
Trends to Avoid When Founding a Startup - rmason
http://www.fast.ai/2018/01/08/startups/
======
sytelus
The catchiest (and wrong) assertion is this:

 _" even for highly technical aspects like deep learning, fast.ai has shown
that people with 1-year of coding experience can become world-class deep
learning practitioners"_

Yes, any Joe can train deep network with dozen lines of Keras. Sure, your
startup can use off-the self models and tweak it a bit... That doesn't make
you "world-class deep learning practitioner". If you are designing the network
for new problem domain, there are thousands of decisions to make - everything
from hyperparameters to network architecture to distributions in data. Making
these decisions without having developed lots of intuition and good
foundations is very hard. I often find usual developers without ML background
and experience completely lost in these cases. Debugging a model that doesn't
work is super hard. There are no IDEs, no breakpoints, no watches and in fact
not even error messages. Its purely statistical debugging and probabilistic
fixes.

~~~
delhanty
>Startups are (by necessity) filled with generalists; big companies are filled
with specialists. People underestimate how effective a generalist can be at
things which are done by specialists. People underestimate how deep
specialties can run. These are simultaneously true. [0]

For Google etc. it probably makes sense to pay top dollar for lots of ML PhDs
(specialists).

A startup looking for opportunities engendered by ML is better off with a
smart generalist. E.g. Dawson Whitfield of Logojoy was a designer. [1]

[0]
[https://twitter.com/patio11/status/936628610474983424?lang=e...](https://twitter.com/patio11/status/936628610474983424?lang=en)

[1] [https://www.indiehackers.com/podcast/038-dawson-whitfield-
of...](https://www.indiehackers.com/podcast/038-dawson-whitfield-of-logojoy)

~~~
nunez
Yes, because at their scale and revenue, it makes sense to start pumping out
your own research. Some PhD theses _do_ eventually become competitive
advantages (Paxos comes to mind), and nothing is better than being able to
work on your “thesis” with a nice paycheck and without the threat of “publish
or perish.”

------
birken
I don't want to diminish the success that this company is having being run in
their own way, but give me a break with these blog posts.

VC is a "trend to avoid"? Avoid "Hypergrowth"? I guess companies like Google,
Facebook, Twitter, Amazon, Stripe, Airbnb, Dropbox, Pinterest and a hundred
others all really messed up.

I mean I could go point by point and give examples that are the opposite of
these trends, but that isn't any more meaningful than these suggestions. You
can choose to run a company however you want, and you should. If you believe
these things are bad, don't do them. Attract employees that agree with you.
The market will decide if you are right or not.

But enough with the blog posts about it, especially if they are dismissing
critical tools that many companies use very successfully. Every company is
different, every product is different, every team is different. Use some
common sense on what tools make sense for you, and keep an open mind.

~~~
csallen
Counterpoint: Blog posts like this one are useful, because the VC-funded
companies you named are _so_ successful at dominating our thoughts,
conversations, and news feeds (HN included) that many founders never see any
examples of people following an alternative path.

It can be inspiring to a lot of people to simply _hear about_ the possibility
of building a small, revenue-generating business or side project.

I've been running Indie Hackers for the past year and a half, interviewing
hundreds of developers about their small businesses[0], and it feels like
every day I talk to someone who's never even considered bootstrapping to be an
option. Spreading awareness is valuable, especially considering that venture
capital is only a viable option for a small minority of companies, and the
ways in which it can cause an otherwise healthy business to fail are rarely
discussed by VCs themselves.

[0]
[https://www.indiehackers.com/businesses](https://www.indiehackers.com/businesses)

~~~
delhanty
+1

>because the VC-funded companies you named are so successful at dominating our
thoughts, conversations, and news feeds (HN included)

Right - HN's corporate sponsor is YC Combinator, so it's kind of inevitable
that the VC narrative dominates.

The good thing about Indie Hackers being acquired by Stripe in April [0]
(congratulations!) is that, even though you now have a corporate sponsor too,
in the short term at least nothing really changes.

