Yep. There's a quote from Bob Parsons (of GoDaddy fame) that goes something like (paraphrased roughly) "Don't be afraid to enter a crowded market, just be better than everybody else."
This is kind of our mindset at Fogbeam Labs, where - depending on how some details shake out - we'll be competing with everybody from Jive Software, Yammer, Alfresco and Broadvision (among others), to Salesforce, IBM, Cisco and Microsoft.
But that's fine. We have an angle to pursue that we think will let us make some inroads against those guys, and we're spoiling for a good fight. Heck, as far as I'm concerned, those guys should be sleeping with one eye open. :-)
Which boils down to either extreme failure or extreme success and little in-between...
Elon Musk couldn't have started SpaceX and Tesla right out of school, he had to build up skill, credentials, and connections first.
For your first startup, make something awesome but try to fly people to Mars. A small acquisition or a business with nice revenue might be the better goal.
In my own life, had I chosen the startup over grad school, I would easily be worth $100M+ right now. I had a ground floor opportunity I idiotically passed on because I was young, stupid, and too idealistic. So I see his point.
That said, I shudder at the thought of hiring a programmer who struggled with calculus and nothing assures me better on that axis than straight As on math and computer science courses above and beyond requirements for their major.
Individuals vary, and one of the best coders I know got a 2-year associates degree out of community college, but this is a really nice foot in the door for me when I don't know the person already.
I'm mostly leaf reading, but it seems to me you are recommending a lean startup / lifestyle business as a first startup. A less ambitious endeavour than say, Google or Amazon, with the primary goal of acquiring skills, small but safer revenue, a stepping stone to the next, bigger, enterprise. Very inspiring, and something young engineers should think about.
BTW, I restate my request from my unsolicited email (hope you don't mind): please share some startup ideas, even if execution is everything, some of us younger, less experienced engineers find brainstorming and finding ideas harder, and would really appreciate some inspiration.
I agree with your point, but "your first startup" is not necessarily "right out of school." In my own case, I'm working on my first startup, after about 15 years in the IT world. And it's been those years of IT experience that has led to me (and to some extent, my co-founders, both of who are younger than I) to develop those beliefs where we feel like we believe something that everybody else doesn't.
Yeah, we're thinking IPO, and eventually acquiring Microsoft. If you're going to dream, dream big, I always say. :-)
"For your first startup, make something awesome but don't try to fly people to Mars."
I didn't even realize it was Peter Thiel who said that, but I embrace that mindset as well. We have a document in our repo called "What we believe" that is where we catalog the things that we think about the world, that we suspect most everybody else would disagree with us on. Looking at that periodically is a valuable tool to help us focus on how we're going to be different.
In one case the great new idea is a new product, in the other case the great new idea is how to be better than the competition.