5 ms·

Startups are an act of desperation

78 points by justinzollars 4y ago

lincarla 4y ago
lincarla 4y ago
nowherebeen 4y ago
I am not sure desperation is the right word here. He used it to list out a bunch of unrelated motivations, but most of them I wouldn’t consider desperate.
- eladgil 4y ago
  I definitely agree motivations for starting a company are mixed, and vary a lot from person to person. For the most successful companies I have seen, the motivations have largely collapsed to the ones I listed - with different mix of motivation by founder. Finding the right word was definitely a struggle, but I think you need to lack alternatives in order to start a company. So "desperation" seemed to fit. Open to other ideas/suggestions on a better word?
  - danielmarkbruce 4y ago
    >> you need to lack alternatives People don't talk about this much. Some brilliant people I know won't start (or stay with) a company because they have too many high paying, interesting alternatives.
  - nithayakumar 4y ago
    >> you need to lack alternatives I dont believe this. Went through YC this year and many of the founders had great alternatives. You could say that none of the alternatives were as attractive... but thats how all decisions are made
  - __derek__ 4y ago
    Reaching for an "extreme" label is the issue here. What you've described in the blog post is lower opportunity costs. That is compatible with but doesn't imply desperation or a lack of alternatives: neither applies to the "revenge" founders or the folks foregoing $200k+ salaries, for example. In fact, both are able to take the risk because of solid-but-not-extravagant alternatives (wealth from prior exit and highly-compensated jobs, respectively). That's what separates both from the VPs pulling down million-dollar comp, who face much higher opportunity costs for the exact same potential reward.
scarface74 4y ago
Statistically, the last reason you should join a startup is to get rich. Most fail and even those that “succeed” most only do so for the VCs.
- SQueeeeeL 4y ago
  Yeah, startup bros typically plan on exploiting the fuck out of a few naive coders to get rich quick. That's why all the real startups have programmers as central figures, they can actually produce and stopped themselves from getting scammed. If you're reading this and thinking about working for an early startup, don't. Best case, you make some douchey boss a few million dollars and worst case you lose years of your life making vaporware. Find a real job with stability.
  - greatpostman 4y ago
    I keep getting “offers” of 10% equity to literally program the whole product that doesn’t even exist yet. Startup bros want 90% to send emails. The crazy thing is people do take those offers.
    - arcturus17 4y ago
      The only programmers taking these offers are at the bottom of the barrel in either skill or self-confidence, I’m afraid.
      - motoxpro 4y ago
        Ironically, the programming is the easy part. It’s figuring out what to program that is hard.
        arcturus17 4y ago
        The business bros offering 10% to their CTO are probably also lousy product managers too, and know very little about what to build anyway.
kazinator 4y ago
I don't think so because desperation refers to lack of hope (literally; check out the eymology). If you have no hope, why would you embark on a startup. Startups are an expression of hope.
- bgoldste 4y ago
  Perhaps something like “hunger” might be a better term
  - kazinator 4y ago
    Startups get desperate when they are failing: running out of funding runway without the business taking off. But long before that, there is a lot of excitement and optimism.
senko 4y ago
> Of course, through the lens of expected value, these numbers look worse as traditionally there has been a high failure rate to startups. "worse" here does a lot of heavy lifting here and doesn't begin to convey the magnitude of "worse" Use YC companies as an example. Acceptance rate around 2%, success rate about 10%. This gives you 0.2% success rate for a typical startup applying to YC. If you do succeed, unless you bootstrapped, you're going to get diluted. Let's handwave this to keeping 75% of your company (a generous assumption!). This gives the expected value of $30k, for 2 to 5 years of hard work. Before taxes.
- nequo 4y ago
  By success, do you mean making it big or staying in business? If the latter, do you think that the 98% who are rejected by YC all go defunct? I don’t know the numbers and I’m curious.
- exac 4y ago
  The set of companies that are rejected from YC can also succeed or fail.
- reducesuffering 4y ago
