Lessons learned : you must be tough to the point where you disgust yourself; humans are even worse than you thought; contracts are a must (like in "whatever you do, even if you're saving the world for free, selling your mother")
Meta lesson : managing humans implies stopping being human. If you don't, then you expose yourself to a lot of disappointment and stress... It doesn't mean treating people like shit, it means you break all the bridges between you and them; bye bye empathy, love, etc. The question is : do you want to be that ?
And in case you don't know, stress means : perpetually exhausted (that is, you don't have a life beside your job, that is 0 quality time with your wife or children and then you end up wondering "they've grown so much and I don't know them"); pain in every part of the body (that is, even when doing your super job, you aches; blood pressure go up, which means you'll be dead at 40; you get sick much quicker; bad sleep which implies bad health). So stress does hurt.
But somehow, I still want to do it : the need for freedom is so big I can't give up :-)
If you treat every tool in the manager's toolbox as a hammer, then every problem looks like a nail. This attitude is usually a result of people finding what they expect.
If you expect the worst in people, they won't let you down. One shouldn't let negative anecdotes cloud their perspective and hinder their ability to relate to other people. You start ignoring situations where you could have done better and don't accept your role in allowing problems to blow up.
Perhaps there is an alternative freedom? Instead of accumulating so much wealth you don't have to work (as per The American Dream), how about cutting consumption so low (and freeing ourselves from a lot of our first world "needs" like 24/7 entertainment) and trying something self-sustaining like subsistence farming?
I feel as if true "freedom" is closer to not relying on "the man" at all, as opposed to attempting to make him your slave.
Your crops can fail because of any number of reasons. With true subsistence farming you could die through no fault of your own. You assume all risks for your own survival.
Most people's earnings peak between 25 and 45, one can always cut down their consumption and pick up subsistence farming at 50 with a fat corporate 401(k) and a paid-off house.
If you really seek freedom, you're probably doing the wrong thing.
Startup = idea + execution + product + team + luck
Startup = idea * execution * product * team * connections * money
Startup = idea * execution * product * team * connections * money * luck
For me the other meaning of luck is when opportunity meets potential/preparedness. If you are 100% capable of going live next day and you bump into a reporter it's much more likely that they will feature you. And you can put yourself into situations when it's more likely to meet reporters if that's what you think need next. From the outside it will still look like "oh Zifffify was so lucky that they got featured on XY".
For instance: All these startups around self-driving vehicles. There's a non-zero chance the publics current unsettledness swings to full on majority disapproval, leading to gov't regulation killing self driving cars.
You can set yourself up to maximize the chance of that not happening, but but you cannot bring the probability to zero. Hence, these startups all rely on being "lucky".
Meaning, unlike what I felt you are implying in your comment here, startups are often and in many variables betting on probabilities that they are not in control of, aka luck in the exact same sense as a lottery ticket.
prepareness = idea * execution * product * team * money
opportunity = connections * random-chance
success = preparedness * opportunity
a * (b * 1000) = (a * 1000) * b
Sorry, I hate bad maths, I realise it is just trying to imply that luck is more important, but in that case it should be * luck^n.
If I score money as 0-1 and luck as 0-1000, then I have a possible overall score out of 1000.
If I score 0.3 on money and 600 on "luck" then I've scored 180 out of 1000, or 18%.
Or if both are 0-1 then I'd have scored 0.3 and 0.6, and overall scored 0.18 out of 1, which is still 18%, it's just the absolute number that has changed.
But the absolute number isn't important in a scale which doesn't have meaningful units.
Let's say you have 4 factors a, b, c, d.
If we are summing them then we can just sum them straight:
score = a + b + c + d
If we want to place more importance on some of them we weight them, with (constant) weights w, x, y, z by doing this:
score = w * a + x * b + y * c + z * d.
If it's a multiplicative relationship however then we multiply straight:
score = a * b * c * d
If we tried add weighting in the same way:
score = w * a * x * b * y * c * z * d
Then all we've done is scale the previous score by (w * x * y * z) which is constant, so hasn't actually affected any ranking.
To weight a multiplicative relationship requires the weights to be exponents:
score = a^w * b^x * c^y * d^z
The scores can be in [0..1] or [1..N], the increased weights still increase relative power of the input parameter.
If you take logs it's clear why.
log(score) = w * log(a) + ... + z * log(d) which is our weighting when summing again, and log is monotonic (proof of which is left to the reader), log(S1) < log(S2) implies S1 < S2.
