I Don't Want to Be a Founder(carolchen.me)
carolchen.me
I Don't Want to Be a Founder
https://carolchen.me/blog/founding-bad/
242 comments
Yeah, that's how I've always expected the VC-Backed-Startup world to work. It's fascinating to me to watch people going into that, expecting it to work out for them.
It's like watching somebody take up smoking. You can watch the history of people doing this activity as far back as you like, and just hardly ever come up with an outcome that seems to make your life genuinely better. But with lots of examples of it making your life worse.
That's not to say I'm against starting a Business though. I've been into bootstrapping SaaS products for the last dozen-odd years, and that absolutely has made my life better in lots of ways, including those on your list of Reasons To Start A Company.
The big one for me is Free Time. If you stay small, things work out really nicely. Every dollar past breakeven adds to your personal salary. No dividing by 2 or 3 or 10, so a little $10k MRR niche is all you need to be set for life. That's the kind of niche that can be serviced with a few hours of support mails a week (once the thing is built, of course), which means a lot more freedom to go do whatever else you want.
It's like watching somebody take up smoking. You can watch the history of people doing this activity as far back as you like, and just hardly ever come up with an outcome that seems to make your life genuinely better. But with lots of examples of it making your life worse.
That's not to say I'm against starting a Business though. I've been into bootstrapping SaaS products for the last dozen-odd years, and that absolutely has made my life better in lots of ways, including those on your list of Reasons To Start A Company.
The big one for me is Free Time. If you stay small, things work out really nicely. Every dollar past breakeven adds to your personal salary. No dividing by 2 or 3 or 10, so a little $10k MRR niche is all you need to be set for life. That's the kind of niche that can be serviced with a few hours of support mails a week (once the thing is built, of course), which means a lot more freedom to go do whatever else you want.
I'm surprised this isn't talked about more. Trading your job for a VC-backed startup is just changing one master for another, with a more uncertain outcome and better upside.
I came to the conclusion I'd much rather own 100% of something small than 10% of a Unicorn. So I changed to part-time work to cover the bills and I'm bootstrapping. I think if I'm ever successful enough to need an HR department, I'll sell the business and move onto the next thing. I don't ever want to spend less than 50% of my day knee-deep in the actual code.
I came to the conclusion I'd much rather own 100% of something small than 10% of a Unicorn. So I changed to part-time work to cover the bills and I'm bootstrapping. I think if I'm ever successful enough to need an HR department, I'll sell the business and move onto the next thing. I don't ever want to spend less than 50% of my day knee-deep in the actual code.
The biggest reason that so pushes me away from VC funding. One Pre-Seed fund reached out, so, and I will most likely pitch the guys. Because VC money allows you to speed things up in ways you can't by relying on free cash flow.
That being said, I'd still prefer the latter becaus I don't want another boss (or multiple ones). Gess it depends on the conditions, so.
And good point about the HR-department moment, that's the thing I fear the most in getting to many customers!
That being said, I'd still prefer the latter becaus I don't want another boss (or multiple ones). Gess it depends on the conditions, so.
And good point about the HR-department moment, that's the thing I fear the most in getting to many customers!
Pre-seed? So that's what maybe $10-$30K investment? Save yourself the trouble and do some contract work for 1-3 months, you can make the same amount with no strings attached.
Then after seed, the 30k are already there. More like 100 - 150k. Would speed things up, but solvable without investors as well. We'll see...
>Oh, and the rejection. The non stop rejection. Every single day, minute, hour. Investors, customers, employees, potential employees. It's not personal, but it sure feels personal. Even when things are going great, there's tons of little micro-rejections, non-stop. I wish someone told me that.
THIS! You feel like your back is always against the wall and you have to defend every product decision. You are right it's not personal and probably good the feedback(most of the time...) but you ja it's hard getting rejected 24/7. And even criticism can later be seen as "rejection" :/ Maybe it's best to view these things not in isolation but on a timeline.. Sure many of the things I produce today, might still suck, but I think it sucks less than my products from 8 years ago. Growth is definitely there.
THIS! You feel like your back is always against the wall and you have to defend every product decision. You are right it's not personal and probably good the feedback(most of the time...) but you ja it's hard getting rejected 24/7. And even criticism can later be seen as "rejection" :/ Maybe it's best to view these things not in isolation but on a timeline.. Sure many of the things I produce today, might still suck, but I think it sucks less than my products from 8 years ago. Growth is definitely there.
"You'll spend more time writing emails than writing code. You end up bogged down in organizational issues, not dreaming up cool new features. Rather than having one boss, you now have dozens... investors, customers, employees, etc."
why not hire a COO that takes care of it? Don't do jobs that you are not happy with for long. For some short time that is acceptable, but not for long.
I don't count my customers as by bosses. And as long as you don't give yourself the trouble, they are not your bosses. However it is important to focus on them, try to think about them and know what they need before they even know it.
why not hire a COO that takes care of it? Don't do jobs that you are not happy with for long. For some short time that is acceptable, but not for long.
I don't count my customers as by bosses. And as long as you don't give yourself the trouble, they are not your bosses. However it is important to focus on them, try to think about them and know what they need before they even know it.
Maybe "boss" wasn't the right word – I should have said "Rather than having one boss, you now have dozens of people you're accountable to... investors, customers, employees, etc."
And sure, hiring can make issues go away (I've definitely done it!), but I think you're missing my point – no matter who you hire below you, if you're the CEO, the buck still stops with you. You're the one ultimately responsible.
And sure, hiring can make issues go away (I've definitely done it!), but I think you're missing my point – no matter who you hire below you, if you're the CEO, the buck still stops with you. You're the one ultimately responsible.
The lesser known truth is that the CEO role is often tedious "normal" work and not being Ironman. You can give in to that and hire a CEO that actually enjoys the meetings and stuff, or at least a COO to run the company day to day. Just because you founded a company does not mean you have to do everything but sure, the pressure to take responsibility is high..
Buck stops with the owner. You can hire a ceo also.
"if you're the CEO, the buck still stops with you." -> Being a founder does not mean being a CEO. You can become CTO, CPO, CMO, or other as a founder.
Of course, CEO is much more prestigious than the other C-level roles. But like you said, it has its own price.
Of course, CEO is much more prestigious than the other C-level roles. But like you said, it has its own price.
Oh, and the rejection. The non stop rejection. Every single day, hour, minute. Investors, customers, employees, potential employees. It's not personal, but it sure feels personal. Even when things are going great, there's tons of little micro-rejections, non-stop. I wish someone told me that.
Yep. That's been one of the toughest parts of the whole process to me. Probably the toughest. That and the fact that nobody else (unless they've been through the same process) can really understand what you're dealing with. It results, for me, in a very lonely feeling at times.
Yep. That's been one of the toughest parts of the whole process to me. Probably the toughest. That and the fact that nobody else (unless they've been through the same process) can really understand what you're dealing with. It results, for me, in a very lonely feeling at times.
It sounds similar to the advice for a number of other disciplines I've seen in my family tree: classical musician and ministry. That is, you do it because you can't imagine doing _anything_ else because the dedication you need to succeed is so great it crushes almost anyone with less than fanatical devotion. But being a successful founder in tech has on average a _lot_ better rewards and social recognition overall than either of the other "tournament" style careers out there, so it's worth the downsides.
The attitude is essentially that of "Find What You Love and Let it Destroy You" quixotic work-centric nihilism that seems both understandable yet ridiculous. For folks that ascribe this worldview though, I do expect them to do fairly well in whatever they do... and to be miserable to be someone unfortunate enough to love them.
The attitude is essentially that of "Find What You Love and Let it Destroy You" quixotic work-centric nihilism that seems both understandable yet ridiculous. For folks that ascribe this worldview though, I do expect them to do fairly well in whatever they do... and to be miserable to be someone unfortunate enough to love them.
> But don't do it because you want to do it. Do it because you literally can't imagine not doing it.
What about because you can't bear the thought of having to work 8 hours a day for the rest of your life? I realize this is probably among the "bad" reasons to start a business (and it probably sounds disrespectful to people who have and will keep on doing that until retirement), but that is how I feel currently.
It may sound like a burnout problem, but there wasn't anything to be burned out by except... having to actually work full-time. I now freelance 10-15 hours per week and that feels doable but I'm not going to have a fun retirement with that (at least living expenses are covered).
What about because you can't bear the thought of having to work 8 hours a day for the rest of your life? I realize this is probably among the "bad" reasons to start a business (and it probably sounds disrespectful to people who have and will keep on doing that until retirement), but that is how I feel currently.
It may sound like a burnout problem, but there wasn't anything to be burned out by except... having to actually work full-time. I now freelance 10-15 hours per week and that feels doable but I'm not going to have a fun retirement with that (at least living expenses are covered).
It is a valid reason. Some people start companies to actually make money. If that is your motivation it can be very powerful. I would also say that it’s going to be (probably) years of 12+ hour days that might end in failure.
Thanks. Somehow that doesn't sound as bad, as long as there is reasonable (whatever that means) chance of it working out. Although, logically, it's clear to me that it is harder than working a job. Only way to know is to do it, I guess.
And maybe see a therapist, because this dread of having to work sounds weird now that I put it in writing. And I did it for many years without seeming to suffer too much, at the time at least.
And maybe see a therapist, because this dread of having to work sounds weird now that I put it in writing. And I did it for many years without seeming to suffer too much, at the time at least.
You have to at least try to find a path toward self-actualization at your current job. Depends on how your relationships are with your various coworkers. For example my personal experience is this: Last gig was a startup, but I was stuck with the wrong people. It only takes one bad apple in your group of cofounders to generate enough chaos to plunge the whole thing into the ground. Since I bailed, I started working 9-5 at a job that pays me more than I've ever been paid and I split my time here working on 3 different projects which are all exciting and which I have a good deal of creative control over, and I enjoy working with every single one of my coworkers. It is my belief that the most effective way to move yourself toward the working environment that you want to have is to shape yourself in the image of the type of person that you want to work with. In my experience that has something to do with experience and knowledge... so I do not shy away from opportunities in which I can expand my experience or knowledge especially in the topics that I'm passionate about. And it's also important to proactively share your experience and knowledge. That one is the most genuine way to demonstrate that you know your stuff.
The article is specifically about VC-backed startups, so I was speaking to that. If you’re worried about burnout, don’t start a company. I take a lot of time off, but you can never really shut your laptop off.
That being said, a smaller drop shipping company or something similar could work!
That being said, a smaller drop shipping company or something similar could work!
> What about because you can't bear the thought of having to work 8 hours a day for the rest of your life?
Probably the lowest risk strategy to solve this problem is get a FAANG job and invest at least half your salary in mutual funds for 10 years.
Probably the lowest risk strategy to solve this problem is get a FAANG job and invest at least half your salary in mutual funds for 10 years.
Yes, probably. Unfortunately, no such thing in my neighborhood.
Yep, I know someone who did this, but without a FAANG job, living in a relatively low cost of living area. It took 15 years to get to the first million, and roughly 20 years to get to two. You need to be able to handle a lot of ups and downs, like the dot com crash, great recession, and now corona.
A lot of people, quite understandably, can't deal with that sort of volatility. You'll see $100K+ drops in a month. You'll also see 6 figure gains, of course. Some people give up, put it all into bonds. That's not good, either.
A lot of people, quite understandably, can't deal with that sort of volatility. You'll see $100K+ drops in a month. You'll also see 6 figure gains, of course. Some people give up, put it all into bonds. That's not good, either.
">Oh, and the rejection. The non stop rejection. Every single day, minute, hour. Investors, customers, employees, potential employees. It's not personal, but it sure feels personal. Even when things are going great, there's tons of little micro-rejections, non-stop. I wish someone told me that."
That was definitely the case with my first startup when I was younger. In my second business that I started 10 years later, I couldn't care less. Most of the time such a feedback is given by people who aren't my target audience and who thus don't have the pain that people I target have. If your target audience rejects you, you have a big big problem.
That was definitely the case with my first startup when I was younger. In my second business that I started 10 years later, I couldn't care less. Most of the time such a feedback is given by people who aren't my target audience and who thus don't have the pain that people I target have. If your target audience rejects you, you have a big big problem.
For the record - I think the issues identified here are isolated to founders of venture backed businesses that are shooting for the moon.
So, could one avoid them by self-funding and growing very slowly?
Not all of them but certainly a few of them. Growing a bootstrapped business slowly meant fewer rejections, less stress about expected growth (hiring, sales) and more control over your role at the company. But eventually you'll hire employees and you will spend less time writing code. I wouldn't necessarily say that's bad though as you might discover that some of those other aspects of running a business are even more satisfying. And you can always make time if you really feel the itch to program something again (once you've hired people to handle support/ sales).
I generally encourage interested people to start their own companies. But I advise against taking VC except for a few use cases that make bootstrapping unrealistic.
I generally encourage interested people to start their own companies. But I advise against taking VC except for a few use cases that make bootstrapping unrealistic.
I bootstrapped a startup to $27m in revenue.
I woke up with knots in my stomach for months thinking about the things I would have to do to get customers and the non-stop rejection the day would hold as I worked to get a foothold for my startup.
There was no VC to call me to account, or VC firm to help with areas you I didn't like or couldn't do.
If I hadn't been able to hold myself accountable to do the things that I dreaded my startup never would have gotten off the ground.
I woke up with knots in my stomach for months thinking about the things I would have to do to get customers and the non-stop rejection the day would hold as I worked to get a foothold for my startup.
There was no VC to call me to account, or VC firm to help with areas you I didn't like or couldn't do.
If I hadn't been able to hold myself accountable to do the things that I dreaded my startup never would have gotten off the ground.
I've bootstrapped several businesses. The stress is there but its different and highly depends on the situation (how much money you have saved up, what market you're in etc.)
> you'll feel guilty because there's something more important you should be doing. (Me? I'm currently procrastinating on an investor update, an H1B application and two performance reviews.) You'll spend more time writing emails than writing code. You end up bogged down in organizational issues...
Somewhere out there in the world is someone incredibly excited to do just that. They aren't necessarily an "ideas" person but wrangling org just get's the heart racing. It's a shame that they're as hard to find as good ideas are
Somewhere out there in the world is someone incredibly excited to do just that. They aren't necessarily an "ideas" person but wrangling org just get's the heart racing. It's a shame that they're as hard to find as good ideas are
Do you think some of these issues could be ameliorated by setting out guidelines in the very beginning such as sticking to a simple business model, saying you won’t scale past a small size, and outsourcing business-related work to 3rd party services? Many engineers probably identify with your quotes about “building something no one else has” and “freedom to work on what I want.”
