>It’s far better to be thought of—and to think of yourself—as a project than a company for as long as possible.
'You' are neither the company nor the project, even if you are the sole person in the company. Startups are of course typically single-project companies, but the two are still not to be conflated.
If any of these things were synonymous, there would be some serious implications. If your project fails, then you as the projectcompanyperson, are a failure and may cease to exist(instead of you still being an alive person whose project failed and whose company may or may not be on the rocks). If the company is the project, then after a pivot the company is not the same company (instead of it being still the same company with a different project). But with the real concepts, definitions and identities, these are different abstraction layers essentially, and everything is more transferable, fault tolerant, and so on.
I get that with sufficient dedication and focus these things can feel like the same. I also believe that I have been someone's project.
This being said, I agree with the general analysis of the essay, specifically with regards to throwing bureaucracy to the wind in favor of lean-and-mean experimentation (and who really wants to grow up?).
It's very easy for startup culture to fall into the trap of equating the people with the project/company they're working on, resulting in unhealthy consequences when things don't go perfectly. It's a tricky thing to come to terms with, because in the early days that overlapping identity—while never healthy—is probably critical to having the momentum to carry on. But as time passes, separating your own identity from that of your project/company is critical to avoid burnout and depression; the company will always crest and trough, but you can't be pegged to its state anymore.
These companies can be quite unhealthy even when things do go well.
Fear of (personal) failure can be a strong motivator though; "One of the most interesting things we've discovered from working on Y Combinator is that founders are more motivated by the fear of looking bad than by the hope of getting millions of dollars. So if you want to get millions of dollars, put yourself in a position where failure will be public and humiliating." 
The point of incorporating a company in the first place is to create a fictional persona that is independent from the person(s) who manage it and/or work for it. To conflate a company with its owner(s) completely undermines the purpose of a company, both legally and psychologically. If you're willing to die with your company, you might as well just register as a sole proprietor.
Equating yourself with your project with your company is one of those grossly irresponsible things that self-made people tend to boast about and romanticize, along with pulling 18-hour workdays and subsisting on ramen. It's a shame that we as a society are complicit in this kind of romanticization. We should treat them as symptoms of a problem, not glorify them as rites of passage.
I got money from all my different projects but never thought about them as companies, I used them to learn and pay for my hobbies. I never thought they could turn into real companies so I worked on them at night after my normal job.
Right now I got back to a project and idea I had back in 2008 when I even registered the domain and created the landing page and sketched a logo. Finally, I want to turn it into a real thing, into a company, but I still think about it as a project.
Same happens when I have to explain to family and friends why I left a well-paid job on tech in Ireland and moved back to my parents home in Spain to work on a website while the country is still broke. By saying "I'm working on a project" seems less serious. They still ask if I can live out of that but if I try to explain I'm working on a company people just freak out and things get really difficult to justify taking the attention out of what's important. Hope one day they understand.
I see this sentiment expressed often, like it's a good thing that you want to pursue an idea that seems bad.
If I were to think about founding a start-up, I'd rather find an opportunity that makes sense and sounds good, validate the opportunity, talk to potential customers, and do as much diligence as possible before diving in. So essentially, if something seems like a bad idea, I'd move on to the next idea.
This may make it harder to create a unicorn (since I'd clearly miss some aspect that makes the idea not bad), but I bet it's a better, less risky way of trying to achieve a high-growth start-up with great potential. Good ideas fail as well, but I'd wager it's less often than bad ideas.
This is not about ideas that seem bad to you.
This is about ideas that seem bad to others, i.e. ideas that seem okay to you, that you probably even verified in the small, but still have trouble convincing others.
I'd say that probably at least partially depends on the group of people you know. The last set of people that I would think would be representative of a random distribution worthy of being a statistical sample is my set of friends, because not only is my idea biased, but I have also selected all of my friends with bias as well.
My general rule of thumb is 'bad ideas come out of nowhere' and 'good ideas are things that require effort'. If you are just throwing stuff at the wall to see what sticks, probably not the best way to go about doing things.
