I've always found pg's essays to be motivational and inspring, but there are two things that always turn me off; 1.) I don't live in San Fransisco, and probably never will, and 2.) I have a family. I often feel dismissed by PG and his disciples. DHH's stuff gives me hope that there's still a chance for "fogeys" (cripes, I'm only 33!) like me.
I have a feeling that, if I ever applied to YCombinator, my application would end up in the wastebasket the moment they caught a whiff of the fact that I have a wife and kids. Is that fair?
I stay up late into the night hacking after the kids go to bed, and I'm in the office hours before other people are there so I can do some extra hacking. Am I not motivated enough? Can I not be passionate? Perhaps DHH is onto something. Perhaps balancing the challenges of work and family five you a healthy dosage of time management and prioritization skills.
There are some interesting comments on DHH's site - several presumably young, single kids are crabby and crying "discrimination!" (e.g., "Wow, that’s actually offensive. And illegal in BC, Canada and I hope other enlightened jurisdictions.", or the more eloquent "I’m single and you can kiss my ..."). I wonder if these people have ever noticed that the discrimination often goes the other way, against the thirty-something parent crowd, too.
I have a feeling that, if I ever applied to YCombinator, my application would end up in the wastebasket the moment they caught a whiff of the fact that I have a wife and kids.
We don't ask on the application form if people have kids, nor as far as I can recall have we asked anyone in an interview. The reason most of the people we fund don't have kids is simply that most of the people who apply don't have kids.
That's good to know! From some of the comments around here, I was starting to feel a little like the guy who showed up at the party uninvited. I probably take things too personally. :)
Just to further reassure you, the average age of YC founders has been creeping upward from the beginning, and there have been many over-30 founders at this point. And, in many polls of age here on News.YC the range of ages run higher than you seem to think. Young single folks are just able to take dramatic risks that occasionally lead to dramatic success, and thus get a disproportionate amount of press. Older folks tend to have responsibilities and more experience which leads to taking fewer and more carefully calculated risks. Successes are less surprising and look more like traditional businesses...so you don't see them talked about as much. But businesses are being started by folks of all ages and a lot of those folks are here at News.YC.
Not for nothing, but for a hiring manager, asking this question is a firing offense. So is age, marital status, religion, or even any question about place of residence apart from "are you capable of being on-site during core hours".
From a lot of unfortunate experience: tech people suck at following these rules.
It's been noted in the past that Y Combinator in fact does ask for founders' ages. Presumably it can skirt the hiring laws because it is funding a company, not employing people.
It's more unfortunate that a few bad apples in the past have made these laws necessary in the first place. Asking someone about their life is hardly a crime, but our governments seem to have no problem making it so. Score another point against a good employer / employee relationship.
You can guess someone's age within a few years at an interview if you wanted to discriminate, so blocking a mention of age is naive. You could also work it out in most cases from the dates given on the resume (unless it becomes illegal to learn about a candidate's education or work history - which wouldn't surprise me to be honest).
You could see what neighborhood someone lives in because that will also be typically included on a resume too. Why would you hire someone who can't even put their street address on their resume? Sure, a street address doesn't have much significance to /most/ hiring decisions, although if you knew a candidate would have a 100 mile commute each day, choosing someone who lived around the corner would make a lot of sense if the job required call-out or easy access to the office.
And so it goes. You'll see someone's race at interview. You can probably even figure out if someone's married (presence of a ring). It seems crazy to make it illegal to ask these questions. Instead, it should be law that it's optional for the candidate to ANSWER them.
You are totally begging the question. If you have somebody's name, you can "ask" the Internet about their age, sex, religion, or race. That's illegal too.
What I'm asking is, one reasonable person to another, what possible reason could you have for wanting to know the age of an applicant? It is legal to ask if a candidate can legally work full time for you. Why would you ask anything more?
This line of reasoning seems nonsensical. There are no non-optional interview questions. But all questions asked during an interview are used to discriminate between candidates; that's the point of an interview. How do you ask a candidate what their age is without discriminating based on age? If you're not discriminating on age, why on earth would you ask the question?
True, I'm guessing based on the demographic similarity between the people we accept (whose circumstances I do eventually learn about) and applicants as a whole. But the median applicant does seem to be about the same as the median company we fund: a pair of guys about 25 years old.
Over generalization is when you generalize to a group larger than is applicable. This is the same group and a very accurate generalization on his part.
It was an over generalization because I'm an exception: further along in life and YC was a great option.
It is probably true that people with more fiduciary responsibilities have more to think about when taking the plunge, but that is a tautology. People with more responsibility have more responsibility.
My point is that even if you have a house, cars, kid(s), student loans, etc. you can do it. It just takes a bit of planning a maybe a little help from your friends & family.