I think many of us would find guidelines like that useful! Because to a corporate engineer drone like myself, starting something small like Pinboard sounds rewarding.
I think many of us would find guidelines like that useful! Because to a corporate engineer drone like myself, starting something small like Pinboard sounds rewarding.
Yeah! I specifically was using the YC definition of "founder" here (VC backed, etc), since that’s what the article is about. Indie hacking is a completely different ballgame!
I've started a few other companies in parallel (for example, https://startupescape.com/) that collectively earn similar to my company salary, and take a few minutes a week to run. You have a limit on how big you can get and how much of a difference you can make, but if you're cool with that then it's definitely possible! In my mind, the only downside is that you're working alone rather than with a team – and it's really fun to have people to share the journey with!
I've started a few other companies in parallel (for example, https://startupescape.com/) that collectively earn similar to my company salary, and take a few minutes a week to run. You have a limit on how big you can get and how much of a difference you can make, but if you're cool with that then it's definitely possible! In my mind, the only downside is that you're working alone rather than with a team – and it's really fun to have people to share the journey with!
This excerpt from Lex Fridman's podcast with Stephen Schwarzman provides a fairly good assessment of the situation...it's a rough ride. - https://www.youtube.com/watch?v=jdt4PPY09rQ
Some folks can handle many things at once and have a structured mind for progressing them all forward simultaneously. My wife had that kind of mind. I do not. I struggled mightily managing a company and ultimately tapped out.
Some folks can handle many things at once and have a structured mind for progressing them all forward simultaneously. My wife had that kind of mind. I do not. I struggled mightily managing a company and ultimately tapped out.
Probably projecting here, but the imo the no1 reason to start a business is writing software for others does not scale, while selling software/service is lucrative.
> selling software/service is lucrative.
Can be lucrative. I know many people who have tried to start a business and failed and were never making money.
Can be lucrative. I know many people who have tried to start a business and failed and were never making money.
Any number of billion-dollar consulting companies might want to disagree with that.
I enjoyed this article, but I think it glosses over a very important part of my (and my cofounders') own motivation for starting a company: vision.
Sometimes you see or believe something that others simply can't or don't, and you want to do something about it. Trying to find a (usually narrowly-defined) job that lets you work on these things can be very hard because there usually has to be someone looking for solutions to these hard-to-see problems, and you sacrifice a bunch (more) of your autonomy in the process.
Founding a startup is a great solution to this problem; convince some capital that you have deep conviction and competence to make a material change in the world and put in your own elbow grease to prove it. If you are willing to work hard you don't need very much money to amplify the impact of your own decisions and efforts and the snowball grows, attracting more resources along its path.
It's still really hard to do, but founding a startup remains one of the best ways to prove out a hypothesis in the real world and achieve actual change, while still allowing for a decent income even in the event of failure. It is worth it if the mission is compelling.
Sometimes you see or believe something that others simply can't or don't, and you want to do something about it. Trying to find a (usually narrowly-defined) job that lets you work on these things can be very hard because there usually has to be someone looking for solutions to these hard-to-see problems, and you sacrifice a bunch (more) of your autonomy in the process.
Founding a startup is a great solution to this problem; convince some capital that you have deep conviction and competence to make a material change in the world and put in your own elbow grease to prove it. If you are willing to work hard you don't need very much money to amplify the impact of your own decisions and efforts and the snowball grows, attracting more resources along its path.
It's still really hard to do, but founding a startup remains one of the best ways to prove out a hypothesis in the real world and achieve actual change, while still allowing for a decent income even in the event of failure. It is worth it if the mission is compelling.
> you see or believe something that others simply can't or don't, and you want to do something about it.
It must be more than vision. I see things all the time that more others can't but I really dont have the time or inclination to start a company.
It must be more than vision. I see things all the time that more others can't but I really dont have the time or inclination to start a company.
One of the most powerful motivations I rarely hear discussed is desperation. As stupid as it sounds, for myself, desperation to prove myself and fear of failing are what have driven me. People in general don't like to be miserable for long periods of time. You almost have to be miserable enough to think a startup is worth it.
"[..] while still allowing for a decent income even in the event of failure." How does this work? You're just taking enough of a salary as an early stage C[X]O/founder that your downside is limited?
Essentially. At least enough not to accrue debt. In the event of complete failure of the startup, you'd still likely come out worse financially than if you'd taken a more traditional job (especially in tech). So there is, of course, still substantial opportunity cost — but the upside of success can be huge.
I successful founded startups since 20 years, starting in the age of 16. In none of them, I founded together with partners that I realy trusted like I trust my wife. However we worked together on a professional level and figured it out everytime.
Why could we do that? because in the end it is a work for roughly 5y and if you stop even thinking about working 24x7x365 you have enough free time for recreational activities. I'm on vacation around 6 times a year, but available to the company on critical stuff.
Yes sometimes it's hard, sometimes you have so much work that even 24 hours a day wont be enough, but then again you need to focus on the important work and think about yourself.
Btw I only did the bootstrap way with every company founded on 25k€ and no VC/Angle/Bank/External money and very low income in the first years (I hire people ASAP). As of today, in average over the last 20y this gave me more then 500k€ yearly salary with the exit money. Not bad and definitive much better than I would have had in in any Employment.
For me it is absolutely no choice to be employed or working in larger companies. I want my own freedom :)
Why could we do that? because in the end it is a work for roughly 5y and if you stop even thinking about working 24x7x365 you have enough free time for recreational activities. I'm on vacation around 6 times a year, but available to the company on critical stuff.
Yes sometimes it's hard, sometimes you have so much work that even 24 hours a day wont be enough, but then again you need to focus on the important work and think about yourself.
Btw I only did the bootstrap way with every company founded on 25k€ and no VC/Angle/Bank/External money and very low income in the first years (I hire people ASAP). As of today, in average over the last 20y this gave me more then 500k€ yearly salary with the exit money. Not bad and definitive much better than I would have had in in any Employment.
For me it is absolutely no choice to be employed or working in larger companies. I want my own freedom :)
Thanks for the inspiring story. I’m guessing that the 25K€ probably referrers to a GmbH in Germany :)
If so, would you say the GmbH/UG (Limited Liability Company) route is a good idea from the start for a solo founder of a bootstrapped SaaS?
I’ve been doing my research and maybe I’m wrong, but it seems like it has quite a lot of overhead for a first time solo founder like myself.
To clarify, I’m an expat in Germany, but I’ve even looked into setting up an LLC in the US or another limited entity because they appear more lightweight to operate than their counterparts in Germany. But then I end up in a complicated international tax situation.
I’m not seeking legal advice, just wondering if you have any tips now that you’ve gone that path several times successfully.
Cheers!
If so, would you say the GmbH/UG (Limited Liability Company) route is a good idea from the start for a solo founder of a bootstrapped SaaS?
I’ve been doing my research and maybe I’m wrong, but it seems like it has quite a lot of overhead for a first time solo founder like myself.
To clarify, I’m an expat in Germany, but I’ve even looked into setting up an LLC in the US or another limited entity because they appear more lightweight to operate than their counterparts in Germany. But then I end up in a complicated international tax situation.
I’m not seeking legal advice, just wondering if you have any tips now that you’ve gone that path several times successfully.
Cheers!
GmbH gives you limited liability, that's its main purpose, to encapsulate risks and create a body on its own. You can just as well just register as a freelancer if there's no significant risk of going into debt suddenly or being sued. The overhead is not that big though, you have to submit tax returns, do proper accounting and you might want a tax consultant for this - that removes most of the headache, and costs you 3k€ a year. The pains start with employees, but I've also outsourced that to an HR company, costs me 30€ per employee per month - removes most of those pains too. Often tax consultants do that too. Bigger pains start at 10 employees, but by then ure hopefully large enough to have a few experienced people around you to take care of those :) All in all, I've found Germany to be less painfull than expected.
> You can just as well just register as a freelancer [...]
Beware: If you're registered as a "Freiberufler", you're not allowed to sell or re-sell any physical or virtual products, including any kind of SaaS (but you're allowed to have employees). If you want to do that, you have to register a Gewerbe. To put it simple, as a Freiberufler you can only sell your time or that of your employees (it doesn't matter whether you use fixed-price contracts or hourly rates), but you can't sell your software.
Beware: If you're registered as a "Freiberufler", you're not allowed to sell or re-sell any physical or virtual products, including any kind of SaaS (but you're allowed to have employees). If you want to do that, you have to register a Gewerbe. To put it simple, as a Freiberufler you can only sell your time or that of your employees (it doesn't matter whether you use fixed-price contracts or hourly rates), but you can't sell your software.
I think you can avoid the complicated international tax situation by not being a tax resident of Germany.
As they stated, they are an expat in Germany, so as long as they stay there for more than 6 months of the year, the are at the minimum required to pay income tax.
You can start out with an Einzelunternehmen (Sole Proprietorship) which means your personal finances and your "companies" finances are the same, but it's very little hassle and cost to set up, basically an online form and a few Euro. Then, when you want to grow your business, limit your financial liability, take in outside money or just better control the flow of capital you can set up a GmbH (don't bother with an UG if you have the €25k at hand). Bonus points if you think it likely that you'll sell your business you can set up two GmbHs in a Holding structure which has big tax benefits in the event of a sale. You still only need the €25k once in that case.
Do not do an Einzelunternehmen to start. Do a UG. Not worth exposing yourself to the unforgiving and extremely aggressive Finanzamt when they decide they want to collect money you didn't expect to owe.
Can you elaborate on that?
My tax adviser told me I should go for a Einzelunternehmen (especially use the Kleingewerbe during the first year) because of the reduced costs (registration costs 25EUR and thats it) and not having the overhead. I’ve heard that registering a UG costs about ~500EUR + yearly costs of around 1500 EUR.
Given that this is during a beginning to try things out - without having too much money laying around to play with it.
Would definitely like to know about risks before getting myself into it.
My tax adviser told me I should go for a Einzelunternehmen (especially use the Kleingewerbe during the first year) because of the reduced costs (registration costs 25EUR and thats it) and not having the overhead. I’ve heard that registering a UG costs about ~500EUR + yearly costs of around 1500 EUR.
Given that this is during a beginning to try things out - without having too much money laying around to play with it.
Would definitely like to know about risks before getting myself into it.
> Given that this is during a beginning to try things out - without having too much money laying around to play with it.
If that's what you want to do, then a Einzelunternehmen (without Handelsregistereintrag) should be fine and less beaurocratic overhead. Especially for bootstrapping or side-projects it's always useful to have a Gewerbe registered.
As long as you follow the best practices (specifying 0€ expected income in the first year, etc.) and don't try to do any financial trickery, Finanzamt also shouldn't be a problem. However once you start to turn a decent profit (100+k/year) and/or start to hire people, you will be required to do more bookkeeping anyway, at which point it makes sense to found a GmbH (or even two layered ones).
If that's what you want to do, then a Einzelunternehmen (without Handelsregistereintrag) should be fine and less beaurocratic overhead. Especially for bootstrapping or side-projects it's always useful to have a Gewerbe registered.
As long as you follow the best practices (specifying 0€ expected income in the first year, etc.) and don't try to do any financial trickery, Finanzamt also shouldn't be a problem. However once you start to turn a decent profit (100+k/year) and/or start to hire people, you will be required to do more bookkeeping anyway, at which point it makes sense to found a GmbH (or even two layered ones).
I know enough smart people who have been pursued by the Finanzamt because their accountant and the Finanzamt had a different interpretation of the law.
Yes it's all Germany based. Don't go the UG way, just found a GmbH.
Please note it is possible to found it with 12500€ and have to provide the other half of the 25k€ later.
My first company was without the GmbH protection and benefits. It was ok but I would not do or suggest it to anyone. Hell of a pain to migrate to a GmbH later.
Please note it is possible to found it with 12500€ and have to provide the other half of the 25k€ later.
My first company was without the GmbH protection and benefits. It was ok but I would not do or suggest it to anyone. Hell of a pain to migrate to a GmbH later.
I‘m about to found a UG in the next few days, so I‘m curious why you say that I should found a GmbH rather than a UG.
If you found with 1€, the moment you place the signature your company is insolvent as it can't pay the resulting invoice. Even if you found with 1k it is often quite near to overwelm the newly created company.
Beside that, UG has very bad reputation and if you need something your company rating will lead to problems like prepayment when ordering goods. New GmbH is not the best either but increased quite fast.
In addition, transition from UG to GmbH is a bit of a pain, as you need a let your books be checked (costly) or by just paying the amount to reach the GmbH money.
Beside that, UG has very bad reputation and if you need something your company rating will lead to problems like prepayment when ordering goods. New GmbH is not the best either but increased quite fast.
In addition, transition from UG to GmbH is a bit of a pain, as you need a let your books be checked (costly) or by just paying the amount to reach the GmbH money.
There are some fixed costs with transitioning to a GmbH (notary, Handelsregister, etc.), along with all the time you have to spend to change the name all over the place, which quickly amounts to a few thousand bucks.
Given that the 1€ founding is an illusion anyway, as you will need to have some money in the company to pay your accountant, Berufsgenossenschaft, (the salary you are living off if you are working full-time), etc., the benefits of requiring somewhat less (maybe 5k instead of 12.5k) are not that great.
Given that the 1€ founding is an illusion anyway, as you will need to have some money in the company to pay your accountant, Berufsgenossenschaft, (the salary you are living off if you are working full-time), etc., the benefits of requiring somewhat less (maybe 5k instead of 12.5k) are not that great.
I heard, that transition from UG to GmbH might be associated with additional costs. Also some older folks don’t like UG in general, because it is “immature” company status for them. Personally I don’t like (haftungsbeschränkt) at the end. It’s longer than actual company’s name and just does not sound good.
Can you explain a bit more about the migration process?
I’ve read that the “most straightfoward way” is to create a new GmbH and transfer all the IP away from the Einzelunternehmen. It seemed kinda complicated though. (As everything is when dealing with the Finanzamt IMO)
I’ve read that the “most straightfoward way” is to create a new GmbH and transfer all the IP away from the Einzelunternehmen. It seemed kinda complicated though. (As everything is when dealing with the Finanzamt IMO)
> For me it is absolutely no choice to be employed or working in larger companies. I want my own freedom :)
Living the dream, what are/were a few of them?
I still have too much psychological/mental stuff from my Fintech startup I left in 2018 to seriously consider doing it again, even though this pandemic put the Industry I focused on as an 'essential' Industry despite denying them access to financial services and payment processing at the same time.
