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Startups in stealth mode need one piece of advice. (humbledmba.com)
288 points by jaf12duke on Feb 15, 2011 | hide | past | favorite | 64 comments

I can't keep count of the number of people who I talk to on a daily basis online or in person, at networking events, etc... that acts as if their idea is so revolutionary that they must keep it to themselves. This is utter bullshit.

In all the time I've been an entrepreneur (over a decade), I've built many successful businesses, sold my companies, etc.. I've never had the problem of anyone stealing my idea except on one incident. And that guy didn't even understand the nature of the business fully or where the vision ended up and gave up after a few months.

Let's be clear about a few things. Your company WILL pivot whether in a small way or big way. Your overall mission and vision WILL change. Anyone that thinks they got everything figured out from day one deserves to be called a retard. Not telling people about your idea has more negative consequences than sharing it with the world.

I can't keep track of the number of times I've received valuable insights, advice, help, connections, etc etc... telling people (including strangers) about what I'm doing. The feedback and help I received in return help me make valuable pivots as needed. Thinking you should hide your idea means you should really look closely in the mirror and reevaluate yourself.

While I believe there are some things you should keep secret, the general idea itself is not one of them.

Side note: Those who use Facebook as an example, please be realistic. Had the Winklevoss Twin and their friend continue, do you realistically believe Facebook (by any other name) would be where it is today? Most of the later innovation that kept Facebook the leader it is today is base on the current Facebook team, not some concept that the idea originated from.

I'd go even further and suggest that the current plaintiffs have proven they could not have made FB. Their focus on "getting credit" signals that they wouldn't have been as focused as Zuck on "making something cool".

From the posts on their engineering blog, it sounds like (esp in the early days) that was clearly the focus -- make something cool, get people to play with it.

"I can't keep count of the number of people who I talk to on a daily basis online or in person, at networking events, etc... that acts as if their idea is so revolutionary that they must keep it to themselves. This is utter bullshit."

Not always!

It can depend heavily on what is meant by "an idea".

Here is an extreme example: 'Idea' (A) is a pill, taken once, and safe, that will cure any cancer right away. 'Idea' (B) is actually how to make such a pill.

For (A), there's little or no reason to keep it secret. For (B) there are some tens of billions of rectangular green reasons to keep it quite secret until some good lawyers have done good things with patents.

Idea (A) is just a broad concept of a new product. Right: Mostly there is no good reason to keep one of those secret.

But idea (B) is much different.

I confess: I never thought of anything like (A) as an 'idea' at all.

An idea like (A) is some first cut description of what to do and commonly easy to think of. An idea like (B) is how to do (A). If (A) would be valuable but is difficult to do and if (B) does it, then (B) has the main importance.

In my career, I've only considered cases of (B) to be an 'idea'. Such ideas do need to be kept secret, say, as in Top Secret in the US DoD, secret before have protection from the USPTO, or trade secret.

If it is obvious and easy to do (A), then I would conclude that there was no technological advantage, no technological barrier to entry, and would would have to look for a special reason to try.

I'm interested only in an (A) when no one else knows how to do it very well and I figured out (B) that does do it well along with the other usual criteria -- many people are eager for the solution and ready to pay; can deliver the solution for much less than can get paid for it; etc.

I confess I'm shocked that people here on HN neglect the role of (B).

I was even more shocked when KP's J. Doerr stated "Ideas are easy; execution is everything" and "ideas are plentiful". True for (A), definitely NOT for (B). If have (B) for that cancer pill, I can assure Doerr that the idea was everything and execution will be entirely routine.

For three years I worked at Bug Labs (open source hardware company). We not only told everyone what we did, we posted the source code and the blueprints online. Nobody ever stole our ideas.

Think about that, people won't even steal your ideas if you give them the plans. It would make a lot of sense for someone else to just come along and build our hardware and sell our software without paying for 15 people doing development and engineering, but nobody did that.

Sure, we kept bits of information private like our negotiations with future partners or plans for the next version, but it really didn't matter that much.

Now I work in the defense industry. What we do on a daily basis is a thousand times more secret than your "stealth" startup and we can still talk about it in more general terms than most "stealth" entrepreneurs talk about their project.

So I call bullshit on the idea that anyone needs to keep a business idea stealthy, unless you are talking the nitty gritty details of the implementation's secret sauce, you will gain far more from sharing and making connections/partnerships than you will from secrecy.

If the BugLabs product started selling then competitors would come out of the woodwork.

If Apple open soured the iTouch do you think Chinese companies would

But by that point they are on to version 2, which is way better and which they can be somewhat more secretive about, if they so choose.

