12 ms·

Why you should choose an ambitious startup idea

105 points by dwynings 15y ago

pg 15y ago
Based on a lot of data, I'd say he's right. It's harder to work on an ambitious idea, but not proportionately harder.
- randome3889 15y ago
  I think he is somewhat right. I do not think you can go directly after large markets. Most successful companies have gone for small markets that then disrupted large markets. I'm (100M exits are not that great for the record!).
- diminish 15y ago
  Actually, once one proves herself with some success it becomes easier to dare to focus on harder ideas. I see the signs of that at PG or Google's Larry Page and Sergey Brin. Once having tasted success, they feel anything is doable and possible. For the majority of start-up entrepreneurs, just succeeding the first time is the hard problem and requires ambition.
  - pg 15y ago
    That's true, but external encouragement can speed up this process. That's a large part of the raison d'etre of YC in fact. We encourage founders and so do the other founders.
- villagefool 15y ago
  Where can that data be found if it is publicly available?
  - aaronblohowiak 15y ago
    you could infer it from the number of employees and the size of the exit, adjusted by the age of the company. This will roughly give you a dollar earned per person-year, assuming that person-years are fungible (they aren't) and will not tell you about chance of success -- but would be interesting nonetheless.
- baddox 15y ago
  To what data are you referring? Surely there are also tons of smaller tech startups (or other small businesses) that were somewhat stable while small, but that failed directly due to their ambition.
  - felipemnoa 15y ago
    >>To what data are you referring? Probably all the data pg has gathered by funding a lot of startups?
    - substack 15y ago
      For which there is a massive amount of selection bias going on. I would want to see actual figures and a proper linear regression model before jumping to any conclusions here.
- verelo 15y ago
  Probably pretty true. I think the type of idea someone comes up with it greatly depends on the individuals personality, which also greatly impacts the success rate.
- larrys 15y ago
  "It's harder to work on an ambitious idea, but not proportionately harder." Sure it may not be harder to work on an ambitious idea than to start an Italian restaurant (or the startup equivalent - something that is ubiquitous and stands a good chance of succeeding if executed correctly). But although I acknowledge that the possibility of hitting it big from opening the "restaurant" is small compared to an ambitious idea, the chance of the restaurant succeeding and being an ongoing concern is magnitudes greater than the ambitious idea. The simple fact is non ambitious ideas don't pay off for investors and that's why investors are biased to not encourage those types of ideas.
- RuggeroAltair 15y ago
  Not only it isn't proportionally harder, but I think that Google feared your essay when you were indicating search as a possible startup. First, Matt Cutts said "Paul's #1 suggestion is reinventing search. I happily welcome competition in search because it keeps us on our toes, but his #2 suggestion resonated with me more: reinventing email." They just today released (for the first time, and they even call it huge news) a video about what they do on a search, I'm sure watchers must have thought that search is so advanced and hard seeing that video that they might give up ;-) I wonder what pushed them to post this video. It's not even very informative, it talks about searches of N-grams and spell corrections, it seems more like something to show how advanced the changes they make are. It must be so hard to catch up with them ;-) Maybe GOOG is afraid of a plethora of startups reinventing search. One may succeed.
AznHisoka 15y ago
It depends on your life circumstances. I think it's easy to choose an ambitious startup once you have a success under your belt, and aren't worried about paying the bills (ie. have a small exit/cushion already). On the other hand, if you still got to pay the bills, and have a family, it makes sense to pursue a smaller idea that doesn't require $10 million in venture capital, or a team of 20 people. You say that you can start small, and go big.. but I'm not so sure many people here have the luxury on working on any project for 2+ years, and still not have any profit to show for it. It makes more sense once you have some cushion as OP does with his first success.
- Geee 15y ago
  That's true, and also brings in the question why rich people don't (typically) start ambitious startups with all their money. Elon Musk is an opposite example however; all his projects being something really big and ambitious on blue ocean markets. There would be so much to explore beyond making the next twitter, but it seems that people aren't just crazy enough.
- drats 15y ago
  Exactly, would Gabriel have been able to start DDG without the money from selling NamesDatabase (or other private money)? I think a lot of these guys who have "made it" forget how difficult resources can be for the rest of us, especially when talking about webscale projects.
  - epi0Bauqu 15y ago
    I was certainly in a great situation. However, we weren't living off any more than my wife's salary (including any DDG investments), so I would say the answer was yes.
    - AznHisoka 15y ago
      Would someone who had a mortgage, and kids to pay tuition for had that luxury though?
pedalpete 15y ago
How do we define an ambitious vs a non-ambitious idea? How many people here are working on ideas that may not seem ambitious on the surface, but with long-term goals that are very ambitious?
- prgibbons 15y ago
  The size of the market and obstacles in the way. For example, K-College education in the U.S. is about a $1 trillion a year economy. Government and self-interested trade organizations stands in the way of disruption (they don't want to be disrupted they want to keep their jobs at the expense of everyone else).
  - pedalpete 15y ago
    I think I have to disagree with your logic. Apple, Microsoft, Facebook and Twitter would not have been considered ambitious. They mostly created their own markets or were so early to a market that had huge potential that they didn't have significant market size or 'obstacles in the way'.
- jt2190 15y ago
