[HN Gopher] Market is the most important factor in a startup's s...
___________________________________________________________________
Market is the most important factor in a startup's success or
failure (2007)
Author : deadcoder0904
Score : 106 points
Date : 2021-04-29 09:12 UTC (2 days ago)
(HTM) web link (pmarchive.com)
(TXT) w3m dump (pmarchive.com)
| hn_throwaway_99 wrote:
| Yes, as others have pointed out, market timing matters, but these
| days any market that is obviously a good one will get flooded
| with a ton of competitors, and with many of these markets
| consolidating to "winner takes all" status, most of those
| competitors will fail (or, perhaps more optimistically, get
| acquired).
|
| I think the winner-take-all nature of many of these hot markets
| is something more apparent now than it was in 2007.
| gjvc wrote:
| What does the "p" in "pmarca" stand for / signify? "public"?
| "private"?
| gerikson wrote:
| IIRC it's been his handle for a long time.
| jcfrei wrote:
| Yup, or put a bit differently: Timing is (almost) everything.
| There's usually only a short window in time where successful new
| tech companies can be started (maybe 1-3 years). Too early and
| nobody cares / buys your product, too late and you won't be able
| to raise enough capital to ever catch up.
| arbuge wrote:
| Counterpoint: lots of money can be made if you're late to the
| party but have a great new spin on it. Assuming the party's big
| enough to accomodate multiple players, and not a natural
| winner-takes-all situation.
| capiki wrote:
| Absolutely. Bumble is my go-to example for this sort of
| business. Essentially a clone of Tinder with one small (but
| clearly important) change.
| golemiprague wrote:
| The interesting bit is that the "important" change is just
| a marketing fad, it doesn't really change anything about
| the interaction since you need to match first anyways so
| who cares who says the first Hi, which is what most women
| write. The onus to impress is still on the men, the
| matching patterns are still the same as Tinder. I think
| bumble and other similiar apps that came after that are
| catering more for the need of people to form tribes and it
| is true for many other products or even computer languages
| usage, the "commmunity" and who is using it is more
| important than the product itself.
| arbuge wrote:
| That's a good one - in a market which I would have thought
| was indeed a winner-takes-all one. The founder obviously
| knew better.
| alisonkisk wrote:
| Tinder was the millionth of a billion dating apps.
| ghaff wrote:
| Not necessarily the same thing, but "fast follower" is
| absolutely a valid business strategy. Let someone else
| establish there's a market, make some mistakes, increase
| awareness--then you can swoop in with a more refined, better
| targeted product.
|
| Apple arguably did this with the iPod.
| dstick wrote:
| Or personal computer, for that matter.
| ghaff wrote:
| The way the PC market developed is complicated.
|
| IBM targeted a business market that hadn't really been
| seriously targeted by the "hobbyist" systems. The Compaq
| was really at the spearhead of the clones. (And IBM
| subsequently whiffed with the PS/2 and OS/2.) And then
| Dell revolutionized distribution. And even that is a
| gross over-simplification.
| Frost1x wrote:
| Apple has done this with a lot of devices throughout their
| history. They often don't create a tech, they refine
| something that's promising into something consumers like,
| usually with appropriate timing (ignoring the brand loyalty
| and following effects they also have). The Tile clone,
| whatever Apple branded it, is yet another recent example of
| this.
|
| The one ingredient missing is that you often also need a
| pile of capital to strong-arm yourself into the market and
| become a viable competitor. There's definitely an optimal
| point to do this as someone else pointed out: too early and
| you suffer the market exploration costs and failure risks,
| too late and you may never catch up.
|
| I personally don't think these sorts of strategies should
| exist from a perspective of principals (it encourages
| capital to copy, not innovative, and further punishes those
| who take on the real risks who are disproportionately
| awarded) but they do. This why IP protections like patents
| came about in the first place, but these systems too have
| been gamed so far they often make little sense anymore
| either (e.g. slight derivations of existing patents that
| mimic the same functional outcomes but are allowed just to
| name one perverse abuse of the patent system--still allows
| a high degree of copying).
