Pathik Shah

Startups are Hard

An excellent post on startups and what it means to be an entrepreneur by @jazzychad of Notifo and PicAFight.

Startups are Hard

Startups are hard. No, startups are damn hard.

Contrary to popular belief, there are no clouds of money that float around Silicon Valley and rain on anyone that utters the phrase, “I’m a founder!” Unfortunately, starting a company and raising money is just as hard as ever; it’s just that the investors don’t have as much leverage as they used to, but they still have a lot.

Most reporting on startups suffers from a terrible case of success bias. Nobody wants to report on a dying startup unless it is to highlight another company that has come along to kill them, but that actually turns into a piece about the better company and not the dying one.

Startups that die rarely talk about it publicly because it is frustrating, embarrassing, and most of the time the people involved want to forget the whole mess and move on rather than sit around talking about the fact that they failed.

Most people don’t want to admit that startups are hard, either, because to admit something is hard is to admit that you don’t know everything there is to know about a certain topic and to display weakness. If there’s one thing you do not want to do as a startup, it’s appear weak. Only the strong survive.

But guess what: startups are hard. At times they are soul-crushingly hard. I am not afraid to admit this anymore. I am not afraid to talk openly about it with peers anymore. So, this post serves as a counterpoint to all the recent postings alluding to the fact that anyone can suddenly decide to be a founder and the next week find themselves swimming around in a kiddie-pool full of angel/VC money.

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Entrepreneurs and Nontrepreneurs

There are two kinds of people – entrepreneurs and nontrepreneurs.

I’m currently a nontrepreneur, aspiring to be an entrepreneur. And here’s an awesome post by Chris Dixon on the subject.

There are two kinds of people in the world

You’ve either started a company or you haven’t. ”Started” doesn’t mean joining as an early employee, or investing or advising or helping out. It means starting with no money, no help, no one who believes in you (except perhaps your closest friends and family), and building an organization from a borrowed cubicle with credit card debt and nowhere to sleep except the office. It almost invariably means being dismissed by arrogant investors who show up a half hour late, totally unprepared and then instead of saying “no” give you non-committal rejections like “we invest at later stage companies.” It means looking prospective employees in the eyes and convincing them to leave safe jobs, quit everything and throw their lot in with you. It means having pundits in the press and blogs who’ve never built anything criticize you and armchair quarterback your every mistake. It means lying awake at night worrying about running out of cash and having a constant knot in your stomach during the day fearing you’ll disappoint the few people who believed in you and validate your smug doubters.

I don’t care if you succeed or fail, if you are Bill Gates or an unknown entrepreneur who gave everything to make it work but didn’t manage to pull through. The important distinction is whether you risked everything, put your life on the line, made commitments to investors, employees, customers and friends, and tried – against all the forces in the world that try to keep new ideas down – to make something new.

via Chris Dixon

Best Essays on Startups and Entrepreneurship by Paul Graham

Paul Graham is probably one of the best writers in the world. All the essays he has written over the years are excellent, and should be read by every aspiring entrepreneur, but these are the ones which I think are the top essays / best articles by Paul Graham. All of them are about startups, entrepreneurship and everything in between.

Top Best Startup Essays by Paul Graham

1. How to Make Wealth

2. How to Start a Startup

3. Hiring is Obsolete

4. Inequality and Risk

5. Ideas for Startups

6. How to Fund a Startup

7. How to Do What You Love

8. The Hardest Lessons for Startups to Learn

9. How to Present to Investors

10. A Student’s Guide to Startups

11. The 18 Mistakes That Kill Startups

12. Why to Not Not Start a Startup

13. The Hacker’s Guide to Investors

14. How Not to Die

15. You Weren’t Meant to Have a Boss

16. Why to Start a Startup in a Bad Economy

17. Startups in 13 Sentences

18. How to Be an Angel Investor

19. Ramen Profitable

20. What Startups Are Really Like

If you liked these, you should definitely read all his essays. Check them out at Paul Graham – Essays

Swoopo – the Penny Auction, Pay-Per-Bid Site – Files for Bankruptcy

Swoopo, one of the most brilliant money-making ideas that I had seen in execution – a pay-per-bid auction site, has apparently filed for bankruptcy.