  This is a very good point. For example, would Google have been considered ambitious (trying to dislodge the dominant search engines) or conservative (launching into an established market)?
revorad 15y ago
I think ambition is in founders, not in ideas. A truly ambitious founder will take the smallest of ideas and turn it into something big.
aaronbrethorst 15y ago
Tractionbook looks interesting, but there's a typo right at the top of the page: "traciton" -> "traction"
- epi0Bauqu 15y ago
  Thanks, fixed, but this project is dead. It just serves as an archive for the interviews.
prgibbons 15y ago
If you want to disrupt higher ed first you have to realize how bloated it is and how it tries to do everything but educate students. more on bloat: http://goldwaterinstitute.org/sites/default/files/Administrative%20Bloat.pdf http://goldwaterinstitute.org/sites/default/files/Administra... I've written some more about how oversold education is here: http://www.thewesternwrangler.com/search/label/administrative%20bloat http://www.thewesternwrangler.com/search/label/administrativ... http://www.thewesternwrangler.com/2011/03/higher-education-recap.html http://www.thewesternwrangler.com/2011/03/higher-education-r...
- prgibbons 15y ago
  1 strategy might be to buy an established university and get rid of the wasteful excess. Another strategy would be to attract the brightest away via some sort of YC/Theil education combo (we provide an education for a cut in your future income and we put you in touch with the brightest minds). You'd then have to overcome all the problems with licensing associated with the alliance between higher ed and local/state government (you can't train engineers, doctors, lawyers without approval from certification schemes, ...software engineers don't require certification yet). You would do this by demonstrating your students are smarter and more capable than the certified students. Once you've taken down the licensing and certification scheme you open the road to disrupt higher education for everyone else.
architgupta 15y ago
Marc Andreessen posted the following comment on Gabriel's blog. "Great post -- this is what my partner Ben and I have always believed. Starting a company is just plain hard. It's not clear that starting an ambitious company is any harder than starting a less ambitious company. Your points on market size and being attractive to the ecosystem (particularly talented employees) are dead on. The other thing we find is that less ambitious startups in Silicon Valley are often built to appeal to an acquirer as an exit strategy -- the cliche of "we will work for two years and then Google will buy us for $50 million". The big problem with that is what we call the "then what" problem -- if Google doesn't buy you, then what? Whereas ambitious companies built to stand on their own two feet and succeed in big markets are both highly attractive as acquisition targets and are viable independent companies. "
- swombat 15y ago
  That's only true if you're following the "build to flip" model. Many supposedly companies all around the world become successful businesses by focusing on a problem that is perhaps less ambitious, but makes money.
  - architgupta 15y ago
    I am not sure I follow your comment. For most startups, if I understand correctly, the founders get rich on a liquidity event - either the company getting sold or IPO'ing. So eventually you are going to flip, if things go well, right? Or go public in the rare but usually better outcome. Anyway this is Andreessen's view. I work on a "smaller problem" right now. :)
    - swombat 15y ago
      Absolutely not. There are many ways for a founder to get rich. Liquidity is just one of them. A pretty standard way is for the company to start issuing dividends. The founder is presumably a major shareholder, and so if a big dividend is issued, they'll get a big chunk of that. Obviously if you've raised VC, then that won't work - though angels will probably be more understanding. So, the conclusion is, liquidity events are only necessary if you've raised VC money. So don't raise VC money if you don't have to.
2pasc 15y ago
I think this is a great post, and this is so true. The only caveat I would add is that sometimes ideas that don't seem ambitious end up being super ambitious. Facebook is a great example of that. In a video you can now find on Youtube, Mark Zuckerberg was describing theFacebook as a directory for college students. Not super ambitious. But then, he realized that he could open it up...and make it a platform, and that became super ambitious. You could say the same about Twitter, I think. The risk of being too ambitious at first is being unable to ship your MVP because it appears too narrow vs. the ambition you have in your head. I know many entrepreneurs that failed because of that. Great entrepreneurs can ship a great MVP for an ambitious idea and thrive from there...
gwawill 15y ago
The funny thing is even when people present the ambitious ideas they are laughed at. let me try again. I have a big idea to take on the banking system, yes the banks.launched the MVP 2 weeks ago not wanting to be too ambitious at the beginning. Have two more features to add that will really challenge them. Plus we already know at this point that banks don't care about the disappearing middle class. http://www.cnbc.com/id/45899309/Why_Banks_Shun_30_Million_Americans http://www.cnbc.com/id/45899309/Why_Banks_Shun_30_Million_Am... http://www.businessweek.com/news/2012-02-29/jpmorgan-sees-clients-with-less-than-100-000-as-unprofitable.html http://www.businessweek.com/news/2012-02-29/jpmorgan-sees-cl.... For now, it is a fun way to save money with friends http://sou-sous.com http://sou-sous.com . If you are not laughing by now and want to join this challenge or any advice, please let me know.
- sopooneo 15y ago
  You post seemed somewhat interesting until I saw the name you chose, then I stopped short. Where are you from that you know that term?
einhverfr 15y ago
I always say: Think big. Plan in meticulous detail. Then shelve your plan and just do it. Come back to your plan a year later and see how you are doing. Business plans are great exercises for thinking through issues. However, don't let it stop you from picking up on important opportunities down the road. Prepare a new plan every year. Again, don't look at it during the year.
- ojbyrne 15y ago
  "Plans are nothing; planning is everything." - Dwight D. Eisenhower
anshima 15y ago
So true,,,,a startup with great potential can do great

