4 ms·

Start a business, not a startup

62 points by pchristensen 19y ago

axod 19y ago
Can we get a spam filter :/
- kirubakaran 19y ago
  You mean, a recommendation engine?
- pius 19y ago
  yeah, it's called just reading the front page and not the newest links ;)
  - axod 19y ago
    3 stories on the front page are from 37signals. Essentially saying pretty much the same thing - "You're wrong", "You're wrong", and "You're even wronger". Just gets a little tiresome IMHO.
    - kirubakaran 19y ago
      This might help: Greasemonkey to blacklist sites. http://www.andrewfarmer.name/2008/04/greasemonkey.html http://www.andrewfarmer.name/2008/04/greasemonkey.html I like their posts so far and would not like to see them gone.
    - pchristensen 19y ago
      Yeah, imagine what the HN readers who have families and focus on profit must feel. The upvotes and comments mean that some (lots) of HN readers appreciate the discussion and the alternate viewpoint.
prakash 19y ago
For those of you interested in growing a business, read Paul Hawken's, "Growing a Business": http://www.amazon.com/dp/0671671642 http://www.amazon.com/dp/0671671642 For those of you arguing for or against, read Joel's Strategy Letter I: Ben and Jerry's vs. Amazon: http://www.joelonsoftware.com/articles/fog0000000056.html http://www.joelonsoftware.com/articles/fog0000000056.html I am with the 37signals guys on this one. DHH's startup school presentation was refreshing.
- Xichekolas 19y ago
  There is no need to 'pick a side' ... this should not be a flame war. Honestly, the 'argument' is over the best way to make millions. That is like arguing over whether it's better to 'have your cake' or 'eat it too'.
  - deleted 19y ago
    [deleted]
  - kirubakaran 19y ago
    It is like: A guy is told "hey get a supermodel gf!" and "hey get a friendly gf!", when the poor guy would go out with any girl given she is neither ugly nor psychotic.
    - dennykmiu 19y ago
      Correct, usually we go out with whoever says YES. And that's my own experience with startup. Everyone has a plan until they get into the mud.
      - justindz 19y ago
        That's why we need more female tech entrepreneurs. Mud wrestling is hawt. [with apologies to all women, ever, for making a joke at your expense]
      - jamesbritt 19y ago
        We need more talks by people who failed. I have to believe that many people have done "the same thing" as Paul Graham, 37 Signals, and other successful people, and still gone nowhere. I'm skeptical that people are really good at recognizing everything that they have done and the influence, good or bad, it had on their success, such that it ports well to other people and situations. Folks probably cannot do "the same thing" as other people, because these other people cannot themselves accurately tell you what they really did, rather what they ended up deciding in retrospect was important to recall.
hugh 19y ago
Y'know, I liked DHH's talk as much as anyone. It was a good talk, which provided an interesting and much-needed contrasting perspective. But haven't we had a sufficient number of reports, notes, videos, paraphrases, discussions, comparisons to other talks, rebuttals and repeats-of-the-same-thing-by-some-other-guy by now?
TrevorJ 19y ago
Well said.
- TrevorJ 19y ago
  Hmm, I see that my appreciation was ill-received :-) Ah well, I found the article to be helpful to me.
  - andreyf 19y ago
    Appreciation is better expressed with an upvote. The comment didn't add anything to the discussion, so it was spam. Although, I do agree that -5 is a bit harsh for simple spam. I'd suggest we try to keep those at -1 or 0.
    - acangiano 19y ago
      > The comment didn't add anything to the discussion, so it was spam. Can we please stop using the word "spam" for everything? Spam doesn't constitute anything online that you didn't appreciate. His comment wasn't enlightening nor insightful and as such many may consider it useless. But it's noise, not spam.
garbowza 19y ago
In the past week this has progressively turned into a "startups" vs "businesses" meme. Regardless of your definition, each is simply a different approach towards business, and as such, they will take different paths (VC funded, angel, self funded) towards their goals. There is no panacea and no single way to succeed, so articles like this that imply otherwise just sound a bit pretentious.
dkokelley 19y ago
I'm surprised I haven't seen more about this yet. Doesn't anyone realize that these smaller businesses are good for 37signals? Starting companies designed to change the world either succeed or die, and they tend to find out which very fast, which leaves a good number of them dead. Those dead ones have no reason to stay subscribed to campfire. 37signals will make more money on "lifestyle" businesses than startup businesses (if startup is defined as high technology, get rich or die trying). It's the long tail of business types. On the left, taller side, you have a few wildly successful companies (startup or otherwise). Just to the right of that, there are the moderately successful ones. They don't make as much, but there are more of them. To the right of that there extends a massive tail of "lifestyle" or similar businesses that didn't set out to change the world or make the founders billions - millions maybe, but not billions. The farther that long tail extends to the right, the larger the market potential for 37signals products. The point is that they don't make money on the hight of the graph (the success of the companies) but by the length of the graph (the number of companies). Bottom line: it's good business for 37signals to encourage more lifestyle companies. I don't blame them for it. In fact, it's actually pretty smart of them.
edw519 19y ago
