
Mistakes That Kill Startups (2006) - docuru
http://paulgraham.com/startupmistakes.html
======
juped
Interesting to see how this aged. By my reckoning:

1 (Single Founder) - people just ignore this one, more or less.

2 (Bad Location) - this one became a horrifying monster that devours
everything it touches.

3 (Marginal Niche) - probably the biggest killer, then and now.

4 (Derivative Idea) - meh. People worry about this too much. Is there an
unserved market?

5 (Obstinacy) - on point. Serve the market.

6 (Hiring Bad Programmers) - This one also became a horrifying monster. Graham
says "In practice what happens is that the business guys choose people they
think are good programmers (it says here on his resume that he's a Microsoft
Certified Developer) but who aren't." Darkly hilarious in hindsight.

7 (Choosing the Wrong Platform) - meh. People use fucking backend Javascript
now.

8 (Slowness in Launching) - Pretty valid.

9 (Launching Too Early) - maybe, I guess.

10 (Having No Specific User in Mind) - absolutely important. You have to be
serving a market.

11 (Raising Too Little Money) - this pendulum has swung way over the other way
now.

12 (Spending Too Much) - Yes. (Hiring too much. Stop trying to feel like an
important funded company.)

13 (Raising Too Much Money) - Something of a subtle point, but still an
important one - especially now that you can get too much money thrown at you
more easily.

14 (Poor Investor Management) - of course.

15 (Sacrificing Users to (Supposed) Profit) - I'll just note that Graham
writes that Google puts users first. Hindsight!

16 (Not Wanting to Get Your Hands Dirty) - Graham means with sales work. Very
much true.

17 (Fights Between Founders) - This is why you vest, I guess. Graham was still
down on founder vesting at the time.

18 (A Half-Hearted Effort) - I mean, why put in more of an effort if you have
a route to fail upward?

~~~
navinsylvester
> 7\. Choosing the Wrong Platform

> But there is a trick you could use if you're not a programmer: visit a top
> computer science department and see what they use in research projects

Please don't shoot yourself with this suggestion. From my personal experience
Academia is so distant from what is relevant or practical to the industry.

~~~
speedgoose
In my experience in European research, you don't get research funding if you
don't work on something relevant or practical to the industry.

~~~
netjiro
I guess this varies a lot. To my shame I don't have hard numbers (! I really
should have.)

Personally I've worked on a half dozen global research network projects
bringing together both public and private funding and 10-15 organisations,
mixed universities, research institutes, and small to behemoth companies.

The target is always some wide ranging new radical technology platform and
they spawn a bunch of startups and spin off projects.

Some targets can turn out to be too difficult, or simply wrong, but I've never
seen a project that hasn't lead to at least one startup / product / new
technology.

~~~
gt50201
Oh! That’s super interesting — what are some examples of this happening?

~~~
netjiro
Eg: Start out looking at nanoparticle functionalisation, then stumble on a
very useful sensor application or targeted molecular delivery.

Eg: Work on autonomous air sensor, then find simple off shoot application for
tuberculosis using a completely different technology.

Eg: Build a medical laser for transdermal drug delivery then find applications
in dental work and scar tissue removal.

Eg: Design a flexible heterogeneous compute cluster for hpc application, then
get customers who want it for the low administration cost.

You start by bringing some very competent and diverse people together to
tackle some tricky and new problem. Then after a while you'll have found a
bunch of peripheral questions and applications for one thing or other you
create in the project.

People talking and sharing experience and knowledge will almost always find
new stuff out in the dark. If you're working on the edge of knowledge there is
almost always interesting stuff hiding just outside the light of your personal
flashlight. Bringing people together in multidisciplinary projects is amazing.

------
noneckbeard
In the Wrong Platform section he mentions how the new PayPal CEO wanted to
switch the company to Windows and “Fortunately for PayPal they switched CEOs
instead.” That CEO they gave the boot? Elon Musk.

It was probably still a good decision and maybe we wouldn’t have spaceX or
Tesla without that change, but still hilarious!

~~~
sethammons
If anyone knows, I’d be interested in more details around the windows thing.

~~~
andygcook
IIRC from reading the book PayPal Wars, Elon wanted to switch PayPal over to
Windows because he saw it as the future. At the time, PayPal was on Unix. Max
Levchin and the other main programmers didn’t want to switch. The disagreement
on platform eventually came to a head and Elon was replaced by the board with
Peter Thiel.

If you haven’t read PayPal Wars, it’s a great book.

~~~
noneckbeard
Agreed. I think it was also a power struggle over which engineering team would
be in control moving forward. Musk’s X.com was built on windows and he wanted
everyone to switch over on the merge.

