (I met with a pair that did this for almost 2 years!).
|
| In the end, it's all situational. Younger founders are lower
| maintenance to the balance sheets and have more potential but
| it's more risk. I'm not a VC so I couldn't say what goes into
| the decision making there other than "he's younger and
| smarter so I'm betting on this horse".
| wintogreen74 wrote:
| >> but also usually have a lifestyle that requires a bit
| more than the average college grad
|
| I've noticed that an entire generation of essentially 0%
| interest rates has skewed this substantially. I'm in my
| 40's and I've scrimped and saved and have very few "premium
| lifestyle tastes", while many 20-somethings have lived well
| beyond their means financed for free their entire lives.
| Their expectation for the baseline standard is much higher
| than 15-20 years ago
| zackmorris wrote:
| Ya this is the point where I stopped reading. People seem to
| have a misconception about the poor: that they can live on next
| to nothing. In reality, the poorer a person is, the more they
| work just to survive.
|
| Not to mention that the world is profoundly less allowing of
| entrepreneurship than it used to be. I graduated from college
| in 1999 with about $25,000 in student loans with a $340/mo
| payment and my rent was $250. I was able to get by on a $10/hr
| seasonal furniture moving job. Today those numbers would be at
| least $50,000, $500/mo loan payment and $750 rent, so a person
| would need $20+/hr just to survive. Which means a real job and
| 40 hour workweeks with no time or motivation left over for a
| side business. Same city, double the population, half the
| independence. Trapped.
|
| I'm disillusioned with it all because nobody ever solved the
| funding problem. Kickstarter is opinionated in what it will
| fund. Crypto turned into a Ponzi scheme instead of a way to
| fund startups. So it's probably over, and I'm just waiting now
| for AI to disrupt society so completely that it's forced to
| adopt UBI or face 50% unemployment.
| Xeoncross wrote:
| Yet another reminder not to take on debt. It's better to put
| the extra work in to pay for stuff upfront then move the
| burden to after college unless you have the network and
| guarantees to know you have a job lined up.
| wintogreen74 wrote:
| >> Yet another reminder not to take on debt.
|
| This isn't terrible advice for dumb new grads who don't
| know better, but there are very different types of debt.
| Consumer debt is almost always bad, but capital debt can be
| good, preferred or necessary. The challenge is something
| like a college education could be either.
| sealeck wrote:
| There are two things I want to say.
|
| First, this is one of those things which is easy to say but
| for many (most?) people hard to implement. Sure, some
| people's family may be able to give them the money they
| need to go to university but this is not the case for most
| people, and in this case it is really hard to earn enough
| money _before starting_ to pay for your university
| education.
|
| The second is that debt can be good (our society is
| literally built on it) in many cases (e.g. home loans,
| provided you can afford to pay them off) if you are not in
| a highly asymmetrical power relationship with your lender.
| Xeoncross wrote:
| While I don't disagree with you, I want to say that this
| idea of it being impossible to go to collage without
| taking out loans is not true. I know multiple people who
| worked, applied for grants, and used cheaper/affordable
| colleges first before uni.
|
| > debt can be good (our society is literally built on it)
|
| I would argue that our countries increased reliance on
| debt over the past 50 years has decimated the lower class
| and harmed the middle class while the wealthiest class
| has seen their influence and ownership percentages surge.
| burnished wrote:
| Student loan debt is typically not the good kind - its
| doled out in far larger amounts than the lender can
| typically acquire because it cant be discharged like
| other forms of debt.
| sealeck wrote:
| Agreed.
| CamelCaseName wrote:
| > Does that mean you can't start a startup in college? Not at
| all. Sam Altman, the co-founder of Loopt, had just finished his
| sophomore year when we funded them, and Loopt is probably the
| most promising of all the startups we've funded so far. But Sam
| Altman is a very unusual guy. Within about three minutes of
| meeting him, I remember thinking "Ah, so this is what Bill Gates
| must have been like when he was 19."
|
| I wonder what this Sam Altman guy will be up to 17 years later
| throwaway2203 wrote:
| Had to look it up.
|
| > Altman is the CEO of OpenAI
|
| Got it.
| romanhn wrote:
| Also the former president of Y Combinator
| thundergolfer wrote:
| Altman's had huge success, but that comparison to Gates aged
| like milk. Gates is one of America's great industrialists,
| founding and growing a company into becoming one of the most
| valuable in the world.
