5 ms·

The credo of a tycoon of old (think JPMorgan or Vanderbilt) was to build an empire. His own empire, in his lifetime. Tycoons of today have build their own empi

by 1gor 18y ago

The credo of a tycoon of old (think JPMorgan or Vanderbilt) was to build an empire. His own empire, in his lifetime. Tycoons of today have build their own empires (Microsoft, Google, Apple, Oracle etc.), same principle, same philosophy. When and why did it happen that flippers took over this market's mindshare? A young entrepreneur today dreams of selling out to Yahoo/Google/Microsoft as soon as possible. Quite often even before his business is profitable. Hey, if you have a growing business that is profitable, you should keep it for yourself. Many people with money I know (so-called 'professional investors') dream of having such a business in their possession. Such business is not listed, so you cannot buy it on the market. What you can buy on the market (what is listed) normally grows slower and is over-researched and over-valued. But of course, if you focus on building the cash flow for yourself, and keeping the option of striking it very big at some time in the future for yourself, then the whole industry of undervalued option-buyers (VCs, angels etc.) will be left without work. So the propaganda is put to work... When is my next funding round?.. A round of what? When is your next client subscribing to your app - that should be the question. DHH thrives on being controversial, but the point he makes here is simply a well forgotten truth about entrepreneurship. Building your business slow and taking full credit for it for yourself used to be the norm before the flipper ethics kicked-in.

dissenter 18y ago
Times change, and America is much more corporate than it used to be. When a market becomes saturated innovative people will look elsewhere to make their mark. I don't want to spend my life managing a business. I want to make some money and do something else. I have no doubt that I would make a fitting CEO. But the hours are long and the work is unappealing. There aren't any CEOs I want to be like. Apple's CEO, maybe, but what price does he pay to do what he does? I really get the feeling that anyone ('anyone') could be a CEO these days. I feel like the CEO is a reward that keeps everyone else on the corporate pyramid. Maybe I'm wrong. I could be. But I haven't seen the argument that debunks that idea. (And I have seen a lot of instances of CEOs who didn't deserve what they received.) The money is a silly motivation. What am I going to do with $6 billion that I couldn't do with $6 million? Spend conspicuously? Raise a family of layabouts? I would much rather become financially independent and begin doing the work I want to, when and where I want to. I like to make things, and I like to talk to creative people. I like to do small things really, really well. And I don't like to spend my time dealing with red tape. I feel like I have an obligation to society, but that I don't have to fulfill it by spending my time managing a large corporation. There a lots of other less flashy positions desperate for someone to do a really great job. I want to do something small perfectly, not something huge good enough. Does that make sense?
- yters 18y ago
  Are there simpler and more dependable ways of doing this than creating a startup?
  - jyu 18y ago
    If you want to solve the money problem, there are a bunch of ways. Creating a startup is hard work and is neither simple nor dependable. For hackers, do IT consulting. For math guys, do trading. For everyone else, do finance. You get the idea.
    - attack 18y ago
      Those don't "solve" the problem. Those don't even give you a wage as good as many of your peers.
      - yters 18y ago
        Another route is to find a place where the cost of living is much lower for a comparable standard of living. According to my research, some more underdeveloped countries seem to be such the place: http://news.ycombinator.com/item?id=122341 http://news.ycombinator.com/item?id=122341 Of course you might say the cost of living won't always stay so low, but if it goes up, then that means the underdeveloped countries are becoming more productive, and the world economy is becoming better. If your interest comes from investments in the world economy, then that means you should be earning more from your investments.
- inovica 18y ago
  I have created a good growing company that leaves me financially independent anyway - on a monthly basis at least - and I can continue to do other things also. I think this attitude of short-term gain misses out that success is a journey and not a destination. Your motivation still IS money - most of the successful people I know achieved the money because they loved what they are doing and the by-product was a financial reward
jmzachary 18y ago
This is a good discussion. The flipper mindset is probably localized to software tech, and maybe that mindset is required. The reason is the constant change of technology, the shifting attention span of web users, and the maturity of the field make it harder to build a "normal" sustainable business. So, most people take the path with less friction: build something that gets enough attention to sell, profits optional. Lack of technical depth and, hence, barriers to competition are factors, too.
- Xichekolas 18y ago
  I don't think the flipper mindset is unique to software. Day traders flip stocks, sometimes in seconds, and a lot of people in Miami (and elsewhere) just took a bath trying to flip condos (buying them in big blocks and then trying to unload them on out-of-towners for ridiculous prices). The general get-rich-quick scheme exists in every business. I think the best software is built by people who are not looking to flip. Linus has been with his baby for over a decade. Richard Stallman even longer. Bill Gates had a lot of trouble giving up his software products, and Marc Andreessen said yesterday that his favorite part was building out the company... being a startup was just how he got to build companies. I think people looking to pump and dump will just do the minimum it takes to get by, and it shows.
asdflkj 18y ago
"Flipper ethics"? Yikes. There is a special flavor of bile that comes from bootstrapping types. I wonder if it's caused by dread of their own lack of connections to investors, or of their lack of expertise in this area, or what. There are actually very good reasons for why "flipping" is good for everyone. It's obviously good for the founders (notwithstanding DHH's puzzling story of a guy who was forced to switch from a mac to a PC after his startup was acquired). And the acquirers take a rational risk by purchasing a startup. At the point of acquisition, a startup may only have a 1/100 chance of being the next Facebook, but it will be acquired for 1/1000th the price of Facebook. 100 of those acquisitions, if you're Google, and what you have is a Facebook for tenth of the price (and a whole pile of other good stuff). In fact, if you don't want to take too much risk, going for acquisition is better than going for revenue on the scale of 37signals. It even seems dishonest that he compares the 37signals way and the IPO way in terms of risk, completely ignoring the acquisition way. Also, I don't think the average hacker wants to be a "tycoon". He probably just wants to solve the money problem once and for all.

