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Can guys in coffeeshops compete with celebrity entrepreneurs? (remarkedly.com)
133 points by krausejj on Feb 18, 2012 | hide | past | web | favorite | 55 comments

You are describing a common gripe that young entrepreneurs have - unfair advantage (in this case celebrity status which is especially helpful for social software, but it could be a number of other things like access to capital, team, proprietary technology, etc.). And I understand - I really do, because I have been there.

But the key thing to realize is that everyone has been there. Caterina did not start as a celebrity - she created a useful product and built her reputation, which she is now leveraging. I bet that when she was starting she was looking at articles of experienced entrepreneurs wondering the same thing that you express in your blog.

And that's what entrepreneurship is all about - finding your angle, your opportunity to create an unfair advantage. It is not easy and there certainly is no standard "here's how you do it" answer - but I hope you don't fall into the trap of thinking that as a new entrepreneur there's nothing you can do to win against more experienced folks. That's the very definition of entrepreneurship - disrupting the status quo by creating something that satisfies a previously unrealized core need.

good point, thanks

I think the tendency on HN is going to be to pile on this guy for not believing in his dreams enough, but I think he's got a point. Tenacity may be a necessary condition, but it isn't a sufficient condition. Resources matter.

But anecdotally, I don't see a strong correlation between celebpreneur status and repeated success. I suspect that any correlation might actually be negative.

There are a few people who defy the odds, though. The one common trait I've observed is that they are laser-focused on the product, so they are less prone to self-delusion.

UPDATE: Brandon Smietana wrote a good answer for this on Quora, reviewing some empirical studies which suggest my intuition is wrong. Entrepreneurs with previous success are probably as likely, or more likely, to succeed in the future. But it's not a given that funding inevitably flows to the more experienced entrepreneur.


Sure, pedigree undeniably opens doors, but I think the reason we pile on this attitude is the same reason I believe in practice over intelligence or free will over determinism: it's just not a useful to dwell on as an entrepreneur.

Building a successful business from scratch is incredibly difficult no matter who you are. Getting a lot of publicity in tech circles in no way translates to success. It can be useful sure, but it won't help without a sticky product to begin with, and if you have a sticky product then there are plenty of other avenues for promotion. There are plenty of ways to bootstrap, and a lot of them will yield more paying customers than getting a flurry of fickle hipster attention from tech blogs.

It's easy to come onto the scene and look around and think it's all been done and how can you ever break into this world with so many brilliant serial entrepreneurs around, but realize every serial entrepreneur once had their first venture. In reality there's never been a better time to do a startup. The field is not "full"—a lot of successful founders lose their hunger and go on to angle investing, which actually increases your odds of getting funding, and in any case the horizon for new ideas is constantly receding.

I think there is something useful to extract from this. One would be the importance of your sociability. Who you know is important in everything from finding good hackers for partners, to knowing someone who knows someone for whatever. You don't have to be a tech celeb to achieve this, but it is something that cannot be accomplished overnight.

That extra free hour might be better spent being socially active vs me writing responses to responses on HN.

If resources matter, then you need to get resources. Writing software is not 100% of building a business.

> I suspect that any correlation might actually be negative.

How so? Is your suspicion based on the possibility that fame changes people for the worse?

I think fame can be a bit of a burden. If you have a kind of guru status you might be averse to taking risks that others think are foolish. Whereas when you were an unknown that wouldn't have mattered.

But, that's a minor factor. This is what I was thinking: celebrity is associated with at least one past success, and it becomes like a characteristic of the person, for at least some time. Business success has many more factors, some of them effectively random, and not associated with the person.

So we should expect reversion to mean for the entrepreneur's post-celebrity ventures. While they may succeed more often than others over time, their next big venture would be highly likely to be a flop.

But: Smietana's post linked to research which suggests that I'm actually totally wrong here, and entrepreneurial success is more of a function of skill. Maybe that suggests that the successful entrepreneurs are the ones who learned the best during their first venture, which makes replicating success easier.

I believe he means a negative correlation (not a negative personality); as in, the more famed celebristatus the less "success" which, was not supported in his original post.

Edit: OP edited with the Quora post, which links more successes (or celebristatus) leads to more success.