I think one of the main reasons all this "37 Signals/DHH/Make Money Now" talk has been so well received is because it's a message ripe for this community. I just spent my first weekend ever in the Silicon Valley and was incredibly impressed with all the smart personable people working on and talking about cool things. I was also perplexed at how many of them were having trouble making money, and the general lack of customer facing skills that we take for granted in other parts of the U.S. Sure, it's nice to dream of hitting a grand slam, but it's also nice to eat while you're dreaming. You CAN have it both ways; it's just so easy to get caught up in the hype of the former that we forget about the latter. Thanks, 37 Signals, for helping put the bus back in the middle of the road where it belongs.
- attack 19y ago
  Yeah you can have it both ways, it's called getting a regular job and having some stock options.
  - edw519 19y ago
    There's lots of ways. You can also write a great app that people want, get them to pay for it, and scale, scale, scale. With great tech, nice financials, and growth, you may be surprised at the investors who seek you, not the other way around.
attack 19y ago
Starting a business sucks. Failure rates are often just as high, no big reward to look forward to, your peers who work a fourth as hard in regular jobs usually get more money. Unless you're already rich, starting a business is the worst of everything.
andreyf 19y ago
I'm guessing this is coming off the discussion DHH and PG had in another thread and... wow. I've never seen such intelligent people waste so much time arguing word choice. What a waste of time. Different kind of "entrepreneurial enterprises" can be successful in different ways - and most of us would be happy with either kind of success. So let's be specific as to what has the highest probability of success. PG advocates iterative design throughout the product - he mentions it repeatedly in his essays and talks, that startups should start somewhere which looks good and change their ideas "en route". It seems to me that DHH might call this "trying to give turds wings" - instead, he advocates starting with an idea which will have a strong market to start with, like Basecamp. Then you can work a productive 4-day week working on "objectives [which] are reasonably clear". PG would argue that most of the time, the objectives should never be too clear - in the sense that we should keep an flexible mindset about what we are building. I guess the unknowns we don't agree on are: 1) How many "obvious" market niches are there, where at least 2,000 users will pay you $40/month? In his SS2008 talk, DHH hypothesizes that there are many, but as far as I can tell, it's just a hunch. 2) What is the probability of hitting one of those niches, and what is the probability of getting acquired/going IPO using "iterative design" to traverse the space of ideas? I don't think there are enough data available to really say. Since there aren't enough data to make a call statistically, both PG and DHH argue from their experiences - which differ. Both are right to claim that you can be successful either way, so I guess the best way to make a call is based on an individual's personality.
- run4yourlives 19y ago
  Take your agnostic ideas away from out religious flame war! :) Just kidding. I don't think its fair to say that DHH is pulling markets out of his butt though. They service the fortune 5M, so obviously their own customers are living proof that the market is bigger than you'll ever need it to be. As well, $40 a month is less than most people pay for a cell phone. That's a pretty low bar. To your second point, given that there exists a "fortune 5M" and there exists a lot fewer "big mammoths", I think there's plenty of data if you care to see it.
menloparkbum 19y ago
A company that sells software to small businesses suggests you start a small business rather than a startup? Call me cynical, but this seems like SEO marketing.
paul 19y ago
"Suggesting startups — specifically tech startups — don’t need to look for revenue opportunities now is akin to spoiling a child and shielding them from the outside world: They’re far less prepared when they eventually have to leave the house for the first time." That's why I make my daughter pay her own way. Sure she's only three years old, but she's already able to work 10 hour days at the factory, which makes her way more profitable than most other three year olds. Best of all, we're not spoiling her, and you can be sure that we won't waste money on frivolous "startup" expenses, such as school.
sabat 19y ago
Enough already with the divisive posts.
hooande 19y ago
I'm still waiting to hear the name of the 'startup' that had a wildly successful product and failed to make any money. The key of course will be the definition of "wildly successful". We could use twitter as an example. Is there any one on hackernews that believes twitter won't make any money when they finally decide on a revenue model? Anyone who is willing to say publicly that 37signals will be worth more as a business than twitter in 12 months? Just to be clear: if your product is very popular, finding a way to make money will not be difficult. You might not make a lot of money (but DHH says that's ok right?) and you might have to sustain a huge level of traffic to stay in business, but you won't go broke.
- skmurphy 19y ago
  I would take that bet. 37 Signals > Twitter in 12, 24 and 36 months. 37 Signals has real businesses paying monthly for a service intrinsic to how they make money. There are clearly scenarios where Twitter can be more successful, but if I had to bet it would be on 37 signals. And I don't user their service but I do use Twitter.
galactus 19y ago
Again, DHH says "what you can't say" on HN ;) http://www.paulgraham.com/say.html http://www.paulgraham.com/say.html

