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Hard Startups

• zwieback 7y ago
  > for the most part talented people want to work on something they find meaningful Is this really true? I would hope so but apparently the definition of meaningful is different for everyone. From my point of view funding and talent has been allocated poorly in recent years.
  • ssharp 7y ago
    "Meaningful" is definitely a range and may not even entail just the company they work for. For example, if you work for a company's whose product you may not be overly passionate for, but your job is satisfactory to you and pays you well so your family can have a nice, comfortable life, I'd consider that meaningful. There is also a distinction between "meaningful" and "most meaningful". If you believe enough if your company's end product and results, that will result in a certain level of meaningfulness for you, even if you aren't solving world hunger or curing cancer.
  • andreilys 7y ago
    > for the most part talented people want to work on something they find meaningful Which in most cases is not economically viable so you have talent that gravitates towards maximizing total comp to achieve financial independence
  • fossuser 7y ago
    I think most people are pretty good at retroactively creating a narrative around whatever they find themselves doing to imbue it with meaning and purpose. I think most people do want to work on something meaningful, but few start with the purpose and then pursue that. Then given the difficulty of actually getting into what you want (either access restrictions via things like admission, the randomness of technical interviews, or the thing you want not being very lucrative) - you're better off doing what you can until you have the money to be free. Unless you can tolerate lots of risk, don't worry that much about having a family, or have some existing family wealth.
• dickjocke 7y ago
  This seems very related to the blog post that introduced me to Paul Graham, and in turn Hacker News, about a phenomenon he calls Schlep Blindness. http://www.paulgraham.com/schlep.html http://www.paulgraham.com/schlep.html I would be curious what people think today's most obvious schelps or hard problems are? Nuclear Fission as in OPs post is cool, but Im thinking more along the lines of something a team of competent developers could do.
  • chubot 7y ago
    I feel like one of the hardest problems in tech is making search engine that credibly competes with Google. It's not just because the tech is hard (and it is), but also because they have some of the strongest network effects, user lock-in, and distribution deals. It sounds almost dumb/crazy for people to try, but there is a newer effort from Europe that I saw on HN recently (i.e. they've been working for ~5 years and are just starting to publicize). And I think PG has mentioned it a few times -- i.e. encouraged people to take on Google :) BTW I think "schleps" are different than "hard startups". I think schleps are about raw effort where you kind of "know" you'll succeed at the end. It seems like most companies are hard because you don't know if what you're building will succeed, even if you build it. edit: "new" search company is cliqz: https://news.ycombinator.com/item?id=21724191 https://news.ycombinator.com/item?id=21724191
    • chris_f 7y ago
      "It sounds almost dumb/crazy for people to try..." Timely comment. I hesitantly shared a "Show HN" this morning for an early search engine I have been working on. I almost feel silly when I tell people about it because I realize it is such a crazy idea. It's obviously nowhere even close to being a competitor to anyone today, but I figure why not. I have been lucky with two prior highly vertical startups, so I decided that my next project would involve asymmetric risk.
      • jacquesm 7y ago
        You should definitely connect with Chuck McManis. https://news.ycombinator.com/user?id=ChuckMcM https://news.ycombinator.com/user?id=ChuckMcM
• kristiandupont 7y ago
  Before I started Submotion, I did a fairly thorough analysis of what kind of startup I wanted to create. I decided that I wanted to create something that - was B2B. Consumers are fickle, things can explode but they can also go out of style just as fast. It's more sexy and makes for better smalltalk but my assessment is that they are much more difficult to grow predictably. - targets SME's. I am somewhat extroverted for a developer, but I will never be the type who goes golfing with CEO's to close deals. Million-dollar deals is not my game, I will go for higher numbers of small ones. - targets tech-savy businesses. Because I speak their language, I understand their needs and I stay in the loop of their world out of curiosity, not because I need to keep up with my industry. The problem is neither hard nor easy, by the definitions of this article. It's deterministic; there's just a bunch of work to be done. I'm doing it. It's slowly evolving. This is definitely a reflection of me being 40 when I started it, it's somewhat boring but that suits me perfectly :-)
  • rogerkirkness 7y ago
    I agree with this, except we decided on closing CEO deals, we sucked at SEO by comparison.
    • Ididntdothis 7y ago
      If you are comfortable with this approach you should have a great future ahead. Most engineers would hate that approach although that’s where the money is.
    • kristiandupont 7y ago
      Oh I am not doing any SEO either. I am still writing emails and making calls, just not the kind that start a 6-month long sales process ending with cigars :-)
      • hef19898 7y ago
        Would you mind if we have a short chat about your sales approach? This is something I am still struggling with a little bit!
• diego 7y ago
  I get his point, but it’s not expressed well. It’s not “easier to succeed.” The chart effort/time has a different shape. Upfront effort is tremendous, and if you can get past that then it gets easier.
• pjdemers 7y ago
  The problem with startups building hard tech is it takes a long time to fail. Failures that take decades doesn't work in the startup model. Image working on a fusion reactor. It might take 25 years to fail. The failure may not be that your idea doesn't work, but because some other kind of reactor comes along that is a better business (ie, cheaper). At this point, you are now a world class expert at a technology that is not economically viable. But, you can't transfer that knowledge, or at least most of it. You are also now 50 years old, give or take. You don't have 25 years to work on the next hard problem. You certainly don't have time to fail again. Back in the day when lots of people worked on hard technology, they were paid well to work on the problem; their life time earnings did not depend on creating a viable business. Because of that, they usually earned a pension, too. Because if you failed, you could retire comfortably, or, at least have enough to choose a second career that didn't pay as well. That model doesn't work for startups.
  • shoo 7y ago
    > At this point, you are now a world class expert at a technology that is not economically viable. But, you can't transfer that knowledge, or at least most of it. You are also now 50 years old, give or take. > Back in the day when lots of people worked on hard technology, they were paid well to work on the problem is the model closer to "tenured research scientist" rather than "startup founder or employee"?