We definitely didn't need the money, and we went to YC. I think plenty has been said about why folks choose YC, and it's pretty rarely the money. There are cheaper sources of financing.
> Perhaps balancing the challenges of work and family five you a healthy dosage of time management and prioritization skills.
Plus, I don't know about you, but I have real world experience about a boatload of pitfalls that I know to avoid that I wasn't aware of 10 years ago. That is a potential source of significant efficiency.
YCombinator startups are startups - it seems that most of them are built to be sold - with a quick (ish) payoff for the founders and investors who sacrificed a lot.
37s viewpoint is more about a sustainable "small" business. Both are valid.
PS I am 33 w. kids as well, and know what it is like. In some ways, you can have a lot more time to think/hack, as you tend to spend more time at home (and quiet time is spent at home, not out at the pub).
"37s viewpoint is more about a sustainable "small" business. Both are valid."
But IMHO 37s viewpoint has little to do with startups. Sure, we could all go and build a modest business that can grow to a small/medium size, and sustain us. But I'm guessing that would count as a failure for a lot of us.
I have a feeling that, if I ever applied to YCombinator, my application would end up in the wastebasket the moment they caught a whiff of the fact that I have a wife and kids. Is that fair?
No, it is not fair for you to air that feeling here. The YC partners get enough discouragement from having to reject a lot of smart people, so why add discouragement about someone speculating they would be rejected if they actually applied?
News.yc is a handout. Take it and be grateful. The information I've gotten here has been invaluable for my own work, and it's actually possible to keep up with it. (I try to follow TechCrunch for photo-specific news that doesn't rise up here, but there's too much noise. I have a day job and 3 kids, so I have to budget my time.)
If you don't want to be dismissed, implement something great. Nobody will ask about your family status.
You're right that the surrounding community is a big part of the value. If stones were themselves tasty, and if they worked to maintain the quality of the other ingredients, I would completely agree with your stone soup analogy.
I don't mind the message -- no, you don't have to live in SF (your loss! :-) and no, you don't have to be single.
It's the delivery I have a problem with. More and more, it seems like DHH and his sidekick are deliberately looking for fights. Like they have something they need to prove.
Even if people with kids were more productive per hour, that's not enough in a real startup. The empirical evidence is pretty clear on that. I can't think of a successful startup whose founders didn't, in addition to being smart and determined etc, also work long hours.
I think the reason for that is more one of risk. Starting a new company is a lot more risky than being an employee of one. And if you have a family to support, you're less likely to be willing to take on big risk.
So I absolutely agree that it's easier to start a company when you're single and have no obligations because you can tolerate much more risk.
Update: Seems that the original argument changed from "if kids are so great, why aren't more founders parents when they start their business" to "kids might make you more productive during regular working hours, but you need more than just regular working hours to start a business".
I'm happy to offer my thoughts on the second argument as well. I think people working on startups generally work way too much and the ones that succeed don't do so because they put in 14-hour days.
At 37signals, our "startup" (Basecamp) got off the ground on a 10 hour/week programming budget and designers who were busy doing client projects. For the first year, it wasn't the sole focus for the company.
We believe those constraints were instrumental in their way they shaped Basecamp and thus part of the success of the company.
Doesn't mean that there might not be other businesses out there where working lots and lots of hours can be beneficial somehow, but I think that it's a fallacy that you need to work crazy hours to succeed. I do believe that others believe this, though, I just don't think it's healthy or beneficial.
All of this is somewhat tangential to the original argument, though, which is that you shouldn't be afraid of hiring family people. Who should start a company is a great debate as well, though.
(If this exchange is confusing to anyone, it's because dhh was replying to my comment while I was still editing it.)
But in reply to the second half: while 37Signals may be a counterexample to the rule that startup founders need to work long hours to succeed, there seem to be a lot more startups that did than didn't.
Different people presumably have different points at which spending more time on something makes the result come out worse. Probably this also varies with the type of work. So it could be that when person = dhh and work = product design, 10 hours per week is a reasonable limit, and when it's someone else and the work = writing database software, the limit might be 70 hours per week.
In the absence of any other evidence, you have to assume that successful startup founders knew what they were doing, and that if they worked long hours it was because it paid off for them.
I fully agree that different businesses require different levels of input to make it work. But this crowd seems to be mostly in the "web business" area, so I think our example is at the very least relevant.
And we're saying here's an example of a web startup that didn't follow the traditional wisdom of "long hours necessary for business success", which is offered as one data point that perhaps "long hours" isn't the success requirement as some might think it is.
Similar to the talk from SUS on Gmail's invitation system. Just because Gmail used an invitation system and had success doesn't mean that using an invitation system will give you success.
