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This post is the quintessential post about how success is about being part of the right networks. The cynical part of me calls it the old boys network, the real

This post is the quintessential post about how success is about being part of the right networks. The cynical part of me calls it the old boys network, the realistic part says that unless you travel in the "right circles" your chances of real success are low. Despite what VCs will tell you about being in the right market, with the right team, and having "traction" and all that, those things only matter (and probably not much) if you aren't in the right network and circles. If you're in the right network, then having the wrong product, wrong market, wrong team, wrong market fit, bad traction, etc. doesn't really matter because those networks will "fix" those problems for you. VC isn't a meritocracy, it's a fairly closed network, and if you can get in you can be successful. For everyone else, success (of the Figma type) is almost near impossible.

vecter 4y ago
> If you're in the right network, then having the wrong product, wrong market, wrong team, wrong market fit, bad traction, etc. doesn't really matter because those networks will "fix" those problems for you. No amount of VC money can fix a bad company that doesn’t solve a burning problem for customers. Conversely, if you do solve a burning problem for a lot customers, getting VCs onboard will be the least of your concerns.
- te_chris 4y ago
  I think you’re missing the point: being in market is its own privilege
  - barry-cotter 4y ago
    Being in market is a product of choice or luck. Insofar as it’s good judgment that’s not privilege that’s being better, merit. Luck, winning the lottery of interests, isn’t merit but there’s no interesting sense in which it’s privilege either.
    - rexreed 4y ago
      Having the right friends in the right networks help you both with market choice and product choice and also provide necessary insights for product-market fit. Not having the right friends or networks means that you have to indeed rely on choice or luck. Having the right network is a significant insight / inside advantage.
- spaetzleesser 4y ago
  “No amount of VC money can fix a bad company that doesn’t solve a burning problem for customers.” From my observation VC money gives companies the opportunity to recover from mistakes (“pivot”) which is something companies without deep pockets can’t do.
  - vecter 4y ago
    More money definitely means more time to pivot and potentially make something work. However, most companies still fail, even after raising large amounts of money. My contention with OP's point is the absoluteness of the statement they made. They basically claimed that knowing the right people will fix all of your problems. If you read what they wrote, that's almost literally what they said. That is in practice extremely far from the truth. For every successful VC-funded company, there are hundreds that never make it to product-market fit. So clearly VC funding and knowing the right folks isn't sufficient for success. In making such a strong (and in general provably false) claim, the OP is also taking away credit from Figma for their wild success. They got there through understanding their customers and building the best product on the open market. Period. It's strange because Figma's success has basically nothing to do with "having enough VC money to pivot around to find product-market fit", which is the central tenet of yours and OP's point. Figma was on the right track the entire time. So this whole point is moot when talking about Figma.
    - rexreed 4y ago
      My comment was not about VC, it was about networks. If you're in the right networks problems will get fixed. Most VCs, to be blunt, are not in the right networks. The vast majority of VCs are "dumb money". The smart money is much harder to get precisely because of the value of the network. If you can get in with that network, your chance of success is high. Simply getting "venture capital" doesn't mean you're in the right network. In fact, the vast majority of the time, it doesn't. Which is why I agree also with what you said that VC money may give you more time to pivot, but doesn't guarantee success. I agree. That's why it has nothing to do with VC and everything to do with the right network.
- rchaud 4y ago
  > No amount of VC money can fix a bad company that doesn’t solve a burning problem for customers. How many SV entrepreneurs actually care about that? What problem is Snapchat solving? Or DoorDash for that matter? The game is about raising capital, first and foremost. Especially in a system where the amount of money you can raise is inversely proportional to the company's actual profitability. Losing money hand over fist? Let us introduce you to our pals at Softbank and the Saudi Arabia "Vision Fund".
  - vecter 4y ago