I also now have made friends with an accountant at a very reputable Accelerator with connections to Silicon Valley VCs. Still, it'd be tempting to get to do it all again for not having to work for anyone again, even though I also bootstrapped and had to have a day job for the first 3.5 years.
Living the dream, what are/were a few of them?
I still have too much psychological/mental stuff from my Fintech startup I left in 2018 to seriously consider doing it again, even though this pandemic put the Industry I focused on as an 'essential' Industry despite denying them access to financial services and payment processing at the same time.
I also now have made friends with an accountant at a very reputable Accelerator with connections to Silicon Valley VCs. Still, it'd be tempting to get to do it all again for not having to work for anyone again, even though I also bootstrapped and had to have a day job for the first 3.5 years.
What are some viable startup ideas in fin tech?
Insurance by app?
Stock trading for free?
Insurance by app?
Stock trading for free?
Not everything needs to be B2C. There are a ton of problems to solve for B2B - for example reconciling buy side transactions to the street. In this space though usually a bank/fund will spin off a product they developed in house but there are a few companies that have started from scratch.
Everyting in Fintech involves a mountain of paperwork and regulation. And probably a huge amount of money from the get-go.
Not true there are lots of regulatory-light fintech applications you can try like building applications on top of banking APIs. Very few people ever really use bank APIs you may find the bank will be glad to talk to you.
You likely (but not always) need a legal entity, but thats a prerequisite for setting up any business.
You likely (but not always) need a legal entity, but thats a prerequisite for setting up any business.
It's refreshing to see somebody stop and evaluate what they actually want, rather than just doing what they think they people like themselves should do.
Places like HN tend to come with the expectation that you should be building a company rather than working for one. That's a "thing you need to signal" if you want to be here. But watching discussions here, it's clear to me that most people just don't want to be entrepreneurs. And it's also clear that many of those people don't realize it.
Pull up a discussion thread on an article about bootrapping a little SaaS company. You'll find all these people coming out of the woodwork to explain how nobody could possibly build a software business today, listing three or four reasons that those of us who have built SaaS stuff never even considered, never ran into, or addressed on the day it came up. It doesn't really matter what the reasons are. The important part is that Building A Software Company Is Impossible So Nobody (Inclucing Me) Should Try (Though Note That I've Correctly Signalled That I Would, Were It Possible).
You'll get whole threads of people talking themselves out of trying, and congratulating themselves on not believing anything the author said because clearly his success was some fluke combination of luck and influence that could never be duplicated by anybody else.
Meanwhile, people who actually are interested in building a business will nod along to some bits of good advice, maybe comment about some of the less good bits, then get back to building something.
I wish it was more acceptable here to simply not want to build a business.
Places like HN tend to come with the expectation that you should be building a company rather than working for one. That's a "thing you need to signal" if you want to be here. But watching discussions here, it's clear to me that most people just don't want to be entrepreneurs. And it's also clear that many of those people don't realize it.
Pull up a discussion thread on an article about bootrapping a little SaaS company. You'll find all these people coming out of the woodwork to explain how nobody could possibly build a software business today, listing three or four reasons that those of us who have built SaaS stuff never even considered, never ran into, or addressed on the day it came up. It doesn't really matter what the reasons are. The important part is that Building A Software Company Is Impossible So Nobody (Inclucing Me) Should Try (Though Note That I've Correctly Signalled That I Would, Were It Possible).
You'll get whole threads of people talking themselves out of trying, and congratulating themselves on not believing anything the author said because clearly his success was some fluke combination of luck and influence that could never be duplicated by anybody else.
Meanwhile, people who actually are interested in building a business will nod along to some bits of good advice, maybe comment about some of the less good bits, then get back to building something.
I wish it was more acceptable here to simply not want to build a business.
I like the article but I honestly have never even stopped to think "should I create a startup?"... is that a common thing?
Maybe it's because I'm still young or because I've never actually been in huge financial distress (which I realise is a privilege) but I don't have the desire to make a lot of money or sell my dream idea/company. All I want is to make enough to cover my living costs and in my spare time work on side projects, code or tinker around. You know, do things that are actually fun to do and allow me to learn new stuff. If I have an idea i'm very passionate about I'd like to just share it with others because they might find it interesting, not turn it into financial profit for me.
Why is it that it's almost a societal expectation that you must always push to level up financially and professionally? In all honesty, I haven't even used my salary for more than rent and food in the last few months because there is simply nothing new that I really need... I haven't had to buy new clothes in at least three years but if I had to I could also do that cheaply at a second hand store; that's just one example. As for my hobbies, even on very dated hardware one can pretty much work on whatever the heart desires and learn, the only thing that is needed is an internet connection.
Why is there always a desire not just to make the money invested back but to make a huge profit? I think in this field we have pretty good wages, now can't we focus on more pressing issues that concern us and future generations?
I don't get it in general... I'm satisfied with what little I have, I don't need anything else because I can already do all the activities that make me happy.
Maybe it's because I'm still young or because I've never actually been in huge financial distress (which I realise is a privilege) but I don't have the desire to make a lot of money or sell my dream idea/company. All I want is to make enough to cover my living costs and in my spare time work on side projects, code or tinker around. You know, do things that are actually fun to do and allow me to learn new stuff. If I have an idea i'm very passionate about I'd like to just share it with others because they might find it interesting, not turn it into financial profit for me.
Why is it that it's almost a societal expectation that you must always push to level up financially and professionally? In all honesty, I haven't even used my salary for more than rent and food in the last few months because there is simply nothing new that I really need... I haven't had to buy new clothes in at least three years but if I had to I could also do that cheaply at a second hand store; that's just one example. As for my hobbies, even on very dated hardware one can pretty much work on whatever the heart desires and learn, the only thing that is needed is an internet connection.
Why is there always a desire not just to make the money invested back but to make a huge profit? I think in this field we have pretty good wages, now can't we focus on more pressing issues that concern us and future generations?
I don't get it in general... I'm satisfied with what little I have, I don't need anything else because I can already do all the activities that make me happy.
Money has always been gamified. It's not so much about purchasing power, but about status - and in the big leagues, it's about political leverage.
VCs are really playing a status game, and the promise is that you too can become a high status player with a public profile and significant economic leverage. It's a completely traditional patronage relationship, based on the promise that if you win a round of the game, they will help you level up.
Ideally you both exit with a unicorn level IPO. That's a real win - for you, but also for them.
So this is not primarily about being able to afford to pay the bills. Or even about "changing the world" by providing a new kind of service. It's more like an economic and political sport.
A win leaves you with plenty of cash, but it also gets you entry to The Network, and eventually you may even graduate to coach yourself.
This is why VCs aren't interested in growing stable, unexciting, but productive businesses. Those are low-status beta plays, and no one ever became a thought leader by funding a small beer Wordpress consultancy - not even one that has been around for more than a decade, is comfortably profitable, and the business owners can afford to retire at 40.
The real stakes aren't money - although that's certainly a factor - but Network profile and reputation.
As a bootstrapper you can choose to play this game, or you can choose to ignore it. And ignoring it is perfectly legitimate. There's a huge amount of stress involved in going full SV, failure is far more likely than success, success is far more likely if you're already in or around The Network, and not everyone cares enough about the benefits to consider it a worthwhile tradeoff.
Anyone who does choose to play it should be aware of what they're getting into, and stories like OP's can do a lot to make the tradeoffs clearer.
VCs are really playing a status game, and the promise is that you too can become a high status player with a public profile and significant economic leverage. It's a completely traditional patronage relationship, based on the promise that if you win a round of the game, they will help you level up.
Ideally you both exit with a unicorn level IPO. That's a real win - for you, but also for them.
So this is not primarily about being able to afford to pay the bills. Or even about "changing the world" by providing a new kind of service. It's more like an economic and political sport.
A win leaves you with plenty of cash, but it also gets you entry to The Network, and eventually you may even graduate to coach yourself.
This is why VCs aren't interested in growing stable, unexciting, but productive businesses. Those are low-status beta plays, and no one ever became a thought leader by funding a small beer Wordpress consultancy - not even one that has been around for more than a decade, is comfortably profitable, and the business owners can afford to retire at 40.
The real stakes aren't money - although that's certainly a factor - but Network profile and reputation.
As a bootstrapper you can choose to play this game, or you can choose to ignore it. And ignoring it is perfectly legitimate. There's a huge amount of stress involved in going full SV, failure is far more likely than success, success is far more likely if you're already in or around The Network, and not everyone cares enough about the benefits to consider it a worthwhile tradeoff.
Anyone who does choose to play it should be aware of what they're getting into, and stories like OP's can do a lot to make the tradeoffs clearer.
It's probably because you're still young. More specifically (and here I'm guessing something about you), romantically unattached. Dating is a tough road to hoe if you can't or won't fund about half of a wedding and at least one of kids-and-a-house or traveling-the-world. Well, not dating exactly - you can get laid and even start relationships but in my experience the relationships will have a half-life and eventually fall apart in the face of increasingly unpleasant conversations about your lack of interest in the expensive stuff mentioned above.
Especially as a software engineer, I think, because ... hippies don't really like us that much, so there just aren't that many would-be ascetics out there willing to date us, and the people who do date us tend to pretty good at pegging their lifestyle expectations to a "leveled-up" career progression.
Especially as a software engineer, I think, because ... hippies don't really like us that much, so there just aren't that many would-be ascetics out there willing to date us, and the people who do date us tend to pretty good at pegging their lifestyle expectations to a "leveled-up" career progression.
What you said is very subjective and is likely the product of the way you present yourself to the world.
Normal people want those things because they’re the things that society deems normal, but there are plenty of weirdos out there if you look.
Normal people want those things because they’re the things that society deems normal, but there are plenty of weirdos out there if you look.
Probably. I've always had kind of a dad vibe.
However in regards to your last clause, I said as much in my comment. "Finding weirdos" was less of a problem than "finding weirdos without a grudge against weirdos like me."
However in regards to your last clause, I said as much in my comment. "Finding weirdos" was less of a problem than "finding weirdos without a grudge against weirdos like me."
Maybe you just need to be hanging out with a better class of folks?
Not to be a dick, but if you find that you are attracting a certain type of person that you don't want to, then it's time for some introspection.
Not to be a dick, but if you find that you are attracting a certain type of person that you don't want to, then it's time for some introspection.
Oh, I'm married, with a kid.
What you're hearing is the result of introspection. At the end of the day it's easier (for someone privileged to be in this line of work) to just suck it up and make house-and-kid money than to date around looking for someone who wants to hitch their wagon to a slacker. And I really do love my wife and son to pieces
What you're hearing is the result of introspection. At the end of the day it's easier (for someone privileged to be in this line of work) to just suck it up and make house-and-kid money than to date around looking for someone who wants to hitch their wagon to a slacker. And I really do love my wife and son to pieces
Good. Glad to hear that you're happy.
Its easy when you're young and single. Imagine you are married and want kids to go to a nice school - where would you live? How much does a house like that cost? (including bills like replacing roof, rebuilding kitchen etc etc)
Sounds like you are close to the philosophy of people like Mr. Money Mustache:
https://www.mrmoneymustache.com/
https://www.mrmoneymustache.com/
What I found is:
> All I want is to make enough to cover my living costs and in my spare time work on side projects, code or tinker around. You know, do things that are actually fun to do and allow me to learn new stuff.
The side projects I'd like to do cost money, unfortunately. Not a fortune, necessarily, but enough that I need to be earning decently to afford to develop those side projects. And it is a fortune to build what I'd really like to. When I was much younger, pure software projects seemed enough. But ideas have a tendancy to grow :-)
Then there's time. As I got older, I realised the time I was putting into side projects was either not enough to build what I hoped to build, so slow that it become socially irrelevant by the time I did anything (others, paid, always had more time to put in), or it was seriously exhausting doing it at the same time as a job.
Over the years this built up into increasing dissatisfaction. When I was younger I had dreams and thought I'd gradually get around to some of them. As years passed by, I realised it's not going to happen for the bigger ones, and I'm sad, already mourning the loss of potential.
On top of all that, life adds major random events, which take major random time and money and all your personal energy for a few years. I don't think that's limited to younger or older people especially, but the longer you live, the more likely it is that major things happen at some time in your life, either to you or people you care about, which take over for a while.
I couldn't care less about profit or money personally, for its own sake. But I have dreams about things I want to make that are much more than just toy projects, and I want basic personal security. It turns out these aren't readily available after all, as I assumed when younger.
> If I have an idea i'm very passionate about I'd like to just share it with others because they might find it interesting
That's a reason to be careful who you work for.
You often can't freely share your most passionate ideas if your employer has a claim over them. And if you're working in a different field, to ensure that kind of claim doesn't hold water, limiting the time spend on a passionate idea to outside-of-work time is quite restrictive too.
All this is not necessarily an argument for founding a VC-backed startup, of course. But it's why just working for some company or other for a whole working life doesn't necessarily work if you have big ideas you're passionate about using.
ps. I wrote this as a contrast to the comments about how relationships, family, marriage, mortgage etc. will matter at some point. I think that comes over as a bit "you don't know now but one day you will have feelings for someone and they will expect you to spend money on them" I wanted to show something different, that happens even if you find a partner who is frugal like yourself, and doesn't cost anything :-)
> All I want is to make enough to cover my living costs and in my spare time work on side projects, code or tinker around. You know, do things that are actually fun to do and allow me to learn new stuff.
The side projects I'd like to do cost money, unfortunately. Not a fortune, necessarily, but enough that I need to be earning decently to afford to develop those side projects. And it is a fortune to build what I'd really like to. When I was much younger, pure software projects seemed enough. But ideas have a tendancy to grow :-)
Then there's time. As I got older, I realised the time I was putting into side projects was either not enough to build what I hoped to build, so slow that it become socially irrelevant by the time I did anything (others, paid, always had more time to put in), or it was seriously exhausting doing it at the same time as a job.
Over the years this built up into increasing dissatisfaction. When I was younger I had dreams and thought I'd gradually get around to some of them. As years passed by, I realised it's not going to happen for the bigger ones, and I'm sad, already mourning the loss of potential.
On top of all that, life adds major random events, which take major random time and money and all your personal energy for a few years. I don't think that's limited to younger or older people especially, but the longer you live, the more likely it is that major things happen at some time in your life, either to you or people you care about, which take over for a while.
I couldn't care less about profit or money personally, for its own sake. But I have dreams about things I want to make that are much more than just toy projects, and I want basic personal security. It turns out these aren't readily available after all, as I assumed when younger.