Edit: Fixed formatting, it thinks * is italic.
If that is the case, then shouldn't money and connections come right after idea? Tons and tons of ideas people have every day are abandoned immediately for lack of money and connections.
a * b * c * d
((a * b) * c) * d
a * ((b * c) * d)
We're talking integers here, though (re: Python).
e.g. 0 * (0/0)
e.g. f() * raise_some_exception()
If it's for money, then my advice is - don't do it. Especially if you have an option to get a 5 figure salary comfortably in a successful company. Successful entrepreneurship is like a lottery. News covers only the successes(lottery wins). No one covers the losses which is way larger. You can easily get lured by seeing the news of successes. And if they are still don't get convinced, it's their destiny to experience it :). If they do not have an option for getting a comfortable salary, it's fine. The hunger will eventually get you money.
If it's for passion, ask them to do it as side hobby/business. After all they are not in it for money. And if they are really lucky they will reach a point where they can make it a full time work.
p.s. I am into my third startup. This is exactly what I would tell my kids, that is if they care to ask.
I disagree with this statement. If you want a company that makes a billion dollars, your chances are very slim. I'm on my fifth company and my current one makes over six figures (a few million in revenue).
All of my friends have gone through many hardships over the last 5 years because they worked at other companies that downsized and they were let go. My career has been pretty stable with my own company.
"If it's for passion, ask them to do it as side hobby/business."
This will ensure that it stays a side-business. Most people don't really have the time to work 9-5 (and many times longer than this) and then run a company full-time. Especially if they have a significant other.
I tried many times to start a company and inevitably failed. Mostly because I couldn't really focus on it with a full-time job. If you really want to start a business, I would recommend saving 6 months to a year of your current salary and quitting. But make sure you actually have a real plan to make money. Market testing is a must.
What I've noticed is that there just aren't that many people out there that are willing to sacrifice their time or are passionate enough to stick with a business long enough for it to succeed.
Before my successful company, I tried multiple times to partner with friends that I thought would be a good fit for a business partner. They all failed within the first year. I would end up doing 99% of the work and my business partner would either do the least-possible amount of work or it would devolve into me being the manager/boss where I had to assign them work (which I really don't want to do). One person just didn't want to give up his drinking/partying time with his other friends.
There is this myth on HN that running a business/startup is glamorous and fun. Many people want to start a company because they like this glamorized idea of running a startup and think it's cool. They usually are slapped in the face with reality pretty quickly.
I never started a company for the money, it was always for the freedom. But what I've come to realize is that money is freedom. The more you have, the less control others have over your path in life.
So what? You winning the lottery doesn't make it any less of a lottery!
Ah, yeah, one other key was his ability to know when to sell out, and an ability to sell such companies; as a matter of fact, he made more than a little money on commissions in helping to sell other people's companies, exiting when you have a small to medium sized company without any unicorn like characteristics can be quite a trick. Arranging for some steady sources of income from commercial real estate also helped in terms of riding out the harder times, as well as paying off the family home as soon as was possible.
They currently have a front row seat to the show. They see my travel, constant calls, late nights early mornings, product testing, team dinners at the house etc...
And that's the only thing that will be the same 20 years from now when they want to start their own thing.
The same skills needed in a startup are also necessary in corporate or government work if you want to be a leader. It's just the boss that's different.
There is no playbook for success, as the slides state in the beginning. But the many experiences and failures of a person help them recognize opportunity when they see it.
Most of the advice out there regarding entrepreneurship will be contradictory and generalized. Knowing which advice to follow when depends on your true north.
I'd say to my kid: get out there and get dirty, stay curious and take nothing for granted.
If you're a startup you probably cannot hire great people, you're much too risky and you don't have the money. Most probable it will be the processes and mismanagement that will block value delivery. Get good enough people that will fit well in the team and create an environment in which they can be most effective.
That sounds harsh, but it's reality.
Your family will be angry and envious. You are doing something your old man only ever dreamt of. They will try to convince you not to.
At first, your friends will think you're nuts, but won't say that to your face. If your business succeeds, you won't have time for friends anyway. Down the road, they'll envy you, and they'll drift away. Some might ask for jobs. Others will spread wild rumours for the hell of it. Don't hire friends, ever, for any reason. You find them stealing petty cash, you're losing an employee and a friend. And the respect of your existing employees.
