"Make something people want" --
1) Make sure you convince the investor that you can make it, that you're the best to make it, and that this is the right time for it
(Best way to show this is by having already done it...)
2) "want" -- as in hair on fire need. Not "tell you they would use if it existed, probably"
3) "people" -- a viable market, sure, but it matters more that you have a way to reach them (probably by being one of them), vs. that there theoretically exist huge numbers of them somewhere. "Oh, we're making something which all students would use, if the school districts provided it" is a lot worse if you have no way to convince school districts to provide it (e.g. if it's a new class of product they don't currently buy, and where incumbents sell (expensively) to the districts for other products).
(Of course, the best way to demonstrate "people want" is committed orders or actual product delivery and use metrics.)
4) "something" -- focus on it being a concrete product, vs. an abstract platform. Having something you can show is ideal.
Aspirational goals are useful, but an answer to the "billion $" question is not always a necessity. Many billion dollar companies started off without an explicit goal to become huge businesses. See Facebook, Amazon, Google, etc.
Quote is from here: http://www.paulgraham.com/ambitious.html
Well, this is built on the JVM, using Groovy and Grails, and implements all the relevant technical standards, including Atom 1.0, RSS 1.0, WSDL 2.0, SOAP 1.13, GRDDL 11.9, FOAF 1.0, RuleML, SWRL, OAGIS, and UMBEL, and it has great features, like application integration over JMS, FTP, REST, SOAP and AMQ using Camel and an Enterprise Service Bus, and there's an Integrated Activity Stream using the activitystrea.ms protocol, and did I mention that you can make semantic assertions and store them in RDF using Jena and then query them using SPARQL...
are you asleep yet? No? Well most customers eyes would have glazed over after about the second acronym.
OTOH, what about:
Are you worried about how your company will survive, and the legacy you will leave behind? Nobody wants to be known as "CEO of a company that went bankrupt". The thing is, you have a ton of potential here, you just need a way to unleash it. Imagine if... all of your employees were enabled to easily and conveniently share, transfer, remix and create knowledge, based on their experiences and the experiences of their co-workers. Imagine if innovations developed in the R&D labs made it into new, profitable product lines 5x faster than they do now. Imagine if you had the ability to have your whole company sense important signals from the environment you operate in, and react to those signals in a agile, adaptive manner.. never letting a competitor get the jump on you, and serving new customer needs before even the customer realizes them. Wouldn't that be a nice thing, Mr. CEO? Yeah? Well then great, we have some gnarly knowledge management and collaboration products that I'd like to tell you about...
Of course, if you really want to get tricky, throw in some NLP "time distortion" pattern language:
You know, Mr. CEO, in five years, when your company is more profitable than ever, and you've won the State Chamber of Commerce "CEO of the Year" award, you're going to look back on today and see that this was the beginning of a very beneficial partnership, aren't you?
Let's talk about substance. Not these dreams, most of which are impractical and laughable. I don't want to waste another year of my life implementing some wanker's dream in the hope that he'll one day throw me a bone (a real title, investor contact) so I can be on the other side of the table, lying to naive smart people in their 20s in order to get them to ruin their lives and relationships in exchange for 0.02% of something because they aren't smart enough to realize that token equity doesn't make them real business partners.
I'm sick of this nonsense. Why is our generation stuck in VC-istan instead of working on things that actually matter?
This whole ecosystem is built on selling dreams to clueless young people of extreme talent and dedication (like me, except I'm not young anymore; thanks assholes for wasting most of my 20s) who have no idea what they're worth yet. I can't speak about "most" but a great many founders that I know well are fuckheads (because the requirement of VC connections selects heavily in favor of assholery) who have no lack of skill already in selling vacuous dreams and making empty promises. Let's not make these lying fucksticks any better than they already are at misleading people.
The stories posted here clearly anger and upset you. This comment you just posted is a strawman argument and you posted a variant of it the other day in another thread, and another variant of it in another thread before that and....you've been posting variants of it on HN almost daily for months now.