|
| Loopt mostly failed, and Altman's other founded company is
| WorldCoin, which also has basically failed. Altman's talent has
| been as an operator within the YCombinator rocketship. He
| hasn't shown he can build technology or great companies.
| xivzgrev wrote:
| OpenAI?
|
| He's been playing long game, working at this since 2015.
| That's a long time to be playing without much of a payoff,
| but it's all come to fruition now. That to me shows a lot of
| leadership ability.
| wintogreen74 wrote:
| >> He's been playing long game
|
| 7 or 8 years is only considered the "long game" in Nintendo
| or JavaScript framework time. I'd also argue jumping
| between substantially different industries, ideas and
| companies is NOT the long game, rather he's continued to
| play a game, and with significant systemic advantages found
| something that might be a moderate to large success.
| blairbeckwith wrote:
| Will be very interesting to see how this comment ages based
| on the trajectory of the last couple of years.
| postsantum wrote:
| One can argue that OpenAI's success is due to techno-magic
| and not the CEO's genious. Unlike MS
| BiteCode_dev wrote:
| You mean, unlike the genious idea of stealing MS-DOS from
| Gary Kildall?
|
| I mean, sure, you can make great profits when you put
| morality asides.
|
| Which Gates did again and again.
|
| People forget about this today because of the extensive
| PR of the last decades to wash the sins of the past, but
| Gates and MS were basically in the middle of a scandal
| every 6 months in the 90. Quite amazing since twitter did
| not exist to report it.
| srhtftw wrote:
| Although Microsoft has stolen things (e.g. from Stac
| Electronics1) in this circumstance I believe you've
| confused "stealing" from Gary Kildall with "licensing"
| from Tim Patterson2.
|
| 1 https://en.wikipedia.org/wiki/Stac_Electronics#Microsof
| t_law...
|
| 2 https://en.wikipedia.org/wiki/MS-DOS#History
| kjksf wrote:
| Gates didn't steal anything.
|
| In fact, when IBM came to Microsoft to talk about
| licensing their programming languages for the PC, it was
| IBM who wanted a packaged deal i.e. get the OS from
| Microsoft as well.
|
| And it was Gates who told IBM reps to go talk to Kildall.
|
| Only when Kildall apparently blew them off Gates took a
| great risk by promising to deliver an OS as well. And he
| did it by buying an existing product to use as a base and
| evolving it.
|
| It's all well document from both Microsoft people and IBM
| people.
| BiteCode_dev wrote:
| That's the post PR story.
|
| And in a few years, there will be no documents stating
| anything wrong about Gates, only the praises.
| TrackerFF wrote:
| When big tech companies started paying $200k-$300k salaries to
| fresh grads, the startup dream kind of started to fade.
| Realistically speaking, going to whatever big tech co has
| probably yielded a far better ROI to the majority of engineers if
| we look at their 10 year employment history, compared to their
| peers that went all-in on startups.
|
| (Yes, some founders obviously hit jackpot)
| reidjs wrote:
| Yeah but those guys had to work at big tech companies. Not
| everything is about ROI or money, even in business. Some people
| genuinely prefer working on "their own thing" or somewhere they
| feel they have more impact even if there is less financial
| reward.
| burnished wrote:
| Oh sure, but like all human traits it occurs along a
| spectrum, and fulfilling that need gets balanced against
| others - a tech salary solveth a multitude of problems after
| all. And I imagine for many getting started in tech seems
| like a great idea, learn a bunch and put aside a nest egg,
| and find out about the golden handcuffs later.
|
| My point being that the sort of intrinsic motivation you are
| describing gets sort of overwhelmed by huge benefits packages
| and total comp.
| wintogreen74 wrote:
| The pool of people who want to work on their own thing as a
| career and livelihood is likely smaller than you think. Lots
| of smart creatives apply this within their jobs and/or do
| their own thing outside of work. Doing what you love as a job
| can be a great way to kill it.
| neilv wrote:
| > _Succeeding as a musician takes determination as well as
| talent, so this answer works out to be the right advice for
| everyone. The ones who are uncertain believe it and give up, and
| the ones who are sufficiently determined think "screw that, I'll
| succeed anyway."_
|
| > _So our official policy now is only to fund undergrads we can
| 't talk out of it._
|
| Speculating wildly on something we still haven't been able to
| figure out...