> If I have an idea i'm very passionate about I'd like to just share it with others because they might find it interesting
That's a reason to be careful who you work for.
You often can't freely share your most passionate ideas if your employer has a claim over them. And if you're working in a different field, to ensure that kind of claim doesn't hold water, limiting the time spend on a passionate idea to outside-of-work time is quite restrictive too.
All this is not necessarily an argument for founding a VC-backed startup, of course. But it's why just working for some company or other for a whole working life doesn't necessarily work if you have big ideas you're passionate about using.
ps. I wrote this as a contrast to the comments about how relationships, family, marriage, mortgage etc. will matter at some point. I think that comes over as a bit "you don't know now but one day you will have feelings for someone and they will expect you to spend money on them" I wanted to show something different, that happens even if you find a partner who is frugal like yourself, and doesn't cost anything :-)
You're doing perfectly fine and I admire your modesty. Actually, on a personal level I feel the same. I need a notebook, a table, a bed and a roof and I could not be happier.
But things change I life and with them your goals and maybe ambitions. I'm now reaching 40 years, have a wife and have 2 smaller kids. We had to move into a bigger house with more space. You also start to depend heavily on a car. I'm still a programmer like I was 20 years before, but now my priorities are different: I want financial stability. I want to spend as much time with my family as possible. I want more freedom regarding my schedule.
But unfortunately work does not allow me as much freedom as I would like to have. I need to work 8 hours a day, 5 days a week. I have a tight schedule and am not really free to shift around my work how I see fit.
Well, the grass is always greener on the other side. If you are a founder you can reach financial stability much faster and you can organize your schedule (mostly) as you see fit. You can also increase your impact in this world if you run your own company. The big drawback is, that your workload will probably increase and you take on other risks in the process. (But these are things you can influence in one way or another).
But things change I life and with them your goals and maybe ambitions. I'm now reaching 40 years, have a wife and have 2 smaller kids. We had to move into a bigger house with more space. You also start to depend heavily on a car. I'm still a programmer like I was 20 years before, but now my priorities are different: I want financial stability. I want to spend as much time with my family as possible. I want more freedom regarding my schedule.
But unfortunately work does not allow me as much freedom as I would like to have. I need to work 8 hours a day, 5 days a week. I have a tight schedule and am not really free to shift around my work how I see fit.
Well, the grass is always greener on the other side. If you are a founder you can reach financial stability much faster and you can organize your schedule (mostly) as you see fit. You can also increase your impact in this world if you run your own company. The big drawback is, that your workload will probably increase and you take on other risks in the process. (But these are things you can influence in one way or another).
I love your mindset and I am not too far off myself.
For me it’s not about being able to buy luxuries but to “buy time”.
Time is - in my opinion - the most valuable resource that we have. Working for the man is trading your time with money given a specific conversation ( your salary ). I’d like to shoot to have a better conversation (I’m EU based and salaries here are not so great compared to the US) while not being tied to a specific location. With the plus of being able to work on whatever you fancy.
I think becoming rich is less about spending that money but more about the financial independence. So it’s not about not going to work but to don’t have to go to work.
Time is - in my opinion - the most valuable resource that we have. Working for the man is trading your time with money given a specific conversation ( your salary ). I’d like to shoot to have a better conversation (I’m EU based and salaries here are not so great compared to the US) while not being tied to a specific location. With the plus of being able to work on whatever you fancy.
I think becoming rich is less about spending that money but more about the financial independence. So it’s not about not going to work but to don’t have to go to work.
Dave McClure had a pretty aggressive talk about why not to do a startup[0] back in 2012 and it resonates with what's written here.
Startups are hard and we love to parade those who made it, struck it rich, but the reality is the vast majority don't. It also requires a skillset/discipline/constitution that is very different than what most people want to do.
In the very large group who don't make it, lies burnt relationships, heartache, debt, lawsuits, depression, even suicide/death. Which on closer inspection, the success group has a lot of the same traits. Only they made it out with IPO, sale, merger, self sustaining business to show for it.
It is scary. It is hard.
But to me, you won't know until you know. And if you want to know, the only way is to try.
That is reason enough.
[0] https://vimeo.com/15799330
Startups are hard and we love to parade those who made it, struck it rich, but the reality is the vast majority don't. It also requires a skillset/discipline/constitution that is very different than what most people want to do.
In the very large group who don't make it, lies burnt relationships, heartache, debt, lawsuits, depression, even suicide/death. Which on closer inspection, the success group has a lot of the same traits. Only they made it out with IPO, sale, merger, self sustaining business to show for it.
It is scary. It is hard.
But to me, you won't know until you know. And if you want to know, the only way is to try.
That is reason enough.
[0] https://vimeo.com/15799330
IMO, damned if you do damned if you don’t.
Before covid it took me 12 months to find a job. I applied to 100 companies. Ironically, got a job during covid and the job is pretty relaxing compared to the job hunt. During the hunt I thought: society is kinda forcing my hand here.
Also: a lot of knowledge workers have to work a lot of hours and keep on learning (e.g. doctors or programmers).
To me, it feels much more like a pick your poison type of thing.
Before covid it took me 12 months to find a job. I applied to 100 companies. Ironically, got a job during covid and the job is pretty relaxing compared to the job hunt. During the hunt I thought: society is kinda forcing my hand here.
Also: a lot of knowledge workers have to work a lot of hours and keep on learning (e.g. doctors or programmers).
To me, it feels much more like a pick your poison type of thing.
> To me, it feels much more like a pick your poison type of thing.
The way out is consistently living way under your means (if possible). If you don't live in poverty, this is likely possible in the general case; just pretend you make XX% less aftertax and voila, you have an %XX savings rate. There are non-monetary costs to doing this, but there are also benefits, and the freedom is really hard to beat.
...though I've heard that that doesn't apply to having a family. I don't know exactly this wouldn't generalize to having a family, but I don't currently have dependents, so this blind spot is likely the reason. The main thing I can think of is how expensive schooling is (via or not via housing prices), and the understandable desire to max out the quality of your kids' schooling (my mom took a super-shitty job as a teacher to get my sister and I free private school tuitions, with a bitch of a commute, until we were old enough to get scholarships).
The way out is consistently living way under your means (if possible). If you don't live in poverty, this is likely possible in the general case; just pretend you make XX% less aftertax and voila, you have an %XX savings rate. There are non-monetary costs to doing this, but there are also benefits, and the freedom is really hard to beat.
...though I've heard that that doesn't apply to having a family. I don't know exactly this wouldn't generalize to having a family, but I don't currently have dependents, so this blind spot is likely the reason. The main thing I can think of is how expensive schooling is (via or not via housing prices), and the understandable desire to max out the quality of your kids' schooling (my mom took a super-shitty job as a teacher to get my sister and I free private school tuitions, with a bitch of a commute, until we were old enough to get scholarships).
> ...though I've heard that that doesn't apply to having a family.
It 100% applies to having a family. (Source: have family.)
It 100% applies to having a family. (Source: have family.)
Could you elaborate? As I said, I'm assuming this is a blind spot, but assuming both parents are onboard with trading consumption for security/freedom, I don't understand what specifically would make this unworkable.
That is to say, the same logic applies to a family: If a family making $120k could survive adequately in a given location, then a family making $160k can pretend they make $120k and do the same thing. As I mentioned, the only exception I can think of is wanting to max out education spending: taking for granted that school spending is valuable for educational outcomes, does this explain 100% of the difficulty in maintaining this habit once having a family?
Other possibilities:
That is to say, the same logic applies to a family: If a family making $120k could survive adequately in a given location, then a family making $160k can pretend they make $120k and do the same thing. As I mentioned, the only exception I can think of is wanting to max out education spending: taking for granted that school spending is valuable for educational outcomes, does this explain 100% of the difficulty in maintaining this habit once having a family?
Other possibilities:
1) education/housing spending is often a proxy for class segregation, which I suppose is another factor you'd want to max out for your kid (I have no experience with this: my parents were upper-class in the old country so they hung out with other upper-class old country people (of various incomes) and I got the values they hoped I would without having to pay for it)
2) Perhaps it has less to do with kids than it does coupling up: anecdotally, most of my male friends who are happy to be ascetic need to start flashing money when they start dating, and most of my female friends are far more interested in consumption/comfortable living spaces. I know few people living well below their means, but 0% of them are women, despite my having many female friends. Though this is a pretty low-confidence guess, since as I said, it's based on anecdota.> That is to say, the same logic applies to a family: If a family making $120k could survive adequately in a given location, then a family making $160k can pretend they make $120k and do the same thing.
Yes, I was trying to agree with you.
I'm married, have a family, and we do exactly what you describe. We live below our means and save as much as possible.
In our case, living below our means worked out as having a single income family, and having a full time care giver in the home. For others, that might mean maxing out two incomes and retiring earlier.
> Perhaps it has less to do with kids than it does coupling up: anecdotally, most of my male friends who are happy to be ascetic need to start flashing money when they start dating, and most of my female friends are far more interested in consumption/comfortable living spaces.
When we started dating, my wife joked she liked me for my crappy old beater of a car. What she meant by that, is she knew a lot of the guys with fancy cars were actually broke because all their money went into their car, and she could tell early on I was more responsible and frugal.
So be careful of over generalizations based on anecdotes. And, frankly, be careful about getting in a serious relationship with someone who doesn't seem capable of living within their means.
Yes, I was trying to agree with you.
I'm married, have a family, and we do exactly what you describe. We live below our means and save as much as possible.
In our case, living below our means worked out as having a single income family, and having a full time care giver in the home. For others, that might mean maxing out two incomes and retiring earlier.
> Perhaps it has less to do with kids than it does coupling up: anecdotally, most of my male friends who are happy to be ascetic need to start flashing money when they start dating, and most of my female friends are far more interested in consumption/comfortable living spaces.
When we started dating, my wife joked she liked me for my crappy old beater of a car. What she meant by that, is she knew a lot of the guys with fancy cars were actually broke because all their money went into their car, and she could tell early on I was more responsible and frugal.
So be careful of over generalizations based on anecdotes. And, frankly, be careful about getting in a serious relationship with someone who doesn't seem capable of living within their means.
Ha, my mistake, I misread your comment's reference to my own. I thought you were saying that it is definitely impossible to do while having a family.
Thanks for your perspective!
Thanks for your perspective!
I have a family, and we live this way. My wife and I both grew up with stretches of financial insecurity and it has really effected how we see things. We're doing well now but we are still hyper aware of how things can change. Our modest home, modest cars, and modest lifestyles reflect that mindset.
The “you win big or fail” mental model is totally wrong. If you fail, dust yourself off and try again. Doesn’t mean you have to do it immediately. Failure definitely sucks. But people who fail once at something they really want to achieve and then write it off as impossible never achieve anything.
Also the high stakes fat stacks VC hyper growth approach is but one way to create a business.
Also the high stakes fat stacks VC hyper growth approach is but one way to create a business.
Who is we, and who's paying for the parade?
For me, the way I thought about it was a bit different. When I did YC I had already worked at Google for a while, and the question I was asking myself was less "do I want to be a founder?" and more "is starting a company something I ever want to try out, in a career that will probably span decades?" If you've had jobs you liked in the past, and you figure that you can probably find those jobs again, and you don't immediately need the big company salary, what is a startup really risking? The worst case is that you work on it for a year or so, it goes nowhere, and you go back to work somewhere else. You miss out on some money but you're going to learn something new in any case.
Same here. I wanted to know what it was like to have all of that responsibility on my shoulders.
I felt like my career was moving at a snail pace within BigTechCo and I was capable of much more. There's no real risk in that situation, unless you're borderline destitute, have dependents who need you, have a serious medical condition that requires a high end employer to support you etc.
Even if you fail, you will have learned many valuable skills and perspectives, and might get hired at your previous employer with a better title.
I felt like my career was moving at a snail pace within BigTechCo and I was capable of much more. There's no real risk in that situation, unless you're borderline destitute, have dependents who need you, have a serious medical condition that requires a high end employer to support you etc.
Even if you fail, you will have learned many valuable skills and perspectives, and might get hired at your previous employer with a better title.
Could someone please explain to me what the value in this article is?
It's written by a 18 year old who has never started a company
So, as someone who has started multiple companies and currently running a profitable albeit small startup, what insights should I get from this article?
It's written by a 18 year old who has never started a company
So, as someone who has started multiple companies and currently running a profitable albeit small startup, what insights should I get from this article?
Does it not strike you as somewhat narcissistic to assume that, because an article isn't valuable to someone in your exact position, it isn't valuable at all?
You comment reminds me of something I read recently in a novel by Ian McEwan, in which a character talks about the sort of novels she would like to read:
> "I suppose I would not have been satisfied until I had in my hands a novel about a girl in a Camden bedsit who occupied a lowly position in MI5 and was without a man."
The character is, of course, "a girl in a Camden bedsit who occupied a lowly position in MI5 and was without a man".
You comment reminds me of something I read recently in a novel by Ian McEwan, in which a character talks about the sort of novels she would like to read:
> "I suppose I would not have been satisfied until I had in my hands a novel about a girl in a Camden bedsit who occupied a lowly position in MI5 and was without a man."
The character is, of course, "a girl in a Camden bedsit who occupied a lowly position in MI5 and was without a man".
Not that other novels are/can be interesting as well, but I would find it fascinating to read a novel about myself.
Maybe you should write a book. It would be about yourself, no matter what.
This comment really is not in the spirit of HN. I would not attack the age of the poster and rather attack the merits of their arguments.
Pointing out the age here is a low effort way of saying that this person is giving advice about things she doesn't really have experience with.
Startup grind, big company ladder grind, marriage, university. Advice is given on all of these, but from what I can figure out from the website she only has minor experience with the startup part.
It can be an interesting read to see how inexperienced people view these things, but mostly this seems to touch upon something the author mentions in the post - self-confidence. She seems to have a ton of it to be able to dish out advice (to 80% of prospective startup founders) without having done any of it herself.
Startup grind, big company ladder grind, marriage, university. Advice is given on all of these, but from what I can figure out from the website she only has minor experience with the startup part.
It can be an interesting read to see how inexperienced people view these things, but mostly this seems to touch upon something the author mentions in the post - self-confidence. She seems to have a ton of it to be able to dish out advice (to 80% of prospective startup founders) without having done any of it herself.
This. I think there are elements of fantasy of what it's like to work at a big corporate vs. working 'for' investors.
