
Steve Jobs' memo to startups - swombat
http://omis.me/2011/10/31/steve-jobs-memo-to-startups/
======
pg
I can't say he was mistaken, since he was only saying he disliked it. But I
don't think there's anything wrong with selling a company at any stage.
Steve's problem with selling seemed to be that you're shirking work by doing
it. But that isn't necessarily, or even usually, true. A lot of people who
sell startups go on to do other things, and often bigger things. If we were
still running Viaweb, we could not have started Y Combinator.

~~~
veyron
What he's criticizing is doing a startup specifically so that it could be
flipped later. If you are in it to build a real company, you actually go
through the hard work that Jobs is talking about.

Did you start viaweb to sell it to someone else later, or did you start it to
build an actual sustainable business?

~~~
pg
We started it to sell. We were not interested in online stores. Some of the
problems were kind of interesting, but neither I nor Robert nor Trevor thought
of Viaweb as our life's work.

Incidentally, building a business to sell doesn't mean it can't be
sustainable. Viaweb made Yahoo lots of money.

~~~
izak30
You attacked that sort of thinking a couple of times at Startup School events.
In certain ways, it was troublesome, because I like to think that's the sort
of person I am, or the business that I want to start. But now hearing you say
again (paraphrase) "we did it this way, and we liked some of the problems, but
really we thought it was just a great opportunity" is promising. Is what
you're trying to say, that the 'best' startups are usually founded by people
who have deep emotional ties about the problems they're solving? (say,
anybots, facebook, google) but that it can still work with the right people
and the right ideas/timing (viaweb, slide, FriendFeed(?)).

IF YCs stance is to pick the former as much as possible (or all the time).
What can a valley outsider do to get the later started?

Sorry, this is the type of question I would have loved to ask at startup
school, it just took a couple of days to formulate.

~~~
pg
I'm not sure what sort of thinking you think I attacked, but I'm not against
people starting startups to sell them. I think it's a mistake when people come
up with startup ideas by trying to think of startup ideas, instead of looking
for real problems that need solving. But you can be working on real problems
and still intend to sell the company.

~~~
izak30
What was in my mind is more like what you describe as "Doodling" in
[<http://paulgraham.com/ideas.html>]. NOT the type thinking that gets you with
the next social geofenced daily deal. There is some differentiator between the
two that I think instinctively I understand, but quantitatively I haven't been
able to describe.

EDIT: First crack at a description: You want an idea that solves a problem,
not starts a startup, and sometimes a startup is a decent vehicle for the
solution.

------
DavidChouinard
This is my personal favourite quote of his:

“The problem with the Internet startup craze isn’t that too many people are
starting companies; it’s that too many people aren’t sticking with it. That’s
somewhat understandable, because there are many moments that are filled with
despair and agony, when you have to fire people and cancel things and deal
with very difficult situations. That’s when you find out who you are and what
your values are.

So when these people sell out, even though they get fabulously rich, they’re
gypping themselves out of one of the potentially most rewarding experiences of
their unfolding lives. Without it, they may never know their values or how to
keep their newfound wealth in perspective.”

------
antimora
From the Economics stand point, overall it's good that there are small start-
ups whose sole purpose to succeed in some specialized area and later be bought
off by a larger company that can use in some strategic maneuver. This is
analogous to X-prize factor.

In fact, Apple has benefited tremendously by buying off companies to enhance
its products (e.g. touch screen). Had everyone out there decided to build long
sustaining companies, there would had been large economic inefficiencies.

~~~
HSO
This is a very good point.

Also, in my case, I know that there are some things I'd like to do that are
almost impossible to do when you're small or it would be a complete waste to
reinvent the wheel.

Some biggies already have the technology I'd need to get closer to my dream,
so I think the ideal path is to keep developing and getting a high profile in
a niche that is under the radar and not easily replicable, and scope out
potential buyers, not just by money offered but by product/vision fit.

In short, it's a mental thing, not what happens on contract paper, that
counts.