As a founder, my ears always perk up with I find pointed criticism of founders on HN. I read carefully to see if there's any ideas or advice I can come away with. But for months now, every time there's been really aggressive criticism of founders on HN, the comment always turns out to be written by you. And it's always the same complaint or variant on it every time. It's gotten to the point where I have to screen comment threads ahead of time in case you've posted already.
Is it really healthy to keep returning to a well you find so poisonous? Jason wrote a well-intended article here and you're using it to post your same ideas for the 10th time this month. Is that fair to him? Is that fair to Hacker News readers?
Take some time off. Find things that excite you, captivate you, and make you feel joyful to be live. VC-istan is clearly not a place you want to spend time in, so go explore and find a better place.
No, I don't dislike all founders or VCs obviously. I just hate most of the ones I've interacted with, and I'm shocked by the number of people who've had similarly horrible experiences. When I left my last startup after being asked to do something horribly unethical, in March 2012, I thought I'd been extremely unlucky. I thought my experience was a 1-in-10,000 case of bad luck. As I poked around, though, I realized that horrible experiences are the norm in VC-istan. People just don't talk about it.
Why the fuck aren't they speaking up? Why aren't they exposing unethical people and companies? Why are people so terrified of ex-bosses that they refuse to tell the truth so the horrible founders can fail and some good ones can step in?
I've managed to put cracks in the image of VC-istan. My job is to make those cracks bigger so some light can get through. At least some of the climate of anger that's been on Hacker News for the past few months is something I've started. Good for me. I'm starting to contribute. Courage is in rare supply in our industry; we tend to bend over and take it when our masters screw us. Well, at least I will fucking speak up.
So, I've also worked in finance. As an industry, it has an image problem. To get smart people, it has to pay. So it does. Most of the work isn't terribly interesting, but the pay is good and the people are actually a lot more decent than in VC-istan. If you're good, they'll treat you well. In general, financial firms are a lot better, ethically speaking, than VC-istan.
If we can bring VC-istan's image in line with what it actually is, then they'll have to (like finance) start treating engineers better if they want to get talent, and the bad startups will die out, making room for good ones.
1. You call founders and VCs rapists and slaveowners. "We tend to bend over and take it when our masters screw us." Do you know founders who literally own their employees? Do you know founders who have literally raped their employees? Of course not. You're trying to score points through lazy writing. Citation needed.
2. You state that developers lack courage. Citation needed.
3. You spend most of the comment writing in the first person singular and then switch to the first person plural in the last paragraph as a rhetorical trick to elicit a sense of solidarity in the reader. This is manipulative.
4. You state that you had a bad experience about a year ago and say that you thought it was a 1-in-10,000 case, but then after you "poked around" you found out it was "the norm", i.e. 1-in-1. This is a ludicrous statement. How can you know what the norm is after poking around? Did you talk to 100 people? The other 9,999? There are actual people out there conducting surveys on things like this. Are you one of them? Citation needed.
You are not contributing. You are not doing a job. You are fearmongering, aggressively and perniciously.
Certainly there are bad actors and bad players in "tech". But simply stating that "horrible experiences are the norm" over and over and over again does not make it true. It's lazy writing.
His overall message is how companies and management can improve -- advice for a position he's never been in and has no experience with.
Wait, so watching idiots incinerate hundreds of millions, if not billions, of dollars of value through horrible business decisions when I could have done their jobs better at 17 is not direct experience?
I'm good at learning from failures-- my own (I've made plenty of mistakes, despite your claim that I don't acknowledge error on my part) and other peoples'.
a frank discussion of why such a high proportion of his employment experiences have been bad compared to typical HNers or engineers
What has astonished me is to learn that my horrible experiences are not atypical. I thought I was the only person to be screwed over so badly, and found out that there are hundreds of people with similar stories.
I won't claim that it's the norm, but it's not shockingly rare. People just don't fucking admit to these experience because they internalize their losses when the reality is that most people have shitty careers not because they are human garbage (as their bosses want them to think) but simply because they have been lied-to, exploited, and fucking robbed blind by their extortionist, criminal managers who have demolished their careers through bad work allocation and political malfeasance.