While execution > idea most of the time, I think it's become a little too accepted, for its own good. Ideas are worthless when they're another spin on a web 2.0 site, or rather a spin on something that already exists. From the link:

Oh, and what was the company? It was yet another Web 2.0 flavor of a question-and-answer, poll-your-friends site with a distant revenue model and no user acquisition strategy. Ran if for two years before we shut it down with almost no revenue achieved. Shocking, I know.

Going stealth is more worth it if your idea isn't in the same universe as ye old web 2.0 social network/web analysis/etc. tool. Hint: these aren't real businesses. This is especially true if your idea is simple to implement technically, but not necessarily simple to implement on a whole.

And the idea that "someone is already doing it" is far from a truth. There are plenty of HUGE problems that no one is working to solve - most likely because they aren't problems with technical solutions. The notion that "ideas are worthless" is really only valid if the idea isn't all that original in the first place.

I was thinking similar things all the way through the article.

We have a start-up in the works. The technical side is fairly easy, and many people could do it. Our value is built on the non-technical stuff, which relies on a network of people and resources that have taken years to develop. We've also done our homework, discreetly, so we really aren't worried about having to pivot dramatically on day one or about not being able to handle running costs for long enough to establish the product.

The biggest risk in our business plan is that we are relying to some extent on time over money, because we're self-funded. We know of no-one making a similar product to us, but there are businesses making other kinds of products that would naturally compete for the same money from the same customers, which makes us mutual threats. If one of them heard what we were planning, they could throw way more money than we currently have into moving sideways, and potentially sabotage our network before we reach critical mass, even if they didn't then establish an equivalent product themselves.

Given the nature of the markets involved, there is a very real prospect of that happening. If you were in our position, would you not keep things quiet until that window had passed?

No, I wouldn't. If your network of people and resources is your key competitive advantage, then you want to maximize it -- and you can do this a lot more effectively if you're discussing things publicly. Alternatively if your network is so easily sabotaged, well, that'll happen in any case after you launch, so better to work through the issues now.

> If your network of people and resources is your key competitive advantage, then you want to maximize it -- and you can do this a lot more effectively if you're discussing things publicly.

Why? We are building our network as fast as we are able, much of it via direct personal introductions within a relatively exclusive club. I don't see how letting other people outside that club know what we are doing gains us anything useful.

Also, if there are lterally only a few people in the world who can provide what you need and you can get most or all of them to sign up to your idea, your network is unassailable. If someone who has contacts with the network from other dealings gets in there first, you're in trouble. So it doesn't follow that a network that is highly vulnerable now would still be so after launch.

if those businesses see values in "moving sideways", and in the process sabotaging your network, wouldn't they have taken your clients anyway, even without the benefit of breaking your company?

if they don't see the value in it, even if they know what you are doing, isn't it unlikely that they would waste money just to crush a would-be competitor?

Unless you are saying what your company is doing is so creative and valuable but yet no one has thought of it before. But IMO a main point of the article is that this is highly unlikely, and even if it is the case, your competitors aren't seeing the value in it, just like how google was in the plain sight of yahoo for so many years. i m not saying you should actively let them know what you are doing, but it probably wouldn't be a big deal even if they get wind of it.

I think perhaps you're seeing a false dichotomy here.

In a nutshell, we are new and high-tech, our competitors are established and low-tech, and we are aiming to solve essentially the same problem for mostly the same people in an easier way.

Perhaps a good analogy would be Netflix. They saw the potential for emerging technologies to disrupt an existing market and built a successful business around doing so, all but killing the old video rental store model in the process. What would have happened if, before Netflix had become established, one of the major rental store chains or perhaps a coalition of big movie studios had realised the potential of those new distribution models and the danger to the existing happy cash generators, and consequently thrown $100,000,000 into getting their own service off the ground? Whether or not the new distribution models ultimately took off, it's a good bet that the world would be a little less red today.

Now, we're building a different product and we're in a much smaller niche market, but the basic risk is the same: if an established dinosaur knew about the idea and realised the impact it could have on their happy cash generators, then it would make sense for them to move sideways and block us to retain their customer base, even if they would otherwise have no need to adapt their existing offering. They almost certainly don't know how to do that today, but they have so much more money than us that they could hire a dozen consultants until they found someone who did. Then they could afford to hire a team ten times our size to beat us to market, while using leverage from their existing network to make our lives difficult until our money ran out.

There's an excellent book that I'm reading called "The innovator's dilemma" which seems relevant to your case. The difficulty with established competitors is that their middle management gets in the way--that is, if you're charging less and offering less, then they won't bother competing against you because they're focused on up-market customers.

I'm in a very similar situation: building a startup that's not technically complicated and has no real competitors (only substitutes).

I'm trying to stay semi-stealth; avoiding talking about it to startup/techies/online but still asking friends, family, and potential customers.

That question is impossible to answer. We don't know what you are trying to do. We can't know what your position actually is.

