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Most startup theory is ex-post, therefore bs (shafyy.com)
379 points by shafyy 3 months ago | hide | past | web | favorite | 163 comments



The primary social function of giving advice is a domination game (http://www.overcomingbias.com/2015/03/advice-shows-status.ht..., http://www.overcomingbias.com/2014/01/advice-isnt-about-info...) - that's why there is a lot of shitty advice. That does not mean there are no good business theories that cover startups. Some of them are scientific theories with all the required rigour - but not all theories need to be properly scientific to be useful, in our daily life we live with lots of ex-post theories, they are not perfect but are still useful. By the way I am the author of one non-scientific startup theory myself https://medium.com/hackernoon/aggregators-bffd36063a72 and I hope it can be useful:) There are also useful advice. It is good to read them, evaluate, adjust them you your circumstances, etc. In the end you need to decide for yourself, but they show you the possibilities.


I hate this interpretation of everything as status games. It seems like a great way to drive yourself insane and develop mental illness as you overreact to mundane situations or fail to take advice from proper authorities. I consider somebody unqualified throwing out nonsensical advice as simply kind of a moron.

To elaborate: I’m convinced that most people viewing this view status as a good or at worse neutral thing, and although they may not approve of tactics they deem immoral (maybe including this one), basically have some admiration for “winning” the game. I view this as a wrong approach. The guy giving advice all the time is blinded by pride and fails to realize even the bounds of his own competence. He’s not winning anything. My opinion is that he looks like a buffoon.


While those overcomingbias articles are nice and true they only offer a limited perspective.

http://www.overcomingbias.com/2015/03/advice-shows-status.ht... : "High-power participants in the study ignored almost two-thirds of the advice they received" - in almost any "game" (or situation that can be modeled by game theory) it may be wise to test the advice of even the best expert you are given. Maybe ignoring advice isn't irrational but actually optimal in order to truly learn or even advance on the current optimal solution to any given situation and maybe the high-powered participants intuitively know this and that's why they're high-powered in the first place.

http://www.overcomingbias.com/2014/01/advice-isnt-about-info... : advice giving and receiving is based on respect but it also builds trust and connection. Why would I build trust with someone who is getting out of the game when I can get advice from any number of people in the game which have similar amounts of wisdom and experience? I get the wisdom and I have a better chance of getting good opportunities from the person in the game whereas I can only get wisdom from the retiree.


Not all ex-post theories are BS. For example, I slam my hand in the drawer and theorize, "Slamming hands in drawers hurts; one should not do it." That theory is pretty solid. It doesn't cover all the edge cases, but following it is better than not following it.

There are lots of startup theories that are equally solid, despite being ex-post. I know a startup that didn't pay payroll tax for a couple years, and it ended badly. The resulting advice is pretty obvious.

There are theories about how to hire, how to find customers, how to negotiate deals. These theories might not apply in every single case, but you should definitely start by knowing what worked in the past.

This post picks a couple of unsupported startup theories, but it's sort of like criticizing physics for the 1% of reality it can't explain and ignoring the 99% it can.


The difference is the prior.

There's strong prior reason to believe not paying payroll tax is not going to end well. The theoretical basis is simple, clear, well-reasoned, and supported by strong evidence in adjacent realms (i.e. the IRS takes taxes taxes pretty seriously).

Whereas the prior on the validity of something like "early-stage founders should live with their customers" is much weaker.

Even though the advice for each presented example is based on sample size n=1, the resulting belief can and should be quite different depending on your prior.

The real meta-advice is to be able to understand and evaluate your prior for any given piece of advice you receive. This mostly comes down to thinking rationally, being knowledgeable, and critically considering each piece of advice for whether it's worth heeding or not.

Which is not so far from the author's message I think ("figure everything out yourself", "I don't mean to say don't take any advice").

(Obligatory shout-out to Bayes Theorem)


> Whereas the prior on the validity of something like "early-stage founders should live with their customers" is much weaker.

There's a pretty strong theoretical reason for that as well: startups succeed because they make something customers want; the more time the person making product decisions spends with times with customers, the more information they can gather about what the customers want; and the more the customer trusts and has a rapport with the founder, the more willing they'll be to share candid feedback.

There are some practical problems that make living with your customers a little problematic if you're not Brian Chesky, namely that they may not want another roommate, you may not want a roommate, they or you may already have a family, or you might just get on each others' nerves.

But if you extend the general principle to "spend a lot of time with your users" (and being able to extend to a general principle is a big advantage of having theoretical reasoning), there are a lot of other companies that have found similar success. Facebook was another one where the founder literally lived with his first users. Google, for all intents and purposes, lived with their first users (it's grad school, after all). DropBox, Reddit, and Instacart were their first users. Apple, Stripe, Clerky, Twitch, etc. were in regular contact with their first users.


That’s an overly wide definition of living with your customers to be useful. Apple for example was selling people kit computers at the start, they did not really have much interaction with or feedback from their customers. Nor could they do much to adapt their product with customer feedback.

I mean if all you mean is have even a tiny amount feedback from a few of your customers. That’s going to include almost every company.


Their first customers were microcomputer enthusiasts and both Steves were members of the Homebrew Computer club, and Woz built Apple I with continuous feedback from the club meetings.

I would argue that it's moving to the Apple II (were they suddenly lost this direct feedback because of the vast expansion of their customer base well beyond their reach.


"Spend the relevant type of time with the appropriately targeted type of users"


There's good reason to believe tons of sociological theories. The problem is figuring out whether the pro or con factors win out, and figuring out if you've nailed down every single factor.

Being simple, clear, and well-reasoned in the realm of people's behavior is not enough to give you very good accuracy.