------
kenjackson
PG wrote a good post on this topic (a counterpoint I would argue).
Unfortunately I can't find it. But it's about why selling your company makes
sense -- why you should give it to people who are optimzied for running a
business. Or something to that effect. Probably worth rereading if I could
find it.

~~~
pg
I think this may be the one you mean: <http://paulgraham.com/prcmc.html>

~~~
kenjackson
That is the one. Looked right at the name in the list of essays and skipped
it. Thanks Paul. Good to reread.

~~~
pg
It's an awkward title (I had to think myself "What was that one called?") but
if I gave it the obvious title it would spoil the surprise ending.

------
AndrewWarner
I don't see the attribution, so here it is:

Walter Isaacson page 569 of the hard cover.

------
ChrisNorstrom
Just because Steve Jobs says it doesn't mean it's true. He's human just like
everyone else.

The thing is, NOT every project, not every product, not every service can be
grown into a full blown company. It just doesn't work that way. Go to any
store and look at all the bottles of shampoo you can choose from, all those
brands belong mainly to 1 or 2 companies, Unilever and Johnson. Same with food
products. If every little shirt, and every brand of crackers where its own
company with it's own marking, and distribution, and it's own packaging plant,
it's own lawyers, it's own administration offices, it's own headquarters...
We'd be paying triple for everything. (although we would have a lot more
jobs... correction, the Chinese would have a lot more jobs...)

Some products just can't be monetized to support themselves so they MUST be
acquired by a company that can integrate them into its own profitable services
(or product line) and compete better with other competitors doing the same.

If nobody flipped it would screw over entrepreneurs by forcing them to commit
themselves to one industry, one company, one product line their whole lives
instead of being able to create companies, sell them, repeat. Thereby going in
and out of numerous industries and markets instead of just one.

Can you really see every product becoming its own corporation? On the other
hand, companies like Google and facebook (who's only difference from
competitors were features) grew into their own massive companies. Sometimes it
works, sometimes it doesn't.

Starting a company, growing it, and optimizing it are three different things.
Very rarely are there people who are good at all three. Jobs is one of them,
Zuckerberg another, but they're lottery stories. Their advice may not work for
the majority of people.

\- My 2 cents.

------
saturdaysaint
Ha, he must have forgotten offering to sell Apple to Commodore back in the
Apple I days for a few hundred thousand dollars. Not to say that we should
punish people whose views change, but it _does_ seem that a lot of his success
in Apple's early days was based on quickly and smartly capitalizing on small
projects (eg quickly bringing Woz's engineering feats to market), not
necessarily building the enduring platform that became his mission. From the
Isaacson bio, he strikes me as a gambler/experimenter whose first company
(thanks to much skill, foresight and luck) just so happened to make sense as a
long term concern.

------
lightyrs
I've been working out of the TechStars offices for the last few months and
most of these guys don't care what their product is as long as they can sell
it to investors. In Job's world, the customer is the consumer. In the startup
world, the customer is the Angel/VC.

------
davidw
"Launch a company and cash in" is what YC owes its existence to, for another
point of view... From PG's description, it doesn't seem like it was exactly
easy.

------
alexwolfe
So true. This term seems to be abused more than ever now a days. I've seen too
many people who are just starting a company (literally), throw this term
around. It's not something to be proud of unless you have something to be
proud of.

~~~
smacktoward
The crazy thing is that you hear people talking about how they've "started a
company" when they haven't figured out how to make their new operation do the
primary thing a company does, which is MAKE MONEY.

If you're not making money, you're not a company. You're a collection of
people that _might_ be a company, someday.

~~~
latch
You are flat out wrong. Not every tech product/company/idea comes together in
a weekend, a month or even a year. Companies doing new science can go for
years, and even decades, without even having a product, let alone clients or
revenue.

~~~
erichocean
Exactly. In my case, it'll have been ~15 years before I see any revenue at all
for my company, Fohr, in 2013.

