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> 1. The vast majority of startups are not successful This alone is why 90% of people will not choose to work at a startup. You will work long hours, for crap

> 1. The vast majority of startups are not successful This alone is why 90% of people will not choose to work at a startup. You will work long hours, for crap pay, and you'll be waiting in line if there is an exit. The odds of there being an exit worth anything to anyone other than a founder are small enough to not even worth considering. If you are a founder you're gambling on your chances. There are ways to mitigate the risk but there's no sure thing. Don't start a startup if you do not have the financial security to basically lose everything you put in. Don't start a startup if you have family that depends on your income. You could choose to eat ramen and sleep on the floor of a college dorm room. Your kids (and CPS) might not appreciate it. I agree the motivation is very important. I disagree that you cannot find the same motivation in a more stable organization (or can't motivate yourself). I recently finished reading, Extreme Ownership [0], and I bring that with me to work. People need to be responsible for outcomes: that's not unique to startups. You can also find that motivation internally and share it with your colleagues as you go. [0] https://www.amazon.ca/Extreme-Ownership-U-S-Navy-SEALs-ebook/dp/B00VE4Y0Z2/ie=UTF8&qid=1486489443&sr=1-1 https://www.amazon.ca/Extreme-Ownership-U-S-Navy-SEALs-ebook...

