
Can guys in coffeeshops compete with celebrity entrepreneurs? - krausejj
http://remarkedly.com/2012/02/18/can-guys-in-coffeeshops-compete-with-celebrity-entrepreneurs/
======
deyan
You are describing a common gripe that young entrepreneurs have - unfair
advantage (in this case celebrity status which is especially helpful for
social software, but it could be a number of other things like access to
capital, team, proprietary technology, etc.). And I understand - I really do,
because I have been there.

But the key thing to realize is that everyone has been there. Caterina did not
start as a celebrity - she created a useful product and built her reputation,
which she is now leveraging. I bet that when she was starting she was looking
at articles of experienced entrepreneurs wondering the same thing that you
express in your blog.

And that's what entrepreneurship is all about - finding your angle, your
opportunity to create an unfair advantage. It is not easy and there certainly
is no standard "here's how you do it" answer - but I hope you don't fall into
the trap of thinking that as a new entrepreneur there's nothing you can do to
win against more experienced folks. That's the very definition of
entrepreneurship - disrupting the status quo by creating something that
satisfies a previously unrealized core need.

~~~
krausejj
good point, thanks

------
neilk
I think the tendency on HN is going to be to pile on this guy for not
believing in his dreams enough, but I think he's got a point. Tenacity may be
a necessary condition, but it isn't a sufficient condition. Resources matter.

But anecdotally, I don't see a strong correlation between celebpreneur status
and repeated success. I suspect that any correlation might actually be
negative.

There are a few people who defy the odds, though. The one common trait I've
observed is that they are laser-focused on the product, so they are less prone
to self-delusion.

UPDATE: Brandon Smietana wrote a good answer for this on Quora, reviewing some
empirical studies which suggest my intuition is wrong. Entrepreneurs with
previous success are probably as likely, or more likely, to succeed in the
future. But it's not a given that funding inevitably flows to the more
experienced entrepreneur.

<http://www.quora.com/How-much-does-startup-pedigree-matter>

~~~
pestaa
> _I suspect that any correlation might actually be negative._

How so? Is your suspicion based on the possibility that fame changes people
for the worse?

~~~
neilk
I think fame can be a bit of a burden. If you have a kind of guru status you
might be averse to taking risks that others think are foolish. Whereas when
you were an unknown that wouldn't have mattered.

But, that's a minor factor. This is what I was thinking: celebrity is
associated with at least one past success, and it becomes like a
characteristic of the person, for at least some time. Business success has
many more factors, some of them effectively random, and not associated with
the person.

So we should expect reversion to mean for the entrepreneur's post-celebrity
ventures. While they may succeed more often than others over time, their next
big venture would be highly likely to be a flop.

But: Smietana's post linked to research which suggests that I'm actually
totally wrong here, and entrepreneurial success is more of a function of
skill. Maybe that suggests that the successful entrepreneurs are the ones who
learned the best during their first venture, which makes replicating success
easier.

------
nilsbunger
Catarina wasn't born into "startup royalty" -- she was an unknown entrepreneur
when she started Flickr.

Most companies from YC, 500 Startups, etc are created by first-time founders,
and they've had remarkable success.

It does help to have an "unfair advantage" in your startup. But for most of us
it isn't celebrity; it's deep knowledge of a market segment, or a special
relationship with a customer or channel, or specialized tech skills, or
something else.

Between that, and mentorship from people who have more experience,
connections, and/or celebrity than you, you can do almost anything.

~~~
Todd
I was going to make this point as well. The corollary is that, to overcome the
implicit bias against the unknowns, your first success must be a genuinely
great or useful idea. The unknowns who became the knowns often had a breakout
success with their first successful product. Caterina and Flickr are the
poster child example.

------
xarien
"but if VCs are already giving money to an established entrepreneur to do the
same thing, why take a chance on a guy doing his coding in his house in a
bathrobe"

Until you change this train of thought, you won't succeed. You need to
convince yourself before you can convince others. If you can't even convince
yourself, no one's going to buy into it.

