
Projects and Companies - runesoerensen
http://blog.samaltman.com/projects-and-companies
======
cossatot
I like the long-standing definitions of the words: the company is the entity
composed of the workers _in their official capacity_ as well as its other
resources, legal rights and so forth, and the project is the work the company
has undertaken, and you are a beautiful if monomaniacal human being.

>It’s far better to be thought of—and to think of yourself—as a project than a
company for as long as possible.

'You' are neither the company nor the project, even if you are the sole person
in the company. Startups are of course typically single-project companies, but
the two are still not to be conflated.

If any of these things were synonymous, there would be some serious
implications. If your project fails, then you as the projectcompanyperson, are
a failure and may cease to exist(instead of you still being an alive person
whose project failed and whose company may or may not be on the rocks). If the
company _is_ the project, then after a pivot the company is not the same
company (instead of it being still the same company with a different project).
But with the real concepts, definitions and identities, these are different
abstraction layers essentially, and everything is more transferable, fault
tolerant, and so on.

I get that with sufficient dedication and focus these things can feel like the
same. I also believe that I have been someone's project.

This being said, I agree with the general analysis of the essay, specifically
with regards to throwing bureaucracy to the wind in favor of lean-and-mean
experimentation (and who really wants to grow up?).

~~~
ianstormtaylor
I also agree with Sam's thesis, and I also strongly agree with your addition.

It's very easy for startup culture to fall into the trap of equating the
people with the project/company they're working on, resulting in unhealthy
consequences when things don't go perfectly. It's a tricky thing to come to
terms with, because in the early days that overlapping identity—while never
healthy—is probably critical to having the momentum to carry on. But as time
passes, separating your own identity from that of your project/company is
critical to avoid burnout and depression; the company will always crest and
trough, but you can't be pegged to its state anymore.

~~~
jacquesm
> resulting in unhealthy consequences when things don't go perfectly.

These companies can be quite unhealthy even when things _do_ go well.

------
jordigg
I've been my entire life working on projects, where I'm from no one knows
anything about startups. I didn't know anything either. I thought Google and
Microsoft had been there for years and were created like any other traditional
company. Couldn't imagine anything built out of a garage or a dorm room.

I got money from all my different projects but never thought about them as
companies, I used them to learn and pay for my hobbies. I never thought they
could turn into real companies so I worked on them at night after my normal
job.

Right now I got back to a project and idea I had back in 2008 when I even
registered the domain and created the landing page and sketched a logo.
Finally, I want to turn it into a real thing, into a company, but I still
think about it as a project.

Same happens when I have to explain to family and friends why I left a well-
paid job on tech in Ireland and moved back to my parents home in Spain to work
on a website while the country is still broke. By saying "I'm working on a
project" seems less serious. They still ask if I can live out of that but if I
try to explain I'm working on a company people just freak out and things get
really difficult to justify taking the attention out of what's important. Hope
one day they understand.

------
babababa
"All of these were ideas that seemed bad but turned out to be good, and this
is the magic formula for major success."

I see this sentiment expressed often, like it's a good thing that you want to
pursue an idea that seems bad.

If I were to think about founding a start-up, I'd rather find an opportunity
that makes sense and sounds good, validate the opportunity, talk to potential
customers, and do as much diligence as possible before diving in. So
essentially, if something seems like a bad idea, I'd move on to the next idea.

This may make it harder to create a unicorn (since I'd clearly miss some
aspect that makes the idea not bad), but I bet it's a better, less risky way
of trying to achieve a high-growth start-up with great potential. Good ideas
fail as well, but I'd wager it's less often than bad ideas.

~~~
vog
I think you misunderstood the point of "seemingly bad ideas".

This is not about ideas that seem bad _to you_.

This is about ideas that seem bad _to others_ , i.e. ideas that seem okay to
you, that you probably even verified in the small, but still have trouble
convincing others.

~~~
77f89faf
Yea, but how much of that is actually [clear understanding of idea + execution
of idea] versus [marketing].

