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We need a "slow startup" movement. pg's definition of a startup is just one kind of startup. I like to call it the VC startup. It's an organization whose goal

We need a "slow startup" movement. pg's definition of a startup is just one kind of startup. I like to call it the VC startup. It's an organization whose goal is to succeed big or fail, and fast. This "charter" is driven by the needs of investors, and I get that. It makes perfect sense, and from where pg's sitting, it's the attitude he needs to have to successfully manage his portfolio. But it's not the only way to grow a startup, and I think it unfairly marginalizes non-VC startups as non-startups. pg probably wouldn't consider my company a startup, but I think he'd be wrong. We're 4 years old, have 4 employees, profitable, and grow at a pokey 100% YoY. The pace of work is enjoyable. We build things for the long-term. We have time to help our customers. We get to see our friends and family. A lot. The principals own 100% of the equity. But in our minds we aren't building just a tech business, we are building a startup. A slow startup. We picked a huge market (photography). We started by marketing to a small niche where we could be profitable while building the infrastructure required to scale to a larger horizontal market. If we'd been VC funded, we might be in the same position for growth; finally finding traction after years and several expensive, painful pivots. In this alternate startup universe we'd own practically none of the company at that point, and we'd have wasted a lot more money. I "grew up" in the 90s dot-com era reading Geoffrey Moore. We feel like we're executing that strategy and doing it well. We're poised for overnight success in a larger market, and on our own terms. I don't feel like any less of a startup than the multiple VC-backed startups I have worked for previously. I do feel a lot less stress. So, if you want to enjoy life, build great things, and potentially make a ton of money, don't think it's not possible. Find or found a slow startup and change the world!