The kind of priors you get by reasoning in a vacuum just aren't good enough in some realms. Bayesianly combining those priors with anecdotes doesn't really help.

Some ex-post theories are fine but I don't think you've hit upon the way to distinguish them.


>There's good reason to believe tons of sociological theories. The problem is figuring out whether the pro or con factors win out, and figuring out if you've nailed down every single factor. Being simple, clear, and well-reasoned in the realm of people's behavior is not enough to give you very good accuracy.

This is all argument in favor of a weak prior, not to ignore the existence and utility of a prior completely. Ideally, you have solid (relevant) empirical data that informs your prior but if you're seriously evaluating "advice" then I'd venture to say that you're probably lacking such data.

Imo, the critique to be had of what I said above is that there's no clear general way to form good priors and thus the advice is somewhat empty. But that's just life -- there's no magic bullet algorithm to discover truth and one has to use his/her brain to do the best they can. Many who seem to well in this area tend to like the Bayesian framing of beliefs, and personally I've found it useful to guide my own thinking as well.


You can reframe almost any statistics as Bayesian if you try hard enough. That doesn't mean it's actually helping you. If you have a method for generating 'good' priors and it doesn't work, it does far more harm than good when you use that to analyze this kind of anecdote. Anecdotes are such weak evidence that the chance it pushes your priors into the correct result is super low. You'd be better off not trying. Just accept the need to gather proper amounts of evidence.

Or in other words: Some undescribed system of priors could help, but the system you actually described doesn't help. So "use priors" is a bad answer.


> "Slamming hands in drawers hurts; one should not do it."

This is a fact and don't think this is what the author is trying to say. I guess he's more focused on the kind of theories which people throw around as some sort of self-evident truth, when in fact it's a personal truth which they learned through trial and error.

But I guess there's a point in learning from some of these "self-evident" truths (this is more rare though)


slamming your hands in drawers is also a personal experiment. I might be wearing a good set of gloves, and it won't hurt


There always has to be a balance between learning from other people's mistakes and making your own. However learning from the right people is important.

You wouldn't use avocadoes when a recipe asks for flour but in the start-up world, everyone seems to think that what works for the well-known successes will automatically work for them.

What really frustrates me (rant, rant... :)) is the notion that if I build, they will come. So so many of the start-ups I work with think that. What happened to people understanding basic business theory? Basic marketing theory would be useful but I don't hold out much hope for that!


Maybe theories about what not to do are more solid.


Nah. In fact that's the whole reason "contrarianism" is a thing.


Thank you for the validation!

My purpose in life is to serve as an example of what not to do.


Sounds like fun!

But you have a paradox.

Do you demonstrate one big thing to not do and go out with a bang, winning a Darwin Award, or demonstrate many smaller (less lethal) things to not do? Which generates more net benefit for the world?

Always these career choices, and what kind of advice is there on that?


Not taking sides, but your example is a https://en.wikipedia.org/wiki/Straw_man fallacy.


It's not. He's directly refuting the claim made in the title of the blog post. That is: Most startup theory is ex-post, therefore bs.

In the title, the author is seemingly making the claim that all ex-post startup advice is BS. The commenter is debunking that claim by providing sound ex-post advice.


Ok come on guys. Obviously, tax law advice that is ex-post is not bs. Law advice is ex-post per definition, because the law needs to be written first. That's not what the post is about.


I think you did a fine post but a wrong generalization. The advice you mentioned is bad because it's not generalizable and possibly not reproducible, but IMO claiming that the advice being ex post is the cause of that was a stretch.


A more generous interpretation of the article’s claim interprets “BS” to not necessarily mean it is false. For instance, if I were to speak condescendingly on a topic I know nothing at all about, I might (unbeknownst to me) actually say some true things... but most people would consider this BS regardless (both the false and the incidentally true things).

This common-sense interpretation of BS agrees with epistemologists’ definitions of “knowledge”—they invariably define it in such a way that a belief must not only be true, but also true for the right kinds of reasons, to count as knowledge (though there is a lot of disagreement about what those right sorts of reasons are). See for instance the “justified true belief” definition and its critics: https://plato.stanford.edu/entries/knowledge-analysis/


> directly refuting the claim made in the title of the blog post. That is: Most [...] In the title, the author is seemingly making the claim that all [...]


Very clever, but missing the point. Those two qualifiers refer to different classes:

(1) Most startup theory is ex-post, therefore bs.

(2) All ex-post startup theory is bullshit.

Those claims may or may not be true, but there's no contradiction between the two. The title does indeed seem to implicitly claim (2), in the form of the following (implied) syllogism:

Most startup theory is ex-post.

All ex-post startup theory is bullshit.

Therefore, most startup theory is bullshit.

Or, more concisely: most startup theory is ex-post, therefore bs.


Well, since I'm here no need for the guesswork. I'm not saying all ex-post theories all bullshit. I think that most ex-post startup thoeries are bullshit.


Thanks, I misread.


Is it though?

The parent comment is criticizing the article for "cherry picking". That in itself is not a fallacy.


I have had a couple of managers over the years who had dreams of writing a book, and with the exception of one, they were all mostly wrong about the secrets of their success. They didn't have any awareness of how their team and especially their leads supported them. Responses varied from humor to hurt feelings.

Ask the people who work for them why the team was successful. They'll probably have very different opinions.


Would you mind expanding on their respective theses? I can see a lot of value in looking at these in a anti-pattern kind of way.


You know, it's funny for all of things I can enumerate on 'how not to do something', there are some pretty big areas where I either don't keep score or tear up the scorecard the moment I don't work there anymore. In this case probably the latter.

