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I love Hacker News, but my least favourite thing about it all is how we glorify 'startups'. It's honestly just a really weird business model, that seems like it

I love Hacker News, but my least favourite thing about it all is how we glorify 'startups'. It's honestly just a really weird business model, that seems like it's bound to inspire things like the recent Zenefits scandal, Uber and Airbnb's disregard for regulation, etc. etc. etc. I dunno... like this story implies, it just seems totally ass-backwards to focus on growth before you're profitable, and pretty unhealthy to boot.

rosser 11y ago
I kinda have to agree. Obviously, I don't have hard numbers to support the notion, but having seen two full boom-bust cycles (I started working in tech in '97) and, looking at what feels more and more like the precipice of a third, I'm strongly inclined to believe that the "growth über alles" mentality that can tend to be a defining aspect of "startup-hood" has probably actually destroyed more good ideas than it's fostered.
Joof 11y ago
Personally, I would love a solid business model where the point is to have flatter management / pay structures instead of making everybody rich. Enough that everyone gets paid well and has some autonomy, but decisions don't get locked up by too much democracy.
anexprogrammer 11y ago
I've started to prefer (including by using it to influence where I spend money) companies that grow the old fashioned way: Make some money and use it to make a little more. Or heaven forbid, were bootstrapped. Why? Seems from experience to be far less likely to produce an "Our Incredible Journey" message. I don't want to sign up for a service, love it, find it useful and be told GTFO after 2 years, ps Google bought us. I've also got very wary of using any new Google, Facebook etc service. Chances are, it won't last. There's something incredibly unhealthy about the way it's all about getting to $1bn and to hell with the product, customers, that got you there etc. I also think the burn rates have got out of hand. Surely there's a better way than burning £20m a year to produce something you'll shutter without a second thought when it runs out. What happened to seeking profit and longevity? I'm very glad I had my time in startups though!
- vmateixeira 11y ago
  Nice comment, you seem to address few of my thoughts on bad products, longevity and customer support. I am a bit concerned though companies don't care about the customer and customer support any more... I wonder if they are counting on peoples laziness on searching and moving to an alternative product/service or is it as simple as there are no alternatives with different policies?
  - anexprogrammer 11y ago
    Good support is expensive and not terribly amenable to scripting, unless you want to do it badly (or not at all). It's certainly possible to differentiate by providing great support, it's just convenient (and very profitable in the short term) to not bother. Great support is hard! I think the public have got far too accepting of little or no support. Yes it's easy to switch, but most people don't unless it's a commodity service - you have to risk the unknown, maybe migrate years of data with little certainty that support in the new home will be better. Sales support tends to be great (and unscripted from more aware staff). There's a magic size, let us imagine it at 100 people where nearly all human endeavours become crap. Try getting support out of your electric utility, car maker, government, phone service, national charity, hard drive maker etc. Personally I think it's connected with the size where they will still hurt at, or at least talk about, your loss. It's certainly possible to get far beyond this size and still give great support - look at Amazon and Apple. Amazon got far beyond that size before starting to become a bit rubbish. Essentially until they started ruining the brand trying to move into food, tablets, 3rd party merchants and everything. Apple have the advantage of their restricted OSX hardware, iOS app store and so on that they have a fairly known quantity to provide support for. I think the key to be in this category is what you think your brand stands for. I think in many, particularly social spaces, it's easy to forget we're not the customer. eg, you can actually get responsive support out of Google adwords or if you buy a Nexus from them (not always great support, but they answer promptly enough). So we're never getting support for search, G+, Facebook or Twitter. I'm sure there;s scope to do it much better, even for the free services. Lastly, I think specifically in the startup space when you're aiming for 20% growth a month, or even a quarter is going to make it far more difficult to do well. Especially if your offering is evolving as fast - even your staff will struggle to stay aware. So it becomes about great user stories, and outreach (PR) and devcons. Good for growth, but chances are individual customers get lost in the gaps. I think the tendency to shoot for an IPO or buyout is unhealthy here - individual experience matters less if you don't need to care about ongoing trading profit whilst getting big fast. That said there's plenty of services I don't think would have happened, or be great without being big. Small Spotify doesn't get music licences, small Uber doesn't have availability when you need it, etc. EDIT: Didn't realise I'd written that much!
sbank 11y ago
> Uber and Airbnb's disregard for regulation That's a good thing as far as I'm concerned.
- TuringTest 11y ago
  Why, you don't think that having a body requiring minimum quality standards and opposing monopolies may be a good thing for consumers and workers?
  - sirkneeland 11y ago
    I think the problem is when the regulatory body forms an unhealthy relationship with the companies that end up becoming monopolies (regulatory capture, good old fashioned corruption, revolving doors between the two, erc) and discourage new entrants. It's a balance. It's hard.
    - TuringTest 11y ago
      Yeah, but then people should not be disregarding regulation, they should be asking for the right kind.
      - RUG3Y 11y ago
        Color me cynical, but asking for the kind of regulation we want rarely seems to have any effect.
        TuringTest 11y ago
        Because you are not a multinational corporation.
epalmer 11y ago
Disclosure: I don't work for a "startup" but have started my own businesses before in the 80's and 90's. I work at a University now in tech. I may get downvoted for this comment. Oh well. I think I get PG's label of startup and why it matters to him and to HN followers. But let us not forget that most businesses are not started as a PG like "startup" and never go through the PG "startup" approach. Look around at the restaurants, small manufacturers, service companies like printer repairs and more. These are the companies that drive the economy. I am tech centric and like many startups and what they seem to offer but I think sometimes things on HN get distorted. I am not anti-startup. In fact I'll be at SXSW and paying attention to the headline grabbers to see what interests me. I hope MightyBell survives and I wish Gina the best of luck. Let us not forget the small business persons that struggle everyday to survive and grow just a little, one customer at a time.
- noir_lord 11y ago
  I think the startup model isn't much better than a lottery. You can have good engineering, good product and good vision and still lose horribly, you can shift the probabilities a little but beyond that I don't think you can. Of course the belief that you are going to succeed is required as well so you end up with lots of people 100% sure they are going to succeed for which a small percentage do (for a given definition of succeed). I think the whole culture around SV-style startups is both fascinating and disconcerting.
xg15 11y ago
> I love Hacker News, but my least favourite thing about it all is how we glorify 'startups'. Considering who runs HN, I'd be more surprised if there were no glorification - or at least very positive attidude - of startups.
- lmitchell 11y ago
  Well yeah I guess so :P but I can still wish it were otherwise!
jerf 11y ago
"Hacker News... we glorify 'startups'." Do "we"? As I write this, you've got nothing but agreement below you. No angry screeds about how important startups are. We have an endless stream of mockery about unicorns. You know about the Zenefits, Uber, and Airbnb's issues precisely because you heard about them on HN; hardly the case that they've been hidden. HN may value entrepreneurs and consider startups at least a valid life style choice, but if you really look, I think the gestalt merely thinks that it glorifies startups... if you look at what is actually being expressed, it's quite harsh on the excesses of the startup world. It seems to be TechCrunch and such that cheerlead moreso than HN, which is usually being cynical, crotchety, and contrarian about "startups".
- lmitchell 11y ago
  I think we largely do - sometimes we're critical of specific moments or companies, but I think we do more than 'consider startups a valid lifestyle choice'. There's too much PG circlejerk and 'guide to how to X your startup's Y' for me to think otherwise. ... but then, I did just about double my lurker HN karma with this post so maybe you're onto something. ;)
PhasmaFelis 11y ago
Agreed. Hacker News has pretty interesting content and discussion, but the price seems to be a fetishistic focus on all things startup-related. I wish there was a site like this that didn't mainly exist as an adjunct to an incubator.

