
When can startups be called successful, e.g. reddit, dropbox? - phsr
http://www.gabrielweinberg.com/blog/2010/05/when-can-a-startup-be-called-successful-eg-reddit-dropbox-yc.html
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dryicerx
When the startup can effortlessly expense a large shark tank to their
office/space without pissing anyone off.

Because to do that, a startup really needs to be successful (roughly according
to the points brought up by the article)... otherwise you will be angering
your investors who don't have a return or they will regard you as horsing
around, your user base will be unsatisfied and regard you as wasting money and
time, and money wise you must be pretty profitable, etc.

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mhartl
_When the startup can effortlessly expense a large shark tank to their
office/space without pissing anyone off._

This reminds me of the _T. rex_ skeleton that lives at the Googleplex.

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mhartl
I just found it on Flickr:

<http://www.flickr.com/photos/jowens/2330818928/>

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byoung2
It seems that having investors increases the likelihood that your business
will be labeled a failure. If you take $10 million, you have to exit with at
least that to be labeled a success. If you take nothing, or just a token
amount, and reach ramen profitability, you can exit with any amount and be a
success.

It is just like making movies. Spend $200 million on a movie, and it needs to
gross at least double that to be a success. Make a $1 million indie movie, and
it will be a smash hit when it earns $5 million.

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dolinsky
It's honestly nothing like making movies, because most movies that are
considered 'successes' wind up losing money.

[http://www.npr.org/blogs/money/2010/05/the_friday_podcast_an...](http://www.npr.org/blogs/money/2010/05/the_friday_podcast_angelina_sh.html)

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byoung2
_most movies that are considered 'successes' wind up losing money._

It's actually just like the movies. The movie is set up as a corporation,
which is funded by an investment by the studio (read:venture capital). The
movie is made by the producer, director, actors, crew (founder, advisors,
employees, contractors). The movie is released (public launch), and hopefully
after a few months of being in theaters (ramen profitable), the movie leaves
theaters (makes an exit). The corporation that was formed to make the movie
pays back the studio (its investors), and the producers, directors, and maybe
the lead actors get their backend cut (stock options). The corporation always
"loses money" because the studio always gets paid back.

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vessenes
I posted this over there, but it relates to HN as well:

\--- These are good thoughts, and of course, it seems clear the devil is in
the details when it comes to defining 'success.' : ).

With the exception of YC, which as you say, has markedly changed the startup
landscape without mind-numbing returns (so far), many of the concerns you
mention are financial, or sort of finance-expectations outcome oriented.

There's a whole other category of outcomes that businesses traditionally
provide: employment, social, civic and cultural improvement. While it's nice
to get rich, and nice to have a successful exit, and even nicer to do it in
such a way that other investors wish you would do it for them, almost
everything you mention above is focused on the outcomes for a really small
number of people: founders + investors.

This strikes me as venture capitalist thinking, and makes me think you've
spent a lot of time with VCs, and not as much time with people trying to say,
invent new water filtration technology, or build out a wind farm with a 50
year ROI, or maybe just make it as farmers in the developing world, .

There can be an element of small-minded profit focus in the VC world, a focus
which can choose to ignore the 'but so what?' question -- 'So what if we got
our clients 35%, ourselves 2/20, and the entrepreneurs 5x their salary
potential for the period?' The billionaires I've met rarely seem to think
about money as a measure of success; they are typically extremely engaged with
the question of how to put that money to actual and good use, applying the
principals they've learned along the way -- not wasting it either in a social
sense, or a financial sense. They are typically extremely people focused,
whether they live simply or extravagantly.

So, to me, there's a possibility of a sort of higher calling in business and
entrepreneurship; moving past the 'make money for our close-knit stakeholders'
idea to making a change in the world, in the lives of employees, actually
moving job creation numbers, and so on. In a way, whatever floats your boat.

I believe that if, as an entrepreneur, you optimize only for financial success
-- e.g. first your own exit value, then investors, you run the risk of hitting
that 'so what' question hard -- perhaps when you've gotten rich, perhaps when
you failed miserably.

On these terms I would call YC an unqualified success -- PG didn't need the
money; he needed to do something useful with the money. He and his team have
done that, and helped re-spin tech entrepreneurialism in America. I think
that's awesome. But, I think it would be great if the work that's been done on
showing young 20-somethings how to launch could be extended on pitching them
on 'why' with a long-term view. Most mid-life entrepreneurs spend a lot of
time thinking about the why, even while they continue to enhance their skills
and ability to deliver good financial results.

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rythie
Maybe it should be something like this:

 _Founders_ : 5x the salary they could have expected in a job over the same
period they worked at the startup, after taking off any monetary investment
they put in (+ interest) and adding any salary earned.

e.g. $60k * 2 years * 5 = $600k for a successful exit per founder.

 _Investors_ : 5x their investment

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webwright
Great post! I'll paraphrase Scott Rafer: "An entrepreneurs success should be
measured by the cash he puts in his pockets." By that measure, I think Dropbox
is currently a success-- Drew is (or should be) making more money than he
could if he'd gotten a job instead of founding Dropbox. For Drew, it'll be
MORE successful when it exits. But if it crashed/burned now, it'd still be a
success for him.

Of course, every startup has a different objective-- and every stakeholder has
an objective.

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durbin
when they are cash flow positive and the point where they are actually
profitable is in the foreseeable future and can be calculated.

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stcredzero
Let's apply this to Diaspora. What if they end up with something that has an
active, satisfied user base, which is also small. (Just for the sake of easy
calculation, let's say it's 170,000 actual, active users.) Would Diaspora be a
success?

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NEPatriot
I don't think so. Their stated objective is to change the world's social
networking platform. Not start a lifestyle business or pet project. If they
had gone into it with a hobbyist's approach 170,000 users is success.

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stcredzero
So then success is tied to intention? What if John Doe did a bootstrap startup
with the intention to become the next Bezos, but instead ended up making $500k
a year? I'd still call that a success.

What if it ended up that Diaspora managed to gain enough users and convert
enough of Facebook's user base to gain about 17.5% market share? (Measured in
time online, on-site. Probably hard to measure, but this is a hypothetical.)
Would they be a success? What percentage would represent the threshold?

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JangoSteve
In your example, I think you would consider it a success, but perhaps John Doe
would not, in that he didn't fulfill his goal. If he did consider it a
success, then I'd say that's due in large part to the fact that he must have
revised his goal somewhere along the way.

Based on that, I would say success is 1) different things to different people,
and 2) the fulfillment of each person's goals.

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orblivion
I think the core question is, would you have been more satisfied not doing it
and going with the next best option. Hopefully the next best option is
something stable, so you can make a useful comparison.

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tibbon
The investors would call it successful when there's a solid and positive exit.

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stretchwithme
when it has created and captured more value than its consumed and free cash
flow is rising. and your mom is bragging about it