    • jedberg 7y ago
      It's 1/2 way between. Back in the day all the big "tech" firms had long term R&D. You could spend years working on tech with no commercial viability as long as you could keep making better demos. You were most likely an employee with a PhD and a pension. But then wall street started demanding quarterly growth and they all cut their R&D departments. Think Bell Labs or Xerox PARC.
      • aogl 7y ago
        I wonder how different interviews were back then by comparison.
• sp527 7y ago
  It’s odd (read: motivated by self-interest) that he didn’t make any attempt to establish the failure rate of these startups and the distribution of outcomes for employees. Further, he didn’t even argue for a referendum on equity comp. He’s blatantly peddling the same broken model of “sell them your fugazzi so they can’t tell their talent is being plundered for (founder/investor) economic gain”. It’s downright insulting. I’d like to read Altman’s thoughts on making the cap table transparent to startup employees. I’m sure it’d be a riot. So why is Altman saying any of this? Because he relies on the portfolio model. He doesn’t care if 99 companies fail and the employees within them end up with squat as long as the 100th is an earth-shattering home run. And he needs the world to start taking more massive risks on YC’s behalf, so they can keep making piles of bank. This is the incentive structure dictating EVERY single VC’s calculus. No one should ever listen to them without understanding this. Incentives. Incentives. Incentives. The “mission” doesn’t matter to a rational person, for a very simple reason: the opportunity cost is the significant amount of wealth (reliably made somewhere like Google) that will afford you the cushion to do whatever you want later in life. These guys need to get real. The highest EV play is to first get wealthy and THEN do what you want. And it doesn’t even have to take that long (most competent engineers could be there by age 35-40). Don’t fall for their “mission” nonsense. It’s a monstrous lie designed to keep funneling tremendous amounts of money to the people at the top.
  • sp527 7y ago
    Note to people downvoting without commenting and raising a counterargument: you’re complicit.
  • 1996 7y ago
    I think people downvote you because you attack their dream that they are "special" (snowflake syndrome, geek version) and will somehow succeed even if on average startups DO crash and burn. You don't seem to be mean, just maybe a little blunt, but it changes nothing: In my experience on HN as in anywhere in the world, people hate to be told then reminded of their failures ("I told you so!"). Because truth hurt. You are trying to give them the truth in one simple post, while YC and co are selling a dream in an expansive application process (in terms of time, effort, equity lost etc) Sorry, but you just can't compete. > The highest EV play is to first get wealthy and THEN do what you want Exactly. Shut up and work for a while, then when you take risks, do it on your own schedule and bankroll. If you are as good as you think you are, certainly profits will come raining! And you will be the only one collecting with a very large bucket. If it's just a "small" acquisition (say 6 digits, something that a fund would find a sad outcome), you will be extremely happy and be ready to try again with your new fuel and hopes- thanks again to your large bucket. Still, there is a place for things like YC: when your idea blows out of proportion and you know that it will die if it can't grow fast enough. But it's an exception, not a rule. Than again, why I am bothering, you can't tell anything to people who don't want to listen. About the "mission"? I disagree with you. Maybe that's what getting you downvoted. We all have one! Mine is to maximize my lifetime wealth while doing things that I enjoy because they match my morality. I think most people have a variant of this one - and, no lie, it is designed to keep funneling money to oneself!
• im_down_w_otp 7y ago
  This is an interesting perspective, but not one I found to be broadly shared by the dozens of VCs that I interacted with during fundraising. That we were doing a hard thing, despite having an experienced, capable, and "battle tested" founding team, as well as early revenue that was nothing to sneeze at, was very often a knock against us. Early on, it was kind of hard not to take this a bit personally, but that quickly gave way to shrewd calculating reality. I think this is a perspective that's afforded to the VCs who have either the pockets or the connections to carry out the strategy that's called out in the OP. Namely, that the startup is probably going to need a lot of money to get to clear product-market fit/readiness before being able to really scale. For the throngs of early-stage VCs out there who can't write Million Dollar checks more than a couple times a year, there's a built-in risk aversion to going after something "deep tech" shaped because they literally can't afford it. What worked for us at the end of the day was essentially having larger, later-stage funds who'd been exposed to or burned by the problems we're solving go to bat for us, and also to find very focused & targeted VCs whose thesis about the future of the world aligned very strongly with ours. We're very happy with where things ended up. One conflating problem I observed during fundraising was that as it became clear that finding thesis alignment was essential, many VCs go out of their way to appear very generic in their thesis. Though others are great about being very specific. When you find a fund that invests in say biotech, they're often really up front about that in numerous obvious ways from their website, to the background of their partners, to their investment portfolio. As a founder not explicitly targeting biotech it is then easy to filter out. However, when it's not so cut and dry (I assume because many VCs want as much deal flow as possible), it actually makes the problem worse for both parties. Founders waste time targeting VCs that don't make much sense, and VCs waste time talking to founders that don't make much sense, but there's a natural tension because you're both living & dying based on matchmaking with each other, and so it feels like you're doing something really irresponsible by clearly signaling and constraining ahead of time who you'll talk to. Because, "What if...?" I learned a ton from the process. It's a really odd knowledge base to have that's useful in almost no other situation.
  • ablekh 7y ago
    Interesting thoughts. Since you apparently have significant experience raising VC funding, I'm curious about your opinion on the following (others, of course, are welcome to chime in). If you were working on a deep tech (science-based) startup and considered using venture capital, would you prefer pitching your idea(s) to VCs, who happen to have relevant domain expertise (most likely, as their educational background) due to potentially being enthusiastic about relevant domain and problems as well as having better understanding of an industry and having some (additional) connections or, on the contrary, avoid such VCs as potentially being "biased" and/or having less enthusiasm / belief in probability of solving relevant problems and, subsequently, the success of the venture? (For the purpose of this question, assume that the market need is validated.)