(BTW, as meta comment, I'm incredibly impressed with the level of discussion here. It's so un-web like ;). Where are all the personal insults, the trolling, and all that which we've otherwise come to accept must be part of a open-for-all comment box. Very nice job!)
(As a new member of this forum I'm a bit shy to add to this thread, but here it goes anyway.)
I suppose you've both seen the writings of Alan Carter (http://the-programmers-stone.com/about/) and it seems to me that it just might be a way of getting these two seemingly differing viewpoints aligned.
If stress is the biggest factor then age or marital status might have very little to do with it. At least directly. Married people might have learned to handle stress well and younger people might be less affected by it.
That is to say, you both might have seen the "less stress affected" crowd and drawn conclusions about it.
It is actually less risky to start a "startup" than it is to bootstrap your own business. If you are a parent, you're better off trying to grow your business with someone else's money than you are with your kids' college fund.
But it does apply to founders. Nearly everyone interviewed in Founders at Work remarked that constraints breed creativity. That focus is one reason startups can kick the ass of big corporations.
It's just that it's possible to overconstrain the solution as much as underconstrain it. In the early stages, there's so much work to do that if you try to add kids to the mix, you don't even attempt it. As the startup gets more developed (or if you start with a simple enough problem), the amount of work needed becomes manageable enough to juggle with family life.
Same goes for having a day job. It worked for Joshua Schacter, Pierre Omidyar, and Steve Wozniak, because the focus of having only so many hours available disciplined them to work on products they could do in those hours. And the economy was such that not many other people were working on those products, so they ended up dominating their niches. But it fails for many, many other entrepreneurs, because the problems they could solve within those constraints had already been solved by hundreds of other people.
Nearly everyone interviewed in Founders at Work remarked that constraints breed creativity.
That doesn't mean that they make you net better, though. If they did, you could prove by induction that the ideal strategy in a startup would be to work an arbitrarily small amount of time per day.
> If they did, you could prove by induction that the ideal strategy in a startup would be to work an arbitrarily small amount of time per day.
For a given startup, a particular limit on startup time might actually be optimal. But I think it's pretty likely that different startups are going to find different sets of constraints (regarding time, budget, or other areas) optimal.
In the early stages, there's so much work to do that if you try to add kids to the mix, you don't even attempt it.
This sentence resonated with me as a father of two. But on second thought, I realize, the root reason I do not attempt it (again, for now) is a lack of finances and stability, not a lack of time. I lack time because I have a day job, and I have a day job because I don't have the money to pursue my own business without incurring lots of debt.
The optimal solution, for me, would be to have 12 months salary saved up, and burn through that while starting my own business. And it wouldn't be a 'startup' by PG's definition--I've learned that control is more important to me than growing fast.
Perhaps the long hours are a consequence of the determination rather than a cause of the success.
I actually thought that people at Google were pretty reasonable. They weren't exactly 9-5, but most people weren't working 80 hours/week either (I certainly didn't).
What else is there to being successful other than productivity?
I'd suggest this: DHH mentions "an amazing ability to get stuff done when the objectives are reasonably clear", but in a startup, often there is no "objective" - reasonably clear or not. Instead, there is something more like a search heuristic based on "the view form here". With time, the heuristic changes, and the objective changes, and the strategy changes, and the product changes. If I remember correctly, Flickr started as a Flash-based chat website. To get from there to what Flickr was acquired as required the notorious "startup hours". Basecamp went through no such life-changing make-overs, and so didn't require those kinds of hours.
I think this is an excellent point and really gets into what David was talking about in his (absolutely inspiring) Startup School presentation and how it relates to this post.
To many people, being in a startup is about selling the same thing to the same people - eyeballs to VCs or Google. That's it. There frequently isn't a lot of concern over what exactly it is that draws them there. In these situations, long hours are required (or at least mandated) because the target moves so frequently because someone has a "better idea" or needs to implement "just this one thing" to appease some VC who ends up not funding you anyway. This lack of focus and constraints leads to middle of the road products that can only be worked on by people working 14 hour days to adapt to the ongoing changes.
It's sort of like when Hollywood is out to make a "blockbuster." They buy a popular comic book character, get a dozen hack writers to work on it - even while the scenes are being shot - and they put in a bunch of crap special effects. Sure, sometimes it works, but most of the time it's a bunch of dreck that will never make back its $200 million budget. Contrast that to the lifestyle business - er, independent film - being written and directed by the guy who LOVES what he's doing and making it for himself and you get Pulp Fiction.
Me, I'd much rather make "Pulp Fiction" than "Daredevil."