Other than that, I think the idea is hardly representative of the product. I would guess that there is probably no reliable correlation between the evaluation of the idea, and the evaluation of the execution. The examples people mention are cherry picked examples. You can hardly evaluate your own potential based on comparing that to a few select examples that have been selected specifically to demonstrate a rhetorical opinion.
Won't a skeptical person find flaw in every idea he is confronted with? In that case, I guess it all boils down to execution. In my opinion, the "idea" need not be very clear but it is okay for it to be filmsy. Building a minimal product with a filmsy idea can help "project" to head in the right direction when you start seeing the facts.
Perhaps, the reason why Google and Facebook succeeded wasn't that the ideas were seemingly bad but "idea" didn't exist in the first place. They just wanted to build something for their own and started getting serious when it got traction.
Knowing that secret, whatever it is, probably requires special insight into a particular area of the world, special ways of thinking that few others are using, and perhaps special methods of operating that few others are using.
That's how an idea that looks bad ends up being good.
My cynical take on "many bad ideas become major successes" is that as an investor betting on 100 companies, your best economics are from 1 or 2 unicorns, and not 50 base hits.
The investor optimized approach is 1 or 2 crazy ideas ended up being prescient and create awesomeness, but the remaining 98 ideas are indeed bad and go nowhere. The founder optimized approach is 50 good ideas create meaningful outcomes that aren't outsized.
In the current climate people want to hear what your monetization strategy is first, or they think you're a loser. And a lot of the time I don't have one, or it's really vague. I just have an idea that seems like it will be really important to at least some people.
Calling it a project also liberates me from feeling guilty about not having a corporation around it, or going to meetups to yammer with my city's alleged startup entrepreneur scene, etc.
Isn't this just cherry-picking of examples that validate a preconception? What about Uber? Dropbox? Amazon? Xiaomi?
> In the fall of 2003, Elizabeth Holmes, a 19-year-old sophomore at Stanford, plopped herself down in the office of her chemical engineering professor, Channing Robertson, and said, “Let’s start a company.”
I also think that back when Amazon started, a lot of people laughed at the idea of selling books online. In fact for many, many years with Amazon making huge losses people predicted they would fail.
But I agree there are always exception to the rule. The question, I suppose, is which one is the rule?
Amazon has been making huge losses for many years because they were reinvesting in expansion, which is very expensive for them. Amazon's investors understand and support these efforts.
That's different from something like Dropbox, where they can't get the majority of users to pay for the service: http://www.businessinsider.com/dropbox-ceo-drew-houston-grow...
The reason nobody else founded Dropbox was because they didn't have the luxury of running a lossmaking business for years on end.
Does a mobile optimized, GPS optimized, delivery service startup idea sound good to you?
Uber didn't solve the car service problem, they solved the getting you in a car right now problem.
"No wireless. Less space than a Nomad. Lame."
edit: further reading suggests my comment is more or less in line with the parent's point - call it a wash :)
Do you think they didn't recognize the potential to move downmarket right from the beginning? Starting as a limo service was just a way to delay regulatory issues. Travis shot down Garrett's idea of owning the assets right at the beginning.
> What about just another online file storage service when there are hundreds of others out there already without any significant traction?
It definitely wasn't the presence of "hundreds" of competitors (at least not ones that didn't require sysadmin expertise) that people were criticizing at the time: https://news.ycombinator.com/item?id=8863
The difference for Uber was that they were able to raise an enormous amount of funding, then use it to subsidize their service to the hilt while expanding to as many locales as possible. It's still not clear that the business is sustainable: http://gawker.com/here-are-the-internal-documents-that-prove...
In the case of Dropbox, they just eschewed profitability and instead pursued consumer traction, whereas Box pivoted to enterprise. And it's still not clear that Dropbox is a better company than Box, especially if Box can get its CAC under control. After all, most people are using Dropbox for free, which is one reason Box pivoted to enterprise: http://www.businessinsider.com/dropbox-ceo-drew-houston-grow...
The differentiating factor between the founding teams wasn't knowledge of some secret, but the social capital needed to raise the financial capital to run a lossmaking business for years on end.
So what's the right word?
