4 ms·

As I was clicking on the link, I was thinking "I wonder if it's just another one of those bogus stories about the Kauffman Foundation statistics." Yep. (Bogus

by pg 17y ago

As I was clicking on the link, I was thinking "I wonder if it's just another one of those bogus stories about the Kauffman Foundation statistics." Yep. (Bogus because the surprisingness comes not from the numbers themselves, but from confusing the concepts of entrepreneur and startup founder. The first paragraph is a prime example.)

mixmax 17y ago
Can you point to a better resource or study?
- pg 17y ago
  I don't know of any. The problem is not with the Kauffman foundation study's data, as far as I know. The problem is all these articles that describe the data as surprising, when most of the surprise is due to confusing startups with small companies generally.
  - startingup 17y ago
    I am not sure I am hot on the startup vs small company distinction, because there exist so many examples of cross-overs. First, there are a lot of tech "startups" (meeting pg's definition) that have preferred to stay small, becoming "lifestyle businesses" as the pejorative term has it (no, it is not my preferred term!). I bet I can think of many that started out as startups, but would not meet pg's definition of startup anymore; there may even be a few YC-backed companies in that list. The opposite also occurs and has occurred, a non-scalable-model based small business morphing into a scalable company. At some level, all taxonomies break down, but startup vs small business taxonomy isn't very strong to begin with.
deleted 17y ago
[deleted]
run4yourlives 17y ago
It’s based on a survey of 549 company founders across a variety of industries (that’s my first mistake, as it turns out entrepreneurs start companies other than Internet software companies — who knew?) Paul the only people confused between the concepts of entrepreneur and starup founder though are people that think all entrepreneurs are startup founders. :) I'd say that's a "Valley" focused viewpoint, and it shows a lot about how insular "Valley" thinking can be. I don't think it's a bad thing to be reminded that "Start Ups" are a small sub-segment of the entrepreneurial path.
- tptacek 17y ago
  That's because really, you're a startup until you're established AND your business model becomes predictable. The Valley wants you to believe you've disqualified yourself once you've found a steady income, even though your business might follow the exact same trajectory as Dropbox once you find the right knobs to turn.
  - pg 17y ago
    That is such a crock. Even if you attribute the worst possible motives to this mythical "Valley," pure greed, they'd be psyched to invest in you if they thought your future trajectory was going to look like Dropbox no matter how you got to wherever you were. The one thing venture investors are not is ideological.
    - tptacek 17y ago
      Now we're speaking past each other. Sorry, I was imprecise. My complaint is that you're describing one business strategy as if it was the defining attribute of a company, and it isn't. 37signals was a consultancy, then it was a product company. Tomorrow it could be a "pg-style" startup, if they decided to pick a product and shoot for the moon.
      - pg 17y ago
        I not only realize companies can morph from consulting to product companies, I advise it: From http://www.paulgraham.com/startupfaq.html http://www.paulgraham.com/startupfaq.html: How can someone start a startup if they have a family to support? The best plan might be to start a consulting business that you can gradually morph into a startup. This way you always have a source of income. See How to Fund a Startup, especially the section labelled "Consulting." So what exactly are you saying I'm mistaken about? Can you give me a specific sentence I've written somewhere that you believe is false?
10ren 17y ago
Do you mean that a substantial number of the respondent entrepreneurs founded companies that are not "startups" (i.e. aren't small)?
- pg 17y ago
  No, that only a tiny fraction of small companies are startups. Most small companies are local service businesses or one-man consulting operations.
  - unalone 17y ago
    So they're not start-ups in your sense of the word, but they're businesses self-started that make a living for the person/people in question.
    - pg 17y ago
      In whose sense of the word is a plumber or a gas station a startup? I'm not putting people who start those types of businesses down. Please don't try to make it sound as if I am.
      - unalone 17y ago
        By the time I went to reply you took out my favorite quip of what you wrote—"That's the kind of line a politician would say." The article was about entrepreneurs. It was not about your idea of startups. Your comment was defending a concept not present in the article. I've never liked the word "startup". Ontologically it means that something's begun. I don't feel comfortable assigning more meaning to the word than that, though the connotations have been assigned.
        pg 17y ago
        The article was about entrepreneurs. It was not about your idea of startups. Imagine an article on a web site about the NFL that began "When you think of a football player, you probably imagine someone six foot five who weighs 250 pounds. But a new study shows the average football player is actually four foot eight and weights 80 pounds." Because the average football player is actually a little league player. So yes, the study described in the article is about founders of small businesses rather than startups (in what you call my sense, meaning the generally accepted sense of the word). But what makes it misleading is that it appears on a site about startups, begins by talking about examples of startups, and then claims it's surprising that people starting small businesses have different characteristics. It's not surprising at all that the average person opening a gas station or starting his own landscaping company is 40.

