

Mark Suster Is Wrong, You Should Be A Startup Entrepreneur - ericingram
http://collaborable.com/blog/mark-suster-is-wrong-you-should-be-a-startup-entrepreneur

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vantran
It's not that Mark is wrong. He doesn't try to answer THE question, because
there is no right or wrong answer. It's not so black and white, yes you should
do it or no you should not. What he did was giving great advice that should
seriously be considered, but the choice is up to you.

Read his advice, he tells it like it is. If you choose to do it, then you have
answered the question for yourself. If Mark advises against it and you think
he's right, indeed you're not an entrepreneur. If you do it anyway, simply
prove that it's the right answer.

~~~
ericingram
I agree that Mark's article is full of great advice, and that he is not
explicitly answering the question for anyone.

This blog was my genuine reaction to Mark's list of characteristics, which is
something that in the past I may have read and felt discouraged.

It's a shame to discourage when I now know the truth: that none of those
characteristics must be identified in order to get started and eventually
succeed at a startup.

------
systemtrigger
I'm amazed you took the leap with zero savings and a two-month old baby to
support. Congrats; what is this 'financially rewarding' startup you created?

~~~
ericingram
My entrepreneurial story isn't over, but I started around 3 years ago with an
ecommerce niche store (I'll get into specifics on my blog soon).

I make twice what I did before I took the leap, and that's because most of our
resources go back into the business.

------
BrainScraps
I like the sentiment. I too think that anyone who has an entrepreneurial spark
should give it a go (with proper preparation of course.) It also seems folly
that if someone isn't predisposed to certain attributes, they shouldn't
attempt the launch.

However, if you're going to throw down a gauntlet with a linkbait title like
that, don't wuss out like this: "Okay, maybe I should say “I disagree” with
Mark on this issue"

~~~
ericingram
Haha, thanks for the feedback, maybe next time I'll up the hard-assery :)

~~~
Dylanlacey
I encourage it. I have a theory that all good meritorious technology
communities are strengthened by mild aggression towards members.

By which I mean things like "Why would you EVER think this was a good idea?"
not "You're fat, ugly and I fucking HATE your skank of a wife".

------
ericingram
I would love to hear feedback on this blog from entrepreneurs and
wantrepreneurs alike.

------
fleitz
<http://xkcd.com/386/> 'nuff said.

------
HilbertSpace
Suster's remarks are similar to many others for starting a business in
information technology, software, Web 2,0, social media, etc.

For all these remarks there is a very simple response: In the US, coast to
coast, villages, towns, cities, on Main Street there are successful businesses
in everything from pizza carryout, Chinese food carryout, franchised fast
food, portrait photography, jewelry, fashion boutiques, dentistry, medical
family practice, CPA, wines and spirits, auto parts, auto repair, auto body
repair, gasoline, convenience store, plumber, electrician, plumbing supply,
electrical supply, hardware, building supply, on and on. A significant
fraction of these Main Street business are _big truck -- little truck_ , that
is, buy in large quantities at a low price per unit and sell in small
quantities at a high price per unit.

These businesses are a huge fraction of the US economy. The fraction is so
large that there is no chance that any significant fraction of the business
founders could satisfy any list of personality characteristics as specific as
Suster's.

Yes, nearly none of these Main Street businesses will become worth over $1
billion (McDonald's, Domino's, maybe a few more did). Still, the businesses
are successful, e.g., commonly last decades and for an owner pay to support a
family.

So, what about the businesses Suster is considering in Web 2.0, etc.?

Well, these businesses have some big advantages including Moore's law and the
Internet and commonly can be started for much less money than even a carryout
pizza shop or, really, nearly any of the Main Street businesses.

E.g., the people who mow grass in my neighborhood drive nice, new trucks, each
pulling a low volume, handmade trailer carrying a high end lawn mower worth
something over $10,000. Altogether they arrive to mow some grass with capital
expense ruining $40,000 which now would buy one heck of a first-cut Web 2.0
server farm.

So, setting aside Suster's focus on businesses that can be started for the
cost of a computer and a good Internet connection and a some amount of hacker
time and soon be worth over $500 million, just why should the advantages of
Moore's law and the Internet require such particular and rare personality
characteristics when millions of Main Street businesses without these
advantages do not?

The answer is simple: The business based on computing don't require satisfying
any such list of particular and rare personality characteristics.