Swizec 9y ago
If you have the entrepreneurial itch and don't have the financial security to back it up, becoming a bootstrapped micropreneur is a great first choice. Start your business on the side, when it revenue is high enough to live on, make the jump. It's slower than a funded startup, but a lot less risky. Does come with a high social opportunity cost due to lack of time, however. But so does starting a startup. If your sidehustle does well, you can even leverage it later to fund your big startup idea. Or, hell, live a good life on a lifestyle business making a few hundred thousand per year. $150k/year revenue won't get you any headlines, but it's plenty to live on and run a solo business. Get to $500k/year and you prob have a higher expected ROI over N years than any startup founder. Disclaimer: my sidehustle is at the $50k/year level, but that's on 60 hours per month. If I didn't insist on living in SF, I could have a very cushy life back in Europe.
- el_benhameen 9y ago
  Thanks for sharing. I find stories like yours more inspiring and motivating than the "ramen to unicorn" ones. I have little interest in scaling a business to IPO, but I'm very interested in building something that holds my interest and lets me support my family and an enjoyable lifestyle.
- moeamaya 9y ago
  Checked out your profile, is your side hustle a combination of books and teaching or do you have another product?
  - Swizec 9y ago
    A combination of books and teaching. I'm experimenting with coaching and a company is sponsoring my React Native writing on a cobranded blog/yt channel. I publish monthly breakdowns on swizec.com and that lists all revenue streams.
    - metalliqaz 9y ago
      Did you leverage a mentor to get started on running something on the side? If so, where did you find one?
      - Swizec 9y ago
        I never had an official mentor, but plenty of people helped and nudged me in the right direction and answered questions. You can find most of them on the internets. It all boils down to this: Make things. Add "Pay For Thing" button. Tell people. I started with following Ramit Sethi's emails for a few years (he's great to drive home the point that yes you do deserve to get paid), then Brennan Dunn's emails and content (he's great for "you totes can make shitloads"), then Nathan Barry's book Authority which is great for "Here are concrete steps to start making bank", and I went to Dunn's DYFConf which is like a baby MicroConf (to which I want to, but haven't, go), oh and of course I listened to all mp3s of all past talks from MicroConf. Patio11's writings helped a lot as well. I used Bryan Harris stuff for ideas on growing an audience, and Kai Davis is great for being a cheerleader and giving good ideas on positioning and writing. Somehow I got invited to the Slack group where many of these micropreneur/microconf celebrities hang out and that's been superb as well. A lot of inspiration and great ideas. Oh and I used Ken Wallace's MastermindJam to join a mastermind of likeminded peers. That helps with keeping you accountable and actually shipping stuff. I also used Amy Hoy's 30x500, but I bought that too late (or too early, hard to say) and it didn't help super much. I should revisit. Oh and levelsio's twitter stream is just a huge bundle of inspiration.
elliotec 9y ago
Being a successful business is not all gambling luck, it's not always working long hours for crap pay, and many, many people have started companies with families and without losing everything they put in. Also, "90% of people choose not to work at a startup" seems like a really bad guess.
- agentultra 9y ago
  I didn't suggest it was impossible or that you couldn't start a business when you have a family or other dependents. I do believe that it's risk to start one or work at one if you do not have ways of mitigating the risk to the people you are responsible to. It is fundamentally a gamble. Everything else is risk mitigation: having a savings account with enough money to cover your obligations of for a couple of years, starting in a low-risk niche, working with partners, insurance, etc, etc. In the end the market may make the venture a flop: hopefully you've taken enough precautions that it doesn't leave you with a foreclosed house and filing for bankruptcy. The only real competitor anyone should care about is themselves. Being an entrepreneur, recklessly, is not going to satisfy that itch in the long run.
fredgrott 9y ago
true but the odds are getting better..it use to be 20%, it's now at 30% contrast that to small biz is now at 50%
- johan_larson 9y ago
  Where did you get that 30% figure, if I may ask? The usually cited figure is 10%.
  - seizethecheese 9y ago
    I second this request.
  - justboxing 9y ago
    > The usually cited figure is 10%. Right. And even that 10% is very optimistic. It's closer to 5% or 7% at the most. > This number suggests that a startling 93% of the companies that get accepted by Y Combinator eventually fail. Source: [2013] "DEAR ENTREPRENEURS: Here's How Bad Your Odds Of Success Are" => http://www.businessinsider.com/startup-odds-of-success-2013-5 http://www.businessinsider.com/startup-odds-of-success-2013-...
nostrademons 9y ago
