
Don’t Build a Billion-Dollar Business - discreditable
https://www.backblaze.com/blog/dont-build-a-billion-dollar-business-really/
======
DavidWanjiru
I say build a company. Go where it takes you. If it takes you to a billion
dollars, fine. If it takes you to a million, fine. If you aim to achieve a
given number, I suggest you question why your ego, as opposed to your
business, needs you to achieve that number. Are you aiming to become number
one or two in your business because you have substantive reasons, or is it
becaused you once read about Jack Welch saying GE businesses had to be number
one or two, and you took that message to heart for no other reason except Jack
Welch said it? Are you aiming for the low millions coz you have a substantive
reason for it, or are you doing it simply coz you admire Paul Graham who
exited at those low millions and you want to be like Paul Graham when you grow
up? Life is fluid, people and businesses change, goal posts get shifted all
the time, businesses that shunned evil start being evil. These are just the
places where businesses take people. Go where yours takes you. And if you
don't like where it takes you, then by all means come back, shift your goal
posts. Change your sport, even, if that's where your business takes you.

~~~
AndrewKemendo
No one accidentally builds a Billion dollar business - so it's not the case
that it just leads you there by default, you need to choose to be that size.

At the same time though, you are right in the market leading nature of it.
That is, while building your business the opportunity might arise that you can
shift what you are doing and that shift would open up your market to a larger
opportunity. Alternatively you could choose not to shift and go for a smaller
win.

Why I take issue with the original post is because it is basically saying, if
it looks like there is a market opportunity to make a billion dollar company,
don't take it.

~~~
arbuge
>> No one accidentally builds a Billion dollar business

Actually some do. The classic example is Google's founders - they tried to
exit to Yahoo! for a million or so, but were turned down.

Perhaps "accidentally" is not the word. Of course, it's not accidental - tons
of hard work is involved. But many people never _dream_ of building a billion
dollar business, and a few of them still get there.

More importantly, focusing on building a billion dollar business might not be
productive. It might actually distract you from doing what customers would
like you to do.

~~~
AndrewKemendo
This gets the point backward. Again, it's not that they set out to create a
billion dollar business. Certainly at one point they were trying for a smaller
exit.

The key point though is that, somewhere between their Yahoo pitch and today
Sergei and Larry made the decision to grow to the $B scale. I think it was
when Eric came on actually was when that shift happened.

~~~
kristianc
The creation of AdWords must have been a key moment in that, surely? If
Auletta's book is to be believed, there were long periods where any kind of
revenue at all out of Google would have been cause for celebration.

------
xiaoma
> _Thus, in rough numbers, the chance that a funded company goes on to become
> a billion-dollar business is 0.005 percent to 0.016 percent. Rounding to any
> significant digits, that’s basically zero._

I'm really getting tired of these calculations of "the chance" of a startup
doing X. You are not a lottery ticket. It's not random. The 20 year-old
version of Mark Zuckerberg beats the 20 year-old version of me every time.
Business isn't exactly chess, but it's a lot closer to hold'em than it is to a
lottery.

~~~
outworlder
It's not _entirely_ random, but most of the forces involved are out of your
control. So, thinking in terms of chance is helpful.

The 20 year old Mark Zuckerberg could likely beat both of us combined in say,
business. And would probably be successful no matter what. But would probably
not be a billion dollar business, were circumstances even slightly different.

Lots of companies and individuals fail all the time, despite their skills.

You are unlikely to be a special snowflake. Even in the case that you are, it
might be summer.

~~~
waterlesscloud
No.

20 year old Mark Zuckerberg would keep adjusting until he was whatever a
unicorn needs to be in this instant. That's his nature.

You would not.

That's the difference.

~~~
coldtea
That's mystical BS thinking, from too many self-help books.

Most succeses had been a combination of being born at the right place and
time, to the right parents, going to the right school and meeting the right
people. Most of those are heavily determined by the past beyond one's control
-- and others are semi-random.

Then there's talent for business and determination -- but it's only
survivorship bias that doesn't let us see that lots of people who didn't get
to have FB also had equal talent for business and determination, or even more
than Mark.

Even a "perfect" Mark could have been hit by a bus before the success, or had
a dehabilitating illness, etc -- and then your "magical unicorn" admiration
would go to whoever else got to be succesful at the time, while Mark still be
the same person (only unsuccesful).

