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If you want to start a startup, go work for someone else (philosophyforprogrammers.blogspot.com)
310 points by Xodarap on Sept 6, 2014 | hide | past | web | favorite | 93 comments



I've done both - worked for 2 other people's startups, founded my own, worked 5+ years at Google, now founding another. My experience is that you learn something from both, but you learn different things from each, and which will teach you more depends on what skills you need to learn.

Working for someone else's startup, I learned how to quickly cobble solutions together. I learned about uncertainty and picking a direction regardless of whether you're sure it'll work. I learned that most startups fail, and that when they fail, the people who end up doing well are the ones who were looking out for their own interests all along. I learned a lot of basic technical skills, how to write code quickly and learn new APIs quickly and deploy software to multiple machines. I learned how quickly problems of scaling a development team crop up, and how early you should start investing in automation.

Working for Google, I learned how to fix problems once and for all and build that culture into the organization. I learned that even in successful companies, everything is temporary, and that great products are usually built through a lot of hard work by many people rather than great ah-ha insights. I learned how to architect systems for scale, and a lot of practices used for robust, high-availability, frequently-deployed systems. I learned the value of research and of spending a lot of time on a single important problem: many startups take a scattershot approach, trying one weekend hackathon after another and finding nobody wants any of them, while oftentimes there are opportunities that nobody has solved because nobody wants to put in the work. I learned how to work in teams and try to understand what other people want. I learned what problems are really painful for big organizations. I learned how to rigorously research the market and use data to make product decisions, rather than making decisions based on what seems best to one person.

Founding a startup, I learned the limitations of all of the above, and that even if you know in theory what can go wrong, it's quite a different matter to avoid committing those mistakes too. I learned a lot more technical skills; it turns out that no matter how well you prepared in your job, finding a workable startup opportunity requires that you do things that you don't know how to do. I learned how to talk to other people and gather information about the market from ordinary conversations. I learned to make decisions in the absence of firm information, knowing that I may be wrong but that I can't make any forward progress without trying something out that is almost certainly wrong. I learned how to take expedient shortcuts, and to un-learn many of the rigorous engineering practices that I learned working for people because they don't apply in this environment.

I've found many of these self-reinforce as well - I got farther on the first startup because I'd learned many of the basic technical skills from the two startup jobs I'd had before, then got into Google from the skills I taught myself founding that startup, then have a different perspective on what's possible for the second startup because of the work I did at Google. The overlap is less than I (or most people) would like, but one of the unfortunate facts of life you learn as you get older is that life is not a linear path of one move reliably preparing you for the next, and there are often twists of pure luck that throw a monkey wrench into all your plans.


This is a great comment, thank you!

> I learned that most startups fail, and that when they fail, the people who end up doing well are the ones who were looking out for their own interests all along.

Can you elaborate on this? How were people "looking out for their own interests", and how did it end up helping them? Could the founders have done things differently to make the outcome more equitable?

Thanks!


Also not the person you are replying to, but I have my own experience with this.

Basically the people who leave a failing firm early do better than those who stick around until the money runs out. They find better jobs faster because they're not competing with a bunch of their former coworkers, they don't have a gap in their employment to explain, and they don't have to answer the question of why they stayed when they should have known the company was failing. If you find yourself in this situation and you think that loyalty has any value, think again.


Not the OP but…

I took it to mean that you have a responsibility to yourself as well as the startup. You give them a lot of time and effort, sure, but you need to keep doing things like reviewing how the job is letting you develop, both technically and as a person, keeping up your tech skills by reading and playing, and building contacts and networks of your own.

The people who have done that (rather than just had their head down and working) have more to fall back on if the startup fails, and probably noticed things weren’t going so well earlier as well.


If you do not care about yourself, you may end up doing all that super important but non glamorous work that does not sound great when looking for another job. You will not have right checks and buzzwords on resume, cause you have been too busy doing useful "normal" work.

Consider also the latest "github is your resume" hiring fad. Do you think it is possible to crunch, give everything possible to your startup employer and have a pet project at the same time?

If you do not care about yourself, you will end up tired and overworked. Another potential employer will interpret it as a "lack of passion".

The issue is not limited to startups through. The same happen in established companies.


Not to speak for the comment you are replying to, but in my experience it likely means that those that worried more about the startup than themselves ended up worse off than those that looked out for there own best interests first.


I think the three reasons entrepreneurs so often give the advise to just "go do it" is that a) the biggest barrier they faced to their own success was the psychological barrier to actually committing to taking the plunge and b) the key to their success was in taking an unconventional approach to at least some aspect of their business and c) they no doubt set off in a bunch wrong directions that had to be corrected, and the only way to learn that was to make those mistakes.

The catch is that while by nature we are risk-averse, there is a degree of reflection that would definitely improve your chances of success. While big wins tend to require unconventional approaches, you can't just break rules at random: you need to understand the rules and the reasons behind them better than everyone else. Finally, mistakes are a key part of entrepreneurship, but learning from them is essential, and that second part is harder than successful entrepreneurs appreciate (because to be successful, you've had to put together a pretty impressive track record of learning from mistakes). Experience is key to interpreting events to learn the right lesson.