After a contractor decided on a radical life change and moved to a different country, leaving us without anyone with his skill set, my old manager used to joke that he should only hire people who have a mortgage, because they'll never leave on their own.
Funny as a joke, but a bit chilling when it's given as real advice.
I'm just going to point out that this sets a troubling precedent. If one firm thinks it's legitimate to discriminate in favor of mothers with children, that suggests that being a parent is an acceptable basis on which to discriminate. It opens the door to people thinking about whether somebody is a mother in making hiring decisions. That's troubling on a lot of levels, and in some states illegal.
EDIT: apparently the source has been revised to make it clear that the point is just to look evenly at parents and non-parents; that's OK, but I'll leave the comment above in reference to the earlier version.
He's not advocating that you should only hire people with families. He's just saying that people with families shouldn't be discriminated against in a startup world that seems to value youth, because they can be as productive.
And the laws are kind of weird. If you say you discriminate, but don't, you've committed a crime. If you say you don't discriminate, but do, it's not a crime. (I think the reality is that everyone discriminates in favor of "people they like" anyway. It is somewhat scary that we have so many thought crimes now.)
The paper is "Implicit Discrimination." Marianne Bertrand, Dolly Chugh and Sendhil Mullainathan; American Economic Review, 2005, 95(2), pp. 94-98.
if you have access. Unfortunately, I don't at this time.
The basic results are that a resume with a 'black' name versus a 'white' name (and no other difference) are far less likely to fetch callbacks. Further, there's no appreciable difference in callbacks for black candidates with increasing skills, whereas there's a drastic increase for white candidates.
There are many other studies, and then there's my own, personal experience, which I'm not about to get into.
I presume you're referring to age/gender discrimination.
At least people generally recognize that sexism is wrong. There is a lot less raised consciousness when it comes to ageism.
You start college early, and everyone says you're too young. And then later, ironically, you find when you hit 30 that the thinking has recently shifted when it comes to start-ups, so then you're too old.
Actually there wasn't anything in DHH's talk that I really disagreed with, except the use of the word "startup" for the kind of company he was describing. There's already a word for companies like Italian restaurants: businesses. A startup is a very specific kind of business: one that starts small but could grow very large. Only a fraction of the 30 million businesses in the US are startups.
I think what made people think DHH's advice was relevant to startups was that he was talking about starting a business to write software, which is also what most startups do. But structurally the kind of small business he was talking about was more like a landscaping company or a shoe store or a restaurant. Which is a perfectly legitimate thing to do; it's just not a startup.
I think that's a pretty narrow definition of a startup. Also, there are plenty of businesses that start out small and then grow very large over time. Actually, most large businesses took a long time to get there.
Say like foot locker or Zappos for a "shoe store" (both big business) and say McDonald's or Olive Garden for a restaurant.
By the same measure, we're building 37signals to grow as well. Grow revenues, grow customers, grow influence. We're just not that hooked on growing head count or office space (which are often the most visible indicators of growth for a private company and thus often mistaken as the only indicators).
To me a startup simply means a new business that's getting off the ground. That business may well end up big one day and it may not, which is okay too.
I generally don't think that you can become a star by trying to be a star. I think you just try to be the best at what you do and if you are, hopefully the star part will take care of itself.
I think that's a pretty narrow definition of a startup.
Maybe, but I didn't invent it. It's just the definition in current use. As most people use the word, it's more specific than a business that's merely new. As most people use the word, it doesn't include barber shops, gas stations, shoe repair stores, etc.
There are structural differences between that kind of company and a startup. McDonald's and Olive Garden aren't restaurants, but restaurant chains. They do things very differently from your local Italian restaurant.
Most restaurant chains didn't start as chains, they started just as that single restaurant. Most big businesses didn't start big, they started small.
But that's again off topic. I do agree that the startup term is most frequently associated with technology companies, but you do hear about startups within a fair number of other lines of business too.
Actually most chains are started as chains. Bizarrely enough I happen to know a lot about this, because the only reading material at the Chinese restaurant near my house in Cambridge is restaurant industry trade mags.
Sometimes the chain guys will take a restaurant that's successful and turn it into a chain, but when they do this they usually keep nothing more than the name and a few recipes. McDonald's was a burger place started by the McDonald brothers, but it only became the McDonald's we know after Ray Kroc bought it and transformed it into a chain.
I agree that startups don't have to be doing technology. I don't remember saying otherwise.
This turns out to be easy to research; just start from the R&I 400 list of chains and go read their corporate histories. If you were in business for many years before opening up satellite locations, we can safely say you weren't started as a chain.
You're right; restaurants conceived as chains dominate the top of the list, with some very notable exceptions, including KFC, Starbucks, and Subway.