The guy I said did have it figured out? I'd like to retract that. He wanted to think of the process of moving stories from the backlog to done as a physics problem. As managers go he was fairly emotionally sophisticated, but that was his big blindspot.

Some of the others had elements of 'mushroom management' (keep them in the dark and feed them bullshit), and a lot of quick fix-feeling techniques. Those can be helpful in small doses, as long as someone else is beating a drum for technical excellence (not perfectionism, but get stuff done, keep it done, and keep getting stuff done).


Any examples where you think they were wrong?


It's fun to read older business books like Built to Last and Good to Great that use the "let's study successful businesses to see what they do" methodology. It's fun because many of the companies featured in those books either are bankrupt today or facing some sort of existential difficulty.

It's survivor bias bullshit wrapped up in feel-good propaganda and people eat it up every time. Study successful people and emulate them. Of course! How could we go wrong?

Nevermind that the successful people are more likely to just be lucky or even just plain wrong about the reasons for their success.

I attribute my success to hard work, getting up early, making steady progress every day, picking great people to work with, and staying ahead of the curve. Sounds great, right? But to really know if any of that matters, we have to study a large number of people who also profess to do exactly those things and see if they're way more successful than average. If they're not...well then I'm just wrong about the reasons for my own success and other factors are more important.

It doesn't sell books though when your message is "in order to be successful you have to be naturally smart, tall, and attractive, work about as hard as everyone else, and be well-connected and lucky."


   in order to be successful you have to be naturally smart, tall, and attractive, work about as hard as everyone else, and be well-connected and lucky."
I can write a short pithy book on that one :-)


I'm surprised nobody has mentioned the QUT CAUSEE study. They actually did follow a group of early-stage startups, interviewing them each year and then afterwards looked at what factors predicted success or failure.

Some of their results: - changing direction as a result of customer feedback (very, very good, one of the best predictors of success) - having an accountant (good) - having one parent born overseas (helpful for some reason) - making use of Australia's research and development tax concession (very good) - knowing the name of your lawyer (bad) - accessing government services designed to help startups (very bad) - writing a business plan and sticking to it (bad) - founders having experience working in enterprises (neither good nor bad, but it slowed the process down a lot)

My favourite gems that they discovered... in the Australian startup community, it appears that investors are no better at picking successes than random chance. Externally-funded companies had no difference in outcome compared to bootstrapped ones; the only difference is that they got to success or failure faster.


...the only difference is that they got to success or failure faster.

To be fair though, that's a big difference. Wasting time on an idea that didn't work is one of my biggest regrets about my first startup. I'd like it to have failed much earlier.


Never heard of it, although I work just up the road from the Garden's Point campus. Where can I find a summary?




When I was in my twenties, I was part of the early "life coach blogger" culture.

Now that I'm almost in my forties, I realize everything I wrote back then was bullshit. Earnest, but bullshit nonetheless.

I'm much more cynical, but I'm also much more likely to just do what seems right and figure out the rest as I go. I don't read "best practices" or advice articles anymore.

This is not to say that there is nothing to be gained from such sources; just that the likelihood of it being useful or accurate given my particular context is small.

In this, my attitude is much closer to where it was in my teens and childhood, where I just had to figure everything out on my own.


I’ve read a lot of time management/productivity books, and there seem to be only two things all of the authors agree on: write stuff down, and continuously tweak your system.

The latter is usually mentioned offhand in the preface, as the author wants to deliver a fait accompli instead of just some tips and tricks.


To what extent do you suppose "continuously tweak your system" really means "show up"?

That is, could you substitute any other activity that requires you to actually pay attention and be present and get equal progress?

I think there may be a category theory of self improvement. The more I look at the things I've done to improve my situation from health to work to finances, the more they start to look similar (in a nutshell, it's not math, it's not psychology, but it might be both).


That’s a large part, but there’s also an aspect of kaizen to it. Everyone’s thoughts work a little bit differently, so the mechanisms that work best for me maybe don’t work quite as well for you. Regularly asking yourself “how can this be better” is the only way to maximize your own efficiency because nobody else is competent to answer the question.


The one true path is that there are no one true paths and that the most successful people seem to have the best managed iterative learning cycles (and write stuff down).


Can you elaborate on "write stuff down"?


Plan, write a log of work, write down your todos, keep track of what your doing and keep yourself accountable.


I keep an Excel control table. Every task assigned goes on that table with a project, type (report, code, algorithm design or integration work) and module (which part of the project needs an update). There is also a remark column which I one day intend to process with nlp. I also like to generate a pivot table at the end of each week to know which type or modules of work I'm neglecting. I've also got some conditional formatting to mark rows as red when I blow the deadline (red) or when I need to finish something by today (yellow). Has worked well for me when I was an engineer and I'm evaluating this work flow for an integrator (it's an official post for someone who makes sure that several teams deliver compatible outputs on time).


Broadly, use external storage (paper or a computer) to keep track of things that you don’t need to know right now so that that mental capacity is available for whatever you’re actually working on.


Mastery is when you not only know the rules but also know which rules you can ignore in your particular situation.


“By all means break the rules, and break them beautifully, deliberately and well. This is one of the ends for which they exist.”

― Robert Bringhurst, The Elements of Typographic Style


"The Code is more what you call guidelines, than actual rules."


I started to see the same trend in technology hopping. New language's or frameworks are barely around long enough to develop long term maintainability best practices borne from experience, so everyone's blog posts are just well intentioned speculation.

You end up seeing enough contradicting information said absolutely that you realise no one is ever 100% right.


This extends to methodologies.

At this point am convinced that a competent team will complete the same project under formally waterfall, XP or Agile governance with only minor schedule differences.


