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The problem with startups has always been a fundamental one, and not really one you can change without redefining what a startup actually is - people try way to

The problem with startups has always been a fundamental one, and not really one you can change without redefining what a startup actually is - people try way too hard to start them. Let me explain; it's reported very very often on YC that 90% of startups fail, and while a lot of these points in the article are disguised as separate ideas, they're all part of the same problem being that people want to make something from nothing, hence why it is called a startup. Traditional businesses begin by pivoting off an exiting business or product, whereby if you're a chemist working for DuPont and develop a new chemical, they might make a subsidiary to produce that. That process is way easier, the money and infrastructure is already there, and everyone is already neatly on board. Contrast this with a startup. You're probably young, lacking financial and networking support, education, and many other things. You want to make a product the world has likely never seen before, completely from scratch. Well, of course your management is going to be shit. Of course you're going to find shit employees. Of course it's unlikely to succeed. This article was completely unnecessary because everyone should know by now what a startup entails, and that it is fundamentally unstable, but that doesn't mean it's not important as a venture and concept.

Swizec 8y ago
> This article was completely unnecessary because everyone should know by now what a startup entails, and that it is fundamentally unstable, but that doesn't mean it's not important as a venture and concept. Strong disagree. Living in San Francisco I often hear the phrase “I work at a small startup, we have just 100 employees” That is significantly different than what you describe which is more of a 5 to 20 people stage. By the time you have 100+ employees and are hitting proper growth curves, your management can no longer be shit, there has to be mentoring, and there’s little room for shit employees.
- ihuman 8y ago
  > I work at a small startup, we have just 100 employees Is that even a startup anymore? To me, any company of that size is just a normal company, not a startup.
  - detaro 8y ago
    Depends if you subscribe to the "company just starting out" definition of "startup", or the "burning money for hockey-stick growth" definition.
  - bradlys 8y ago
    A lot of these are still taking venture money and require it to exist. They're usually not profitable or have very low amounts of profit (such a low amount that it wouldn't allow them to chase high growth). Only way for the business to sustain would be to axe a lot of staff but then they wouldn't be able to improve their product. (Thus they'd get outdated and overtaken by the competition eventually) So they're still startups because they're looking for that hockey stick growth, don't have a sustainable business model (one that doesn't require consistent innovation), and require VC money to keep going. Plenty of startups here in the bay with well over 100 employees.
aaavl2821 8y ago
In non-tech industries big companies actually have a lot of trouble innovating, or driving resources and infrastructure to new initiatives. Startups exist to overcome this lack of maneuverability at big companies. Often the entrepreneurs are seasoned execs from these big companies who can't realize their vision under big company constraints Biopharma is a perfect example. It represents over 20% of venture funding. Most entrepreneurs are 50+ years old. Big companies get orders of magnitude lower return on r&d investment than VC backed companies. And the returns have actually been better than tech startups in the last few years
- slededit 8y ago
  An incumbent's return will be weighed down by lost share from their legacy business. Colloquially known as the innovators dilemma. Even if they overcome it they will still have lower returns than a startup who steals 100% of their market share from incumbents.
sonnyblarney 8y ago
"That process is way easier, the money and infrastructure is already there, and everyone is already neatly on board." This is rare. Most companies do not have processes for change and innovation, and the only way anything gets done is if the CEO pushes hard for it. Those things are far and few between. " Well, of course your management is going to be shit." It's only 'shit' if you assume managements job is to provide clear and detailed plans on how it's going to work out. If you grasp that startups have inherent ambiguity, and that all systems have to be highly adaptive and you'll be 'micro-pivoting' every week, well, then management may not seem so bad, depending on. Good, thoughtful, professional managers might often fail miserably at a startup. It takes a little bit of experience actually to recognize what makes good leadership in a dynamic situation, because often it's counterintuitive.

Swizec 8y ago

> This article was completely unnecessary because everyone should know by now what a startup entails, and that it is fundamentally unstable, but that doesn't mean it's not important as a venture and concept. Strong disagree. Living in San Francisco I often hear the phrase “I work at a small startup, we have just 100 employees” That is significantly different than what you describe which is more of a 5 to 20 people stage. By the time you have 100+ employees and are hitting proper growth curves, your management can no longer be shit, there has to be mentoring, and there’s little room for shit employees.

ihuman 8y ago
> I work at a small startup, we have just 100 employees Is that even a startup anymore? To me, any company of that size is just a normal company, not a startup.
- detaro 8y ago
  Depends if you subscribe to the "company just starting out" definition of "startup", or the "burning money for hockey-stick growth" definition.
- bradlys 8y ago
  A lot of these are still taking venture money and require it to exist. They're usually not profitable or have very low amounts of profit (such a low amount that it wouldn't allow them to chase high growth). Only way for the business to sustain would be to axe a lot of staff but then they wouldn't be able to improve their product. (Thus they'd get outdated and overtaken by the competition eventually) So they're still startups because they're looking for that hockey stick growth, don't have a sustainable business model (one that doesn't require consistent innovation), and require VC money to keep going. Plenty of startups here in the bay with well over 100 employees.

aaavl2821 8y ago

In non-tech industries big companies actually have a lot of trouble innovating, or driving resources and infrastructure to new initiatives. Startups exist to overcome this lack of maneuverability at big companies. Often the entrepreneurs are seasoned execs from these big companies who can't realize their vision under big company constraints Biopharma is a perfect example. It represents over 20% of venture funding. Most entrepreneurs are 50+ years old. Big companies get orders of magnitude lower return on r&d investment than VC backed companies. And the returns have actually been better than tech startups in the last few years

slededit 8y ago
An incumbent's return will be weighed down by lost share from their legacy business. Colloquially known as the innovators dilemma. Even if they overcome it they will still have lower returns than a startup who steals 100% of their market share from incumbents.

sonnyblarney 8y ago

"That process is way easier, the money and infrastructure is already there, and everyone is already neatly on board." This is rare. Most companies do not have processes for change and innovation, and the only way anything gets done is if the CEO pushes hard for it. Those things are far and few between. " Well, of course your management is going to be shit." It's only 'shit' if you assume managements job is to provide clear and detailed plans on how it's going to work out. If you grasp that startups have inherent ambiguity, and that all systems have to be highly adaptive and you'll be 'micro-pivoting' every week, well, then management may not seem so bad, depending on. Good, thoughtful, professional managers might often fail miserably at a startup. It takes a little bit of experience actually to recognize what makes good leadership in a dynamic situation, because often it's counterintuitive.