If you can convince yourself that you have what it takes to succeed and that
your secret sauce or magic formula is enough to staff off even the likes of
google, then you'll still convincing others including those VCs you've
mentioned.

~~~
mixmax
Or maybe the OP is just realistic? It certainly seems plausible that an
established player will have an easier time raising money, generating buzz and
getting a product out there than an unproven guy coding at home in a bathrobe.

While I agree with you that you need to be an optimist, you also need to be
realistic. If you have no track record and start building a company to compete
with virgin galactic you will fail.

Ultimately it's about what you want to do with your life; you can reach for
the stars, get a nice safe job at a big company or somewhere in between. But
you should acknowledge that the more of a risk you take the likelier you are
to fail. Most people with highflying dreams don't make it, and you should
factor this into the equation.

~~~
xarien
Being a realist and a successful entrepreneur is almost mutually exclusive.
It's about having a vision and executing to that vision whether it seems
realistic at the time being or not.

It's about being a dreamer. It's about being a risk taker. It's about being
overconfident in realms that may be familiar. It's about being so passionate
about what your doing, it becomes infectious.

Realists are better fit for project managers at large corporations...

~~~
zeemonkee
> It's about being a dreamer

No, that's being an idiot.

A successful entrepreneur - as opposed to someone who loses their shirt - may
be a visionary and a dreamer. But they take _calculated_ risks. You have to
know when to persevere, when to pivot, and when to give up - especially if
you're playing with other people's money or your life savings.

Yes, vision and confidence are important, in order to bring employees,
investors and customers on board. But unless they are grounded in reality, you
will fail horribly, unless you are very, very lucky.

------
larrys
"Certainly we could’ve tried to raise money; but if VCs are already giving
money to an established entrepreneur to do the same thing, why take a chance
on a guy doing his coding in his house in a bathrobe? Again, the celebrity
entrepreneur has huge advantages."

No question the celebrity has a halo around them which helps with getting
funded.

But I know of many many cases where VC's are trying to find the next Zuck and
they know that person exists somewhere in a coffee shop. And even if that
wasn't the case stop with the doubting attitude it won't get you anywhere.
(Same with girls btw.)

Some other tips - your blog <http://www.remarkedly.com> doesn't even have a
bio on you or what you've done etc. That would be helpful to someone who might
want to approach you after seeing what you have done. Or even reading this on
hackernews (HN profile has no contact info either.)

And skychalk.com is also missing any "about" info regarding the founders as
well. And while whois for skychalk.com has some contact info (is that you or
your partner?) whois for remarkedly is private. It shouldn't be. You need as
much exposure as you can.

~~~
krausejj
good points, thanks, I'll make some changes

------
dmix
Well if you build a silicon valley style social site that require mass scale
and has a chicken/egg problem - of course the silicon valley elite will
dominate you.

But theres tons of other apps that solve real world problems, that don't feed
off of that type of environment to succeed.

Solve a problem a lot of people have really well and you can compete on your
own and then go on to raise capital to really compete.

------
jvandenbroeck
Your missing the point, your not learning the lesson, you forget the
importance of product development, why didn't your idea catch on? Why might
Caterina's version succeed why yours didn't? I don't think it's just
publicity.

Instead of developing something, waiting 3 months to see how it goes & then
putting it in the closet because it wasn't popular enough, iterate. Why didn't
it took of? What should you change, who are your customers, how can you get
them to use the product? If your customers don't use the product, why don't
they use it?

I bet Caterina is busy asking all these questions and iterating her product.
If it succeeds, then I think that's the reason why it succeeds an not because
she's a "celeb". There is a difference between the experience from a guy in a
coffeeshop and the co-founder of Flickr & Hunch..