Catarina wasn't born into "startup royalty" -- she was an unknown entrepreneur when she started Flickr.

Most companies from YC, 500 Startups, etc are created by first-time founders, and they've had remarkable success.

It does help to have an "unfair advantage" in your startup. But for most of us it isn't celebrity; it's deep knowledge of a market segment, or a special relationship with a customer or channel, or specialized tech skills, or something else.

Between that, and mentorship from people who have more experience, connections, and/or celebrity than you, you can do almost anything.

I was going to make this point as well. The corollary is that, to overcome the implicit bias against the unknowns, your first success must be a genuinely great or useful idea. The unknowns who became the knowns often had a breakout success with their first successful product. Caterina and Flickr are the poster child example.

"but if VCs are already giving money to an established entrepreneur to do the same thing, why take a chance on a guy doing his coding in his house in a bathrobe"

Until you change this train of thought, you won't succeed. You need to convince yourself before you can convince others. If you can't even convince yourself, no one's going to buy into it.

If you can convince yourself that you have what it takes to succeed and that your secret sauce or magic formula is enough to staff off even the likes of google, then you'll still convincing others including those VCs you've mentioned.

Or maybe the OP is just realistic? It certainly seems plausible that an established player will have an easier time raising money, generating buzz and getting a product out there than an unproven guy coding at home in a bathrobe.

While I agree with you that you need to be an optimist, you also need to be realistic. If you have no track record and start building a company to compete with virgin galactic you will fail.

Ultimately it's about what you want to do with your life; you can reach for the stars, get a nice safe job at a big company or somewhere in between. But you should acknowledge that the more of a risk you take the likelier you are to fail. Most people with highflying dreams don't make it, and you should factor this into the equation.

Being a realist and a successful entrepreneur is almost mutually exclusive. It's about having a vision and executing to that vision whether it seems realistic at the time being or not.

It's about being a dreamer. It's about being a risk taker. It's about being overconfident in realms that may be familiar. It's about being so passionate about what your doing, it becomes infectious.

Realists are better fit for project managers at large corporations...

> It's about being a dreamer

No, that's being an idiot.

A successful entrepreneur - as opposed to someone who loses their shirt - may be a visionary and a dreamer. But they take calculated risks. You have to know when to persevere, when to pivot, and when to give up - especially if you're playing with other people's money or your life savings.

Yes, vision and confidence are important, in order to bring employees, investors and customers on board. But unless they are grounded in reality, you will fail horribly, unless you are very, very lucky.

Just get out there, do the work, keep failing until you succeed. You don't have time to think about being realistic.

Just because VC #1 invested in the established entrepreneur, do not forget about VC#2, 3, 4, 5 etc. that are also trying to invest a dollar in that space. Use the famous person as a proof that there is a market to be had, and then work on your pitch that you are hungrier and more determined to succeed.

Agree—I think it's perhaps the largest part of chicken-and-egg problem here IMO. You need to be genuinely confident if you want to convince people. And being really sure that you're right is the best way to act confidently.

AFAIK having some mild mania helps in this regard. Probably there are also ways to hack your mind to temporary ‘disable’ doubts that can tone you down.

it's definitely a tough balancing act - if you're too sure, you might miss signals that you need to adjust or pivot - you have to calibrate your own feelings and thought processes so that you are confident enough to push but also realistic enough to make good decisions.

or maybe you just bring a pusher onto the team to spread the word if the hacker is more of a diffident type

Confidence and being self aware doesn't have to be mutually exclusive. In fact, I believe they're complementary. Now, if you were to describe it as arrogance, then it may be cause to miss some cues.

"Certainly we could’ve tried to raise money; but if VCs are already giving money to an established entrepreneur to do the same thing, why take a chance on a guy doing his coding in his house in a bathrobe? Again, the celebrity entrepreneur has huge advantages."

No question the celebrity has a halo around them which helps with getting funded.

But I know of many many cases where VC's are trying to find the next Zuck and they know that person exists somewhere in a coffee shop. And even if that wasn't the case stop with the doubting attitude it won't get you anywhere. (Same with girls btw.)

Some other tips - your blog http://www.remarkedly.com doesn't even have a bio on you or what you've done etc. That would be helpful to someone who might want to approach you after seeing what you have done. Or even reading this on hackernews (HN profile has no contact info either.)

