While there is some laudable-if-extremely-conventional wisdom in here, almost every point suffers from either survival bias ("Successful companies succeed by being successful.") or from having obvious counter-examples ("Was Steve Jobs a nice guy?"), or both.
Instead, take it as input and context, and then form your own opinions (and biases). We knowingly ask for biased opinions of our friends, family, and coworkers all the time; apply the same process here.
That's a good point, and I definitely have this tendency.
On the other hand, I don't think a list like this is that helpful. With as much experience as Sam Altman has, I'd prefer to see him do deep dives into particular items on the list, with an attempt to establish causality between the item on the list and the success of a particular company within a particular context.
Why did this particular strength help this particular company at this particular time in its lifecycle, facing this particular environment? Has that strength proven a weakness in a different context?
That seems more useful to me than, effectively, "Be tough, be smart and care a lot", which is great advice, but not something anyone with passing familiarity with startups doesn't already know.
It's clear we mostly look at success as an example, but then again there could be a cause/effect confusion in the accusation of "Survival bias"
I think PG's advice "Don't Die" combined with some of these traits like They generate revenue very early on in their lives, They keep expenses low and They are focused on growth logically seems to lead towards a company biased towards survival.
It would be interesting to build a Bayesian model of these traits.
Also, I feel like akinator.com is using a Bayesian tree. Would you confirm this? What algorithm do you think they are using?
I thought PG's explanation in "A Plan for Spam" was pretty good: http://www.paulgraham.com/naivebayes.html
Also, I feel like akinator.com is using a Bayesian tree. Would you confirm this?
It's possible, but I doubt it.
What algorithm do you think they are using?
A plain binary search tree would work perfectly. I guess it could be broken by people entering deliberately wrong data, but..
It's clearly some kind of search tree, because the questions are influenced by previous answers.
You could do a Bayesian version, but I'm not sure it would perform any better.
I'm trying to list the usages of Bayesian inferences in industry. So, there is spam filtering, I bet there would be recommandation engines (ex: amazon's product recommandation, ad targeting). Would you know of other uses?
Do you know of some kind of tutorial of how one particular bayesian engine is applied to a particular dataset in a commercial venture?
Also, I have been looking at weka (http://www.cs.waikato.ac.nz/ml/weka/), and j48 in particular. j48 is an implementation of the C4.5 algorithm, (which is close to ID3 and C5). Here is how I learned about C4.5: http://www.cs.umd.edu/~samir/498/10Algorithms-08.pdf.
Would you happen to know if one of these algorithms have commercial applications?
In a different subject, Judea Pearl has been awarded the Turing award for using Bayesian networks to calculate probability of causality. Which is different than traditional Bayesian analysis, where we calculate probabilities of a property being true. In his theory, he claims one can calculate the probability of a property being a necessary condition, the probability of a sufficient condition to another property (and the probability of both combined). I'm really having trouble understanding the ins and outs of this too. Have you heard about an usage of this theory? Do you think it has a viable shot at having commercial applications?
"They are obsessed with the quality of the product/experience"
Maybe "competitive advantage" is not so directly addressed, but I feel some of the other points touch on it, like "do things that don't scale".
And "obsessed with the quality of the product/experience" is BS wording. It means nothing. I could say the same thing about any subject without making any distinctive point. It's not about being "obsessed", it's about "making the right choices in terms of priority regarding the product/experience". That's more like it, and that says that decision/compromise is needed in everything you create.
I made the mistake in my first years. I made consultingware products which didn't grow but paid expenses and helped me keep my company alive and even grow it very slowly. Then, I dropped the non-growth products and focused on a single growing product.
Same goes for Jeff Bezos. Yet, incredibly successful. That's a few major counter-examples.
Bill Gates is certainly ruthless when it comes to business. You don't want to come to him if you work at microsoft and your project is failing.
However I'm sure on a personal level he is very nice, and he is certainly doing a lot of good with his foundation.
More on topic, this seems like the very definition of cargo culting to me. Why not just focus on what makes sense for your company? There generally is no simple catch-all solution, especially not to success.
It would surely help if the survivors themselves would acknowledge survivor bias more. Not seeing much of that.