rosser 11y ago

I kinda have to agree. Obviously, I don't have hard numbers to support the notion, but having seen two full boom-bust cycles (I started working in tech in '97) and, looking at what feels more and more like the precipice of a third, I'm strongly inclined to believe that the "growth über alles" mentality that can tend to be a defining aspect of "startup-hood" has probably actually destroyed more good ideas than it's fostered.

Joof 11y ago

Personally, I would love a solid business model where the point is to have flatter management / pay structures instead of making everybody rich. Enough that everyone gets paid well and has some autonomy, but decisions don't get locked up by too much democracy.

anexprogrammer 11y ago

I've started to prefer (including by using it to influence where I spend money) companies that grow the old fashioned way: Make some money and use it to make a little more. Or heaven forbid, were bootstrapped. Why? Seems from experience to be far less likely to produce an "Our Incredible Journey" message. I don't want to sign up for a service, love it, find it useful and be told GTFO after 2 years, ps Google bought us. I've also got very wary of using any new Google, Facebook etc service. Chances are, it won't last. There's something incredibly unhealthy about the way it's all about getting to $1bn and to hell with the product, customers, that got you there etc. I also think the burn rates have got out of hand. Surely there's a better way than burning £20m a year to produce something you'll shutter without a second thought when it runs out. What happened to seeking profit and longevity? I'm very glad I had my time in startups though!