You wrote that

>Stripe wants to grow the GDP of the internet

so having 1,000,000 Indie Hackers starting companies is completely aligned
with Stripe's corporate interests and that at least provides a counterpoint to
HN and YC Combinator.

Further out, if Stripe Atlas grows big enough then we could end up with an
Amazon Marketplace situation where small companies are forced to take whatever
terms "Darth Vader" (#patio11) offers.

But we're a long way from that point yet.

A 3rd way is not to start a business at all. As Vincent Woo said in his recent
podcast with you [1]:

>Right, so readers at home, if you can start a business, do that, but also
maybe don't. It's not easy, it's a lot of work and there are a lot of things
that valuable in life that have nothing to do with money, that's how I'd put
that.

[0] [https://www.indiehackers.com/blog/acquired-by-
stripe](https://www.indiehackers.com/blog/acquired-by-stripe)

[1] [https://www.indiehackers.com/podcast/041-vincent-woo-of-
code...](https://www.indiehackers.com/podcast/041-vincent-woo-of-coderpad)

~~~
dang
The "VC narrative" doesn't dominate HN. Quite the opposite.

Most everyone thinks it does, but that only makes it more untrue.

~~~
delhanty
Seeing as you're associated with HN that can hardly be an objective claim.

~~~
dang
Oh indeed, but seeing as we work on HN every day, we're more steeped in the
data than anyone else is, and to us this is a pretty obvious observation. I'm
saying 'we' because I'm sure all the moderators agree.

The HN community stopped being based in SV many years ago, if it ever was to
begin with. It's heavily international, widely distributed even in the US, and
significantly more sympathetic to boostrapper/indiehacker narratives than to
VC ones. Which is pretty easy to understand if you think about who the users
are and how many of them there are.

In terms of comment quality, the cynical end of anti-VC sentiment is a problem
because it's so knee-jerk and predictable. Solid critique is welcome, but
alas, there isn't much. As a moderator I don't care what people like or hate
but I do care about getting the best insights from all sides, and this is one
area where we don't, really. Or rather, we do, but it's drowned out by
Dunning-Kruger and reversion to the mean and all the other phenomena that make
internet forums suck.

------
lpolovets
I have a vested interest as a VC, but I disagree that VC funding is a negative
signal. That's a very blanket statement to make, and there are lots of toxic
VC-funded companies but also lots of amazing ones. (Similarly, there are tons
of toxic non-VC companies and tons of amazing ones.)

The way I'd frame it is:

1) If you want to build a company that is venture scale, taking VC funding is
a great option to consider. If you don't want to build such a company, VC
funding is a very poor option.

2) There are good and bad VCs. The bad ones suck. The good ones will help you
and support you even if the outcome is 2x or 0x. Fred Wilson at Union Square
Ventures articulates this attitude well in several posts:

a) "If you look at the distribution of outcomes in a venture fund, you will
see that it is a classic power law curve, with the best investment in each
fund towering over the rest, followed by a few other strong investments,
followed by a few other decent ones, and then a long tail of investments that
don’t move the needle for the VC fund.

But that long tail is comprised of entrepreneurs and their teams. People who
have given years of their lives to a dream that was ultimately not realized.

And as I have written many times over the years on this blog, I spent the
majority of my time on that long tail. This is irrational behavior if you
think about fund economics, but I believe it is rational behavior if you think
about firm reputation." ([http://avc.com/2015/11/power-law-and-the-long-
tail/](http://avc.com/2015/11/power-law-and-the-long-tail/))

b) "There are two interesting things here that I always think about. The first
is that even the very best investors in the VC business only get a hit about
1/3 of the time. That means that they have their share of "slog it outs" and
"hit the walls" too. I am certainly in that camp. The second is that we end up
spending an incredible amount of time and energy (hopefully not money) on the
2/3 of our investments that don't work out. When everything goes well, you
really don't need that much from a VC. Of course, I have added value in all of
my winners. But its the ones that don't work that I have left my blood, sweat,
and tears on. And that's the paradox of being a VC that cares. Which is the
only kind of VC you want to work with." ([http://avc.com/2013/03/when-things-
dont-work-out/](http://avc.com/2013/03/when-things-dont-work-out/))

~~~
crdb
I'd frame 1) slightly differently, as there are many cases of bootstrapped
unicorns.