I wouldn't put myself so far out there on these issues if I hadn't realized that there's a whole corrupt system whose malignancies are underreported. If it was just me having bad experiences, I wouldn't go out there and point out how awful it is. Too embarrassing, no point. Unfortunately, the abuses of talent by the well-connected criminals are commonplace and it's time to fight back. Technology is our territory by rights and we should take it back from those assholes.
I'd be lying if I claimed you did not spark my interest with your episode at my workplace. However, I am in no way upset about it, any more than I'd be upset by one of those YouTube fail videos. I was actually one of the ones who tried to help you. So, let's stick to discussion of my actual points. If I made untrue claims, it's enough to point them out, right?
Reiterating my primary point, in case it has been lost in the back-and-forth: if your approach leads to satisfaction, success, wealth, fame, or any other thing an ordinary person wants, I'd love to see some evidence of it. Does any exist? Failing evidence, I advise a novice to consider your words with a strong degree of skepticism, and to take into account your personal track record. This is healthy, no?
> so watching idiots ... [fail where] I could have done better at 17
You are like a walking, talking paragon of the Dunning-Kreuger effect. If you could do better, do it. I'd be surprised, but surprise is an emotion rationalists welcome. If I see some evidence of your extraordinary claims , I'll update.
And, no, backseat CEO-ing does not count as experience. Come on, that much must be obvious.
> not atypical
Hard to say if you're falling to selection bias or me. You are highly atypical among the people I know or have heard of, and your comments certainly stand out as unusual on this site.
> Technology is our territory
It is the territory of people who make things, or who lead makers, as it has always been. People who do neither of those are mere onlookers.
Caused by: DoucheOverloadException
Caused by: MoronDoesntUnderstandDunningKrugerError
Keep it up. The world needs more people who are willing to shed the light on unpopular truths, speak their minds, and say things most other people won't say.
Furthermore, while "connections" are important in business and financing (and always will - it's called human nature), I don't think it's ever been easier to raise money for the young unconnected entrepreneur.
I'd suggest you take a chill pill.
PS: The article you are commenting on isn't even on selling the dream to prospective employees, but on pitching well at Y combinator.
It might even be true. You might actually be that special guy. But until you show us all how it's done, you're just ranting on a blog while actual startups somehow keep getting built (and sold) left and right.
Great parallel is Ted Dziuba from Uncov. Total internet asshole with Uncov. Does Pressflip and flops. Not as easy as it looks. But then does Milo and succeeds. And finds he doesn't have as much time for hating online as he did. That could be your track, or else you could just philosophize about how great it would be if everyone listened to you. Go show us how it's done, get that 20% stake of Church Inc. and disrupt "VCistan" while others take the .02% of Google, Facebook, LinkedIn, Palantir, Twitter, Dropbox, AirBnB and the like. Let's see how you do!
When I became a founder, I made sure to explain to our team that our chances of success were very low but that if we succeeded, we would have a tremendous positive impact on the world. They would get paid close to market rates and have reasonable equity in the company (much much higher than .02%) but that they shouldn't expect to get rich from the equity.
This post is specifically for pitching investors. I have tremendous respect for bootstrapped companies and I see venture backed companies as a different beast: high risk high reward. Most fail - that's just the way it goes. But some do succeed. And succeed in a big way. And if you are trying to get venture capital, you need to help the investor see the full potential (which may not be realized) of your company.
I don't see bootstrapped companies as being any lower on either the "risk" or "reward" spectrums. The risk is different to be sure... it's years of your life, and blood, sweat and tears, more than large dollar amounts, but that's just a detail. Time is the most essential commodity we have, and we all have far too little of it. Spending even one precious minute on a startup is a tremendous amount of risk.
And if you are trying to get venture capital, you need to help the investor see the full potential (which may not be realized) of your company
It's really bigger than Venture Capital. "Sell the Dream" should apply to selling to investors, partners, customers, employees, etc., etc. Hell, I throw in a little "sell the dream" stuff when "selling" myself to women.. aka, when I'm at a bar, meeting somebody new, and looking to exchange numbers and connect later.