Also, I can't help thinking you'd learn a huge amount at YCombinator even if at the end of it you said, you know what, this isn't for me, you'd be doing it from a position of having actual experience that tells you that. She also mentions she'd prefer to work for a well founded early stage start up - I wonder where you can find those?
Also, I can't help thinking you'd learn a huge amount at YCombinator even if at the end of it you said, you know what, this isn't for me, you'd be doing it from a position of having actual experience that tells you that. She also mentions she'd prefer to work for a well founded early stage start up - I wonder where you can find those?
Can someone explain to me, what the value of metacomments like this are?
Don't assume that something is completely useless just because it isn't targeted directly at you or because you have more experience or knowledge than the author.
If the article didn't do much for you, consider the value to be in the comment section. It's a good topic for YC, and I see a lot of insight here, anecdotal and otherwise.
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Well the article got people talking and sharing their own experiences, and I'd say that is valuable.
You’re clearly not there target audience. I thought the article displayed an impressive amount of self awareness for a young guy
*girl, :)
Oh wow, I assumed mid twenties haha.
I feel conned.
I feel conned.
Just because an article exists, doesn't mean you're in the target audience for it.
Title should be: I don't want to take VC money and I don't think you do either
I am this close to changing it, this is very good
I like how according to Silicon Valley, a "Founder" is a person that has borrowed capital from VCs. I live in Silicon Valley and there are more businesses here that are not backed by VCs than otherwise. Tens of thousands of small businesses who work as hard as the top dogs sucking up to VCs, yet they're just businesses with owners, not "Startups" with "Founders". Some people still call Dropbox, Airbnb and Uber as "Startups". I am a little annoyed by this just like I am annoyed by buzzwords of today - AI, crypto (bonus points if you throw in the term - supply-chain), and of course, the new kid on the block - "Quantum".
Do you guys not see this and introspect once in a while?
Do you guys not see this and introspect once in a while?
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A "Founder" is someone who creates their own company with or without VC money. If VC money was a pre requisite then Jeff Bezos wont be a founder.
I hear this come up so much and it's just trite.
I don't think anybody in Silicon Valley would say the _definition_ of a Founder is someone who takes VC money.
All companies require capital to operate. All capital has a cost. In many high growth companies, the amount of time it takes to build a product and go to market has a significant effect of how much market share that company can acquire. Selling equity or taking on debt is how many companies can reduce that time and acquire more market share.
It just happens to be that the companies Silicon Valley is most interested in are companies that have to raise capital this way, with very very few exceptions.
Now more than ever, VCs will happily tell a a founder "your business is not a business that fits with the VC model well, don't raise VC money." The VCs who say that do not think the people they are are saying that to "aren't founders" - their business just doesn't need VC investment.
I don't think anybody in Silicon Valley would say the _definition_ of a Founder is someone who takes VC money.
All companies require capital to operate. All capital has a cost. In many high growth companies, the amount of time it takes to build a product and go to market has a significant effect of how much market share that company can acquire. Selling equity or taking on debt is how many companies can reduce that time and acquire more market share.
It just happens to be that the companies Silicon Valley is most interested in are companies that have to raise capital this way, with very very few exceptions.
Now more than ever, VCs will happily tell a a founder "your business is not a business that fits with the VC model well, don't raise VC money." The VCs who say that do not think the people they are are saying that to "aren't founders" - their business just doesn't need VC investment.
I do find it interesting that in spite of the fact that so few companies will ever accept VC money or go public, this model is viewed by many as the dominant or only way to start a tech business. This is in spite of the fact that Technology businesses may very well have the lowest capital requirements of any type of company in history.
It was the same way in the 80s with finance. Even though most finance workers were (and are) accountants working boring 9-to-5 corporate jobs, everyone assumed that anyone in finance worked on Wall Street and snorted coke off of strippers in NYC nightclubs every weekend.
It was the same way in the 80s with finance. Even though most finance workers were (and are) accountants working boring 9-to-5 corporate jobs, everyone assumed that anyone in finance worked on Wall Street and snorted coke off of strippers in NYC nightclubs every weekend.
Yah my feelings about running a startup are completely different for bootstrapped/hacked up companies (I think that's the term?)
The downsides are still there it takes the same level of commitment, dedication, and obsessive effort to bootstrap.
It has taken me 5 years to bootstrap a niche b2b saas to $1m ARR. It is both awesome and terrible.
It has taken me 5 years to bootstrap a niche b2b saas to $1m ARR. It is both awesome and terrible.
It doesn't have to be stressful or full-commitment. I'm cool with $50k ARR.
I'm not even sure revenue is that good of a signal of the work put in. Didn't the Basecamp guys start off on just 10 hours a week inbetween their day job.
By day job do you mean running 37signals the new media design firm at the dawn of the web?
I wouldn’t really isolate the “day job” part here, it was sort of the quintessential dogfood SaaS.
I wouldn’t really isolate the “day job” part here, it was sort of the quintessential dogfood SaaS.
That's an amazing achievement to have reached that milestone!
Its talked about a lot because the VCs are out there beating a drum, as they should. Drawing a crowd. Hopefully an interesting one.
Once you get a crowd, everyone starts doing what the people around them do. Its natural. It takes some time and experience to figure out whether you need to be there or not.
Once you get a crowd, everyone starts doing what the people around them do. Its natural. It takes some time and experience to figure out whether you need to be there or not.
For me the main reason to try it is the frustration of having been working for 20 years as a freelancer or as en employee.
In both cases I've been investing my time and blood in exchange for money. Then the money runs out and you start all over again, and again. I want to invest my time into something which hopefully can grow so that I can keep investing more of my time instead of just giving it away. I want to plant a forest that will produce on its own instead of having to plant and harvest again on each season.
Freedom is another important aspect. I've been frustrated during my professional career with clients and bosses making the wrong decisions again and again and living with the consequences of those decisions.
I might totally fail while building what I'm building (see my profile) but that's better than waking up one day and realizing I've wasted my life. Thankfully I'm in a position where I can invest a couple of years of my life without earning money and I don't have people depending on me.
In both cases I've been investing my time and blood in exchange for money. Then the money runs out and you start all over again, and again. I want to invest my time into something which hopefully can grow so that I can keep investing more of my time instead of just giving it away. I want to plant a forest that will produce on its own instead of having to plant and harvest again on each season.
Freedom is another important aspect. I've been frustrated during my professional career with clients and bosses making the wrong decisions again and again and living with the consequences of those decisions.
I might totally fail while building what I'm building (see my profile) but that's better than waking up one day and realizing I've wasted my life. Thankfully I'm in a position where I can invest a couple of years of my life without earning money and I don't have people depending on me.
i think if those are your motivations, then you definitely don't want to start a startup. You want to start a small business where you're the boss and maybe you have one or two assistants. Or maybe you just want to start a side project. As a founder, i think you very quickly lose your sense of freedom and control.
As a 20 year freelancer myself, a side project is a good way to go. But if that takes off and starts requiring more structure, more resources, and eventually overtakes the day job, it essentially becomes a startup.
Sorry, i meant "startup" in terms of "company predicated on exponential growth". If you have a small business where you're the boss, you just grow it slowly how you you want. But as a startup founder, your surrounding circumstances essentially are dictating what you have to do in order to get that exponential growth. Your customers are your boss, your board is your boss, the market is your boss.
> You want to start a small business
Maybe something got lost in translation (I'm not a native speaker) but a startup cannot be small?
Maybe something got lost in translation (I'm not a native speaker) but a startup cannot be small?
"Startup" means many things to many people, but most people most of the time use it to mean something close to a rapid-growth business (millions in revenue in < 3yr from start, growth measured in integer multiples per year from there), commonly targeting revenues such that (anecdotally) maxing out in the low $millions means the startup will likely fail for financial reasons. Creating a business that can do this frequently means taking outside investment from speculative investors (VC, angel) in numbers ranging from the low six figures for young, unproven startups, to tens of millions of dollars for established startups with obvious room to grow. You spend that money doubling your headcount every year and possibly doing things like subsidizing freemium users.
Crucially, the startup might not be like a business in some important regards. It's common to operate a startup at a significant financial loss, with the goal of either being bought out or growing fast enough to "make it up in volume" before the VC money runs out.
(sidenote: the word "startup" is also coming to sometimes be used to mean a self-funded tech-oriented business, without VC backing, with a slower expected growth rate but an expectation of maxing out at significant revenues).
All of this is in contrast to "small businesses", which have relatively modest growth prospects (sub-$1m is very common), frequently keep a headcount low enough to gather all employees in a small room, and are designed with prompt profitability in mind from the start, due to taking little/no outside investment.
Startups, both by their mode of operation and their level of ambition, rapidly grow to hundreds or thousands of employees, and demand immense revenue/funding to cover that. Small businesses are designed to get off the ground efficiently and more or less coast, sometimes with limited growth over time, sometimes keeping a steadystate.
Crucially, the startup might not be like a business in some important regards. It's common to operate a startup at a significant financial loss, with the goal of either being bought out or growing fast enough to "make it up in volume" before the VC money runs out.
(sidenote: the word "startup" is also coming to sometimes be used to mean a self-funded tech-oriented business, without VC backing, with a slower expected growth rate but an expectation of maxing out at significant revenues).
All of this is in contrast to "small businesses", which have relatively modest growth prospects (sub-$1m is very common), frequently keep a headcount low enough to gather all employees in a small room, and are designed with prompt profitability in mind from the start, due to taking little/no outside investment.
Startups, both by their mode of operation and their level of ambition, rapidly grow to hundreds or thousands of employees, and demand immense revenue/funding to cover that. Small businesses are designed to get off the ground efficiently and more or less coast, sometimes with limited growth over time, sometimes keeping a steadystate.
Interesting. I'm from Europe and here "startup" usually means a new tech company. At least that's how I've used it and how I've heard people use it. Also in Mexico where I'm currently residing.
Anyway, about the comment I should start a small business instead of a startup, yeah I don't plan to grow to millions of users and having hundreds of employees.
Anyway, about the comment I should start a small business instead of a startup, yeah I don't plan to grow to millions of users and having hundreds of employees.
My take on this is: the only people who should become a founder are the people who can't bear the thought of not doing it. Anyone with less than "Give me libertly or give me death" levels of commitment should not even bother.
This seems like an unnecessary barrier to new ideas and innovation. So many of the businesses we rely on started as simple hobbies or games.
But of course there are obvious exceptions
I think what most of us want is to be free of the tyranny of employment. And I don’t think founding a company is best way to mitigate that if you aren’t completely into it, you could just go become a freelancer or start a small services Center in your locality.
If that's the case, definitely don't start a company. Instead of being beholden to one manager, you're all of a sudden beholden to dozens... employees, investors, board, customers, etc. Being a founder is just a job.
> Being a founder is just a job
a founder has the power to make changes to his job. An employee doesn't.
Even tho a founder is beholden to their investors, board and customers, the founder is also empowered (after all, he/she calls the shots).
An employee is beholden to his/her manager, but cannot "call the shots" but simply takes orders.
a founder has the power to make changes to his job. An employee doesn't.
Even tho a founder is beholden to their investors, board and customers, the founder is also empowered (after all, he/she calls the shots).
An employee is beholden to his/her manager, but cannot "call the shots" but simply takes orders.
This seems like a rather naive view to me (and one that I also used to have). As a business owner you are far more accountable to a far greater number of people than you ever will be as an employee. You have the authority to make more decisions, but it’s hardly a “whatever you like” sort of situation. Nearly all of the decisions you make will just be about balancing all the responsibilities you have to other people. As a business owner you might have more authority, but there are many areas where an employee would typically have more freedom. An employee has the freedom to leave all their work problems at the office and go home at the end of the day, or take a vacation. An employee has the freedom to leave the moment a better opportunity comes along. An employee has the freedom to only worry about the problems they’re specifically employed to solve. A business owner would not be expected to have any of that. If your primary concern is a greater level of autonomy at work, then you’d typically be better off seeking and employer who will give you more autonomy than you would be owning a business.
> An employee is beholden to his/her manager, but cannot "call the shots" but simply takes orders.
This is true only insofar as the value you bring to the company cannot be outweighed by the shots you want to call.
If you are, for lack of a better term, that good (and while I have a dim view of VC-silly startups, the successful ones I know really are that good), that can be a very wide remit. It very well might be "wide enough," even, and it's worth considering.
This is true only insofar as the value you bring to the company cannot be outweighed by the shots you want to call.
If you are, for lack of a better term, that good (and while I have a dim view of VC-silly startups, the successful ones I know really are that good), that can be a very wide remit. It very well might be "wide enough," even, and it's worth considering.
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I don’t get “the tyranny of employment”. I’ve had bad jobs before, but within a couple of months I got a new one- in my case always within the same company. My peers in tech have had incredibly dynamic careers as W2 employees.
I’ve toyed with starting a company a few times, but it’s primarily been because there is problem I want to solve that no existing organization I know of is likely to solve it own their own.
I suspect what I really want is a professorship and tenure, but I’d probably be more likely to succeed at creating and exiting a startup successfully at this point.
I’ve toyed with starting a company a few times, but it’s primarily been because there is problem I want to solve that no existing organization I know of is likely to solve it own their own.
I suspect what I really want is a professorship and tenure, but I’d probably be more likely to succeed at creating and exiting a startup successfully at this point.
I don’t get “the tyranny of employment”.
For the first 16 years of my working life I went through a number of jobs, only one of which I really liked. This probably says more about me than the employers. I think some of us just aren't suited to working in corporations.
For the first 16 years of my working life I went through a number of jobs, only one of which I really liked. This probably says more about me than the employers. I think some of us just aren't suited to working in corporations.
Why is it that starting a tech start up is seen as an uber difficult task often resulting in burnout while starting a business in a technical occupation such as electrical or refrigeration is (seemingly) less risque? Surely there are a plenty of opportunities where rather boring software can be applied to business problems. Does it always need to be a monumental technical accomplishment to create a success?
The difference is in the HN-style (and Bay Area) understanding of the word "startup", which is focused on hyper growth at all costs or bust. Starting a small business in something like HVAC is very different in that you typically start small, with relatively low ambition, and grow the business organically over a long period of time. The latter is definitely difficult and sometimes stressful, but not in the same way as when you have investors pushing you to bump your revenue up by 10x in the next year or gtfo.
There was an article on HN about extremely successful Mormon startups. Interesting that they all manage to leave the office at 5pm (because they all have 6 kids) and build multi-billion dollar businesses.
Would you mind linking? I'd love to read that article. I've anecdotally begin to notice more and more B2B startups from Utah make it onto the map that fit just that profile.