I've told you that:

1. the biggest risk we have identified in our business plan is being squished by a sideways-moving competitor that has decided to invade the part of the market we are attempting to take;

2. they are only going to be able to do this for a certain period of time before we hit critical mass and can defend ourselves;

3. by implication, we do not believe that they will do this without knowledge of both our vision and the fact that we are working on it right now; and

4. we believe there is a real danger that they would take this action to defend themselves if they could.

Perhaps I wasn't clear, but from our point of view, that is all the justification we need to keep things under wraps for now.

I work for a 'stealth' startup.

The idea is just a very small part of the reason why we are in stealth. There are some other serious reasons why we don't want to go public right now. Unfortunately I can only talk about the stuff related to the idea itself.

Our idea is boring and not revolutionary. We already have some competitors in the vertical and while there is no point in trying to hide the actual idea, there are differences in the way we implement stuff that can get us an advantage over the competition.

    >> Execution is more important than the idea
I like this slogan as much as the next guy, but its implications may not be what you think they are. What if execution is (mostly) a function of money you have? What if someone with double the money we have can execute in half the time? What if they can copy your "execution" just because they can iterate faster since they have enough money in the bank?

    >> The most likely cause of failure is your incompetence,
       not losing to the competition.
But losing to competition is also a likely outcome. Isn't it?

    >> First mover advantage is just silliness
We've got a little funding from VCs. Some of our competitors are more than well funded. Investors are looking for proven entrepreneurs to enter this emerging market and they will get well funded too. There is a serious first mover advantage to be made especially when VCs are ready to drain money just to get the first mover advantage.

    >> You desperately need real feedback
This is orthogonal to going public with your idea.

Also, most people in our team are very good and have proven track records. If we are not in stealth mode, it will just draw unwanted attention. We don't want that at this point.

Again, as I said this is just part of the reasons why we are in stealth. Almost all of our competetors are public with the idea, and of course we don't know about any stealth competitors :)

This article assumes that all startups go into stealth mode just because of the fear of someone copying the idea. While this may be the case for many startups, this is not true at least in our case. [Our biggest reasons for being in stealth are people related. Sorry cannot expand on that]

So, you have some obscure reason for being in stealth mode, but can't tell us more than that, other than that the original poster is completely wrong in your case. You show this by giving completely generic arguments to one line sentences from his post.

In my opinion you are not really contributing to the discussion. Just stop.

If 2x the money wins the race, then get 2x the money. A good idea has a case that can be made for it and, at least, an expectation of the value you will create. That is what you (and others) invest against. There shouldn't be such thing as "they have more money" for an idea that you expect to generate well more than that investment. There is only "they were willing or able to get more money". This isn't trivial - believing in the projections and selling your passion and networking to find investors are all really hard.

Losing to the competition is a possible outcome, but not necessarily the "likely outcome". Anyway, the way to manage that is still to execute better. Competition helps teams that need competition to rise to the occasion, but rising to the occasion is what is needed. Without it, losing is the likely outcome whether there was competition or not.

Seems like the argument for 1st mover advantage is: first mover = funding = success rather than first mover = success. sure, I do believe that funding can lead to success -- any resource advantage leads to success. Yet, I do think first mover advantage has some more important benefits. Things like taking most of the market out of the gate (why would we need a second brown fizzy sugar water?) or defining the landscape (oh, a good carfax score is what tells you a used car is good). I think certain circumstances make first movers better and others make 2nd, 3rd or later-movers better, but an absolute is pretty hard to prove.

I would say you need customer feedback or maybe expert feedback. Some sort of feedback always helps. But, so does vision. However you get to a good product is how you need to get to a good product. You just need to know and do that. The reason feedback - specifically from actual customers - is usually chosen is because it is more on the science side than the art side, but I surely can't knock those people and teams that can deliver product excellence due to vision, luck or art.

Re: "What if someone with double the money we have can execute in half the time?"

See Henry Ford working, by himself, after work, late into the night, for years and years, on his prototype car, while others with more money were doing the same thing. His quote on the subject, "no amount of finance will cure mismanagement". His friends at General Electric said he was wasting his time on the gas combustion engine because the world was going electric.

The story of the v-8 engine is a bit different.

From "Think and Grow Rich"...

Early in the age of the automobile, Ford decided to produce his now famous V-8 motor. He chose to build an engine with the entire eight cylinders cast in one block, and instructed his engineers to produce a design for the engine. The design was put on paper, but the engineers agreed, every one of them, that it was simply impossible to cast an eight-cylinder gas engine block in one piece.

Ford said, “Produce it anyway.”

“But,” they replied, “it’s impossible!”

“Go ahead,” Ford commanded, “and stay on the job until you succeed no matter how much time is required.”