vmateixeira 11y ago
Nice comment, you seem to address few of my thoughts on bad products, longevity and customer support. I am a bit concerned though companies don't care about the customer and customer support any more... I wonder if they are counting on peoples laziness on searching and moving to an alternative product/service or is it as simple as there are no alternatives with different policies?
- anexprogrammer 11y ago
  Good support is expensive and not terribly amenable to scripting, unless you want to do it badly (or not at all). It's certainly possible to differentiate by providing great support, it's just convenient (and very profitable in the short term) to not bother. Great support is hard! I think the public have got far too accepting of little or no support. Yes it's easy to switch, but most people don't unless it's a commodity service - you have to risk the unknown, maybe migrate years of data with little certainty that support in the new home will be better. Sales support tends to be great (and unscripted from more aware staff). There's a magic size, let us imagine it at 100 people where nearly all human endeavours become crap. Try getting support out of your electric utility, car maker, government, phone service, national charity, hard drive maker etc. Personally I think it's connected with the size where they will still hurt at, or at least talk about, your loss. It's certainly possible to get far beyond this size and still give great support - look at Amazon and Apple. Amazon got far beyond that size before starting to become a bit rubbish. Essentially until they started ruining the brand trying to move into food, tablets, 3rd party merchants and everything. Apple have the advantage of their restricted OSX hardware, iOS app store and so on that they have a fairly known quantity to provide support for. I think the key to be in this category is what you think your brand stands for. I think in many, particularly social spaces, it's easy to forget we're not the customer. eg, you can actually get responsive support out of Google adwords or if you buy a Nexus from them (not always great support, but they answer promptly enough). So we're never getting support for search, G+, Facebook or Twitter. I'm sure there;s scope to do it much better, even for the free services. Lastly, I think specifically in the startup space when you're aiming for 20% growth a month, or even a quarter is going to make it far more difficult to do well. Especially if your offering is evolving as fast - even your staff will struggle to stay aware. So it becomes about great user stories, and outreach (PR) and devcons. Good for growth, but chances are individual customers get lost in the gaps. I think the tendency to shoot for an IPO or buyout is unhealthy here - individual experience matters less if you don't need to care about ongoing trading profit whilst getting big fast. That said there's plenty of services I don't think would have happened, or be great without being big. Small Spotify doesn't get music licences, small Uber doesn't have availability when you need it, etc. EDIT: Didn't realise I'd written that much!

sbank 11y ago

> Uber and Airbnb's disregard for regulation That's a good thing as far as I'm concerned.

TuringTest 11y ago
Why, you don't think that having a body requiring minimum quality standards and opposing monopolies may be a good thing for consumers and workers?
- sirkneeland 11y ago
  I think the problem is when the regulatory body forms an unhealthy relationship with the companies that end up becoming monopolies (regulatory capture, good old fashioned corruption, revolving doors between the two, erc) and discourage new entrants. It's a balance. It's hard.
  - TuringTest 11y ago
    Yeah, but then people should not be disregarding regulation, they should be asking for the right kind.
    - RUG3Y 11y ago
      Color me cynical, but asking for the kind of regulation we want rarely seems to have any effect.
      - TuringTest 11y ago
        Because you are not a multinational corporation.

epalmer 11y ago

Disclosure: I don't work for a "startup" but have started my own businesses before in the 80's and 90's. I work at a University now in tech. I may get downvoted for this comment. Oh well. I think I get PG's label of startup and why it matters to him and to HN followers. But let us not forget that most businesses are not started as a PG like "startup" and never go through the PG "startup" approach. Look around at the restaurants, small manufacturers, service companies like printer repairs and more. These are the companies that drive the economy. I am tech centric and like many startups and what they seem to offer but I think sometimes things on HN get distorted. I am not anti-startup. In fact I'll be at SXSW and paying attention to the headline grabbers to see what interests me. I hope MightyBell survives and I wish Gina the best of luck. Let us not forget the small business persons that struggle everyday to survive and grow just a little, one customer at a time.

noir_lord 11y ago
I think the startup model isn't much better than a lottery. You can have good engineering, good product and good vision and still lose horribly, you can shift the probabilities a little but beyond that I don't think you can. Of course the belief that you are going to succeed is required as well so you end up with lots of people 100% sure they are going to succeed for which a small percentage do (for a given definition of succeed). I think the whole culture around SV-style startups is both fascinating and disconcerting.

xg15 11y ago

> I love Hacker News, but my least favourite thing about it all is how we glorify 'startups'. Considering who runs HN, I'd be more surprised if there were no glorification - or at least very positive attidude - of startups.

lmitchell 11y ago
Well yeah I guess so :P but I can still wish it were otherwise!

jerf 11y ago

"Hacker News... we glorify 'startups'." Do "we"? As I write this, you've got nothing but agreement below you. No angry screeds about how important startups are. We have an endless stream of mockery about unicorns. You know about the Zenefits, Uber, and Airbnb's issues precisely because you heard about them on HN; hardly the case that they've been hidden. HN may value entrepreneurs and consider startups at least a valid life style choice, but if you really look, I think the gestalt merely thinks that it glorifies startups... if you look at what is actually being expressed, it's quite harsh on the excesses of the startup world. It seems to be TechCrunch and such that cheerlead moreso than HN, which is usually being cynical, crotchety, and contrarian about "startups".

lmitchell 11y ago
I think we largely do - sometimes we're critical of specific moments or companies, but I think we do more than 'consider startups a valid lifestyle choice'. There's too much PG circlejerk and 'guide to how to X your startup's Y' for me to think otherwise. ... but then, I did just about double my lurker HN karma with this post so maybe you're onto something. ;)

PhasmaFelis 11y ago

Agreed. Hacker News has pretty interesting content and discussion, but the price seems to be a fetishistic focus on all things startup-related. I wish there was a site like this that didn't mainly exist as an adjunct to an incubator.