I'd argue that if you're thinking in these terms, you're probably not the startup type. There was an interesting RibbonFarm essay on "guardian" vs. "commerce" syndrome that really crystallized this for me: https://www.ribbonfarm.com/2014/06/04/saints-and-traders-the-john-henry-fable-reconsidered/ https://www.ribbonfarm.com/2014/06/04/saints-and-traders-the... Entrepreneurs are the ultimate in "commerce" types, but beyond that, his key point was about bulletpoint #2, "exert prowess" vs. "compete". For most people, the point of effort is to get a reward; you are doing things now so that you can be the person you want to be at the end. You do your homework so you can graduate from a good college; you get a job so you can make money and live a good life; you get your MBA so you can get a promotion. For a small minority of people, this is reversed. Who you want to be is just a guidepost for what you should be doing. It's the doing that's the important part. The RibbonFarm article describes this as the finite vs. the infinite game; guardian types do things for the victory at the end, while commerce types set the victory conditions so they have a motive to keep doing things. So you went to school because the material was interesting, and graduation was a little side-note along the way. Or you program computers because that's what you want to do, and the salary just determines who you should program computers for. It's these folks who make the best entrepreneurs, simply because if you're playing to win, there are ways to win with less effort. This, BTW, is why so many entrepreneurs go on to found repeat companies, and why a few are (frankly) dicks after they've gotten rich. A lot of folks can't imagine founding a company after you already have F-U money; why put yourself through all those challenges if you don't have to? But for many entrepreneurs, the challenges are the point, the competition is the point, and they don't stop competing just because they've gotten rich. Sometimes this is expressed in healthy ways, like YCombinator after ViaWeb, Medium after Twitter after Blogger, git after Linux, Stripe after Auctomatic, etc. And sometimes it's expressed in unhealthy ways, like Khosla's feud with San Mateo county over his beachfront property. But the point is that these people aren't founding companies because they need money or success, it's because they love the thrill of competition.
- ABCLAW 9y ago
  Sure. This is a nice dichotomy. Until you add "living out of a car with your pregnant wife and 2 year old child" to the things you have organized your life to do. Humans are very adverse to ruin, and this has nothing to do with what they want to do or achieve. It has to do with what they do not want to experience or put others through.
Animats 9y ago
The odds of there being an exit worth anything to anyone other than a founder are small enough to not even worth considering. So if you go to work for a startup, you should demand substantially more money than with an established company. It didn't used to be that way. It used to be that the first dozen or so employees of a successful startup did very well, and the first hundred or so did OK.
- Analemma_ 9y ago
  > So if you go to work for a startup, you should demand substantially more money than with an established company. The problem is that most startups can't match, much less beat, established companies on salary, and they'll just turn you down. It's not even malice or greed on their part, it's just that they have a finite runway and a few tens of thousands of dollars a year on a single person can mean the difference between life and death. No one wants to say it out loud, but I'm starting to think that the startup economy requires people to accept the gamble of shit salary for a chance at the equity lottery. I decided not to play along with that and only work for megacorps, but it's up to each individual.
  - marssaxman 9y ago
    The megacorp economy requires people to accept the likelihood of crushing institutionalized misery in exchange for a chance at being able to sustain a high salary long enough that the accumulated pile of cash after you finally quit will allow you to live a good enough life to make up for all that lost time and deferred happiness. I decided not to play along with that and will never again work for a megacorp, because life is short and I want to enjoy mine. It is, as you say, up to each individual!
    - metalliqaz 9y ago
      But then you have kids, and kids require stability. So you go to work for the man, because the kids are more important.
      - 9y ago
austenallred 9y ago
> Don't start a startup if you have family that depends on your income. This one deserves to be called out. You can make a perfectly respectable living starting a company (perhaps not saving as much), and if it doesn't work out and you're savvy you'll have a job in no-time. Especially if you're an engineer in the bay area.
- t_fatus 9y ago
  This is indeed true, but your family might suffer from what you're ready to give away when they are not. This is what I experience right now and it's not always easy.
brucephillips 9y ago
I agree with most of what you wrote, but I will say that people outside of the scene might not realize how common it is for founders to raise a couple million in seed funding, then pay themselves a market salary (I've seen as high as $350K for a CEO of a ~10 person company), removing most of the downside. I'm not saying this is advisable, but it's common.
mwseibel 9y ago
On the flip side - if you want to be a founder - try to start early. On balance you often have fewer constraints, lower expenses, and much more life flexibility.
- tonyedgecombe 9y ago
  Or start later because you are likely to have higher savings, better contacts and more experience.
  - sah2ed 9y ago
    Starting later selects for a founding a different kind of company than the one a fresh graduate/drop out would found. I don't think there is a best time to be a founder; it's largely an individual thing.