So what's going on? Suster is working way too hard looking for the _secrets_
and, thus, is getting way off the track.

~~~
hugh3
_just why should the advantages of Moore's law and the Internet require such
particular and rare personality characteristics when millions of Main Street
businesses without these advantages do not?_

Well, mostly because starting an internet business is a lot harder, because
there's (more or less) a single global market and it's more competitive.

If I have the only sporting goods store in Iron Knob it doesn't really matter
that there's a much bigger and better one in Medicine Hat. But if I start a
crappy online bookstore it's going to have a lot of trouble competing with
Amazon.

It's a winner-takes-all market, so in order to succeed you need to be doing
something that nobody else is doing, or else doing it better than everyone
else, or _at least_ doing it the same as everyone else but having
significantly better traction. That means that most internet startups are
aimed towards doing stuff that nobody has ever done before, which requires a
lot more hard work and brainpower than ordering tennis balls by the thousand
and selling them by the can.

The upside of the winner-takes-all marketplace is that the winner takes all.
The downside of the winner-takes-all marketplace is that the winner takes all.

Now I suppose there are _some_ unoriginal business opportunities on the
internet, but they're largely a bit sleazy -- buying up domains and sticking
SEO-optimized crap on them, for instance. Even that is a lot harder than
buying a lawnmower and knocking on the doors of folks with messy lawns though.

~~~
HilbertSpace
You gave a good explanation of a major point I omitted, the common situation
of Main Street businesses having a strong _geographical barrier to entry_.

And your point about "winner take all" on the Internet is simple but basically
correct.

Okay, but still: Joe has an _idea_ , maybe _Facebook for cat owners_ ,
optimized for mobile with a special alarm when GPS says they are near a cat
owner of the opposite sex, a _pivot_ from his semi-successful _MySpace for dog
owners_ , a _pivot_ from his quasi-successful _MeetUp for gerbil lovers_. To
Joe, each of these is a really _new, unique, no competition_ idea. And
"romantic angle?" "Nearly all romantic angle." And, if he gets just 2% of all
the ...!

Maybe Joe's ideas are terrific, and maybe they suck. If he does _fail fast_ ,
then for each such pivot he will soon learn which case is true.

So, all that said, just where in there does Joe need all those special
personality characteristics Suster listed? I mean, Joe has a brother Sam who
started a Chicago style pizza place in LA -- that was his _innovative_ idea
for a Main Street business. Like nearly all Main Street business owners, Sam
is just a regular guy, just like his brother Joe.

Net, I see Moore's law and the Internet as mostly just advantages except for
the one issue you mentioned, the flip side of the great opportunity of serving
the world is no geographical barrier to entry. So, if Joe's _idea_ really is
new and good and he is on the way to tens of millions of _uniques_ a month
just from his cable TV ISP connection and some mid-tower case servers on wire
shelf racks in his spare bedroom, then I'm missing just why Joe has to have
personality characteristics different from the rest of Main Street. Or, if
Joe's latest pivot idea basically sucks, then the solution is to think of a
better idea and not have some rare personality characteristics.

Uh, Suster is right in the soup of _Internet social media entrepreneurship_
taking in ideas, thoughts, impressions, etc. from a fire hose and pushing them
out at the same rate. Or, Fred Wilson once commented that he doesn't see how
Suster gets any sleep. But my view of Suster is that, however successful he
has been or is being, he's not the most _disciplined_ thinker. Of course, with
the fire hose rates he is using, even if only some of his ideas are good then
he can do well, which I suspect he is.

In a sense, I cheated on Suster: I turned his _context_ around to essentially
just another Main Street business except exploiting Moore's law and the
Internet (and as you pointed out, also needs some real novelty to make up for
the lack of geographical barrier to entry) from his context of, say, Mark
Zuckerberg as he crosses the stormy seas of growth to 600 million users, Steve
Jobs when he executed his semi-triumphant role of _return of the native_ ,
Andrew Mason growing Groupon and telling Google that they didn't have money
enough, etc.

Both contexts are relevant: Of course, Suster wants $1 billion or so exits,
but a lot of entrepreneurs would be happy owning over 50% of a $50 million
exit.

Maybe Suster is saying that for a $1+ billion exit, or $50+ billion, need a
Facebook, and for that have to go through some wild and crazy times, and for
that need a Zuckerberg, and for that need Suster's rare personality
characteristics.

