What are the startups really
I present to you the translation of Paul Graham's next great essay What Startups Are Really Like .
October 2009
(This essay is based on a speech at the Startup School in 2009.)
I didn’t know what to talk about at the Startup School, so I decided to ask the creators of the startups we financed. What I have not written?
')
I am in an unusual situation, having the opportunity to check those essays that I wrote about startups. I hope that the essays on other topics are also true, but I do not have the opportunity to check them. Essays about startups are checked by 70 different people every 6 months.
So, I sent a letter to all the founders in which I asked them what unexpected things they had encountered while creating a startup. In fact, I asked them what I myself misunderstood, because I explained everything quite well, and nothing should have surprised them.
I can proudly say that I received one answer, which read:
The bad news is that I received more than 100 other answers with descriptions of surprises faced by the founders of startups.
The responses received were clearly divided into several categories; It is remarkable how often several people were surprised exactly by the same thing.
It was a surprise that most founders mentioned. There were two types of answers: that you need to carefully select the co-founders, and that you need to work very hard to support relationships in the team.
People would like them to pay more attention when choosing partners for themselves, their character and purposefulness, rather than their abilities.
Here is a typical answer:
The character is very important because in a startup it is subjected to more severe tests than in most other situations. One of the founders clearly said that the relationship in the team was more important than the abilities of the people who composed it:
We learned this lesson a long time ago. If you look at the application at YC (Y Combinator, the company that Paul Graham created, and which deals with startup financing, translator comment), you will see more questions about the obligations and relationships between the founders of the startup than their abilities.
The founders of successful startups talked less about choosing partners, and more about how much they worked on maintaining relationships.
Several people used the word "married." This is a much more intense relationship than is usually found between colleagues. Partly because stress is much stronger, partly because the founders are often the whole company. Therefore, these relationships should be built on high quality material. This is the basis of everything.
As far as relationships inside a startup are more intense than relationships between regular colleagues, so are the relations between the founders of a startup and their company. Running a startup is not the same as having a job or being a student. Startup management does not stop for a second. This is so different from the experience of most people that they do not understand it yet do not face.
Everything is exacerbated by the high pace of events in a startup, it seems that time begins to flow more slowly:
With a good set of circumstances, full immersion can be exciting:
Although, I must say that this is a quote from the person we have financed this summer. Maybe a couple of years in his words will be less enthusiastic.
Something else turned out to be a surprise for many people. They were not ready for such steep ups and downs.
In a startup, it seems to you that everything is going great at one moment, and that everything is awful the next. And by the following point I mean in a few hours.
Difficult are, of course, falls. For many startups, this was a big surprise:
After a time, if no significant success comes, it starts to exhaust:
There is a limit to how much you can take on. And if you have reached the point where you can not stand more, it does not mean that the end of the world has come. A lot of founders of successful startups experienced failures on their way.
The good news is that the highs are high too. Several startup founders wrote that what surprised them most was how fun and interesting it was to work in a startup:
Most of all they like freedom:
Honestly, if I haven’t talked about this before, I’m not going to go further. Let it be better for people to think that starting a new company is a dark and difficult task than if they wait for fun, and after a few months say: “Is this something that should be fun? Are you kidding? ”
The truth is that for most people it will not be fun at all. Most of what we do when considering applications is that we are trying to weed out those who do not like working in a startup for our own and their well-being.
It would be best to say this: starting a startup is just as fun as taking a survival course if you like such things. In other words, it will not be fun for you if you don’t like such things.
Many startup founders were surprised at how important perseverance was. It was a pleasant and unpleasant surprise at the same time: they were surprised at the level of necessary perseverance
and at the same time, as far as perseverance itself was able to solve problems:
Several founders explicitly mentioned that perseverance was more important than mind.
This applies not only to the mind, but also to abilities in general, which is why so many people said that in choosing the partners, character was more important.
You will need perseverance because everything takes longer than you expect. Many were surprised by this:
When a startup comes into contact with bureaucratic organizations, such as a large company or a venture capital fund, there is tremendous stress.