------
lrobb
As Spolsky recently said:

"Making a major horizontal product that’s useful in any walk of life is almost
impossible to pull off. You can’t charge very much, because you’re competing
with other horizontal products that can amortize their development costs
across a huge number of users. It’s high risk, high reward: not suitable for a
young bootstrapped startup, but not a bad idea for a second or third product
from a mature and stable company like Fog Creek."

~~~
drostie
There is another factor, too: we as coders are principally biased to work on
projects which are _fun_ , and that can supersaturate this market. So I just
spent a couple days working on a project to embed a couple of lisp-like
structures in JavaScript for building up properly-indented HTML templates. The
idea came from seeing people who were successful at using the C preprocessor
to create templating schemes. I might port the code to a language that I'm
less familiar with, like Clojure, just to get a feel for that language, but I
wanted the core structure to exist in a context that I was already comfortable
with and could debug. (Really that's half the reason why I use Node.js -- back
in the IE versus Netscape days, JavaScript was my second real programming
language and it always has the benefits of comfort, even as I learn more Lisp
and Ruby.)

Anyway, this happens to be useful for me, because it lets me define macros
which I can use to build up XML trees. But now if we come to the question:
could I sell it for a profit? -- then the answer is "no, because it was too
fun to build." Don't get me wrong, it will save me a bit of time (and it might
save others a bit of time) to be able to separate my template-development
language from HTML -- but I fully expect that a programmer at the startup of
your choice who needs it will also say, "this looks like a fun two-day
project, let me see what I can do."

------
DanielBMarkham
I think the premise here is that your idea and hers are somehow fighting. You
both had the same general idea, but due to her celebrity status, yours will
never succeed.

Your ideas are not fighting.

Ideas don't matter. Say that over and over again until it sinks in. The fact
is, all those other things -- connections, designers, fame, money - _might_ be
the key ingredient (or part of the recipe) to make an idea like that take off
in a global marketplace. Or not.

We see this with these categories of ideas all the time. Things like cloud
storage. Everybody did it -- with all kinds of famous people and different
strategies, some expensive, some not. It was finally the Dropbox guys who got
it working.

It's like baking a cake that nobody has ever made before and without a recipe.
Some cake ideas need fancy ingredients to make work. You're not going to have
those. The real trick, however, is taking the ingredients you have and forming
the best cake possible, the one the most people want, not looking at what the
other guys are doing.

It not a true statement that only big budgets and famous people can create
large startups. Perhaps it helps. In either case, don't know, don't care.
Focus on what you have. Let those other folks do their own thing. It's better
to spend your afternoon finding one person who likes what you are doing and is
a customer than it is to spend your energy on this kind of stuff. If you have
a customer acquisition model that you've worked out and is humming along, you
are doing awesome. The mind plays all kinds of tricks to get us off-path in
our startups. To keep us from focusing on what's really important.

Mind your knitting.

ADD: You can look at this the complete opposite way as well. I blogged about
the _drawbacks_ money can bring to the startup process just a few days ago:
[http://www.whattofix.com/blog/archives/2012/02/being-rich-
wi...](http://www.whattofix.com/blog/archives/2012/02/being-rich-will.php)
It's the creative assembly of the ingredients you have at your disposal that
matters, that you should be concentrating on. Not thinking for a second about
some resource you do not have available. It's just a waste of time.

I understand this advice sounds trite and programmed. Something along the
lines of "you can do anything!"

I don't mean this as facile. The problem here is by focusing on the
ingredients of a startup, and not the assembly, we're not left with anything
to talk about. Do you need publicity do do a startup like X? Some people will
show you examples of how the answer is "no". Some others will show how the
answer is "yes". There's just nothing useful there -- it's the assembly.
People can wave their hands around on either side of the discussion and make
broad pronouncements, but nobody really knows. Could you start a business
selling Porsches if you're poor? I'd _guess_ probably not, but I don't really
know for sure. Nobody knows until somebody does it. Startups are new business
engines that didn't exist before. It's the quality of the assembled engine
that matters, not the individual pieces. Extrapolation and generalization are
not very good tools for talking about them. That's the way it works.

If your question was a very detailed one about the exact configuration of your
marketing and customer funnel, and the exact strategies being used by your
competition, along with data, _we would still be guessing a lot, but at least
we might get some traction on the problem_. But once again, we'd look at
perfecting the model _using the resources you currently have_. But if your
question is just guys in coffee shops versus famous people, nothing much
useful is going to happen.

So I'm not trying to make an overarching "buck up!" statement. I just don't
think you can do any kind of analysis with the question as it has been posed.