Similar example; the Wright brothers refused funding from the aviation financiers at the time, funded their own work and solved the problem of powered flight in a much shorter time than others had been fruitlessly working on it.

I assume you have some new take on what you're doing - otherwise you wouldn't be doing it. The main takeaway of the post is that you almost always need feedback to execute new approaches properly.

It sounds like you're assuming that your execution will be flawless, even something to be copied by competitors, but how can you know without testing it on the customer? If you're in a market like pharmaceuticals, where all user testing can be done in a lab, execution in a bubble makes sense, but if your startup is a web product it sounds like hubris.

For reference, Steve Blank has a great set of posts about needs of different types of startups: http://bit.ly/if6Okn

The ideas I have for products right now are things I would use. Unscatter.com will be a unified search and social client portal. Fanatastic.com will be a sports community site encouraging users to share and discuss latest sports news. I have an idea for a service, rather than product review site I am kicking around with a friend. Lastly I want to make a site people can make books filled with their personal wisdom to share with their kids.

The worst thing that could happen is someone steal those ideas and execute them so well that I use it instead of building my own. I don't think entrepeneurism is about chasing the dollar, it's about building something worthwhile. That's why I dumped stealth mode a long time ago.

In response to fanatastic: I stream a lot of soccer games, and whenever something big happens, my first instinct is to see what people are saying about it.

Google+twitter give live updates, but it's not very conversational.

Reddit is conversational, but the format isn't quite right: it's hard to follow where new conversations are happening. This is currently my go-to.

Justin.tv has chat during a stream (almost ideal!), but only until it gets shut down for copyright infringement.

I don't know exactly what I want, but there's certainly some opportunity here.

That's pretty similar to what I was thinking for fanatastic. It's on hold right now, the site that's up is probably 2 years old now with no fresh data.. anyway the idea is users would be able to sign up and pick their favorite teams. They would then have a customized page of all the news, twitter and facebook streams for their teams.

I'd then allow digg style voting up of stories in order to bubble things up to the top page of the site. The social aspect comes in when the news stories are tagged by teams. I'm a big NFL guy and a Redskins fans, well a story about a Redskins/Cowboys game would show up on both Cowboys and Redskins fans pages. That could spark entertaining dialogue, if for example you've ever tailgated at a game and seen how things go there.

The challenges are the news gathering initially, once it matures users may feed the site news themselves. Also moderation will be a big issue. It will probably be the factor that causes the site to succeed or fail.

Marketing would have to be a bit more old fashioned. I'd go after people at the games, they're the ones who spend so much money to see their teams live, get them hooked and the others will follow. Big signs, free t-shirts/hats, even a free stand passing out water bottles to people walking towards the stadium would be great in a lot of cities.

Out of all my ideas I think this is the one I think would be the most fun to work on, from development to marketing. But I'm a big sports fan.

And this is a great example of the advantages of not being stealthy: good feedback and a potential early user.

Depends on what you mean by "stealth".

If stealth means spending over a year and a boatload of cash developing a product without ever getting any feedback from any potential customers, then yeah, that's likely a dead end.

If stealth, however, means meeting quietly with a small (but representative) group of potential customers while you work the kinks out of your project before launch, then I think that is a smart strategy. There's nothing wrong with giving yourself as much of a head start as possible.

As a general rule, I don't talk about my ideas/project with other developers. I especially don't discuss it with industry people who may be my future competitors. What I might discuss are things like the overarching problem I'm attempting to solve. I may even describe some of the very basic mechanisms, or ask questions that hint at the philosophy behind my approach.

I know HN can be fiercely against the notion that ideas matter at all, but most successful businesses have their "secret sauce" and it's not smart to just give it away before you're primed to leverage it to your benefit. I mean, front page today is an article about Coke's secret recipe; sometimes, the what really does matter as much as the how.

I talk about my startup ideas all the time... in person. I haven't posted them online. The reason is that the former benefits me, and the latter doesn't. The feedback I might get from, say, a hacker news comment just isn't as good as what I hear from people I talk to.

So there really is a pretty big difference in what is meant by "stealth mode". Putting up a landing page to gather emails to hear more when you're ready, and only talking in depth about the product in person to help make it better, isn't so much as stealth mode as heads-down-mode.

Not telling your friends because of fear of your idea being stolen is really quite dumb. Not just because they wont steal your idea, but more importantly they might make your product better!

Very good points all around.

One thing I'd add: IP- and idea-defense isn't always the strategy behind the stealth tactic. Oftentimes, companies are stealthy just to generate hype. It's a marketing ploy, plain and simple, usually correlated with an invite-three-friends beta a few weeks after some tantalizing tidbits about the company are "revealed" on TechCrunch.