One of the reasons why the founders are surprised by this is that they themselves work quickly and therefore expect the same from others. That is why the search for funding and access to the global market so often start-ups are killed.
But I think the main reason why startup founders are surprised at how long everything is happening is because they are too self-confident. They think they will have instant success like Google or Facebook. They say that only 1 out of 100 successful startups have such a trajectory, and they all think: "we will be that 1".
Maybe they will listen to what one of the more successful founders says:
The fact that everything lasts a long time, there are positive sides. Patient work causes less stress and you can do better:
That is why things get much better when a startup reaches the point of profitability. You can switch to another mode of operation.
We often emphasize that startups rarely succeed just because they implement some magical idea. I think that the founders of startups have already driven it into their heads. But many were also surprised by the fact that this applies to cases inside a startup. You have to do a bunch of different things:
Most start-up hackers would prefer to be constantly engaged in programming. But you do not have to, unless of course you fail. You can rephrase it like this: if you only program all your time, you will fail.
This principle applies even to programming. Very rarely is there any genius hack that ensures you success:
Even in those rare cases when some tricky hack brings you success, you most likely will not be able to know about it until the last moment:
So the best strategy is to try many different things. The reason for not having to put all your eggs in one basket is not quite normal, which also applies to the case when you know which basket is the best. In a startup, you don't even know that.
Many talked about how important it was to launch with a minimal work product. By this time, everyone already knows that you need to run as soon as possible and do iterations. It is practically a mantra in YC. Still, a lot of people got burned without doing this:
Why do people spend so much time on the first version? Primarily because of pride. They hate the idea that you need to release a product that can be better. They worry about what people will say about them. But it needs to be overcome:
Do not worry about what others will say. If your first version is so good that the trolls do not make fun of it, you have run too long.
One of the founders said that this should apply to any programming, not just start-ups, and I tend to agree with him. Now, when I am programming, I try to think: “How would I write this so that people who read my code would admire how compact and how little it does?”. Too much programming is poison.
Product development is communication with the user, which does not actually begin until you start up. Before you start, you are like an identikit artist who does not show the first version of his sketch to a witness.
Quickly launching is so important that it is even better for you to treat the first version of your product as a trick for getting the first users to start this communication.
As soon as you begin to communicate with users, I guarantee you will be surprised at what they tell you.
The information received will be pleasant and unpleasant at the same time. They will not like what you have done. But on the other hand, they will want you to do many other things that will be easy to accomplish. They will not be able to tell you (or even realize) what they don’t like, until you launch the wrong product and start communicating.
The great benefit of attracting users is that you may want to change your idea. We always advise the founders of startups to treat their idea as a hypothesis, and not as a drawing. Still, they are surprised at how well a change of idea works.
Just determination, without flexibility, is a stupid and simple algorithm that can not give anything but a mediocre local maximum:
You need to move forward, but at the same time dodge and turn to find a more suitable path. One of the founders expressed it shortly:
This advice is quite difficult to follow, because many people do not understand how difficult it is to evaluate ideas for start-ups, especially their own. Experienced startup founders have learned to keep their mind open:
You can never say what works and what doesn't. You just need to do what seems best at the moment. We ourselves do this in YC. And we still do not know whether this will work, but it looks like a promising hypothesis.
To come up with a good idea is how to find out something indecent. Someone will look at you strangely and you are already thinking: "Oh God, he knows."
These alarms are almost always unfounded:
People often react so nervously to competitors because they overestimate ideas. If ideas were really so important, then competitors with the same idea would be a real threat. But usually decides the execution:
As a rule, this applies even to those cases where competitors receive a lot of public attention.
Hype does not create satisfied users, at least not in such a complex area as high technology.
Many startup founders complained that finding users is very difficult.