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rexreed
The REAL mistakes that kill startups:

1\. Not solving a real problem - Product / market fit

2\. Raising Too much money - Growing beyond ability for the market to support

3\. Hiring the wrong people

4\. Too much founder ego

5\. Too much founder inexperience combined with a lack of a desire to learn

6\. Focusing too much on investor needs vs. customer needs

7\. Spending too much money

8\. Perfect is the enemy of good - Start small, think big, iterate often.

I think single founder issues, so-called "bad location" issues, derivative
ideas are not really issues at all. The top 7 will kill you even if you have
great locations. And there are many examples of great business started by sole
founders outside the high expense "prime" locations.

~~~
barrkel
On "bad location": consumer-focused startups will need to scale up fast if
they get traction. Those are the ones that benefit most from being in SV: a
pool of skilled labour they can bid their VC dollars + stratospheric ambitions
on.

B2B companies may be better off located in one of the top areas for the
business vertical. For example, non-consumer FinTech startups may be better
off in New York or London than SV.

~~~
hinkley
I still firmly believe that a lot of people get the scalability/sustainability
thing wrong, and then overhire like crazy.

If you ran a lean startup, would location be as much of an issue? Or asked the
other way around: should all startups outside of the valley be lean startups?

It may just be the horizontal versus vertical question. A lot of the work I
do, when to have the autonomy to do it, is to make sure that every developer
can get more done, or be more certain that the work really _is_ done. I’m
trying to vertically scale developers.

In systems design, when communication is cheap you scale horizontally. When
it’s expensive, you scale vertically. What have we really done as an industry
to improve the effectiveness of human communication? I mean, really? Most of
those improvements were made in the 90’s, a bit more in the 00’s, and
everything since has been refinement (or regression.)

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jancurn
> PayPal only just dodged this bullet. After they merged with X.com, the new
> CEO wanted to switch to Windows — even after PayPal cofounder Max Levchin
> showed that their software scaled only 1% as well on Windows as Unix.
> Fortunately for PayPal they switched CEOs instead.

It’s pretty funny to see that in 2006 Elon Musk didn’t even deserve a mention
of his name. How things have changed...

~~~
pragmatic
We laugh now, but I remember reading that iis on windows nt blew the doors of
Apache in the late 90s/early 00s.

I'd love to find the source as I can't find it right now, bit I thought that
was bc Apache could only fork back then, etc

~~~
alexkcd
I remember reading that too. I think Ben Horowitz might have talked about this
in The Hard Thing About Hard Things, though I might be misremembering the
source.

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iamcasen
Hiring bad programmers is so common it's crazy. Most hacker news types
probably won't know this, but there are so many startups out there than aren't
VC backed and they have a limited dev budget. They try and hire who they think
is good, spend all their money on programmer salaries, and then what get's
built is a total turd. They never get traction because they keep failing to
launch. Company dies. All too common.

~~~
codingslave
The funny part is they scoff at an extra 50k for a better programmer, and then
watch as that cheaper guy that looks good on paper writes a pile of garbage

~~~
iamcasen
True, but how can a non-technical founder know who is good, or who is just
expensive? I've seen dev consultancies that are very expensive, and they play
the part in every way, but they produce total garbage. There really isn't any
way to know unless... well you know.

The best way to figure it out is through a vigorous investigation of
references I think, but even then, the past projects they worked on may have
been better suited to their skills that what you're hiring them for.

------
arielm
Very insightful, as with most of Paul’s work. But it also shows a very
specific mindset. In my opinion #15 was wrong back than and is even more
obviously wrong now in 2020.

The idea that you have to build first and monetize later has barely worked for
some and forced many many many others to sell at no gain or close. We mostly
saw the successful ones, but what happened recently with the likes of wework
is causing that perception to shift.

#16 though is super important, and not just from the programmer direction. A
good founder needs to understand the moving pieces of their startup,
regardless of whether they have the training for that or not. I’m not saying
they should be the ones to lead the effort on something they have no clue
about, but they should be able to understand it. This is critical for single
founders and important for multiple founders who make decisions together.

------
mbesto
The only mistake that kills startup is running out of money. Every other piece
of advice is hand-wavy at best and lacks context. For example - How much is
too much to raise? How much is too little? What constitutes a bad programmer?

~~~
longerthoughts
I agree but don’t think “don’t run out of money” makes for very helpful
advice, hence a bunch of other suggestions that help you not run out of money.
If a doctor told me “don’t have a heart attack/stroke/etc” I’d probably have
some follow-up questions.

~~~
mbesto
So, how is "don't hire bad people" good advice when you can't describe what a
good or bad hire looks like?

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adrianmsmith
> Many of the applications we get are imitations of some existing company.
> That's one source of ideas, but not the best. If you look at the origins of
> successful startups, few were started in imitation of some other startup.
> Where did they get their ideas? Usually from some specific, unsolved problem
> the founders identified.