by pg 17y ago

mixmax 17y ago

Can you point to a better resource or study?

pg 17y ago
I don't know of any. The problem is not with the Kauffman foundation study's data, as far as I know. The problem is all these articles that describe the data as surprising, when most of the surprise is due to confusing startups with small companies generally.
- startingup 17y ago
  I am not sure I am hot on the startup vs small company distinction, because there exist so many examples of cross-overs. First, there are a lot of tech "startups" (meeting pg's definition) that have preferred to stay small, becoming "lifestyle businesses" as the pejorative term has it (no, it is not my preferred term!). I bet I can think of many that started out as startups, but would not meet pg's definition of startup anymore; there may even be a few YC-backed companies in that list. The opposite also occurs and has occurred, a non-scalable-model based small business morphing into a scalable company. At some level, all taxonomies break down, but startup vs small business taxonomy isn't very strong to begin with.

deleted 17y ago

[deleted]

run4yourlives 17y ago

It’s based on a survey of 549 company founders across a variety of industries (that’s my first mistake, as it turns out entrepreneurs start companies other than Internet software companies — who knew?) Paul the only people confused between the concepts of entrepreneur and starup founder though are people that think all entrepreneurs are startup founders. :) I'd say that's a "Valley" focused viewpoint, and it shows a lot about how insular "Valley" thinking can be. I don't think it's a bad thing to be reminded that "Start Ups" are a small sub-segment of the entrepreneurial path.

tptacek 17y ago
That's because really, you're a startup until you're established AND your business model becomes predictable. The Valley wants you to believe you've disqualified yourself once you've found a steady income, even though your business might follow the exact same trajectory as Dropbox once you find the right knobs to turn.
- pg 17y ago
  That is such a crock. Even if you attribute the worst possible motives to this mythical "Valley," pure greed, they'd be psyched to invest in you if they thought your future trajectory was going to look like Dropbox no matter how you got to wherever you were. The one thing venture investors are not is ideological.
  - tptacek 17y ago
    Now we're speaking past each other. Sorry, I was imprecise. My complaint is that you're describing one business strategy as if it was the defining attribute of a company, and it isn't. 37signals was a consultancy, then it was a product company. Tomorrow it could be a "pg-style" startup, if they decided to pick a product and shoot for the moon.
    - pg 17y ago
      I not only realize companies can morph from consulting to product companies, I advise it: From http://www.paulgraham.com/startupfaq.html http://www.paulgraham.com/startupfaq.html: How can someone start a startup if they have a family to support? The best plan might be to start a consulting business that you can gradually morph into a startup. This way you always have a source of income. See How to Fund a Startup, especially the section labelled "Consulting." So what exactly are you saying I'm mistaken about? Can you give me a specific sentence I've written somewhere that you believe is false?

10ren 17y ago

Do you mean that a substantial number of the respondent entrepreneurs founded companies that are not "startups" (i.e. aren't small)?

pg 17y ago
No, that only a tiny fraction of small companies are startups. Most small companies are local service businesses or one-man consulting operations.
- unalone 17y ago
  So they're not start-ups in your sense of the word, but they're businesses self-started that make a living for the person/people in question.
  - pg 17y ago
    In whose sense of the word is a plumber or a gas station a startup? I'm not putting people who start those types of businesses down. Please don't try to make it sound as if I am.
    - unalone 17y ago
      By the time I went to reply you took out my favorite quip of what you wrote—"That's the kind of line a politician would say." The article was about entrepreneurs. It was not about your idea of startups. Your comment was defending a concept not present in the article. I've never liked the word "startup". Ontologically it means that something's begun. I don't feel comfortable assigning more meaning to the word than that, though the connotations have been assigned.
      - pg 17y ago
        The article was about entrepreneurs. It was not about your idea of startups. Imagine an article on a web site about the NFL that began "When you think of a football player, you probably imagine someone six foot five who weighs 250 pounds. But a new study shows the average football player is actually four foot eight and weights 80 pounds." Because the average football player is actually a little league player. So yes, the study described in the article is about founders of small businesses rather than startups (in what you call my sense, meaning the generally accepted sense of the word). But what makes it misleading is that it appears on a site about startups, begins by talking about examples of startups, and then claims it's surprising that people starting small businesses have different characteristics. It's not surprising at all that the average person opening a gas station or starting his own landscaping company is 40.