> I learned that most startups fail, and that when they fail, the people who end up doing well are the ones who were looking out for their own interests all along.

Pay attention to this.


It just confused me. How does anyone do well out of a failing startup? By jumping ship early? By going to a competitor? Surely there are no golden parachutes, right?


There definitely are golden parachutes. In my experience, when a startup is going to die, it will thrash around a bit before it quits living.

Most recently, the company was running out of money (~3 months runway), no significant progress was made on the large new funding round we were looking for, and a small round wouldn't do any good since there were big (expensive) milestones to meet. With about 2.5 months left, we laid off about 80-90% of the staff to extend the runway.

Most employees were let go with two week severance packages and about 1 week's worth of insurance. "Critical" employees stayed and were given sizable 'retention' packages with big bonuses if new funding was arranged.


For me, the applied skills I learned at a startup made me a much more attractive prospect. I can speak from experience about the relative strengths and weaknesses of machine learning models on real data, instead of the somewhat sterilized and over-used datasets often passed around in academia. It means a higher salary when I did jump ship into corporate-land.

Plus, it was just plain fun. Startups are the closest thing to the intellectual excitement and curiosity of grad school I've found in the private sector.


Still you get paid the whole time. You meet risk-takers. I've gotten almost every job for 20 years from connections I made at my first startup.


That's like asking "How does any do well out of failing?"

And the answer is surely the same: by learning from mistakes made.


I don't have as much knowledge to impart however I will piggyback. In my experience working for companies of different sizes and stages of growth can be eye opening. Seeing teams work through problems from different perspectives has given me great confidence when figuring out how to address new challenges and uncertainty.


I really like your introspection. I have read a lot of articles about startups (never started one, not even close). Given you summary here, I would definitely pay to read more of your insights.

Please write more down. I am sure I am not the only one who would wait in line to pay for it.

And do please fix the URL in your profile.


I come from marketing and working on my product all by myself now. Very well said. The journey to experience and learn is very personal. Even it can not always be monetized and is less possible to be fully got by others, it's still worth it.


Wanted to say I appreciate your in-depth reply. Quite nice hearing from someone who's had the experience and chose to introspect for us.


Very insightful. Compared to working in corporate or big org, startup can teach you a lot about yourself.


FYI, your url in your HN profile doesn't load (wanted to checkout what your new startup is).


The path I took (founded four startups previously, two exits, currently working on fifth) was to first have a go at consulting.

Working for yourself is not much different from running a startup. You have a product (yourself). You have sales (winning contracts). You have accounting (for your invoices and for your expenses) and have to keep books. You have legal (your contracts). It's a great way to learn how to run a (hopefully) profitable business and build the foundation you'll need to run a startup.


Very informative and amusing post. My favorite statistic was the 18% of entrepreneurs succeed the first time, and only 20% succeed the second time.

> The sort of person who jumps in and gives advice to the masses without doing a lot of research first generally believes that you should jump in and do things without doing a lot of research first.

Like most good polemics, this one probably overstates the case. It seems to me that if you want to pursue an idea when you're young and inexperienced then go for it; but don't go for "it" because doing so is intrinsically better than getting a job.

In my thirties I left a pretty promising career to pursue the dream of designing games and running a games company. I failed (in the ways I cared about -- we didn't lose money or go broke). I think I learned a lot. One thing I learned is that sometimes there are advantages to being young, and poor, and hungry (in the "stay hungry" sense) and sometimes there are advantages to being older, comfortably well-off, and experienced.


>My favorite statistic was the 18% of entrepreneurs succeed the first time, and only 20% succeed the second time.

This is a potentially misleading stat. The second cohort only includes the failures. So clearly at least some of them learned something.

It's a 36% total success rate for entrepreneurs who try twice.

(Though I guess that number is missing those that try once and don't try again)


There is nothing to suggest that the second cohort only includes failures, and bear in mind that many people -- having failed -- won't try a second time -- and if they've learned anything, it will be the people who figure out they're never going to succeed who drop out. Without knowing the probability that someone who succeeds vs. fails will try again there's simply no way to tell.

Anecdotally, it's very common for entrepreneurs to start a business, wait until it's up and running, sell it, and start over. This applies both in high-tech and more prosaic areas like restaurants and gas stations. I imagine that first-time successes are very likely to try again.


Actually, the post says it explicitly that this 20% includes only failures. --> "... entrepreneurs who previously failed have a 20% chance of succeeding."


But what chance of success do entrepreneurs who previously succeeded have?


This statistic wasn't there but one could imagine that it would be higher than 20%. Also, keep in mind that success is a subjective term -- for some people it's when you make $1M, break-even or get acquihired, for others it's at least $100M or $1B.


Who's to say that the 36% one is not a potentially misleading stat?