~~~
waterlesscloud
I'm sure that line of thought makes you feel better, but it's pretty
demonstrably not the case.

~~~
s73v3r
Your thing isn't demonstrably the case either. In fact, a lot of what led him
to create facebook was pure coincidental luck.

~~~
HeyLaughingBoy
I think the point he's trying to make is that if it wasn't Facebook,
Zuckerberg would have been successful with something else. Perhaps not as
wildly successful, but he certainly wouldn't have regressed to the average,
run of the mill consumer getting by on the 9-5.

~~~
coldtea
Why? What special quality does Mark have?

He wasn't some genius programmer. He created a glorified forum (and in PHP).

He wasn't some genius businessman (evident from his early interviews). He
created something at the right time, that got momentum because of that, and
that attracted the right people to help make it a success business wise.

Would he have gotten somewhere else if it wasn't for that? Maybe, maybe not.

I don't see anything particularly convincing that he wouldn't have regressed
to the mean.

~~~
unabst
Some traits shared by Mark, Bill, Steve, Jeff, and even PG apart from being
born white, not poor, male, lucky, etc:

1) self driven

2) loves to build

3) doesn't let things get in their way

4) goals based on their version of the future

5) deep thinkers / intellects

6) holds their own values and priorities

7) evidence driven / scientific

8) conqueror's mindset

9) idea person, doer, dreamer, student, teacher all in one

10) never was about the money, and more about passion

I don't claim this list to be 100% accurate or exhaustive, but the point is
there is more than just luck and DNA, and many of these traits are acquirable.
The demographic to me says that the chances of becoming _that person_ are
higher under those circumstances, but the demographic itself does not directly
enable or cause any such success. Just as all presidents were white until
Obama, maybe we just need someone to shatter the stereotype.

Personally, what I respect most is their capacity to generate their own
philosophies and to then apply them to their products, to their companies, and
to their lives. I find people that can do this are successful at any level.

~~~
coldtea
A lot of those features we just ascribe to them post-factum because of their
success. And a lot of those features are also shared by people without much
success.

I mean is Mark "deep thinkers / intellects" etc in general? Or it's just a
(average) smart college boy who wrote a service that hit the right spots and
got viral?

I also know many millionaires (and billionaires) for whom it was always "about
the money", and that was their passion.

~~~
unabst
That isn't a list of accolades. They are character traits heavily utilized on
the way to what was accomplished. When comparing Mark to a kid who wrote a
program that went viral, just see how instrumental he was. Facebook is far
more than just a viral web site, and it didn't fall into place with Mark
sitting back and seeing where all the pieces would land.

Yes, many of the traits are shared with average people, as is the trait of
being human. This to me only attests to how similar and ordinary and close we
really are to those we love to put on high pedestals. How do ordinary people
accomplish extra-ordinary feats? To this I suspect combination is key. You
could be perfectly capable but not have a dream. You could be a dreamer but
lack self motivation... and so on and so forth. And sure, maybe you had it all
except for the money to fund yourself. But either way, if we are admitting
there is a combination, we're already past the luck hypothesis.

------
chucksmash
There was a similar article submitted last week that resonated with me more:

[https://news.ycombinator.com/item?id=10149308](https://news.ycombinator.com/item?id=10149308)

Focused more on building a small (5ish people) business with $1mil in revenue
a year as the path to enlightenment.

Key insight: building a $1mil/yr business ($7/mo * 12 mo/yr * 12,000
subscribers) that focuses on delivering pure awesome is an _excellent_ way to
build a $10mil/yr business is an _excellent_ way to....

~~~
dangrossman
> building a $1mil/yr business ($7/mo * 12 mo/yr * 12,000 subscribers) ...

Much easier to do if you sell to businesses. At $100/mo instead of $7/mo you
only need 833 customers. I'm nearly there just by adding 1-2 customers a day,
which is eminently doable without a team.

~~~
vijayr
you are building a million dollar biz _alone_? what kind of product is it?

Just curious, are there any other examples of one man million dollar software
business?

~~~
dangrossman
[https://www.improvely.com](https://www.improvely.com) \-- marketing tools.
"Solopreneur" seems to be a good search term for finding other examples,
though I think it sounds silly.