  You're twisting those numbers quite a bit. Anyone can apply to YC, like half are an idea. I'd wager most of the rejected are not following through with 2-5 years of hard work on it. You're also acting like a reject from YC means 0 EV, even when many successful startups have like 3 applications to YC, if they even were accepted at all. That $30k EV number is useless and not in any way the actual EV of 2-5 years hard work on a startup.
- akomtu 4y ago
  This logic is faulty for one reason: it's not a casino with randomly distributed chances. The number of FANG employees is low compared to the entire population, yet some of the students are almost guaranteed to make it there, because of their apparent smarts and mindset, while others have about zero chances. So it's a lottery, but the tickets aren't sold to everyone. The same is true for startup founders: some of them are obviously going to make it one day, while others don't even need to apply.
trynewideas 4y ago
> One of the reasons you rarely see a MAMAA (Meta, Alphabet, Microsoft, Apple, Amazon) VP or above start a company is the lack of desperation Only Facebook/Meta, only VP or higher, only exit-to-founder, only since 2021, and only the ones that I can find in <15 minutes: - Statsig, Vijaye Raji (VP Entertainment, VP Gaming): https://www.geekwire.com/2021/former-head-facebook-seattle-scores-cash-startup-helps-devs-quickly-test-product-features/ https://www.geekwire.com/2021/former-head-facebook-seattle-s... - Anonym, Graham Mudd (VP Product Marketing/Ads): https://www.adexchanger.com/ad-exchange-news/metas-graham-mudd-to-depart-and-found-his-own-privacy-startup/ https://www.adexchanger.com/ad-exchange-news/metas-graham-mu... - Mori, Cory Ondrejka (VP Engineer): https://www.speakers.co.uk/speakers/cory-ondrejka/ https://www.speakers.co.uk/speakers/cory-ondrejka/ - Detect, Hugo Barra (VP of VR): https://www.bloomberg.com/news/articles/2021-12-15/former-facebook-executive-barra-to-lead-covid-testing-startup https://www.bloomberg.com/news/articles/2021-12-15/former-fa... - Lightspark, David Marcus (Head of fintech unit Novi): https://www.protocol.com/bulletins/david-marcus-lightspark https://www.protocol.com/bulletins/david-marcus-lightspark - Additional Ventures, Mike Schroepfer (ex-CTO; he founded AV two years prior to exit, but left FB to focus on it): https://www.cnbc.com/2022/07/30/facebook-former-cto-mike-schroepfer-on-his-new-climate-change-focus.html https://www.cnbc.com/2022/07/30/facebook-former-cto-mike-sch...
- iLoveOncall 4y ago
  Well it seems like "rarely" was the perfect adjective then. For each of those you have a hundred thousand that are not from a VP or higher.
  - __derek__ 4y ago
    That population of VP+ is also significantly smaller, though.
anonreeeeplor 4y ago
I quit FAANG to do startups this year. I quit because I was completely bored out of my mind, hyper underutilized, there were so many people around me doing the same work as me so zero interesting growth options. Now that I am in a (very good) startup, I am incredibly happy, learning and innovating nonstop, meeting new people, in a hyper growth market, building a completely new skillset. I could never go back to these big companies. Not unless I was reporting directly to a CEO. I am not getting rich but I am filled with joy. At my previous job, I was so frustrated and the work was so pointless I was literally throwing things in my house. It made me so angry how stupid and useless a waste of time. We were working on a product which was entirely fake and everyone in the team knew it, but it was generally agreed we would all fake it together. I would rather suck on a gas pipe than go back. It was damaging my mental health. Say what you want about desperation: You only have time in your life. They were wasting my only resource, my time.
- ng12 4y ago
  I did the same, except I ended up at two startups which became toxic and stressful and not nearly worth the effort I put into them. Maybe I'm just not good at picking startups. Anyways, I'm back at a boring but high paying job and trying to focus less on the things I do at work and more on the things I do outside of it.
  - gnat 4y ago
    > trying to focus less on the things I do at work and more on the things I do outside of it This is an under-recommended but totally solid approach to a happy life. The takeaway I got from Po Bronson's "What Should I Do With My Life?" was that vocations are overrated -- your job might be funding the things that make you happy today and that's just fine. The secret is to be happy today, not to be miserable now because <some story about future happiness>.
- greatpostman 4y ago
  I’m currently trapped in FAANG. What you have sounds amazing, but a lot of startups are terrible
seydor 4y ago
People make websites to solve their own problems "Startup people" often want to "make a startup"