Assuming the 18%/20% stats are correct, it is a 34.4% success rate from the 18% and 20% stat.

The 36% stat may not be out of the realm of possibility with the difference in values here - there may be context missing from all the numbers cited here. They don't seem to disagree with each other significantly though.


I have an explanation. I got the math wrong. I meant to do:

18 + (82 * .2) but I calculated 16.4 and then added 20 instead of 18.


Or it could just as easily mean that 18% succeed the first time, and the second time (after either an exit or a failure) only 2% more succeed

Which you could take to mean "If I don't succeed in my first venture, I am not part of the 18%- so am I part of the +2%?"


Love these sorts of reflections -- insight about a career in software, from those that have been in it long enough to have one.


> It's unclear whether the average person learns anything from a startup.

> Entrepreneurs don't seem to learn much from their failures

There is a difference between not learning anything at all and not learning something from failures that will help in a future startup venture. I have learned a tremendous amount working at startups. I am closer to everything, nothing is in a silo and I have gotten exposure to all parts of the architecture whereas at an employer I would have been barred from infrastructure and operation tasks. There is also much more freedom to use whatever technology you want to try out, and thus you learn a lot about new programming languages and new libraries and new ways of doing things without having to get approval from layers of management and architects. You learn about your self too, your limits, you have to become independent, and self-reliant.

> Our most important finding is that the reward to the entrepreneurs who provide the ideas and long hours of hard work in these startups is zero.

Maybe if you only consider money. If you are into startups for the money alone, I feel like I would agree, stay away. If you're in a start up for the small team size, for controlling your own destiny, for being close to the customer, close to the product, and don't want to see your life's days waste away in meetings and products that never see the light of day then the value is actually immeasurable.


Analysis like this is interesting because it assesses entrepreneurship like a career choice. Most entrepreneurs arise out of an idea. They aren't sitting on HN dreaming of becoming an entrepreneur(not that there is anything wrong with that). You see an unfulfilled need in the marketplace, believe you have the solution and can smell the money.

The thought, "is this a good long-term career choice?" isn't in the equation. That's for people looking to build a career. This is your one great idea that will make you rich, fuck a career. You are your boss from now on.

If your thought process doesn't look like that than maybe you just haven't stumbled upon that great idea. The idea that strips every rational bone out of your body, that keeps you up at night. Or may you just don't have the risk tolerance for entrepreneurship.

It's a fairly cavalier mindset, but you have to have that kind of naivete to outlive the struggles of starting a business.


I don't think I agree with this as stated.

In my observation, entrepreneurship is absolutely a career path, and most people who start a company keep starting them, move between working at them and creating them, or else get involved at an advisor/investor level if they've already had success.

I definitely think of my startup as a career path, and while I might get rich doing it, it's certainly in my mind that the technical challenges might just be insurmountable.

It might just fail through no fault of my own (a problem with hard science startups), and I am 100% confident that the skills I've picked up in doing this will make it easier to get the kind of job I would want next -- working at a much higher than entry level at either a small company or a new startup. Having that "CEO" and prior experience managing complicated projects on my resume absolutely puts me in a different class in looking for new jobs if it comes to that. I would have been hard pressed to come by that kind of experience at Intel or another big company, even though at one of those places I would have gotten tons of great experience in doing tech development.


> Most entrepreneurs arise out of an idea.

And how did you get that idea? How did you get the experience to see that there was an unfilled need in the marketplace?

People who have experience in a field perceive their risks as lower (correctly!) and are therefore more likely to start a company. It is a perfectly rational decision and is unrelated to risk tolerance.


Exactly my point actually. You work in an industry, might even have a cozy corporate job and great benefits. You're on a solid career trajectory. Leaving that to start a company rarely makes financial sense. But most people aren't assessing it through that lens. They know their industry, have a great idea, and they HAVE TO DO IT. Even if financially it seems nuts!


Entrepreneurs are, in general, not motivated by money. This may be what you are saying - in which case I agree! What I object to is this statement:

> Or may you just don't have the risk tolerance for entrepreneurship.

Risk tolerance is at best weakly related to the likelihood that you will become an entrepreneur, and risk-tolerant entrepreneurs [perform worse](http://hal.archives-ouvertes.fr/docs/00/85/66/06/PDF/PEER_st...) than average.


>The thought, "is this a good long-term career choice?" isn't in the equation. That's for people looking to build a career. This is your one great idea that will make you rich, fuck a career.

So building a career and being an entrepreneur are incompatible? I completely disagree with that idea. Not every entrepreneur is going for the big dollar exit.

I for one would be perfectly happy building my own company and never taking a dime of funding. Who wants to exit when you're doing what you love?

Fuck a career? No thanks, I like what I do and hope I can do it for a long time.


The general idea is the same in education and almost every other aspect of life: learning enough, then applied practice. You do a programming language tutorial then work on your own programs to really grasp it. If you skip the first step you'll make needless mistakes and pick up bad habits, if you skip the second you'll rarely be of much use in the real world.

