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Ok let me tell you a secret here. A secret which books, youtube channels, startup accelerators won't tell you. The stories that you hear with hard work, findin
by ilrwbwrkhv 3y ago
Ok let me tell you a secret here. A secret which books, youtube channels, startup accelerators won't tell you.
The stories that you hear with hard work, finding a niche, product market fit, build a great product are all lies.
The true secret is what I think of as "dirty business".
Think: spam, sex, gambling, money making, scraping data, connections (which are not dirty per se but often not mentioned in stories).
Examples:
LinkedIn: spam
Snapchat: sex
Google: money making
Facebook: sex, spam
Slack: connections
Uber: connections, money making
Airbnb: spam
I can go on and on and almost any large scale success (over $10 million ARR) have had these things.
The only time these can be broken is when a new paradigm starts:
Examples:
PC
Internet
Mobile
LLM
These usually happen every decade or so and you have ~2 years to make it (Dirty business also helps here to go really fast).
The other key insight is the way the capitalism system works, if you achieve the initial growth, you almost always will succeed. To go from $10 million ARR to $100 million ARR is easy as pie.
So, the bottom line is if you are a normal, moral person, who is righteous and thinking I will make something to help others and disrupt the world, you will fail.
The alternative is small tech businesses which at the most you can sell for a few million dollars. That is still achievable and easy. You must hyper focus on a location and a niche and just sell to them. But I don't think of them as a startup. They are more like your local salons and restaurants. A mom and pop shop which is instead dealing in software.
For B2B software you need to have at least 3 - 5 customers willing to sign $10,000 and above contracts before you write a single line of code. This is still possible but you need the connections and the deep insight of the industry to make something meaningful.
I do not know why so much of the literature and teaching stuff discounts that initial spark which causes startups to grow. They are all lies. Focus on connections with local politicians (donate $10,000 to the up and coming politician?), movers and shakers, buying large amount of scraped data etc. Think dirty business and then maybe you will have a chance of succeeding.
Would love any counter arguments and comments. This is from a very long, over a decade research into why some businesses succeed and others fail.
- muzani 3y agoI was reading racketeering on Wikipedia last night and one thing that surprised me was "illegal taxis". Okay, what's that? https://en.wikipedia.org/wiki/Illegal_taxi_operation https://en.wikipedia.org/wiki/Illegal_taxi_operation Oh there's Uber mentioned at the bottom there, with no clear definition why it's not racketeering. Another interesting situation was when I was reading up on bank runs. Basically the default behavior of a bank is to have a bank run when people pull out of it. People will pull out when deposits are not insured by the gov or other third party entity. 2008 crash happened because entities that were not banks were behaving like banks (e.g. construction companies giving out loans) but they were not insured like banks. When banks are insured, they are very tightly regulated to the point they make little profit. Most of the time, when someone makes a ton of money in finance, they're not playing by the tight rules of banks but act like banks. Basically all the fintech stuff you see today.
- ilrwbwrkhv 3y agoAbsolutely. I was talking to some more folks today. I just finished looking into this a few days back. I might write a book or something on this. It is crazy how much B.S. we are fed without talking about the spark. Building a good product and those things matter much later.