A few years down the road, when Fogbeam Labs is a wildly profitable billion dollar company, and has an IPO and a building named "Fogbeam Tower", I'm totally going to come back to HN and post a big "Thank You" to all the people here who helped us on our path - like the ones reminding us to "sell the dream".
And the reward is generally lower too - a steady income stream that can go upwards of high six, maybe lower seven figures. Obviously if you want to keep building, hiring more people, etc, then it starts to look more like a "regular" company. But, outside of rare exceptions which are known but uncommon, a bootstrapped company is not going to become a billion dollar company without any outside funding.
That's what I mean by risk/reward. Certainly time is a big "cost" but again, the "risk of failure" in a bootstrapped software company is lower than a venture backed startup.
But, outside of rare exceptions which are known but uncommon, a bootstrapped company is not going to become a billion dollar company without any outside funding.
You're probably right in the strictest sense. But one might be a hundred million dollar company, which is still a different order or achievement than the retaurant/plumber/dry-cleaner type deal.
And the reward is generally lower too - a steady income stream that can go upwards of high six, maybe lower seven figures. Obviously if you want to keep building, hiring more people, etc, then it starts to look more like a "regular" company.
Of course I'm biased, since we (Fogbeam Labs) are choosing the bootstrapping approach for now, and we aspire to be a billion dollar company one day. But the "for now" may be the key point in that sentence. We haven't unilaterally ruled out taking outside money someday, but we don't feel the need right now.
compared to a startup backed by venture funding that needs to reach hundreds of millions in revenue to be a "success".
Yeah, if we don't eventually reach the "hundreds of millions in revenue" I'll feel like we failed. The only exception would be in the event of an acquisition. If we got acquired while still bootstrapping, a much smaller acquisition could result in a financial windfall for the founders, since we retain (between us, at the moment) 100% of the equity in the company. But it would still need to be enough to give us "FU Money" or I'll feel like we failed. :-)
I agree with the other commenters urging you to turn your energy elsewhere for a while. It's tough to trust other people and give them your time, even if you're getting paid for it. A lot people don't acknowledge that sufficiently. But if you want the type of success you seem to imagine for yourself you are probably going to have to find ways to trust other people and convince other people to trust you. And the tone of your recent negativity on HN is doing short term damage to the prospects of that happening.
Raising VC is a human process. You need to convince some high status individual(s) that your plan has more upside than risk. The most successful way to do that is to sell something. So the sorts of people that succeed tend to be more salesman, than engineer.
Now add in huge amounts of money, plus some ego and you have a recipe for drama and backstabbing.
Come to New York and hang around some of the true upper class. Not software engineers making $200k or Wall Street quants making $600k, but actual upper-uppers. Convince them that you're one of them (it can be done) and see what they're really like when not on camera. When you see the real quality of the people running society, you'll want to puke-- and possibly kill people.
They earn VC connections and build social capital by (usually altrustically) helping other founders, creating a product that makes people's lives better
Hahahaha. You actually claim to believe that people can "earn" (I love your use of this word; A+ stuff) VC connections through legitimate means. Well done. I fell for it. Here's a gold coin; can I cross the bridge now?
In my world, anyone who has a credible idea and meaningful traction can get a meeting with most VCs fairly easily. Are you suggesting that after such a meeting, an investor would refuse to fund someone with a good idea because they're not enough of an asshole or connected to the right people?
There's no need to be so dismissive so quickly. Our perspectives on the world are formed by reference experiences.
I've seen numerous entrepreneurs come to Silicon Valley with absolutely zero connections, work hard to build a real business that makes real money (I'm talking B2B/SaaS products, not trivial social media apps), and raise funding from top tier investors when they had enough traction.
Perhaps you haven't seen this phenomenon. That doesn't mean it doesn't exist.
This is most heavily rooted in Silicon Valley culture, but I'm sure even in New York and elsewhere, the fastest way to get ahead, build your network, get connected to the people who run the world, etc is to be as helpful as possible to as many people as possible and know that eventually the rewards will come back to you.