Here, working at another company can be considered the first step in learning about building businesses, and I'm sure it's beneficial, but in startups I've found you can quickly learn and practice whatever you're intending or supposed to do. Let me give an example form personal experience. At one point in my life I had never sold anything before and probably would have been a lot better if I had worked in another company and observed the sales department, however, when my time came, I had to start contacting customers. I spent a while reading about sales then just went for it. I improved a lot in a short space of time... now I consider this an accelerated experience gain because I researched exactly what I needed for a particular task and applied it to a problem. In the same way I'd only learn about some particular aspect of programming because I've discovered it's what I need.


Article is confusing "startup" with "small business", if your field and your methods are old enough to be tried-and-true then, yes, by all means, apprentice yourself and learn the ropes. After spending the 7 or so years working in a social-networking company, you too can create another stable small-business in social-networking that (for example) staggers users' twitter posts or sells slightly ridiculous shirts to facebook hipsters. If you balance your books and keep at it, you'll probably make a handsome chunk of money and maybe even make it really big one day.

If your field / technology / process is dangerously new and untested because you just invented it (e.g. you're mining titanium from the moon using gravity fields, you're desalinating sea water, you're selling a headset that streams movies into your right eye checks your social feed in your left eye and sucks your dick), there's going to be preciously little other people and books can teach you. You've entered the realm of vague opinions, uncertain grey zones, and questionable futures. In that case, you're only choice is to either not do it and wait for more tests to return, or do it blindly in hopes of learning on the job.

PG and his cronies recommend the "just do it" path for startups in the second category because if you succeed, you'll find yourself in a temporary market monopoly where you'll be entitled to make astronomical amounts of money. PG and his cronies then invest maybe 1% or so of their utility while you invest around 99% of your utility. If your business succeeds, PG and friends get a 1.5x boost to their utilities, while you get maybe a 2x boost to yours. If your business fails, PG and friends shrug it off and offer you some words of encouragement as you pick up the splattered mess of your life off the floor and write a book about how the world wasn't ready for the movie-streaming-eye-sucking machine.


"e.g. you're mining titanium from the moon using gravity fields, you're desalinating sea water"

The fundamental disconnect here is that while there are some "startups" that actually do novel things, most are more like "build some ruby on rails app that does XYZ thing that has always been done, but do it on computers, and maybe cheaper than the big guy can by just ignoring existing regulations until we get big enough that anyone cares".

And then you wind up with a startup company probably full of 20 year olds who are smart and driven but haven't yet seen the hundreds of ways in which they can paint themselves into a corner with bad software practices which creates this negative feedback loop where everyone is working 80-120 hours spinning their wheels trying to get shit to "just work" whereas if they had more experienced technical talent (say people who have worked on highly scalable software at google or microsoft or whoever for 5 years) who have already "seen some shit", they would likely have much higher quality at a fraction of the development time.

(And while the salaries for experienced folks would have to be higher per employee, they could get by with a lot less of them and still have better code).


This is a little bit out there .... I think it is kind of confused. If you are mining titanium on the moon or whatever, then this will not be your first start-up unless you are already a billionaire and are willing to throw your money away or your "mining startup" is really you investing your billions into into someone that can do it, in which case it is not necessarily you "doing the startup" so I'm not sure it is relevant to the discussion.

Also, I think you vastly underestimate what kind of business knowledge is needed in running a successful business. Take your headset into the right-eye example, if you are a fresh-faced kid with nothing but an idea of how to put music into somebody's right eye, or whatever, you may not understand much about GAAP, manufacturing, how deals are brokered, etc.


I would agree that if you don't intend to utterly disrupt some industry, that some experience working in another company can be helpful.

I would argue that as much good knowledge may be gained that the equal number of bad habits may be learned and turn you into an "inside the box thinker".

Working in a hardware startup is a great example of this duality, however. Old engineers know that planning, testing, and quality debugging lead to a great product and that no amount of research can beat a good test program. Young engineers are willing to try stuff because they don't know what they don't know. Some huge innovations have come from younguns trying stuff that "shouldn't" work, and become industry shaping product innovations.

Who's right in the end? Both have been.

Last, I think I am pretty sick of people saying "what the formula is". Just shut up, because there isn't one!


After working for a big multinational pay company, an investment bank, and a year-long internship at a VC firm, and now starting my own business, I really appreciate the experiences that I got from BigCo, especially when it comes to operations, managing customer service, and doing lots of manual work.

Here are my lessons: 1. MVP should be very minimal. Do not bloat it with lots of automation. Just let a human deal with it. That's when you get real user feedback, which you can later automate.

2. Track your interactions with customers (investors, angels, partners) via "Saleforce"-like software. There are cleaner and easier versions out there, which can integrate with the web or mobile apps, and the customer will not even know he or she submitted a ticket or has some reference number.