And skychalk.com is also missing any "about" info regarding the founders as well. And while whois for skychalk.com has some contact info (is that you or your partner?) whois for remarkedly is private. It shouldn't be. You need as much exposure as you can.

good points, thanks, I'll make some changes

Well if you build a silicon valley style social site that require mass scale and has a chicken/egg problem - of course the silicon valley elite will dominate you.

But theres tons of other apps that solve real world problems, that don't feed off of that type of environment to succeed.

Solve a problem a lot of people have really well and you can compete on your own and then go on to raise capital to really compete.

Your missing the point, your not learning the lesson, you forget the importance of product development, why didn't your idea catch on? Why might Caterina's version succeed why yours didn't? I don't think it's just publicity.

Instead of developing something, waiting 3 months to see how it goes & then putting it in the closet because it wasn't popular enough, iterate. Why didn't it took of? What should you change, who are your customers, how can you get them to use the product? If your customers don't use the product, why don't they use it?

I bet Caterina is busy asking all these questions and iterating her product. If it succeeds, then I think that's the reason why it succeeds an not because she's a "celeb". There is a difference between the experience from a guy in a coffeeshop and the co-founder of Flickr & Hunch..

As Spolsky recently said:

"Making a major horizontal product that’s useful in any walk of life is almost impossible to pull off. You can’t charge very much, because you’re competing with other horizontal products that can amortize their development costs across a huge number of users. It’s high risk, high reward: not suitable for a young bootstrapped startup, but not a bad idea for a second or third product from a mature and stable company like Fog Creek."

There is another factor, too: we as coders are principally biased to work on projects which are fun, and that can supersaturate this market. So I just spent a couple days working on a project to embed a couple of lisp-like structures in JavaScript for building up properly-indented HTML templates. The idea came from seeing people who were successful at using the C preprocessor to create templating schemes. I might port the code to a language that I'm less familiar with, like Clojure, just to get a feel for that language, but I wanted the core structure to exist in a context that I was already comfortable with and could debug. (Really that's half the reason why I use Node.js -- back in the IE versus Netscape days, JavaScript was my second real programming language and it always has the benefits of comfort, even as I learn more Lisp and Ruby.)

Anyway, this happens to be useful for me, because it lets me define macros which I can use to build up XML trees. But now if we come to the question: could I sell it for a profit? -- then the answer is "no, because it was too fun to build." Don't get me wrong, it will save me a bit of time (and it might save others a bit of time) to be able to separate my template-development language from HTML -- but I fully expect that a programmer at the startup of your choice who needs it will also say, "this looks like a fun two-day project, let me see what I can do."

I think the premise here is that your idea and hers are somehow fighting. You both had the same general idea, but due to her celebrity status, yours will never succeed.

Your ideas are not fighting.

Ideas don't matter. Say that over and over again until it sinks in. The fact is, all those other things -- connections, designers, fame, money - might be the key ingredient (or part of the recipe) to make an idea like that take off in a global marketplace. Or not.

We see this with these categories of ideas all the time. Things like cloud storage. Everybody did it -- with all kinds of famous people and different strategies, some expensive, some not. It was finally the Dropbox guys who got it working.

It's like baking a cake that nobody has ever made before and without a recipe. Some cake ideas need fancy ingredients to make work. You're not going to have those. The real trick, however, is taking the ingredients you have and forming the best cake possible, the one the most people want, not looking at what the other guys are doing.

It not a true statement that only big budgets and famous people can create large startups. Perhaps it helps. In either case, don't know, don't care. Focus on what you have. Let those other folks do their own thing. It's better to spend your afternoon finding one person who likes what you are doing and is a customer than it is to spend your energy on this kind of stuff. If you have a customer acquisition model that you've worked out and is humming along, you are doing awesome. The mind plays all kinds of tricks to get us off-path in our startups. To keep us from focusing on what's really important.

Mind your knitting.

ADD: You can look at this the complete opposite way as well. I blogged about the drawbacks money can bring to the startup process just a few days ago: http://www.whattofix.com/blog/archives/2012/02/being-rich-wi... It's the creative assembly of the ingredients you have at your disposal that matters, that you should be concentrating on. Not thinking for a second about some resource you do not have available. It's just a waste of time.