• rafiki6 7y ago
  Something that really bugs me about this is the lack of examples where this succeeds. In my mind, a good one is Intel. To that end, how many microprocessor startups actually ended up succeeding at the same working on some fundamental and challenging things? Also, the thing about hard startups is there is a lot of luck involved. Counter to what the author is saying, you do need a degree or some level of measurable expertise to start a hard startup, because not only do you need the expertise, you also need the credibility to get people to work with you and you need that solid team to get funding. The reality is, many "hard" startups actually were things birthed by experts in a field that got lucky enough to have the right expertise at the right time, but also managed to derisk many aspects of the business by being experts.
  • ummonk 7y ago
    It seems odd, given that highly successful startups overwhelmingly were "easy" startups (including one of the examples he mentions - Instagram).
    • arkades 7y ago
      He didn't say easy startups couldn't be successful - just that Insta had to stand up to several orders of magnitude more competition than a 'hard' startup was/would have been. As a matter of survivorship bias, it would be shocking if there wasn't some surviving 'easy' photo-sharing startup. But looking at it prospectively, I think his point was: you could be fending off 9 competitors rather than 999 competitors, not knowing in advance if you're going to be the 1 survivor.
  • jpmattia 7y ago
    > Counter to what the author is saying, you do need a degree or some level of measurable expertise to start a hard startup, because not only do you need the expertise, you also need the credibility to get people to work with you and you need that solid team to get funding. Interestingly, this criterion causes Microsoft to be in the "Easy Startup" column. (Facebook too, but that seems more correct.) The Elizabeth Holmes example is also interesting to consider. Lack of degree in a hard field was no barrier to raising a ton of money. > In my mind, a good one is Intel. To that end, how many microprocessor startups actually ended up succeeding at the same working on some fundamental and challenging things? Nit: Intel's first products were memory, not CPUs. https://www.google.com/search?q=intel+first+product&oq=intel+first+pro&aqs=chrome.2.0j69i57j0l6.5384j0j7&sourceid=chrome&ie=UTF-8 https://www.google.com/search?q=intel+first+product&oq=intel... )
• foobiekr 7y ago
  Another fairly common take on this is a preference for technical risk over business risk. For the VCs that are from the "real" technology era, there seems to be a distinct preference for "if you can solve the technical challenges, you'll mint gold" businesses over things like social networking which simply work or do not in a way that cannot be addressed by the addition of technical or business skill. These companies tend to be very expensive and take 3Y or so to be tested on the market, so in a way they are not for people who want to follow the as-quick-as-possible MVP approach, but they also tend to have defensibility which your generic SaaS does not have.
• jrkelly 7y ago
  "If you want to start a company working on a better way to build homes, gene editing, artificial general intelligence, a new education system, or carbon sequestration, you may actually be able to get it funded, even if you don’t have a degree or much experience." I encourage anyone to give hard startups a shot, but there are tons of PhDs/Postdocs out there who would make amazing founders -- they should make the leap! Often feels to me like recent undergraduates get more encouragement to launch startups than recent PhDs/postdocs -- which is a weird miss especially when it comes to hard startups where PhDs have the advantage of deep understanding of a hard field.
  • jimkri 7y ago
    I'm currently in the research phase for an idea using algae/other plants that sequester CO2 rapidly and continue to have questions, which lead to more questions. Thankfully there is a ton of research that has been done, which makes diving into the topic easy. But having someone to work with that has a PhD/postdoc in this area could help build the idea faster. How can I meet someone with a PhD/postdoc in a specific field? Should I just browse ASU for PhD students or look at specific universities and areas.
    • jrkelly 7y ago
      Yeah look at research group websites at major research universities that are working in your area of interest. The students are usually listed on the lab website. They’d love to be emailed.
    • grandridge 7y ago
      You mean like, photosynthesis?
    • pfdietz 7y ago
      I suggest you look at algae that live in highly alkaline lakes, like soda lakes in Africa. The high pH means the water scrubs CO2 from the air, which is then available (as carbonate and bicarbonate) for the algae to use. (Mass transfer is an underappreciated limit on photosynthesis. A corn field in still air becomes CO2 limited pretty quickly in bright sunlight.)
• stopachka 7y ago
  I love the spirit of this, but I'm not sure this reflects reality as well. There are some examples that come to mind (boom, openai), but I think many more examples that have a different impetus. The most common successful impetus i.m.o is "tinkering" Playing, solving something lightly, and realize it's taking off like crazy. I think this can be a better light to follow, because it removes the pressure of thinking of the excellent idea out of the bat. Just play, show stuff to users, and see where it grows. Examples of these kind of successes: Facebook, Instagram, Gmail, YCombinator, PG's first startup, etc
• avmich 7y ago
  > Be willing to make a very long-term commitment to what you’re doing. Is it always the case that successful founders do this commitment?
• ssivark 7y ago
  “When all you have is a hammer, everything looks like a nail.” Seems like Sam Altman’s hammer is startup investing, so he tries to solve everythin... even the most challenging/ambitious problems through those means. Doesn’t necessarily mean it’s a bad approach, but that seems to be his bias. It’s worth having a more nuanced discussion. The current piece sounds more like cheerleading than advice.
  • arkades 7y ago
    Strong agree. I found Sam Altman's writing on quora and followed it off-and-on long, long before I found out "who he is." And his advice is so overly-positive and one-note that, honestly, I thought he was a snake oil salesman or self-help guru. I would never have guessed he was actually a VC / successful entrepreneur. Frankly, his arguments and writing continue to sound like Self-Help Guru shined through the lens of SV VC to me. Nuance isn't really on the table.
    • throwaway8291 7y ago
      Agreed. I remain amazed until today about his progression. He founded a startup to solve a white upper middle class "problem", raised millions for that, was lucky to get a little bit more when he sold out his startup's users' data to the greater fool and now runs around and tries to get rich off other peoples creativity and sweat through the VC vehicle. When I learned that he actually founded OpenAI that org lost almost all appeal to me. So yes, it might not be too much of a stretch to picture him as the embodiment of the current silicon valley mindset and all its tech-hybris and duplicity.
