Pro success and the difference between growing and production

Let's come up with an analogy, and then make fun of it thoroughly: imagine that you have just acquired a plot of land. What will you do? Mining or farming?

If you are engaged in farming, you will first need to purchase seeds, and then work all season to make a profit. And every year you will bury ( literally ) most of the profits back into the land, salaries and mortgage payments. You will intelligently handle the soil so that it continues to give you a crop year after year. If you are lucky and do everything right, you will harvest, sales will grow and, eventually, earn a decent life. But every year, no matter how rich you are, you will return to the beginning: bending your back while working on the ground. When you finally retire, then if you did everything right, the soil will be as good as with the purchase, and your farm will live on.

However, you can do mining. You will need a certain amount of money to pay for the rental of equipment and hire people who will work in the mine. And then: bam, profit! You make money. You tear a huge hole in the ground and pull out all the metal that is there. The work goes with maximum speed: there is nothing to take care of, nothing to save for the future. You earn a lot of money, the land is depleted, and you move on, leaving behind a crater that is not suitable for anything.
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By this time you probably already understood that I am not really talking about farming or mining. This is just a metaphor for managing a software company. You can regard the creation of a company as a step towards producing good software or as a step towards selling stocks, hitting the bank and moving on .

Perhaps it is obvious that I respect one of the approaches more. In fact, I would say that the big problem for our industry is that the mining was so much touted. Around us are constantly stories about “Look, Bob Smith successfully sold the company two years after its foundation, and now he is a billionaire!”. And most importantly, if you want to attract money from the outside, then usually you just need to be production-oriented, because few investors are interested in partnering with those who are not going to sell the company and just want to produce good products and sell them for a fair price. price Usually the first thing an investor will ask you is: “How are you going to go out of business?”

The problem with mining in our industry is that this approach does not work. It leads to the creation of curves, useless companies.

Founders and business angels usually do not really care about what will happen to the companies that they created after the sale. Because the money has already been received and everything went further. Nobody will reproach that the company founded by you was covered after your leaving. In fact, again, for it almost give a medal: “Bob Smith founded the Unlucky Commercian, sold for 46 million dollars and dumped before everything was covered! Genius!"

And even if some of the “mining” companies are bent to an IPO or resale, then for the founders this is not a catastrophe - their steep salaries were taken from investors' money, which means that the founder can simply do something else and raise more funds from outside. Business angels, of course, would prefer that every business was successful, but they consciously play the lottery. All they need is for a small percentage of the companies in which they have invested to grow into something huge and then they will more than return all that has been invested. Business angels are considered geniuses because no one ever talks about all the companies that have covered themselves. Therefore, such investors do not have a problem finding a large number of people for joint investment. Imagine, for example, a person with a lot of Amazon stock. He is a billionaire. And so he wants to invest in some new adventure. Will you invest in this adventure with him? The correct answer is that you do not have enough information to make a decision . How many companies, of those in which he invested, covered? Do you have a reason to believe in what he really knew about Amazon’s future success, or was he just lucky for once?

Remember, in the magazine Fortune do not write articles about all those who have invested in ePizzaOnline and lost all the money. You read only about those who won the lottery. About them speak everywhere.

This is a fundamental problem: we blindly follow those who won the lottery, and we think that we can also win if we act the same way. But, basically, lotteries create a large number of losers in small ways. About these do not write in magazines, but most of them.

Often we naively believe that if there is an established system (stock market, venture financing system, selling CDs with programs in stores, Microsoft Windows), then it benefits everyone, otherwise it would not exist. This is simply not true. It is only necessary that a certain number of people bring all this a lot of money, and publicly bring it. In this situation, the system will be supported. Even if most people lose a little because of its existence.

In mining companies, charismatic, upscale founders and their investors can get a lot of money. But employees, customers and secondary investors are likely to have, since such companies and their products usually suck.

If you are building a company only for the purpose of looking great at one particular moment - on the day of entering the exchange - then you do not think about the future. You do not (go back to the metaphor) take care of the soil, do not make sure that your cattle are healthy and happy, and you don’t do anything else. All you think about is to look like you’ll have good sales in the future.

The stock market itself provokes this behavior: for the market, the potential growth in your sales is important, not the current volume of your sales, because the point of buying shares is to sell them later to another at a higher price.

I want to draw attention to this: imagine that a successful company has an annual profit of, say, four million dollars a year. Year after year four million. Great, right? I mean, I would be happy to own such a company. But this company is terrible in terms of investing . Its market value will be about the same all the time, because there is no annual increase in profit volumes. It means there will be no point in buying stocks at a price higher than now. You can buy stocks for $ 100, but they will continue to cost $ 100 and, therefore, this is a bad investment for you. (Obviously, I greatly simplify everything here. At a minimum, a company that demonstrates stability will increase in price over time. But, I think you get the point.)

What upsets me is the number of people who want to mine, who come to me and say: “I don’t know anything about the programs, but I see gold in those hills and therefore I want to start a company and earn my million dollars! I have an idea and all that, just give me the magic spell that you used to get rich, and I will do it all. ”

This is not how it works. Your idea sucks. No, I don't call you a fool - my ideas sucks too. All ideas sucks because they are just ideas . They are worth nothing.

I succeeded because I worked to bring the idea to life . Lot. All life. At the age of 12 I learned how to program and since then I have programmed at every opportunity. It took me eighteen years to become a millionaire. I did not have a brilliant idea. I just continued to work, hating what I had done before, and trying to do better next time.

The idea is worth nothing. Try to come up with an idea that costs something by itself. "I would like to come up with a web browser at one time." Bullshit. A web browser was invented at least twenty years ago (in 1968) before it was programmed on the NeXTstep computer. A product that could be used led to a revolution in the Internet, not an idea.

Velcro? This idea is useless if you cannot make them. Sticky notes for notes? They were generally created thanks to a happy accident by a person who worked at 3M to get a glue of strong fixation. This man has been researching and working in the chemical industry for years. He did not wake up one day with the thought: “I think I should come up with sticky notes for notes!” And then attracted venture capital and hired a few guys to do everything.

What about Delicious Library (the product that the author of the article is working on is a translator )? We did not come up with the idea of ​​creating disk catalogs. But Mike Matas made the program beautiful and simple and now we own this market. Of course, I came up with the idea of ​​scanning barcodes with a webcam, but this idea would not have cost anything if I had not programmed it . It took almost a year to implement. But what about the idea? Yes, I thought of it once while taking a shower. Trifle.

The people who actually change the world are farmers. Steve Jobs is constantly working on what his company produces. Every minute of every day. He lives, dreams and breathes it all. He is fixated, mad and frightening, but he is trying to create something. He didn’t say once: “Hey, here’s an idea: a smartphone! Bam! Go do it. And while I’m in the sauna. " It does not happen. God is in the details. In the implementation.

The most exciting in attending the conference " Technology, Entertainment, Design " was the realization that all the people before whom I bow are farmers. Doctors and DNA researchers, dancers and chocolate makers, oceanographers and cosmologists, investors all have in common: they are crazy. They work on what they love, literally all the time. You will not be able to talk to them without talking about the object of their passion.

The secret of success, it turns out, is very simple: work up a sweat. Appreciate what you create, not the fame or the money you get. And you will succeed.

Translator's Note:
Translator can not share the opinion of the author about Steve Jobs, Windows, MacOS and other people and products mentioned in the article. Please take this into account when evaluating the translation and the personality of the translator.