I understand this advice sounds trite and programmed. Something along the lines of "you can do anything!"

I don't mean this as facile. The problem here is by focusing on the ingredients of a startup, and not the assembly, we're not left with anything to talk about. Do you need publicity do do a startup like X? Some people will show you examples of how the answer is "no". Some others will show how the answer is "yes". There's just nothing useful there -- it's the assembly. People can wave their hands around on either side of the discussion and make broad pronouncements, but nobody really knows. Could you start a business selling Porsches if you're poor? I'd guess probably not, but I don't really know for sure. Nobody knows until somebody does it. Startups are new business engines that didn't exist before. It's the quality of the assembled engine that matters, not the individual pieces. Extrapolation and generalization are not very good tools for talking about them. That's the way it works.

If your question was a very detailed one about the exact configuration of your marketing and customer funnel, and the exact strategies being used by your competition, along with data, we would still be guessing a lot, but at least we might get some traction on the problem. But once again, we'd look at perfecting the model using the resources you currently have. But if your question is just guys in coffee shops versus famous people, nothing much useful is going to happen.

So I'm not trying to make an overarching "buck up!" statement. I just don't think you can do any kind of analysis with the question as it has been posed.

I spent years, from about age 15 or 16 (circa 1995) when I first stumbled onto the Internet, through 22 or 23, thinking that ideas are what mattered the most.

I don't think that point can be emphasized enough: your idea is not a unique snowflake. It's the other factors that actually determine success. The idea is the absolute easiest part of anything worthwhile you'll ever build.

The mainstream media sells the notion of the magic idea, the overnight success, etc. I came of age in the initial era of the dotcom fantasy. It was very easy to be sold by the 24/7 press coverage in the mid to late '90s, that magic ideas were worth billions because of how fast bullshit companies were acquiring zillion dollar valuations. Of course you can count on one hand how many dotcom billionaires made it out alive from that era.

It took years, a few failures, and a lot of reading to correct the flawed assumptions I had taken on. I owe a lot to countless web authors, from the likes of Chris Dixon to Mark Cuban to things people like Andreessen and Horowitz have written, and so on and so forth. I think those guys most valuable contributions to other entrepreneurs is in what they write, not the money they invest - they'll have impacted radically more entrepreneurs with the writing.

BTW, the site is ok. If it could be leased to another site for a small price, and the data could be embedded onto pages via widgets it could work.

There are thousands of newsletters and small papers that are online, or going online, and they usually have classifieds that haven't been taken over by craigslist. CL hacks away at the mainstream classifieds, but niche classifieds are still selling.

For every one hundred comments that say that ideas do not matter I will have to add one comments that say:

IDEAS is what matter. Please do not confuse idea with a confused unclear statement with no connection with the specific implementation. Ideas is the specific intellectual way to move forwards and towards your goals.

As you pointed out, (of-course?) celebrity is an enormous edge in building start-up traction in a social product offering, just as it is in most if not all other domains that require building external support to achieve a goal. An edge is just an edge though; it neither guarantees success for celebrities nor failures for non-celebrities. As someone that's struggled for a long time with how to seed a social network this seems pretty obvious to me and I agree it's a solution to the chicken-and-egg problem of kicking off a social site that you and I can't really compete with. We would have to win on product in a space where celebrity-type reach is not a requirement to creating value for the initial user base (i.e., a smaller chicken-and-egg problem vs. a larger one).

agreed - nice insights - but those spaces where celebrity status isn't a requirement are so small. even in enterprise software where you can succeed with unit sales, it is hard to sell without either prior sales or a reputation.

do you have any good areas where you think young entrepreneurs should be looking?

The sweet spot seems to be online, paid subscription-based services, priced moderately, bought with a credit card by individual professionals or small businesses.

Part of executing on your vision is marketing. As a techie myself, it's my weakest area and my main goal for this year is to become better at it. I've seen people start with no connections but they built up the connections they needed. You need to do the same thing and not make excuses.

I've been interested in hyperlocal as well and had a website in the space years ago. I consider it an obvious idea that techies really like, which means there are tons of people working on it. The idea is simply waiting for the market to come around, but once it does, you'll have even more competition including established companies like Foursquare. If a well-known entrepreneur simply getting funding irks you, then you're going to be in for a bumpy ride.