It's a difficult question. If you can’t find users, it’s hard to tell if this is happening because they know little about you, or because you simply have a bad product. Even good products may experience difficulties due to the high cost of switching to or integrating them:
One of the founders quite sharply criticized YC for not paying much attention to attracting users:
This may be true; maybe we need to fix it, especially for applications like games. If you are doing something where the basic difficulties are of a technical nature, you can rely on the fact that people themselves will spread information about you, as Google did. One of the founders was surprised how well it worked for them:
But some other types of startups can win more without improving the product, but with the help of deals and marketing.
Deals are broken. This is the law of the world of startups. Startups have no power, and good startup ideas tend to look erroneous. Therefore, everyone is afraid to make deals with you and you cannot do anything about it.
For investors, this also partially applies:
As a rule, I advise to be pessimistic. Assume that you will not find the money, and if someone offers it to you, assume that you can never find it.
Why do startup founders ignore me? Mostly because they are optimistic in nature. It is a mistake to be optimistic about things you cannot control. Be optimistic about your ability and that you can do something wonderful. But you are looking for problems if you are optimistic about big companies and venture capital investors.
Many startup founders said they were surprised by the ignorance of investors:
Business angels are slightly better than venture investors, because they usually have their own startup experience:
Why are the founders so surprised that venture investors don't understand anything? I think because investors seem dauntingly powerful.
The reason they seem powerful is that the profession requires them to be such. Venture investors are becoming, convincing financial managers to give hundreds of millions of dollars. How to do it? You need to look very confident and pretend that you understand technology.
Due to the fact that investors may misjudge you, you will have to work more on how to sell yourself. One of the founders of startups said that he was most surprised by:
It really surprised me. This summer, we invited several university graduates to tell new start-up creators about finding funding, and almost 100% of their advice came down to investor psychology. I thought that I was cynical in relation to venture capital investors, but it turned out that the founders of startups are much more cynical.
At the same time, venture capital investors themselves have no idea that those startups that they like are the ones who can best show themselves. This is exactly the same phenomenon that we described in the previous paragraph. Venture investors get money by exposing themselves confident to financial managers, and start-up creators get money by making sure they are confident before venture investors.
It would seem that it should not come as a surprise that luck plays a big role in the search for financing and making deals. Still, many startups were surprised by this.
If you remember the famous startups, it will become pretty obvious that luck plays a huge role. Where would Microsoft be now if IBM insisted on an exclusive license for DOS?
Why do startup founders ignore this? Businessmen are probably not, but hackers are used to a world where abilities and skills are paramount and you get what you deserve.
In fact, the best approximation is to say that success is the product of ability, dedication and luck. No matter how cool and determined you are, if luck is zero, the product will also be zero.
Quotes about luck belong to those founders whose startups have failed. Those startup creators who quickly fizzled out mostly blame themselves on this. Creators of startups who quickly succeeded are usually not aware of how successful they were. Here those who are between them see how important luck is.
A surprising number of startup founders said they were most surprised by the value of the community. Some of them were referring to the micro-community of startup founders at YC:
And this should not be surprising, because it is specially organized in this way. Other people were surprised by the value of the startup community in a broader sense:
They were particularly surprised by the general benevolent attitude:
And, in particular, the fact that it spread to the very top:
This is one of the reasons why I like being part of this world. Creating wealth is not a one-way game, and you do not need to beat people in the back to win.
I forgot one more thing that surprised many startup creators: outside the startup world, startup founders get no respect:
In part, this is due to the fact that the rest of the world simply does not understand startups, and this is partly another fact that shows that most of the good ideas of startups seem bad:
Unfortunately, this also applies to girls:
I knew about it, but already forgot.
The last big surprise that the startup creators wrote about was how much everything changed as they grew. The biggest change was that less programming was needed.
In particular, now you have to deal with employees who often have a completely different motivation:
Fortunately, things can get much less stressful when you reach flight height:
I would like to say that this is true for all successful startups, but 75% looks very convincing.
There were other categories, but these are the most frequent. The first question that comes to mind after seeing them all, is there anything in common between them?