~~~
cddotdotslash
Not to derail the original discussion, but I'm curious too - what methods are
you using to gain 1-2 users (paying $100/mo) per day? I'm building out a
product that I'm marketing to businesses, but am struggling to find ways to
actually get the name / brand in front of enough people.

------
brudgers
The thing is, building a billion dollar business doesn't require 1000x the
work or entail 1000x the stress of building a million dollar one...even if it
is more than 1000x less likely. It's also the case that only getting 5% of the
way to a billion dollar business after six years is probably going to feel
better than 20% of a million dollar business after two years...one comes with
a reasonable paycheck, the other doesn't. Finally, the investors in your
million dollar idea aren't going to be any less assholes, and probably moreso;
your credit card and local bank are less ok with failure than angels and VC.

To put it another way, building a lifestyle business already requires a huge
amount of luck and time on top of the hard work and stress. There are only so
many trips to the plate and swinging for the fence may be the rationale
option.

~~~
gmac
_The thing is, building a billion dollar business doesn 't require 1000x the
work or entail 1000x the stress of building a million dollar one_

The key thing is, a billion dollars is nothing like 1000x better than a
million. In fact, I suspect it's barely 1.1x better (and there's even some
weak evidence from subjective wellbeing studies that it could be worse).

The St Petersburg Paradox[1] is a fun application of this fact — the fact that
when you already have a LOT of money, even a LOT more money is pretty well
useless to you.

[1]
[https://en.wikipedia.org/wiki/St._Petersburg_paradox](https://en.wikipedia.org/wiki/St._Petersburg_paradox)

~~~
orblivion
Do you really mean 1 million or, say, 10 million? I think there's a huge
difference between these two. I haven't done the math, but I figure with the
latter you could retire without thinking (much) about what you spend money on.
From that point, yes a billion isn't much different.

~~~
gmac
Hmm. I agree there could be a difference between 1 million and 10 million. To
an approximation, 1 million is not having to worry about housing, while 10
million is not having to worry about work.

But I'm not sure not having to worry about work would be good for everybody —
me included. It _could_ be good ... but I worry it could also leave one
purposeless and adrift (I have some anecdotal evidence on this point).

Apologies for not looking up the literature to corroborate this (or not), but
I should get back to the day job.

~~~
avn2109
>> "...1 million is not having to worry about housing, while 10 million is not
having to worry about work."

These numbers are low by a factor of ~2 unless you want to live in flyover
country/a cheap country other than America.

~~~
sokoloff
I live in Cambridge, MA and I can't see any way that $10MM isn't enough to
never worry about work again. At a first approximation, that's $300-350K in
income without much risk of principal drawdown. It's surely enough for $250K
in income (plus an inflation "raise" each year) forever.

If that's not enough to not worry about work, you might have lifestyle issues.

$1MM won't buy you a "really nice house" here, though, so I agree with you on
that point, but it is still enough to not worry about housing if you choose
"sufficient, not luxurious" level of housing.

~~~
HeyLaughingBoy
As a counterpoint from the "flyover country" viewpoint, I live in rural
Minnesota about 40 miles outside Minneapolis.

$1MM will buy you a very nice new construction 6,000+ sq ft house on about 20
or more acres of land with an outdoor pool most likely. And you're within
commuting distance of major job markets. $10MM and you're living quite
comfortably (probably spending weekends at your cabin on the lake) and
certainly not needing to work, so maybe you spend your free time tending to
your horses or alpacas.

------
tptacek
It feels dismissive to write this, but:

Every VC I've ever talked to --- middle double digits over 3 different
startups --- has told me this story about how they're not looking for
"10-baggers" or "unicorns" or whatever it is they're calling them these days.
They want to invest in founders, trust that a good team will come up with ways
to make money if they just stay out of the way, &c &c zzz.

The fact is that the economics of venture capital pretty much depend on
most/all of a portfolio's investments having some shot at becoming
outlandishly successful. The winners have to pay for the losers.

~~~
ig1
The two aren't mutually incompatible.

If you're an early-stage investor you don't look for unicorns not because you
don't want them (you obviously do) but because you can't spot them based on
business model, traction, etc.

As an early stage investor you focus on team/founders because that's the best
early predictor that a company will become a unicorn in the longer term.

~~~
waterlesscloud
No no no.

According to people commenting here, it's not the team or founders, it's luck.