The above statement may seem to you full of naiveté and wide-eyed optimism, but that's the optimal strategy for success for even the most hardened cynic; look up some research on persuasion through reciprocity and liking.
For background, I am absolutely about as far as you can get from "upper crust, social elite" status by birth. I've detailed my background here before, and I don't want to go through it all again, but suffice it to say that I'm a lot closer to "white trash" than I am to "blue blood" by birth and upbringing.
But I have connections to VCs. I know a few on a first-name basis. I know a few I can get a meeting with basically anytime, if I have something ready to pitch. Can I guarantee that I'd get money? Absolutely not, but I feel pretty confident in saying that if we didn't get funded, it would not be about me not having been born into the "true upper class" or not being the right kind of asshole.
Are their snobby VCs out there, that won't talk to you unless you're part of the "old boy's club?" I'm sure there are. But there are also ones that aren't like that.
Now, all that might lead one to ask "How do you get VC connections if you don't have them, and aren't part of the 'upper class'?"
To which I say, it's like an article that ran here on HN a while back, titled "How to date a supermodel". The gist was something along the lines of "start by moving to where supermodels are and then hang out where the supermodels hang out". For me, that meant moving from a rural backwater county in NC, to the Research Triangle Park area, and starting to attend the kind of events that VCs attend, meeting them, making their acquaintance, talking to them, asking them for advice, having the occasional (non pitch) coffee meeting with them, etc.
Now it's been a slow process, I'll say that. And we are talking NC here, not Silicon Valley or New York. Maybe things are radically different there. But from where I'm sitting, it is absolutely possible to cultivate connections, even a degree of personal friendship, with VCs, without having any special pre-existing status and without being a huge asshole. (This is assuming you accept that I'm not a huge asshole. Maybe I am and just don't know it).
Easy there. Easy.
I actually agree with a lot of the things you have to say about the startup world -- there are a ton of idiot hucksters out here who take advantage of naive people, and it's hard to tell them apart from the good folks. I also agree that many of the products being built down here are pointless and derivative. But there are good people in this industry, and you, personally, can have a good outcome from working at a startup even if it means that you don't get rich. And also, just because you get a small percentage of a startup does not automatically mean you're being exploited.
You're setting up an implicit false dichotomy: that inexperienced people can choose between the promised land, or fall prey to the scheming machinations of the VC-backed startup world. But that's crap. The fact is, most jobs are bad. The worst jobs explicitly make the trade of units of your life for dollars. Most are just boring, meaningless, anonymous slogs for some bureaucracy where you can't change anything or even have much of a voice. Startup jobs, for better or worse, are the some of the only ones you can get as an inexperienced person where you at least have a chance of changing the world in some meaningful way. That carries value.
Personally, I'd rather give up a few dollars in earning potential when I'm young to do something idealistic and bold. There's really no better place to do that -- right now -- than at a startup company doing something you believe. Big companies are stable gigs, but designed mostly to keep you in your place (don't make waves, labor unit!) Academia is a fount of bureaucracy and disappointment. Research labs are (sadly) dead or dying, or available only to the most senior people. Startups are selling a dream, but at least they're doing it honestly. Nobody makes you take that startup job.
Here's how to handle the nonsense in the startup world: take control of your life. If you're a programmer in this world, you're privileged to live in one of the most favorable labor markets in human history, so there's no excuse for complaining about being trapped in a shitty job. Take the best job you can find...and quit if it sucks. You'll have a new job in a month. Don't count on getting rich, because you probably won't. And if some nimrod gets rich with a derivative iPhone app and you're still working in the salt mines? Hey....at least you're not selling insurance or writing COBOL in a basement in Albany. Or literally mining salt.
I agree in theory, but it's actually much harder to ensure a career-long pipeline of interesting work than it is to just get rich. Culture isn't stable, especially in VC-istan. So, I would argue that even if you have an interesting job in VC-istan (say, machine learning in an R&D-like environment while your company is flush with cash and management is atypically non-obnoxious) you have a small likelihood of keeping it that way, and you're better off just cashing out if you can. If you can't because you didn't negotiate a decent equity package or because you're a founder who got ruined by VCs, then you lost.