62 points by pchristensen 19y ago

axod 19y ago

Can we get a spam filter :/

kirubakaran 19y ago
You mean, a recommendation engine?
pius 19y ago
yeah, it's called just reading the front page and not the newest links ;)
- axod 19y ago
  3 stories on the front page are from 37signals. Essentially saying pretty much the same thing - "You're wrong", "You're wrong", and "You're even wronger". Just gets a little tiresome IMHO.
  - kirubakaran 19y ago
    This might help: Greasemonkey to blacklist sites. http://www.andrewfarmer.name/2008/04/greasemonkey.html http://www.andrewfarmer.name/2008/04/greasemonkey.html I like their posts so far and would not like to see them gone.
  - pchristensen 19y ago
    Yeah, imagine what the HN readers who have families and focus on profit must feel. The upvotes and comments mean that some (lots) of HN readers appreciate the discussion and the alternate viewpoint.

prakash 19y ago

For those of you interested in growing a business, read Paul Hawken's, "Growing a Business": http://www.amazon.com/dp/0671671642 http://www.amazon.com/dp/0671671642 For those of you arguing for or against, read Joel's Strategy Letter I: Ben and Jerry's vs. Amazon: http://www.joelonsoftware.com/articles/fog0000000056.html http://www.joelonsoftware.com/articles/fog0000000056.html I am with the 37signals guys on this one. DHH's startup school presentation was refreshing.