|
| I think the latter (joining late) can often be overcome
| with more capital though. The issue often isn't that you
| can't catch up, it's that it's often not worth the
| investment and risk perceived by investors with sufficient
| capital to try and split any existing market and innovative
| over what exists, especially if it's capital intensive.
| There are usually other lower barrier to entry markets to
| muscle into and get money out of.
| sbacic wrote:
| > I personally don't think these sorts of strategies
| should exist from a perspective of principals (it
| encourages capital to copy, not innovative, and further
| punishes those who take on the real risks who are
| disproportionately awarded) but they do.
|
| To play devil's advocate - what about network effects?
| There are plenty of examples where a possibly inferior
| service built a moat around itself through network
| effects, preventing a potentially better rival from
| competing.
| dctoedt wrote:
| > _" fast follower" is absolutely a valid business
| strategy. ... Apple arguably did this with the iPod._
|
| So did Google -- remember AltaVista? [0]
|
| [0] https://en.wikipedia.org/wiki/AltaVista
| ghaff wrote:
| I was actually listening to a podcast that went into
| AltaVista a few months back. One of the folks involved in
| AltaVista originally hired me into my current role but
| the public episode hasn't dropped yet.
| https://www.redhat.com/en/command-line-heroes
| tediousdemise wrote:
| Just yesterday, I was looking at a PlayStation Vita that my
| girlfriend's brother scored off eBay. Released in 2011, it was
| Sony's last handheld console.
|
| _Wow, looks like a smaller Nintendo Switch_ , I thought. He
| told me there's homebrew to connect it to a larger screen.
|
| Timing is everything.
| redisman wrote:
| iPhone and Android killed the handheld market. The switch
| works because it's a portable console rather than a handheld
| sombremesa wrote:
| > He told me there's homebrew to connect it to a larger
| screen.
|
| > Timing is everything.
|
| Yeesh. I assume you know what homebrew means.
|
| Perhaps putting features in your product is what mattered
| more than timing here.
| tediousdemise wrote:
| Yeah, it's sad they didn't make it an official feature.
| Apple adds common jailbreak tweaks to official iOS releases
| all the time.
|
| You would think Sony could at least iterate on their
| product with features the gaming community wants instead of
| shuttering the product line permanently.
| johbjo wrote:
| Not really. Early/immature tech causes early movers to
| overspend and be invested in the wrong things. Early, usually
| the tech is expensive so it's perceived to be valuable on its
| own. Later, when the tech has diffused and is ubiquitous, it's
| clear that various secondary things create the actual value.
|
| Successful early movers realize how the value-creation is going
| to happen once the tech is mature, and focus on that.
| latenightcoding wrote:
| The startup scene has changed significantly the last 10 years.
| Thalmic labs/north failed as a startup but they still managed to
| get acquired and celebrated as a success story.
| xyzzy21 wrote:
| Yeah, really? Economic conditions are important for an economic
| activity that depends on making money from its market?! I would
| hope so.
| marban wrote:
| I've sold three businesses to Idealab and the single biggest
| lesson I learned from Bill Gross was timing and having the means
| to buy yourself into the market in a short amount of time.
|
| https://ted2srt.org/talks/bill_gross_the_single_biggest_reas...
| chiefalchemist wrote:
| Two contrarian thoughts:
|
| - He uses team (i.e., a balanced and cohesive unit), when he
| really means "team" (i.e., a collection individuals on the same
| payroll). Put another way, talent is not synonymous with team.
|
| - This differentiation is important because Team is far more
| likely to find p/m fit than "team". Put another way, unless the
| market is new / created then it's there...sitting...waiting. Then
| the question is: Who finds it first? Answer: The most able team.
| nowherebeen wrote:
| On a side note, marketing is also hugely important for success.