I saw it right away, and one of the founders of YC, to whom I read this list, also saw it. It should have been surprises, something that I did not tell people. What is common between them?All this I have already said. If I had written another essay with the same theses, without generalizing the answers of the creators of startups, everyone would have said that I ran out of ideas and that I simply repeat myself.
Unfortunately, everything did not fit, so the sequel is read here .
October 2009
(This essay is based on a speech at the Startup School in 2009.)
I didn’t know what to talk about at the Startup School, so I decided to ask the creators of the startups we financed. What I have not written?
')
I am in an unusual situation, having the opportunity to check those essays that I wrote about startups. I hope that the essays on other topics are also true, but I do not have the opportunity to check them. Essays about startups are checked by 70 different people every 6 months.
So, I sent a letter to all the founders in which I asked them what unexpected things they had encountered while creating a startup. In fact, I asked them what I myself misunderstood, because I explained everything quite well, and nothing should have surprised them.
I can proudly say that I received one answer, which read:
What surprised me the most was that it was really quite predictable!
The bad news is that I received more than 100 other answers with descriptions of surprises faced by the founders of startups.
The responses received were clearly divided into several categories; It is remarkable how often several people were surprised exactly by the same thing.
1. Be careful with the choice of companions.
It was a surprise that most founders mentioned. There were two types of answers: that you need to carefully select the co-founders, and that you need to work very hard to support relationships in the team.
People would like them to pay more attention when choosing partners for themselves, their character and purposefulness, rather than their abilities.
Here is a typical answer:
You can not say that you know the character of a person well enough, if you did not work with him in one startup.
The character is very important because in a startup it is subjected to more severe tests than in most other situations. One of the founders clearly said that the relationship in the team was more important than the abilities of the people who composed it:
I would rather start a startup with a friend than with a stranger, even if it is more productive. Startups are so complex that the emotional and social support that friendship gives you outweigh the loss in productivity.
We learned this lesson a long time ago. If you look at the application at YC (Y Combinator, the company that Paul Graham created, and which deals with startup financing, translator comment), you will see more questions about the obligations and relationships between the founders of the startup than their abilities.
The founders of successful startups talked less about choosing partners, and more about how much they worked on maintaining relationships.
It struck me as the relationship between the founders of a startup is moving from friendship to marriage. My relationship with my partner went from just friendship to the fact that we began to meet all the time to clean up finances and clean up all the crap. A startup was our child. I once put it like this: “We’re supposedly married, just don’t fuck.”
Several people used the word "married." This is a much more intense relationship than is usually found between colleagues. Partly because stress is much stronger, partly because the founders are often the whole company. Therefore, these relationships should be built on high quality material. This is the basis of everything.
2. Startups take up your whole life
As far as relationships inside a startup are more intense than relationships between regular colleagues, so are the relations between the founders of a startup and their company. Running a startup is not the same as having a job or being a student. Startup management does not stop for a second. This is so different from the experience of most people that they do not understand it yet do not face.
I did not think that I would spend almost every minute until I was asleep, or working on a startup, or thinking about it. Your life changes completely when you start working for your company, and not for someone else.
Everything is exacerbated by the high pace of events in a startup, it seems that time begins to flow more slowly:
I think that the most unexpected for me was the change in the perception of time. When we worked on our startup, the time was stretched so that the month seemed like a giant interval.
With a good set of circumstances, full immersion can be exciting:
It's amazing how much a startup absorbs you, in the sense that you think of it day and night, but never treat it as a “job”.
Although, I must say that this is a quote from the person we have financed this summer. Maybe a couple of years in his words will be less enthusiastic.
3. Emotional roller coaster.
Something else turned out to be a surprise for many people. They were not ready for such steep ups and downs.
In a startup, it seems to you that everything is going great at one moment, and that everything is awful the next. And by the following point I mean in a few hours.
Emotional ups and downs were the biggest surprise for me. One day, we consider ourselves another Google and dream about how we will buy the islands; in the second, we are thinking about how to tell our loved ones about our complete failure; And so on and so forth.