That said, marketing gimmicry like this often makes me wonder what the company's trying to hide. A half-baked product? Timing delays? A lack of total confidence in the product's superiority to all alternatives on the market, or about to hit the market? It certainly raises more concern than interest, at least in this user.

When I think a company is limiting invites to generate buzz, it totally turns me off.

OTOH, when I can tell it's because they don't want to overload their systems, or are still clearly building something, I don't mind. It's really just that a "beta" is now a marketing ploy; my paragraph above is really discussing what used to be an "alpha".

So to me, beta = marketing, I hate it. Alpha = testing, I love it. I'm not very good at telling them apart, tho, b/c they both call themselves beta (damn you gmail!)

I'm a fan of semi stealth, your happy to talk about the idea, you want feedback from engaged users who will be your primary market, what you don't want is to plaster your startup all over the internet without something awesome to show people.

You want to be able to capitalize on limited attention when you can grab the spotlight, not when you have a landing page or a buggy product with no advantage over competitors.

Hell, feedback is constantly helping me shape my project, usually (I hope) for the better.

It is not who builds the best product, it is who markets it the best, who gets the publicity, who convinces the world that their version of the thing is the best.

You could build the best product on Earth but if only a handful of people know about it while a few million know about the second-best product, it isn't hard to guess which one wins.

While I agree with most of the article, I also think it's important who you choose to get advice from. Some people just don't get it. They'll discourage you without giving real constructive advice. Though I've never met PG in person, it seems like that's PG gift - the ability to give good feedback and direction on a product. But not everybody has that gift. My preferred path is to talk with tons of people to brainstorm thoughts that could lead to real product. Once you got a good product idea, brainstorm and start building it with a team. Then, get some good advice. you don't need to go totally public, but you need some good advice. Keep iterating. There will be a time where you go public and get feedback from lots more people. Also, I think it depends on the product. Sometimes you'll incubate a bit longer, sometimes shorter. Sometimes you'll need public feedback quicker, sometimes later. Early advice and feedback doesn't always means advice/feedback from everybody you meet.

Impossible to apply general advice like this to every situation. As usual, reality is "it depends"

Here's a legitimate reason to keep your product or service stealth: when you're in customer development mode and you have plenty of customers to represent your possible target markets and therefore plenty of feedback, and therefore more feedback and exposure would be redundant and likely mean disappointed customers. Why burn through a lot of potential customers when you're not ready presenting them with a bad first time impression.

I totally agree with his point that stealth mode is a pointless waste of time.

But some of his reasons only apply if what you're after is to be "The [Well Known Digital Property] Guy", ala Mark "The Facebook Guy!" Zuckerberg. For instance, if all you want is to get an independant company going selling enough units to building companies to help them manage their inventory of nails, so you don't have to work for someone else, having a small market is fine.

Secrecy is just as unimportant, but for different reasons.

Great post.

I agree that execution is everything and an idea without a proper execution is worthless. So any smart ass MBA's with "game-changing ideas" but absolutely no idea about what it takes to actually build something from nothing need to take a long hard look at themselves and stop being bullshitters.

However, the title of the post is not 100% accurate as the term "stealth mode" does not specifically relate to not launching, protecting a non-existant "IP" or being unwilling to share your ideas.

Launching a product in "stealth mode" (as in avoiding significant public exposure and media coverage during the first stages of the product's life) can in some cases be a good marketing strategy and I can see why some entrepreneurs would choose to launch to a smaller group of customers and test their ideas and implementations before contacting Techcrunch, going onto Mixergy or wasting time meeting with VC's who want a piece of the action before anyone knows what the action is.

Never doing soomething is rarely a sound strategy.

Just like all other aspects of business, there can be solid reasoning behind staying stealth mode. I'll agree that this USUALLY isnt the case for most people who go stealth, but to say that it is ALWAYS poor strategy is simplistic and trivializes the idea of having any business strategy pre-launch.

Here are four startup ideas:

a better search algorithm for the semantic web a voice conferencing system that allows multiple concurrent discussions a community for software developers to share revenue a home device that offers multi-room MP3 streaming Now, be honest. How many of these ideas did you think were so insanely great that you want to drop your own plans and jump on it?


Believe it or not, each of these ideas has someone today, obsessing full-time to make it a reality.

(source http://blog.fairsoftware.net/2009/03/11/the-great-startup-id... )

> community for software developers to share revenue

is kindof tempting to do, though

I think when deciding the go stealth or not you should decide what you have more confidence in: you or your idea. In general be positive and have confidence in yourself and your team. You know that your first idea won't be your best idea. If you find there's no competition and you are all alone your idea probably doesn't work and you will find something better eventually. If you meet competition, you just validated the market anyways and grew the whole pie. At that point its about believing that your team can out execute the competition.