Time is also a currency, so you make a trade-off between time (extra years of
your life spent acquiring funds to scale, and delayed product launch) and
control.

Time is also an issue when you have competition, in the sense that your
competitors can get there first by raising money.

~~~
lpolovets
I agree with you. I tried to be deliberate about this by saying VC is a great
option to consider for venture scale company -- but it's definitely not the
only option.

------
nikanj
The common mental model of a fledgling software startup is too large by at
least one order of magnitude.

For a decent, traction-but-no-rocketship product oriented startup, you need
one solid back-end+ops guy, one solid front-end+UX guy, and one programmer for
each mobile platform you wish to support. Add a CEO+sales+finances person, to
keep the business side of the business compliant.

Yes, you won't get a cool continuous integration autoscaling whatnot doodad.
YAGNI also applies to infrastructure, people and organizational hierarchies.
Don't build them just because Google and Facebook have them.

Look for a profitable company that's just one size bigger than you are today,
and aim for that. They've already proven that it's possible to operate at that
size with the whatever they've got. Repeat as you grow.

~~~
jjeaff
There are startups out there running their whole backend on products like
graph.cool and have no need for an ops person.

And they are building their app in react native with one developer (which can
then be launched in iOS and Android simultaneously).

------
rmykhajliw
Yep, all the points are the truth. I've got some of those mistakes in the past
especially VC funding, and it's really painful. Staying small is not a big
lose or something, actually you can earn 10x more money by staying small than
burning billions and keep working crazy hours. For example you can look on
what's up for the price of 19 instagrams they had around 30 employees. They
were small and output was way bigger than in general VC - funded company.

------
nlh
Great points. Strongly agree with #3 in particular ("like a family") because
I've made this exact mistake with companies I've led in the past.

To elaborate on what the piece touches on but doesn't specifically say:

> You will need to make hard decisions for the sake of > the business. You
> can’t actually offer people anything > remotely close to lifelong loyalty or
> security, and it’s > dishonest to implicitly do so.

To be clear(er): You will have to fire people, and firing someone who thinks
of themselves as a family member or who you think of as similar makes the
whole thing much more painful. Further, it can make you, as a leader, hesitate
when it's an action you really need to take ("but this person is like my
brother - we'll make it work!").

At my most recent company, we took the opposite approach -- we all liked each
other a lot, we worked well together, and we ate lunch together as a team, but
at 6pm everyone went home to their own lives and families. The lines were
clear, the understandings were there, and I think it was a much better way to
run things.

~~~
EGreg
How about taking it one step further and not _hiring_ people onto a team but
instead _rewarding_ them:

[https://qbix.com/blog/index.php/2016/11/properly-valuing-
con...](https://qbix.com/blog/index.php/2016/11/properly-valuing-
contributions/)

------
sk5t
Hmm, this article took a quick turn into a story about how it takes just one
year of coding experience + something from fast.ai to become "world-class deep
learning practitioners"; make of that what you will.

~~~
paulgb
I don't see anything that mentions just a year of coding experience, but as a
participant in their free MOOC I can say that it's highly worthwhile. It's
unique and complimentary to the more academic material usually found on deep
learning.

~~~
karthikb
From the article... "And even for highly technical aspects like deep learning,
fast.ai has shown that people with 1-year of coding experience can become
world-class deep learning practitioners; you don’t need to hire Stanford PhDs.
"

~~~
tinymollusk
I was in their recent course. No previous AI experience, although I've been
coding for 20 years. Using what I learned in the class, I am regularly able to
finish in the top 20% on most Kaggle competitions.

Just being able to solve some of those problems allows me to provide employers
with major value.

------
deepnotderp
I agree a lot with #3 but disagree _heavily_ with #4.