      • appleshore 7y ago
        As opposed to what, being a financial engineer or wealth manager? Or maybe he should be a real entrepreneur and open up a well managed brand of gas stations? Or build a better kitchen utensil? Or maybe leverage political relationships for tax abatements for major real estate deals? Vs pushing people to strive for grand ideas, restructuring the greatest accelerator in SV history towards big, bold ideas.
• Liron 7y ago
  Long-term-committed founders are indeed a big advantage to a business. If you're committed to investing 20 years of your time into a startup, then you're self-funding a multi-$million Series A, just in terms of market value of your time. Investors who spot a commited founder and buy in at pre-seed valuation are getting a deal.
• dheera 7y ago
  > The most counterintuitive secret about startups is that it’s often easier to succeed with a hard startup than an easy one. For white male founders, yes. For a lot of others, they don't believe you can do something hard. Speaking from numerous fundraising experiences in which I got continually asked crappy "how do I believe you can do this" and even "what would you do if I do [bad thing]" type questions instead of growth questions. I realize I'll probably get downvoted not just on Sand Hill road but on HN as well, but I believe this does need to be said.
  • aty268 7y ago
    What about indian male founders? As a W/M, I feel like I know more of them that were successful than W/M founders.
  • coffeemug 7y ago
    Do you seriously think white male founders don't get asked these questions?
• avocado4 7y ago
  > If you want to start a company working on a better way to build homes, gene editing, artificial general intelligence, a new education system, or carbon sequestration, you may actually be able to get it funded One of those is not like the others.
• spectramax 7y ago
  What bothers me about Sam Altman's writing is the following: 1) He talks about X, X being an observation with survivorship bias painted all over it, but Sam Altman asserts as if it is true. Stop writing with authority over unsubstantiated claims - you can only be humble and say "Perhaps X is true because of my observations, take it with a grain salt". 2) Statements like "Easy startups are easy to start but hard to make successful." are fluffy with no real substance. I might as well read "How to become a millionaire" books. 3) Completely obvious observations: "Then talk about that big vision and work relentlessly towards it, but always have a reasonable next step." You might as well say "When you are embarking on a startup endeavor, make sure it is successful". I can't help but exclaim "No shit!". IMO these articles and blog posts offer zero advice of substance. I despise them very much. There is nothing to learn from it, this is like grocery store aisle tabloid version of the Silicon Valley.
  • qchris 7y ago
    The first point on your list is something that I come back fairly frequently when reading through blog posts like this, or (for example) listening to things like TED talks. I understand that there's a need to stand behind any given thesis, but it seems to me that there is often a lack of distinction between "I'm claiming this to be true primarily based on my experience" and "I'm claiming this to be true based on widely-accepted external factors, like peer-reviewed papers, industry standards, statistically-significant trends, etc.". When people don't meaningfully differentiate between those two positions while communicating, it passes the burden of deciding which claims fall into which category onto the reader. And since I'm then unable to distinguish if the writer themself recognizes that difference, I find myself less easily able to give any of their claims the benefit of the doubt. That isn't a recipe for taking their advice or conclusions to heart.
    • spectramax 7y ago
      I think you summarized it better than I could. When stating facts, be assertive and provide source. When stating opinions, state them as opinions, not facts. As a reader, I wanna chuck the whole thing out of the window. This is pretty common place - Harari's Sapiens suffers from this behavior excessively - I cannot read it and I don't understand why people like this book so much. Full of unsubstantiated claims.
• jkubicek 7y ago
  I feel like the money quote was buried in the postscript. > Another solution to this problem is to think about startups that can become quite successful with less than ten people. As compensation packages from the giant tech companies continue to increase, I suspect this will become a trend. As cash comp at big public companies grow and the future value of startup options plummet, we need to start thinking about different ways to start businesses, and this feels like the right solution to me. Starting a company with 10 competent people that I enjoy being around and targeting $5-10mm in revenue sounds perfect. Maybe $10mm isn't reasonable, but even if we hit 1/4th of that amount, it's still plenty to support a small company.
  • jiofih 7y ago
    That’s not exactly what he is aiming for; the quote is most likely related to Instagram which reached a $1bn valuation with ~10 people. A lifestyle business is worthless to VC (and unsustainable if it decides to take VC money).
    • hef19898 7y ago
      Slowly I having my doubts about that. At least for early stage and angle investment. Investors need a 10x exit. Now imagine an early stage investment of 250k in a small business that grows to 10 million revenue. Healthy, because it is a lifestyle business not geared towards hyper growth. Assuming the company is profitable and cash positive, buying back the investor for 2.5 million through a bank loan is a reasonable thing. But that hints at an interesting problem. 250k is angle and seed, not traditional VCs. And there seems to be so much desperate money out there in the current "no interest for your bank account" times that there simply aren't enough small businesses like that strategy to work. Hence VCs, hyper growth, and, ultimately, things like SoftBank. Whether that is healthy is everyone's guess.
      • baddox 7y ago
        Why would a company bother buying back the investment? Surely there’s not much reason to do that unless the terms of the investment were different than what is common today.
• nickpinkston 7y ago
  Also, when laying out your strategy, don't make the mistake of betting everything on the hard problem working quickly. Uber started as a taxi hailing service, not a self-driving taxi service, and that was the right plan. Make a model that makes money now using low-risk tech/ops approaches so you have the money to build your flux capacitor to plug into the business you already built to unleash the phase II hard-tech-powered model.
• readhn 7y ago
  >The most counterintuitive secret about startups is that it’s often easier to succeed with a hard startup than an easy one. I completely disagree. It has nothing to do with being "easy" or "hard". It has everything to do with the RIGHT people heading the team of RIGHT people. Put RIGHT people together and you can solve both easiest and hardest problems out there. Companies fail a lot of times because wrong people with wrong or little experience make executive decisions that ultimately destroy these companies. Poor managers cant build and keep good teams together. Poor managers ultimately erase companies chances to succeed.