Swizec 9y ago

If you have the entrepreneurial itch and don't have the financial security to back it up, becoming a bootstrapped micropreneur is a great first choice. Start your business on the side, when it revenue is high enough to live on, make the jump. It's slower than a funded startup, but a lot less risky. Does come with a high social opportunity cost due to lack of time, however. But so does starting a startup. If your sidehustle does well, you can even leverage it later to fund your big startup idea. Or, hell, live a good life on a lifestyle business making a few hundred thousand per year. $150k/year revenue won't get you any headlines, but it's plenty to live on and run a solo business. Get to $500k/year and you prob have a higher expected ROI over N years than any startup founder. Disclaimer: my sidehustle is at the $50k/year level, but that's on 60 hours per month. If I didn't insist on living in SF, I could have a very cushy life back in Europe.

el_benhameen 9y ago
Thanks for sharing. I find stories like yours more inspiring and motivating than the "ramen to unicorn" ones. I have little interest in scaling a business to IPO, but I'm very interested in building something that holds my interest and lets me support my family and an enjoyable lifestyle.
moeamaya 9y ago
Checked out your profile, is your side hustle a combination of books and teaching or do you have another product?
- Swizec 9y ago
  A combination of books and teaching. I'm experimenting with coaching and a company is sponsoring my React Native writing on a cobranded blog/yt channel. I publish monthly breakdowns on swizec.com and that lists all revenue streams.
  - metalliqaz 9y ago
    Did you leverage a mentor to get started on running something on the side? If so, where did you find one?
    - Swizec 9y ago
      I never had an official mentor, but plenty of people helped and nudged me in the right direction and answered questions. You can find most of them on the internets. It all boils down to this: Make things. Add "Pay For Thing" button. Tell people. I started with following Ramit Sethi's emails for a few years (he's great to drive home the point that yes you do deserve to get paid), then Brennan Dunn's emails and content (he's great for "you totes can make shitloads"), then Nathan Barry's book Authority which is great for "Here are concrete steps to start making bank", and I went to Dunn's DYFConf which is like a baby MicroConf (to which I want to, but haven't, go), oh and of course I listened to all mp3s of all past talks from MicroConf. Patio11's writings helped a lot as well. I used Bryan Harris stuff for ideas on growing an audience, and Kai Davis is great for being a cheerleader and giving good ideas on positioning and writing. Somehow I got invited to the Slack group where many of these micropreneur/microconf celebrities hang out and that's been superb as well. A lot of inspiration and great ideas. Oh and I used Ken Wallace's MastermindJam to join a mastermind of likeminded peers. That helps with keeping you accountable and actually shipping stuff. I also used Amy Hoy's 30x500, but I bought that too late (or too early, hard to say) and it didn't help super much. I should revisit. Oh and levelsio's twitter stream is just a huge bundle of inspiration.

elliotec 9y ago

Being a successful business is not all gambling luck, it's not always working long hours for crap pay, and many, many people have started companies with families and without losing everything they put in. Also, "90% of people choose not to work at a startup" seems like a really bad guess.

agentultra 9y ago
I didn't suggest it was impossible or that you couldn't start a business when you have a family or other dependents. I do believe that it's risk to start one or work at one if you do not have ways of mitigating the risk to the people you are responsible to. It is fundamentally a gamble. Everything else is risk mitigation: having a savings account with enough money to cover your obligations of for a couple of years, starting in a low-risk niche, working with partners, insurance, etc, etc. In the end the market may make the venture a flop: hopefully you've taken enough precautions that it doesn't leave you with a foreclosed house and filing for bankruptcy. The only real competitor anyone should care about is themselves. Being an entrepreneur, recklessly, is not going to satisfy that itch in the long run.

fredgrott 9y ago

true but the odds are getting better..it use to be 20%, it's now at 30% contrast that to small biz is now at 50%

johan_larson 9y ago
Where did you get that 30% figure, if I may ask? The usually cited figure is 10%.
- seizethecheese 9y ago
  I second this request.
- justboxing 9y ago
  > The usually cited figure is 10%. Right. And even that 10% is very optimistic. It's closer to 5% or 7% at the most. > This number suggests that a startling 93% of the companies that get accepted by Y Combinator eventually fail. Source: [2013] "DEAR ENTREPRENEURS: Here's How Bad Your Odds Of Success Are" => http://www.businessinsider.com/startup-odds-of-success-2013-5 http://www.businessinsider.com/startup-odds-of-success-2013-...