78 points by justinzollars 4y ago

I am not sure desperation is the right word here. He used it to list out a bunch of unrelated motivations, but most of them I wouldn’t consider desperate.

eladgil 4y ago
I definitely agree motivations for starting a company are mixed, and vary a lot from person to person. For the most successful companies I have seen, the motivations have largely collapsed to the ones I listed - with different mix of motivation by founder. Finding the right word was definitely a struggle, but I think you need to lack alternatives in order to start a company. So "desperation" seemed to fit. Open to other ideas/suggestions on a better word?
- danielmarkbruce 4y ago
  >> you need to lack alternatives People don't talk about this much. Some brilliant people I know won't start (or stay with) a company because they have too many high paying, interesting alternatives.
- nithayakumar 4y ago
  >> you need to lack alternatives I dont believe this. Went through YC this year and many of the founders had great alternatives. You could say that none of the alternatives were as attractive... but thats how all decisions are made
- __derek__ 4y ago
  Reaching for an "extreme" label is the issue here. What you've described in the blog post is lower opportunity costs. That is compatible with but doesn't imply desperation or a lack of alternatives: neither applies to the "revenge" founders or the folks foregoing $200k+ salaries, for example. In fact, both are able to take the risk because of solid-but-not-extravagant alternatives (wealth from prior exit and highly-compensated jobs, respectively). That's what separates both from the VPs pulling down million-dollar comp, who face much higher opportunity costs for the exact same potential reward.

scarface74 4y ago

Statistically, the last reason you should join a startup is to get rich. Most fail and even those that “succeed” most only do so for the VCs.

SQueeeeeL 4y ago
Yeah, startup bros typically plan on exploiting the fuck out of a few naive coders to get rich quick. That's why all the real startups have programmers as central figures, they can actually produce and stopped themselves from getting scammed. If you're reading this and thinking about working for an early startup, don't. Best case, you make some douchey boss a few million dollars and worst case you lose years of your life making vaporware. Find a real job with stability.
- greatpostman 4y ago
  I keep getting “offers” of 10% equity to literally program the whole product that doesn’t even exist yet. Startup bros want 90% to send emails. The crazy thing is people do take those offers.
  - arcturus17 4y ago
    The only programmers taking these offers are at the bottom of the barrel in either skill or self-confidence, I’m afraid.
    - motoxpro 4y ago
      Ironically, the programming is the easy part. It’s figuring out what to program that is hard.
      - arcturus17 4y ago
        The business bros offering 10% to their CTO are probably also lousy product managers too, and know very little about what to build anyway.

kazinator 4y ago

I don't think so because desperation refers to lack of hope (literally; check out the eymology). If you have no hope, why would you embark on a startup. Startups are an expression of hope.

bgoldste 4y ago
Perhaps something like “hunger” might be a better term
- kazinator 4y ago
  Startups get desperate when they are failing: running out of funding runway without the business taking off. But long before that, there is a lot of excitement and optimism.

senko 4y ago

> Of course, through the lens of expected value, these numbers look worse as traditionally there has been a high failure rate to startups. "worse" here does a lot of heavy lifting here and doesn't begin to convey the magnitude of "worse" Use YC companies as an example. Acceptance rate around 2%, success rate about 10%. This gives you 0.2% success rate for a typical startup applying to YC. If you do succeed, unless you bootstrapped, you're going to get diluted. Let's handwave this to keeping 75% of your company (a generous assumption!). This gives the expected value of $30k, for 2 to 5 years of hard work. Before taxes.

nequo 4y ago
By success, do you mean making it big or staying in business? If the latter, do you think that the 98% who are rejected by YC all go defunct? I don’t know the numbers and I’m curious.
exac 4y ago
The set of companies that are rejected from YC can also succeed or fail.
reducesuffering 4y ago
You're twisting those numbers quite a bit. Anyone can apply to YC, like half are an idea. I'd wager most of the rejected are not following through with 2-5 years of hard work on it. You're also acting like a reject from YC means 0 EV, even when many successful startups have like 3 applications to YC, if they even were accepted at all. That $30k EV number is useless and not in any way the actual EV of 2-5 years hard work on a startup.
akomtu 4y ago
This logic is faulty for one reason: it's not a casino with randomly distributed chances. The number of FANG employees is low compared to the entire population, yet some of the students are almost guaranteed to make it there, because of their apparent smarts and mindset, while others have about zero chances. So it's a lottery, but the tickets aren't sold to everyone. The same is true for startup founders: some of them are obviously going to make it one day, while others don't even need to apply.