  • thorwasdfasdf 7y ago
    Consider this: When facebook came on the scene and made it super easy for developers to publish apps, what happened? A bazillion people all the sudden jumped in and next thing you knew, within less than a year, there were 100K+ apps in the app store. That's because, it was easy to do so, too easy. And this leads to a ton of competition. Now, imagine for a second, it was much harder: let's say only a 100 engineers in the world knew how to do it, then there'd be far fewer apps in the app store and far fewer competition.
• amirhirsch 7y ago
  Counterpoint: If you're looking for a life-changing outcome you probably shouldn't work on a hard startup until after you've already saved some money working somewhere else -- like at least spend two years somewhere stable so you can get approved for a mortgage. Investors in hard startups are often more like patrons who don't really understand the tech in which they are investing. They probably got their first taste at money from selling a software app and then invested that money in other "easy" software startups until they had enough money to patronize your quantum computing project. Think of the clout they are generating from magnanimously throwing money at PhDs they've convinced to waste their lives in a field that will never produce practical outcomes. When there's an economic downturn, the investor will still be rich, just not enough to continue patronizing your project. The PhDs may scrape by somehow or eventually be overcome by the existential dread that they should have worked on something with fewer hurdles and higher probability of success so they pivot to work on a location sharing app or venture capital investing.
  • euix 7y ago
    Are you talking about Jim Simons and the Flatiron institute right here? In his case at least, he is paying pretty well.
    • deepnotderp 7y ago
      Rentec is the polar opposite of "easy software"
    • selimthegrim 7y ago
      I think he means Google
• DrNuke 7y ago
  Sometimes it is serendipity that makes the biggest breakthrough, though... see for example the Ebola drug now, this same evening, seeming effective against Coronavirus... you as a VC can neither plan for nor invest in any given lab or boutique consultancy worldwide... and the bigger and bigger hammer thrown at hard nuts is just another way, a very expensive one and possibly unsustainable by VC?
  • pfdietz 7y ago
    They tested that drug against Feline Infectious Peritonitis, and it was highly effective (turning a cat death sentence into a 80% cure rate), but decided not to commercialize for that because the market was too small. I bet they're kicking themselves now.
• eanzenberg 7y ago
  This is true: If I'm going to take a 40-50% paycut (or more) then I better damn well believe in their goal and mission, enough that their 1% equity will be valuable to me. It's on an emotional level, not a practical one.
• mootzville 7y ago
  Thanks Sam, I needed this reminder.
• toohotatopic 7y ago
  In sailing, don't you want wind from the side? With tailwind, you can't sail faster than the velocity of the wind.
  • doitLP 7y ago
    Airplanes like tailwinds.
    • toohotatopic 7y ago
      Not when they are starting.
• PopeDotNinja 7y ago
  > Few recruiting messages are as powerful (when true) as “the world needs this, it won’t happen any time soon if we don’t do it, and we are much less likely to succeed if you don’t join.” This line would work on me if it the founder(s) and I were in the same boat. But when you have 20% and you won't even tell me what percent of the company my X shares are worth, your pitch only makes me thing "I'm less likely to be rich if you don't slave away for a really long time (and I might be a few million if we're modestly successful, and in that scenario you probably won't get anything)". When startup equity distribution becomes more like a pirate ship, where everybody gets X, and the captain gets 2X, then I'll buy into the "we're all in this together" pitch.
• thorwasdfasdf 7y ago
  I agree with most of this post. But there's one part he's wrong about. The most precious commodity is not talent. As he said "That year, probably over 1,000 photo sharing startups were funded". That means, when that original photo sharing startup was hiring, it could have filled every position x1000 times, if they could find all those candidates. That's an indication of a vast oversupply of talent. The most precious commodity is Opportunity: Market opportunity. And, I know, human desires are endless. But, (legally) solvable problems are not endless, they're currently in very very short supply. this is why we end up with start ups like juicero. out of desperation, entrepreneurs are forced to take on problems that aren't really problems because all the real problems are blocked by legislation/legality/monopoly: education, housing, transportation, medical insurance.
  • brlewis 7y ago
    You envision a world with exactly one way to share photos? In this world, is there also only one word-sharing site? I think there are more information problems out there than software engineers.
    • thorwasdfasdf 7y ago
      Consider this: every day on ProductHunt, we see dozens if not hundred new apps pumped out. How many of those succeed? Not very many. Why? Each and every one of those apps was designed to solve a problem. So, why is there so little demand? It's because users already have another app/spreadsheet/website/solution/process that does something too similar and because their existing solution is good enough. The fact that so many apps are being produced and fail to see traction is an indication of massive oversupply of solutions and talent. It's just too easy to produce yet another app, and so everyone does. this inevitably, must lead to an oversupply of solutions.
      • nmfisher 7y ago
        You're exactly right. Outside of deep deep tech (e.g. self-driving cars), you'd have to really, REALLY dig deep to find one or two startups that failed because of lack of technical talent. Now consider how many startups failed because of lack of customer demand - nearly all of them. This isn't just an indicator of an oversupply of talent, it also suggests an oversupply of capital. Cheap money lets you find talent, but it doesn't guarantee a path to a profitable business.
• whack 7y ago
  > If you want to start a company working on a better way to build homes, gene editing, artificial general intelligence, a new education system, or carbon sequestration, you may actually be able to get it funded, even if you don’t have a degree or much experience. Is this actually true? I have plenty of "hard startups" that I would love to work on. But these hard startups require far more investments and manpower, even to get to the MVP stage. As someone with minimal prior-startup-success and investor-contacts, I get the impression that no one is going to bet significant sums on me and my unproven idea. Am I wrong?
  • fogetti 7y ago
    That's a fair point. My impression is that most hard startups are started by founders who come from academia.
  • arbitrarylimit 7y ago
    You're skipping over the previous sentence, which is that you convince people you're serious about it.