I'm a huge fan of Alistair Cockburn's thinking on this point. He argues that people - and their characteristics - are a far greater driver of project success than methodology.

The argument is not a formal one, but I think still holds a lot of weight:

https://ameyakarve.wordpress.com/2012/07/22/characterizing-p...


I agree with this for the most part, though there are many false positives of “great teams” on paper who screw it all up purely because of a backwards methodology.

Methodology and people are not mutually exclusive. And it’s a lot harder to swap in and out people (though it may be necessary).


I too am quite skeptical, but I do try to find the "best practices" contents in areas where I am new. I find these articles often provide some insight from the perspective of someone who actually has experience (extra credit if he/she is part of a team), and even if I eventually change my practices as I learn more, I start down a good, if not perfect, path. In short, it speeds up my learning process.


I always try to keep in mind that having any strategy at all, even if it's not the actual best strategy, is usually good enough. So while yes, a lot of the advice you get is bullshit specifically, generally following some system is almost always better than not following any system at all.

This is also something I try to remember when making a tough decision; how substantial is the difference going to be, actually? Usually it's not anywhere near as substantial/irreversible as I thought.

I've stopped fighting a great many work battles for this same reason, as well.


I'm surprised this blog post made the first page of HN given its lack of sources or analysis.

Maybe a good discussion can come on one example startup advice from YC: do things that don't scale.

I think this is really sound in that they're saying "get product-market-fit with some segment of users." i.e. know that there's demand for your product/service even if it's pretty manual to deliver early on. Then see how to automate. Because most product/services aren't materially better than existing options and so you never get product-market-fit even when it's entirely manual and customized to the user.

As a founder I've been guilty of building first because it's fun. I saw what I wanted in user research and built a whole app accordingly. It failed. Would've been better to start with a smaller attack surface (email newsletter) and once we found success to then scale. The interesting thing is I knew of the advice "do things that don't scale" beforehand. But until I failed I didn't know why it mattered and how to apply it.

Net: applying advice is harder than evaluating if the advice is good or bad. You want to have enough time to fail a lot and then appreciate the wisdom of startup advice :-)


> I'm surprised this blog post made the first page of HN given its lack of sources or analysis.

Sometimes people will upvote articles not for the quality but for the discussion they will trigger.


Ah, good point. Thanks.


This 100%. I sometimes upvote posts without even reading them because the comments are very interesting.


I guess the parent comment isn't very interesting...


I'm surprised myself. But I guess it's right in the target group.

"Do things that don't scale" is good advice, I agree. But maybe the reality is more "Do ALSO things that don't scale", and then it becomes much more obvious and irrelevant, doesn't it?


Sorry shafyy. I don't understand why the addition of "ALSO" chnages the statement. Sorry for being dense.


My point is they're not saying "ONLY do things that don't scale". It's more like, "from time to time, ALSO do things that don't scale". Which, as I said, I think is good advice, but also pretty common sense.


Ah thanks for the clarification. My interpretation of the advice is to START with things that don't scale. Because it's about getting to Product-market-fit soonest. Then the advice is not common sense.


> common sense

Is this a meaningful category of knowledge?


If it truly is common sense, then yes I would say. The question always is, is it really common sense.


"...know that there's demand for your product/service even if it's pretty manual to deliver early on. Then see how to automate."

So, Theranos? (I swear, if I had a quarter for every company that had "good product-market fit", I'd have...a lot of quarters. Possibly all of them.)

Advice isn't terribly useful if you can only evaluate it after you've taken it, or not.

P.S. Think I can get VC funding for my corner fruit cart?


No, because they didn't deliver anything early on, manually or otherwise. "Dont do crimes and fraud" is another great bit of advice IMO.

Even healthcare isn't immune from market considerations. Might have been a good idea for regeneron to have done more market research before developing praulent for example.


no, they failed because they failed. If she'd won some of her gambles she'd be a hero.

My go-to ex-post example is FedEx, whose founder took their last month's payroll to Vegas, and won big enough to keep the business going. I was taught about that in business school (as an example of entrepreneurial spirit). Founders who do bad things and lose are convicted of fraud (and gambling with your employees' payroll is definitely fraud). Founders who do bad things and win are hailed as heroes.


Tell the ceo of Novartis that winning the gamble of hiding that data was falsified for their recently approved drug makes him a hero. The drug is successful and scientifically the falsification fo the data didn't matter. But that doesn't mean that his reputation isn't getting dragged through the mud right now for condoning lying to the FDA


Having read the riveting book Bad Blood it seems Theranos failed for two reasons:

1. Elizabeth Holmes concocted a product that defied the laws of chemistry and physics and couldn't actually be built. She refused to relax constraints like size/packaging that may have made it plausible.

2. She engaged in fraud in the hopes that eventually #1 would be solved and created a culture without transparency that further hampered the product from ever working.

This wasn't a case of a gamble that didn't pay off. This was a case of an infeasible idea, poorly executed, and compounding the issue with outright fraud. No startup advice necessary to avoid this.


Tell that to the ceo of uber, who built a multi billion dollar company (even after the recent underperformance) but also did some bad things, and then got kicked out of his own company for doing those bad things.

Success isn't a guarantee of your sins being forgiven at all


How many people do you know that can spin up an $76 billion dollar business from scratch? Damned few. His board let him make mistakes while providing little or no guidance.

I see Uber's problems more as a failure of the board to govern than solely the fault of the founder.


That's because this is anti-advice. It's saying figure it out yourself. How does one source such advice? How does one analyze it? It is the same idea as The answer to “Will you mentor me?” is no.

https://news.ycombinator.com/item?id=20715136


The point is that plenty of companies did all the things the advice tells them to do and still failed.



Damn right.