I still don't buy it.

Here's another approach: A calm, very carefully reasoned guy gets told in high
school that his goal of going to MIT is a hoot. But he goes. Basically he gets
done in three years but sticks around for a fourth year and, then, takes two
reading courses. One of these is in Lie Groups and Lie Algebras from I.
Singer. Then he goes to grad math at Berkeley and cleans up a really messy
proof for a major result in differential geometry. He is back at MIT for a
while, then goes to military work at the Institute for Defense Analysis at
Princeton, gets fired for giving _Newsweek_ an interview about the Viet Nam
war, then becomes Chairman of the math department at Stony Brook. There he
works with S. Chern and gets a new result that now physicists like for their
work with differential geometry.

Then some earlier little efforts in business pay off, and he invests the money
and plays the stock market. He does well, in two years or so multiplies his
money by a factor of 12. He leaves to start a hedge fund and does better and
better. Finally he takes human judgment out of the trading and does it all
with software based on math ideas and carefully _back_ tested. Soon he is
paying himself about $2 billion a year. Last year he retired and now is doing
philanthropy and is back to math.

Uh, Brookhaven National Lab wanted to collide some heavy ions, see if they
could create a _quark-gluon plasma_ , needed $12 million or so; Congress
wouldn't fund it; so he did.

Lesson: He's very successful and is not a wild or crazy guy.

Sure, he's Jim Simons, COB of Renaissance Technologies on Long Island as in
his biographical lecture at MIT

[http://paul.kedrosky.com/archives/2011/01/james_simons_sp.ht...](http://paul.kedrosky.com/archives/2011/01/james_simons_sp.html)

and his testimony before Waxman's committee with article at

<http://www.nytimes.com/2008/11/14/business/14hedge.html>

and Simons's video at

[http://video.nytimes.com/video/2008/11/13/business/119483281...](http://video.nytimes.com/video/2008/11/13/business/1194832812497/testimony-
of-james-simons.html)

I. Singer? He's as in the Atiyah-Singer index theorem which won one of the
first, maybe the first, Abel Prizes created by the Nobel committee as a Nobel
prize in math.

Uh, for success on the Internet, we agree on the need for powerful, new ideas,
hopefully with a barrier to entry from difficult to duplicate or equal
technology and not just from devoted users, and for that we need to be quite
open about where the ideas come from. Uh, Simons is one of a kind in hedge
funds. Well Internet entrepreneurship needs to be welcoming one of a kind
people, also, and Suster needs to be looking for them; then Suster needs to
throw out his list of personality characteristics.

Drawing from the first Indiana Jones movie, with his list Suster is "digging
in the wrong place". His _filter_ is just independent of anything that makes
any sense and, thus, is throwing both wheat and chaff indiscriminately.

Beyond that, there's another push on Suster: Recently John Doerr spouted off
again on the old saw that "Ideas are easy, and execution is everything.". No:
Bad ideas are easy, and then execution is everything. Good ideas are
difficult, and then execution is routine.

Well, for evaluating ideas as new, correct, significant, and powerful with
valuable results for business, can count without taking shoes off all the
information technology venture partners who can do such evaluations: Uh just
doing well evaluating new, correct, and significant takes a peer-reviewed
journal editor, and there may not be even ten information technology venture
partners in all of the US qualified to be a journal editor.

So, basically the venture partners ignore the ideas and, instead, say, for a
seed round look at the user interface and evaluate if people might like it,
for a Series A look at ComScore numbers, for a Series B look at revenue and
earnings. Basically their view is that at each _stage_ , doing well on their
criteria makes also looking at the idea unnecessary. But this does not mean
that ideas are irrelevant or that good ideas are easy. Still, from this old
saw, Suster goes too far and expects that execution will be some mad house
where he wants his personality characteristics. If he wants a mad house, then
he can have it.

~~~
nostrademons
Because many of those markets aren't really markets.

In all likelihood, the market of _Facebook for cat owners_ is no different
than the market for _Facebook_. Why would a cat-owning user prefer a dedicated
site over Facebook itself? They lose their social network, they have to check
multiple websites to stay up to date, and the website owner doesn't have the
benefits of scale that FaceBoook does. There's no competitive advantage to
that particular idea.

The characteristics that Suster list are important because this is the _norm_
in winner-take-all markets. The vast majority of things that you think are
viable markets aren't really; if they were, a competitor would already have
gotten to them. So you have to strike out and do something new over and over
again, until you finally hit on something that actually works. That's really
stressful, particularly when you're doing it without knowing where your next
paycheck is coming from.