~~~
shingen
I spent years, from about age 15 or 16 (circa 1995) when I first stumbled onto
the Internet, through 22 or 23, thinking that ideas are what mattered the
most.

I don't think that point can be emphasized enough: your idea is not a unique
snowflake. It's the other factors that actually determine success. The idea is
the absolute easiest part of anything worthwhile you'll ever build.

The mainstream media sells the notion of the magic idea, the overnight
success, etc. I came of age in the initial era of the dotcom fantasy. It was
very easy to be sold by the 24/7 press coverage in the mid to late '90s, that
magic ideas were worth billions because of how fast bullshit companies were
acquiring zillion dollar valuations. Of course you can count on one hand how
many dotcom billionaires made it out alive from that era.

It took years, a few failures, and a lot of reading to correct the flawed
assumptions I had taken on. I owe a lot to countless web authors, from the
likes of Chris Dixon to Mark Cuban to things people like Andreessen and
Horowitz have written, and so on and so forth. I think those guys most
valuable contributions to other entrepreneurs is in what they write, not the
money they invest - they'll have impacted radically more entrepreneurs with
the writing.

------
wildgift
BTW, the site is ok. If it could be leased to another site for a small price,
and the data could be embedded onto pages via widgets it could work.

There are thousands of newsletters and small papers that are online, or going
online, and they usually have classifieds that haven't been taken over by
craigslist. CL hacks away at the mainstream classifieds, but niche classifieds
are still selling.

------
gsivil
For every one hundred comments that say that ideas do not matter I will have
to add one comments that say:

IDEAS is what matter. Please do not confuse idea with a confused unclear
statement with no connection with the specific implementation. Ideas is the
specific intellectual way to move forwards and towards your goals.

------
bglenn09
As you pointed out, (of-course?) celebrity is an enormous edge in building
start-up traction in a social product offering, just as it is in most if not
all other domains that require building external support to achieve a goal. An
edge is just an edge though; it neither guarantees success for celebrities nor
failures for non-celebrities. As someone that's struggled for a long time with
how to seed a social network this seems pretty obvious to me and I agree it's
a solution to the chicken-and-egg problem of kicking off a social site that
you and I can't really compete with. We would have to win on product in a
space where celebrity-type reach is not a requirement to creating value for
the initial user base (i.e., a smaller chicken-and-egg problem vs. a larger
one).

~~~
krausejj
agreed - nice insights - but those spaces where celebrity status isn't a
requirement are so small. even in enterprise software where you can succeed
with unit sales, it is hard to sell without either prior sales or a
reputation.

do you have any good areas where you think young entrepreneurs should be
looking?

~~~
gyardley
The sweet spot seems to be online, paid subscription-based services, priced
moderately, bought with a credit card by individual professionals or small
businesses.

------
capsule_toy
Part of executing on your vision is marketing. As a techie myself, it's my
weakest area and my main goal for this year is to become better at it. I've
seen people start with no connections but they built up the connections they
needed. You need to do the same thing and not make excuses.

I've been interested in hyperlocal as well and had a website in the space
years ago. I consider it an obvious idea that techies really like, which means
there are tons of people working on it. The idea is simply waiting for the
market to come around, but once it does, you'll have even more competition
including established companies like Foursquare. If a well-known entrepreneur
simply getting funding irks you, then you're going to be in for a bumpy ride.

------
flyosity
I'll be impressed with Pinwheel if it makes money. I'm impressed when any
startup has actual revenues (revenues such that a gigantic user base increase
is a good thing because you have money to pay for more EC2 instances) and you
don't have to be a "celebrity entrepreneur" to make money. Good ideas with
great execution with a solid path to revenue make money, and you can be a guy
in a coffee shop (or someone spending 2 hours a night after work) to do this.
I'd say that your potential customers don't care if you're a celebrity or not
if the thing you're building seems valuable to them.