Xichekolas 19y ago
There is no need to 'pick a side' ... this should not be a flame war. Honestly, the 'argument' is over the best way to make millions. That is like arguing over whether it's better to 'have your cake' or 'eat it too'.
- deleted 19y ago
  [deleted]
- kirubakaran 19y ago
  It is like: A guy is told "hey get a supermodel gf!" and "hey get a friendly gf!", when the poor guy would go out with any girl given she is neither ugly nor psychotic.
  - dennykmiu 19y ago
    Correct, usually we go out with whoever says YES. And that's my own experience with startup. Everyone has a plan until they get into the mud.
    - justindz 19y ago
      That's why we need more female tech entrepreneurs. Mud wrestling is hawt. [with apologies to all women, ever, for making a joke at your expense]
    - jamesbritt 19y ago
      We need more talks by people who failed. I have to believe that many people have done "the same thing" as Paul Graham, 37 Signals, and other successful people, and still gone nowhere. I'm skeptical that people are really good at recognizing everything that they have done and the influence, good or bad, it had on their success, such that it ports well to other people and situations. Folks probably cannot do "the same thing" as other people, because these other people cannot themselves accurately tell you what they really did, rather what they ended up deciding in retrospect was important to recall.

hugh 19y ago

Y'know, I liked DHH's talk as much as anyone. It was a good talk, which provided an interesting and much-needed contrasting perspective. But haven't we had a sufficient number of reports, notes, videos, paraphrases, discussions, comparisons to other talks, rebuttals and repeats-of-the-same-thing-by-some-other-guy by now?

TrevorJ 19y ago

Well said.

TrevorJ 19y ago
Hmm, I see that my appreciation was ill-received :-) Ah well, I found the article to be helpful to me.
- andreyf 19y ago
  Appreciation is better expressed with an upvote. The comment didn't add anything to the discussion, so it was spam. Although, I do agree that -5 is a bit harsh for simple spam. I'd suggest we try to keep those at -1 or 0.
  - acangiano 19y ago
    > The comment didn't add anything to the discussion, so it was spam. Can we please stop using the word "spam" for everything? Spam doesn't constitute anything online that you didn't appreciate. His comment wasn't enlightening nor insightful and as such many may consider it useless. But it's noise, not spam.

garbowza 19y ago

In the past week this has progressively turned into a "startups" vs "businesses" meme. Regardless of your definition, each is simply a different approach towards business, and as such, they will take different paths (VC funded, angel, self funded) towards their goals. There is no panacea and no single way to succeed, so articles like this that imply otherwise just sound a bit pretentious.

dkokelley 19y ago

I'm surprised I haven't seen more about this yet. Doesn't anyone realize that these smaller businesses are good for 37signals? Starting companies designed to change the world either succeed or die, and they tend to find out which very fast, which leaves a good number of them dead. Those dead ones have no reason to stay subscribed to campfire. 37signals will make more money on "lifestyle" businesses than startup businesses (if startup is defined as high technology, get rich or die trying). It's the long tail of business types. On the left, taller side, you have a few wildly successful companies (startup or otherwise). Just to the right of that, there are the moderately successful ones. They don't make as much, but there are more of them. To the right of that there extends a massive tail of "lifestyle" or similar businesses that didn't set out to change the world or make the founders billions - millions maybe, but not billions. The farther that long tail extends to the right, the larger the market potential for 37signals products. The point is that they don't make money on the hight of the graph (the success of the companies) but by the length of the graph (the number of companies). Bottom line: it's good business for 37signals to encourage more lifestyle companies. I don't blame them for it. In fact, it's actually pretty smart of them.

edw519 19y ago

I think one of the main reasons all this "37 Signals/DHH/Make Money Now" talk has been so well received is because it's a message ripe for this community. I just spent my first weekend ever in the Silicon Valley and was incredibly impressed with all the smart personable people working on and talking about cool things. I was also perplexed at how many of them were having trouble making money, and the general lack of customer facing skills that we take for granted in other parts of the U.S. Sure, it's nice to dream of hitting a grand slam, but it's also nice to eat while you're dreaming. You CAN have it both ways; it's just so easy to get caught up in the hype of the former that we forget about the latter. Thanks, 37 Signals, for helping put the bus back in the middle of the road where it belongs.

attack 19y ago
Yeah you can have it both ways, it's called getting a regular job and having some stock options.
- edw519 19y ago
  There's lots of ways. You can also write a great app that people want, get them to pay for it, and scale, scale, scale. With great tech, nice financials, and growth, you may be surprised at the investors who seek you, not the other way around.