3. At startup things go really fast, however the tech is being slow to release.


I've been doing my startup and have been working in companies on and off on the side and to be honest I have a quite strong opinion towards the point of view that people need to collect experience in a company before starting their company. I think this is really bad. More specifically, every single day that you work at a company

1. The likelihood of you starting a company and the final size of your company decreases, because every day you learn more about what's not possible. Your mind becomes more restricted and corporate experience will certainly not encourage you to invent Snapchat, Facebook, Twitter, Uber. These ideas can only be done by people who have NO restrictions whatsoever in their minds, who think everything is possible. Corporate life will prevent you from having these ideas and that is why I want to prevent working in a company by all means as long as I can. Which brings us to our second point.

2. You get more used to corporate life, which includes receiving a pay-check, which is mostly not based on how much money you made the company, adapting your personality so that you are good in company politics, so that you look good, so that you get promoted, but that's actually not good for the company. These learnings are very bad for starting a company.

3. You come closer to having kids. I think having kids is probably the biggest factor preventing people from starting companies. Having kids is almost like starting a company, they are your own startup, so having 2 startups is near to impossible.

There is some merit in working at a company, to learn about how politics are weaved into corporate life. This helps you to understand that when you need to sell to a larger company that the person you are selling to care much more about how they look by buying your product than how good your product actually is for his/her company.

This is why working 6 months does have value, which is how long it usually takes to understand how company politics work. However everything more than 6 months will reduce your capability in starting your own startup, every single day.


It kind of drives me nuts that I've read a lot of this research elsewhere, and all of my experiences have either flew in the face of them, or there were major asterisks. It makes me wonder, who were the people being studied, because I can see all of this being true in the general population, and you can even see it in most of the valley.

There is something about the results that I don't trust, much like the way that I don't trust anything I read about what's good or bad for you. Years ago, they said fat was bad for you. Turns out, it's complicated. Then they said carbs were bad. All I can tell is that my parent's immigrant diet was healthier in ways that could not be assessed by "research."


I think it has something to do with the idea that 3% of YC applicants have a 100% chance of getting an interview.

If you follow PG's ethos perfectly maybe you choose to work at a great startup that is going to succeed and then you start your own. Work at Justin.tv, and then start Twitch/ZeroCater


I would disagree with the causality. The sort of person who can get an influential job in a top-tier startup is probably also the sort of person who can start a good company.


Sure. And that person would benefit from working at the top tier startup before starting his own.


place/time and a sprinkle of luck


On the carbs thing ... I think it has something to do with "moderation" or something like that.


I found that starting a startup taught me quickly what I didn't know. In my case, it led me to search for a place where I could learn what I needed.

It's hard to know what to look for, what to learn, when you have not ran against any walls. Starting a startup forces you to find solutions you don't have, for problems you weren't aware off. You might have many solutions when employed, but you're unaware whether those will help you with your startup and what problems you might encounter.


While I am not the first person to defend Paul Graham's writing, I must admit that the author of this article has zero understanding of what is actually meant by the phrase "just do it."

All that statement relays is this: there is no secret formula to having a successful startup! So, the only way to figure things out is to actually be out there doing it.

It is very true that you can learn things working for someone else that would contribute to your future startup. But that is highly dependent on who you are working for and what you are doing for them.

As in regards to the cited studies. The first study actually lists a total of 8 important factors for startups that lasted longer than 5 years and were started between 1991-2000. Interestingly, startups during those years had a 1 in 5 chance of survival. (Sidepoint: Does anyone know if the survival rate for startups today is anywhere close to this rate?) In other words, industry experience is only one of many factors ... and industry experience means having worked in the same industry as your startup, it doesn't mean working in any industry for any employer.

To list the 8 important factors for everyone (and I have a feeling that these are in order of importance):

1. supply chain integration 2. market scope 3. firm age 4. size of founding team 5. financial resources 6. founders' marketing experience 7. founders' industry experience 8. existence of patent protection

[0] http://onlinelibrary.wiley.com/doi/10.1111/j.1540-5885.2007....


Companies are like babies, if you wait to be 100% ready to have one, you'll never have one. You will never know everything, you will never be prepared for everything. Being fully in control (specially through means of statistical modeling) is just an illusion, it might be true for big enough samples, but means nothing for your particular case... and that is why Paul Graham's advice is actually a very good one.


Not that I have heaps of experience to base this on, but here's my general thoughts on a good strategy:

    while(0 == ideas.good_ideas.count ||
        FAIL == start_company(&ideas, &experience)) {

        // no ideas, or failed startup
        while(THRESHOLD > experience.why_failed.confidence ||
            0 == ideas.good_ideas.count) {
            
            // no ideas, and/or not sure why startup failed
            work_in_leadership_for_young_but_successful_company(&experience, &ideas);
        }
    }

    // would be interested to read more articles on
    // what goes here
    end_game();
I think employment for the sake of being a better entrepreneur is a great strategy, but only if you can find the right role, and only if you approach it with the correct frame of mind.