So you need a way to identify luck. Then you're golden!

~~~
rfrey
Nobody is saying luck is sufficient, just that it's necessary. As is talent,
hard work, &c.

The role of luck ("fortune", "fate") in the success of great people is a deep
and ancient question, and you should not dismiss it. Machiavelli's Prince is
at least 50% about the subject, and Sun Tzu is infatuated with it.
Acknowledging luck does not mean dismissing the successful - it's just
intellectual honesty.

~~~
weddpros
I can understand how a very logic/scientific mind could have difficulty with
the concept of luck. Citing literature may not help.

Let's say there's some stochastic mechanics at work, randomness more than
'luck'. Luck is the attribute of someone, when randomness is an attribute of
events, which makes a big difference.

Of course I can understand people citing 'luck' as necessary... but it's more
superstition than science.

All in all, it means you can't really know for sure...

~~~
rfrey
You're right, "luck" is a bad word because some people do have the notion of
luck as an attribute.

It's not exactly the same as a stochastic variable though. It's really any
forces that you cannot influence, control, or anticipate.

------
jmduke
Kyle Neath wrote a very similar post last week, which IMHO is more developer-
centric and less VC-centric:

[http://warpspire.com/posts/million-dollar-
products/](http://warpspire.com/posts/million-dollar-products/)

~~~
welanes
Great link, thanks.

------
nxb
Is lower goals really more founder-friendly? I'm not so sure.

A bit perplexing, but in my experience, VCs who aim lower will often put far
more stress and pressure on founders to meet short-term milestones and ramp up
revenues immediately. Since the distant billion dollar goal is gone, it
becomes all about the short-term.

Aiming for a billion is a great filter too. At the early stages, you
desperately need to be associated at least a few investors / founders /
employees who absolutely believe you're on the path to something huge. Low
goals allows more people to get involved who have extremely misaligned
interests, who are often looking for something medium sized to milk, instead
of something huge to help grow.

~~~
ThomPete
Thats not how business work.

You don't build a business by setting out to be Facebook. You build a business
by setting out to create thefacebook for universities.

Whether that will end up with a billion dollar company is a matter of way to
many factors.

Edit: I can see you edited your post a little. My response here is to what you
wrote originally.

~~~
smikhanov

        > You don't build a business by setting out to be Facebook.
        > You build a business by setting out to create thefacebook for universities.
    

Paul Graham is the only person in the world who can get away with spreading
this, please don't repeat after him.

In practice, the difference between building a billion dollar company and
building a 10 million dollar company is marginal. You still need to constantly
raise money, you will ruin your culture and so on; everything that OP
describes as awful downsides of SV mentality is just as present. The author
seems to hint towards bootsrapping ("figure out how to earn your first
dollar", etc), but examples that he gives, with the exception of 37Signals are
just smaller and less successful versions of Facebook with all downsides
included.

~~~
fweespeech
> In practice, the difference between building a billion dollar company and
> building a 10 million dollar company is marginal.

As someone who works at a company that was acquired in the 8 figures range...

You don't know what you are talking about.

~~~
smikhanov
Care to elaborate on the difference between the two that you have observed?
I'm genuinely interested.

~~~
fweespeech
* The value/importance of a 1% increase in efficiency can make or break team performance. 1% of an 8 figure company isn't enough to fund a multi discpline, multi-person team looking to improve efficiency for a year. The parent company literally employs a team whose sole purpose is internal efficiency/performance improvements where "single digit percentage" improvements are enough productivity to justify a multi-million dollar budget. Sure it "exists" in theory in a smaller company but it no one is paid to perform the job because the cost/benefit isn't there.

* The mindset change in regards to accounting, legal risks, etc.

* The amount of red tape & interaction with state/federal governments. No one cared what we were doing when we were just an 8 figure company.

* We actually care about PR when it, frankly, didn't matter before.

Sure, you "care" about these things as a smaller business but you don't have
dedicated teams of people solely to manage them. Building dedicated teams
solely to perform function X vs. having teams that are more general purpose is
a huuuuuuuuge practical difference imo.

------
ig1
What missed here is that if you're operating in a market which you can build a
billion dollar business, you can miss badly and still have a hugely successful
company.

If you're operating in a market where your turnover is going to max out at a
few million then you have a much smaller margin for error, you have to execute
close to perfectly to win that market.

Building a large business doesn't have to involve raising huge amounts of
money, taking undue risks, etc.

------
pyrrhotech
It's important to note that the numbers discussed by the New York Times were
only of VC-funded tech companies founded this century. There are at least a
few thousand private companies in the US worth 1 billion or more. Forbes keeps
track of a few hundred here [http://www.forbes.com/largest-private-
companies/list/](http://www.forbes.com/largest-private-companies/list/) with
the lowest on the list having over 2 billion in revenue.

It's nearly impossible to start a company and have it worth a billion dollars
within a decade. But if you drop the get rich quick thinking of Silicon
Valley, it's much more possible if you grow slow and steady over a few decades
or generations even. My family has a business started 30 years ago that's now
worth in the hundreds of millions for example, and we are ecstatic if it grows
15% per year. In the next 20 years, if we don't fail, we should have a billion
dollar business. We don't take excessive risk, so there's a fairly good shot.
It's a bank in the South FWIW.

------
ianstallings
To be honest I don't even think about making billions. I play the hand I'm
dealt to the best of my abilities. And it works just fine.