| If you don't know how to reach your market, it doesn't matter how
| big your market or good your product is. No one will know about
| it.
| going_to_800 wrote:
| Not really. I can give countless examples of mediocre products
| with no marketing doing super well because the market really
| needed that product.
| sokoloff wrote:
| I really don't want this to sound snarky, but I think listing
| 3-5 of the best examples would be quite enlightening to
| readers.
| nowherebeen wrote:
| I would like to know also.
|
| Also note just because some companies aren't flashy with
| their marketing, doesn't mean they aren't doing any.
| ghaff wrote:
| Marketing != advertising. There are a ton of things
| companies do with respect to marketing that are mostly
| pretty invisible to the average consumer.
| deadcoder0904 wrote:
| > One highly successful software entrepreneur is burning through
| something like $80 million in venture funding in his latest
| startup and has practically nothing to show for it except for
| some great press clippings and a couple of beta customers --
| because there is virtually no market for what he is building.
|
| Who was he talking about? Anyone has any clues?
| codemac wrote:
| The number of possible startups this could be is... incredible.
| vishnugupta wrote:
| Wild guess, Magic Leap?
| ilaksh wrote:
| Augmented reality has a potential market as large as that of
| cell phones. Magic Leap raised not tens of millions but more
| than a billion dollars if I recall correctly.
|
| I believe the issue is that their product is expensive and
| therefore did not become popular and therefore has relatively
| few applications and so does not become popular.
| ghaff wrote:
| Wearable augmented reality will _probably_ be very big some
| day. (The probably being mostly a hedge against essentially
| the Glasshole factor--i.e. never becoming socially
| acceptable for day to day casual use, as opposed to
| commercial applications.)
|
| But the _when_ is anyone 's guess and could easily be a
| decade or three out.
| ilaksh wrote:
| "Easily three decades" is a short-sighted prediction in
| my opinion.
|
| Some of the optical waveguide prototypes are quite
| similar to normal glasses especially with power and
| compute on a tether in a pocket or something. I will be
| very surprised if it really takes ten years.
| ghaff wrote:
| It's mostly the observation that VR and AR have been
| right around the corner for a long time. (And, yes, I'm
| aware that are VR products in the market but also that
| it's not really mainstream.)
|
| So I wouldn't be shocked if there were mainstream
| consumer AR glasses before the end of the decade. I also
| wouldn't be shocked if 10 years from now they were still
| at the "real soon now" stage.
| gumby wrote:
| Remember "color" for example? This happens more than you'd
| think.
| dang wrote:
| At least one past thread - maybe others?
|
| _The Pmarca Guide to Startups, part 4: The only thing that
| matters (2007)_ - https://news.ycombinator.com/item?id=14412463 -
| May 2017 (17 comments)
| ilaksh wrote:
| One aspect of markets for relatively new technologies is that
| there is a dynamic related to the practicality and affordability
| of products and social momentum for new product categories. I
| suspect that things like patents sometimes play a role there
| also.
|
| For example, e-ink displays. Personally I think the idea of
| having a photo or framed image on a wall that can display an
| effectively infinite number of different pictures, another one
| every day, is an extremely attractive proposition compared to the
| low-tech standard of leaving the same image there for years.
|
| But it looks to me that the pricing for the display modules is
| holding that market back. Maybe because of a patent or something
| and not enough competition. But also, it COULD become a big thing
| at any time for a wealthy demographic, especially for the smaller
| ones say the size of a normal sheet of paper. But that depends on
| whether it becomes trendy. Which is partially about luck and what
| individual people do and how many friends they have.
| spiritplumber wrote:
| I could tell a couple of stories but they'd be boring.
| throw14082020 wrote:
| Did anyone learn from that post or the comments on this page? I'm
| struggling to extract any value, everything is sensible, but a
| lot of it is opinions, open to interpretation and high level "its
| a judgement calls". I don't think any of it is useful in
| practice. Not much was backed by evidence or science.