Still, I think most of these points are either obvious or tautologies, and many of them can cause harm when they are focused on obsessively.
And, so I'm not just another critic, let me offer two points I'd make about startups that stand, somewhat, in opposition to the points made here:
1) Successful companies ship. This is often in direct opposition to obsessing over quality: you have to accept that your app, which is a piece of shit, needs to get out there, so you can get feedback, before you make it a gleaming cube of perfection.
2) Random chance is going to factor in your startups success far more than you'd like, so building a startup that will not die no matter what (rev/run > 1) is going to give you a better shot at making it over the hump. This often means putting up with uncertainty and not knowing exactly what you should be or will be doing. And it will be hard on you, mentally.
<Super-Succeess> is typically the outlier. You could have 100 companies with these traits, and 98 of them could fail. Its not clear with that type of failure rate you can really differentiate meaningful information, because the overlap of explanatory "data points" is just too noisy.
Super success is typically more of a black-swan. This is essay is less relevant in that endeavor. But it probably is not bad at all if it was merely aiming for "nice/er places to work". Or, "avoiding a bad bet" type of argument. That makes it closer to describing a "white swan", which again is not altogether useless. Its just not really what the title is proclaiming. Not that Sam would be unique in that regards, thoug. I think its fair to cut him some slack on that.
Of course, it begs the question: Do "super successful people" tend to eggagerate? Which is even itself an enlightening question. It seems many people believe in "fake it to you make it". But on the otherhand, many people who have "made it" tend to revert to understatement. And many more become successful merely with true confidence. So again...who knows.
> After any process that leaves behind survivors, the non-survivors are often destroyed or muted or removed from your view. If failures becomes invisible, then naturally you will pay more attention to successes.
> As the psychologist Daniel Kahneman writes in his book Thinking Fast and Slow, “A stupid decision that works out well becomes a brilliant decision in hindsight.”
I think it's pretty unlikely that he's not taking unsuccessful startups into account. But it's not a statistical paper, it's an essay. You can't attack the guy for not including likelihood ratios and p-values in his prose.
Sam Altman has experience with a particular group of companies. A small subset of companies out of a huge set of people who do business. In a wide variety of places.
This writeup certainly makes some good points but it is specific to companies of a certain type and Sam has not qualified that at all in his post.
"than pretty much anyone has seen companies at all."
I've been observing companies (as have many other HN readers) since before Sam was even born. (I started my first company right out of college and that a very long time ago.)
OK, fine. If you have lots of relevant experience, then write a counter-argument that's more substantial than "selection bias!"
I'm sure we'd all like to read a comment that outlined some specific, well-thought-out points of disagreement with Sam's arguments.
I see mostly opinions, not arguments. An argument is generally what follows if you ask someone "why?".
In the very first paragraph, Sam writes "It’s from personal experience and I’m sure there are plenty of exceptions."
What should be done to satisfy people like you?
Yet still one would expect that most quick decisions are bad decisions. I would conjecture there are far more failures that come from quick decision than successes.
But if the market strongly favors speed then it will select those few that just happen through chance to make the right quick decision.
(Taken from reply below)
If lots of unsuccessful companies were frugal with money (say), then maybe being frugal with money doesn't help your chance of success.
ruth·less, ˈro͞oTHləs/, adjective
1. having or showing no pity or compassion for others.
what does "ruthless" mean nowadays in valley newspeak? or did i miss a memo about "nice"..?
I generally treat business as more PVE rather than PVP (as you could have guessed, football is not my game or metaphor of choice), but I sometimes work with great people who have rather the opposite inclination. They're ruthless cutthroats, but I mean that in the best possible way.
1) Those who will cut you some slack if you make an error, on the understanding that we are all human and we all make mistakes and one day you may mean forgiveness yourself
2) Those who operate to extremely high standards of perfection and expect everyone else to do the same.
Type 2 people often achieve great results, until they make an error and all the people they have "punished" in similar circumstances get their revenge.
I know plenty of doctors who are wonderful people, and who are ruthless in their work, meaning they will see it that a task gets done no matter what convoluted channels he/she must use. They're not mean people. They're not assholes, but they're serious about their responsibilities. For a founder, it could mean being ruthless in getting a meeting with an important person, or being ruthless in managing finances, or being ruthless in getting investors on the phone.
