Paul Graham. Why "hairdresser" can not be a startup. Part 1

If you write code or even create your own company, then this is definitely a must read and must have for you.
There are many definitions of the word “startup”, the simplest one and, in my opinion, Paul Graham created the right one, namely “start-up = growth”.

Your attention free translation , any additions well.

Since the article is quite voluminous, for convenience, we have divided it into three logical parts.
')
So part one.

A startup is a company created for rapid growth. This means that not all companies founded from scratch can call themselves startups. It does not matter the scope of work, technology, investment attraction, product output - growth is the basis of all fundamentals, and everything connected with the notion of “start-up” is somehow connected with growth in the first place.
Perhaps this is the most important thought that must be learned before opening a startup. If there is growth, everything else will fall into place. It should be your compass and, at the same time, the determining factor when making decisions.

In order to understand the difference between different new businesses, consider the main difference, which is often overlooked. Millions of new companies are opening around the world every day. Most of them represent the service sector - restaurants, hairdressers, etc. - and are not startups (exceptions, as we know, are everywhere, but still): a hairdresser is not created for accelerated growth, while search engines only exist for the sake of it. Startups simply have a different purpose, rather than ordinary small businesses. To feel the difference, think about the purpose of mahogany seedlings in comparison with bean sprouts ?!

If all companies had a similar fate, and their success depended on the effort and luck of the founder, we would not need a separate category for “special companies”. We could just talk about more successful and less successful businesses, but startups differ from similar companies in their basic structure, if you like - “DNA”. Google is not some kind of barber shop whose owner was more hardworking than everyone else. Google was originally different ...

For rapid growth, a startup must produce a product that will definitely be in demand on the world market. This is another difference from the standard Google "hairdresser".
Fast growth means a) the production of what so many want, b) the ability to serve all customers, regardless of distance, time, etc. At the “a” stage all “hairdressing salons” function successfully (each of us needs a haircut from time to time). The problem lies elsewhere: the business of a “hairdresser” is usually “tied” to the locality, which means people from remote areas will probably not go far for a new hairstyle.

* In order not to be misleading, let us explain: this is not about a large number of service users, but about a large market (the number of customers multiplied by their purchasing power). The most important thing here is not to fall into the trap: the high purchasing power of a limited number of “buyers” will turn you from a startup into a consulting firm.

At the same time, the writing of software, which can easily cope with the “b” condition, may be confronted with the “a” problem: even open access to the program for studying Tibetan language in Hungary can be negated by the low demand for such a product.

Large companies are severely limited by the terms "a" and "b". Strong and promising startups - no.

The limitations of a traditional business, no matter how paradoxical it may be, protect it. Coming back to the barber shop example: opening it, you will most likely compete only with barber shops in your district. The search engine will compete with the world!

The secret to success is simple: when you start up a startup, think about something that did not exist before, because when you enter the global market, you have to implement the idea that no one had thought of before you. Sometimes it seems that to search for such an idea, conscious, long-term, focused work of the brain is needed, however, as practice shows, in fact everything happens quite differently: the founders of successful startups are simply “other” people with a “different” way of thinking, therefore in those things that seem obvious to an ordinary person, the start-up finds something of his own, something that everyone “missed” - the next big thing. Amusing is the fact that the fateful decisions, as a rule, are made by the leaders of startups subconsciously.

Another difference of successful founders of startups is that they are able to answer very different questions: a combination of technological literacy and skill with the ability to apply this literacy on time and for a wide range of tasks. Yesterday's “bad” idea today may turn out to be a genius simply because the technological world is changing too rapidly, and with it the needs and new problems arise. For example: young Stephen Wozniak wanted a personal computer, which for 1975 was a very unexpected desire. Technological literacy came to his aid, because Steve, not only wanted a PC, he also knew HOW to do it. The problem he solved ultimately resulted in a product that Apple is selling to millions of people on the planet today. Plus, Steve was ahead of his contemporaries: by the time many people realized how attractive the computer market was, Apple was already operating on it, taking a significant share.

The same story happened with Google: Larry Payg and Sergey Brin wanted to explore the Internet. Unlike most specialists, they have enough competence and knowledge to assess the imperfections of the existing “search engines”, as well as the possibilities for their improvement. Over the next few years, the problem of Page and Green became universal, and already everyone, not even the most demanding user, could see the weak points of the search engines with the naked eye. However, Google in this matter is already too detached from just emerging competitors.

With these examples, one of the relationships between the idea for a startup and existing technologies can be traced: on the one hand, dramatic changes in a certain area reveal problems, and on the other, they provide ample opportunities for solving them! Another connection also follows from this: in the process of solving new problems, start-ups create new technologies, which closes the circle of constant development.

To be continued…