105 points by dwynings 15y ago

pg 15y ago

Based on a lot of data, I'd say he's right. It's harder to work on an ambitious idea, but not proportionately harder.

randome3889 15y ago
I think he is somewhat right. I do not think you can go directly after large markets. Most successful companies have gone for small markets that then disrupted large markets. I'm (100M exits are not that great for the record!).
diminish 15y ago
Actually, once one proves herself with some success it becomes easier to dare to focus on harder ideas. I see the signs of that at PG or Google's Larry Page and Sergey Brin. Once having tasted success, they feel anything is doable and possible. For the majority of start-up entrepreneurs, just succeeding the first time is the hard problem and requires ambition.
- pg 15y ago
  That's true, but external encouragement can speed up this process. That's a large part of the raison d'etre of YC in fact. We encourage founders and so do the other founders.
villagefool 15y ago
Where can that data be found if it is publicly available?
- aaronblohowiak 15y ago
  you could infer it from the number of employees and the size of the exit, adjusted by the age of the company. This will roughly give you a dollar earned per person-year, assuming that person-years are fungible (they aren't) and will not tell you about chance of success -- but would be interesting nonetheless.
baddox 15y ago
To what data are you referring? Surely there are also tons of smaller tech startups (or other small businesses) that were somewhat stable while small, but that failed directly due to their ambition.
- felipemnoa 15y ago
  >>To what data are you referring? Probably all the data pg has gathered by funding a lot of startups?
  - substack 15y ago
    For which there is a massive amount of selection bias going on. I would want to see actual figures and a proper linear regression model before jumping to any conclusions here.
verelo 15y ago
Probably pretty true. I think the type of idea someone comes up with it greatly depends on the individuals personality, which also greatly impacts the success rate.
larrys 15y ago
"It's harder to work on an ambitious idea, but not proportionately harder." Sure it may not be harder to work on an ambitious idea than to start an Italian restaurant (or the startup equivalent - something that is ubiquitous and stands a good chance of succeeding if executed correctly). But although I acknowledge that the possibility of hitting it big from opening the "restaurant" is small compared to an ambitious idea, the chance of the restaurant succeeding and being an ongoing concern is magnitudes greater than the ambitious idea. The simple fact is non ambitious ideas don't pay off for investors and that's why investors are biased to not encourage those types of ideas.
RuggeroAltair 15y ago
Not only it isn't proportionally harder, but I think that Google feared your essay when you were indicating search as a possible startup. First, Matt Cutts said "Paul's #1 suggestion is reinventing search. I happily welcome competition in search because it keeps us on our toes, but his #2 suggestion resonated with me more: reinventing email." They just today released (for the first time, and they even call it huge news) a video about what they do on a search, I'm sure watchers must have thought that search is so advanced and hard seeing that video that they might give up ;-) I wonder what pushed them to post this video. It's not even very informative, it talks about searches of N-grams and spell corrections, it seems more like something to show how advanced the changes they make are. It must be so hard to catch up with them ;-) Maybe GOOG is afraid of a plethora of startups reinventing search. One may succeed.