Carnap vs Popper

Popper = create hypothesis and falsify

Carnap = see instances and use induction to create hypothesis

Everything else they say about the scientific method is the same.

Herbert Simon, in thinking of sciences of the artificial, used the Carnap method to create a ton of valuable science.

It's not that post-facto is bad - carnap showed otherwise.

It's about the quality of the science and the specificity of the recommendations, that lead to bs.

For instance you can mitigate for survivorship bias by studying the dead as well as the living, and driving deep into the differences. But that's a lot of work!

As a theory, effectuation studies the difference in decision making processes between expert entrepreneurs and corporate CEOs. The result, while similarly post-facto, is delightful. See effectuation.org - Vinod Khosla remarked it was the first useful study on entrepreneurship he had ever read.


I think having lots of data points is the only way to give proper advice about Startups. YC has given outstanding startup advice from a specific SV perspective.

I've been running a UI/UX design firm for the last 10 years, working with small unknown bootstrapping founders, up to well funded and awesome companies founded by super stars like Elon Musk and others. Though this was never my intent, over the years we've collected so many datapoints that alongside our design work we tend to advice and steer the companies we work with into directions we think the company should go. All backed by real examples from previous experiences. Being in positions where you work with a lot of companies over a longer period of time, I think, is the best way form thoughtful startup advice.


While data points do help, impactful startups often change the paradigm and how things are done. So, again, I don't think relying too much on emperical data points is good for founders. If you do, you'll rarely do something interesting and new.


> If you do, you'll rarely do something interesting and new.

And if you don't you'll also rarely do something interesting and new.

It's not as fun to talk about, but most startups will not be particularly impactful and exceedingly few actually change any paradigm. And that's ok too.

I guess I'm saying if you are trying to find general advice based on analysis of outliers, it may not work well.


As I mentioned, data-points can help steer in the right direction. I'm definitely not talking about disruption or changing paradigms. The same way a YC can't guarantee each startup will disrupt an industry. All they can do is help make something good, go to great faster.


Agreed.


Just curious, what’s your website?


Here you go http://fairpixels.pro (there's no 'advice' on there if that's what you're looking for)


> Do you think Musk copied that strategy from the business school he never went to.

Elon Musk did his undergrad at Wharton.

I guess the statement might be true if you mean "business school" to strictly mean a graduate MBA program. But Musk definitely took business classes that would have been nearly identical to those taken by MBAs.


Why cut the writer so much slack? Musk went to business school period. Undergraduate, graduate doesn't matter. Doesn't matter what classes he took either. That is not what is talked about in the statement.

Curious why it even matters what is written by the OP given such a glaring and easy to figure out wrong mistake.


According to the OPs response to one of my comments in this thread, this is just his opinion in a short blog post, so we should "deal with it." Doesnt particularly incline me to cut him any slack or to trust that his arguments are made with any sort of rigor at all - it's like there's no sound foundation to even start a debate or engage with what he wrote.


And that is even more remarkable considering what he is trying to do (K12 ed) read this:

https://shafyy.com/about/

What is really strange to me is how HN feasts on blog posts as if they were more special than a simple HN comment. And I do mean 'feast'.

And saying that in reply to you (just read the comments) shows no pride at all in what you are saying ie 'deal with it'.


Oh wow I did not realize that he's trying to do something education oriented, that makes it 1000x worse. I believe that it's important to instill a sense of intellectual integrity and critical thinking ability into the next generation of society, and I definitely don't think OP is instilling that in anyone based on how he handled criticism and refused to engage with sincerity or intellectual honesty in this thread. That's unfortunate.


I was a bit confused by that line. He wasn't even a dropout, he got a business degree along with his physics degree, and "start with a premium market and move to bigger less premium markets" sounds like the sort of case study that could definitely be taught in a business lecture. I doubt that he copied any strategies from his business classes but this particular example is hardly implausible.


He has an economics and physics degree, not business. Did he take business classes and read business books? Probably.

https://en.wikipedia.org/wiki/Elon_Musk


It's a business degree. The undergrad wharton degree just happens to be called a B.S. in economics, but there's only a few economists classes in it, it's entirely a business degree with business concentrations and so on. I think he concentrated (like a major) in entrepreneurship but I might be wrong on that.


Wharton is the business school of the University of Pennsylvania. He went to business school and got and completed all the same business requirements everyone else has to take. I studied accounting at university along side finance, business administration, supply chain, and economics students. I'm sure there are plenty of schools who offer a degree just called "business," but most people have a specific business degree. I'm looking at the degree requirements right now, it's all the same stuff everyone has to take: marketing, management, logistics, stats, finance. Unless things were really different back then, an economics degree from Wharton is definitely a business degree.


Economics falls under the business umbrella at most US universities. An Economics degree will almost certainly have included finance, accounting, and marketing classes. Some schools, like my own, don't even differentiate between majors on the granted degree - any students in any of those majors just get a BSBA despite the different focus.

Wharton is similar in that all undergrad degrees are in "economics" even though students still select a major.


https://en.wikipedia.org/wiki/Whig_history

"The term is also used extensively in the history of science to mean historiography that focuses on the successful chain of theories and experiments that led to present-day science, while ignoring failed theories and dead ends."


Emulating successful startups is folly. It's the myriad failures that you will never learn about that you should be concerned with.

I'll just leave this here. https://en.m.wikipedia.org/wiki/Survivorship_bias


this. So much. Copying the success stories makes no sense unless you also understand how other people following the same strategies failed. You have to study the failures in order to understand the successes.