• jariel 7y ago
  I find these 'Valley Koans' popularised in the last long while to be a little troublesome. Things like 0->1->n Do things that don't scale Andreesen Horowitz bit on 'The Good Ideas That Seem Bad' Paul G's essays. They all have nice little nuggets of wisdom, but what the almost always lack are good examples and concrete evidence. Funny that many HN comments are better researched than a lot of these 'Deep Thoughts'. Since these guys have access to startup data like nobody else, golly, wouldn't it be nice to see examples and break-downs? i.e. here's 1000 YC startups, and how they categorise in terms of 'hard/simple' problems. Here's their trajectory. Here's some mitigating factors etc.. The reason I write this is because of my flinch on this note from Sam. He's worth listening to, absolutely, but that doesn't mean we can't disagree. The problem with his thesis is that YC makes all their money from very regular businesses. There is no 'magic' to Stripe. It's a really great product that did mostly what previous products did, with a much cleaner API that devs loved. This is not koolaid/AI kind of stuff. For pragmatically minded people, yes, it does seem like it could 'really help change the world', but really ... it's not sexy. AirBnB because it's more consumer, yes, I can see some koolaid about 'sharing' etc. but again I don't think it's in the category of 'tough problems'. DoorDash, Instacart, Dropbox, Faire, Brex, Flexport, Checkr, Mixpanel. So many of the big YC companies are solving regular kinds of business problems, in big market places. The 'heady' startup would be 'Cruise' but that was an odd man out for a few reasons. All the things it would seem to me that Engineers would really like to solve are not quite on that top list. The 'coolest tech' YC startups aren't really the big hits.
  • keenmaster 7y ago
    The biggest "deep problem"-type leaps in the past few decades have been due to innovations in technological infrastructure: the advent of the internet, GPS, and smartphone for example. All three innovations benefited from the positive externalities of government funding, as well as routine R&D and large corporations. The entities that collectively solved those hard problems only captured a fraction of the profits/benefits of their innovations. The quickest route to success for a "hard problem" startup is to see the obvious Next Big Thing that is still in early adoption phases, and find the best way to translate it to the broader market. I know, that's not solving a hard problem in the same sense as the OP, but I think it's an underrated strategy with a quicker feedback loop and higher likelihood of success. What's the Next Big Thing? One of them is AR combined with AI, cloud-computing, and 5G for real-time rendering of 3D objects. That will enable so many incredible things. Imagine the most profitable possibilities, for software, peripherals, physical objects that play a part in the new physical-digital realm, etc...and start hacking now. By the time AR devices are mainstream, you'll be ready to profit immensely while everyone else is scrambling to learn the fundamentals of AR. VR is fairly mediocre right now. Of course, you know it will get better. However, do you think you correctly predict the magnitude and speed of that change? It's fairly likely that VR will be very, very good in the next ten years. If you're ready for that scenario, you can strike gold. Self-driving cars are another Next Big Thing. Right now all the attention is on Velodyne, Waymo, etc...and those are promising companies. However, there's plenty of room for startups in that space. Anticipate how self-driving cars will change the world, and profit off of that change. That can make you rich. I'd rather ride the tsunami of new technologies than try to capture the energy from late-stage ambient tidal waves (such as making another camera app, or a niche ERP tool for enterprise). On the other side of the spectrum, it's noble to try to invent the Next Big Thing yourself, but the odds are against you even if you're extremely smart. You might be just as likely to stumble into the Next Big Thing doing routine work at a big company.
• crankylinuxuser 7y ago
  Hard startup, huh? Well, that's what I'm doing. I'm doing a SigInt startup to prevent PII breaches and things like this from happening: https://www.zdnet.com/article/hacked-tornado-sirens-taken-offline-in-two-texas-cities-ahead-of-major-storm/ https://www.zdnet.com/article/hacked-tornado-sirens-taken-of... I've got a lineup of hardware with specific industry use cases. Right now, I'm the designer, hardware engineer, software engineer, and more. And right now, Only have around $2k of my own money in it, with possibly more on its way from grants and funds. All equity is ours.
• ttul 7y ago
  A colleague of mine more than a decade ago started a company in the alternative energy space with very interesting yet extremely difficult and unproven technology. It took them a decade to find out that the performance of the technology was not quite good enough to be commercially successful. He burned perhaps a third of his working life grinding away on something that won't succeed - perhaps at all. Yes, there is some chance of a base hit OEM deal for a very niche application of the technology. But it's definitely not making anyone rich after so many years. Hard startups are exciting and fun, but unless you are already rich, it may not be worth the risk. Comparatively, you could spin up and fail five times at an "easy tech" startup and perhaps have a greater overall chance of winning the one time that you need to win to make it all worthwhile.
  • mrg3_2013 7y ago
    VCs are incentivized to see more hard startups start. As a founder, I agree you don't want to be doing it, unless you life goal aligns with it or you are already rich.
• matchagaucho 7y ago
  It's also true that "easy startups" can iterate into solving progressively harder problems. The "hard" idea doesn't need to be the mission day one. Amazon was just an online bookstore at one time.
  • glbrew 7y ago
    The set "easy problems iterated" is a subset of "hard problems" and I would argue a very small and uninteresting subset. Biotech, energy, next gen computing physics; I don't see any of those as iterating on a simple problem.
• mc3 7y ago
  And the opposite end of the spectrum, if you want to get something going more quickly: https://www.indiehackers.com/post/how-to-brainstorm-great-business-ideas-ab51c3d51c https://www.indiehackers.com/post/how-to-brainstorm-great-bu...
• bigcohoneypot 7y ago
  I find ycombinator to be acting completely ignorant of why and how it succeed. The whole notion that they can apply the techniques for an internet startup to hard things is bizarre. As the internet S curve comes to a close, new organizations should be built. Using ycombinator's name to launch unsuccessful startups is just asking to destroy Bs
  • dana321 7y ago
    So, oh wise one, what should we all be working on?
    • JabavuAdams 7y ago
      GAI
    • bigcohoneypot 7y ago
      open a bunch of yc only clubs. Turn inward.
  • DoreenMichele 7y ago
    This appears to be the personal blog of Sam Altman. He stepped down as president of YC like last May or something. I wouldn't conflate his personal blog with "official YC messaging" or something like that.