Something else that the top of that list shares in common is that they were lucrative for their investors.
Something else that they share is that they are all crappy. Look how far down that list you have to go before you hit something you'd actually choose freely? In-N-Out is #89.
What then, qualifies as a startup per your definition, even in the technology space? You could say that Apple, Microsoft, and Yahoo started off along the local restaurant model, selling (or providing services to) a small group of local hobbyists and expanding naturally as new opportunities presented themselves. [EDIT: In each of these businesses (except yahoo, maybe) the goal was to grow a business. I don't even know if MSFT ever took VC. They just sold product until the IPO. I doubt they saw VC or a public exit as an upfront goal. They just ran the business to the point where it was a natural progression.
I try just to use standard definition. A startup as most people use the word means a comparatively small, comparatively young company that is designed to grow very big. Most but not all such companies create technology, because technology scales so well.
Basically, the difference between a small business and a startup is like the difference between a shrub and a redwood seedling.
The metaphor isn't perfect, because occasionally companies are transformed from one to the other. But this is extraordinarily rare.
Yahoo! became a business by accident. Apple was started by a guy who wanted to make the best personal computers, and Microsoft was started by a guy who wanted to put a computer in every home and on every desktop.
In the Apple/Microsoft initial period, there were plenty of smaller competitors who wanted to slowly sell stuff to hobbyists and "expand naturally" and none of those companies exist anymore.
d Microsoft was started by a guy who wanted to put a computer in every home and on every desktop
There were no desktops when Microsoft started. There was the Altair, and they started by writing a basic for it. The market was not planetary as it is now.
Apple was started by a guy who wanted to make the best personal computers
Woz was making computers for himself and to show off at homebrew. From his own words, the Apple I was a PC board they sold to hobbyists for $40 apiece after manufacturing them for $20, per Jobs's egging. You're probably right about Yahoo, but MSFT and APPL did not start out as global reach companies. They started out as local restaurants.
I'd love to be able to know exactly what Steve Jobs and Bill Gates were thinking when they started their respective companies, but I'm pretty sure they had bigger designs than what you're suggesting.
You're probably right, as my psychic abilities and time travel skills have been failing of late...I can't imagine any rational business owner not wanting as much money and market share as possible. I know I do.
Well, as long as "as much money and market share as possible" doesn't equate to "growing as fast as possible." There are plenty of 'conservative' businesses that avoid growing fast like the plague. Risk management and all that.
I don't think Apple, Microsoft, Yahoo started off to build small businesses with family men. These were young , extremely ambitious, single people, out to change the world.
Actually, our primary metric is profit. But you're otherwise completely correct. We're interested in growing profit, growing customers, and growing influence the best we can.
If that happens to lead to a billion-dollar company, awesome. But the odds of business tells us that's probably not overly likely, so we're making sure we'll be happy even if that doesn't happen.
(Who knew merely being satisfied with millions -- single, tens, or even hundreds -- would sound like a humble goal in this context.)
It is crazy to think that the perceived odds of building a billion-dollar company are less for a small established team already making millions of dollars than they are for a 3-month old team with $20,000 in the bank. But people do perceive the world that way.
I don't get it - who compared the odds anywhere in this discussion? It seems to me that the goals are just completely different. DHH is not explicitly aiming to grow the company into a billion dollar mammoth. A startup and its investors are very explicitly aiming for that (or somewhere close). Both are viable but completely different ecosystems.
You've assumed that 37Signals refusal to staff up and take speculative VC rounds means they're steering the ship away from being "a billion dollar mammoth". But 37Signals is more successful than most of the companies (yes, most) that take VC rounds, and has enviable revenue growth.
I think you're seeing a business model that doesn't fit the YC get-rich-quick mold --- and that's what it is, read the essays --- and pushing it into a "small business" bucket. The real world doesn't bucket like you want it to.
You're absolutely correct. I have a friend who works for a company that does nothing but launch franchise changes, and they've had a few monster scores. They do it in a few ways. One is by, as you mentioned, taking a pre-existing successful restaurant and using the name and some of the menu.
Some times they will simply develop concepts (often 4 or 5 at a time) start one of each, and see what sticks.
I've studied the restaurant industry quite a bit and can only think of a few chains that stumbled into it.
pg has been specifically keeping the definition of "startup" narrow, to describe only the businesses that go through the two-guys-plus-vc-plus-sleepless-nights-equals-fast-megabucks pattern that we saw in 2000. I think that's the model he's most interested in, that he sees as the most dynamic and rewarding.
Shiny.
That said, the things you describe closely match what I've wanted to pursue. For me, and many others, it's the more rewarding, long-term way of doing things. Your talk at SS08 was a huge breath of fresh air.