~~~
sibmike
Here is the best and the most honest comment on this thread. Just do it boys n
girls. N see where it takes you. Nature, nurture, luck? One can't change these
things, so just do it n see where it takes you.

Ps: the most interesting question is if it is the creator who shapes the
creation or is it vice versa.

------
jgalt212
Let's not forget that most, if not all of these unicorns are not really
billion dollar businesses.

Just because a16z buys shares at year two at a $100MM valuation, and more
shares at year 3 at $400MM valuation, and even more shares at year 4 at $1B
valuation does not make you a billion dollar biz.

In fact, it says more about a16z bubble inflation methods than anything else.

------
adventured
"What I do take issue with is the fact that Silicon Valley derides almost any
other kind of business."

Why care what 'Silicon Valley' thinks about that? The author is making a
mental mistake there. If you want to build a million dollar business, you
don't need to care what the big money in SV thinks at all. So, stop. It is
that simple.

------
socrates1998
I agree with this. I get both sides, I mean, who wouldn't want to have a
billion dollar business? But building one is insanely lucky and there are a
ton of super talented businessmen and engineers that haven't done it.

The problem with aiming so high, like the article points out, is that you
often fail and are left with almost nothing if it fails. You took a low salary
with a lot of equity, but if you work for 3-5 years on a project and then it
turns out the company fails (which is highly likely), then you just worked for
3-5 years for a cheap discount.

Sure, you might have learned a lot in that time, but if you worked at a better
salary for a more stable opportunity, you would have learned stuff as well
(different, but maybe not less important stuff).

I get the allure, but as I get older, I don't really see the value. You don't
have forever in your career to make below average wages on the lotteries
chance you will make millions.

------
cdnsteve
Instead of having a billion dollar plan have an exit plan first, that's more
impressive because you acknowledge failure head on. The chances of you failing
are much greater than you even surviving 5 years. As a founder, you need to
have an exit strategy that will be the least impactful to your team.
Statistics Canada shows a huge failure rate folks. Everyone wants billions but
everyone needs steady employement.
[http://www.ic.gc.ca/eic/site/061.nsf/eng/02807.html](http://www.ic.gc.ca/eic/site/061.nsf/eng/02807.html)

------
alexro
The thing is - you can't by any means start building a billion dollar business
just by deciding to do so.

Take google - attempted to sell at 100 mln

Take facebook - was in-college network

Take airbnb - struggled along for many years

What this article is trying to convey?

~~~
arielm
I believe it's trying to point out the currently flawed mindset of the valley.
The same mindset that would fail to build any of the businesses that you
listed above ;)