attack 19y ago

Starting a business sucks. Failure rates are often just as high, no big reward to look forward to, your peers who work a fourth as hard in regular jobs usually get more money. Unless you're already rich, starting a business is the worst of everything.

andreyf 19y ago

I'm guessing this is coming off the discussion DHH and PG had in another thread and... wow. I've never seen such intelligent people waste so much time arguing word choice. What a waste of time. Different kind of "entrepreneurial enterprises" can be successful in different ways - and most of us would be happy with either kind of success. So let's be specific as to what has the highest probability of success. PG advocates iterative design throughout the product - he mentions it repeatedly in his essays and talks, that startups should start somewhere which looks good and change their ideas "en route". It seems to me that DHH might call this "trying to give turds wings" - instead, he advocates starting with an idea which will have a strong market to start with, like Basecamp. Then you can work a productive 4-day week working on "objectives [which] are reasonably clear". PG would argue that most of the time, the objectives should never be too clear - in the sense that we should keep an flexible mindset about what we are building. I guess the unknowns we don't agree on are: 1) How many "obvious" market niches are there, where at least 2,000 users will pay you $40/month? In his SS2008 talk, DHH hypothesizes that there are many, but as far as I can tell, it's just a hunch. 2) What is the probability of hitting one of those niches, and what is the probability of getting acquired/going IPO using "iterative design" to traverse the space of ideas? I don't think there are enough data available to really say. Since there aren't enough data to make a call statistically, both PG and DHH argue from their experiences - which differ. Both are right to claim that you can be successful either way, so I guess the best way to make a call is based on an individual's personality.

run4yourlives 19y ago
Take your agnostic ideas away from out religious flame war! :) Just kidding. I don't think its fair to say that DHH is pulling markets out of his butt though. They service the fortune 5M, so obviously their own customers are living proof that the market is bigger than you'll ever need it to be. As well, $40 a month is less than most people pay for a cell phone. That's a pretty low bar. To your second point, given that there exists a "fortune 5M" and there exists a lot fewer "big mammoths", I think there's plenty of data if you care to see it.

menloparkbum 19y ago

A company that sells software to small businesses suggests you start a small business rather than a startup? Call me cynical, but this seems like SEO marketing.

paul 19y ago

"Suggesting startups — specifically tech startups — don’t need to look for revenue opportunities now is akin to spoiling a child and shielding them from the outside world: They’re far less prepared when they eventually have to leave the house for the first time." That's why I make my daughter pay her own way. Sure she's only three years old, but she's already able to work 10 hour days at the factory, which makes her way more profitable than most other three year olds. Best of all, we're not spoiling her, and you can be sure that we won't waste money on frivolous "startup" expenses, such as school.

sabat 19y ago

Enough already with the divisive posts.

hooande 19y ago

I'm still waiting to hear the name of the 'startup' that had a wildly successful product and failed to make any money. The key of course will be the definition of "wildly successful". We could use twitter as an example. Is there any one on hackernews that believes twitter won't make any money when they finally decide on a revenue model? Anyone who is willing to say publicly that 37signals will be worth more as a business than twitter in 12 months? Just to be clear: if your product is very popular, finding a way to make money will not be difficult. You might not make a lot of money (but DHH says that's ok right?) and you might have to sustain a huge level of traffic to stay in business, but you won't go broke.

skmurphy 19y ago
I would take that bet. 37 Signals > Twitter in 12, 24 and 36 months. 37 Signals has real businesses paying monthly for a service intrinsic to how they make money. There are clearly scenarios where Twitter can be more successful, but if I had to bet it would be on 37 signals. And I don't user their service but I do use Twitter.

galactus 19y ago

Again, DHH says "what you can't say" on HN ;) http://www.paulgraham.com/say.html http://www.paulgraham.com/say.html