Difficult are, of course, falls. For many startups, this was a big surprise:
How difficult it is to keep a team’s motivation on difficult days, how low those falls can be.
After a time, if no significant success comes, it starts to exhaust:
One of your first tips to founders of startups: “just don’t die”, but the energy to support the team in the absence of overwhelming success is not taken from the air, it is drawn from the founders themselves.
There is a limit to how much you can take on. And if you have reached the point where you can not stand more, it does not mean that the end of the world has come. A lot of founders of successful startups experienced failures on their way.
4. It can be fun
The good news is that the highs are high too. Several startup founders wrote that what surprised them most was how fun and interesting it was to work in a startup:
I think you talk a little about how to create a startup is very interesting. I am satisfied with my work more than most of my friends who have not created new companies.
Most of all they like freedom:
I am surprised at how much better it is to work on what contains a challenge and requires creativity, what I believe in; this is very different from the usual stuff that I did before. I knew that it should be better, but I did not know how much.
Honestly, if I haven’t talked about this before, I’m not going to go further. Let it be better for people to think that starting a new company is a dark and difficult task than if they wait for fun, and after a few months say: “Is this something that should be fun? Are you kidding? ”
The truth is that for most people it will not be fun at all. Most of what we do when considering applications is that we are trying to weed out those who do not like working in a startup for our own and their well-being.
It would be best to say this: starting a startup is just as fun as taking a survival course if you like such things. In other words, it will not be fun for you if you don’t like such things.
5. Perseverance is the key to victory.
Many startup founders were surprised at how important perseverance was. It was a pleasant and unpleasant surprise at the same time: they were surprised at the level of necessary perseverance
Everyone wrote about how purposeful and flexible it was necessary to be, but when I myself went through it, I realized that the necessary level of sense of purpose was still underestimated.
and at the same time, as far as perseverance itself was able to solve problems:
If you are persistent, then even those problems that initially seem to be beyond your control (for example, immigration) are resolved themselves.
Several founders explicitly mentioned that perseverance was more important than mind.
I was constantly amazed at how much perseverance was more important than just the mind.
This applies not only to the mind, but also to abilities in general, which is why so many people said that in choosing the partners, character was more important.
6. It is for long
You will need perseverance because everything takes longer than you expect. Many were surprised by this:
I am constantly surprised at how long everything happens. If a product does not survive that explosive growth, like some other very few products, everything from development to deals (especially deals) takes 2-3 times longer than I guess.
When a startup comes into contact with bureaucratic organizations, such as a large company or a venture capital fund, there is tremendous stress.
One of the reasons why the founders are surprised by this is that they themselves work quickly and therefore expect the same from others. That is why the search for funding and access to the global market so often start-ups are killed.
But I think the main reason why startup founders are surprised at how long everything is happening is because they are too self-confident. They think they will have instant success like Google or Facebook. They say that only 1 out of 100 successful startups have such a trajectory, and they all think: "we will be that 1".
Maybe they will listen to what one of the more successful founders says:
The main thing that I did not understand before taking up all this is that perseverance is the name of this game. For the vast majority of startups that will become successful, it will be a very long journey, at least 3 years, and maybe 5+.
The fact that everything lasts a long time, there are positive sides. Patient work causes less stress and you can do better:
Since we are relaxed, it is much easier for us to enjoy what we do. This awkward nervous energy has disappeared, mixed with the desperate need not to fail, which has controlled all of our actions. Now we can concentrate on what is best for our company, product, employees and customers.
That is why things get much better when a startup reaches the point of profitability. You can switch to another mode of operation.
7. A lot of little things
We often emphasize that startups rarely succeed just because they implement some magical idea. I think that the founders of startups have already driven it into their heads. But many were also surprised by the fact that this applies to cases inside a startup. You have to do a bunch of different things:
In a startup, there is much more routine work than glamor. If you had taken any random length of time, you would rather find me looking for some strange bug when loading a DLL in the Swedish version of Windows, or looking for a bug in the financial model in the Excel table at night before the next rally than generating brilliant strategic ideas.