There are canonical examples of PhD theses that became successful companies,
not to mention the dozens of companies who exited (e.g. CV companies to
Qualcomm).

~~~
kinkrtyavimoodh
Yeah, Akamai, Google, to some extent Bose come to mind.

Most PhD theses would NOT become companies, so this is good advice for a PhD
student but not for a founder. If a founder finds a PhD thesis that is worth
productionizing, then the fact that it was a PhD thesis is irrelevant.

~~~
philipov
The advice is "Don't productionize _your_ PhD" thesis," so I think it is in
fact aimed at PhD students in the exact spirit you pointed out, not founders
surveying the academic field.

------
stretchwithme
Pretending to be a family is bad news. Especially if you tell prospective
employees that and then remind them that employment is "at will".

~~~
FireBeyond
Right? "We're a family... and if you fuck up, you're outta the family."

~~~
stretchwithme
Not even. Business errors or just a bad economy can get you laid off from the
family.

"Times are hard, Jimmy. So Mom will drop you off downtown."

------
outsidetheparty
Negative trends 4 and 5 are not, contra the article, AI-specific; AI just
happens to be the intellectual problem of the moment.

The team I was on waaaay back in the prehistory of the web era was warned
against hiring too many PhDs. We disregarded the advice. (These were smart
guys, yo! They had PhDs!) We spent a couple of years tackling interesting
problems instead of relevant problems, and just about entirely missed out on
the first web bubble as a result.

I love smart academic people. I love those big brains. I'll never hire one
ever again. Give me someone who's more interested in working around a problem
than in studying it, and we'll get things done. Give me a PhD and we'll have a
nice paper about it about 5 years after anyone other than their thesis advisor
cares.

------
kriro
First of all fast.ai is awesome and most of the points they make align quite
well with my personal views which of course doesn't mean they are the right
views ;) but...

"""Hiring a bunch of academic researchers will not improve your product and
harms your company by diverting so many resources (unless your goal is an
aquihire)."""

Disagree. Ceteris paribus a previous academic researcher isn't necessarily a
worse hire than a graduate or someone who has worked at other tech companies.
I'm really not a fan of this "don't hire people from academia" narrative. A
good scientist is well versed in systematic problem solving which doesn't
sound like a horrible skillset for someone working at a startup. Sure there's
enough people with PhDs that can't write working code but there's also enough
people that can. I'm not sure about the US but hiring a PhD isn't necessarily
more expensive than hiring someone with job experience in the tech sector
either. I get their basic idea but it's news to me that even AI startups are
on "only PhDs all the time" hiring frenzies.

------
jwilliams
Without hyperbole, one of the biggest trends to avoid is overgeneralization.

A large part of one's experience at a startup is unique to that context.

Certainly not all. But certainly a lot -- Probably the majority of what counts
as advice.

Being able to filter what's generalizable and what's not is the most useful
skill an advisor can develop -- ironically, even more than the experience.
(And I'm breaking my own hypothesis by giving advice there).

------
jdoliner
> Then I realized that most of the startups were indistinguishable from one
> another: nearly everyone was following the same destructive trends which are
> bad for employees and bad for products

This is rich coming from the founder of a startup that's indistinguishable
from all the other coding bootcamp, MooC startups out there with a dash Deep
Learning thrown in to make it extra trendy.

As for the actual advice, I think it's pretty hit or miss.

> 1\. Venture Capital Nothing in her description of VC is wrong here. But the
> lesson: "VC is to be avoided" is an oversimplification. VC money is a tool.
> It's not always the right tool, and it certainly has its downsides. But it
> has its upsides too. In many cases it's the only way to get a business off
> the ground.

> 2\. Hypergrowth I don't really know where the author puts the line between
> hypergrowth and just growth, as PG has said: starts are growth. They must
> always be growing, is there such thing as too much growth? Maybe, if really
> bad things are happening in the company because of the growth like people
> are burning out and quitting... but really that's only bad because
> eventually it will hurt growth. So I think the simple lesson is grow as fast
> as possible, don't be short sighted.

> 3\. Trying to be “like a family” This one I agree with. Trying to be like a
> family in a professional setting is dishonest, and eventually the truth of
> the situation becomes clear. It's better to be honest from the start.