According to the author: - 18% success rate for time founders - 20% success rate after that

Implying previous experience almost doesn't matter that much... so just trying 5 times should assure 1 success.

In that view, starting your company as soon as you can would still be the best way to get to your first success faster.


>So trying 5 times should assure 1 success

That's NOT how probability works. Just because you have a 50-50 chance of flipping heads does not mean it only takes two try's to get heads. On AVERAGE it does.


Yea, I think even if people know this they don't intuitively grasp how far off they are. Five tries at 20% success rate is only 67% overall. That's about the same odds you have to win two rounds of russian roulette.

To have an overall 99% chance (what we might conversationally say is a guarantee), it'd take 21 tries.


> According to the author: - 18% success rate for time founders - 20% success rate after that ... so just trying 5 times should assure 1 success.

Not according to the Binomial theorem. For a success probability of .2 per independent trial and a binary outcome (i.e. success or failure, no intermediate states):

     Trials  Probability of >= 1 successes
     -------------------------------------
       1      .20
       2      .36
       3      .38
       4      .48
       5      .67
      10      .89
     100      .99
But the probability of success never equals 1.

Source: http://arachnoid.com/binomial_probability


These aren't independent events. The OP may be right, but for the wrong reasons.


> These aren't independent events.

I agree. There are a number of ways this could be true -- a person has more experience, is more likely to succeed in later tries because of being seasoned -- or might even be so discouraged by a first failure that he is then programmed to fail. But to a first approximation, the tries are independent. It only shows the limited applicability of theoretical analyses to real-world events.


Interesting. I am on my sixth startup. The first one, in Los Angeles, shut down, but the product was sold to another company and became the core product in the next company over 10 years, and that company eventually sold for hundreds of millions in cash. (Nothing for me.) I learnt a lot of painful but good lessons.

The second company was a consulting company, in London UK, with some friends. We did well, but it was so boring eventually that I closed it. Learnt a lot though.

The third one was a software reseller, in London UK, which worked quite well for a number of years. Top worldwide reseller for several products. But the companies we resold for were so keen to cash out that they stabbed the resellers in the back to improve the numbers right before the sale. Handed over my part of the company to my colleagues and moved on.

Fourth company was another consulting company with some friends (Stockholm, Sweden). But quickly found out we were not lined up on goals and methods, so exited that. (Most of them joined me in the next startup, so it was ok.)

Fifth company was a software product startup in San Francisco. Made several mistakes on sales, marketing and people and ran out of money in the dot com bust, and a VC investment, where we had a term sheet, evaporated.

Went back to the third company for a while to help them restructure and pick up new products then moved on.

Sixth organisation started seven years ago and we now have 60 people and have stared expanding rapidly worldwide in a market which is very different and very rewarding. I am finally able to use everything I learned in the previous five attempts and really use that knowledge. People from three of the previous startups are also in this one.


Totally agree about the learning in consulting - you're always working on your customers _actual_ need ...even if that need ends up not being viable or meaningful in the larger market


I think this is in interesting point (modulo the remark made elsewhere about "assuring" success), but I don't have the evidence to know how it should affect your decisions.

The research I cited found that first time and failed entrepreneurs have a 20% chance of success, whereas "skilled" entrepreneurs have a 30% chance of success. So if you can become "skilled" in one stint of employment, then you would expect to succeed sooner by being employed first than if you were doing startups that whole time.

But it's entirely possible that it takes multiple stints of direct employment to obtain whatever knowledge makes you skilled, in which case your argument is valid. I just don't know of any evidence about this though.


Yep - if you spend 8 years working for someone else, that's 2-4 chances at a startup you've lost.


I've got a full time job, and I've done startups - both are obviously valuable. A friend of mine approached me recently with the idea of doing a startup - but he didn't have any ideas. He wanted to do consulting in his chosen space to find that idea.

My problem with this is that, in my mind, it doubles the risk - you have go into consulting (which is not risk free), then hope you find an idea. There is then additional risk of starting the company and finding out if the idea is a scalable product - I've had it happen twice that we thought we had a product, but it turned out we had a product that required so much consulting to launch we were essentially a consulting company.


Consulting isn't all that risky depending. I never made as much money as when I was part of a consulting partnership. But the work was less glamorous/interesting. Mostly solving legacy system problems (where by definition companies might have lost their expertise and have to call in an outsider).

At least a startup is always new and fresh, at least with a good product. That's why I gave up on consulting (that and the other partners had a falling-out) and have been in startups every since.


Did you find any ideas while consulting that you could use in spinning up a startup? I agree with you about consulting.


Sure ideas are a dime a dozen. Getting a team, funding, traction are all more important.


The self-employment study says that when people who are self-employed switch to dependent employment their wages are at least as high as their dependent employment counterparts.

From an earnings perspective, that makes start ups more appealing. You can take a shot at starting your own company. If it fails, you can still make at least as much money as if you had not started your own company.