VC-istan is all about money. You think your CEO wouldn't make you (not just you; the whole company) do boring work if that's what the market wanted? Of course he would. (Maybe he should; that's another debate.) Personally, I refuse to do boring work unless I am getting the outsized payout.
If you're working for money, which 90+ percent of people are because they have no other choice, and you aren't making enough money to buy your freedom and own your life instead of renting it from one boss or the next, then you lost. You will be judged as a failure and your credibility will go to zero. I hate that it is this way, but there is no point of sugarcoating it. I'd rather expose reality for what it is, incite some anger, and get to work fixing the fucker.
There's really no better place to do that -- right now -- than at a startup company doing something you believe. Big companies are stable gigs, but designed mostly to keep you in your place (don't make waves, labor unit!)
What makes you think startups are different? That you aren't seen as a resource to be exploited? If you work at a closed-allocation startup with MBA culture and VPs of NTWTFK (Non-Techincal-Who-The-Fuck-Knows) out-earning programmers, you get all the negatives of startups and big companies but none of the upsides of either.
Here's how to handle the nonsense in the startup world: own your life. If you're a programmer in this world, you're privileged to live in one of the most favorable labor markets in human history.
Try changing jobs a few times. The "job hopper" stigma is real because there are out-of-touch pre-dementia patients who still believe that it's a sign of poor character rather than bad luck amid the new reality. When you're 25, no one cares if you have a 6-monther. Try it when you're 35, though.
I believe Bret Victor tried to answer this on his Investing on Principle:
Default choice 1:
The world will try to make you define yourself by a skill. That's why you have a major in college. That's why you have a job title. You are a software engineer. And you'll probably specialize to be a database engineer, or a front-end engineer, and you'll be given front ends and asked to engineer them. And that can be worthwhile, and valuable, And if you want to pursue your life pursuing excellence, and practicing a skill, you can do that. That is the path of a craftsman. That is the most common path.
Default choice 2:
The only other path you hear about much is the path of the problem solver. So I see entrepreneurship and academic research as kind of two sides of that coin. There's a field, there's a set of problems in that field, or needs in the market. You go and you choose one, and you work it and make your contribution. And a little bit later on, you choose another problem, work it, make a contribution there. Again, that can be worthwhile and valuable, and if that's what you want to do, you can take that path
But I don't see Larry Tesler on either of those paths. I wouldn't say he was contributing to the field of user experience design, because there was no such thing. He didn't choose some open problem to solve, he came across a problem that only existed in his own head, that no one else even recognized. And certainly, he did not define himself by his craft, he defined himself by his cause, by the principle that he fought to uphold.
There are many ways to live your life. That's maybe the most important thing to realize in your life, that every aspect of your life is a choice. There are default choices. You can choose to sleepwalk through your life, and accept the path that is laid out for you. You can choose to accept the world as it is. But you don't have to. If there's something in the world that you feel is a wrong, and you have a vision for what a better world could be, you can find your guiding principle, and you can fight for a cause. So after this talk, I'd like you to take a little time, and think about what matters to you, what you believe in, and what you might fight for.
And I add: following non default choices is hard. Following a principle is hard. Noam Chomsky explains the deep reason why that is on his Manufacturing Consent
Sounds like bullshit to me. If anything, we should encourage less focus on accomplishment, less hero worship, and less celebrity-fetish nonsense. An argument should stand or fall on its merits, not the fame of the speaker. And sometimes an opinion is just an opinion, and not something that needs to be picked over like this was a high-school debate club.
Everyone's entitled to their opinion. If you're going to argue from experience however, you have to have compelling experiences to argue from.
Then shame on them. One shouldn't assume anything is true, just because somebody argues their position vigorously. If people are actually doing what you describe (which I doubt, to be honest), then they need to develop better filters.
If you're going to argue from experience however, you have to have compelling experiences to argue from.
Bunk. All of our experiences are compelling in their own way, and everyone should share their experience and opinions. The onus is on the receiver to parse, filter, analyze, synthesize, etc. and form whatever conclusions - if any - they might form.