5 ms·

Lying about your progress and metrics is extremely rampant in the startup world of SV... but IMO SV's biggest lie is that you need to be in SV and you need SV m

by ffn 11y ago

Lying about your progress and metrics is extremely rampant in the startup world of SV... but IMO SV's biggest lie is that you need to be in SV and you need SV money to build a successful company. This flat out isn't true, especially if you're building a web service where your customers can be anywhere in the world and services / platforms that allow you to scale up incrementally exist. Most of what goes into building a startup is time-consuming trial-and-error grunt-work (e.g. reading documentation, editing boiler-plate code, answering emails / phone) that can be done much more cheaply and less stressful-ly from your mom's basement than hemorrhaging $10k to $100k / month in a downtown SF office while the scaffold of a 4 month deadline looms ominously before you. (There's a case to be made for the value of mentorship, but that value is always multiplicative and never additive - as in, if you don't have a business, your value of 0 is still 0 after multiplying it by the value of your mentor. So for mentors, the later the better.) SV's second biggest lie is that you need the so-called "hockey-stick" growth curve to be competitive in order to be successful. This lie is clever because you're so caught on hockey-stick that you forget to question the premise of competitive. In the beginning of founding your startup, knowing about your competition might help you build your own product, but worrying about your competition is worthless because the world is more than big enough for the both of you (especially considering you don't exist yet). And if you don't have overhead (i.e. you didn't take SV money and hire a ton of SV's cleverest and most paid engineers), the world will always be biggest enough for you to survive. SV's third biggest lie is coffee can replace sleep. That's not true, and one of your organs (usually your liver, but I've heard stories of kidneys, lymph nodes, beards, and even ovaries) will let you know after a bit.