I believe there is a difference between being in "stealth" mode and having people sign NDAs.

I have a startup I call in stealth mode not because we do not get feedback from users or have advisors and investors sign NDAs, but because we want to grow on our own terms. We want to get direct feedback from our target market with out opening the flood gates where noise enters into the equation.

I completely agree with your statement about NDAs are a load of shit, but stealth as something else is not always a bad thing.

The first milestone in the success of a startup is getting the product out the door and the second being getting revenue. Stealth mode and empty signup/landing pages are just there to create hype and buzz. If you ask anyone in the valley what matters, it's execution.

So let's leave all these empty promises and expectations at the door and bring transparency and openness to the table. That's where startups get people, like users and investors, listening and contributing in a big, big way.

While everything posted in the first tier of comments is true, so-called stealth mode is not a inherently bad idea.

It just means you keep some things to yourself for a while.

niyazpk demonstrates an actual use of the word stealth: you've got an advantage that would be immediately obvious to someone doing the same crap as you. you don't have to do anything special to draw attention to how easy it is to do crap.

"The most likely cause of failure is your incompetence, not losing to the competition"

It is amazing how far you can get by not screwing things up too badly.

Whilst you keep pedalling and don't do any truly daft - competitors you once feared find novel and surprising ways of eliminating themselves.

Stealth mode is no fun. Though it may make sense when you have a strategic partnership that requires silence until release. Of course, that's a very different kind of startup than most of the "my web 2.0 of the day" ventures often touting stealth mode.

"This is a hard lesson if you're not the one that will do the building, because it means that your contribution is not as valuable as you thought."

For this one quote alone I'd love to meet the author and buy them a beer.

I now share my ideas openly. If I am not doing it at the moment, someone else is. If I am doing it, well, I want people to know about it.

If I am not doing it at the moment, someone else is.

You're assuming that # of people with an amazing idea = # of people with the tech skills/knowledge to make it happen.

Don't forget that the vast majority of businesspeople (very, very successful business people) are significantly less technically-inclined than a HN-reader.

And you're assuming my ideas are amazing. ;)

Point taken. But, I like to give one thing my full attention, so that goes into the decision too.

And the vast majority of technical people (very, very clever technical people) are useless in terms of execution.

Gee, it must be fun to call entrepreneurs silly.

My view is that the article is 99 44/100%, fresh, soft, still steaming, and actually destructive, BS.

The whole post is based on what is apparently deliberately both an obscure and even ambiguous use of the word 'idea'. So, with such deliberate obscurity and ambiguity, all he has is a way to insult entrepreneurs so that all he has is that steaming pile.


So, at the beginning of his post, to him an 'idea' is something worth protecting as intellectual property.

There actually are ideas worth protecting: Sometimes they are protected by Top Secret in the US DoD, via the USPTO, and by trade secret law. In research, the first person with a really good idea can win a valuable prize, e.g., a Nobel. Flatly, protecting ideas is not all just foolishness.

Then during his post he bends his idea to mean just some general description from 100,000 feet up that would need no protection and likely could not get any from, say, the USPTO.

So, by the end of his post, to him an 'idea' is something as vague as, say,

Facebook but for dog lovers, "with nearly all romantic angle", and, to keep quality up, need an invitation to get in.

Yes, for such an 'idea', to quote J. Doerr at KP, "execution is everything" and for a good reason: The idea is trivial; anyone could think up such ideas at a rate of one a minute for most of an hour.

Now we come to the real weakness in the author: He's missing the standard, old 'paradigm' of an entrepreneur with a good 'idea':

Start with a problem that millions, maybe hundreds of millions, of people have and would very much like to have solved or at least solved much better than at present.

Since some millions of people have the problem, the 'idea' of solving the problem is obvious. In that case, just why is the problem not solved?

Simple: No one knows how to solve it.

The classic example is one pill taken once to cure any cancer. And, that's not the 'idea'. Instead the 'idea' would be how to make the pill, and that would need protection. In terms of entrepreneurship, the pill is the 'secret sauce', and the word 'secret' is well chosen.

So, the author is deliberately confusing a trivial idea, one pill to cure cancer, with a difficult idea, how to make such a pill. Silly author with a silly post.

Q. But your example is from biomedical. The article and HN are concerned with software.

A. Oh, poor one: There are plenty of big problems that can be solved by software and a good idea where the idea is quite difficult to construct but much better than anything else available or obvious.

So, the big problem of the author is that he does not understand the possibility of such ideas.

So, he has

1.) Execution is more important than the idea

For a trivial idea, yes. However, if the idea was actually how to make a one pill cure for any cancer, then the idea was all that was important and, believe me, "execution" will be only very routine.

2.) Someone else has the exact same idea.