I’m not sure if I’d agree with that point. Google were not the first search
engine, Facebook was not the first social network, etc.

I mean, for a user perspective, Google literally worked like other search
engines at the time. You enter your phrase, see results.

Of course the results were better than Yahoo, the user-interface cleaner, etc.
But that’s definitely incremental value for the user, not a whole new category
of product.

~~~
hn_throwaway_99
Meh, I kind of think you're both right. I mean, while Google was just the
evolution of a search engine, they _did_ solve a very specific unsolved
problem that the founders identified (namely, how to rank results in a manner
that was a much better indicator of relevance and quality). When it comes to
Facebook, people forget that before them, using your real name and identity
online in a social network was extremely rare.

Similarly, there were loads of dating apps before Tinder, but they solved a
very specific problem: how to let either partner indicate interest withOUT
letting the other partner know unless there was a match, in an intuitive way.

So yes, there are not many startups that are bold ideas that are completely
new (for exceptions see Elon Musk), but they mostly DO bring something
fundamentally new to the table.

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docuru
I bet many of you have read all of Paul's essays, I thought I have read this
one. I didn't know this one exists until today. Many of the points in 2006 are
still hold true

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danielmarkbruce
Shameless plug - I put (almost)all PG essays in podcast form here:

[https://www.roderick.io/feed/pg](https://www.roderick.io/feed/pg)

This is the rss(xml). In most podcast apps you can add a podcast by url.

------
tjchear
I'm gonna take a stab at assessing the relevance of the mistakes to a self-
bootstrapper:

1\. Single Founder: Plenty examples of successful bootstrappers on
Indiehackers. There are also plenty of failed bootstrappers, but you likely
won't hear about them obviously. The reasons pg listed for single founder
failure is still valid for a bootstrapper though - it's a very lonely journey.

2\. Bad Location: this is important for a different reason: as a bootstrapper
relying on their own savings, I'd say location with low cost of living and
fast Internet is the most ideal.

3\. Marginal Niche: bootstrappers target niches since they're not focused on
hyper-growth like conventional startups do.

4\. Derivative Idea: not that big of a deal. Derivative ideas are pretty
common amongst bootstrappers. You spend less time finding product/market fit
if you work on popular/derivative ideas - but of course you'll also run into
plenty of competitors.

5\. Obstinacy: yeah, big killer. Be willing to adapt is sound advice
regardless of your situation. The question is when do you know things aren't
working well, or you just need to push a little more? Talk to users.

6\. Hiring Bad Programmers: Definitely a killer. For bootstrappers who work
alone, the question becomes am I skilled enough to build the product within a
realistic scope and timeframe?

7\. Choosing the Wrong Platform: people tend to use whatever they're most
skilled at/comfortable with. It's still important that you do a survey of
what's available out there before you commit, and always have a realistic
migration plan when your success outgrows your initial scope.

8\. Slowness in Launching: bootstrappers are big on the idea of MVPs and
launching fast, but in practice, this is hard. Perfectionism is the bane of
those who failed to launch.

9\. Launching too Early: valid, but I imagine this is less of a problem for
bootstrappers since you likely don't have much attention at the initial launch
anyway.

10\. Having No Specific User In Mind: totally valid.

11\. Raising too little money: irrelevant.

12\. Spending too much: I can't speak for all bootstrappers, but if you're
bootstrapping from your own savings you're likely to be more careful with your
spending.

13\. Raising too much money: irrelevant.

14\. Poor investor management: irrelevant.

15\. Sacrificing Users to Supposed Profit: bootstrapped companies have to be
profitable from day 1. There's no investor money to keep you going. I believe
a good trade-off can be achieved here.

16\. Not Wanting to Get Your Hands Dirty: yeah, arguably the most important
one. Only way to deal with this is to constantly reach out to people and talk
to them.

17\. Fights Between Founders: totally valid, but irrelevant to single founder
bootstrappers (plenty of these).

18\. A half-hearted effort: a killer, for sure. But you don't necessarily have
to quit your day job. Ideally, work part time as a consultant/contractor, and
work on your business the rest of the time. It comes down to self (and time)
management.

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bze12
this still holds pretty true, but you know the essay is dated when he calls it
"The Facebook"

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ablekh
Here are relevant thoughts from 10 years later by another well-known venture
capitalist (and 2x founder) Mark Suster: [https://bothsidesofthetable.com/how-
to-decrease-the-odds-tha...](https://bothsidesofthetable.com/how-to-decrease-
the-odds-that-your-startup-fails-e0fc13213792).

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jimthrow
Most software startups die due to lack of demand for their product.

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jacknews
messages from a bygone era

~~~
hazz99
Which parts do you think have been antiquated?