DASD 14y ago
Perhaps even applaud "slow" in the sense of longterm as a movement. It applies to not only "startups." Joel Spolsky wrote a great article about this in 2009 that also had an active discussion here. http://news.ycombinator.com/item?id=920668 http://news.ycombinator.com/item?id=920668 http://www.inc.com/magazine/20091101/does-slow-growth-equal-slow-death.html http://www.inc.com/magazine/20091101/does-slow-growth-equal-...
- apinstein 14y ago
  Thanks for sharing. The growth part that Joel writes about is very interesting. One of the most important things about Crossing the Chasm/Inside the Tornado is knowing where your company and your market are in the TALC. At first blush it'd seem like you always have to hurry to grow or else you end up crossing the chasm too late and are relegated to monkey status forever. However, when you mix in some insight from Innovator's Dilemma, you see that you get a new market TALC curve whenever the market's primary feature requirement changes. So for a "mature market" like photography, we are trying to figure out what the next shift in feature needs will be, and hopefully pivot and cross the chasm to catch that wave.
readyfounder 14y ago
Couldn't agree more. PG's definition of "startup" aside, there are plenty of high growth businesses that started at a measured pace, with little or no outside capital, found a market sweet spot, then scaled rapidly (usually with later stage capital)... Maybe they're not startups, but they are highly successful businesses with high impact and wealthy founders. Not easy to do, but perhaps at least as likely to succeed as a classically defined startup (whether tech or non-tech).
- drumdance 14y ago
  Microsoft comes to mind. They didn't really have a sustainable revenue model for four years and I believe didn't take any VC until right before their IPO.
outside1234 14y ago
After several "fast startups" I'm with you on this. We're doing it slow this time - no VCs, bootstrapped - and it is making a huge difference. Focus is on building a service that people will pay for so we can keep building the service instead of wasting tons of time doing the "VC money dance." It has helped tremendously in almost everything - more time with family - more time working on the product than on VC stroking - more focus on the customer. I'm on the slow startup train and I'm never going back.
- danielweber 14y ago
  It's nice, but you have to watch out for ending up in the dead zone -- a company that's hasn't failed, but is just sitting there and staying in place. It's really tough to find the right middle point, and it's probably different for every business.
photon137 14y ago
Couldn't agree more - let the entrepreneurs define and live the term "startup" - not the VCs. (PS: After sleeping over pg's essay, I found it much less convincing the next day - implicitly, he's mixing up price with value, ignoring the temporal nature of markets and of opportunities - Google couldn't have been a startup in 1989 and Ford was a startup in the 1910s - and disregarding multi-product and B2B startups (premium Tibetan to Hungarian services) altogether. The clincher from yesterday - weekly growth of 7% - sounds like utter BS today.) EDIT: Not sure why I'm being downvoted. I'm just pointing out that this article only and only defines a startup in terms of its worthiness to investors. It's as misleading as any other single-formula characterization of a complex multi-agent system. Startups != Growth, period.
- garry 14y ago
  7% weekly growth may seem like BS, but it happens. The arbiter of this growth rate is a function of need and reach as PG said. To say it is BS while there is evidence the phenomenon is possible (having experienced it first hand and seeing friends achieve it for long periods of time) and that we even know the factors in it -- that is a self limiting belief indeed.
  - photon137 14y ago
    I am not terming that as BS because it's impossible - it's not. I'm saying it's not suitable for all businesses (it might be downright hara-kiri for some of them) - that alone should not disqualify them from being known or viewed as startups.
    - PeterisP 14y ago
      Why not? Words and terms are useful only if they mean something. It is not useful to mix "high growth startups" and "slow growth startups" in a single word meaning/term, as the practical difference is actually bigger than what they have in common. So PG is saying that "startup" means "growth startup", and young enterprises without the goal of explosive growth should be called something else, as they are significantly different.
larrys 14y ago
"pg's definition of a startup is just one kind of startup." Most important is that PG's definition of a startup (or Fred Wilson's or Steve Blanks or pmarcas or Doug McClure's etc.) is to serve a purpose of what is good for them in their business model which is to make money off of people who take chances with their time hoping for a certain outcome. It's not about what is good for any particular person or for society. Guess what? That's not what business is about either. And YC is a business. It's not on a mission to help the world although that could be a by product of a successful investment. That's fine as we all tend to do what is in our best interest (in varying degrees of course), but it needs to be recognized and considered when one makes a decision to go down that path of which the person taking the journey is the one who has something to loose (time or impact on family). Possibly the parent poster is jesting or perhaps they didn't realize this before, but it is quite obvious that what people write is self serving in so many ways. PG is no different. Notice also that PG didn't exactly do anything "ambitious" with his time. He choose a path of certainty (Harvard and YC was certainly not "bet the ranch" in any way it's an excellent idea that in retrospect anyone can see had an excellent chance of working with a smallish downside). Viaweb was not "ambitious" either. I was around when that was founded and it was fairly obvious small business needed online stores and there were multiple companies doing the same thing. Before you downvote, this is not in any way to rain on Paul's parade or take away any of his achievements at all. Or to try and make a point that there is anything wrong with what he is saying vs. what he has done. There are always the "to be sure phrases" sprinkled about. PG does this quite early (in the fourth paragraph) by stating "because most startups fail." which of course is slipped in there the same way financial firms say "past performance is no guarantee of future gains" in their advertising (while taking out expensive full page ads in order to tout their past performance - at least they did back in the day..)
- tlb 14y ago
  Businesses that are good for society need to grow quickly to actually reach a large fraction of society. To get from 100 users to 100 million, you need to double 20 times. If you only double once a year, it'll take 20 years before you benefit a lot of people. If you can double 5 times a year, you benefit a lot of people after only 4 years. So no, rapid growth isn't just something investors like. If your product helps people, you want it to help the most people possible as soon as possible.
anovikov 14y ago
I think the problem with business like this is that there are few of the niches where it can exist sustainably (and thus be worth money). You either eat out small niche quickly, or big players come and eat you for breakfast, or you specialize so deeply that you turn into a consulting company ('job'). So most of the time, you have to be 'pg kind of startup' or go bust (while there are quite a few exceptions). In most markets big enough where a business can exist for a long time you either have to grow fast VC-style, or someone else will do it.

DASD 14y ago

Perhaps even applaud "slow" in the sense of longterm as a movement. It applies to not only "startups." Joel Spolsky wrote a great article about this in 2009 that also had an active discussion here. http://news.ycombinator.com/item?id=920668 http://news.ycombinator.com/item?id=920668 http://www.inc.com/magazine/20091101/does-slow-growth-equal-slow-death.html http://www.inc.com/magazine/20091101/does-slow-growth-equal-...

apinstein 14y ago
Thanks for sharing. The growth part that Joel writes about is very interesting. One of the most important things about Crossing the Chasm/Inside the Tornado is knowing where your company and your market are in the TALC. At first blush it'd seem like you always have to hurry to grow or else you end up crossing the chasm too late and are relegated to monkey status forever. However, when you mix in some insight from Innovator's Dilemma, you see that you get a new market TALC curve whenever the market's primary feature requirement changes. So for a "mature market" like photography, we are trying to figure out what the next shift in feature needs will be, and hopefully pivot and cross the chasm to catch that wave.

readyfounder 14y ago

Couldn't agree more. PG's definition of "startup" aside, there are plenty of high growth businesses that started at a measured pace, with little or no outside capital, found a market sweet spot, then scaled rapidly (usually with later stage capital)... Maybe they're not startups, but they are highly successful businesses with high impact and wealthy founders. Not easy to do, but perhaps at least as likely to succeed as a classically defined startup (whether tech or non-tech).

drumdance 14y ago
Microsoft comes to mind. They didn't really have a sustainable revenue model for four years and I believe didn't take any VC until right before their IPO.