I'd say that probably at least partially depends on the group of people you
know. The last set of people that I would think would be representative of a
random distribution worthy of being a statistical sample is my set of friends,
because not only is my idea biased, but I have also selected all of my friends
with bias as well.

My general rule of thumb is 'bad ideas come out of nowhere' and 'good ideas
are things that require effort'. If you are just throwing stuff at the wall to
see what sticks, probably not the best way to go about doing things.

Other than that, I think the idea is hardly representative of the product. I
would guess that there is probably no reliable correlation between the
evaluation of the idea, and the evaluation of the execution. The examples
people mention are cherry picked examples. You can hardly evaluate your own
potential based on comparing that to a few select examples that have been
selected specifically to demonstrate a rhetorical opinion.

------
neilk
About a year ago I started being careful to call my things projects too.

In the current climate people want to hear what your monetization strategy is
first, or they think you're a loser. And a lot of the time I don't have one,
or it's really vague. I just have an idea that seems like it will be really
important to at least some people.

Calling it a project also liberates me from feeling guilty about not having a
corporation around it, or going to meetups to yammer with my city's alleged
startup entrepreneur scene, etc.

------
w1ntermute
> The best companies start out with ideas that don’t sound very good. They
> start out as projects, and in fact sometimes they sound so inconsequential
> the founders wouldn't let themselves work on them if they had to defend them
> as a company.

Isn't this just cherry-picking of examples that validate a preconception? What
about Uber? Dropbox? Amazon? Xiaomi?

Theranos:

> In the fall of 2003, Elizabeth Holmes, a 19-year-old sophomore at Stanford,
> plopped herself down in the office of her chemical engineering professor,
> Channing Robertson, and said, “Let’s start a company.”

[http://fortune.com/2014/06/12/theranos-blood-
holmes/](http://fortune.com/2014/06/12/theranos-blood-holmes/)

~~~
volaski
Does a limo service as a startup idea sound cool to you? What about just
another online file storage service when there are hundreds of others out
there already without any significant traction?

~~~
w1ntermute
> Does a limo service as a startup idea sound cool to you?

Do you think they didn't recognize the potential to move downmarket right from
the beginning? Starting as a limo service was just a way to delay regulatory
issues. Travis shot down Garrett's idea of owning the assets right at the
beginning.

> What about just another online file storage service when there are hundreds
> of others out there already without any significant traction?

It definitely wasn't the presence of "hundreds" of competitors (at least not
ones that didn't require sysadmin expertise) that people were criticizing at
the time:
[https://news.ycombinator.com/item?id=8863](https://news.ycombinator.com/item?id=8863)

~~~
volaski
Your argument actually supports my argument. Yeah that's why the expression is
"looks like a bad idea", not "it is a bad idea". It looks like a bad idea to
others, but not to the founders because the founders obviously know (or
believe) something that others don't. Otherwise, if the founders were working
on something even they thought was a bad idea, that would be an idiot.

~~~
w1ntermute
No, you're missing the point. The idea was obvious to plenty of others (Box in
the case of Dropbox, Lyft/Sidecar in the case of Uber).

The difference for Uber was that they were able to raise an enormous amount of
funding, then use it to subsidize their service to the hilt while expanding to
as many locales as possible. It's still not clear that the business is
sustainable: [http://gawker.com/here-are-the-internal-documents-that-
prove...](http://gawker.com/here-are-the-internal-documents-that-prove-uber-
is-a-mo-1704234157)

In the case of Dropbox, they just eschewed profitability and instead pursued
consumer traction, whereas Box pivoted to enterprise. And it's still not clear
that Dropbox is a better company than Box, especially if Box can get its CAC
under control. After all, most people are using Dropbox for free, which is one
reason Box pivoted to enterprise: [http://www.businessinsider.com/dropbox-ceo-
drew-houston-grow...](http://www.businessinsider.com/dropbox-ceo-drew-houston-
growth-not-profitability-2015-6)

The differentiating factor between the founding teams wasn't knowledge of some
secret, but the social capital needed to raise the financial capital to run a
lossmaking business for years on end.