------
kalleboo
Source?

edit: did some googling and it's from the biography. This is what I hate about
tumblr. It's all completely random stuff with no context, no sourcing and no
discussion, just those pointless reblog "notes"

edit2: of course, biography not autobiography, dunno what I was thinking

~~~
sax
Perhaps this is nitpicking, in this day and age. But that's his biography (as
opposed to autobiography).

BTW, how would you do things differently than reblog "notes"?

~~~
aangjie
It's not nitpicking to me... it(autobio vs bio) does make a huge difference
even in this age.

------
shawnc
The whole startup, get funding, sell the company idea is a new one to me - and
yet i've been self-employed for close to 12 years. I had one job after High
School, and that was working with my dad.

So my opinion on this is likely not so valid - but I think that those that
enter into it for the 'quick buck' are few and far between, and also those
that succeed at it are even fewer. It's not the 'ideal' way to go about
starting a business, and I don't think it's the norm either.

It's a sweeping generalization - which is easiest to make and from reading his
Bio, Steve's normal communication style as well.

------
pittsburgh
Between this post and comments from startup school along the same lines, there
seems to be a lot of people complaining about founders looking to make a quick
buck without having to work hard for it.

I live in SF. I'm running a startup, and many of my friends are as well. Where
are these lazy, get rich quick people I keep reading about? Am I just lucky to
only be surrounded by hard-working entrepreneurs who are trying to build long-
term viable businesses, or is this problem being overblown a little?

This is me genuinely asking, not making a statement in question form.

~~~
middus
What's wrong with looking to make a quick buck without having to work hard for
it in the first place?

~~~
anon808
There's no rules, you can do whatever you want. But i think a lot of people
have realized history shows the get rich quick type of folks tend not to
actually contribute anything to human progress and more often than not are
looking to take advantage of others for their own gain (allowing them to save
time to riches). My question: Why would I ever want to deal with anyone like
that, and why would anyone else?

~~~
jarek
How many people are actually contributing anything to human progress?

~~~
anon808
who cares. all you can control is what you choose to do.

------
daimyoyo
With this in mind I wonder why he chose to sell Pixar. While he made a
tremendous amount of money from the sale, I don't think it was really enough
to make a tremendous change in his lifestyle.

~~~
amirmc
As a result of the sale, he also became a major shareholder in Disney and
joined the board. That might have had a bigger impact for him than just the
monetary value from the sale.

~~~
yardie
Indeed, I think people really underestimate the importance of having the
Disney catalog in the iTunes store. And when I say Disney I mean Disney, ABC,
Miramax and the other subsidiary studios.

------
cgarvey
Does this mean I should drop the title "Social Media Expert Bootstrapping
Startup Entrepreneur" from my brushed-aluminum oversized business card?

------
jnorthrop
I've always believed there are three kinds of entrepreneurs. 1) Those that
want to build an empire from scratch. 2) Those that want to build to sell and
retire rich. 3) Those that want to generate an income stream that will allow
them to live the lifestyle of their choice (maybe working 3 days a week).

All are valid and I consider all of them startups.

------
kvnn
I think we've gotten to the point where we are submitting, upvoting and
discussing content solely because it has to do with Steve Jobs.

This (out of context) quote benefits me in absolutely no way. It might, if
there was elaboration or example.

Anyway, in my opinion this is a low quality submission and I'm irked by it.

------
jwingy
So what?