Startup are (almost) never profitable when they "start up". Hence they need to raise money through investors until they grow enough to develop a mature, profitable product. Delivering this product can take years and require a large workforce. In the meantime the company still needs to pay the employees and creditors.
Traditional businesses like electricians start with a typical business plan. They might need to borrow some cash at the beginning but if the business plan is spot on, they'll start making money quickly, enough to cover the costs and make profit.
Traditional businesses like electricians start with a typical business plan. They might need to borrow some cash at the beginning but if the business plan is spot on, they'll start making money quickly, enough to cover the costs and make profit.
It's the difference between R&D and other forms of labor. One tech startup might capture the entire market, but one electrician can't.
starting a startup is not the same as starting a business. By definition a startup is a type of business whose business model is not yet proven. So you end up with 2 types of risks in a startup - the normal risk of starting a business (like the electrical engineer), as well as business model risk where the model may prove to be unprofitable.
Thanks. This is the most useful concept I heard so far.
If you're starting an electrical company, you're probably using off the shelf components and using tried and trusted techniques to install them. A tech startup is more closely equivalent to a company designing new electrical components. I wonder how many of those fail?
The author has agreed elsewhere in this thread that he’s basically writing about taking VC money.
That being said, the advice applies elsewhere. My dad was a physician in US military and then decided to open up a private practice. He spent decades running a business where he was the sole source of revenue, and as far as I can tell hated dealing with any aspect of it that wasn’t direct patient care. He eventually joined a larger physician group and was much happier in his job.
That being said, the advice applies elsewhere. My dad was a physician in US military and then decided to open up a private practice. He spent decades running a business where he was the sole source of revenue, and as far as I can tell hated dealing with any aspect of it that wasn’t direct patient care. He eventually joined a larger physician group and was much happier in his job.
*she
The term "startup" here implies that you're building technology to provide a scalable product or service. Starting an electrical or similar contracting company is more like going freelance than working on a "startup". You're directly selling your hours so it's very accessible and easy to bootstrap, but scaling it up is far harder.
I think you mean "risky"... unless your startup is in the sex industry.
Being a contractor or freelancer has more in common with those sort of businesses.
The commitment point is very true, and extends to employees and clients if you're in certain spaces and want to maintain a clean record in civil or moral court.
The rest of these arguments seem like bad framing. From a certain school of thought, entire point of a startup is to leverage your risk taking ability relative to incumbents in the market and your economic peers. Working at a startup forces you to learn more, faster; and you're challenged by real market factors, not artificial incentive structures created by a large org or academic institution. You also wear a ton of hats that you have no access to early in your career at larger orgs or in academia. Hiring, management, sales, accounting, taxes, finance, product ideation and refinement, etc - early years at FAANG or medium sized orgs will not expose you to all of these. Even an experimental team that lets you play with cool technological toys.
"Not being at school" is an silly way to describe, "4 years of school is sometimes a poor choice of use of the best risk-taking opportunities of a person's life".
"Your VC is not the one at risk here" is a reason to avoid VC, subvert some of the incentives that VCs give you, or ignore a subset of the advice they they give you, not a reason to avoid risky ventures.
It's important to note that the author here is an 18 year old and has no significant real-life perspective on either running a company or being part of a larger org. Nothing about that affects their ability to accurately pontificate on the pros and cons of running a startup, but there also isn't a lot of skin in the game or experience to back up that perspective. The bayesian prior here is negative.
If you're partway through a uni degree or similar learning program, or an incumbent engineer at a small or large org, then you should look at starting or joining an early-stage startup as a great way to take risks that you will be less able to every year (because of increasing costs of living, commitments to a new generation of your family if you marry and have children, incentives to purchase real estate, etc). The payoff will hopefully be huge and will be distributed across potential exits, experience, and personal growth.
The rest of these arguments seem like bad framing. From a certain school of thought, entire point of a startup is to leverage your risk taking ability relative to incumbents in the market and your economic peers. Working at a startup forces you to learn more, faster; and you're challenged by real market factors, not artificial incentive structures created by a large org or academic institution. You also wear a ton of hats that you have no access to early in your career at larger orgs or in academia. Hiring, management, sales, accounting, taxes, finance, product ideation and refinement, etc - early years at FAANG or medium sized orgs will not expose you to all of these. Even an experimental team that lets you play with cool technological toys.
"Not being at school" is an silly way to describe, "4 years of school is sometimes a poor choice of use of the best risk-taking opportunities of a person's life".
"Your VC is not the one at risk here" is a reason to avoid VC, subvert some of the incentives that VCs give you, or ignore a subset of the advice they they give you, not a reason to avoid risky ventures.
It's important to note that the author here is an 18 year old and has no significant real-life perspective on either running a company or being part of a larger org. Nothing about that affects their ability to accurately pontificate on the pros and cons of running a startup, but there also isn't a lot of skin in the game or experience to back up that perspective. The bayesian prior here is negative.
If you're partway through a uni degree or similar learning program, or an incumbent engineer at a small or large org, then you should look at starting or joining an early-stage startup as a great way to take risks that you will be less able to every year (because of increasing costs of living, commitments to a new generation of your family if you marry and have children, incentives to purchase real estate, etc). The payoff will hopefully be huge and will be distributed across potential exits, experience, and personal growth.
Not really mentioned by the author, but my own experience is that you need to strongly consider the 80/20 rule for founders. If you start a business, you will spend 80% of your time doing the business things you don't want to do, and only 20% of your time doing the things you enjoy.
What this means in practice is that if you want to start a company because, for example, you just want to build products without dealing with manager/team bullshit, you are going to have an awful time. You need to be very honest with yourself about your ability and dedication to do all the things that actually get a business off the ground, not just the things you want to do and imagine you'll spend all your time doing.
What this means in practice is that if you want to start a company because, for example, you just want to build products without dealing with manager/team bullshit, you are going to have an awful time. You need to be very honest with yourself about your ability and dedication to do all the things that actually get a business off the ground, not just the things you want to do and imagine you'll spend all your time doing.
Reacting mostly to the ending/conclusion here.
I don't know about other founders, but for me, startups are basically the only vehicle for solving big problems that nobody else will/can solve.
Often the reasons that (nearly) nobody else is trying to solve your exact problem are 1) it is risky/unlikely to monetize well, 2) it is hard, grueling, or boring work that may not even function right in the end, 3) might believe it to be impossible or not worth it.
But if you have a big problem in front of you and you strongly believe it can be solved and should be solved, then what other choice do you have but to start a startup?
There are lots of people (maybe myself? I dunno.) who feel strongly about solving a problem but also feel that they don't have "what it takes" to be a successful startup founder. I have a failed startup in my past. The failure process wrecked me for years, emotionally, socially, financially, the whole thing. I'm okay now, don't worry.
But are there any other reasonable options for "trying to solve a big problem that is otherwise being ignored" other than starting a startup?
I want to solve big problems I care about. I have that ego discussed in the article; often I find I do believe I have the right combination of things to solve a particular problem better than other people. So I feel like it is my responsibility to do it.
But being a startup founder is hard and if your personality or circumstances aren't a good fit, then, what do you do? Just stay frustrated that the problem isn't being solved?
I don't know about other founders, but for me, startups are basically the only vehicle for solving big problems that nobody else will/can solve.
Often the reasons that (nearly) nobody else is trying to solve your exact problem are 1) it is risky/unlikely to monetize well, 2) it is hard, grueling, or boring work that may not even function right in the end, 3) might believe it to be impossible or not worth it.
But if you have a big problem in front of you and you strongly believe it can be solved and should be solved, then what other choice do you have but to start a startup?
There are lots of people (maybe myself? I dunno.) who feel strongly about solving a problem but also feel that they don't have "what it takes" to be a successful startup founder. I have a failed startup in my past. The failure process wrecked me for years, emotionally, socially, financially, the whole thing. I'm okay now, don't worry.
But are there any other reasonable options for "trying to solve a big problem that is otherwise being ignored" other than starting a startup?
I want to solve big problems I care about. I have that ego discussed in the article; often I find I do believe I have the right combination of things to solve a particular problem better than other people. So I feel like it is my responsibility to do it.
But being a startup founder is hard and if your personality or circumstances aren't a good fit, then, what do you do? Just stay frustrated that the problem isn't being solved?
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This resonates very strongly with me. Everywhere I work, I find really cool things to invent and business process improvements. Sometimes the biggest impacts these have are at the megacorps due to economies of scale. Often though there's so much friction, overhead, and red tape that it's impossible to get buy-in from team members and managers in the megacorps. This happens even in the best cases where everyone is open-minded and supportive. Sometimes large groups just don't have the excess capacity needed to re-tool. In large companies that don't have the best case cultures, it's nearly impossible to implement improvements or use any cross-team resources (human, physical or digital) to bring an invention to life.
It seems you're absolutely right that a startup is your only option if your idea is a proposed solution to a problem that is outside the mission/domain of (your/any) current organization, and/or if any organizations which would be interested simply can't devote resources and time to developing, evangelizing, and implementing your solution.
However, the risk involved in the process is so damned high. I love working in teams, whether at large megacorps, small contracting groups, or on my own or my friend's startup ideas. I don't love the "burnt relationships, heartache, debt, lawsuits, depression" (as 'irjustin phrased it elsewhere in this thread), that can be associated with startups.
Some startups are well-positioned for co-operative mutual interest VC money (repl.it would be a strange thing to bootstrap). Some startups are fantastic for bootstrapping (Sparkfun/Adafruit), and many could probably succeed just fine doing either (mailchimp, bootcamp come to mind). Still others probably best operate via philantrophic arrangements (OpenStax).
It seems you're absolutely right that a startup is your only option if your idea is a proposed solution to a problem that is outside the mission/domain of (your/any) current organization, and/or if any organizations which would be interested simply can't devote resources and time to developing, evangelizing, and implementing your solution.
However, the risk involved in the process is so damned high. I love working in teams, whether at large megacorps, small contracting groups, or on my own or my friend's startup ideas. I don't love the "burnt relationships, heartache, debt, lawsuits, depression" (as 'irjustin phrased it elsewhere in this thread), that can be associated with startups.
Some startups are well-positioned for co-operative mutual interest VC money (repl.it would be a strange thing to bootstrap). Some startups are fantastic for bootstrapping (Sparkfun/Adafruit), and many could probably succeed just fine doing either (mailchimp, bootcamp come to mind). Still others probably best operate via philantrophic arrangements (OpenStax).
Going to disagree with you here. In many (I'll even say most) cases, being an executive or respected consultant at a large company with established resources, staff, and customers will give you significantly better opportunity to actually solve a big problem. The vast majority of startups are not, in fact, solving big problems. They are solving small problems for a small subset of people who need problems solved (usually yuppies) because those are the problems they are able to solve efficiently.
What you probably mean is that startups are good at innovating a potential solution to a big problem. But this is an entirely different thing than actually solving it at scale, and is the reason many startups end up getting bought or acquihired before they do anything of large importance.
What you probably mean is that startups are good at innovating a potential solution to a big problem. But this is an entirely different thing than actually solving it at scale, and is the reason many startups end up getting bought or acquihired before they do anything of large importance.
This made me sad to read. Not everyone should found a company. Frankly, in school, the people who annoyed me most were the ones who vowed to be an “entrepreneur.” Always sounded pretentious. But, as someone who has garnered wealth and happiness from creating something from scratch, I do hope we continue to celebrate, if not idolize, that. And, I hope, we remember the humble beginnings of Yahoo, eBay, Google, Dropbox, Facebook, AirBnB, Cloudflare, etc. Not everyone needs to be a founder to be successful. But I hope everyone will continue to believe they can be one. Not for themselves, but for what they can build for the world.
Also, it’s a distinctly SV mindset that startups and entrepreneurs is this zero/hero dichotomy. The world is full of “moderately” successful startups that throw off a few million in free cash flow for a relatively small team.
If I were to give advice to other founders, it would be stop building for an IPO/acquisition. Build for the middle ground, and take opportunities to step on the gas if you see them.
If I were to give advice to other founders, it would be stop building for an IPO/acquisition. Build for the middle ground, and take opportunities to step on the gas if you see them.
Is software startup by solo founders still viable anymore? Today the age of apps/SaaS seems ending. It is oversaturated, and the low hanging (low technical complexity) fruits are already taken left and right.
This comes up a lot here. In short:
* Yes, software startups by solo founders are very much still viable.
* No, the age of apps/SaaS is not ending
* It is not oversaturated either. There are ALWAYS new ideas to build, new products in demand, and new ways to make money.
* It always seems like the low-hanging fruits have been "taken", because you've observed them being successful (it's a reductive argument). They probably weren't low-hanging when they were originally built - just in retrospect. Similarly, some of the app/SaaS ideas being built by solo founders right now may seem low-hanging in a few years.
The crispest example someone once gave me for why the world never actually runs out of things to build (easy or otherwise) was:
* New technical innovation A emerges (it can be anything - a new sensor on a phone, a new form factor, a new feature in software, a new API, etc.)
* Product B emerges that cleverly uses innovation A.
* Product C emerges that competes with Product B
* Service D emerges that helps compare Products B & C
Repeat ad infinitum...
Unless you believe we've reached the end of the first step (no new technical innovations!), then we haven't even come close to running out of things to build.
* Yes, software startups by solo founders are very much still viable.
* No, the age of apps/SaaS is not ending
* It is not oversaturated either. There are ALWAYS new ideas to build, new products in demand, and new ways to make money.
* It always seems like the low-hanging fruits have been "taken", because you've observed them being successful (it's a reductive argument). They probably weren't low-hanging when they were originally built - just in retrospect. Similarly, some of the app/SaaS ideas being built by solo founders right now may seem low-hanging in a few years.
The crispest example someone once gave me for why the world never actually runs out of things to build (easy or otherwise) was:
* New technical innovation A emerges (it can be anything - a new sensor on a phone, a new form factor, a new feature in software, a new API, etc.)
* Product B emerges that cleverly uses innovation A.
* Product C emerges that competes with Product B
* Service D emerges that helps compare Products B & C
Repeat ad infinitum...
Unless you believe we've reached the end of the first step (no new technical innovations!), then we haven't even come close to running out of things to build.
That's really an interesting example. Thanks
You could have written the same comment 5/10/15/20 years ago. The markets always will be saturated, the low-hanging fruit will always be taken (almost by definition), but then somehow, a new group of kids(and not so-kids) will come up with new solutions.