The other thing is this blog post is looking at the average outcome. If you are starting a company, you are already starting from the assumption that you are not average.


Glaring logical conclusion that is omitted: if there even is the slight bump in the likelihood of success having worked for someone else vs. not, it's still clear that simply the number of attempts at starting a company is still the overwhelmingly more important factor in overall success.

It doesn't dismiss the point as the author is refuting a specific claim made by PG and others (that you will be better off in your second startup having learned from doing another startup vs. having a job) but it's still worth noting.


I get the "link-bait" virtues of your title(and it worked on me), but the title contradicts itself, literally.

If you want to start a start up, start a start up.

The body of your text also contradicts itself. One of your premises speaks to the luck nature of success. Conceding your premise, the supporting text that follows amounts to advising people to study to win the lottery.

A more interesting treatment would consider time cost, iterative or serial entrepreneurship vs. whatever your win condition is, etc.


there is no contradiction. what you want to do and what this article suggests you do instead are not mutually exclusive.

consider the (perhaps poorly guided) advice "if you want to go to Florida [i think you should] go to Hawaii [instead]".


Bootstrapping my start-ups while working 9 to 5 on site consulting jobs has proved frustrating!

All those who brought me on knew explicitly of my start-ups and yet my consulting gigs never lasted more then a year. Which has been frustrating because my bosses and I befriend each other during the course of the year, but end up turning on me due to office politics. Sigh!

Well im starting a remote consulting gig, which is great, as I will turn in solid work and be far away from office politics.


> be far away from office politics.

heh. it may actually be worse, because being remote adds a new dynamic to all the politics.

Good luck.


It's a work as many hours as I like and need to and they don't own or have rights to my start-up companies nor can later profit from them.

I made it clear to them I am working towards raising money for my start-up and will be able to work a few days a week (weekends included).

My focus is turn in solid/perfect work and rinse and repeat. Not try and worry about trying to create friendships/getting the right people to like me.

I am likable and have a good amount of friends, but when your doing more then just the 9 to 5 and getting visible attention for it, it seems to effect people negatively towards me. So goodbye office politics and thankfully their office is 4 hours away from home.


I don't understand this. If you want to do a startup, just do it. Do it before you have a bunch of excuses for why you shouldn't.


"Just do it"... but have a fallback plan for when you will, statistically, almost inevitably fail.

Granted, if you're on the technical side (and in SV or another "tech hub") then the fallback plan is usually "get a job with someone else within a couple of days of starting to look", but for that to be a reasonable fallback plan you still need to be careful during your startup time to not take on lots of personal debt, etc.


Yeah, but then there is good research and bad research. Hey should have done a bayesian analysis and iterated through all the people who've been successful with startups. What percentage of them were likely successful because of previous employment and those that weren't. How many of these guys are your zucks and gates and andreesens of the world?


The number one rule in startups, just like any other endeavor is just do it and unleash the potentials you never knew you got. TRY is key. Very often we read a lot of rules, dos and donts from successful people and finally just get confused. A lot of them won't tell you they learned their mistakes early on, made corrective adjustments and moved along.


All research are "on average" and given a set of conditions. So, shouting "anecdata!" is not a as strong as it sounds. There are many circumstances to consider.

[Disclaimer: I am person who regrets not "just doing it" while waiting for better times - and motivation for a particular project evaporates in years.]


I pretty sure in one of the essays PG says you should finish collage and go work for 2-3 years (or maybe it wasn't him)

I think there is no simple answer. Try defaulting to work for a few years, but if you are hacking a project while you are studying and you are convinced that you are on to something, take a year break to try it.


work for 2-3 years, yes; college, maybe later.

If I could write a note to my high-school counterpart, it'd say 'learn javascript, screw college, start working right after school'.


you can definitely learn more by working with/for someone else than by simply striking out on your own (too early) IF those people actually care about mentoring and have the ability to communicate their knowledge and experiences.

Sometimes working on your own ideas vs someone elses is very appealing regardless of how efficient the learning might be. So, sometimes I have to remind myself and others -- doing this is not just about efficiency.

I chuckle at the "Academics joke that "a month in the lab can save you an hour in the library." line in the post. What immediately came to my mind was something Click and Clack said : "reality often astonishes theory" ..which is why spending time in the dirty reality of building and experimenting (or even reproducing something you found in the library) is the yin to the library's yang.


Out of curiosity, does anyone know how academic positions are counted in these numbers? Are the Google founders counted as having been previously employed in tech, for example? (They had paid PhD research positions at Stanford CS, but never worked in "regular" tech jobs in industry.)


In my observation, academic research shares a lot in common with entrepreneurship. Stealing from nostrademons above:

>>>> Working for someone else's startup, I learned how to quickly cobble solutions together. I learned about uncertainty and picking a direction regardless of whether you're sure it'll work. I learned that most startups fail, and that when they fail, the people who end up doing well are the ones who were looking out for their own interests all along. I learned a lot of basic technical skills, how to write code quickly and learn new APIs quickly and deploy software to multiple machines. I learned how quickly problems of scaling a development team crop up, and how early you should start investing in automation. <<<<

I pretty much experienced all of those things in the course of my PhD research, with the exception of forming teams.