You can be ruthless in seeking success while being a nice person. The two aren't mutually exclusive, and it's not hard to see that that's what the OP was getting across.
tl;dr - In plain terms, ruthless here means being unforgivingly persistent.
> what does "ruthless" mean nowadays in valley newspeak? or did i miss a memo about "nice"..?
reads as if the commenter didn't even attempt to understand what @sama meant. Instead, it appears as if he saw that what @sama wrote was technically inconsistent and glommed onto that without actually engaging with the essay. If the commenter was simply offering up copyediting advice, well, he could've left out the color ("valley newspeak", etc.).
As it stands, the comment is utterly boring and, I suspect, reflects the attitude @kyro meant to highlight with the phrase "forced stupidity." "Technically correct" is not actually the best kind of correct (https://www.youtube.com/watch?v=hou0lU8WMgo).
> Feeling or showing no mercy
The quote was either phrased worded or the author doesn't understand the word. Ruthless people are not nice.
Something along the old lines of, I'll be your best bud, but if you cross me...
Is there any software that takes IPA or ASCII IPA as inpit and gives speech as an output?
Or does IPA not work like that?
It just can't be done, I'm sorry.
You're much better of using a tts engine tuned for a certain language.
I can't imagine you'd get very far in any competitive enterprise if you spent all your time feeling bad about that.
Lance Armstrong isn't a great athlete .. he's a cheater.
Going off on a tangent now but...
He's a cheater and a lying scumbag, but you can't say he isn't a great athlete. He is in fact one of the best competitive athletes the world has ever known. Even a guy who rides the Tour de France once and comes in at last place fits in that category.
I don't often like to follow people, but when I do, this attribute matters to me. I'm not sure, but I suspect that it's a signal that someone wants to build something great more than accumulate accolades. In the latter case, I help someone get rich and famous (which is fine!). But in the former, I'm a part of something awesome.
I find it a little difficult to articulate why this affects me so deeply, but it resonates with me, and talented people I know.
In general, I suspect these attributes are important if for no other reason than talented people you might be recruiting will be on the lookout for them.
So although it's a hybrid of two traits mentioned in the article ("They are obsessed with the quality of the product/experience" and "They don't get excited about pretending to run a startup"), it is still one that should be there by itself.
Of the companies that became very successful, what were some common traits? That's what this post is about.
"Yeah but you only looked at the successful companies."
That's the biggest difference between me now and starting my first company - I was ultra-excited to call myself "CEO of startup" the first time around, this time around we don't even have titles because we don't give a shit. We have a CEO because you need to know at whom the buck stops, but we've even discussed using that interchangeably depending the situation (decided against it) because of how thoroughly we don't care.
I don't think the way I felt the first time around was bad or the reason we failed - but it was a pretty good signal, and I even knew it at the time.
I thought one of the less obvious, and especially interesting, insights was the following:
Another way this trait shows itself is "right-sized" first projects. You can't go from zero to huge; you have to find something not too big and not too small to build first. They seem to have an innate talent for figuring out right-sized projects.
I wonder how much of this talent (which I'd call a "knack") can be acquired from experience.
I noticed in myself an instinct for categorizing projects as "right time"/"right place". By "instinct" I don't mean I'm particularly good at this, I may be really bad. I mean that I have a feeling, which I can imagine as some sort of neural pattern recognition algorithm. I'd guess everyone has this same feeling .. to what extent can it be tuned into a "knack"?
"They are obsessed about their customers' success."
Everything else is a byproduct.
Here is a quote:
"In a great market -- a market with lots of real potential customers -- the market pulls product out of the startup."
The reality is probably a little of both.
You will not find opportunity if you're not searching. You will not profit from opportunity if you're not seizing it.
You can't fail if you don't try. Sounds stupid, but not every opportunity is worth it. Risk can and will bite. You don't get an INC cover story by ruining your personal life though.
More drastically, use the Omaha Beach landing, as depicted in Saving Private Ryan, as an example:
All soldiers were equally equipped, motivated, trained. But then a grenade falls from the sky and hits your landing vessel. Completely outside of your control, but still you're fucked and die.