• dana321 7y ago
  Solving hard problems is the trap of the genius. I know. We want a simpler world, but create complex software to do that. All we are doing is moving the complexity under the rug somewhere else. The complexity is still there, warts and all. Doing something mundane over a large surface area (quantity being the hard vector) is better than solving a really difficult problem that has little reach in terms of real-world value. The complexity in my own startup is its multi-layered nature, solving multiple problems for multiple levels of ability. I'm still aware of the fail aspect, but one layer will succeed. I know this. I have a 10 year challenge, but sooner is better. I know for a fact what i'm doing isn't being done out in the wild apart from a couple of sporadic os projects badly implemented and a couple of small commercial ventures that kind-of work. On different products on different levels. If you're going to put your eggs into one basket, make it the basket of n dimensions.
  • erikpukinskis 7y ago
    I am on a similar arc, attacking a multi-facet problem space and assuming some % of facets will fail. Would love to chat with someone on a similar path. Email me if you are interested in that!
• quelsolaar 7y ago
  Im all-in on hard problems, but the startup echo system isn't. I have to self fund because I don't think there is funding available for projects that take time and don't have a fast ROI. To guild the kid of things that can disrupt the really big players: FAANG, big oil, Detroit, Boeing you need more time and need to solve harder problems. I find it curious that Elon Musk is such a hero in the startup world, when his companies had to be self funded for a long time because VCs don't want to invest in that kind of bets.
• travisl12 7y ago
  > An easy startup is a headwind; a hard startup is a tailwind... Is that backwards? Wouldn't a tail wind represent "easier"?
  • adenverd 7y ago
    Not backwards. The point he's making is that hard problems attract talent and capital, which makes them easier to keep going.
• pfdietz 7y ago
  The problem with long term goals is that you've permanently screwed yourself if the goal is bad. With short term goals, you get unavoidable feedback quickly that keeps that from happening.
• jarjoura 7y ago
  Just 10 years ago the dominant message was, startups today are lucky that they are easy and cheap to spin up. It makes testing hypothesis easy. That brought in a flood of small angel and seed investors with thousands of bonkers ideas. When I think of hard startups, I think of FitBit, GoPro, or even Oculus. Yet, all those companies did was prove that people want fitness trackers or smart cameras, or screens wrapped around eyes. Those companies early employees were all specialized PhD employees with very specific skill-sets. You aren't going to go to an 8 week bootcamp and come out able to contribute meaningful to the research needed to pull off those products. Sam is right, yes, you will have an enthusiastic group of people knocking on the door to work there, but the bar is exceptionally high to hire the people you need to be successful. Google, Facebook, Amazon, Microsoft, Apple, AMD, Nvidia, etc, they are all paying top salaries with great perks to work on hard problems with the resources to be successful. Want to build custom servers, Amazon has a dedicated Gravitron engineering team and internal customers salivating at deploying them. Microsoft is currently already shipping AR glasses with a cohort of trained developers already able to write software for them. Apple, well, there's a rumor they are building an ARM laptop, and we know only Apple will be able to shift the industry in that direction. No hard startup could do that. On and on... Anyway, not trying to be cynical, but I do think the problem is deeper and VCs will need to give huge initial rounds, with really long several years runways, just to bring in the talent needed to compete against the established players. Then, these hard startups need to be prepared for the sea of copycats who will swoop in for free after all the hard research was done. Another example of what I mean by huge rounds: https://techcrunch.com/2019/12/23/rivian-adds-1-3-billion-in-funding-for-its-electric-utility-and-adventure-vehicles/ https://techcrunch.com/2019/12/23/rivian-adds-1-3-billion-in...
• choonway 7y ago
  I think Tesla, SpaceX is an indication of how much investor faith and strength of stomach is required in order to make things work. But honestly, how many VCs would rather invest in something else than see 2 rocket launches fail in a row and getting laughed at?
• unexaminedlife 7y ago
  I'm almost thinking hard startups shouldn't exist. If a startup is considered hard, what is making it hard. Probably ecosystem / infrastructure. Maybe a good approach would be to ask the founder why timeline is so long or will cost so much. Once they answer those questions, ask them to build an "easier" startup that will be able to sustain itself and can (eventually) partner with the "hard" startup, which will only be launched once it becomes easy. And I'm not saying do something different. I'm saying the "easier" startup would be built as a means to enabling the hard startup.
  • erikpukinskis 7y ago
    This is also how I think software engineering should be organized. But most orgs seem to want hard thing with big priority done now.
• mitjam 7y ago
  Probably the hardest startups today tacle climate related problems. They face hard problems and the problem of not yet marketed demands.
• rl3 7y ago
  It would be nice if part of the ecosystem was structured more in terms of supporting founders who want to take on hard problems via way of dedicating their life to it. I'll provide my own perspective here in case anyone finds it interesting: I've been working on my startup for 7 years now, and the damage it's done to my personal life and well-being has pretty much ground progress to a halt, with the exception of advances in thinking in certain areas, which has been nothing short of mind-blowing recently. Of course, a large part of this is my own failure to plan instrumentally. Admittedly it's quite backwards to spend years planning the mid and high-levels first, then not have a solid plan to get from 0 to 1. Ending up there by accident is easier than you'd think. Fortunately I now have a fully tractable, instrumental plan that goes from 0 to ripping the guts out of a couple FAANG-scale companies: 1. Get a well-paying engineering job I'll probably hate, because money, quality of life, and sanity all have instrumental value. Hopefully keep the fire alive during this period. 2. Work it for about two years, then raise a pre-seed round (at year 9!) to support myself for the next couple of years, while I embark on a formal pre-production phase, and possibly develop an up-to-date prototype/PoC. 3. Potentially a seed round totaling a few million. Hire a few key people and put together a refined prototype/pitch over the course of a year, for a Series A that no high-caliber VC with sufficient funds could refuse. 4. At year 12, raise a 100M+ Series A, with the caveat it's going to take about a decade to do properly, with further funding rounds along the way. 5. Complete the journey, or at least achieve the intended objectives, a decade later at year 22. --- I'm well aware that sounds insane, mostly was just a writing exercise to underscore the timescales involved. The funding requirements are high because it's basically a blueprint for something that will become an indispensable part of people's every day life, and it consists of multiple verticals all woven together, sharing a common technology. Thinking about how to do this precisely was not trivial and took years. End of the day I'd rather be skipping to step two, but I'm ironically out of time at this point. Job it is. In retrospect, a proper plan would have been this: a) Work a job until financially comfortable. b) Do a smaller-scale startup or two. c) Then dream big. Hindsight is of course 20/20, and I suspect isolation, desperation, being depressed, being uncomfortable—all those things breed a level of ideation you might otherwise not encounter. It ain't recommended, though at least perhaps there's a silver lining. --- For the most part, the tractability of the plan has only increased with time, not decreased, and I don't view competition or someone else figuring it out as a threat. The biggest threat I face actually, is some of my talent pool may be aging out. Of the 50 or so people I've kept an eye on for years and basically dream of hiring on a daily basis, a few key people are in or approaching their 60s. On the bright side, if anyone ever doubts how committed I am in the long-term, it should be easy enough to simply respond that I'm moving so slow the people I want to hire may end up retiring before I can hire them!