Project - Sam gives good reason why this word works in the beginning, so long as you're not looking for external validation. At some point though, your project becomes something more.
Company - the people working on the project, and all the processes and resources that go into supporting those people.
Business - the transactional model that enables the company to make money and keep doing what they're doing.
Mission - for some people, the business is the mission. But for most success stories, even in the beginning when it was just a project, there was an underlying mission, a purpose and a plan. Unfortunately, the word feels mushy. I'd hate to hear people going around saying they're "working on a mission."
Ultimately, the word I use will likely depend on the context.
Here's a picture of the diagram:
Calling an effort a project (or even, an experiment) helps free us up to be more flexible and receptive to the market, and removes a bit of our personal identity from the mix. Sam's great point is for a "project" we're more likely to pursue an idea inside the magic overlap zone of Thiel's diagram
If you find yourself not doing something because you don't think it's worthy of the fine company you've built, you're thinking way too much about the formal company and not enough about the ideas, work, and vision that made the company what it is.
I agree with this, with one caveat. Some of my most productive bursts of output or problem solving have occurred right after a self-imposed, brief period of slacking off. There can be a tremendous benefit from the mental break that goes with 'controlled slacking off,' so long as it's intentional rather than an indication of something more serious (like not wanting to work on the project).
...and I'm like "idea? I have a business. I make my living off of this idea."
When you’re working on a project, you can experiment with ideas for a long time. When you have a company, the clock is ticking and people expect results. This gets to the danger with projects—a lot of people use them as an excuse to not work very hard. If you don’t have the self-discipline to work hard without external pressure, projects can be a license to slack off.
The idea that people were calling his startup a project instead of a company irked him because he perceived that, in their minds, they were putting his startup in the category of things people pursue without any intent of completing or being accountable for. That's how most people regard their projects: as hobbies.
That's at least what I was thinking to myself. The reaction I had when reading this essay was to think to myself "well, how do you expect to be taken seriously if it's not something you intend to deliver and be responsible for," but then he delivered this gem above.
The company doesn't deliver that level of intention, you have to generate it. Once you have it, the company is just a legal entity, and if you don't have it then no amount of incorporation, schedules, meetings etc is going to compensate for that.
Company over project is probably a bigger problem in SF/SV than anywhere else. I see a lot of people in both hardware and software making very elaborate and technically successful projects that never graduate from being projects.
(Although most real lab rats will admit that they can't always experiment like they want to because reagents and instrument time are often expensive and samples are often irreplaceable. Enter: computer modeling.)
This is hardly a list of the best companies, and a few of them don't support the argument:
1. The search/portal market was already significant when Google launched. Companies like Yahoo, Excite, Lycos were already public traded at the time, and were some of the hottest issues in the tech space. So it's no wonder Andy Bechtolsheim cut Larry and Sergey a check for $100,000 before a corporate entity even existed.
2. When Facebook launched, Friendster already had millions of users and had received a $30 million acquisition offer from Google. MySpace, which was created by people who saw Friendster's popularity, was founded by people trying to capitalize on the social networking hype that was already present in 2003.
3. Even Airbnb is hardly a post child for Sam's argument. Homeaway, VRBO and Couchsurfing were all well established when Airbnb launched.
For most entrepreneurs, "start out with an idea that doesn't sound very good" isn't likely to turn out very good.
Google and Facebook are both often used as examples exactly because they were "late" to the party. That seemed like a bad idea, but they both had a secret (as Peter Thiel likes to say), that made it not a bad idea.
I don't recall anyone considering Facebook a bad idea either, just that it was "yet another social media" site. Facebook mostly lucked out because of MySpace's user exodus.
Facebook is a bit different in that the market they went after was the right one not that their product was that much better. Zuck may have been lucky at the start, but he soon realised that he was on the right path and stuck to it.
First-mover advantage is overrated, and in the tech industry, you'll notice that many if not most successful companies were not first-movers. Often, first-mover advantage is a disadvantage.
In even the most established markets, you can find meaningful niches and adjacencies that the big players aren't tapping. Many times, the untapped adjacencies can expand the overall size of the market significantly (see Airbnb).