Nonsense. Absolutely 100% total nonsense. I've published papers in the peer-reviewed research literature where the standard requirement is "new, correct, and significant". Note the "new". And I got a Ph.D. from a good research university, and there the main requirement was "an original contribution to knowledge worthy of publication". Note the "original".

3.) Totally unique ideas generally don't make it

Nonsense. What he means is, say, a new product, of a very different kind in all respects, e.g., one that requires customers to do something quite new, for a new need for new customers in a new market generally doesn't make it. Right.

But a one pill cure for cancer, which would be "totally unique", would have to fight customers off with rings of guards, literally.

4.) The most likely cause of failure is your incompetence, not losing to the competition

Yup, insult the entrepreneur again.

5.) You desperately need real feedback

Yup, insult the entrepreneur again.

6.) First mover advantage is just silliness

Nonsense: A first mover advantage is just that, an "advantage" and not "silliness".

Net, the author wants to insult entrepreneurs and doesn't understand what a really good 'idea' actually is.

Totally unique ideas don't make it. You can't build a business on being ten years ahead of the market - you'll have a 0.0001% response rate. To be a successful entrepreneur, you have to be fifteen minutes ahead of the market - and that means that, yes, there are other people with ideas very, very close to yours who are working on it at the same time.

(Edit as afterthought: sometimes you can be way ahead of people and still make it big, and these quantum leaps make history. It's just that it's poor strategy to assume you're going to win that lottery - and the people who aren't actually ready to start a startup tend to underestimate the length of the odds. Hell, we all do, it's what makes H. sapiens so much fun to watch.)

The larger point here is that in starting a startup, you're not really working on an idea so much you're working on assembling a team of people to implement the idea, learning how to build a business, how to manage customers, marketing and sales, technical support - all that stuff. The idea is just the irritant that gets the pearl going.

Your "ten years ahead of the market" is not very well defined or meaningful. If a business idea is poor, then there have to be better objections than that. If that's the only objection, then it is not very serious.

There can be many reasons a business can fail; being "ten years ahead of the market" is not a meaningful description of any of them.

Again, for an extreme scenario, if you see how to make a pill so that that one pill taken once will safely cure any cancer, then you will have a very successful business. And, with irony, at this point one might guess that the pill was "50 years ahead" of the state of the art, the rest of medical science, or something or other, maybe your "market", and all that will matter not at all. Instead you will literally have to hire guards to keep the desperate customers from knocking down your door.

"Ahead of the market" is just next to irrelevant.

The challenge in the one pill is just understanding how to make it. That challenge is similar for many products that would obviously be very valuable to have. The reason we don't have the products is that no one has the understanding to know how to make the product. As soon as someone does understand how to make the product, then they will have a successful business and 'behind, equal, or ahead of the market' will be irrelevant.

For your first paragraph, I addressed essentially exactly your content in my:

"3.) Totally unique ideas generally don't make it

Nonsense. What he means is, say, a new product, of a very different kind in all respects, e.g., one that requires customers to do something quite new, for a new need for new customers in a new market generally doesn't make it. Right.

But a one pill cure for cancer, which would be 'totally unique', would have to fight customers off with rings of guards, literally."

That a product is "totally unique" is not by itself a handicap. Business history is awash in very successful products that were "totally unique". Home lighting? People used candles made from 'tallow', that is, fat. Next came burning whale oil, then gas lights burning a crude natural gas made from coal, then kerosene made from newly discovered crude oil, then incandescent electric lights, then fluorescent electric lights, and now light emitting diodes. From the first candle to the present, that each advance was "totally unique" was not a handicap. Instead, each advance was better and, thus, warmly welcomed.

Electric power for a house? Suppose in 1900 you had a really nice house but without electric power. Now what? It will be a PAIN to run the wires. If the wires are all behind the walls, then there is a lot of carpentry to do. If the wires are, say, in tubes or some such but visible, then you have just made a mess out of possibly some gorgeous construction. Home electric power was "totally unique", but people eagerly did it.

In 1950, people who traveled across the Atlantic used steamships. By 1970, there were nearly no such steamships. Why? Boeing made the 707 that was fast, smooth, and quiet and got people across in a few hours instead of a few days. The 707 was "totally unique" and accepted right away. So was the Concorde, for those who could pay for it.

The first telegraphs? Definitely "totally unique", and was a rapidly growing business right away.

TV? Definitely "totally unique", and soon nearly everyone had to have one, and moderately wealthy people had several. Early on the programming was suckage; the electronics was unreliable; and the signal quality was awful; still people bought them.

A large fraction of all the materials now used in small commercial building construction was not even on the market 30 years ago. But each time a good, new "totally unique" product came out, it made good progress. So, want some long floor joists? Want to look for a 20 foot long 2 x 12? F'get about. Instead you will likely have to use a fake wooden I-beam where the interior is plywood and the top and bottom are glued from thin strips of wood. For exterior sheathing? Used to use diagonal 1 x 6 or some such. Then used plywood. Now use 'oriented strand particle board' glued up from wood scraps.