It's hard to test theories when the underlying system constantly changes like it does in economics. Something that works today might not work tomorrow. A theory that looks sound when applied to yesteryears data might stop working before the sun rises. When many others try to apply the same tricks that made you successful the cake on that table might suddenly be divided into so many pieces that everybody will go home hungry. You must find a new table with a new cake but old data and old theory doesn't help much with that because someone else is already there. You need to think fresh and unconventional or you need to squeeze blood out of stones harder than anybody else.

Physicists have it easy in comparison. One of the basic truths of natural science is that the laws of nature are independent of the observer and time and experiments can be repeated as many times as you like with the same results.


>experiments can be repeated as many times as you like with the same results

That is not actually true, there is a lot of randomness, and in quantum mechanics the randomness is fundamental. The real secret of the natural sciences is that good physicists never publish if they know they don't know the answer. It took hundreds of years of that policy before the narrowly applicable theories blossomed into the general laws of the universe. If the focus was determining the general laws of the universe from the start no progress could have been made: Newton could have guessed at the laws of motion, but without the specific and painstaking celestial observations preceding him nobody would have known he was right. Economists could enjoy a similar success, but it would be at the expense of 400 years of saying only things that policymakers thought were obvious, while refusing to answer useful questions.

There are plenty of "very true" theories in economics, but they often aren't broad enough to answer the questions about economics that the fate of nations ride on. However 400 years from now those narrow but well-tested theories will be the foundation of the true general economics and all the rest will be forgotten.


Sure, there is randomness but in normal cases you can apply statistics to describe it reasonably well. The results are not 100% sure but 99% or 99.99999% or whatever you need. It's not that the laws of gravity stop working entirely over night. Newtons theory wasn't perfect and Einsteins theory isn't perfect but it describes what happens in nature very very well for billions of years.


You could find physical places where things seemed to change drastically one hour to the next, for example my dog. You can also find things in economics that don't change, like the laws of supply and demand in a true commodity market. Supply and demand in a true commodity market is a pretty narrow situation, but the early history of physics is full of narrow theories like Kepler's laws and the precursors to PV=nRT.

If you went back 400 years and demanded that physicists explain my dog's behaviors, you would probably get some answers that sounded OK (kind of like Aristotle's attempts at physics) and maybe even were convincing to people of the time, but they wouldn't have much truth value. Present day economics has a few equivalents to Boyle's gas law, many equivalents to ancient Greek physics, and no equivalents to atomic theory.


The emotions of your dog are not laws of nature.

The "true market" is like "no true Scotsman" or "a closed system" or "a spherical cow on a frictionless plane". It assumes something that doesn't exist. In economics the influence of the things it assumes wrongly can be very significant. In physics wrong assumptions can also make the results wrong and a lot of work (or rather most work) is done on checking if all the assumptions are sound and ensuring that the influence of the remaining gaps are negligible. That is something that is hard to do in economics when it involves interactions with the global market.

Yes, special theories can be precursors for more general theories.


>The "true market" is like "no true Scotsman" or "a closed system" or "a spherical cow on a frictionless plane".

Come on, what is physics about then? ;)

Even today, systems like my dog are computationally infeasible to predict from the fundamentals, even though everything my dog does is a logical consequence of QED. That's why it is impossible to make progress without assuming a spherical cow and then traveling to every dairy farm in the world in search of the roundest heifer available.

In 400 years economists might still be unable to predict recessions, but I think by then the specific and very true theories of today will have had enough time to evolve into general laws that could predict recessions in principle.


With regards to your dog, you should look into chaotic systems and the butterfly effect. Chaos here doesn't mean that anything is possible or that each outcome is equally likely. It refers to that the outcome changes greatly for even minimal changes of the inputs. Since we don't know everything at one point in time, we can only make limited predictions about a future state. No matter how precise we measure the system it will still behave chaotically.

To some extent this is also true for the economy which contains many feedback loops and meta-stable states. Even if we have the perfect theory it might still behave chaotically and might be as unpredictable as the weather.


"Ceteris paribus" is the magic assumption under which it works.


> Or “Airbnb growth hacked Craigslist to link to their own website. And did you know that the founders lived with their users. You should do that, too!””

I was told by a founder that I was a first time founder (I am not) because I didn’t believe this strategy works anymore. He was basically mocking me for being so stupid to not know now growth hacking like this works.

And all the time I was thinking at the back of my head about how dogmatic his thinking was. What works 10 years ago doesn’t mean it still works today.

Copying other people’s strategy is the worst way to run a startup. By the time you have heard it, another 100 people probably heard it too and doing the same thing.

I agree with the post. Think for yourself. And definitely don’t talk down to other founders thinking you know better. Especially if you haven’t succeeded.


Agree. Recently listened to a podcast with Jason Fried where he made this point exactly. It's this IndieHacker episode here: https://www.indiehackers.com/podcast/105-jason-fried-of-base...

Edit: Corrected link


Can you update this link? Looks like you just linked back to this thread's URL.


Just did, thanks


Startup (and business) theory is really pretty simple:

1) Identify problem

2) Come up with, or look up for existing solutions

3) Develop, iterate

4) Identify and get some competitive edge

5) Keep pleasing clients

Of course, there's a ton of things underneath all this, like marketing, funding, or simply being lucky with timing.

The copy-cat method is probably the most legit, and battle-tested method. I.e, simply just copy some existing product or solution, with a known market.

The entrepreneurship scene preaches originality and novel idea to hopeful founders, but to me, it always ends up with a race for who can do something better than their competitor.

I've noticed that in many countries outside US, especially western Europe, some of the largest startups are those that play-by-play copy successful US startups, probably hoping to get acquired once the US startups start expanding to said countries.


I feel like this post mistakes advice for directive.