trynewideas 4y ago

> One of the reasons you rarely see a MAMAA (Meta, Alphabet, Microsoft, Apple, Amazon) VP or above start a company is the lack of desperation Only Facebook/Meta, only VP or higher, only exit-to-founder, only since 2021, and only the ones that I can find in <15 minutes: - Statsig, Vijaye Raji (VP Entertainment, VP Gaming): https://www.geekwire.com/2021/former-head-facebook-seattle-scores-cash-startup-helps-devs-quickly-test-product-features/ https://www.geekwire.com/2021/former-head-facebook-seattle-s... - Anonym, Graham Mudd (VP Product Marketing/Ads): https://www.adexchanger.com/ad-exchange-news/metas-graham-mudd-to-depart-and-found-his-own-privacy-startup/ https://www.adexchanger.com/ad-exchange-news/metas-graham-mu... - Mori, Cory Ondrejka (VP Engineer): https://www.speakers.co.uk/speakers/cory-ondrejka/ https://www.speakers.co.uk/speakers/cory-ondrejka/ - Detect, Hugo Barra (VP of VR): https://www.bloomberg.com/news/articles/2021-12-15/former-facebook-executive-barra-to-lead-covid-testing-startup https://www.bloomberg.com/news/articles/2021-12-15/former-fa... - Lightspark, David Marcus (Head of fintech unit Novi): https://www.protocol.com/bulletins/david-marcus-lightspark https://www.protocol.com/bulletins/david-marcus-lightspark - Additional Ventures, Mike Schroepfer (ex-CTO; he founded AV two years prior to exit, but left FB to focus on it): https://www.cnbc.com/2022/07/30/facebook-former-cto-mike-schroepfer-on-his-new-climate-change-focus.html https://www.cnbc.com/2022/07/30/facebook-former-cto-mike-sch...

iLoveOncall 4y ago
Well it seems like "rarely" was the perfect adjective then. For each of those you have a hundred thousand that are not from a VP or higher.
- __derek__ 4y ago
  That population of VP+ is also significantly smaller, though.

anonreeeeplor 4y ago

I quit FAANG to do startups this year. I quit because I was completely bored out of my mind, hyper underutilized, there were so many people around me doing the same work as me so zero interesting growth options. Now that I am in a (very good) startup, I am incredibly happy, learning and innovating nonstop, meeting new people, in a hyper growth market, building a completely new skillset. I could never go back to these big companies. Not unless I was reporting directly to a CEO. I am not getting rich but I am filled with joy. At my previous job, I was so frustrated and the work was so pointless I was literally throwing things in my house. It made me so angry how stupid and useless a waste of time. We were working on a product which was entirely fake and everyone in the team knew it, but it was generally agreed we would all fake it together. I would rather suck on a gas pipe than go back. It was damaging my mental health. Say what you want about desperation: You only have time in your life. They were wasting my only resource, my time.

ng12 4y ago
I did the same, except I ended up at two startups which became toxic and stressful and not nearly worth the effort I put into them. Maybe I'm just not good at picking startups. Anyways, I'm back at a boring but high paying job and trying to focus less on the things I do at work and more on the things I do outside of it.
- gnat 4y ago
  > trying to focus less on the things I do at work and more on the things I do outside of it This is an under-recommended but totally solid approach to a happy life. The takeaway I got from Po Bronson's "What Should I Do With My Life?" was that vocations are overrated -- your job might be funding the things that make you happy today and that's just fine. The secret is to be happy today, not to be miserable now because <some story about future happiness>.
greatpostman 4y ago
I’m currently trapped in FAANG. What you have sounds amazing, but a lot of startups are terrible

seydor 4y ago

People make websites to solve their own problems "Startup people" often want to "make a startup"