I don't know what qualifies as 'cashing in', but there's more to life than
just running a company. Just because you've decided not to stick around for
20-30 years doesn't mean everything you did up until then wasn't hard work.

~~~
ticks
I don't think he's talking about hard work. He is talking about people who are
driven by short term thinking. People who don't really care about their work.

------
alecbenzer
I think the guts of what he's saying is just "I hate when people call
themselves 'entrepreneurs', when really they just want to get rich quick."

edit: quotes like this make me feel like I better understand how Jobs really
might have thought (as opposed to how some of his fanboys think, which is what
I kind of assume he would think like). Another quote I like is this one:

> We’re born, we live for a brief instant, and we die. It’s been happening for
> a long time. Technology is not changing it much – if at all.

------
Hyena
He's making a subtle distinction because he objects to the word "entrepreneur"
in this context. I see this as a valid objection; perhaps we should consider
retiring "serial entrepreneur" for someone who does this frequently. What
they're actually doing is building a business that builds businesses. A term
for meta-firms might be good.

------
idspispopd
It is an interesting situation, there seems to be the one-brand, one-tech
company. Just ripe for sale, when there is no reason(other than funding) that
a founder couldn't start a small tech company or group, and grow various new
technologies under the same umbrella, turning each into a product, and thus
money stream.

------
bomatson
Entrepreneur, defined: "A person who organizes and operates a business or
businesses, taking on financial risk to do so"

<http://bit.ly/uMwlXV>

Much respect for entrepreneurs that see it through the whole road, but it
doesn't make all the other brilliant entrepreneurs just 'unemployed'

------
textlaundry
Apple wouldn't be alive without the existence of so-called "Cash Startups".
The entire iLife suite, Siri, and a host of their other products came from
buying out small companies. I wonder how Steve would have responded if the
Dropbox guys showed him that quote in their negotiations.

------
mekoka
It's worth noting that Steve Jobs was one of the few lucky ones to work doing
something that they _love_. Working hard in this context still qualifies as
hard work, but believing that it's all what entrepreneurship is about is a
rather naive and delusional view of things.

------
jpdoctor
_“I hate it when people call themselves ‘entrepreneurs’ when what they’re
really trying to do is launch a startup, so they can cash in and move on._

Of course, this is exactly what is desired from the investor POV, so why the
people they fund should act differently is a stretch.

------
noonespecial
I kind of think the opposite. Entrepreneurs _are_ the ones that create viable
businesses, cash in, and move on (usually to try to do it again.)

Steve, on the other hand, created the mother of all lifestyle businesses. (for
his value of lifestyle, of course)

~~~
gizmo
I think that's stretching the definition of lifestyle business a bit much.
Surely not every person who starts a business for the long haul is building a
lifestyle business?

A lifestyle business is a business you start in order to live a certain
lifestyle. The dictionary definition talks about generating an income that is
sufficient to sustain a lifestyle, but no more. Steve certainly didn't start
Apple because he wanted to maintain a specific lifestyle.

~~~
philwelch
Maybe leading and inspiring talented people to build world-changing products
was Steve's preferred lifestyle.

------
brudgers
If you go to YC, you already have started selling your company.

Not that there's anything wrong with that.

But there is no reason to kid one's self.

------
zmonkeyz
If your product consists of various products that you build and sell why
wouldn't you be an entrepreneur?

------
jbp
Exactly, Steve wouldn't be back at Apple if he(Next) didn't sell out. No Apple
A4/A5 if PASemi didn't sell out. No Siri either if Siri didn't sell out.

------
lightyrs
Amen.

------
CamperBob
"Don't bother. Whatever you're working on, we've already patented it."

~~~
rokhayakebe
Can you elaborate on this, please?

Do you mean the minute you publish your work it is already patented?

------
snarfy
This from the guy who took the $5000 for breakout after Woz stayed up for 4
days straight fixing design issues caused by bad specs from Jobs. Fucking
managers.

~~~
nirvana
Do you have a citation for the "design issues" thing, or are you just making
that up?

It was over 4 days because Bushnell needed the game fast. The design was
completely in Woz's hands and the incentive was to do it with as few chips as
possible, also from Bushnell.

Your claim that Jobs took all the money is a lie. The allegation is he split
the original fee with Woz exactly as promised, and simply never told Woz about
the bonus. The whole amount was less than $5,000.

It amazes me that people are such Apple haters that they will resort to making
up such lies in order to bash the guy who created the personal computer
industry (along with woz) and helped create everything from the switching
power supply to the smartphone.