• new_realist 7y ago
  Translation: the only startups willing to play YC’s sweatshop game are fruit flies; they want meatier deal flow. I doubt the founders of hard startups are that stupid.
  • deleted 7y ago
    [deleted]
• rexreed 7y ago
  Silicon Valley loves to shine its turds. And they love to believe their own stink about how much they're disrupting and changing the world. And yet the most funded startups are just car services and rooms-for-rent and song-sharing-apps and the next social media whatever. When the top 10 SV funded startups are solving really big problems, then I'll start believing this nonsense.
  • vapemaster 7y ago
    So where is the geographic location that does fund hard problems? SV $ is far from perfect but it is surprisingly audacious and fault tolerant. A few examples old and young: Genentech SpaceX Joby TAE Technologies
    • rexreed 7y ago
      The geographic location of the company or the money? These aren't the same thing. * There's a lot more biotech in Boston than SV * There's even more biotech in Pennsylvania * Battery tech companies are all over the country * There's a ton of space tech in Texas and Mississippi. Yes, Mississippi. And Florida. * Telecom? Look outside the US for strength * Cybersecurity? Maryland. Virgnia. and Israel. * AI? Literally every major country in the world. * Advanced materials? So many places. Increasingly SV has less and less to offer. Maybe raw money, but I thought companies were looking for smart money, not dumb money.
      • MetalGuru 7y ago
        You specifically reference funding, so I would assume he's referring to VC capital allocation.
• rexreed 7y ago
  Unpopular opinion: Silicon Valley is in the beginning stages of a period of decline. There's lots of great entrepreneurial activity elsewhere, and for building these sorts of "hard startups", the truth is that SF and SV are not the best places to do it. People and rent simply cost too much, and the venture scene lacks depth in these areas.
  • unlinked_dll 7y ago
    I disagree, having worked both outside and in the Bay Area. The network effects are unparalleled. We're paid far better (my salary nearly doubled when I moved to the Bay, my rent didn't). It's far easier to find quality talent and freelancers for startups than elsewhere. But most importantly, the money and culture is here. Raising money outside of the VC scene here is orders of magnitude more difficult and you get far less for the time you spend. And I could go on about how places I've been (South Florida, Chicago, Research Triad, etc) all claim to want to be the "next Silicon Valley" but they won't. Partly because SV didn't become the "next" anything, it garnered a unique culture that funded massive amounts of innovation, and anyone chasing a trend is too late. But mostly because the money and tech people in those cities are too cowardly to do anything truly innovative, by and large. There are outliers, of course. But frankly there's not a lot interesting going on anywhere outside the Bay and it pays way, way worse.
    • rexreed 7y ago
      Not for the sort of "hard tech" that Samalt is talking about here. Those network effects aren't as prevalent for those working with nuclear fusion, or space tech, or advanced materials, or battery technology. Yes, you can find lots of brogrammers cranking away at the next advanced app using React, etc. in the Silicon Valley / SF / Bay area and get paid better there for doing that sort of thing. For that, Silicon Valley has the tech in spades. But if you want to start an advanced lightning company, for example, the Research Triangle (not Triad) that you refer to above is the place to do it. It's the home of CREE and many other LED innovators. Not Silicon Valley.
  • kilroy123 7y ago
    I agree with you. I'm going to attempt to start a "hard startup" and it will be outside of the bay area.
• airnomad 7y ago
  Sometime those start-up gurus sound like self-help gurus.
• tjholowaychuk 7y ago
  Or just don’t be a huge noob and create a real business, without privileged funding.
• trevyn 7y ago
  Is Sam trying to write like PG?
• tikiman163 7y ago
  This is basically drivel. My personal motto is "we chose to go to the moon, not because it is easy, but because it is hard!" The trend of startup failures has nothing to do with the difficulty of the problem they were trying to solve, and everything to do with the fact that smart people can spot when a startup is just a copy of something else already successful. Yes, startups doing photos sharing apps increased after Instagram was created. That's because most people are idiots and just won't realize they aren't going to disrupt a new industry. Venture capitalists also frequently invest in failures because they too are idiots. The reason there are only 2 startups trying to do cold fusion energy is because nobody has any clue on how to make that happen, where as social media apps can be designed and built in an assembly line. Yes, trying to invent a new industry is infinitely harder, but for the most part we all know that startups aren't going to invent successful cold fusion. Either someone will invent it by accident, or some chemist/physicist is going to figure it out as part of a think tank funded by either the government or by one of the existing fortune 50 companies. Picking a hard problem to solve can't make it easier for your startup to succeed because the hard startups are basically trying to get retardedly lucky. There is no mythical group of employees who you can identify as being the group who will invent cold fusion, which is why these kinds of startups always fail. Funding one of them is throwing money away, where as funding a photo sharing app has a small chance of breaking even if they at least have a unique selling point.