While I think it is much more useful to learn from others' success than others' failure (lessons from your own failures are invaluable), let's not forget selection bias. A lot of startup success is luck--or, in other words, factors outside of the control of the founders or their advisors.
Many, if not most, founders aren't even aware of these factors, don't appreciate them fully, or won't acknowledge them out of ego. In many cases the advice should be "work hard, be smart, and buy the winning lottery ticket."
My advice is to attempt startups in the center of a confluence of macrotrends; that will tilt the odds more in your favor.
I am curious how this advice applies (if at all) to Viaweb? If it sounds like I am presuming, I honestly would not be surprised to hear Viaweb was solving multiple problems you may have encountered at the time.
As a side, the most financially successful side project I started (not calling it a start-up out of respect for your definition) was a vampire themed energy drink - it did not solve a problem for me or anyone else but took advantage of a market created by the entertainment industry. The side project I am most proud of having co-started is a $20/month primary health care network for uninsured/under-insured which was the result of a personal problem - I was uninsured.
Yeah well an answer would be to solve problems entrepreneurs have, or "selling shovels" as some might like to say.
But it's an interesting conundrum, I don't have any deep or special knowledge of some other field that would allow me to see problems faced in that industry, so going by the advice of solving my own problems translates to solve the problems of starting a business.
Why is that your biggest problem? Why do you need to start a company? I can almost guarantee that the reasons you come up with can be solved with alternatives much easier than starting a company.
Being a consultant is the first thing that comes to mind. You pick your projects, set your price, and customers tend to appreciate you more than a boss would his employees (outlying companies aside).
I actually agree and thought this originally. But I think it would involve more politics than what I'd feel like putting up with. However I think consulting is a really good business to transition into organically, from simply helping out multiple different organizations then just end up building a career out of it. Plus I think having founded a successful company or two (that's more innovative than not) is a good prerequisite.
If 1,000 CS grads found startups attempting to solve a problem they each have, are they guaranteed success? Or will there be five outliers which exit for billions and then tell everyone all they need to do is to solve their own problems?
Telling others to solve a problem they have seems more like an algorithm to generate at least some successes by guaranteeing diversity. This million monkeys approach is a strength of capitalism, but I wonder if it's the method which maximizes expected value for a would be founder. It seems more of a method to guarantee a minimum return for a VC.
Certainly not. Only a fraction of them will have the determination and intelligence required to turn a problem into a startup. And some of those will be unlucky. But more of the 1000 will succeed starting from that rule than any other.
This is not one of those cases where founders and investors' interests are opposed.
It may well maximise expected value for a would-be founder, but that may not map to the founder's implicit utility function. Imagine you have two options:
Option A: 100% chance of receiving $1 billion
Option B: 50% chance of receiving $0; 50% chance of receiving $4 billion
The expected value of A is $1bn. The expected value of B is $2bn. However, most people I know would choose option A, although it has the lower expected value.
Agree! It is the outliers like snapchat @3billion and instagram @1billion that were not created to solve problems but to start a startup, which are covered 90% of the time and influences developers to follow the same path.We hardly hear of companies like indeed.com sold for $1billion, climate corporation $930 million and solve real problems.
I actually think it is easier to enter an existing market, with an existing problem and competitors.
>> It is the outliers like snapchat @3billion and instagram @1billion that were not created to solve problems but to start a startup.
That's not why either were started. Both were started as just cool little projects by guys who wanted the product. They may have rapidly shifted into growth at all costs, but that's not why they were initially created.
I do agree that they weren't created to solve a problem in the way DropBox was, just to scratch an itch of the founders. Which makes growth hacks like Dropbox's referrals much more difficult. Dropbox could survive on people loving the product no matter how many others used it. Snapchat and Instagram value to users craters without a critical mass of users.
I disagree, snapchat was made with a purpose of being a startup, this is documented in the leaked deposition videos where they discussed who came up with the idea. Instagram, which morphed from a location app was created with the intention to create a startup, see the Stanford ecorner video. Now, craigslist was created without the intention of being a startup, it morphed from an email list when the founder realized how popular it was.
>> snapchat was made with a purpose of being a startup, this is documented in the leaked deposition videos where they discussed who came up with the idea.
Good point about Instagram. You're right, Burbn was started as a startup, it was the photo filter and sharing part that they kept that was Systrom's piece that he just wanted (since he claims to have been square cropping and filtering his photo's for years).
With Snapchat, however, that's not the whole story told by people who knew Speigel at Stanford (my brother was his year). The argument came after they'd already built the app and run around campus showing off how cool their app was. They did, however, very quickly realized that what they built was a company. It's also extremely likely that they had all intended to start a company and that SnapChat immediately became the company once they figured out what they were doing.
A lot of startup success is luck--or, in other words, factors outside of the control of the founders or their advisors.
Yup. I hope everyone here has read the fantastic Fooled By Randomness.
Which is not to say that Drew Houston isn't awesome - by all accounts he is. But it's easy to give way too much credence to advice from a big success whose specific situation differs from our own. (And everyone's specific situation differs from our own.)
> A lot of startup success is luck--or, in other words, factors outside of the control of the founders or their advisors.
Success is very much luck, but a lot of failure is predictable. There are a large number of startups that simply can't succeed because they have a contrived idea that ticks the boxes on some VC's checklist but that excites no potential customer.
> "My advice is to attempt startups in the center of a confluence of macrotrends"
That's basically like saying "buy the winning lottery ticket" in my opinion. There are lots of eyes watching for macrotrends, and lots of people trying to capitalize on that. Identifying the trend is part of success, sure, but that's the easy part - the hard part is separating yourself somehow. Luck isn't the whole reason for that separation, but it's a significant part of it.
I do agree that many founders don't recognize their luck. To their credit though, I think they often emphasize the "work hard, be smart" part instead of saying "I knew I was better than all my competitors because..."
Many, if not most, founders aren't even aware of these factors, don't appreciate them fully, or won't acknowledge them out of ego. In many cases the advice should be "work hard, be smart, and buy the winning lottery ticket."
My advice is to attempt startups in the center of a confluence of macrotrends; that will tilt the odds more in your favor.