I'll be impressed with Pinwheel if it makes money. I'm impressed when any startup has actual revenues (revenues such that a gigantic user base increase is a good thing because you have money to pay for more EC2 instances) and you don't have to be a "celebrity entrepreneur" to make money. Good ideas with great execution with a solid path to revenue make money, and you can be a guy in a coffee shop (or someone spending 2 hours a night after work) to do this. I'd say that your potential customers don't care if you're a celebrity or not if the thing you're building seems valuable to them.

Caterina Fake gets a better first look on her projects because she earned it. She's cashing in on the value she already created. To overcome that, you just need to work harder, smarter and be better.

Or swim for the 'blue ocean'.

There's no way Pinwheel is going to dominate the entire general category up and down.

No reason SkyChalk shouldn't consider pivoting and looking for a niche to own within the area they're working in. Particularly since they aren't really out any money, so the financial cost of iterating and pivoting some on the existing product should be very very modest.

"... The idea was to have a hyperlocal message board, where people could leave announcements for neighbors (garage sales, missing cats), missed connections, small businesses could talk directly to their customers, etc. While we got some decent press and initial interest, the site never took off. ..."

Is this a case of "celebrity entrepreneurs" vs "guy in coffeeshop" or is it just a better executed idea? Read the above description and compare it to "Find and leave notes around the world". Creating a hyperlocal service is a marginal business proposition in most areas. The authour correctly identifies the lack of density as a problem but also misses the one thing that might make pinwheel a success, increasing adoption and usage of hardware.

    We're hiring iOS developers and content interns
The difference here with the authour and Fake is understanding two ideas, Moore's law and the importance of location. The use of iphone in the tech/creative dense SF is the garden of Eden for hyperlocal type services making everywhere else seem like a desert.

Of course this isn't the first time Fake has tied a companies trajectory to hardware, think Flickr and the explosion of digital cameras from 2003. Now we have three requirements for hyperlocal product: Moore's law, geo-location and timing. No make that four. Nowhere in the post did I read any understanding of the importance of mapping or GIS.

I don't think anyone is disputing the fact that guys in coffeeshops can't make successful startups. I don't think that is the point the author is trying to make. The ecosystem, much like the rest of the world, is centered on averages and unfortunately, it becomes a LOT easier to start a company and not FAIL when you have something to leverage. In the startup world, there is the deadpool and avoiding the deadpool is very unlikely when you have a plethora of experience to play.

Everyone starts with nothing and people succeed based on merit, there is nobody who is creating a shitty product and succeeding just because they are Kevin Rose. BUT, Kevin Rose can start a company and get millions in funding with the snap of his fingers and average Joe has to work and work and grind and grind before that happens. And probably, there are average Joe's out there that do all of this and still don't make it because of some other reason, that may even be out of Joe's control.

So conclusion is that success in the startup world is still about making a great product and building a good business but getting funding in my opinion is just as equally about product as it is about selling the founders to the investors and if you have something good to sell, like 'I created Flickr', it's incredibly easy to raise money. And one could argue that with money comes another level of huge advantage, and the sooner you raise money, the more advantage you have. SO in the end, having experience is a huge differentiator when looking at averages across the board.

It's true that celebrity entrepreneurs have a decided advantage in terms of [ease of getting press, money to hire people, making connections, etc].

However, I think most of those things can actually be replicated (though admittedly not as easily) by the unknown coffee shop entrepreneur. Yes, you have to hustle your ass off. But it works, and most people are very sympathetic to the cause of the underdog entrepreneur and will go out of their way to help.

Additionally, "guys in coffee shops" have the advantage of being extremely agile, can turn their startup on a dime, and can do whatever they want.

This "whatever they want" thing is kind of important -- what I'm saying is "they can do mildly shady stuff". For example, krausejj could have chosen to populate his map with a bunch of fake people and posts, or unknown airbnb type startups can spam craigslist users. I'm not saying it won't bite you in the end, but airbnb seems to be doing great, and whether it was a calculated decision on their part/they were aware of the activities of the third party the engaged or not, I think they're winning now.