------
pcmaffey
I've been thinking about this recently. Especially as the term "startup" feels
distasteful, a verb that's been turned into a noun. I'm not building a
startup. Nor am I continually starting (though sometimes it feels that way.)

So what's the right word?

Project - Sam gives good reason why this word works in the beginning, so long
as you're not looking for external validation. At some point though, your
project becomes something more.

Company - the people working on the project, and all the processes and
resources that go into supporting those people.

Business - the transactional model that enables the company to make money and
keep doing what they're doing.

Mission - for some people, the business is the mission. But for most success
stories, even in the beginning when it was just a project, there was an
underlying mission, a purpose and a plan. Unfortunately, the word feels mushy.
I'd hate to hear people going around saying they're "working on a mission."

Ultimately, the word I use will likely depend on the context.

------
paulsutter
Peter Thiel has a famous Venn diagram with two circles: "good idea" and
"sounds like a bad idea". He says that the best opportunities fall in the
overlap between the two circles.

Here's a picture of the diagram:

[http://www.businessinsider.com/this-venn-diagram-shows-
why-s...](http://www.businessinsider.com/this-venn-diagram-shows-why-startup-
investing-is-hard-you-have-to-be-on-bad-ideas-2012-9)

Calling an effort a project (or even, an experiment) helps free us up to be
more flexible and receptive to the market, and removes a bit of our personal
identity from the mix. Sam's great point is for a "project" we're more likely
to pursue an idea inside the magic overlap zone of Thiel's diagram

------
sytse
GitLab we always talk about GitLab the company and GitLab the project as
separate things. This because the open source project is bigger than the
company. Hopefully this helps us keep thinking like a project.

------
pcmonk
I'm not sure the words "project" and "company" are the best words for it, but
this idea is definitely important. It's a general principle in life to never
take yourself too seriously.

If you find yourself not doing something because you don't think it's worthy
of the fine company you've built, you're thinking way too much about the
formal company and not enough about the ideas, work, and vision that made the
company what it is.

------
zeeshanm
The point about having self-discipline to work on projects is very true. I
have found that the best way to stay motivated is to write as little code as
possible and deploy as mush as possible. My usual commit is never more than
~50 lines of code. There is no better satisfaction than seeing your code doing
magic in the wild.

------
adventured
> If you don’t have the self-discipline to work hard without external
> pressure, projects can be a license to slack off.

I agree with this, with one caveat. Some of my most productive bursts of
output or problem solving have occurred right after a self-imposed, brief
period of slacking off. There can be a tremendous benefit from the mental
break that goes with 'controlled slacking off,' so long as it's intentional
rather than an indication of something more serious (like not wanting to work
on the project).

------
rdlecler1
While Sam may ultimately be correct, in practice this is only great advice if
your a nth time entrepreneur who has made VCs a lot of money. The problem here
is that most entrepreneurs don't fall into this category and most investors
don't want to invest in projects. Unless you have an extremely compelling
mission driven project you also won't be able to attract talent in this
market.

~~~
coryl
Most projects will never get to that phase. If its successful and gets
traction, then it can become a company. If its not, then you move on to
something else. Its a mental hack to keep you flexible and creative, rather
than being locked into the pressures of running a "company".

------
kepano
I've always liked the word project when talking about startups. The word
inherently conveys the idea that you're building up to something that will
exist in the future (in Latin it means "throw forward"). It gives you the
flexibility to change and evolve. "Company" feels like something established
and somewhat static.

------
malcolmocean
I've had a similar-but-different experience around being taken seriously with
my app Complice. I'd be making small talk with other entrepreneurs (often
students or whatever) and people would regularly break the ice with, "So
what's your idea?"

...and I'm like "idea? I have a business. I make my living off of this idea."

------
jessedhillon
This paragraph is basically the whole point of the post:

 _When you’re working on a project, you can experiment with ideas for a long
time. When you have a company, the clock is ticking and people expect results.
This gets to the danger with projects—a lot of people use them as an excuse to
not work very hard. If you don’t have the self-discipline to work hard without
external pressure, projects can be a license to slack off._

The idea that people were calling his startup a project instead of a company
irked him because he perceived that, in their minds, they were putting his
startup in the category of things people pursue without any intent of
completing or being accountable for. That's how most people regard their
projects: as hobbies.

That's at least what I was thinking to myself. The reaction I had when reading
this essay was to think to myself "well, how do you expect to be taken
seriously if it's not something you intend to deliver and be responsible for,"
but then he delivered this gem above.

The _company_ doesn't deliver that level of intention, _you_ have to generate
it. Once you have it, the company is just a legal entity, and if you don't
have it then no amount of incorporation, schedules, meetings etc is going to
compensate for that.

------
studentrob
"Don't take your job so seriously" is something we all could do well to
remember. Keep learning, keep it fun

------
gozo
I think the middle road between a project and a company is a small business.

Company over project is probably a bigger problem in SF/SV than anywhere else.
I see a lot of people in both hardware and software making very elaborate and
technically successful projects that never graduate from being projects.

------
pbreit
"Companies" seem like terrible vehicles to work on "projects". Is there a
better answer? The dreaded incubator?