by 1gor 18y ago

dissenter 18y ago

Times change, and America is much more corporate than it used to be. When a market becomes saturated innovative people will look elsewhere to make their mark. I don't want to spend my life managing a business. I want to make some money and do something else. I have no doubt that I would make a fitting CEO. But the hours are long and the work is unappealing. There aren't any CEOs I want to be like. Apple's CEO, maybe, but what price does he pay to do what he does? I really get the feeling that anyone ('anyone') could be a CEO these days. I feel like the CEO is a reward that keeps everyone else on the corporate pyramid. Maybe I'm wrong. I could be. But I haven't seen the argument that debunks that idea. (And I have seen a lot of instances of CEOs who didn't deserve what they received.) The money is a silly motivation. What am I going to do with $6 billion that I couldn't do with $6 million? Spend conspicuously? Raise a family of layabouts? I would much rather become financially independent and begin doing the work I want to, when and where I want to. I like to make things, and I like to talk to creative people. I like to do small things really, really well. And I don't like to spend my time dealing with red tape. I feel like I have an obligation to society, but that I don't have to fulfill it by spending my time managing a large corporation. There a lots of other less flashy positions desperate for someone to do a really great job. I want to do something small perfectly, not something huge good enough. Does that make sense?

yters 18y ago
Are there simpler and more dependable ways of doing this than creating a startup?
- jyu 18y ago
  If you want to solve the money problem, there are a bunch of ways. Creating a startup is hard work and is neither simple nor dependable. For hackers, do IT consulting. For math guys, do trading. For everyone else, do finance. You get the idea.
  - attack 18y ago
    Those don't "solve" the problem. Those don't even give you a wage as good as many of your peers.
    - yters 18y ago
      Another route is to find a place where the cost of living is much lower for a comparable standard of living. According to my research, some more underdeveloped countries seem to be such the place: http://news.ycombinator.com/item?id=122341 http://news.ycombinator.com/item?id=122341 Of course you might say the cost of living won't always stay so low, but if it goes up, then that means the underdeveloped countries are becoming more productive, and the world economy is becoming better. If your interest comes from investments in the world economy, then that means you should be earning more from your investments.
inovica 18y ago
I have created a good growing company that leaves me financially independent anyway - on a monthly basis at least - and I can continue to do other things also. I think this attitude of short-term gain misses out that success is a journey and not a destination. Your motivation still IS money - most of the successful people I know achieved the money because they loved what they are doing and the by-product was a financial reward

jmzachary 18y ago

This is a good discussion. The flipper mindset is probably localized to software tech, and maybe that mindset is required. The reason is the constant change of technology, the shifting attention span of web users, and the maturity of the field make it harder to build a "normal" sustainable business. So, most people take the path with less friction: build something that gets enough attention to sell, profits optional. Lack of technical depth and, hence, barriers to competition are factors, too.

Xichekolas 18y ago
I don't think the flipper mindset is unique to software. Day traders flip stocks, sometimes in seconds, and a lot of people in Miami (and elsewhere) just took a bath trying to flip condos (buying them in big blocks and then trying to unload them on out-of-towners for ridiculous prices). The general get-rich-quick scheme exists in every business. I think the best software is built by people who are not looking to flip. Linus has been with his baby for over a decade. Richard Stallman even longer. Bill Gates had a lot of trouble giving up his software products, and Marc Andreessen said yesterday that his favorite part was building out the company... being a startup was just how he got to build companies. I think people looking to pump and dump will just do the minimum it takes to get by, and it shows.

asdflkj 18y ago

"Flipper ethics"? Yikes. There is a special flavor of bile that comes from bootstrapping types. I wonder if it's caused by dread of their own lack of connections to investors, or of their lack of expertise in this area, or what. There are actually very good reasons for why "flipping" is good for everyone. It's obviously good for the founders (notwithstanding DHH's puzzling story of a guy who was forced to switch from a mac to a PC after his startup was acquired). And the acquirers take a rational risk by purchasing a startup. At the point of acquisition, a startup may only have a 1/100 chance of being the next Facebook, but it will be acquired for 1/1000th the price of Facebook. 100 of those acquisitions, if you're Google, and what you have is a Facebook for tenth of the price (and a whole pile of other good stuff). In fact, if you don't want to take too much risk, going for acquisition is better than going for revenue on the scale of 37signals. It even seems dishonest that he compares the 37signals way and the IPO way in terms of risk, completely ignoring the acquisition way. Also, I don't think the average hacker wants to be a "tycoon". He probably just wants to solve the money problem once and for all.