jordanpg 11y ago
In sum, capitalism churns away normally in the the United States. The magic internet hasn't been able to revolutionize away any of the basic realities of economics. In other news, I hear that Amazon just turned a profit for the first time! ;)
roghummal 11y ago
SF's biggest lie is that it's SV.
deleted 11y ago
[deleted]
austenallred 11y ago
No one claims you need to be in SV or raise VC to bootstrap your way to make a living (or even be wildly rich). It's a lot harder to create a company with an enormous impact that scales quickly without doing so, however. And this is coming from the founder of a VC-backed company not in the Valley. It's all about what you're aiming for. I have to make a living, but I want to change the world. To do that my company would have to scale more quickly than revenue would allow, so I must raise VC.
- MichaelCrawford 11y ago
  Would you regard it as a wise investment to put your entire life savings on a single spin of the wheel at Vegas? While you may not lose actual money with a failed startup - that is, if you have the G-d Given Sense to save some of your salary - failed startups, even many successful ones have many other costs. A close friend and coworker at Live Picture became homeless. He's doing well now but when he told me of his plight I was concerned he would take his own life. Consider the essays the Elon Musk's ex-wife likes to write about how to become a billionaire. My own divorce had quite a lot to do with my own effort to succeed in business. I did not have funding because I did not pursue it, but had I sought funding our marriage would not have lasted as long as it did.
- MichaelCrawford 11y ago
  While Siddartha Gautama had funding, Jesus Christ did not.
- krampian 11y ago
  Again this is not black and white. There are plenty of non-VC funded companies that scaled quickly and had enough of an impact that you could say they "changed the world" to some extent. There are plenty of VC-funded companies that went nowhere and changed nothing except the returns of their VC funds (for the worse).
rokhayakebe 11y ago
While I agree with you 100%, it appears to me that (without data) wherever you have a high concentration of many people pursuing the same object, there you will find most of the innovation happening. This is just true, even though the biggest innovation may come from a remote place.
flyinglizard 11y ago
1. SV money buys you some access to the market, in publicity and networking effects. Rural startups don't enjoy the same prestige or easy access to other companies. 2. The hockey stick is mainly needed to deal with impatient investors, not in itself. If you had a stable supply of money, you could grow over any number of years, but without showing the right graph its hard to raise money. 3. At least in SF you have a pool of clever engineers or cofounders. Its not like that in all places. I think it really depends on what kind of company you are building. If its something startup oriented like APIs, or any fad (like IoT), SV is your place. If you're in a capital intensive business, SV is again you place. If you're solving problems for tech companies.. then again. And if its social, you'd be cool if you're in SV and backed by an SV firm. You need the networking and coverage to succeed, and its much easier to come by in SV. If you're making enterprise software, real hardware products, SMB tools and apps, then you can be anywhere else really. Besides, SV has that startup vibe going for it. Its not quantifiable but it sure energizes to some degree.
- timr 11y ago
  "SV money buys you some access to the market, in publicity and networking effects." It buys you into the echo chamber. Unless your customers are in the startup world, this probably doesn't matter for your business. Pick a business category that isn't technology or software. Very likely, all of the most recent successes in that category were founded outside of silicon valley. "At least in SF you have a pool of clever engineers or cofounders. Its not like that in all places." It's not like that in all places, but it's way better than people pretend. The unemployment rate for a good engineer in the valley is negative -- everyone is being poached by identical-sounding startups, all the time. So you're really just paying substantially more for access to a group of people who have worked at other tech companies. ...meanwhile, many of the best engineers I know continue to live outside of the valley, and work for a fraction of the going rate.
  - irishcoffee 11y ago
    > "At least in SF you have a pool of clever engineers or cofounders. Its not like that in all places." Heh, I've always viewed these people as the people selling shovels during a gold rush. Good on them.
AndrewKemendo 11y ago
SV's biggest lie is that you need to be in SV and you need SV money to build a successful company. I don't think anyone in the valley is saying that. I think what they actually do say is that if you want to build a $BN company, the best place to do that is in the valley - which I think is probably true. Look. Something like 80% of the world's Venture Capital money is in the valley. It has the highest number of exits and the most concentrated group of developers. So if you want to maximize your chances of massive success that's where you go. Just like if you want to be an actor, you go to LA, or if you want to be an Ibanker you go to NY.
busterarm 11y ago
> That's not true, and one of your organs... ...beards... ...will let you know after a bit. Hahaha, I lost it at this one. Thanks for the laugh!
prostoalex 11y ago
> Most of what goes into building a startup is time-consuming trial-and-error grunt-work (e.g. reading documentation, editing boiler-plate code, answering emails / phone) that can be done much more cheaply and less stressful-ly from your mom's basement than hemorrhaging $10k to $100k / month in a downtown SF office while the scaffold of a 4 month deadline looms ominously before you. You're right, but it's important to note the distinction between startup and a small business. Category changers generally rely on influx of capital to scale up and gain advantage of economies of scale. Businesses that depend on network effect also require high growth, and it's usually bought with capital. http://paulgraham.com/growth.html http://paulgraham.com/growth.html "Millions of companies are started every year in the US. Only a tiny fraction are startups. Most are service businesses—restaurants, barbershops, plumbers, and so on. These are not startups, except in a few unusual cases. A barbershop isn't designed to grow fast. Whereas a search engine, for example, is."

by ffn 11y ago

jordanpg 11y ago

In sum, capitalism churns away normally in the the United States. The magic internet hasn't been able to revolutionize away any of the basic realities of economics. In other news, I hear that Amazon just turned a profit for the first time! ;)

roghummal 11y ago

SF's biggest lie is that it's SV.

deleted 11y ago

[deleted]

austenallred 11y ago

No one claims you need to be in SV or raise VC to bootstrap your way to make a living (or even be wildly rich). It's a lot harder to create a company with an enormous impact that scales quickly without doing so, however. And this is coming from the founder of a VC-backed company not in the Valley. It's all about what you're aiming for. I have to make a living, but I want to change the world. To do that my company would have to scale more quickly than revenue would allow, so I must raise VC.