AznHisoka 15y ago

It depends on your life circumstances. I think it's easy to choose an ambitious startup once you have a success under your belt, and aren't worried about paying the bills (ie. have a small exit/cushion already). On the other hand, if you still got to pay the bills, and have a family, it makes sense to pursue a smaller idea that doesn't require $10 million in venture capital, or a team of 20 people. You say that you can start small, and go big.. but I'm not so sure many people here have the luxury on working on any project for 2+ years, and still not have any profit to show for it. It makes more sense once you have some cushion as OP does with his first success.

Geee 15y ago
That's true, and also brings in the question why rich people don't (typically) start ambitious startups with all their money. Elon Musk is an opposite example however; all his projects being something really big and ambitious on blue ocean markets. There would be so much to explore beyond making the next twitter, but it seems that people aren't just crazy enough.
drats 15y ago
Exactly, would Gabriel have been able to start DDG without the money from selling NamesDatabase (or other private money)? I think a lot of these guys who have "made it" forget how difficult resources can be for the rest of us, especially when talking about webscale projects.
- epi0Bauqu 15y ago
  I was certainly in a great situation. However, we weren't living off any more than my wife's salary (including any DDG investments), so I would say the answer was yes.
  - AznHisoka 15y ago
    Would someone who had a mortgage, and kids to pay tuition for had that luxury though?

pedalpete 15y ago

How do we define an ambitious vs a non-ambitious idea? How many people here are working on ideas that may not seem ambitious on the surface, but with long-term goals that are very ambitious?

prgibbons 15y ago
The size of the market and obstacles in the way. For example, K-College education in the U.S. is about a $1 trillion a year economy. Government and self-interested trade organizations stands in the way of disruption (they don't want to be disrupted they want to keep their jobs at the expense of everyone else).
- pedalpete 15y ago
  I think I have to disagree with your logic. Apple, Microsoft, Facebook and Twitter would not have been considered ambitious. They mostly created their own markets or were so early to a market that had huge potential that they didn't have significant market size or 'obstacles in the way'.
jt2190 15y ago
This is a very good point. For example, would Google have been considered ambitious (trying to dislodge the dominant search engines) or conservative (launching into an established market)?

revorad 15y ago

I think ambition is in founders, not in ideas. A truly ambitious founder will take the smallest of ideas and turn it into something big.

aaronbrethorst 15y ago

Tractionbook looks interesting, but there's a typo right at the top of the page: "traciton" -> "traction"

epi0Bauqu 15y ago
Thanks, fixed, but this project is dead. It just serves as an archive for the interviews.

prgibbons 15y ago

If you want to disrupt higher ed first you have to realize how bloated it is and how it tries to do everything but educate students. more on bloat: http://goldwaterinstitute.org/sites/default/files/Administrative%20Bloat.pdf http://goldwaterinstitute.org/sites/default/files/Administra... I've written some more about how oversold education is here: http://www.thewesternwrangler.com/search/label/administrative%20bloat http://www.thewesternwrangler.com/search/label/administrativ... http://www.thewesternwrangler.com/2011/03/higher-education-recap.html http://www.thewesternwrangler.com/2011/03/higher-education-r...