------
bengarvey
Caterina Fake gets a better first look on her projects because she earned it.
She's cashing in on the value she already created. To overcome that, you just
need to work harder, smarter and be better.

~~~
shingen
Or swim for the 'blue ocean'.

There's no way Pinwheel is going to dominate the entire general category up
and down.

No reason SkyChalk shouldn't consider pivoting and looking for a niche to own
within the area they're working in. Particularly since they aren't really out
any money, so the financial cost of iterating and pivoting some on the
existing product should be very very modest.

------
bootload
_"... The idea was to have a hyperlocal message board, where people could
leave announcements for neighbors (garage sales, missing cats), missed
connections, small businesses could talk directly to their customers, etc.
While we got some decent press and initial interest, the site never took off.
..."_

Is this a case of _"celebrity entrepreneurs"_ vs _"guy in coffeeshop"_ or is
it just a better executed idea? Read the above description and compare it to
_"Find and leave notes around the world"_. Creating a hyperlocal service is a
marginal business proposition in most areas. The authour correctly identifies
the lack of density as a problem but also misses the one thing that might make
pinwheel a success, increasing adoption and usage of hardware.

    
    
        We're hiring iOS developers and content interns
        https://pinwheel.com/jobs/
    

The difference here with the authour and Fake is understanding two ideas,
Moore's law and the importance of location. The use of iphone in the
tech/creative dense SF is the garden of Eden for hyperlocal type services
making everywhere else seem like a desert.

Of course this isn't the first time Fake has tied a companies trajectory to
hardware, think Flickr and the explosion of digital cameras from 2003. Now we
have three requirements for hyperlocal product: Moore's law, geo-location and
timing. No make that four. Nowhere in the post did I read any understanding of
the importance of mapping or GIS.

------
progolferyo
I don't think anyone is disputing the fact that guys in coffeeshops can't make
successful startups. I don't think that is the point the author is trying to
make. The ecosystem, much like the rest of the world, is centered on averages
and unfortunately, it becomes a LOT easier to start a company and not FAIL
when you have something to leverage. In the startup world, there is the
deadpool and avoiding the deadpool is very unlikely when you have a plethora
of experience to play.

Everyone starts with nothing and people succeed based on merit, there is
nobody who is creating a shitty product and succeeding just because they are
Kevin Rose. BUT, Kevin Rose can start a company and get millions in funding
with the snap of his fingers and average Joe has to work and work and grind
and grind before that happens. And probably, there are average Joe's out there
that do all of this and still don't make it because of some other reason, that
may even be out of Joe's control.

So conclusion is that success in the startup world is still about making a
great product and building a good business but getting funding in my opinion
is just as equally about product as it is about selling the founders to the
investors and if you have something good to sell, like 'I created Flickr',
it's incredibly easy to raise money. And one could argue that with money comes
another level of huge advantage, and the sooner you raise money, the more
advantage you have. SO in the end, having experience is a huge differentiator
when looking at averages across the board.

------
ezl
It's true that celebrity entrepreneurs have a decided advantage in terms of
[ease of getting press, money to hire people, making connections, etc].

However, I think most of those things can actually be replicated (though
admittedly not as easily) by the unknown coffee shop entrepreneur. Yes, you
have to hustle your ass off. But it works, and most people are very
sympathetic to the cause of the underdog entrepreneur and will go out of their
way to help.

Additionally, "guys in coffee shops" have the advantage of being extremely
agile, can turn their startup on a dime, and can do whatever they want.

This "whatever they want" thing is kind of important -- what I'm saying is
"they can do mildly shady stuff". For example, krausejj could have chosen to
populate his map with a bunch of fake people and posts, or unknown airbnb type
startups can spam craigslist users. I'm not saying it won't bite you in the
end, but airbnb seems to be doing great, and whether it was a calculated
decision on their part/they were aware of the activities of the third party
the engaged or not, I think they're winning now.

Each entrepreneur has different challenges, I'm not saying one isn't easier
than the other, but Davids can absolutely wreck Goliaths in some arenas. They
just need to embrace a different bag of tricks.

I'm a guy in a coffee shop -- and for now, I wouldn't have it any other way.

------
whosKen
Sounds like most people are jumping on the "it's not the idea, it's the
execution" bandwagon. However, there is a link between popularity and