MichaelCrawford 11y ago
Would you regard it as a wise investment to put your entire life savings on a single spin of the wheel at Vegas? While you may not lose actual money with a failed startup - that is, if you have the G-d Given Sense to save some of your salary - failed startups, even many successful ones have many other costs. A close friend and coworker at Live Picture became homeless. He's doing well now but when he told me of his plight I was concerned he would take his own life. Consider the essays the Elon Musk's ex-wife likes to write about how to become a billionaire. My own divorce had quite a lot to do with my own effort to succeed in business. I did not have funding because I did not pursue it, but had I sought funding our marriage would not have lasted as long as it did.
MichaelCrawford 11y ago
While Siddartha Gautama had funding, Jesus Christ did not.
krampian 11y ago
Again this is not black and white. There are plenty of non-VC funded companies that scaled quickly and had enough of an impact that you could say they "changed the world" to some extent. There are plenty of VC-funded companies that went nowhere and changed nothing except the returns of their VC funds (for the worse).

rokhayakebe 11y ago

While I agree with you 100%, it appears to me that (without data) wherever you have a high concentration of many people pursuing the same object, there you will find most of the innovation happening. This is just true, even though the biggest innovation may come from a remote place.

flyinglizard 11y ago

1. SV money buys you some access to the market, in publicity and networking effects. Rural startups don't enjoy the same prestige or easy access to other companies. 2. The hockey stick is mainly needed to deal with impatient investors, not in itself. If you had a stable supply of money, you could grow over any number of years, but without showing the right graph its hard to raise money. 3. At least in SF you have a pool of clever engineers or cofounders. Its not like that in all places. I think it really depends on what kind of company you are building. If its something startup oriented like APIs, or any fad (like IoT), SV is your place. If you're in a capital intensive business, SV is again you place. If you're solving problems for tech companies.. then again. And if its social, you'd be cool if you're in SV and backed by an SV firm. You need the networking and coverage to succeed, and its much easier to come by in SV. If you're making enterprise software, real hardware products, SMB tools and apps, then you can be anywhere else really. Besides, SV has that startup vibe going for it. Its not quantifiable but it sure energizes to some degree.

timr 11y ago
"SV money buys you some access to the market, in publicity and networking effects." It buys you into the echo chamber. Unless your customers are in the startup world, this probably doesn't matter for your business. Pick a business category that isn't technology or software. Very likely, all of the most recent successes in that category were founded outside of silicon valley. "At least in SF you have a pool of clever engineers or cofounders. Its not like that in all places." It's not like that in all places, but it's way better than people pretend. The unemployment rate for a good engineer in the valley is negative -- everyone is being poached by identical-sounding startups, all the time. So you're really just paying substantially more for access to a group of people who have worked at other tech companies. ...meanwhile, many of the best engineers I know continue to live outside of the valley, and work for a fraction of the going rate.
- irishcoffee 11y ago
  > "At least in SF you have a pool of clever engineers or cofounders. Its not like that in all places." Heh, I've always viewed these people as the people selling shovels during a gold rush. Good on them.

AndrewKemendo 11y ago

SV's biggest lie is that you need to be in SV and you need SV money to build a successful company. I don't think anyone in the valley is saying that. I think what they actually do say is that if you want to build a $BN company, the best place to do that is in the valley - which I think is probably true. Look. Something like 80% of the world's Venture Capital money is in the valley. It has the highest number of exits and the most concentrated group of developers. So if you want to maximize your chances of massive success that's where you go. Just like if you want to be an actor, you go to LA, or if you want to be an Ibanker you go to NY.

busterarm 11y ago

> That's not true, and one of your organs... ...beards... ...will let you know after a bit. Hahaha, I lost it at this one. Thanks for the laugh!

prostoalex 11y ago

> Most of what goes into building a startup is time-consuming trial-and-error grunt-work (e.g. reading documentation, editing boiler-plate code, answering emails / phone) that can be done much more cheaply and less stressful-ly from your mom's basement than hemorrhaging $10k to $100k / month in a downtown SF office while the scaffold of a 4 month deadline looms ominously before you. You're right, but it's important to note the distinction between startup and a small business. Category changers generally rely on influx of capital to scale up and gain advantage of economies of scale. Businesses that depend on network effect also require high growth, and it's usually bought with capital. http://paulgraham.com/growth.html http://paulgraham.com/growth.html "Millions of companies are started every year in the US. Only a tiny fraction are startups. Most are service businesses—restaurants, barbershops, plumbers, and so on. These are not startups, except in a few unusual cases. A barbershop isn't designed to grow fast. Whereas a search engine, for example, is."