    I think it's pretty obvious what problems Snapchat and DoorDash are solving. Snapchat lets people stay in touch in fun ways and DoorDash lets people eat food without having to go out and get it themselves. Maybe you personally don't find value in those companies, but hundreds of millions of people use Snapchat and tens of millions of people use DoorDash, so clearly they find value in it. To go further on your point though, how did the Vision Fund solve any problems for entrepreneurs? It gave them a lot of money which they burned through, but then the floor fell out on businesses that weren't sustainable.
    - rchaud 4y ago
      > Snapchat lets people stay in touch in fun ways and DoorDash lets people eat food without having to go out and get it themselves. This is a marketing pitch, not a problem. Restaurants have delivered since time immemorial and with better margins than anything Doordash has managed. The Snapchat "problem" was solved with two cans and a string. At least that was still an ad-free experience.
interactivecode 4y ago
From what I can tell is that "traction" can give you entry into the right network and circles. Entry then gets you opportunity to funding. University circles, family connections, previous job or internship networks can also get you entry.
- rexreed 4y ago
  For every thousand startups struggling for traction and to get market/fit, there's the one founder with the right connections that will get there faster and with more funding because they have the right network and connections to accelerate product/market fit, fund raising, and attracting the right team. Not having the right network isn't a guarantee of failure by any means, but it certainly isn't as optimal has having a network with people in the right places. Having the right network and connections trumps almost everything else, in venture-backed startup world that is.
closedloop129 4y ago
If the network is that important, isn't there a startup looming that provides such a network to the many people who are not in one? I tend to think that networks are not excluding on principle. If somebody can demonstrate value, people will be eager to include that person into the network. On the other hand, Quibi shows that networks alone cannot rescue startups. The interesting group are all the average people who could create something successful (of the Figma type) together. As a group, they have access to all resources, but they don't coordinate them. $20B means that 20.000 people could come together and make $1M each. Maybe they need a tool (of the Figma type) to coordinate themselves and that's another startup opportunity.
- deleted 4y ago
  [deleted]
- rexreed 4y ago
  A high value network is a group of people that have inherent trust or a common background or understanding that allows them to provide access to each other's highest value connections and resources. A low value network are those people that don't really know each other and won't trust providing access to high value resources or people, even if they share common interests. A network of people with common interests is not the same as a network of people with common background or other deep connections. This is what prevents startups (or LinkedIN or Meetup or what have you) providing the same depth of network as a "closed" network provides. By definition a high value network will be somewhat to very exclusionary. Low value networks are inclusive. And no, networks alone can't accomplish much, and having a great network is no guarantee of success. But clearly having a great, high value network provides a significant advantage over not having any network or only access to low value networks.
- anonu 4y ago
  My cynical point of view: if you try to replicate the benefits of a network with technology, social media, etc... the benefits of such a network quickly become overwhelmed by volume and the quality degrades.
- duped 4y ago
  > Quibi shows that networks alone cannot rescue startups Arguably it goes to GP's point - it's not about having a network, but the "right" network. Quibi had the wrong network and was doomed from inception. > If the network is that important, isn't there a startup looming that provides such a network to the many people who are not in one? There is, it's called Y Combinator.
nickpp 4y ago
Seems rather easy to join this network: an internship. Which usually is awarded meritocratic, too. But attitude matters a lot: if you sped this internship complaining how people are unfair and are not inviting you the their networks and circles - do not be surprised success eludes you. I personally would never associate or invest in somebody with your mindset: you already lost. I’d rather work with wildly optimistic, even deluded, people.
smeagull 4y ago
I think this is true, but only for a very particular sort of business, and a particular sort of success. on HN it may seem like the only possible business is a tech start up with an acquisition as the measure of success, but it isn't.