Happens to the best, to this day, SEAL, DEVGRU or not.
Bad luck is bad luck.
Same in business.
Do everything right and still fail.
Luck is underrated.
There is Risk Management, I wonder if Luck Management is something that will arise in the future. Chance works both ways.
So, yes - (bad) luck as a function of hard work is highly volatile. But as it is antifragile, volatility is a good thing.
I do believe that the people at YC have a lot of experience (and are likely to be quite systematic in their analyses when they do them) but that doesn't mean I'm going to take every post at face value.
"Survivorship bias is the logical error of concentrating on the people or things that 'survived' some process and inadvertently overlooking those that did not because of their lack of visibility." [Wiki]
Sam's saying that very successful companies tend to hit all of these points, in contrast to less successful or unsuccessful companies, which will miss one or more of them.
You don't need to take the post at face value, but if you're claiming this is a result of survivorship bias, then you're arguing that successful companies just happen to have these traits, and they don't actually help the companies succeed. I don't think that's true.
I think this is exactly what he's arguing
If you're of the opinion that startup successes are mostly luck and timing, then this makes perfect sense.
If a team/company had every single positive/beneficial trait on that list, then how much more likely are they to "succeed"?
You can possess all of the other traits, and you're still pretty much guaranteed to run into numerous points in the life of a company where you're staring into the abyss of imminent failure. The ability to withstand that kind of pressure is probably a prerequisite for highly successful founders.
> They are tough and calm. Founders of great companies are always tough and unflappable.
I would add - Don't mind not sleeping.
"They have a whatever-it-takes attitude." - This is such a powerful trait that it puts the "big dreamers" to shame and separates the Wannapreneurs from Entrepreneurs. Anyone is capable of dreaming, talking big, generate ideas et al.. but few are capable of executing them by doing whatever it takes to turn that dream into reality. Ha, it reminds me of the "never give up frog poster".
Please add to "They don't get excited about pretending to run a startup" - they're not on Twitter tweeting cliche's around vision/team/culture/design/customer love all day. That's a big red flag to me.
I noticed this one is not quite easy to make:
"*They grow organically. And they are generally skeptical of inorganic strategies like big partnership deals and to a lesser extent PR. They certainly don't have huge press events to launch their startup. Mediocre founders focus on big PR launches to answer their growth prayers."
Most startup companies are looking for big partnership deals with PR support intensively. But they are focusing on building customer base. It's really not easy.
Of course we'd prefer a deep dive, but that requires a lot more thinking, data, reasoning and work.
You're talking about a book versus a blog.
I really liked this essay.
Yes, some of the stuff is redundant, but there's enough modifications and it is compact enough that this is a very useful list.
If you can do better, do it.
I see a lot of whining and complaining on here and no alternative solutions that are better. If you have something better to say, say it. If you've read something better, provide the link.
Otherwise, be a little more appreciative that someone who knows a lot more than 99.99% of the folks in startups is sharing his insights concisely for free.
For example, are there areas where he was a mediocre founder by his own definition? Were there times when he was mediocre and then became great? What did it take to go from mediocre to great?
I'm surprised that the essay is so general in nature when there's a wealth of specific (and maybe more valuable) cases that could have been shared even after respecting privacy of individuals involved, etc.
* They are sublime swordsmen.
* They revere the supreme commander.
All I can say is: the only factor really worth a damn is luck. Unfortunately you can't control luck, the only thing you can do is increase your luck surface. From my experience, nothing on that list actually does that - what increases luck is: hard work, value of idea, connections and personality. Re-order at will.
Is this true?
If "super successful" can be understood as "the biggest tech IPOs of the last 15 years", then I think that Google, Facebook, LinkedIn & Twitter would be at the very top of that list. I guess it depends on how we define "very early".
- the generate revenue very early on in their lives
- they keep expenses low
Is in direct contrast with many of the most successful startups. As far as I know, Google, Facebook, YouTube, Instagram, Skype don't fit this criteria.
Has Google+ written all over it.
You still need to add in the resources (money, energy, charisma) to fund sustained hard work, market resonance, and luck to reach super success.
And, frugality is good in the beginning but after you prove yourself, you have to step on the gas.
That many supers in writing? Sorry, but that's bad writing.