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I dont understand why starting an enterprise has become such a scary thing in the tech world. So many people start businesses, so many mom and pop shops etc. IM

I dont understand why starting an enterprise has become such a scary thing in the tech world. So many people start businesses, so many mom and pop shops etc. IMHO startups have become scary to start because we jump too quickly into starting them or have too grand expectations from outset.

muzani 2y ago
A mom and pop restaurant can compete with Burger King and Starbucks. It's not quite the same with tech, as they can pay the $300k salaries for people to do the same thing you do, and they can buy out your market. Basically everything that can be done with money is stacked against you, and all you have as a startup is more grit than all these straight A students who graduated from ivy leagues.
chefandy 2y ago
The way friends approached startups in the .com era seemed to be more like “hey, [friend]… we know how to write code, and we think we can address [thing] in [some market] better than [incumbent], so let’s spend nights and weekends hacking together a working proof of concept. It might not be representative, but the people I’ve known that wanted to start tech businesses in the past 15/20 years approached it the way people start restaurants. You can’t slowly ramp up most restaurant concepts with a DIY budget— you need to invest a lot upfront, and you need a lot of existing expertise for even pretty trivial concepts. (And before people say food trucks and catering and private chef and the like— catering and private cheffing are totally different businesses with very different processes and institutional knowledge, and in most places, food trucks aren’t dramatically cheaper than opening a small restaurant.) Folks seem eager to start acting like a CEO and delegating things to people paid with investor money rather than making something themselves and getting it off the ground. Maybe that’s what the business requires? Maybe in software markets, customers aren’t interested in scrappy small players anymore, perhaps worried about lack of support, shitty UX, them going out of business or whatever. Just speculation. Not even going to pretend I’ve got broad non-anecdotal knowledge on this.
- Earw0rm 2y ago
  I think the problem with that approach, in today's market, comes when you try to hire. Junior engineers didn't cost more than any other recent graduate, and as you could get away with a few rough edges in production for quite a while, you could put together an adequately balanced team for not much money. The tooling was much worse, but the compliance burden was much less. Did your friends in the .com era talk about "doing a startup" or "starting a business"? I feel like that's changed a bit, people are more calculated and cynical about how the game is to be played with respect to rounds, exit strategies and so on. The "startup" model specifically means something a bit different to "starting a business", around ambition, scale, investment model etc. All businesses need to be started, but not all businesses are startups.
  - chefandy 2y ago
    I don’t think the idea of starting a business in tech these days commonly exists independently of the modern tech conception of “doing a startup.” And with the hiring part, the idea was that you’d do the work yourselves and only hire anyone at all when you couldn’t do the work anymore, or you got a big enough contract/sale/etc that you could pay them. The fact that the exit strategy/investment/initial expensive hiring messiness exists is the symptom, not the cause. What I don’t really get is the cause, and I suspect it’s cultural rather than logistical. Not doing something unless you can ramp it fast enough to start worrying about paying anyone other than the people that decided to do it is a deliberate choice. In a restaurant, it’s not. You literally can’t do it without the initial investment. My dad was a mechanical engineer in a startup making industrial paper handling equipment in the 90s— one of the first hires after the handful of founders worked themselves to design and fabricate the first machines securing them the contracts to afford more employees.
    - Earw0rm 2y ago
      That's partly because of growth based valuations, and fast-acting network effects. The whole model is predicated on "get there fast, get the monopoly". Which you can't either with a traditional, non-scalable business (restaurants) or even a scalable industrial business (cars) - yes you get economy of scale, but they benefit relatively little from network effects of other people owning them. Goods like fashion which don't need a service ecosystem, even less so. Total scalability & strong network effect points toward a "get the monopoly, now" business model. Which, IDK, might suit some things but definitely isn't the right fit for all things tech.
malthaus 2y ago
because tech people don't want to start a lifestyle or low-growth business. they are reading about giga rounds, unicorns and hockey-sticks as well as the VC/PG propaganda on hackernews etc all day and think that this is the only way to do it. they eat ramen for 10 years, often even believing in someone else's dream without substantional equity to match the risk/reward profile. meanwhile, the plumber next door who started his own plumbing business is driving a ferrari on weekends.
- mettamage 2y ago
  Do you have a good resource for starting lifestyle businesses?
  - satvikpendem 2y ago
    Indie Hackers, boringcashcow.com

muzani 2y ago

A mom and pop restaurant can compete with Burger King and Starbucks. It's not quite the same with tech, as they can pay the $300k salaries for people to do the same thing you do, and they can buy out your market. Basically everything that can be done with money is stacked against you, and all you have as a startup is more grit than all these straight A students who graduated from ivy leagues.