vecter 4y ago

> If you're in the right network, then having the wrong product, wrong market, wrong team, wrong market fit, bad traction, etc. doesn't really matter because those networks will "fix" those problems for you. No amount of VC money can fix a bad company that doesn’t solve a burning problem for customers. Conversely, if you do solve a burning problem for a lot customers, getting VCs onboard will be the least of your concerns.

te_chris 4y ago
I think you’re missing the point: being in market is its own privilege
- barry-cotter 4y ago
  Being in market is a product of choice or luck. Insofar as it’s good judgment that’s not privilege that’s being better, merit. Luck, winning the lottery of interests, isn’t merit but there’s no interesting sense in which it’s privilege either.
  - rexreed 4y ago
    Having the right friends in the right networks help you both with market choice and product choice and also provide necessary insights for product-market fit. Not having the right friends or networks means that you have to indeed rely on choice or luck. Having the right network is a significant insight / inside advantage.
spaetzleesser 4y ago
“No amount of VC money can fix a bad company that doesn’t solve a burning problem for customers.” From my observation VC money gives companies the opportunity to recover from mistakes (“pivot”) which is something companies without deep pockets can’t do.
- vecter 4y ago
  More money definitely means more time to pivot and potentially make something work. However, most companies still fail, even after raising large amounts of money. My contention with OP's point is the absoluteness of the statement they made. They basically claimed that knowing the right people will fix all of your problems. If you read what they wrote, that's almost literally what they said. That is in practice extremely far from the truth. For every successful VC-funded company, there are hundreds that never make it to product-market fit. So clearly VC funding and knowing the right folks isn't sufficient for success. In making such a strong (and in general provably false) claim, the OP is also taking away credit from Figma for their wild success. They got there through understanding their customers and building the best product on the open market. Period. It's strange because Figma's success has basically nothing to do with "having enough VC money to pivot around to find product-market fit", which is the central tenet of yours and OP's point. Figma was on the right track the entire time. So this whole point is moot when talking about Figma.
  - rexreed 4y ago
    My comment was not about VC, it was about networks. If you're in the right networks problems will get fixed. Most VCs, to be blunt, are not in the right networks. The vast majority of VCs are "dumb money". The smart money is much harder to get precisely because of the value of the network. If you can get in with that network, your chance of success is high. Simply getting "venture capital" doesn't mean you're in the right network. In fact, the vast majority of the time, it doesn't. Which is why I agree also with what you said that VC money may give you more time to pivot, but doesn't guarantee success. I agree. That's why it has nothing to do with VC and everything to do with the right network.
rchaud 4y ago
> No amount of VC money can fix a bad company that doesn’t solve a burning problem for customers. How many SV entrepreneurs actually care about that? What problem is Snapchat solving? Or DoorDash for that matter? The game is about raising capital, first and foremost. Especially in a system where the amount of money you can raise is inversely proportional to the company's actual profitability. Losing money hand over fist? Let us introduce you to our pals at Softbank and the Saudi Arabia "Vision Fund".
- vecter 4y ago
  I think it's pretty obvious what problems Snapchat and DoorDash are solving. Snapchat lets people stay in touch in fun ways and DoorDash lets people eat food without having to go out and get it themselves. Maybe you personally don't find value in those companies, but hundreds of millions of people use Snapchat and tens of millions of people use DoorDash, so clearly they find value in it. To go further on your point though, how did the Vision Fund solve any problems for entrepreneurs? It gave them a lot of money which they burned through, but then the floor fell out on businesses that weren't sustainable.
  - rchaud 4y ago
    > Snapchat lets people stay in touch in fun ways and DoorDash lets people eat food without having to go out and get it themselves. This is a marketing pitch, not a problem. Restaurants have delivered since time immemorial and with better margins than anything Doordash has managed. The Snapchat "problem" was solved with two cans and a string. At least that was still an ad-free experience.

interactivecode 4y ago

From what I can tell is that "traction" can give you entry into the right network and circles. Entry then gets you opportunity to funding. University circles, family connections, previous job or internship networks can also get you entry.

rexreed 4y ago
For every thousand startups struggling for traction and to get market/fit, there's the one founder with the right connections that will get there faster and with more funding because they have the right network and connections to accelerate product/market fit, fund raising, and attracting the right team. Not having the right network isn't a guarantee of failure by any means, but it certainly isn't as optimal has having a network with people in the right places. Having the right network and connections trumps almost everything else, in venture-backed startup world that is.

closedloop129 4y ago

If the network is that important, isn't there a startup looming that provides such a network to the many people who are not in one? I tend to think that networks are not excluding on principle. If somebody can demonstrate value, people will be eager to include that person into the network. On the other hand, Quibi shows that networks alone cannot rescue startups. The interesting group are all the average people who could create something successful (of the Figma type) together. As a group, they have access to all resources, but they don't coordinate them. $20B means that 20.000 people could come together and make $1M each. Maybe they need a tool (of the Figma type) to coordinate themselves and that's another startup opportunity.

deleted 4y ago
[deleted]
rexreed 4y ago
A high value network is a group of people that have inherent trust or a common background or understanding that allows them to provide access to each other's highest value connections and resources. A low value network are those people that don't really know each other and won't trust providing access to high value resources or people, even if they share common interests. A network of people with common interests is not the same as a network of people with common background or other deep connections. This is what prevents startups (or LinkedIN or Meetup or what have you) providing the same depth of network as a "closed" network provides. By definition a high value network will be somewhat to very exclusionary. Low value networks are inclusive. And no, networks alone can't accomplish much, and having a great network is no guarantee of success. But clearly having a great, high value network provides a significant advantage over not having any network or only access to low value networks.
anonu 4y ago
My cynical point of view: if you try to replicate the benefits of a network with technology, social media, etc... the benefits of such a network quickly become overwhelmed by volume and the quality degrades.
duped 4y ago
> Quibi shows that networks alone cannot rescue startups Arguably it goes to GP's point - it's not about having a network, but the "right" network. Quibi had the wrong network and was doomed from inception. > If the network is that important, isn't there a startup looming that provides such a network to the many people who are not in one? There is, it's called Y Combinator.

nickpp 4y ago

Seems rather easy to join this network: an internship. Which usually is awarded meritocratic, too. But attitude matters a lot: if you sped this internship complaining how people are unfair and are not inviting you the their networks and circles - do not be surprised success eludes you. I personally would never associate or invest in somebody with your mindset: you already lost. I’d rather work with wildly optimistic, even deluded, people.

smeagull 4y ago

I think this is true, but only for a very particular sort of business, and a particular sort of success. on HN it may seem like the only possible business is a tech start up with an acquisition as the measure of success, but it isn't.