~~~
cossatot
Labs?

(Although most real lab rats will admit that they can't always experiment like
they want to because reagents and instrument time are often expensive and
samples are often irreplaceable. Enter: computer modeling.)

------
7Figures2Commas
> _The best companies start out with ideas that don’t sound very good._ They
> start out as projects, and in fact sometimes they sound so inconsequential
> the founders wouldn't let themselves work on them if they had to defend them
> as a company. Google and Yahoo started as grad students’ projects. Facebook
> was a project Zuckerberg built while he was a sophomore in college. Twitter
> was a side project that started with a single engineer inside a company
> doing something totally different. Airbnb was a side project to make some
> money to afford rent. They all became companies later.

This is hardly a list of the best companies, and a few of them don't support
the argument:

1\. The search/portal market was already significant when Google launched.
Companies like Yahoo, Excite, Lycos were already public traded at the time,
and were some of the hottest issues in the tech space. So it's no wonder Andy
Bechtolsheim cut Larry and Sergey a check for $100,000 before a corporate
entity even existed.

2\. When Facebook launched, Friendster already had millions of users and had
received a $30 million acquisition offer from Google. MySpace, which was
created by people who saw Friendster's popularity, was founded by people
trying to capitalize on the social networking hype that was already present in
2003.

3\. Even Airbnb is hardly a post child for Sam's argument. Homeaway, VRBO and
Couchsurfing were all well established when Airbnb launched.

For most entrepreneurs, "start out with an idea that doesn't sound very good"
isn't likely to turn out very good.

~~~
malanj
Starting a company when there are already established and strong competitors
probably counts as "looks like a bad idea". I think the point is that the
_company_ (or project) seemed like a bad idea, not necessarily the market as a
whole.

Google and Facebook are both often used as examples exactly because they were
"late" to the party. That seemed like a bad idea, but they both had a secret
(as Peter Thiel likes to say), that made it not a bad idea.

~~~
mtberatwork
When Google came about I don't recall anyone thinking that it (indexing the
web, page rank, etc) was a bad idea. Everyone knew search was horrible at the
time and many established players were simply directories with thin search
layers. Yes, there were established competitors, but none of them were really
strong aside from a tiny minority (altavista for example).

I don't recall anyone considering Facebook a bad idea either, just that it was
"yet another social media" site. Facebook mostly lucked out because of
MySpace's user exodus.

~~~
danieltillett
I agree that when Google came out it was far better than its competitors.

Facebook is a bit different in that the market they went after was the right
one not that their product was that much better. Zuck may have been lucky at
the start, but he soon realised that he was on the right path and stuck to it.

~~~
kedean
Facebook had a secret ingredient too, they were one of the only sites on the
Internet to use exclusivity correctly. They built up hype and got users
drooling by slowing becoming available to more groups, and once they became
available to everyone they were already established and validated. Of course
luck and a simple design factored in too, but I think the exclusivity was the
biggest part.