|
| I was talking with an old colleague, and one of the biggest
| problems we've heard of in too many startups is founders with
| little-to-no experience who seem mind-bogglingly, clinically sure
| of themselves. Even in fields in which they have zero education
| or experience, even when all the highly-skilled specialists they
| hired are telling them the opposite. Even when they're told the
| good employees and customers will leave if they do a stupid thing
| that they have no business even considering. But why are so many
| of these people getting funded?
|
| Going back to the article: imagine you're pitching, and startup
| experts who seem to be on your side are nevertheless trying to
| talk inexperienced you out of it. You can't make an argument that
| convinces them to stop trying to talk you out of it. Maybe they
| know something you don't? Nope, then you're rewarded for
| irrational confidence in yourself, and perhaps for manipulative
| fake-it-till-you-make-it behaviors.
|
| Even if this wasn't the nature of the discouragement PG wrote
| about, given how influential PG's articles seemed early in tech
| startups, maybe a lot of investors since then have been selecting
| for, and encouraging, some traits that we've seen destroy more
| companies than they make?
|
| If that's the case, was that part of some angel/VC formulas all
| along, to make some percentage of the investments be in
| narcissists, till you hit a high-functioning one? Or that, plus
| roll the dice on whether the necessary mitigating/complementary
| external factors align at random? Maybe that's not a bad
| strategy, especially when the investment environment is such that
| you can have an apparently skyrocketing property, and exit rich,
| before anyone realizes the rocket has deep-seated problems and is
| going to blow up.
|
| Obviously, personalities like this have existed before tech
| startups, but maybe not as frequently enabled by professional
| investors?
|
| Speculating wildly here, but the not-unusual clinically
| overconfident startup founder (to the point of self-destructive)
| is a phenomenon we haven't been able to figure out in any
| satisfying way, and only have guesses.
| kjksf wrote:
| Impossible to comment without you providing specifics of the
| things that founders do that are so obviously wrong.
|
| You're also giving way, WAY, WAAAY too much credit to
| "experts".
|
| Two prominent counter-examples: AirBnB and SpaceX.
|
| If AirBnB founders asked anyone involved in hotel industry,
| they would tell them it'll surely fail. The laws, the liability
| (what if someone trashes the place?), who will want to sleep in
| stranger's bed? who will allow strangers to sleep in their bed?
|
| And yet AirBnB is amazingly successful.
|
| Not because those were not valid concerns but because they were
| overblown.
|
| Same with SpaceX: it was ridiculed on principle (what does
| internet guy know about rockets?) and it was ridiculed for
| their methodology (fail fast, iterate quickly, blow up rockets
| to learn from failures).
|
| Armstrong, the guy who landed on the moon, testified before
| Congress telling them to not award SpaceX any contracts because
| they will surely fail.
|
| Doesn't get more "expert" or more wrong than that.
|
| Also, framing "fake it until you make it" as "manipulative"
| suggests that you're coming at this with some chip on the
| shoulder. The nature of learning is that first you don't know
| and then you know.
|
| If only experts could do stuff then there would be no experts.
| Even Einstein didn't know physics.
| teachrdan wrote:
| > Impossible to comment without you providing specifics of
| the things that founders do that are so obviously wrong.
|
| I don't find it impossible at all. One example that everyone
| knows is Theranos. Elizabeth Holmes was a know-nothing with
| total conviction -- exactly the kind of young person Paul
| Graham lionizes in his post. She dropped out of Stanford at
| 19 to found a medical equipment company! When tons of experts
| believed that the samples Theranos relied upon were too small
| to yield accurate results! Which turned out to be true!!
|
| There are, of course, a handful of businesses that have done
| quite well and defied all expectations in the process. But
| they are the exception rather than the rule. Most startups
| fail, and it's not at all obvious that being completely sure
| of yourself despite (because of?) your ignorance is an
| advantage.
| ufmace wrote:
| The thing you gotta remember about this is that YC etc are
| Venture Capitalists. They're a subset of the funding industry
| that is primary concerned with funding extreme long-shots that
| have a small chance of becoming massively and wildly
| successful. They're not out to build stable businesses or to
| make the world a better place (per se), they're out to find the
| unicorns and get in on them early in hopes of wild profits,
| enough to outshine all of the attempts that fail dismally. Of
| course they want the founders to be like that, that's the
| entire purpose of their operation.
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