chefandy 2y ago

The way friends approached startups in the .com era seemed to be more like “hey, [friend]… we know how to write code, and we think we can address [thing] in [some market] better than [incumbent], so let’s spend nights and weekends hacking together a working proof of concept. It might not be representative, but the people I’ve known that wanted to start tech businesses in the past 15/20 years approached it the way people start restaurants. You can’t slowly ramp up most restaurant concepts with a DIY budget— you need to invest a lot upfront, and you need a lot of existing expertise for even pretty trivial concepts. (And before people say food trucks and catering and private chef and the like— catering and private cheffing are totally different businesses with very different processes and institutional knowledge, and in most places, food trucks aren’t dramatically cheaper than opening a small restaurant.) Folks seem eager to start acting like a CEO and delegating things to people paid with investor money rather than making something themselves and getting it off the ground. Maybe that’s what the business requires? Maybe in software markets, customers aren’t interested in scrappy small players anymore, perhaps worried about lack of support, shitty UX, them going out of business or whatever. Just speculation. Not even going to pretend I’ve got broad non-anecdotal knowledge on this.

Earw0rm 2y ago
I think the problem with that approach, in today's market, comes when you try to hire. Junior engineers didn't cost more than any other recent graduate, and as you could get away with a few rough edges in production for quite a while, you could put together an adequately balanced team for not much money. The tooling was much worse, but the compliance burden was much less. Did your friends in the .com era talk about "doing a startup" or "starting a business"? I feel like that's changed a bit, people are more calculated and cynical about how the game is to be played with respect to rounds, exit strategies and so on. The "startup" model specifically means something a bit different to "starting a business", around ambition, scale, investment model etc. All businesses need to be started, but not all businesses are startups.
- chefandy 2y ago
  I don’t think the idea of starting a business in tech these days commonly exists independently of the modern tech conception of “doing a startup.” And with the hiring part, the idea was that you’d do the work yourselves and only hire anyone at all when you couldn’t do the work anymore, or you got a big enough contract/sale/etc that you could pay them. The fact that the exit strategy/investment/initial expensive hiring messiness exists is the symptom, not the cause. What I don’t really get is the cause, and I suspect it’s cultural rather than logistical. Not doing something unless you can ramp it fast enough to start worrying about paying anyone other than the people that decided to do it is a deliberate choice. In a restaurant, it’s not. You literally can’t do it without the initial investment. My dad was a mechanical engineer in a startup making industrial paper handling equipment in the 90s— one of the first hires after the handful of founders worked themselves to design and fabricate the first machines securing them the contracts to afford more employees.
  - Earw0rm 2y ago
    That's partly because of growth based valuations, and fast-acting network effects. The whole model is predicated on "get there fast, get the monopoly". Which you can't either with a traditional, non-scalable business (restaurants) or even a scalable industrial business (cars) - yes you get economy of scale, but they benefit relatively little from network effects of other people owning them. Goods like fashion which don't need a service ecosystem, even less so. Total scalability & strong network effect points toward a "get the monopoly, now" business model. Which, IDK, might suit some things but definitely isn't the right fit for all things tech.

malthaus 2y ago

because tech people don't want to start a lifestyle or low-growth business. they are reading about giga rounds, unicorns and hockey-sticks as well as the VC/PG propaganda on hackernews etc all day and think that this is the only way to do it. they eat ramen for 10 years, often even believing in someone else's dream without substantional equity to match the risk/reward profile. meanwhile, the plumber next door who started his own plumbing business is driving a ferrari on weekends.

mettamage 2y ago
Do you have a good resource for starting lifestyle businesses?
- satvikpendem 2y ago
  Indie Hackers, boringcashcow.com