nostrademons 9y ago

I'd argue that if you're thinking in these terms, you're probably not the startup type. There was an interesting RibbonFarm essay on "guardian" vs. "commerce" syndrome that really crystallized this for me: https://www.ribbonfarm.com/2014/06/04/saints-and-traders-the-john-henry-fable-reconsidered/ https://www.ribbonfarm.com/2014/06/04/saints-and-traders-the... Entrepreneurs are the ultimate in "commerce" types, but beyond that, his key point was about bulletpoint #2, "exert prowess" vs. "compete". For most people, the point of effort is to get a reward; you are doing things now so that you can be the person you want to be at the end. You do your homework so you can graduate from a good college; you get a job so you can make money and live a good life; you get your MBA so you can get a promotion. For a small minority of people, this is reversed. Who you want to be is just a guidepost for what you should be doing. It's the doing that's the important part. The RibbonFarm article describes this as the finite vs. the infinite game; guardian types do things for the victory at the end, while commerce types set the victory conditions so they have a motive to keep doing things. So you went to school because the material was interesting, and graduation was a little side-note along the way. Or you program computers because that's what you want to do, and the salary just determines who you should program computers for. It's these folks who make the best entrepreneurs, simply because if you're playing to win, there are ways to win with less effort. This, BTW, is why so many entrepreneurs go on to found repeat companies, and why a few are (frankly) dicks after they've gotten rich. A lot of folks can't imagine founding a company after you already have F-U money; why put yourself through all those challenges if you don't have to? But for many entrepreneurs, the challenges are the point, the competition is the point, and they don't stop competing just because they've gotten rich. Sometimes this is expressed in healthy ways, like YCombinator after ViaWeb, Medium after Twitter after Blogger, git after Linux, Stripe after Auctomatic, etc. And sometimes it's expressed in unhealthy ways, like Khosla's feud with San Mateo county over his beachfront property. But the point is that these people aren't founding companies because they need money or success, it's because they love the thrill of competition.

ABCLAW 9y ago
Sure. This is a nice dichotomy. Until you add "living out of a car with your pregnant wife and 2 year old child" to the things you have organized your life to do. Humans are very adverse to ruin, and this has nothing to do with what they want to do or achieve. It has to do with what they do not want to experience or put others through.

Animats 9y ago

The odds of there being an exit worth anything to anyone other than a founder are small enough to not even worth considering. So if you go to work for a startup, you should demand substantially more money than with an established company. It didn't used to be that way. It used to be that the first dozen or so employees of a successful startup did very well, and the first hundred or so did OK.

Analemma_ 9y ago
> So if you go to work for a startup, you should demand substantially more money than with an established company. The problem is that most startups can't match, much less beat, established companies on salary, and they'll just turn you down. It's not even malice or greed on their part, it's just that they have a finite runway and a few tens of thousands of dollars a year on a single person can mean the difference between life and death. No one wants to say it out loud, but I'm starting to think that the startup economy requires people to accept the gamble of shit salary for a chance at the equity lottery. I decided not to play along with that and only work for megacorps, but it's up to each individual.
- marssaxman 9y ago
  The megacorp economy requires people to accept the likelihood of crushing institutionalized misery in exchange for a chance at being able to sustain a high salary long enough that the accumulated pile of cash after you finally quit will allow you to live a good enough life to make up for all that lost time and deferred happiness. I decided not to play along with that and will never again work for a megacorp, because life is short and I want to enjoy mine. It is, as you say, up to each individual!
  - metalliqaz 9y ago
    But then you have kids, and kids require stability. So you go to work for the man, because the kids are more important.
    - 9y ago

austenallred 9y ago

> Don't start a startup if you have family that depends on your income. This one deserves to be called out. You can make a perfectly respectable living starting a company (perhaps not saving as much), and if it doesn't work out and you're savvy you'll have a job in no-time. Especially if you're an engineer in the bay area.

t_fatus 9y ago
This is indeed true, but your family might suffer from what you're ready to give away when they are not. This is what I experience right now and it's not always easy.

brucephillips 9y ago

I agree with most of what you wrote, but I will say that people outside of the scene might not realize how common it is for founders to raise a couple million in seed funding, then pay themselves a market salary (I've seen as high as $350K for a CEO of a ~10 person company), removing most of the downside. I'm not saying this is advisable, but it's common.

mwseibel 9y ago

On the flip side - if you want to be a founder - try to start early. On balance you often have fewer constraints, lower expenses, and much more life flexibility.

tonyedgecombe 9y ago
Or start later because you are likely to have higher savings, better contacts and more experience.
- sah2ed 9y ago
  Starting later selects for a founding a different kind of company than the one a fresh graduate/drop out would found. I don't think there is a best time to be a founder; it's largely an individual thing.