Generally researchers identify industries by using a code system like [NAICS](http://en.wikipedia.org/wiki/North_American_Industry_Classif...). My guess is that the Google founders would not have been in a similar industry code, but I'm not familiar enough with Stanford to say for sure.


If you want to be a cobbler, go work at a cobbler's shop. If you want to be a luthier, go work at a luthiers. If you want to start a startup, go work at a startup for a while.

Why is this news?


Also is http://www.paulgraham.com/ down for anyone else?


I worked for two startups. One startup was fairly large 100+, it sure didn't feel like a startup except for when it asked people to come on weekends and work or stay behind until 11pm and have the manager call at 1am about work. It also played the startup card when it came to pay. I learned that if you screw people over, they will still stay if it means they can keep a job.

Another startup I joined was small, 20 people. CEO was very caring guy. Paid people better and no crazy hours. Learned some things from the boss.

Overall, I've learned more from the second startup, but it probably won't matter in helping my own. I learned so much more about just bootstrapping my own product.


Finding which startups to work for is the trick


These venture-funded startups make a mockery of the concept. After all, if you're a true entrepreneur, are you really going to waste 6 months of your life asking a fucking venture capitalist for permission to be a founder? The VC-funded game is just the same private-sector social climbing that a previous generation called "the corporate ladder".

The real problem, the 9500-pound chain-smoking and belching elephant in the room, is that almost no one can bootstrap because the U.S. middle class is nearly gone and almost no one has any fucking money. In the 1960s, with strong unions and low housing costs and cheap health insurance that covered everything, worker bees actually could save up and have starting capital. The Satanic Trinity (housing, healthcare, and tuition) that is now killing the middle class wasn't even on the horizon, so people of average means had a real shot at starting their own ventures-- without having to get permission from a bunch of effete Sand Hill Road bureaucrats.

Add to this the obscene cost of living in Silicon Valley. Even the people with supposedly well-paid corporate jobs can't afford to buy houses. The only real way to make money in the Valley: be a landlord. Whenever entrepreneurship revives on the North American continent, it will be far from the tapped-out, overpriced, landlord's paradise wasteland of California.

Ok, so on to the finding itself... I agree. Most people who launch successful businesses had to learn on someone else's dime and risk before they had the capital, skills, and domain knowledge necessary to go on their own. It's pretty rare that a 22-year-old, fresh out of college, has (a) the leadership skill to create a business from scratch, and (b) insight into a real-world problem that can actually be made into a business. These VC darlings aren't true entrepreneurs and shouldn't be taken as typical; instead, they're rich kids whose parents are laundering family connections so it looks like their underachieving spawn are "startup wunderkinds" instead of well-placed halfwits that Wall Street didn't want.


That's just, like, your opinion man. You seem to be focusing on the glitzy veneer of the Sand Hill VCs and ignoring the fact that new capital intensive businesses almost always involve seed investment, be it from friends and family, or venture capitalists.

In either case, it's almost always a good idea to use other peoples' money instead of your own. Particularly in environments like the current one where you can get money without giving up ridiculous amounts of equity. You're undermining your ability to have a few failures to learn from if you put all of your personal assets on the line in one venture.

If your main complaint isn't VCs per se, but access to VCs, then sure, that's a fair argument. But arguing that somehow we'd be better of if people were risking massive amounts of their personal capital on their startups (vs what we have now where the risk is split between them and others who can afford it) seems wrong. Even the founders who do have money aren't so dumb as to turn away VCs out of pride of being a "true entrepreneur" if the terms are favorable.


In either case, it's almost always a good idea to use other peoples' money instead of your own.

I agree. You used to be able to get bank loans on co-investment (i.e. you put up some of the capital). Now they require personal liability. Things have gone to the worse.

You're undermining your ability to have a few failures to learn from if you put all of your personal assets on the line in one venture.

True. But in a time when (a) bank loans were available with co-investment alone (not you're-insane-if-you-take-it personal liability) and (b) people in the middle class actually had money, it was possible to get going while only putting up 5% of the seed money (and getting a larger equity disbursement, because you actually are doing the work on a low salary).

But arguing that somehow we'd be better of if people were risking massive amounts of their personal capital on their startups (vs what we have now where the risk is split between them and others who can afford it) seems wrong.

I agree. My point is that, before the VC era, people didn't have to risk massive amounts of personal capital. A 5% co-investment, and a willingness to work on a lower-than-market salary for a while, was enough to get you in the game.

Even the founders who do have money aren't so dumb as to turn away VCs out of pride of being a "true entrepreneur" if the terms are favorable.

Fair. It's not that all VC is bad or should be turned away. It's that a 6-month permission-seeking process discourages most people who have the entrepreneurial spirit, favoring social climbers.




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