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 | How to start a startup(ZT) |
| | Should You?
But should you start a company? Are you the right sort of person to do it? If you are, is it worth it?
More people are the right sort of person to start a startup than realize it. That\'s the main reason I wrote this. There could be ten times more startups than there are, and that would probably be a good thing.
I was, I now realize, exactly the right sort of person to start a startup. But the idea terrified me at first. I was forced into it because I was a Lisp hacker. The company I\'d been consulting for seemed to be running into trouble, and there were not a lot of other companies using Lisp. Since I couldn\'t bear the thought of programming in another language (this was 1995, remember, when \"another language\" meant C++) the only option seemed to be to start a new company using Lisp.
I realize this sounds far-fetched, but if you\'re a Lisp hacker you\'ll know what I mean. And if the idea of starting a startup frightened me so much that I only did it out of necessity, there must be a lot of people who would be good at it but who are too intimidated to try.
So who should start a startup? Someone who is a good hacker, between about 23 and 38, and who wants to solve the money problem in one shot instead of getting paid gradually over a conventional working life.
I can\'t say precisely what a good hacker is. At a first rate university this might include the top half of computer science majors. Though of course you don\'t have to be a CS major to be a hacker; I was a philosophy major in college.
It\'s hard to tell whether you\'re a good hacker, especially when you\'re young. Fortunately the process of starting startups tends to select them automatically. What drives people to start startups is (or should be) looking at existing technology and thinking, don\'t these guys realize they should be doing x, y, and z? And that\'s also a sign that one is a good hacker.
I put the lower bound at 23 not because there\'s something that doesn\'t happen to your brain till then, but because you need to see what it\'s like in an existing business before you try running your own. The business doesn\'t have to be a startup. I spent a year working for a software company to pay off my college loans. It was the worst year of my adult life, but I learned, without realizing it at the time, a lot of valuable lessons about the software business. In this case they were mostly negative lessons: don\'t have a lot of meetings; don\'t have chunks of code that multiple people own; don\'t have a sales guy running the company; don\'t make a high-end product; don\'t let your code get too big; don\'t leave finding bugs to QA people; don\'t go too long between releases; don\'t isolate developers from users; don\'t move from Cambridge to Route 128; and so on. [8] But negative lessons are just as valuable as positive ones. Perhaps even more valuable: it\'s hard to repeat a brilliant performance, but it\'s straightforward to avoid errors. [9]
The other reason it\'s hard to start a company before 23 is that people won\'t take you seriously. VCs won\'t trust you, and will try to reduce you to a mascot as a condition of funding. Customers will worry you\'re going to flake out and leave them stranded. Even you yourself, unless you\'re very unusual, will feel your age to some degree; you\'ll find it awkward to be the boss of someone much older than you, and if you\'re 21, hiring only people younger rather limits your options.
Some people could probably start a company at 18 if they wanted to. Bill Gates was 19 when he and Paul Allen started Microsoft. (Paul Allen was 22, though, and that probably made a difference.) So if you\'re thinking, I don\'t care what he says, I\'m going to start a company now, you may be the sort of person who could get away with it.
The other cutoff, 38, has a lot more play in it. One reason I put it there is that I don\'t think many people have the physical stamina much past that age. I used to work till 2:00 or 3:00 AM every night, seven days a week. I don\'t know if I could do that now.
Also, startups are a big risk financially. If you try something that blows up and leaves you broke at 26, big deal; a lot of 26 year olds are broke. By 38 you can\'t take so many risks-- especially if you have kids.
My final test may be the most restrictive. Do you actually want to start a startup? What it amounts to, economically, is compressing your working life into the smallest possible space. Instead of working at an ordinary rate for 40 years, you work like hell for four. And maybe end up with nothing-- though in that case it probably won\'t take four years.
During this time you\'ll do little but work, because when you\'re not working, your competitors will be. My only leisure activities were running, which I needed to do to keep working anyway, and about fifteen minutes of reading a night. I had a girlfriend for a total of two months during that three year period. Every couple weeks I would take a few hours off to visit a used bookshop or go to a friend\'s house for dinner. I went to visit my family twice. Otherwise I just worked.
Working was often fun, because the people I worked with were some of my best friends. Sometimes it was even technically interesting. But only about 10% of the time. The best I can say for the other 90% is that some of it is funnier in hindsight than it seemed then. Like the time the power went off in Cambridge for about six hours, and we made the mistake of trying to start a gasoline powered generator inside our offices. I won\'t try that again.
I don\'t think the amount of bullshit you have to deal with in a startup is more than you\'d endure in an ordinary working life. It\'s probably less, in fact; it just seems like a lot because it\'s compressed into a short period. So mainly what a startup buys you is time. That\'s the way to think about it if you\'re trying to decide whether to start one. If you\'re the sort of person who would like to solve the money problem once and for all instead of working for a salary for 40 years, then a startup makes sense.
For a lot of people the conflict is between startups and graduate school. Grad students are just the age, and just the sort of people, to start software startups. You may worry that if you do you\'ll blow your chances of an academic career. But it\'s possible to be part of a startup and stay in grad school, especially at first. Two of our three original hackers were in grad school the whole time, and both got their degrees. There are few sources of energy so powerful as a procrastinating grad student.
If you do have to leave grad school, in the worst case it won\'t be for too long. If a startup fails, it will probably fail quickly enough that you can return to academic life. And if it succeeds, you may find you no longer have such a burning desire to be an assistant professor.
If you want to do it, do it. Starting a startup is not the great mystery it seems from outside. It\'s not something you have to know about \"business\" to do. Build something users love, and spend less than you make. How hard is that?
Notes
[1] Google\'s revenues are about two billion a year, but half comes from ads on other sites.
[2] One advantage startups have over established companies is that there are no discrimination laws about starting businesses. For example, I would be reluctant to start a startup with a woman who had small children, or was likely to have them soon. But you\'re not allowed to ask prospective employees if they plan to have kids soon. Believe it or not, under current US law, you\'re not even allowed to discriminate on the basis of intelligence. Whereas when you\'re starting a company, you can discriminate on any basis you want about who you start it with.
[3] Learning to hack is a lot cheaper than business school, because you can do it mostly on your own. For the price of a Linux box, a copy of K&R, and a few hours of advice from your neighbor\'s fifteen year old son, you\'ll be well on your way.
[4] Corollary: Avoid starting a startup to sell things to the biggest company of all, the government. Yes, there are lots of opportunities to sell them technology. But let someone else start those startups.
[5] A friend who started a company in Germany told me they do care about the paperwork there, and that there\'s more of it. Which helps explain why there are not more startups in Germany.
[6] At the seed stage our valuation was in principle $100,000, because Julian got 10% of the company. But this is a very misleading number, because the money was the least important of the things Julian gave us.
[7] The same goes for companies that seem to want to acquire you. There will be a few that are only pretending to in order to pick your brains. But you can never tell for sure which these are, so the best approach is to seem entirely open, but to fail to mention a few critical technical secrets.
[8] I was as bad an employee as this place was a company. I apologize to anyone who had to work with me there.
[9] You could probably write a book about how to succeed in business by doing everything in exactly the opposite way from the DMV.
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