But, I don't think it's all that fair to dilute someone else's definition of a startup with your own idea of what a startup is. It might be time to come up with a different term, and let startup mean the thing that pg and the vc guys and others want it to mean.
I think that's a hijacking of the word that's not helpful at all. And I don't think that pg would argue that you can only call yourself a startup if you're going for VC funding and a sale or IPO.
If so, there's an awful lot of tech companies that have been wrongfully labeled as startups under this narrow definition. And you'd only be able to call yourself a startup in retrospect once you saw whether you ended up being a megabucks exit.
So 37signals would have been a startup if we sold to Google tomorrow, but not if we kept on as an independent company just making money?
No, he might not, but getting funding of some kind is a pretty large part of the kinds of startups that they /are/ talking about, because it makes it easier to develop that massive, rapid growth that gets people's attention. Likewise, a sale or IPO aren't the only ways to derive value out of the startup, but they're the ones that get the most focus, because they're the fastest way to get the desired results (lots of money). I think that this point of view was pretty clear in several of the talks at SS08.
Do I necessarily think that that's the only kind of "startup" that exists? No, not at all. (And I'm probably gonna get busted at some point for putting words in pg's mouth.)
So, coming back and saying, "No, we're talking about two different approaches to the same thing!" ... well, that's not helpful.
Again, my only point is that they're talking about a very specific sort of model when they use the word "startup". If you think your model is the same thing, I wonder how you'd distinguish between a startup and a "software business", or "web venture", or whatever. (And, I think this point is getting made by other elsewhere, not just in this thread but outside of news.yc.)
So it's gotten this far now? DHH loves to start fights so much that he had to come over to PG's forum and start them?
PG, who is always civil here, dragged into a stupid semantic fight?
I boggle.
"So 37signals would have been a startup if we sold to Google tomorrow, but not if we kept on as an independent company just making money?"
No, man. You're just playing semantic games, and you know it . The company would have been a startup if its founders had the intentions of being large or becoming part of something large.
Really, you have nothing better to do than to come to this nice place and crap all over it?
I think it's quite interesting to see him here. He disagrees, in a polite way. That kind of thing is healthy. I don't really agree with dhh's definition of a startup, but there's probably not a sharp line between 'startup' and 'a new business' in some cases. In any case, I like the 37signals model, even though I have some nagging doubts about whether it's really quite so simple in an on line world where network effects and other economic factors are often very different from "the real world".
pg has been specifically keeping the definition of "startup" narrow
Argh. I haven't been doing anything to the definition of the word. I'm just using it as everyone does. Think about newspaper headlines, for example. Wouldn't you be surprised if a company described in a headline as a "startup" turned out to be a shoe repair shop, or Exxon?
Pardon me for quibbling: it's not about potential growth, but about having an extended period of time at the beginning without significant revenue. A shoe repair shop is not a startup because its debt is expected to stop deepening as soon as the doors are open, not because of its limited growth potential.
I got an accountant to do my taxes this year for the first time. He called my sole proprietorship a startup and did the accounting accordingly. Bootstrappers: keep records of all your expenses, even if it takes years for you to get everything going. Eventually it will all be deductible, amortized over 5 years from the time you start getting revenue.
A startup exists to make extraordinary profits by arbitraging a temporary economic disequilibrium by doing more than anyone thought possible with less than anyone thought possible; the industry is irrelevant.
I was just trying to provide a heuristic to answer your question. I don't think it's black and white though. As for Threadless, I do think it's a startup because they invented a new process to fill a temporary market disequilibrium. But if another company came along and did the same thing then I'm not so sure.
Am I the only one that thinks 'startup' simply means a new business without profits? This just seems like a silly semantic debate. 37signals was a startup once, it just happened to choose a different outcome.
Every startup should be free to choose their outcome, and if most choose to try and quickly flip, then more power to them. If they choose to try and build a profitable independent business, great! There is no need to turn the 'liquidity event' vs 'sustainable business' camps into warring factions, like some weird language flame war.
It was refreshing at SUS to see a contrasting opinion, but neither side is trying to argue that their way is the only way. Both ways obviously work, and I think anyone would be happy with either of them over not succeeding at all.
One of my problems with DHH's talk was the examples he used. Starting your own restaurant is incredibly risky from a statistical standpoint. Even if you don't die in the restaurant business, you hardly make any money at all. And since this thread is ostensibly about work-life balance, the restaurant business is probably the only example DHH could have chosen where everyone works longer hours than a pg-defined startup.