execution. The more popularity you have, the more resource you have; the more
resources you have, the more options of execution you can choose from. When
the OP mentioned network, exposure, money, etc that's all part of the
resources which Caterina has. Even if the coffeeshopers have a wonderful idea
and a great game plan of execution, the lack of resource may not permit that
game plan to be played out. It's similar to the Jeremy Lin conundrum --
despite all his talent, it wasn't until Knicks got desperate and took a gamble
that Jeremy had a chance to shine (translation: Knicks and Jeremy both got
lucky). It's true that idea and celebrity status is not the answer to all
problems. However, to say that it doesn't give you a giant upper hand would be
lying to oneself, and that's probably the worst thing an entrepreneur can do.

------
benologist
Her name and her investors aren't going to be why people decide they like her
product (if they decide they do). They're also not going to be the reason why
people didn't like yours.

You're always going to be competing with someone and unless you are Apple
they're going to be bigger, better positioned, and have more money than you.

------
rwhitman
I think the biggest difference between a first time coffeeshop entrepreneur
and a seasoned entrepreneur comes down to the stamina to withstand multiple
pivots both psychologically & financially.

------
GigabyteCoin
>spent three months on it, and no money

What is 3 months worth to you in terms of cash?

$100 in facebook advertising can go a long way with the right campaign.

Perhaps you could have spent your resources more efficiently?

------
wildgift
That's kind of the whole message of capitalism - capital is king. But small
companies can compete by operating in niches and local markets. Craigslist
dominates today because they dominated the SF market so completely. Everyone
else had to use loads of money to try and grab other markets, but CL had SF as
proof, and sensible people posted in the proven platform rather than the
competition.

------
kennystone
When you make a product that needs mass consumer adoption, celebrity could
easily matter. Consumer apps are extremely competitive and the most difficult
to succeed in. Use your valuable skills to solve a real problem for people
with real money and your chance for success will skyrocket. You don't have to
pick the most difficult battles.

------
zacman85
Entrepreneur logic and VC logic are very different, so try to see it from
their side. First off, not all of the VCs will get in on Pinwheel, and may be
looking for something similar to invest in. Secondly, competition in a space
simply validates the space and the companies in it.

------
feralchimp
Seems to me that a high-profile entrant to the market, generating buzz and
paying heftily to market the concept, could in itself breathe new life into
SkyChalk.

The cyclist on the team-sponsored, wind-tunnel optimized trials bike can still
be drafted.

------
colbyh
A great example of your network being just as valuable as your product.

------
myoder
How much press did you manage to get for SkyChalk?

------
dannyr
Her app is in closed beta.

Have you actually tried using her app?

------
lr
Really awesome site. Did you apply to YC?

------
dmauro
VC's aren't buying into an idea. They're buying into talent and a vision. If
Pinwheel succeeds, that does not mean that SkyChalk would have succeeded.

------
shingen
One of the best ways to overcome the chicken-or-the-egg problem the guy is
hung up on, is by using the classic bowling pin strategy. You don't need to
have huge advantages in your favor to make use of that.

eBay had a severe chicken or the egg problem when it started out. So did
Craigslist. Almost anything that needs buyers and sellers simultaneously has
that problem (or content suppliers and content consumers). Most people
overcome it by knocking down one local pin to start with, and then knocking
down more pins and more pins and more pins. Groupon is another more recent
example, they didn't start out in 250 cities. Amazon.com didn't start out
trying to sell everything, they sold a tiny selection of books. Facebook
didn't try to conquer the world on day one, they started as an extraordinarily
tiny 'app' for Harvard, and once they knocked over that bowling pin....

My favorite example: Plenty of Fish, the dating site. Started by a complete
nobody, with almost no money, never took venture capital, and had no famous
backers. He knocked down a pin in Canada and around his general area of
Canada, to get started. Then it spread across the border to America and went
international. He did all of that while stacked up against extreme competition
in the dating scene, with monsters like Match & eHarmony that were a million
times larger - he managed to find a space he could exist in (free), and
focused locally with a product that could later spread globally.

SkyChalk perhaps should have just been for San Francisco, or insert market
here, but had the ability to scale once they conquered that first market and
proved their product.

The creators of SkyChalk have a lot to learn yet.

------
publicus
It's not what you know, but who you know. Welcome to capitalism.