Your cofounder, no matter how well you get on, will at some point down the road he the biggest single source of stress in your life. They'll kick you when you're down, as support requires effort, and empathy, both of which end up in short supply.
Your wife will leave you for someone, anyone, she sees more often than you.
Your customers will never thank you, will pay as late as possible, and your biggest and most lucrative clients will go bust with huge debts outstanding. Sometimes clients will try to physically assault you.
Again, nobody will want to talk to you about it. Anyone you do talk to tells you you should be grateful and happy and shut your damn whining hole. You're wondering what bit about 20 hours a day 7 days a week for the last ten years you should be grateful for. Certainly not the pay - you pay your staff 3x as much as yourself.
The technology is the easy bit.
Humans are extremely hard work. Unless you enjoy the full shitty panoply of human behaviour, do not start a business.
I left mine a month back after a decade. So not worth it.
They went through many-year periods of extreme stress, week-to-week "will I have to close shop this week" trials, and 0 vacation when starting their business.
Before starting the business, each one had really good relationships. Solidly built. Years invested in each other. A good community of friends who actually cared for each other. They'd weathered other storms of life before. They knew when focus was needed on the relationships, and trusted that the business would work out.
They came out with some scars. But are now in a better spot then ever.
Sounds like you may not have had that.
It's hard to build a support network when you've moved every 18 months since infancy - everywhere and everyone is always new. Started the business when I was 22, come from a very atomised background - like a lot of entrepreneurs. People either start businesses because they're very secure and content with their lives, or the complete opposite.
I had friends when I started the businesss, but when there's no time to be made, people inevitably drift away. It's also hard for them when they see their goofy friend who everybody knew was going to fail, succeed. Nobody likes to admit they were wrong, and envy is a wedge that will drive apart the closest of friends. At this point I know nobody.
Not everyone comes from a small community they've lived within their entire lives. Many don't in fact. What I present is the grim reality of starting an intensive 24/7 business.
I hope you find people who love and support you, and a project to work on that doesn't make you hate those around you.
“Folks are usually about as happy as they make their minds up to be.”
― Abraham Lincoln
Being self employed and being an employer are entirely different sports.
I don't hate anyone, but I am certainly a hate figure. I was the asshole who chased invoices, sat clients down and told them their rates were going up, asked people not to be drunk at their desks, that sort of thing. Someone has to do the dirty work, and it doesn't win you friends or make you happy.
Looking back my level of happy memories is pretty much inversely related to the size of the company - when there was 2/3/4 of us it was deeply enjoyable even though we were living hand to mouth. I suspect most of the time we were over 100 I was utterly miserable to the extent of never really wanting to go down that particular route again.
I'm not sure. I know a CEO who is an ex-developer and funded a startup, and I think he is happy to do those. It's still a worry, of course, but I don't think he lets it get to him like it would to me. It's all a game he loves to play, not just a necessary chore. In fact, despite having the skills, he was never a developer reluctantly doing business work; he's a CEO through and through, and only picked up technical work when needed, not the other way around.
You make one little ethical compromise after another, and you become that which you once sought to oppose.
It's actually the guy who tried to hit me in s meeting I have to thank - I saw a vision of myself after another decade.
I worked very hard, but never 20 hour days. I get along great with my cofounders. My wife and I just had our first child, joining the club with my other two cofounders.
Agree that the technology is generally still the easy part though.
Makes your point no less valid, however - all businesses are different. I walked into a bear pit, thinking it was a rose garden.
I'm willing to bet it wasn't all bad and that you didn't always feel that it was pointless and a waste of time. You left the business a month ago, I bet the sore is still fresh and no doubt it was sore for a long time before you decided to stop.
In time the pain will fade and you will have both the good and the bad memories.
For me, doing business stuff, is neither good nor bad. It just is. It lets me do shit I like, and sometimes - often - that involves shit I don't like. But all in all it's fun as hell.
It was the crushing responsibility that got me in the end - billions flowing through our systems, the thousands of livelihoods that directly or indirectly rely on your house of cards, unending anxiety and mistrust from clients erodes you into being anxious and not trusting yourself.
It was a blast in the early years, when I was getting my hands dirty and if it all went wrong it was just my shirt to lose, but the last five years have comprised shitty politics, and I just no longer had the will to go on dealing with it - my physical health started to severely suffer about two years ago - turns out relentless stress does subtle and Bad Things to your body.