Yes, all the low hanging fruit has been taken but why would you want compete on that anyways? Being a solo founder doesn't mean you can't solve hard problems.
“You get paid in direct proportion to the difficulty of problems you solve”
“You get paid in direct proportion to the difficulty of problems you solve”
> “You get paid in direct proportion to the difficulty of problems you solve”
No, you really don't. Your "pay" is a function of the market size, your market share, the budget of your customers, the amount of perceived value you create for them, your ability to sell, your costs, and probably some other minor factors. The difficulty of the problems you solve is – if at all – only indirectly related to some of those factors.
No, you really don't. Your "pay" is a function of the market size, your market share, the budget of your customers, the amount of perceived value you create for them, your ability to sell, your costs, and probably some other minor factors. The difficulty of the problems you solve is – if at all – only indirectly related to some of those factors.
All those functions all lead back to how difficult of a problem you are solving for them. A difficult problem means there are less competitors and more market share for you, with a high chance that the competition's solution doesn't even deliver on its promises.
Less competition naturally leads to a higher premium you can charge. Businesses typically set aside a static budget for software that solves a "low-hanging fruit problem" (e.g. invoicing software). Because a business doesn't have a set budget for problems that they themselves aren't used to having solved, this also feeds back into being able to charge a higher premium. It's also much easier to get traction when solving a hard problem, which is another function of getting paid. Of course, this is all dependent on actually solving the hard problem :)
Less competition naturally leads to a higher premium you can charge. Businesses typically set aside a static budget for software that solves a "low-hanging fruit problem" (e.g. invoicing software). Because a business doesn't have a set budget for problems that they themselves aren't used to having solved, this also feeds back into being able to charge a higher premium. It's also much easier to get traction when solving a hard problem, which is another function of getting paid. Of course, this is all dependent on actually solving the hard problem :)
Title is a bit misleading, 3/4 of the arguments against being a founder in the article are conditions that may not apply.
1. Reliance on a co-founder is stressful 2. VC vs founder risk profile 3. Don't dropout to found a company
I think these all apply more to the "get rich quick" approach and sure, I agree that is a bit of a moonshot.
But instead of writing off founding, why not look at ways to mitigate risk? Complete an education, spend some years working in an industry, or start a bootstrapped company in a niche that you learn from the industry. Or any combination of those that fits your risk profile.
And have an exit plan in mind, for either the success story or the failure. That solves the sense of self- a calculated business plan that didn't work out does not have to be devestating.
1. Reliance on a co-founder is stressful 2. VC vs founder risk profile 3. Don't dropout to found a company
I think these all apply more to the "get rich quick" approach and sure, I agree that is a bit of a moonshot.
But instead of writing off founding, why not look at ways to mitigate risk? Complete an education, spend some years working in an industry, or start a bootstrapped company in a niche that you learn from the industry. Or any combination of those that fits your risk profile.
And have an exit plan in mind, for either the success story or the failure. That solves the sense of self- a calculated business plan that didn't work out does not have to be devestating.
Yes, I always think working in business for a while is useful because you see so many inefficiencies that give you ideas. Like the guys that made millions on ski resort management software. Who knew that was even a thing!?
She misses the most important difference between owning a startup and owning a project in a company: actual ownership. You don't own the profits in a company. I mean, really??
Anyone can write articles like this. Be careful who you learn from.
Anyone can write articles like this. Be careful who you learn from.
I don’t think the point about making more money in industry is particularly compelling. I feel like I would be mostly losing opportunity cost and would be pretty confident I could get at least as good a job, if not better, with the lost experience. Further, in what way is joining an early stage startup financially advantageous to being a founder? The only benefit is it being easier to walk away, but the upside is greatly reduced, and the worst case is not much better (perhaps a higher salary).
I also don’t really agree with the point that being an employee engineer can be just as ambitious as being a founder. You can do great things as an engineer but you won’t capture even close to all of its value, and for better or worse will likely not get as much recognition or influence for it either.
There is nothing wrong with not wanting to start a company, and maybe there are people who feel compelled to do it for the wrong reasons. It seems to really boil down to risk tolerance and whether you would actually be comfortable running a business
I also don’t really agree with the point that being an employee engineer can be just as ambitious as being a founder. You can do great things as an engineer but you won’t capture even close to all of its value, and for better or worse will likely not get as much recognition or influence for it either.
There is nothing wrong with not wanting to start a company, and maybe there are people who feel compelled to do it for the wrong reasons. It seems to really boil down to risk tolerance and whether you would actually be comfortable running a business
It is definitely hard and stressful, but when you have your own company, it is up to you to decide how you want to run the company.
You don't have to have co-founders, you don't have to take VC money. You don't have to do anything period.
It is your company, you run it and if somebody else wants to run it, they can either fire you if they have means to do it or buy you out.
You don't have to have co-founders, you don't have to take VC money. You don't have to do anything period.
It is your company, you run it and if somebody else wants to run it, they can either fire you if they have means to do it or buy you out.
This is technically correct, and running a lifestyle business can suit some people.
But running a business is stressful because at the very least you have to deal with taxes, accounts, cashflow and sales that are more complex than being an employee. If you take on even a single employee it's another level of complexity on top, and you have to make payroll every month without fail.
For me at least it was better to do it for a few years with an exit in sight (in my case it went out of business, oh well!) rather than knowing that the stress of finding payroll every month would go on and on forever. And that means going for growth or bust, having a co-founder and all that.
But running a business is stressful because at the very least you have to deal with taxes, accounts, cashflow and sales that are more complex than being an employee. If you take on even a single employee it's another level of complexity on top, and you have to make payroll every month without fail.
For me at least it was better to do it for a few years with an exit in sight (in my case it went out of business, oh well!) rather than knowing that the stress of finding payroll every month would go on and on forever. And that means going for growth or bust, having a co-founder and all that.
To be honest, taxes, accounts, and cashflow are overestimated. There's plenty of softwar/services out there now to make this less painful.
I liked the article, but it just seems like a way to justify whatever self-doubts come from being a founder. It seemed like the author was just reinforcing the doubts they had about succeeding. A big part of being in a startup is belief in one's self. They said they became more confident than they thought was warranted through 'self-hypnosis' , but in reality that just means they had a ton of self-doubt and listened to that little voice of doubt in their head. Sometimes you just have to take a chance and realize that nothing is irreversible; you will learn from your failures/successes. You don't have just one chance, you have as many chances as you're willing to take.
At first I wanted to add some smart-sounding comment to this, but then I took a sneak peak at the author's home page, and realized she's 18 only years old.
This made me think: even if she might not be 100% right, or she might have missed some important detail, etc, it's really impressive that at this age she's able to articulate this concept quite well. I was way dumber when I was 18. Heck, when I was double that.
To be clear and to avoid being misinterpreted: being 18 to me simply count as not possibly having several years of experience as a founder, which makes her thoughts even more impressive.
This made me think: even if she might not be 100% right, or she might have missed some important detail, etc, it's really impressive that at this age she's able to articulate this concept quite well. I was way dumber when I was 18. Heck, when I was double that.
To be clear and to avoid being misinterpreted: being 18 to me simply count as not possibly having several years of experience as a founder, which makes her thoughts even more impressive.
You don’t need a cofounder.
You don’t need a VC/funding.
You don’t need to over identify self with business.
You don’t need a VC/funding.
You don’t need to over identify self with business.
I’m a former VC-backed founder and I liked the post, but this part made me cringe:
> To be ambitious often means things like wanting to do a Ph.D, become a medical doctor or an astronaut.
Why should it be considered ambitious to do a PhD or become a medical doctor. Those are just slogs that most people can get through if they stick it out... Something is very wrong with our cultural preconceptions around ambition. It’s like real ambition is now so taboo we can’t even talk about it or something... Can anybody explain it to me like I’m 5yo?
> To be ambitious often means things like wanting to do a Ph.D, become a medical doctor or an astronaut.
Why should it be considered ambitious to do a PhD or become a medical doctor. Those are just slogs that most people can get through if they stick it out... Something is very wrong with our cultural preconceptions around ambition. It’s like real ambition is now so taboo we can’t even talk about it or something... Can anybody explain it to me like I’m 5yo?
Those are just slogs that most people can get through if they stick it out...
Most adults in the US do not even have a college degree. For their children, aspiring to be a doctor would be incredibly ambitious and an amazing accomplishment.
Acknowledging that these high-prestige professions are very difficult for certain members of society to get into does not make talking about your ambitions "taboo", and I frankly find your comment incredibly out of touch with the average person.
Most adults in the US do not even have a college degree. For their children, aspiring to be a doctor would be incredibly ambitious and an amazing accomplishment.
Acknowledging that these high-prestige professions are very difficult for certain members of society to get into does not make talking about your ambitions "taboo", and I frankly find your comment incredibly out of touch with the average person.
OP is simply meaning the steps are laid out for those disciplines - and one must follow the path. It just takes the time and effort and one can progress there. Whereas entrepreneurship is finding the path, along with much more - and failure is still a high chance.
Yea, sorry, I’m in Sweden so may have a different perspective. But you must realize that if a child says “I’m going to start a successful VC-backed company” then that’s a lot more ambitious than saying “I’m gonna go to medical school”, right? (At least if we by more ambitious mean “has a lower probability of success”.)
So you basically say that becoming a doctor or an astronaut is easy and doesn't require "ambition".
I'm sorry I can't agree with that. Maybe as a former VC-backed founder you'd like to have the monopoly of ambition but there are many many ways to be ambitious. For some it's just be able to run 5km after being overweight for decades, for others it's changing the world with a vaccine.
I'm sorry I can't agree with that. Maybe as a former VC-backed founder you'd like to have the monopoly of ambition but there are many many ways to be ambitious. For some it's just be able to run 5km after being overweight for decades, for others it's changing the world with a vaccine.
How anybody can equate becoming a doctor with becoming an astronaut is just beyond me. How many doctors are there in this world? How many astronauts? Ballpark answers to those two simple questions should be enough to understand they require vastly different levels of ambition...
> It’s like real ambition is now so taboo we can’t even talk about it
Both in the times of the Romans and in the middle ages ambition wouldn't often be talked about since it was seen as a negative thing.
That's not what you meant of course, but I always find it funny how people today seem to think that ambition has always been a virtuous trait or something.
Both in the times of the Romans and in the middle ages ambition wouldn't often be talked about since it was seen as a negative thing.
That's not what you meant of course, but I always find it funny how people today seem to think that ambition has always been a virtuous trait or something.
Of course, when one actually takes that entire part in context it's clear what the author means:
> To be ambitious often means things like wanting to do a Ph.D, become a medical doctor or an astronaut. On that scale, it's not really about being better at something you're doing (though it partially is), but joining a new game where it's supposedly harder.
> To be ambitious often means things like wanting to do a Ph.D, become a medical doctor or an astronaut. On that scale, it's not really about being better at something you're doing (though it partially is), but joining a new game where it's supposedly harder.
Is it? Do people think it’s harder to do a PhD or get through medical school than it is to succeed with a VC-backed startup...?
Nobody said it was harder, so what's your question exactly?
I guess I’m confused by exactly that distinction...
If “more ambitious“ does not mean “willing to attempt harder” things, then what exactly does it mean?
Or do people just think that a founder successful VC-backed startup is not as “successful” as somebody who graduates from medical school or gets a PhD?
If “more ambitious“ does not mean “willing to attempt harder” things, then what exactly does it mean?
Or do people just think that a founder successful VC-backed startup is not as “successful” as somebody who graduates from medical school or gets a PhD?
> Why should it be considered ambitious to do a PhD or become a medical doctor.
At least it seems more ambitious to me than writing that note taking app or making people click ads.
At least it seems more ambitious to me than writing that note taking app or making people click ads.
Interesting thoughts Carol, thanks for sharing. It's important to have this sort of conversation with yourself when considering the foundations of starting a company. The fact that you've expressed it in such a way that others can tap into may be valuable for those like you at or approaching this crossroads. Fascinating thought process!
Not enough entrepreneurs/founders are able to have such a pragmatic and mature dialogue up front about the pros and cons. It's imperative that they do for the sake of their time and emotional well being - at the least. Kudos to you for going through it and making a decision which suits your needs.
You've said: "Setting goals like working at a certain company, promotions (up to positions like CTO) and building a specific type of thing aren't less ambitious than building a successful startup." ... and I would ask you to elaborate on that, like is there anything more "ambitious" than building successful startup or how do you perceive the scale of ambition in the context of say business/professional pursuits?
PS - I didn't know that hey.com was considered a "huge, groundbreaking" product...certainly captured some hearts and minds of the early adopter meets anti apple/establishment crowd but is it (yet) recognized outside of that bubble?
Not enough entrepreneurs/founders are able to have such a pragmatic and mature dialogue up front about the pros and cons. It's imperative that they do for the sake of their time and emotional well being - at the least. Kudos to you for going through it and making a decision which suits your needs.
You've said: "Setting goals like working at a certain company, promotions (up to positions like CTO) and building a specific type of thing aren't less ambitious than building a successful startup." ... and I would ask you to elaborate on that, like is there anything more "ambitious" than building successful startup or how do you perceive the scale of ambition in the context of say business/professional pursuits?
PS - I didn't know that hey.com was considered a "huge, groundbreaking" product...certainly captured some hearts and minds of the early adopter meets anti apple/establishment crowd but is it (yet) recognized outside of that bubble?
You may not wish to be a founder if you believe the only way to succeed is to chase venture capital.
If you value freedom over becoming a billionaire there's an alternative and that's bootstrapping. Plus your odds jump from under 10% to as much as 50%. If you don't quickly reach product-market-fit it's a short journey. Sometimes having that pressure early brings clarity to the mind.
If you value freedom over becoming a billionaire there's an alternative and that's bootstrapping. Plus your odds jump from under 10% to as much as 50%. If you don't quickly reach product-market-fit it's a short journey. Sometimes having that pressure early brings clarity to the mind.
I really liked the article which raises many valid points. You should not start a company without thinking those through. And have a cofounder who sees those in a similar fashion.
On a flip side working for a large company has different challenges and limitations. They tend to be bureaucratic and have been moving in the direction of avoiding risk and increasing control over employees. Once this reaches a certain level, dancing to the HR tunes while in the straitjacket of 20 policies can get very taxing.
Separately, I wonder why the 14-hour workday is the norm in startups. What would happen if founders try to get somewhere in four months instead of three and have a firm agreement between founders of "no more than 10 hour work days; at least one, preferably two days a week of no work"?
It seems everyone agrees that "it does not work this way". Can someone explain?