~~~
HilbertSpace
Yes, Facebook for cat owners is absurd; it was supposed to be a hoot and a
parody of a silly idea.

Your description of trying over and over is common but should not be the only
way.

Broadly another way is really the old entrepreneurship paradigm: Find a nasty
problem that many people have and that has no good solution and where a large
fraction of the people would be eager to have a good solution.

Look for a good solution. If actually find one, then go forward, implement the
solution, and offer it to the people who wanted it.

Then there's the old saw that "Whatever you are working on, at least 20 other
people are working on the same thing with the same ideas.". Well, this claim
is silly: Anyone who has done much peer-reviewed original research can see
clearly that, a large fraction of such research, especially once the work has
been reviewed and accepted for publication, is unique with no one else doing
anything very close.

E.g., once I was working in a research project applying artificial
intelligence (AI) to system and network monitoring and management. Well, one
of the first needs is doing well detecting problems in real time. Such
detection is for either (A) old problems seen before or (B) new problems,
_zero day_ , never seen before. Assume that whenever we see a B problem we
implement corrections and, thus, convert it to an A problem and solve it so
that we never see it again. So, we are left with detecting B problems.

I thought that the AI techniques we were using were junk.

Indeed, clearly, as we monitor, there are two ways to be wrong, (1) a false
alarm where we say that the system is sick when it is healthy and (2) a missed
detection of a real problem where we say that the system is healthy when it is
sick. So, clearly we are now necessarily close to statistical hypothesis
testing with Type I error (false alarms) and Type II error (missed
detections).

Then we are necessarily close to the classic Neyman-Pearson result on the way,
for each rate of false alarms, to get the lowest possible rate of missed
detections.

Well the whole field of zero day monitoring had not yet gotten even this far,
which is really just a junior level course in mathematical statistics.

So, we want to do a hypothesis test. Okay but for the large literature of such
tests, we have two issues: First, from server farms and networks, we can
collect data on many variables, not just one. So, we want to be _multi-
dimensional_. Second, especially being multi-dimensional, we have no hope of
knowing the probability distribution of, say, a healthy system. So, we want
our work to be _distribution-free_.

Well, can look through the literature, especially, say, E. Lehmann, and find
nothing on multidimensional, distribution-free tests.

So, one Saturday I put my feet up and created a large, new family of such
tests. I wrote out theorems and proofs to justify what I was doing. I wrote
some corresponding software. Then I had some data from a complicated server
farm, washed it through my software, and saw that I was getting what my
theorems said. Then I did a long series of Monte Carlo tests with some very
complicated data; my detection techniques worked just as intended.

So, get to select false alarm rate in advance and get that rate exactly. There
is not enough data to get all of Neyman-Pearson, but in a powerful sense,
asymptotically, for whatever false alarm rate is selected the techniques give
the lowest possible rate of missed detections.

So, my work is progress in zero day monitoring of complex systems and
networks. I published the work.

Got to tell you, history since I did that work and published it shows clearly
that I was the only person in the world doing anything like what I did.

Is there a business in this, say, to be sold to HP, Microsoft, IBM, EMC,
Cisco, or some such? Maybe, but my current project is easier to do and more
valuable.

The lesson is, broadly, if really have something new and advanced, the chances
that someone else is doing the same thing are small.

Of course, what I'm really talking about is applied math as the crucial, core
'secret sauce' to get a much better solution to a nasty problem and not just
routine software for just some intuitive idea.

Then this is a broad area of opportunities: In column A list nasty problems
people would like to have solved. In column B list some applied math
techniques, old or new, that take in data and spit out results. Then find a
good pair, a problem from column A and a solution from column B where the
solution is much better than anything else for the problem and likely
difficult to duplicate or equal. Now write the corresponding software and
proceed with little risk of anyone else doing the same thing. The key is
making the project one in applied math, not just computing or computer
science.

Where'd I get this _paradigm_? Sure: The US DoD has been doing such things
with great success all the way back to WWII, and I started my career around DC
in DoD work.

Can this paradigm work in _Web 2.0_ and _consumer-facing_ Internet? I do
believe so!