~~~
alexro
But then it lists the VC who don't think so... Puzzled

~~~
matthewmacleod
It's quite clear that there's a general perception that bigger is better. The
fact that some VCs are investing in smaller businesses doesn't negate that.

------
marze
If you want to change the world significantly, you will need significant
numbers of customers, and associated revenue. Nothing wrong with wanting to
change the world.

One of the author's arguments is that you will dilute your ownership by taking
on the "required" investment needed to have a chance at reaching the magic 1B.
Is this true? Of the 40 mentioned private >1B firms, what fraction raised lots
of VC money and experienced significant founder dilution? My guess is not that
many of them; the author simply assumes it is the case.

------
jt2190
I agree with Gleb's point that there's no shame in trying to achieve a small,
profitable business instead of a shoot-for-the-moon billion dollar business,
however, I don't understand the "if your VC-funded startup fails there is only
downside for you" attitude.

Some benefits of taking funding:

* you move financial risk off of yourself onto others in exchange for a paycheck * you can get the cash to start the business today * you gain work experience, and probably get more responsibility than you'd get at an "entry level" job

------
baristaGeek
I agree with the article when it poses that a product should be built because
you enjoy doing so and when it becomes a company you should do it to generate
revenue and not an exit.

However, it's incoherent that an article that is against the "Go big or go
home" philosophy discusses how much your company valuation needs to multiply
given you sell X% of shares in T amount of time.

At least in today's macroeconomic context, a company is the best platform to
scale something valuable, and investors are there to help with that scaling
process.

------
sparkzilla
If you have a product that has a huge potential market then go for it. You
will probably only have one chance. The problem I see at YC is that, despite
supposedly looking for unicorns, so many of the companies that go through the
accelerator only have limited markets. I think it's dangerous to impose
unicorn-style thinking on young founders whose products or psychology may
actually not be up to it.

------
ArkyBeagle
The United States used to be planted thick with $40M/year companies. These
sustained families and made modest opportunities to innovate. They could be
anywhere.

I used to work at one. It doesn't exist any more.

At some point this went out of style.

Because of observer bias, _this_ is what I see when people talk about
inequality. And I see that it was quite deliberately chosen.

------
jenkoian
but, the 3 comma club...

~~~
brianwawok
The doors need to open like THIS

------
sly010
Aiming for orbit and running out of fuel means you will probably fall back and
burn up in the atmosphere. Aiming for the moon and running out of fuel means
you can still get to orbit (which is still very cool) but you have to plan
ahead. Mishandling rocket fuel and blowing up is always possibility.

------
rw2
I don't think people choses to build a business of a certain size. It's more
like people try to build a successful business, and it settles into it's
natural size. Planning your company size is not what I did as entrepreneur,
making sure your company survive is.

------
SeoxyS
Buffer has raised a 3.5M Series A. GitHub has a quarter billion dollar in
funding. Bootstrapping doesn't have to be an eternal culture, it might just be
what makes sense in the early days of a company, and it might no longer make
sense further down the line.

------
DrNuke
The underlying message here is that you may be overlooking a very good
lifestyle business opportunity (which is totally under your control) while
looking at a startup framework that is at best casual and at worst not
depending on you at all.

------
sokoloff
> If you sell 80 percent of your shares before an exit, your company needs to
> be worth 500 percent more for you and your employees to make the same
> amount.

It needs to be worth 400% more for a same founder/employee value share.

------
kristianp
The text is way too light on this site. Please improve the contrast. See
[http://contrastrebellion.com/](http://contrastrebellion.com/)

------
phkahler
My most interesting "great idea" actually wants to be a non-profit. OTOH a
friend thinks it's also potentially a billion dollar idea because of the total
lack of anything in the space. But that would require finding a way to reap
the rewards without driving away the users - they can not be the product in
this case.

------
Kenji
Regardless of whether or not I want to build such a business...

Don't tell me what to do. Really.

------
austenallred
What if I want to build a billion dollar company?

~~~
onedev
glhf

------
ljw1001
ok.

------
caser
Good read :)

------
le_clochard
P(my business becoming a billion dollar business) (~0.0005%) * (1-P(me saying
"no" to letting my business become a billion dollar business) (~0.0005%)) is
still 0.00000499997. Nothing to worry about, Budman.

OR

Has Budman just written this article as psychological warfare against any soft
targets who might be competing against his future billion dollar business? The
plot thickens.

------
AndrewKemendo
What is this constant thread of "Don't shoot for the stars?" Why are people
trying to reign in expectations and goals for what are essentially crazy and
highly talented people?

I don't want to run a $10M company, I want to run a $10BN company. It's the
difference between tee ball and Major League.

The author is basically saying that everyone should just shoot to stay in tee
ball, which is equally as arbitrary as choosing to shoot for the majors. What
the hell is the point of all of this if we aren't going for the big win?