Most start-up hackers would prefer to be constantly engaged in programming. But you do not have to, unless of course you fail. You can rephrase it like this: if you only program all your time, you will fail.
This principle applies even to programming. Very rarely is there any genius hack that ensures you success:
I learned never to put on any particular feature of an application or a deal or anything else. Everything happens gradually and you should just keep doing a bunch of things until you stumble upon something.
Even in those rare cases when some tricky hack brings you success, you most likely will not be able to know about it until the last moment:
There is no such thing as a main idea that will bring you success. Well, or at least you will not know which one.
So the best strategy is to try many different things. The reason for not having to put all your eggs in one basket is not quite normal, which also applies to the case when you know which basket is the best. In a startup, you don't even know that.
8. Start with the smallest
Many talked about how important it was to launch with a minimal work product. By this time, everyone already knows that you need to run as soon as possible and do iterations. It is practically a mantra in YC. Still, a lot of people got burned without doing this:
Do the smallest thing that can be called a complete application and sell it.
Why do people spend so much time on the first version? Primarily because of pride. They hate the idea that you need to release a product that can be better. They worry about what people will say about them. But it needs to be overcome:
To do something simple at first glance does not at all mean doing something insignificant or useless.
Do not worry about what others will say. If your first version is so good that the trolls do not make fun of it, you have run too long.
One of the founders said that this should apply to any programming, not just start-ups, and I tend to agree with him. Now, when I am programming, I try to think: “How would I write this so that people who read my code would admire how compact and how little it does?”. Too much programming is poison.
9. Attract users
Product development is communication with the user, which does not actually begin until you start up. Before you start, you are like an identikit artist who does not show the first version of his sketch to a witness.
Quickly launching is so important that it is even better for you to treat the first version of your product as a trick for getting the first users to start this communication.
I learned to think about the first steps of a startup as a great experiment. All products should be considered as an experiment. And those for which there is a market, show promising results very quickly.
As soon as you begin to communicate with users, I guarantee you will be surprised at what they tell you.
When you give users the opportunity to tell you what they need, they will reveal to you a lot of amazing things that they find valuable, as well as what they are willing to pay for.
The information received will be pleasant and unpleasant at the same time. They will not like what you have done. But on the other hand, they will want you to do many other things that will be easy to accomplish. They will not be able to tell you (or even realize) what they don’t like, until you launch the wrong product and start communicating.
10. Change the idea
The great benefit of attracting users is that you may want to change your idea. We always advise the founders of startups to treat their idea as a hypothesis, and not as a drawing. Still, they are surprised at how well a change of idea works.
Usually, when you complain that something is going very hard, you are advised to work even more. In a startup, I think you need to find a problem that is easily solved and solved. Everyone is familiar with optimizing solutions and the first thing that comes to mind, but optimization in the field of problems can bring you good results.
Just determination, without flexibility, is a stupid and simple algorithm that can not give anything but a mediocre local maximum:
When someone is determined, there is a danger that he will take a long and difficult path that will still lead to nowhere.
You need to move forward, but at the same time dodge and turn to find a more suitable path. One of the founders expressed it shortly:
Fast iterations are the key to success.
This advice is quite difficult to follow, because many people do not understand how difficult it is to evaluate ideas for start-ups, especially their own. Experienced startup founders have learned to keep their mind open:
I no longer laugh at ideas, because I know how badly I assess whether they are good or not.
You can never say what works and what doesn't. You just need to do what seems best at the moment. We ourselves do this in YC. And we still do not know whether this will work, but it looks like a promising hypothesis.
11. Do not worry about competitors.
To come up with a good idea is how to find out something indecent. Someone will look at you strangely and you are already thinking: "Oh God, he knows."
These alarms are almost always unfounded:
Companies that at first glance seemed to be competitors and the threat turned out to be not such at all. Even if they worked in the same field, their goals were different.
People often react so nervously to competitors because they overestimate ideas. If ideas were really so important, then competitors with the same idea would be a real threat. But usually decides the execution:
All the troubles caused by the appearance of a new competitor were forgotten in a week. It always comes down to your own product and market approach.