Most of the great founders I've encountered are excellent pattern-matching engines who can absorb large quantities of advice and then re-apply it within their personal contexts rather than rejecting it outright, ex post facto or not.

No you probably don't need to live with your users, but yes you should probably spend significant time with them doing the thing your company is trying to help them do better.

Putting advice to work is more than regurgitation... then again, if your company's goal is to normalize short-term living with strangers well then yeah, you probably should live with a few.


The issue isn't that its ex-post, it's how theory is built. There are better and more credible resources/work on this topic than a blog post.

The most common terms I've seen that gets used in academic research that is critical of how theories about entrepreneurship are built are 'mythifciation' and 'reification'...

e.g., https://onlinelibrary.wiley.com/doi/abs/10.1111/1467-6486.00...


From the article:

”Do you think Brian Chesky of Airbnb heard that strategy from a friend? Hell, do you even think that freeriding off of Craigslist was their reason for success?”

Yes, freeriding off of Craigslist was the reason for their early success, without which their later success was not possible. Having a good model means absolutely nothing without some ability to market it, especially in the marketplace space. Initial momentum is what causes these businesses to either succeed or fail.

The idea of using free ways to get your startup initial momentum is absolutely not BS.


Or literal freeways.

It's a common conceit of Industrialists (or at the very least, American Industrialists) to claim that they hoisted themselves up by their bootstraps and that their success is entirely their own. And then they begrudge paying for the sorts of public works and infrastructure projects that kept them from a lot more adversity. Hell, some won't even mentor or help people the way that people looked after them when they were young and naive.


> The idea of using free ways to get your startup initial momentum is absolutely not BS.

Agree, and that's also not what I said :-)


That’s how I read it in the context of your premise. You seemed to be mocking the notion that Craigslist was a vital part of their success. I am not sure how else to interpret “....Hell, do you even think that freeriding off of Craigslist was their reason for success?”


I'm saying that they would have been successful with or without this marketing tactics. I am not saying that startups shoulnd't use free marketing opportunities.


Exactly, which means you're saying that this wasn't a vital part of their success, while the other commenter is saying the opposite, so I don't think you agree with the argument that doing things that don't scale is a critical part of their success right? Unless I'm misreading something.


Yeah this was my point. IMO they would have never made it to the point of becoming a viral success without their prolific Craigslist spamming operation. Every virus needs a patient 0.


>> Do you think Musk copied that strategy from the business school he never went to? Do you think Brian Chesky of Airbnb heard that strategy from a friend?

Maybe not, but that doesn't mean talking to other successful founders isn't extremely helpful. The best founders have multiple great ideas and not enough time to execute on them. If you want to increase your success rate, you should use feedback from other successful founders to decide which great idea to invest your time in.


Also, musk could totally have learned that strategy when he was in bschool, and chesky could totally have gotten the idea from a friend. Those are hardly implausible situations.


I agree, I don't now that for a fact. It's more a form of rhetoric to trigger interesting discussions. Seems to work ;-)


Sure, but it wasn't phrased as an open ended question, it was framed as rhetorical questions with a given answer that are evidence for your conclusion. I'm confused by the "bschool he never went to" bit as well. I'll grant that it sparks an interesting discussion, but I don't think that it does much to support your thesis as evidence.


I'm not writing an academic thesis. It's just my opinion in a short blog post. Deal with it :-)


Not exactly sure what there is to deal with here, and it's certainly not easy to have an interesting discussion about a topic if you decide that it's not worth trying to argue your point instead of telling the other person to "deal with it" when they ask for clarification about what some of your points mean or point out things that would make your argument stronger if addressed


The thing is though that you've probably read so much startup advice that your sick of it and know a lot of it and dont find any value in it anymore. you've reached a tipping point where you done reading about this shit and just want to build stuff. but if you dont know anything about startups or business or whatever its still probably useful to read about it.


The problem with startup theory is, that the theory that actually works is mostly the "don't do this". Only once in a blue moon does they prove to be wrong, but they are also the least valuable as many of the are quite obvious.

The part of startup theory most people are interested in "the do's", most of the time doesn't work as they are highly contextual.


"Ignore advice" is not good advice. Even for startups. There are so many predictable ways that founders screw up. I, personally, have committed most of them. A few of them I avoided, or stopped doing soon enough to survive, and often it was with the help of good advice. YC gives good advice: Talk to your users. Build something people want. Run lean. Those are all great for people starting out. There is a lot of knowledge much more specialized that, contained in the collective wisdom of startup operators and investors. The challenge is to vet your sources, know which advice applies to your situation, and how to implement it. Nobody can teach you how to be a good judge of character. And nobody knows your startup well enough to decide for you which advice and how. But we can all learn from others who have gone through the ringer, whether it's PG, Michael Seibel, Naval, Lemkin or others.


Airbnb and Tesla surely looked at other business models for success and modified or adapted it to their own. These theories can provide a framework to help people think through the problems without reinventing the wheel. On to the irony of the post: this post is giving advice “ignore advice think for yourself”. Bs.


> Do you think Brian Chesky of Airbnb heard that strategy from a friend?

I'm pretty sure he heard it from Paul Graham.


I'd be more interested in learning of what other startups used the same strategy and failed anyway.

Ultimately luck is a large portion of success.


Don’t study success. The people who double their money by betting it all on black didn’t have some divine insight that you can copy, they just got lucky. But do study failure. The people who lose everything by betting it all on red did have a fatal flaw in their approach to risk that will be valuable for you to avoid or at least be well aware of.

One of the obvious faliures to study is that many great teams with great ideas failed to get any funding because they didn’t walk the startup walk or talk the startup talk with potential investors, which is exactly why you should talk about copying Tesla and about growth hacking.