~~~
untog
For one, because the chances of shooting for the stars and failing is very
high. You have to take on a lot of funding, spend a lot on user acquisition,
etc. etc. etc.

Do you want a _highly talented_ person to work on something for two years that
ends up being utterly destroyed, or do you want them to work for 20 years on a
business that keeps improving?

 _What the hell is the point of all of this if we aren 't going for the big
win?_

Life? What you're saying sounds like the result of an absolutely off-whack
work/life balance. There is, and will always be, more to life than work.

~~~
AndrewKemendo
>There is, and will always be, more to life than work.

This is where I am in constant disagreement with people. My work based on what
I want to be doing with my life. I want my life to be my work - that's what
life is about imo, dedicating your efforts to something that grows and
sustains a community. A lot of people don't want that for some reason, but if
you look at basically every person who has ever done something great and
massive no matter what it is, ghandi, gates etc... their life WAS their work.

~~~
untog
If you're including Ghandi in here then you have a pretty broad definition of
"work".

In any case: if you're so intent on building a billion dollar company, what
will you do when, as probably states will be the case, that company does not
reach a billion dollars and in fact fails entirely?

~~~
AndrewKemendo
That's right I do have a broad definition. "Work" to me is the thing that you
are putting most of your effort to. Maybe you are a stay at home mom, and your
work is raising children - you have to be all in for that. Same goes for
anything.

If one venture fails completely, then you take what you learned and start
again when you can.

If you are in a position that you can start your own company and raise money
for it, the worst that can happen is that you have to go find a job. Lets even
assume that you lose your house in the process. Ok, well downsize, keep your
head down till the next opportunity arises and keep moving forward. I don't
see any other way to live.

People have these marginal goals of working 9-5 going to the beach on the
weekend, having a couple kids, then retiring at 65/70 and traveling or
whatever till they die at 85. That sounds terrible to me - and my guess is
that would sound terrible to anyone who worked on something that people gain
value from (Salk, Scorsese, Musk etc...).

~~~
untog
_People have these marginal goals of working 9-5 going to the beach on the
weekend, having a couple kids, then retiring at 65 /70 and traveling or
whatever till they die at 85._

You're drawing lines where there are none. Why, exactly, is striving for but
not necessarily achieving a billion dollar company a more worthwhile pursuit
than raising children and traveling the world?

 _If you are in a position that you can start your own company and raise money
for it, the worst that can happen is that you have to go find a job._

No, the worst that can happen is that you waste years of your life, and look
back as an old man and only see a series of failed ventures to your name.

~~~
AndrewKemendo
I think we're too hung up on the number. It has nothing to do, really, with
the dollar amount of the company - that's just a proxy for impact/scale. I
could as easily say "Be President" or any other things that are at that scale.

It's a more worthwhile pursuit because your individual impact can be much
wider.

------
kragen
This is a deeply insightful post on the Dollar-Auction-style tournament nature
of the startup ecosystem, with interesting parallels to Sudhir Venkatesh’s
research on why drug dealers are willing to work for less than minimum wage.

~~~
eterm
This is the same company who came to the conclusion it was cheaper to send
people to costco to buy hard drives and manually remove them from enclosures
than just negotiate with a vendor[1].

They reckoned they bought 5.5 petabytes of data at retail prices. I've always
taken what they say with a grain of salt.

[1]
[https://www.backblaze.com/blog/backblaze_drive_farming/](https://www.backblaze.com/blog/backblaze_drive_farming/)

~~~
atYevP
Yev from Backblaze here -> Unfortunately we aren't large enough to negotiate
with hard drive manufacturers. We've tried, believe me, but since we're not
putting in order of 10,000 drives at a time, they refuse to speak with us. The
closest we get is an introduction to their preferred vendor channels, but we
have to go through them like anyone else. At the time we did the "farming" it
was because those channels had dried up and risen in price by almost 3x, and
we were faced with going out of business or getting creative. I assure you, we
would RATHER work with manufacturers directly, but it's not as easy as calling
up Seagate and asking for a bunch of drives on the cheap (especially when
computer companies like Dell and Apple need those drives to make THEIR product
lines works). They can raise prices of their computers by a few dollars and
not really feel an impact, we can't!

~~~
kragen
Thanks for the extra details! Very interesting.

~~~
atYevP
My pleasure!