outside1234 14y ago

After several "fast startups" I'm with you on this. We're doing it slow this time - no VCs, bootstrapped - and it is making a huge difference. Focus is on building a service that people will pay for so we can keep building the service instead of wasting tons of time doing the "VC money dance." It has helped tremendously in almost everything - more time with family - more time working on the product than on VC stroking - more focus on the customer. I'm on the slow startup train and I'm never going back.

danielweber 14y ago
It's nice, but you have to watch out for ending up in the dead zone -- a company that's hasn't failed, but is just sitting there and staying in place. It's really tough to find the right middle point, and it's probably different for every business.

photon137 14y ago

Couldn't agree more - let the entrepreneurs define and live the term "startup" - not the VCs. (PS: After sleeping over pg's essay, I found it much less convincing the next day - implicitly, he's mixing up price with value, ignoring the temporal nature of markets and of opportunities - Google couldn't have been a startup in 1989 and Ford was a startup in the 1910s - and disregarding multi-product and B2B startups (premium Tibetan to Hungarian services) altogether. The clincher from yesterday - weekly growth of 7% - sounds like utter BS today.) EDIT: Not sure why I'm being downvoted. I'm just pointing out that this article only and only defines a startup in terms of its worthiness to investors. It's as misleading as any other single-formula characterization of a complex multi-agent system. Startups != Growth, period.

garry 14y ago
7% weekly growth may seem like BS, but it happens. The arbiter of this growth rate is a function of need and reach as PG said. To say it is BS while there is evidence the phenomenon is possible (having experienced it first hand and seeing friends achieve it for long periods of time) and that we even know the factors in it -- that is a self limiting belief indeed.
- photon137 14y ago
  I am not terming that as BS because it's impossible - it's not. I'm saying it's not suitable for all businesses (it might be downright hara-kiri for some of them) - that alone should not disqualify them from being known or viewed as startups.
  - PeterisP 14y ago
    Why not? Words and terms are useful only if they mean something. It is not useful to mix "high growth startups" and "slow growth startups" in a single word meaning/term, as the practical difference is actually bigger than what they have in common. So PG is saying that "startup" means "growth startup", and young enterprises without the goal of explosive growth should be called something else, as they are significantly different.

larrys 14y ago

"pg's definition of a startup is just one kind of startup." Most important is that PG's definition of a startup (or Fred Wilson's or Steve Blanks or pmarcas or Doug McClure's etc.) is to serve a purpose of what is good for them in their business model which is to make money off of people who take chances with their time hoping for a certain outcome. It's not about what is good for any particular person or for society. Guess what? That's not what business is about either. And YC is a business. It's not on a mission to help the world although that could be a by product of a successful investment. That's fine as we all tend to do what is in our best interest (in varying degrees of course), but it needs to be recognized and considered when one makes a decision to go down that path of which the person taking the journey is the one who has something to loose (time or impact on family). Possibly the parent poster is jesting or perhaps they didn't realize this before, but it is quite obvious that what people write is self serving in so many ways. PG is no different. Notice also that PG didn't exactly do anything "ambitious" with his time. He choose a path of certainty (Harvard and YC was certainly not "bet the ranch" in any way it's an excellent idea that in retrospect anyone can see had an excellent chance of working with a smallish downside). Viaweb was not "ambitious" either. I was around when that was founded and it was fairly obvious small business needed online stores and there were multiple companies doing the same thing. Before you downvote, this is not in any way to rain on Paul's parade or take away any of his achievements at all. Or to try and make a point that there is anything wrong with what he is saying vs. what he has done. There are always the "to be sure phrases" sprinkled about. PG does this quite early (in the fourth paragraph) by stating "because most startups fail." which of course is slipped in there the same way financial firms say "past performance is no guarantee of future gains" in their advertising (while taking out expensive full page ads in order to tout their past performance - at least they did back in the day..)

tlb 14y ago
Businesses that are good for society need to grow quickly to actually reach a large fraction of society. To get from 100 users to 100 million, you need to double 20 times. If you only double once a year, it'll take 20 years before you benefit a lot of people. If you can double 5 times a year, you benefit a lot of people after only 4 years. So no, rapid growth isn't just something investors like. If your product helps people, you want it to help the most people possible as soon as possible.

anovikov 14y ago

I think the problem with business like this is that there are few of the niches where it can exist sustainably (and thus be worth money). You either eat out small niche quickly, or big players come and eat you for breakfast, or you specialize so deeply that you turn into a consulting company ('job'). So most of the time, you have to be 'pg kind of startup' or go bust (while there are quite a few exceptions). In most markets big enough where a business can exist for a long time you either have to grow fast VC-style, or someone else will do it.