Zappos was also a poor choice. It wasn't as if Zappos was a small time shoe store that decided to put up a web storefront and somehow magically scaled up its operations into a billion dollar business in the course of 5 years. Zappos was started buy a guy who had 250 million dollars from selling a software startup to Microsoft. It was specifically started to corner the online shoe market, in the same way Amazon was started to corner the online book market. It was also funded by Sequoia capital, further making it more like a "startup" startup than a DHH work-life-balance startup.
I think that this is an important point. The term "startup" has been narrowed to the point where it doesn't include what are disparagingly referred to as "lifestyle companies".
And I think that's really unfortunate because controlling the language controls the thinking.
Let's face it: people (at least in tech circles) think it is very cool to be in a startup. And it is in the VCs interests to further that sense -- of being caught up in something big and exciting.
It lends a rockstar sensibility to a startup that is NOT conferred to a lifestyle company.
Even reading at Paul's posting on this tends to reinforce that subtle dig -- look at the examples: "landscaping company or a shoe store or a restaurant". None of those sound exciting to me.
Perhaps my issue is that the measure of "grow very large" is ambiguous. Does it mean large profits? Sorry, Facebook. Large revenues? Sorry Youtube. Spending lots of money? Yay Webvan! Perhaps it means employing lots of people -- which the left-winger in me approves of mightily!
I've always felt that the goal should be to touch as many lives a possible. That's my personal metric on which I base "large". This is consistent with Paul's examples -- you can touch a limited number of people with a landscaping company or a shoe store or a restaurant.
But on the web you can touch a LOT of lives with a small set of money. I would hazard that David's touched far more lives at 37Signals through their consumer products and through Rails than all by one or two of the startups on YC or part of YC.
how is the business model of wufoo different from 37 signals? Are they a startup or a shoe store? A startup should simply be a company that is just getting started. Once they become profitable feel free to call the a "business".
A company that starts small but grows very large could describe exactly the 'Italian Restaurant' sort of startup. On the web you have a much bigger neighbourhood than any Italian restaurant. The limitation on a landscaping company, for example, is its ability to scale and the geographic area it can serve.
I think Graham's analogy is more apt that he realizes. Here's where it takes us:
Yes, the majority of breakout chains/startups are started as chains/startups.
But, plenty of breakout businesses aren't built to scale out fast. Starbucks didn't break out for over a decade. Microsoft didn't get the DOS contract until '81.
Meanwhile, lots of small businesses are small deliberately. Thomas Keller isn't franchising Per Se. Grant Achatz isn't franchising Alinea.
So what does it tell us when a company runs a single restaurant for 10 years, or refuses to take VC funding or hire ahead of revenue?
Celebrity chef restaurants are not really businesses - they are more like old-school arts patronages. They are started with funding by rich finance guys who are looking for a hobby project to make themselves feel cooler. The only people who go there are also uber rich finance guys, other people in the celebrity class, and the occasional not-as-rich foodie. As soon as the rich people and celebrities get bored with the restaurant, it shuts down.
Alinea was funded by 8 futures traders who each put in half a million dollars.
Opened in May 2005, Mr. Kokonas says Alinea grossed $3.5 million its first year, an average of $14,000 for every night it was open. There are eight investors: The smallest stake was $75,000, the largest Mr. Kokonas', at just less than $500,000. Return on investment is expected to exceed 20% per year, he says.
This doesn't sound like an old-school arts patronage to me.
Not that I'm an expert on the celebrity chef restaurant business or anything, but I can name one example where this is at least partly true: Ferran Adria's El Bulli (voted best restaurant in the world a few years ago) actually operates at a loss. Adria supplements his income by putting out books and by selling some of the more unusual ingredients he uses.
Charlie Trotter, Frontera, French Laundry, Babbo. All successful businesses. That there are unsuccessful businesses in the same category does not make them "old-school arts patronages".
The economics of celebrity chef restaurants are so different from anything else that they resemble arts patronages more than they resemble the economics of other businesses, including other restaurants.
You have to already be famous to start one, you have to have met a rich guy who thinks investing in you will make him cool, you only cater to a class of people who in previous centuries would be known as "the aristocracy." Etc.
Just want to say that was a great talk (watched the video) last week. Also, I saw you in Vancouver (Fuck You!) a while back and was impressed with your speaking ability then as well.
In the startups I've worked for, the best systems administrators were guys with 5-10 year old kids.
Experience actually counts for more in systems administration, so being older isn't a disadvantage. Surviving the infant-toddler years hones one's skills at managing interrupt-driven tasks and strange working hours.
Not to dredge up the past, but this refreshingly contrasts with Zuckerberg's encouragement at Startup School 2007: 'If you want to found a successful company, you should only hire young people with technical expertise'. http://www.texasstartupblog.com/2007/03/27/facebook-class-ac...