As a rule, this applies even to those cases where competitors receive a lot of public attention.
Competitors, about which bloggers write a lot of good reviews, as a rule, are not really winners and can disappear from the horizon very quickly. In the end, everyone needs only customers.
Hype does not create satisfied users, at least not in such a complex area as high technology.
12. Search users hard
Many startup founders complained that finding users is very difficult.
I couldn’t even imagine that you need to spend so much time to get users.
It's a difficult question. If you can’t find users, it’s hard to tell if this is happening because they know little about you, or because you simply have a bad product. Even good products may experience difficulties due to the high cost of switching to or integrating them:
Making people move to a new service is incredibly hard. This is especially true when companies already use another service, because it requires the work of their developers. If your company is small, they think that it is not urgent.
One of the founders quite sharply criticized YC for not paying much attention to attracting users:
YC preaches “do what people want” as an engineering challenge, a continuous stream of improvements until a sufficient number of people are satisfied, and then the application will take off. Very little is said about the price of getting users.
This may be true; maybe we need to fix it, especially for applications like games. If you are doing something where the basic difficulties are of a technical nature, you can rely on the fact that people themselves will spread information about you, as Google did. One of the founders was surprised how well it worked for them:
There is an irrational fear that no one will buy your product. But if you work a lot and gradually improve it, you have nothing to worry about.
But some other types of startups can win more without improving the product, but with the help of deals and marketing.
13. Expect the worst of transactions.
Deals are broken. This is the law of the world of startups. Startups have no power, and good startup ideas tend to look erroneous. Therefore, everyone is afraid to make deals with you and you cannot do anything about it.
For investors, this also partially applies:
Looking back now, I think it would be much better if we worked on the assumption that we could never get additional investments. This would make us look for ways to make a profit much earlier.
As a rule, I advise to be pessimistic. Assume that you will not find the money, and if someone offers it to you, assume that you can never find it.
If someone gives you money, take it. You constantly say this, but I think it needs to be emphasized again. We had the opportunity to receive much more money than we received last year, and I would like us to do this.
Why do startup founders ignore me? Mostly because they are optimistic in nature. It is a mistake to be optimistic about things you cannot control. Be optimistic about your ability and that you can do something wonderful. But you are looking for problems if you are optimistic about big companies and venture capital investors.
14. Investors do not understand
Many startup founders said they were surprised by the ignorance of investors:
They do not even understand the things in which they invested. I know investors who have invested money in the device, and who could not turn it on when I asked them to hold a demonstration.
Business angels are slightly better than venture investors, because they usually have their own startup experience:
Venture investors in half the cases do not understand what they are talking about and are a hundred years behind in their thinking. Some were great, but 95% of the investors we dealt with were unprofessional, it was unlikely that they were well-versed in business or that they had a creative vision. With business angels, as a rule, it was much better to communicate.
Why are the founders so surprised that venture investors don't understand anything? I think because investors seem dauntingly powerful.
The reason they seem powerful is that the profession requires them to be such. Venture investors are becoming, convincing financial managers to give hundreds of millions of dollars. How to do it? You need to look very confident and pretend that you understand technology.
15. You may have to play
Due to the fact that investors may misjudge you, you will have to work more on how to sell yourself. One of the founders of startups said that he was most surprised by:
How fake confidence impresses investors.
It really surprised me. This summer, we invited several university graduates to tell new start-up creators about finding funding, and almost 100% of their advice came down to investor psychology. I thought that I was cynical in relation to venture capital investors, but it turned out that the founders of startups are much more cynical.
Much of what startup creators do is just show off. And it works.
At the same time, venture capital investors themselves have no idea that those startups that they like are the ones who can best show themselves. This is exactly the same phenomenon that we described in the previous paragraph. Venture investors get money by exposing themselves confident to financial managers, and start-up creators get money by making sure they are confident before venture investors.