Insulation? Now commonly polyurethane foam installed with a special spray gun when the outer sheathing is on but the inner walls are not. "Totally unique" product.

A microwave oven? "Totally unique" and caught on right away.

FedEx overnight small package delivery? When it came out, it was "totally unique" but caught on quickly.

The US does a census each 10 years. By about 1880 or so, it was taking longer than 10 years to process the census data. So the Census Bureau worked with Herman Hollerith who, roughly, borrowed from Jacquard's special loom ("totally unique") and made his "totally unique" punched card equipment; it was used in the next census and was much faster. That the solution was "totally unique" didn't bother the 19th century census people at all.

During WWII, the main means of numerical calculations was just mechanical calculators. Looking for something better, von Neumann and others built some "totally unique" electronic digital computers. Caught on right away.

Daisy wheel printers? "Totally unique" and caught on right away. I still have one connected to a serial port at 1200 bps with XON/XOFF and use it for typing addresses on envelopes.

The dot matrix printer, the laser printer, the ink jet printer? "Totally unique" and caught on right away.

In the late 1940s, Bell Labs finally was successful on what they had wanted before WWII -- a solid state electronic amplifier to replace hot, unreliable vacuum tubes. It was called the 'transistor' and was "totally unique" and was very welcome right away.

Just what is it you find so difficult to accept about a good, new solution for a serious problem? Somehow you believe that being new is a serious obstacle? You believe that can take some average of what is in the market and then conclude that anything much different has a handicap?

Again, the reasons for failure are much more solid than some comparison with some chronology of some average of 'the market', which really is essentially irrelevant.

One of the major opportunities for entrepreneurs is just to find such good solutions. For business success, it is in some ways easier if the target customers already know that they want the problem solved.

Still sometimes entrepreneurs also find very successful products to solve problems people didn't even realize they had or wanted solved: Apparently examples include iPhone, Twitter, and Facebook.

Umm actually the guys who coined the term "first mover advantage" actually wrote a paper explaining why they were wrong. They published it in the harvard business review so u should be able to find it via google.

Google for "Rethinking the First-Mover Advantage"

"First mover advantage" is still an 'advantage'. E.g., Hughes Tool. Xerox and their photocopier that they made for about $1500 and sold for about $29,000. FedEx had a nice first mover advantage: They were flying under CAB regulation Part 91b for unscheduled air taxi, intended for mom and pop air charter operations. So, their planes had to have max gross takeoff weight of 25,000 pounds. With an exception they got 28,660 and could fly the Dassault Fan Jet Falcon DA-20 and quickly bought about all there were. Bigger planes? Illegal for them to operate trucks. That first mover advantage was key for their success. Then Carter appointed Kahn to the CAB, and he killed it. Then FedEx and everyone else, e.g., UPS, could both fly large airplanes and operate trucks. The guy who comes second or later might win, but being first can still be one heck of an advantage.

You don't win Nobel prizes for ideas, you earn them for doing great science, and that takes a lot of time and hard work.

No, not always or really: In research, the 'idea', if it is correct, really is the core of the work. All it takes to win the Abel prize and more is a good idea for answering the question P versus NP. The only difficulty is the idea. Then have to type in the theorems and proofs, and that is likely less than 100 pages, at maybe five hours a page, and not so difficult.

2.) Someone else has the exact same idea. Nonsense. Absolutely 100% total nonsense. I've published papers in the peer-reviewed research literature where the standard requirement is "new, correct, and significant". Note the "new". And I got a Ph.D. from a good research university, and there the main requirement was "an original contribution to knowledge worthy of publication". Note the "original".

We're talking about business ideas, not new research. Your new discoveries didn't grow up to be successful businesses. They're too young for that.

They didn't grow to be successful businesses, but that they are too young is not the reason. One of the ideas and papers was, and remains, a candidate for a successful, new business, but it would take a little more cash than I have to get it going: There were interested customers. I gave a nice presentation at one. But the target customers would be only the high end server farms and networks, and developing and selling to them are expensive, even if the software from the core research is done, and it mostly is.

My current project is based on my original rsearch; we will see in coming months if I can build into a successful business. About three dozen VCs are eager to see a prototype. For good or bad, I didn't write a prototype and, instead, wrote production quality code. At this point, I need to develop only a few more simple Web pages and the VCs will be able to see it. And the original research is just crucial for the project and has high promise of a high technological barrier to entry.

"No deal, amateur."

Yeah, startups in stealth mode suck. Just look at Asana.


Great article, I just friended & messaged you on FB

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