> 4\. Attempting to productionize a PhD thesis We'll have to tell Larry Page
> he's wasting his time trying to turn that dumb Page Rank thesis into a
> company. There are a lot of companies that fail this way and there are a lot
> of PhD theses that shouldn't be commercialized but people try none the less.
> As with all things startups, there's a thousand failures for every success
> and the only way to tell the difference is to actually found the company.

> 5\. Hiring a bunch of academic researchers The only company I've really
> observed doing this is Google and it seems to have worked out for them. I
> can easily believe that their are companies out there that higher a bunch of
> researchers to do a job they're not really capable of doing. I've also known
> academic researchers who were able to have a huge impact in the role they
> were hired for even though it wasn't really research. The general statement
> of this is that you needed to hire people for roles they want to and can
> perform. Researchers might be a particular anti-pattern in this but it's far
> from the only one.

------
sokoloff
Is doubling in a year even "hypergrowth"? Doubling revenue every a month or
two? Sure. Doubling revenue in a year is a very strong growth rate for an
established company, but it doesn't strike me as particularly hypergrowth.

Doubling headcount in a year seems also fairly routine for early-stage
companies (assuming funding and cachet is in place).

~~~
Kerrick
Doubling headcount from 3 -> 6 is quite different than from 450 -> 909.

------
andreygrehov
#3. This is so truth. People have no idea what they talking about when they
say "we are a family". Forget this whole family crap! Hire skilled and
talented people. Let them do their job. Give them freedom and don't stand in
their way. Employees barely know what a friendship is, let alone a family.

------
hyperpallium
> You and your adviser picked your thesis topic because it’s an interesting
> technical problem with good opportunities to publish, _not_ because it has a
> large opportunity for impact in an underserved market with few barriers to
> entry.

This is obvious, yet an easy mistake. Behind it is applying the same values to
a business as to a PhD - not only in topic selection, but also in execution.
It's related to the conundrum that solving a problem that real people have now
does not always require a technically great soluton. Even a revolutionary
business does not necessarily require a technically great solution.

Academic success requires academic values and skills; business success
requires business values and skills.

Of course, if you _want_ to create a technologically revolutionary business,
you'll need both.

------
40acres
A trend that I would like to see more startups buck is the use of the
independent contractor model. While I believe startups like Uber and Lyft
could not achieve the scale that they have w.o this model, there are smaller
startups & markets where I believe the increase in value to customer service
can really differentiate a product.

Studies have shown that customer service, ability to execute & perform, and
general quality of service correlate with whether or not the employee is an
IC/temp or not. I've wondered if any startups have gone the opposite direction
and hired folks FT/PT for roles that otherwise would seem to be filled by ICs.

------
quickthrower2
Being pedantic:

I thought the definition of 'startup' is a company aiming for massive growth.
If not you are a regular business.

So maybe the message is "You don't have to be a startup"

------
c8d3f7b49897918
Negative trend 6: adopting a trendy, complex web stack before you absolutely
have to when a simple one would get you to market faster

~~~
linkmotif
What are some examples of a trendy, complex web stack? Or, what are some
examples of a non-trendy, non-complex web stack?

~~~
parthdesai
Adding pub-sub/queue/message broker in your app when a normal when a normal
connection to SQL db from your web app is more than sufficient. There are a
lot of companies that have kafka in their stack when they actually don't need
it. This is one thing i have seen a lot.

On front-end side adding redux when a normal react-app would be just fine.

~~~
linkmotif
What do you think draws people to these technologies?

~~~
beisner
This website.

~~~
linkmotif
Lately this website has been a SQL love fest.

------
hedonistic7283
>Negative trend 3: “Our startup is like a family”

No, just no. I disagree with this. I’m just a lowly employee and I spend 1/3rd
of my life with the office.

I want that office to be my family when I’m spending so much of my life there.

------
plinkplonk
How does fast.ai make money?

~~~
newusertoday
+1, i am curious too, can someone answer this?

------
stretchwithme
Avoid trends in general, unless they make sense.

Well, that's what an AI told me to do.