prgibbons 15y ago
1 strategy might be to buy an established university and get rid of the wasteful excess. Another strategy would be to attract the brightest away via some sort of YC/Theil education combo (we provide an education for a cut in your future income and we put you in touch with the brightest minds). You'd then have to overcome all the problems with licensing associated with the alliance between higher ed and local/state government (you can't train engineers, doctors, lawyers without approval from certification schemes, ...software engineers don't require certification yet). You would do this by demonstrating your students are smarter and more capable than the certified students. Once you've taken down the licensing and certification scheme you open the road to disrupt higher education for everyone else.

architgupta 15y ago

Marc Andreessen posted the following comment on Gabriel's blog. "Great post -- this is what my partner Ben and I have always believed. Starting a company is just plain hard. It's not clear that starting an ambitious company is any harder than starting a less ambitious company. Your points on market size and being attractive to the ecosystem (particularly talented employees) are dead on. The other thing we find is that less ambitious startups in Silicon Valley are often built to appeal to an acquirer as an exit strategy -- the cliche of "we will work for two years and then Google will buy us for $50 million". The big problem with that is what we call the "then what" problem -- if Google doesn't buy you, then what? Whereas ambitious companies built to stand on their own two feet and succeed in big markets are both highly attractive as acquisition targets and are viable independent companies. "

swombat 15y ago
That's only true if you're following the "build to flip" model. Many supposedly companies all around the world become successful businesses by focusing on a problem that is perhaps less ambitious, but makes money.
- architgupta 15y ago
  I am not sure I follow your comment. For most startups, if I understand correctly, the founders get rich on a liquidity event - either the company getting sold or IPO'ing. So eventually you are going to flip, if things go well, right? Or go public in the rare but usually better outcome. Anyway this is Andreessen's view. I work on a "smaller problem" right now. :)
  - swombat 15y ago
    Absolutely not. There are many ways for a founder to get rich. Liquidity is just one of them. A pretty standard way is for the company to start issuing dividends. The founder is presumably a major shareholder, and so if a big dividend is issued, they'll get a big chunk of that. Obviously if you've raised VC, then that won't work - though angels will probably be more understanding. So, the conclusion is, liquidity events are only necessary if you've raised VC money. So don't raise VC money if you don't have to.

2pasc 15y ago

I think this is a great post, and this is so true. The only caveat I would add is that sometimes ideas that don't seem ambitious end up being super ambitious. Facebook is a great example of that. In a video you can now find on Youtube, Mark Zuckerberg was describing theFacebook as a directory for college students. Not super ambitious. But then, he realized that he could open it up...and make it a platform, and that became super ambitious. You could say the same about Twitter, I think. The risk of being too ambitious at first is being unable to ship your MVP because it appears too narrow vs. the ambition you have in your head. I know many entrepreneurs that failed because of that. Great entrepreneurs can ship a great MVP for an ambitious idea and thrive from there...

gwawill 15y ago

The funny thing is even when people present the ambitious ideas they are laughed at. let me try again. I have a big idea to take on the banking system, yes the banks.launched the MVP 2 weeks ago not wanting to be too ambitious at the beginning. Have two more features to add that will really challenge them. Plus we already know at this point that banks don't care about the disappearing middle class. http://www.cnbc.com/id/45899309/Why_Banks_Shun_30_Million_Americans http://www.cnbc.com/id/45899309/Why_Banks_Shun_30_Million_Am... http://www.businessweek.com/news/2012-02-29/jpmorgan-sees-clients-with-less-than-100-000-as-unprofitable.html http://www.businessweek.com/news/2012-02-29/jpmorgan-sees-cl.... For now, it is a fun way to save money with friends http://sou-sous.com http://sou-sous.com . If you are not laughing by now and want to join this challenge or any advice, please let me know.

sopooneo 15y ago
You post seemed somewhat interesting until I saw the name you chose, then I stopped short. Where are you from that you know that term?

einhverfr 15y ago

I always say: Think big. Plan in meticulous detail. Then shelve your plan and just do it. Come back to your plan a year later and see how you are doing. Business plans are great exercises for thinking through issues. However, don't let it stop you from picking up on important opportunities down the road. Prepare a new plan every year. Again, don't look at it during the year.

ojbyrne 15y ago
"Plans are nothing; planning is everything." - Dwight D. Eisenhower

anshima 15y ago

So true,,,,a startup with great potential can do great