I think the same about most management theory, most of the corporate bs can be categorized as a form of Cargo-Cult.

Look how well they did doing that, let's copy them without understanding the context or anything below the surface of the things.


I agree that most anecdotal startup advice is BS, which is why I barely pay attention to it. What I'd like more of is textbook-like material offering terminology and detailed case studies. Simply knowing the common name for something (e.g. marketing terms like https://en.wikipedia.org/wiki/Veblen_good) or the usual process of how things work (like a typical schedule of the process for accepting angel funding) is far more useful than advice that seems like darts thrown at a dartboard.


So true. Everyone and her grandmother is an armchair startup expert these days. WTF is a startup anyway. I’m building a new for-profit business enterprise, not a social i-have-one-too startup. Call it what it is.


Many years ago I read a ton of books on trading psychology. The best books—widely considered to be bibles of their field—came to the following conclusion:

There's many valid approaches, and often these approaches are radically different. Regardless of whatever approach you choose, if it is to be successful, it must be both reasoned out by—and compatible with—you.

I can't name a single great entrepreneur that didn't have very strong opinions, or that largely relied on outside advice. These things must come from within, and critical thinking is no exception.


So much crappy business advice suffers from Survivorship Bias [1]. “Companies A, B, and C did X and succeeded. Companies D, E, and F did not do X and failed. Therefore, X leads to success.” Ignoring how many companies also did X but failed too. The book “Good to Great” contains nothing but Survivorship Bias and is adored by Business Schools.

1: https://en.m.wikipedia.org/wiki/Survivorship_bias (excuse the mobile link)


I did two startups in the nineties. There was little or no information out there and the Internet quite frankly was a brand new world. Or so we thought at the time ;<).

Now there's too much information out there. Lots of it is total malarkey to be polite. If I had the choice I'd much rather have too much information than no information. I honestly believe that I would have made fewer mistakes.


It's not all b.s. but it's hard to sort the good from the bad. It's impossible to test out theories so you have to try lots of possibilities and hope for the best. There are 2 basics that are part of every successful projects: hard work and luck. Anything else you have to evaluate and decide whether it's worth the risk in time and resources.


Reminds me of the book "Good To Great". The author took a bunch of successful companies, and found patterns that they all had in common. But just because all these companies did X, didn't mean that made them successful. It could've been because of survivorship bias. So yes, most business/startup advice is curve overfitting, imo.


I don't recall "Good to Great" coming to this conclusion - it was the later critical pieces. (Poor guy - it was a lot of analysis!)

IIRC, the book "First, Break all the Rules" actually challenged the "Good to Great" methodology a bit on this point.

(The other point, IIRC, was that first you have to find the right questions, before the right answers can be considered).


Much of the empirical academic literature on entrepreneurship and startups does not suffer from ex post rationalization.


Yes, all future success stories will play out differently.

And no, we have identified patterns accross many past successful cases so we think we can risk theorizing some formulae and advice.

Top of my mind: - Build something really wanted/needed - The A Team - Timing - Early/easy access to funding

And whether you like it or not: luck!


The other side of the coin is after you've built a few startups, you see the same pattern coming up again and again. Part of being creative is to know where to focus your attention (I.e. figuring out PMF) rather than wasting cycles on problems with clear solutions.


I'd agree that it's rarely a good idea to directly copy any other startup. It's probably good to hear many of their stories of success - maybe a few pieces of one or two will give you a great idea, or at least tend to make you think in the best ways.


Take a working idea, find out why it's working, find out how to make it better, try it out.

It doesn't make sense to only copy a working idea without understanding why it's working because your copy will be slightly worse. While you might have some success you won't take the big share. You must find a weakness in the original idea or the execution or the location or anything else. If you have a solid point where you can improve you have a chance. Don't be afraid of stealing ideas and making them better.


That's exactly the point of my post!


I can't help thinking of this wonderful talk about how to win the lottery: https://youtu.be/l_F9jxsfGCw


That's actually a pretty great video. The tldw version: advice on how to buy more lottery tickets is useful; advice on how to win the lottery is not.


I really like this thinking, its more independent and logical. Just because the idea worked for one, doesn't mean its gonna work for all. We need to create our own paths to freedom.


BS feels heavy handed, but I sense her/his point. Paraphrasing:

Stop following and look for your own magic.

Yeah. Pleny of cookie-cutter knock off wannabe brands and products would benefit from such thoughts.


My marriage advice is always this: "Don't listen to any marriage advice except mine". I suppose if I wrote a longer version it would sound like this article.


But can you imagine starting a marriage never having heard any advice or even seen a marriage in person? You were raised by wolves, but one day you came to the village, met a girl, and now a guy in a robe says you're married. How much trial and error will it take to become a good husband? You should go acquire some wisdom by asking people.

Many startup founders are basically in that situation for a dozen kinds of relationships. They've never hired, never closed a sale, never rented an office, never tried to collect a late payment, never fired someone, never raised VC money, never hired a marketing firm... Those things aren't rocket science and you can certainly learn to do any of them, but noob mistakes are expensive and you don't have a big cushion of time and money. So it's good to have someone to talk your plans over with first.

A lot of advice does come down to "That's a standard problem, and here's a standard way to solve it that works fine." That's fundamentally conservative advice, but startups seem to do best if they innovate only on the few things that make them unique and just do the standard thing for everything else.


"Marry my wife. It worked for me!"


"To what do you attribute your success?"

"We listened to the people who gave us advice."

"We didn't listen to the naysayers."

One hears stories of both types.


Much of the empirical work published in academic journals on startups is not ex post.


Make something people want + Do something you love = All you need to know. Enjoy.


Kind of ironic that this is advice for startups.


History is written by the victors.




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