On a flip side working for a large company has different challenges and limitations. They tend to be bureaucratic and have been moving in the direction of avoiding risk and increasing control over employees. Once this reaches a certain level, dancing to the HR tunes while in the straitjacket of 20 policies can get very taxing.
Separately, I wonder why the 14-hour workday is the norm in startups. What would happen if founders try to get somewhere in four months instead of three and have a firm agreement between founders of "no more than 10 hour work days; at least one, preferably two days a week of no work"?
It seems everyone agrees that "it does not work this way". Can someone explain?
> A lot of people claim that startups are less money, but I find for signicant number of founders, that's not true -- not because they'll definitely have a good exit, but because they're skilled in ways that allow them to raise enough money to pay themselves like they would at a big company. If that applies to you, then going to a startup probably is your best shot at getting rich! For other people, the expected value of industry (particularly joining a well-founded early-stage startup) is usually higher.
I've never heard this before. Raising enough VC money to pay yourself a corporate salary (i.e. 6-figure or beyond) sounds like fraudulent use of VC money?
I've never heard this before. Raising enough VC money to pay yourself a corporate salary (i.e. 6-figure or beyond) sounds like fraudulent use of VC money?
VCs want founders to be paid a market salary so that they can focus on their startup and not be distracted with other shiny things.
Why not? You might be the CEO of your new wannabe company, but your landlord is still going to demand his monthly rent. Bills still need to be paid. It’s unrealistic to be burning through your savings, because you probably don’t have enough.
And if you had enough money, you’d probably have self-funded your startup idea yourself, instead of having to deal with pesky VC investors.
And if you had enough money, you’d probably have self-funded your startup idea yourself, instead of having to deal with pesky VC investors.
Ugh, come on, for the vast majority of people, marriage and family are the best things in their lives.
From what I can gather from the article, the author has neither been in a startup, nor in a marriage, yet they feel qualified to mentor people on both :-)
From what I can gather from the article, the author has neither been in a startup, nor in a marriage, yet they feel qualified to mentor people on both :-)
Mostly valid arguments. Founding a startup with a co-founder can be like being in a marriage, and there are a lot of frustrations on the path to success (or failure).
That said, she doesn't seem to realize how privileged she actually is, having to choose between a high-paying job at a SV company or accepting to join one of the most famous startup accelerator programs... I don't think she does that on purpuse, just seems a bit out of touch (but then again this is HN so maybe not).
That said, she doesn't seem to realize how privileged she actually is, having to choose between a high-paying job at a SV company or accepting to join one of the most famous startup accelerator programs... I don't think she does that on purpuse, just seems a bit out of touch (but then again this is HN so maybe not).
I worry about the people who want to start companies. I think that's a terrible motivation that more often than not leads to failure (and drags others down with you).
I have personally never wanted to start a company. I have seen something I've wanted to change in the world, and failed to find a way to change it without starting a company.
Not starting a company would have been quite a bit less painful. I would 100% take that option if it were on the table.
I have personally never wanted to start a company. I have seen something I've wanted to change in the world, and failed to find a way to change it without starting a company.
Not starting a company would have been quite a bit less painful. I would 100% take that option if it were on the table.
I think the commitment aspect of a startup is mostly underrated by people
Freedom? Closing the work laptop at 6PM is freedom. Not having to worry about office rentals, trash collection, bathroom cleaning is freedom. Fine, you could go WeWork for that, or just stay at home (aren't we all) but something will go off at night, or your future self will regret your past self decisions.
Freedom? Closing the work laptop at 6PM is freedom. Not having to worry about office rentals, trash collection, bathroom cleaning is freedom. Fine, you could go WeWork for that, or just stay at home (aren't we all) but something will go off at night, or your future self will regret your past self decisions.
Are you confusing commitment with responsibility?
If something goes off at night or if you have an idea and decide to put in a few extra hours at 6pm, it's an opportunity to do some work to improve things for the future of your project. You don't have to. Some people like such low-hanging fruit though.
Office rentals and bathroom cleaning are responsibilities like those pretty much everyone has to deal with in adult life. They can feel like a burden if you have Peter Pan Syndrome, but are consequences of life decisions and not special commitments that need to be questioned every day.
If something goes off at night or if you have an idea and decide to put in a few extra hours at 6pm, it's an opportunity to do some work to improve things for the future of your project. You don't have to. Some people like such low-hanging fruit though.
Office rentals and bathroom cleaning are responsibilities like those pretty much everyone has to deal with in adult life. They can feel like a burden if you have Peter Pan Syndrome, but are consequences of life decisions and not special commitments that need to be questioned every day.
It is really a choice between wanting freedom while accepting the troubles that come with it or sitting under the shade of employment with the occasional bug bites.
Most of all, I am glad that there is this awakening that one questions their situation and wants to change things up. That to me is growth. Thanks for sharing this.
> The VCs are your "bosses" as you answer to them (though much less than a regular "boss") and to the ones you hope to raise capital from in the future.
Isn't this based solely on the equity makeup? If an investor only has 10%, but me and my co-founder share 90% then what absolute power does the investor really have?
Isn't this based solely on the equity makeup? If an investor only has 10%, but me and my co-founder share 90% then what absolute power does the investor really have?
Investors' job does not stop with giving the money. Very often, on the contrary, they are the people who will help you with connections to next round investors, will help with IPO, etc. They will not do any of this if you don't do what they want :)
yeah i get that, that sounds more like a "partnership", though. I was mostly talking about the "boss" verbiage.
An investor is only a boss if they have more equity or voting rights, correct?
An investor is only a boss if they have more equity or voting rights, correct?
It's partnership when things go as intended, it's "boss" when there are problems. Just make sure there are no problems ;)
The value of starting a company is you can hope to accomplish something which other people have not. It is a bit like being an explorer finding new lands like Columbus. It is an adventure. But you might end up marooned.
Whereas if you just work for someone else you accomplish some income. You can pay your rent or get a mortgage maybe even buy a sports-car! But you don't have real job-security and in the US you don't even have the security to know if you get fired you could still keep your health insurance.
You are serving someone else's goal which probably is to maximize their financial profit. When you work for them you are their opponent. More for you is less for them. It's not full zero-sum of course but if they are the kind of person who just wants money they will view you that way, as somebody they can make money from. It's a game and they can win big, but you really can't. Your benefit is you learn things but after some years you start thinking you are wasting your life that way taking orders from some clueless greedy business-person.
Just my feeling at the moment.
Whereas if you just work for someone else you accomplish some income. You can pay your rent or get a mortgage maybe even buy a sports-car! But you don't have real job-security and in the US you don't even have the security to know if you get fired you could still keep your health insurance.
You are serving someone else's goal which probably is to maximize their financial profit. When you work for them you are their opponent. More for you is less for them. It's not full zero-sum of course but if they are the kind of person who just wants money they will view you that way, as somebody they can make money from. It's a game and they can win big, but you really can't. Your benefit is you learn things but after some years you start thinking you are wasting your life that way taking orders from some clueless greedy business-person.
Just my feeling at the moment.
There are a lot of bootstrapped founders, actually the vast majority of them since the percentage of companies that VCs fund versus the number of pitches is tiny, so this doesn't seem that accurate. Just look on www.indiehackers.com for more info on these types of founders.
Not sure about being a founder. I rather be a entrepreneur and if that means that at some point i end up founding a startup, so be it. But the term “founder” seems like a unnecessarily limiting word and i don’t understand why it appeals to some people.
Being a founder requires a bit of insanity or a belief in one’s self beyond the negativity that will be incurred by the effort.
For many, the suffering is not worth any vision. For some, like myself, doing nothing is a greater suffering.
For many, the suffering is not worth any vision. For some, like myself, doing nothing is a greater suffering.
Using the word "founder" is ridiculously narcissistic when you are simply starting a business just like millions of people have done before. I try to stay away from people who call themselves that.
Which word do you approve of? It seems like every terminology gets cliche at some point, but this is the first time I've heard of someone who has strong feelings about the "founder/co-founder" title.
"Business owner" is neutral and meaningful. I guess "founder" is best reserved for writers of constitutions and the like.
Only be a founder if you:
A) Think you are better than what your resumes/work history says. B) Are better than what your resume/work history says.
Most people with a strong enough resume/work history to get funding fail both.
A) Think you are better than what your resumes/work history says. B) Are better than what your resume/work history says.
Most people with a strong enough resume/work history to get funding fail both.
I had a funny experience where a friend was trying to recruit me to be part of some venture.
We met up and got in a car with another lady who he was trying to recruit as well, and he kept talking about it as if it was already a done deal that we were in.
At one point, she and I looked at each other and were like "Excuse me. No offense, but I don't know who the hell you are." We didn't join his thing, but ended up starting three companies together, so we were compatible business partners.
You need some time to get to know each other. I find it's better if you don't consider it like marriage, investing a lot of emotion in it. It either works or it doesn't, and you can leave as friends.
We met up and got in a car with another lady who he was trying to recruit as well, and he kept talking about it as if it was already a done deal that we were in.
At one point, she and I looked at each other and were like "Excuse me. No offense, but I don't know who the hell you are." We didn't join his thing, but ended up starting three companies together, so we were compatible business partners.
You need some time to get to know each other. I find it's better if you don't consider it like marriage, investing a lot of emotion in it. It either works or it doesn't, and you can leave as friends.
this is personal. doesn't apply to me.
I founded my first company 10 years ago. now in my second company. I enjoy it very much.
I am in contact with many happy founders.
Your co-founder is not the same as with your wife, because you will spend MORE time with your co-founder than with your wife.
Off topic to the content of the article, but this is a really slick looking blog! Is this a template or something custom?
Don't tell me what I do and don't want. I hate articles like this.
Cool, so best to do a bootstrapped solo-founder thing ;)
This article has such a strong mental bias towards the Bay Area worldview. It assumes so deeply that the two types of people in the world are VC-backed startup founders and engineers at top tier tech companies. This is so completely off. Many people (including me) decided to start bootstrapped companies that are profitable on day 1 (or soon thereafter), with richly rewarding work. Many folks literally can’t get a job because they have no marketable skills and their only solution is to create something brand new. Other folks just want to have a good story to tell about trying to change the world. It’s really in this small bubble that you can create an equivalence between tech founder and tech employee.
This is correct (am author), bad oversight. Opinions were only applicable towards the scope you described
Hm okay, thanks for acknowledging! I guess the reason I had strong words for this was that the mental bias I observed is actually extremely pervasive among people here in the bay. In fact the first question I get about my firm is whether/how much I raised.
I'm afraid of Bay-Area-view-of-the-world-being-inaccurate sorta things, was kind of sad to see it in myself (though my scope was narrowed partially because my only experience was choosing between industry vs startup)
If you're interested in the wider world of startups you might like the "Startups for the Rest of Us" podcast (https://www.startupsfortherestofus.com/) and the community around it. Some examples:
* https://microconf.com/
* https://tinyseed.com/
* http://bootstrappedweb.com/
* https://indie.vc
They are probably closest to the Silicon Valley startup world in the kinds of businesses being built.
Getting further away you have things like affiliate marketers and drop shippers. The "Tropical MBA" podcast (https://www.tropicalmba.com/) is more in that space.
* https://microconf.com/
* https://tinyseed.com/
* http://bootstrappedweb.com/
* https://indie.vc
They are probably closest to the Silicon Valley startup world in the kinds of businesses being built.
Getting further away you have things like affiliate marketers and drop shippers. The "Tropical MBA" podcast (https://www.tropicalmba.com/) is more in that space.
Please don’t feel like this article wasn’t useful to some people though even with bias; as a new entrant to the industry I liked reading it!
"Startup" is not really synonymous with "small business". It may not be a universal view but it does seem really common nowadays for the word "startup" to imply attempts at fast-growing, VC-funded new companies.
Also while most people don't work at the big-name sexy tech companies, I think the author's point was about what people should aspire to as the pinnacle of a career. Not what people commonly settle for.
Also while most people don't work at the big-name sexy tech companies, I think the author's point was about what people should aspire to as the pinnacle of a career. Not what people commonly settle for.
Do you have any self awareness of how awful that sounds?
I guess not. Maybe you can elaborate?
Are you aware of the forum guidelines governing comments?
Are you aware of the forum guidelines governing comments?
As someone who would love to pursue that path, I’d be interested in hearing more about your story if you’re willing to share.
I don't even want to work, but unfortunately food and shelter cost money.
It's all a trade-off. Don't be a founder, but then you have to put up with crazy company politics, feeling of meaninglessness, having a boss, and so on.
Personally I don't think anybody is entitled to a job, though. Hence my "I don't even want to work" statement. People have to do something to survive, that is just reality.
It's all a trade-off. Don't be a founder, but then you have to put up with crazy company politics, feeling of meaninglessness, having a boss, and so on.
Personally I don't think anybody is entitled to a job, though. Hence my "I don't even want to work" statement. People have to do something to survive, that is just reality.
The biggest reason: Some of us would be horrible to work under. One day VCs will get it.
Don't want to be a founder? Good, you don't have to be.
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But he wasn't wrong. Write down a list of why you want to start a company. I bet the list involves things like "building something nobody else has," "getting to program and design and do a bit of business-y stuff" or "freedom to work on what I want". That's only true when you start. Pretty soon, you're spending all day in meetings, and only a small portion of your time will go to the things you currently enjoy doing... and you'll feel guilty because there's something more important you should be doing. (Me? I'm currently procrastinating on an investor update, an H1B application and two performance reviews.) You'll spend more time writing emails than writing code. You end up bogged down in organizational issues, not dreaming up cool new features. Rather than having one boss, you now have dozens... investors, customers, employees, etc.
Oh, and the rejection. The non stop rejection. Every single day, hour, minute. Investors, customers, employees, potential employees. It's not personal, but it sure feels personal. Even when things are going great, there's tons of little micro-rejections, non-stop. I wish someone told me that.
It's really hard. I don't know a single founder who hasn't had relationship problems because of their company, or suffered from depression. Hanging out with founders is less like the TV show Silicon Valley, and more like group therapy.
This isn't to say you shouldn't do it. But just be prepared for what being a founder actually entails. Talk to a few founders of medium sized companies about how they're doing. If you're still on board, then maybe you're right for the job. For me, I wouldn't change a thing... I love it. It's incredibly hard, but there's a reason I haven't even thought of leaving. If you're the same way, then go for it!
But don't do it because you want to do it. Do it because you literally can't imagine not doing it.
(If you're doing it now and things are getting hard and you need someone to talk to, my email is in my bio :) )