It had a very innovative business model, in which the bidders in an auction paid for every bid, rather than the winner paying the final price of the item. On the surface, it seemed like you could get items for much less than their actual price (not accounting for the price of the bids), if you won. But those who lost the auction still had to pay for the bids. Once you started bidding, you were invested in it, and HAD to recover the price of the bids placed by bidding more, losing even more money in the process.

Every time someone bid, the purchase price and the timer were bumped up. The one who bid last won the item, which was quite easy as long as there weren’t many users. But Swoopo soon became very popular and attracted a lot of users, driving up prices of every item on auction, effectively printing money for the owners of Swoopo.

People even tried to game Swoopo by using custom bidding programs, but were no match against BidButler, the automated bidding program by Swoopo. If such a tool were available to just one bidder, he would definitely win, but since everyone could use it, the only winner was Swoopo. At its peak, it had millions in revenue and spawned many clones, most of which are already dead.

But it seems that finally its users realized that “The only winning move is not to play”.

R. I. P. Swoopo.

The Characters of Silicon Valley

People you will often encounter in the startup world, especially in Silicon Valley.

Here is a list of the best ones.

Startup Founder:
You have done one of the following things:
- Raised capital (including joined an incubator)
- Generated revenue
- Registered a business entity for that specific project
- Committed to working full time on the project or hired other people to do so

Faux Founder:
You say you’re running a startup, but you’ve not designed or shipped an MVP (or know what an MVP is). Instead you are still looking for a co-founder (usually technical) or you’ve found an engineer(s) to build a prototype that has taken 6 months (so far) without shipping anything. If you are lucky you have a ‘coming soon’ page

Super Secret Agent Orange CIA Operative Founder:
You say you have a startup, but can’t seem to articulate what you do in any meaningful way (even the general space) and at the first question about your company you clam up and then start to cite the need for an NDA. You then ask for more meetings or introductions to other people so that you can give them the same treatment.

Delusional Founder:
You have raised way too much money and are burning it quickly on a crazy idea. You think you know everything. Chances are you’ve still not shipped your product or if you have it’s heavy, got too many features and is a clone of something else that existed 5 years ago.

Faux Angel:
You pretend to have some money that you *might* invest in the right startup. But you don’t. Since you’re not actually investing no one’s quite sure what it is you really do.

Angel:
You have actual money. You actually invest it regularly. You might even have 500 hats. If you’re good (or just loud) somehow you manage to be everywhere and do everything. If you’re more of an introvert, most people don’t know your name – but you help make dreams come true.

VC:
You have a lot more money. You rarely invest it, but when you do it makes a big difference to the company. If you are not very good, you overvalue your contribution to startups. If you’re a good VC you recognize you are just an enabler who is lucky to be involved in making a dream come true or changing the world

Socialite:
You’re not actually in tech – you just hang around the tech scene because you want to. You may even somehow (seem to) know more about the latest tech news than most of the people who are actually trying to work in the space because you have time to actually read the blogs.

Blogger:
You write for a real blog (i.e. it has more readers than just your family and immediate friends). Startup founders probably wish you would listen to them. You probably wish you were a startup founder. You also probably get a lot of PR girls hanging around you.

Faux Blogger:
You write on *A* blog, but no one reads it. You call yourself a blogger in the hopes you might be confused for the category above.

Web Celeb:
You’re famous for talking about the tech scene and pimping the things you like. You’ve likely never actually shipped a software product before or run a web business but you speak loudly and without reservation so people believe you know what you’re talking about. You also probably get a lot of PR girls hanging around you.

Consultant:
You work at a real firm or have real customers with known brands (either because you helped them get known or because they were known before you got there). You actually move the needle for them and assist with product launches, events, product planning, HR or other PRACTICAL matters

Faux Consultant:
You go to all the startup events (ALL of them), you talk like you understand startups but you are a ‘consultant’. You’re not really a consultant though, you are just looking for work. You don’t represent any real firm or domain expert – u just want to be part of the scene or find an opportunity

Check out the complete list here – Characters of Silicon Valley