I'm totally aware that I could have walked years ago, but there was always hope that it would get better, and at that point I don't think the business would have survived without me - it's only really in the last 18 months that I filled the final gaps and made myself redundant.
I made the decision to leave several years ago - it's just taken time to get to the point where I could.
It wasn't fun as hell, it was just hell :)
Did you have a VC monkey on your back or just realized too late what was happening and couldn't turn back? Or did something else make you grow it so big?
No, where things went wrong for me boiled down to me ending up in a role which comprised dealing with the stuff that nobody else wanted to deal with. My cofounder was a great orchestrator, but ran away from anything that looked emotionally hard, so I ended up just doing the drainimg stuff.
We did take funding because it was supposed to be part of a strategic deal. Deal didn't pan out, so we had a fairly hands-off investor.
We grew to the size we did (52 staff when I left) because the business was leaning more and more towards client service rather than technology. I wanted to take the platform to mass market, the business as a whole had just become too conservative (culturally throughout) to consider it. I found myself an entrepreneur and innovator locked in a stale process driven environment in which nothing ever really progressed or changed - which I had helped build.
If I start another business it's small isolated teams all the way down. No "big company", each SBU gets supreme autonomy. Only works for certain kinds of businesses of course, but they're the interesting ones.
In hindsight, what would you have done differently? Can you imagine a set of circumstances where you would be running the company as a happy person?
The "Everybody will Treat you like you have a disease" definitely didn't happen, but I'm sure that's in part due to the culture you live in, in this case, SW Missouri, in the extreme SW part that's culturally southern. His father, whom I'm named after, died when he was 11, but he was entrepreneurial himself, pretty much had to be when you start your family in the early '30s AKA the Great Depression, and from a farming background, and his mother had enough of that sort of thing as well, plus a farming background. One aunt who didn't, to my knowledge, discourage him. Ditto my mother's side, she also grew up on a farm.
Friends? The only problem he had there was as they started dying off, we've got relatively good genes. Somehow, he had the people skills to make it work, including going into business with some of this like minded friends. Can't remember if he hired any, though.
Didn't as a rule have co-founders, aside from those combination efforts with like minded friends.
That's where you a) have to use some skill in picking a wife (and I'm sure it helped to do so in 1959 instead of today), but most importantly, don't let it consume you, maintain that "life/work balance" everyone talks about. I don't recall work ever getting in the way of his hunting and fishing trips (his two major forms of recreation), or taking up so much time he didn't have any for his family.
Attitude, in part, also, maybe not taking things so seriously, if a venture failed, well, he'd move on to the next one soon enough.
Customers? They wouldn't get far in trying to physically assaulting him, that shit doesn't work well in Red State America where we're de facto and de jure allowed to defend ourselves with lethal force if called for. Thanks? Not sure he gave a damn about that, only if their checks cleared. And, again, one key is don't get in so deep that one client screwing up does more than force the closure of the business.
Again, nobody will want to talk to you about it.
Simply not his experience. Where do you live, what kind of culture is all this a norm as you perceive it???
But, yeah, humans are the "extremely hard work", and that's where he had a lot of talent. The technology, he's find people with it, who needed the sort of support he could provide, human in terms of hiring, managing and firing, legal, in setting up corporations, business models including taxes (many periods in his working lifetime when taxation was hostile), retirement money vehicles like IRAs, etc.
I wouldn't say he "enjoy[ed] the full shitty panoply of human behaviour", but he was certainly capable of dealing with it, that was in fact one of the secrets of his success when partnering with the "technical" types of people (scare quotes because that also including for a period of time groups of doctors, work that allowed him to also run a venture on the side).
If you don't have what it takes on the human side, as you obviously don't, then don't take this path, at least not without teaming with someone like my father who'll shield you from much of it.
Love this. Without a customer you do not have a business
Incorrect. That is ONE method. The method I would prefer more people took. Another (of possibly several) is to lock your customers in like the telco's did until they were broken up.
If you have a monopoly - your customers can't go anywhere else, you don't have to be ethical or respectful.
Is any employee over 22 or so wanting to help their companies more than themselves?
These are also the things you can (maybe?) only understand deeply via experience.
“If I had asked people what they wanted, they would have said faster horses.” - Henry Ford
Very motivational. I really wish people would stop using this one though:
"The best way to predict the future is to invent it." - Alan Kay
Just seems to trivialize the problem, very de-motivating in my opinion.