I'll admit, DHH coming into Hacker News is a breath of fresh air, even if a few of the 20-somethings here (including myself) can sniff out the psuedo-defeatist , "statistically its not possible" scent it is tinged with. I think, on the whole of things, pg isn't out to attract the type of people that want to start the types of business DHH is talking about.
I think pg is set out to do the same thing VC's do (invest in outlandish, maybe crazy ideas), albeit with a focus on extremely good hackers and with a fraction of the budget.
What DHH seems to be implying is that you should focus on building something that you can get paid for, right away, and throw away the big dreams. Which is pretty much the opposite of pg.
Maybe I'm in the minority. I think DHH's arrival here is a big gust of foul air.
Suddenly the arguments are getting out of control, and pg's participating. Nitpicky, negative, petty debates.
I've read every DHH post that's appeared here in the past days, and every one of them comes off like the work of a sophomoric contrarian who believes that the minor success he's had entitles him to tell the world how to think.
I like this place better when positive, hopeful people are having conversations.
I have enjoyed the comments in this post, even if sometimes negative.
For example the PG's and DHH's discussion about definition of a "startup" might seem like nitpicking when taken out of context, but I found it extremely valuable.
Extremely valuable? Why? Because DHH deigned to comment on our little forum? Can't be for any other reason: he's not saying anything interesting or useful, anything less than obvious.
I found it extremely valuable, because I would like to know what exactly the term "startup" means. Not a dictionary definition, but how people really use the term.
We all argue from our narrow perspective. Certainly pg did, at least at first, when he offered his own startup experiences as a model for others. Perhaps since then his vision has been more empirically verified. But DHH's advice is basically conservative -- he's just arguing that web businesss can grow like other conventional small businesses -- so it has a fair amount of weight behind it too.
pg and dhh have been very civil in their exchanges, even though perhaps they're not exactly arguing over profound ideas. It appears that you are the one who has introduced personal attacks on dhh. Would you say those things to him in person?
Read again. No, they haven't. David goads; PG apparently feels the need to defend himself. I presume that it's because he's answering DHH -- the argument itself is pointless, and DHH's points are sophomoric and trivial. It is devolving.
I've been a programmer since I was 12 years old, and have over 30 years experience with technology companies - and yes, startups too .. I helped get a few major 90's-era dotcoms up and running and many of them are still at it today.
My experience is this: either you waste a lot of time futzing around with computers, or you make them do the work they need to do and get on with your life. It has nothing to do with how old or young you are, or how many kids you have. I am a very happy Father now - in fact, this is the greatest startup, with the most rewards, I've ever been involved in - and I'm still applying the same fundamental policy to myself as a programmer: get things done, don't futz around with computers, make them actually do the work they're supposed to do.
It doesn't matter what "kind" of person you are, it matters only what kind of things you make. I know 50-year old grandfathers who can kick royal Assembler ass and still leave early at the end of the day, and I know 18 year old kids who put the keyboard down after 8 hours and go do something else instead, as well.
IMHO, this over-generalization about 'types of people' is a real curse. I would say, don't do it. There are no 'types' of people in the computer world, no matter how the ycombinator cultists want to pitch it to the world: there are people who get things done, and people who don't.
Get things done. Get your code written, working, tested, and in the hands of people who will actually use it. If you can't do this, then you will fail. If you can, then rock on .. may your kids, now and in the future, always appreciate this aspect of you as a person.
So someone is arrogant when you don't agree with them? And you don't even have to know what they're saying to make that call, you just have to read a three-word summary? What a unique path to expanding your horizon.
I've always found pg's essays to be motivational and inspring, but there are two things that always turn me off; 1.) I don't live in San Fransisco, and probably never will, and 2.) I have a family. I often feel dismissed by PG and his disciples. DHH's stuff gives me hope that there's still a chance for "fogeys" (cripes, I'm only 33!) like me.
I have a feeling that, if I ever applied to YCombinator, my application would end up in the wastebasket the moment they caught a whiff of the fact that I have a wife and kids. Is that fair?
I stay up late into the night hacking after the kids go to bed, and I'm in the office hours before other people are there so I can do some extra hacking. Am I not motivated enough? Can I not be passionate? Perhaps DHH is onto something. Perhaps balancing the challenges of work and family five you a healthy dosage of time management and prioritization skills.
There are some interesting comments on DHH's site - several presumably young, single kids are crabby and crying "discrimination!" (e.g., "Wow, that’s actually offensive. And illegal in BC, Canada and I hope other enlightened jurisdictions.", or the more eloquent "I’m single and you can kiss my ..."). I wonder if these people have ever noticed that the discrimination often goes the other way, against the thirty-something parent crowd, too.