Each entrepreneur has different challenges, I'm not saying one isn't easier than the other, but Davids can absolutely wreck Goliaths in some arenas. They just need to embrace a different bag of tricks.

I'm a guy in a coffee shop -- and for now, I wouldn't have it any other way.

Sounds like most people are jumping on the "it's not the idea, it's the execution" bandwagon. However, there is a link between popularity and execution. The more popularity you have, the more resource you have; the more resources you have, the more options of execution you can choose from. When the OP mentioned network, exposure, money, etc that's all part of the resources which Caterina has. Even if the coffeeshopers have a wonderful idea and a great game plan of execution, the lack of resource may not permit that game plan to be played out. It's similar to the Jeremy Lin conundrum -- despite all his talent, it wasn't until Knicks got desperate and took a gamble that Jeremy had a chance to shine (translation: Knicks and Jeremy both got lucky). It's true that idea and celebrity status is not the answer to all problems. However, to say that it doesn't give you a giant upper hand would be lying to oneself, and that's probably the worst thing an entrepreneur can do.

Her name and her investors aren't going to be why people decide they like her product (if they decide they do). They're also not going to be the reason why people didn't like yours.

You're always going to be competing with someone and unless you are Apple they're going to be bigger, better positioned, and have more money than you.

I think the biggest difference between a first time coffeeshop entrepreneur and a seasoned entrepreneur comes down to the stamina to withstand multiple pivots both psychologically & financially.

>spent three months on it, and no money

What is 3 months worth to you in terms of cash?

$100 in facebook advertising can go a long way with the right campaign.

Perhaps you could have spent your resources more efficiently?

That's kind of the whole message of capitalism - capital is king. But small companies can compete by operating in niches and local markets. Craigslist dominates today because they dominated the SF market so completely. Everyone else had to use loads of money to try and grab other markets, but CL had SF as proof, and sensible people posted in the proven platform rather than the competition.

When you make a product that needs mass consumer adoption, celebrity could easily matter. Consumer apps are extremely competitive and the most difficult to succeed in. Use your valuable skills to solve a real problem for people with real money and your chance for success will skyrocket. You don't have to pick the most difficult battles.

Entrepreneur logic and VC logic are very different, so try to see it from their side. First off, not all of the VCs will get in on Pinwheel, and may be looking for something similar to invest in. Secondly, competition in a space simply validates the space and the companies in it.

Seems to me that a high-profile entrant to the market, generating buzz and paying heftily to market the concept, could in itself breathe new life into SkyChalk.

The cyclist on the team-sponsored, wind-tunnel optimized trials bike can still be drafted.

A great example of your network being just as valuable as your product.

How much press did you manage to get for SkyChalk?

Her app is in closed beta.

Have you actually tried using her app?

Really awesome site. Did you apply to YC?

VC's aren't buying into an idea. They're buying into talent and a vision. If Pinwheel succeeds, that does not mean that SkyChalk would have succeeded.

One of the best ways to overcome the chicken-or-the-egg problem the guy is hung up on, is by using the classic bowling pin strategy. You don't need to have huge advantages in your favor to make use of that.

eBay had a severe chicken or the egg problem when it started out. So did Craigslist. Almost anything that needs buyers and sellers simultaneously has that problem (or content suppliers and content consumers). Most people overcome it by knocking down one local pin to start with, and then knocking down more pins and more pins and more pins. Groupon is another more recent example, they didn't start out in 250 cities. Amazon.com didn't start out trying to sell everything, they sold a tiny selection of books. Facebook didn't try to conquer the world on day one, they started as an extraordinarily tiny 'app' for Harvard, and once they knocked over that bowling pin....

My favorite example: Plenty of Fish, the dating site. Started by a complete nobody, with almost no money, never took venture capital, and had no famous backers. He knocked down a pin in Canada and around his general area of Canada, to get started. Then it spread across the border to America and went international. He did all of that while stacked up against extreme competition in the dating scene, with monsters like Match & eHarmony that were a million times larger - he managed to find a space he could exist in (free), and focused locally with a product that could later spread globally.

SkyChalk perhaps should have just been for San Francisco, or insert market here, but had the ability to scale once they conquered that first market and proved their product.

The creators of SkyChalk have a lot to learn yet.

It's not what you know, but who you know. Welcome to capitalism.

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