16. Luck plays a big role.
It would seem that it should not come as a surprise that luck plays a big role in the search for financing and making deals. Still, many startups were surprised by this.
I did not realize how much luck means and how much lies beyond our control.
If you remember the famous startups, it will become pretty obvious that luck plays a huge role. Where would Microsoft be now if IBM insisted on an exclusive license for DOS?
Why do startup founders ignore this? Businessmen are probably not, but hackers are used to a world where abilities and skills are paramount and you get what you deserve.
When we started our startup, I bought into the dream of all startups: this is a game in which skills decide everything. So it is, to some extent. Abilities have value. Just as purposefulness. But luck is a critical ingredient.
In fact, the best approximation is to say that success is the product of ability, dedication and luck. No matter how cool and determined you are, if luck is zero, the product will also be zero.
Quotes about luck belong to those founders whose startups have failed. Those startup creators who quickly fizzled out mostly blame themselves on this. Creators of startups who quickly succeeded are usually not aware of how successful they were. Here those who are between them see how important luck is.
17. The value of the community
A surprising number of startup founders said they were most surprised by the value of the community. Some of them were referring to the micro-community of startup founders at YC:
The immense importance of the YC group of companies experiencing the same problems at the same time.
And this should not be surprising, because it is specially organized in this way. Other people were surprised by the value of the startup community in a broader sense:
A huge advantage is life in Silicon Valley, where you can not help but hear the news about the latest technologies and startups. And you constantly intersect with useful people.
They were particularly surprised by the general benevolent attitude:
The most amazing thing I saw was the desire of people to help us. Even people who could not get anything from this, put aside their affairs to help us succeed.
And, in particular, the fact that it spread to the very top:
I was very surprised at how accessible the high-ranking and interesting people are. It is amazing how easy it is to reach these people and get an immediate answer.
This is one of the reasons why I like being part of this world. Creating wealth is not a one-way game, and you do not need to beat people in the back to win.
18. You will not receive respect
I forgot one more thing that surprised many startup creators: outside the startup world, startup founders get no respect:
I found that in my social environment, I received much more respect when I said: “I worked on Microsoft Office”, rather than if I said: “I work in a small startup that nobody has heard of, it's called x”.
In part, this is due to the fact that the rest of the world simply does not understand startups, and this is partly another fact that shows that most of the good ideas of startups seem bad:
If you tell your idea to a random person, in 95% of cases you will find a person who decides that your idea is garbage and you are wasting your time (although perhaps he will not tell you in person).
Unfortunately, this also applies to girls:
I was surprised that the fact that I was the founder of a startup did not cause more sympathy for women.
I knew about it, but already forgot.
19. Everything changes as it grows.
The last big surprise that the startup creators wrote about was how much everything changed as they grew. The biggest change was that less programming was needed.
The description of your work as the founder of a startup is completely rewritten every 6-12 months. Less programming, more management / planning / organization of the company, hiring people, putting things in order, and just organizing events that should happen a few months from now.
In particular, now you have to deal with employees who often have a completely different motivation:
I knew what the success conditions of the startup creator were, and I constantly concentrated on this, since I knew that I wanted to create a startup from the age of 19. The conditions for success of an employee are completely different, and it took me some time to figure it out.
Fortunately, things can get much less stressful when you reach flight height:
I would say that 75% of the stress is gone from the moment we started. Now manage a business much nicer. We are more confident. We are calmer. We fight less. We sleep more.
I would like to say that this is true for all successful startups, but 75% looks very convincing.
General
There were other categories, but these are the most frequent. The first question that comes to mind after seeing them all, is there anything in common between them?
I saw it right away, and one of the founders of YC, to whom I read this list, also saw it. It should have been surprises, something that I did not tell people. What is common between them?All this I have already said. If I had written another essay with the same theses, without generalizing the answers of the creators of startups, everyone would have said that I ran out of ideas and that I simply repeat myself.
Unfortunately, everything did not fit, so the sequel is read here .
Source: https://habr.com/ru/post/74666/
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