|
| My perspective: Always _just do it_. If you 're good enough to
| succeed you'll succeed, and if you're not good enough, you never
| were gonna succeed anyway. Of course, you need to be scientific
| in your approach, but nothing on this page is scientific. Apart
| from my perspective ;)
| fairity wrote:
| I did. As a founder, the idea I'm currently working on has
| required a decade of hard work to turn into a moderate success.
| It's a hunch of mine that the reason it's a moderate success
| and not a huge success is primarily due to market -- and, this
| article supports that hypothesis.
|
| Although Marc doesn't present the evidence that his claims are
| based on, I'm sure his thesis is based on the thousands of
| companies he's witnessed succeed and fail.
|
| Needless to say, next time (if there is a next), I'll spend a
| lot more time analyzing market before diving in head first.
| pototo666 wrote:
| My two cents.
|
| The first time I read this post was two years ago. I was
| working a problem: how to practice Japanese. I had users and
| revenue, but no growth. Simple maths told me my product would
| never grow as a startup, and I had no way out of the niche.
| This post helped me confirm my worry: my market is too small.
|
| What I learned: add a filter to the problem I want to solve. Is
| the problem big, or is it going to be big? This is expecially
| important when I am working on something I am passionate about.
| There is confirmation bias and wishful thinking when it comes
| to what I love.
|
| Now I am working on a problem I care about, and the problem is
| big.
|
| This post expresses an idea that I can easily relate to, given
| my experience. In this sense, it is useful.
| sk5t wrote:
| > If you're good enough to succeed you'll succeed
|
| Luck and connections, too, friend.
| [deleted]
| p-sharma wrote:
| I think the main factor is being already rich or being born into
| a rich/influential family. A lot of problems startups have
| suddenly disappear when you can ask your dad for a small loan of
| 1 million dollars or ask your mum for a meeting with the chairman
| of IBM. Not saying this is the only factor but this "Great
| Filter" that weeds out those who don't have money or contacts
| helps others to develop their business with less competition.
| ttul wrote:
| Money solves the problem of having enough kicks at the can.
| Getting product market fit will eventually happen. You'll just
| run out of money before then, in most cases.
| nowherebeen wrote:
| > Money solves the problem of having enough kicks at the can
|
| Lots of people don't realize learning to read the market is
| also a separate skill that can't be learned through working
| for a company. It takes time and a few failures to wise up.
| lprubin wrote:
| Do you have any advice or resources for "learning to read
| the market"?
| throwaway_goog wrote:
| It doesn't. I semi-retired at 33 and then spent the time
| since then doing 20+ different startup ideas. Still no
| success. Bank account is bigger now than when I retired, but
| startup dreams are effectively dead.
|
| Bottleneck is that the market moves on in the time you spend
| pivoting, and eventually your inside information about what's
| hot and what's worth building gets stale, along with your
| technical skills. I know a number of other
| entrepreneur/retirees in the same boat - 5+ years working on
| various ideas, often after having a previous exit - and it
| never seems to result in a big company.
| alisonkisk wrote:
| Sounds like you didn't use money to hire staff and tools to
| accelerate progress.
| forgingahead wrote:
| Your comment doesn't hold up to real-world facts. Plenty of
| founders with startup success have come from humble
| backgrounds, and plenty of rich kids try to start businesses
| but never make anything viable or profitable.
| whateveracct wrote:
| Neither of those existential facts refute the premise
| necessarily
| nytesky wrote:
| I would be very curious to hear about founders of successful
| startups from humble backgrounds, and curious what you
| consider humble? For me, that would be growing up going to a
| non-elite public high school, college on scholarship, parents
| who are like plumbers or high school teachers or insurance
| agent.
| nostrademons wrote:
| Steve Jobs of Apple (machinist and accountant parents,
| neither of whom had a college degree. Dropped out of Reed
| College).
|
| Jan Koum of Whatsapp (Ukrainian immigrant, came to U.S.
| with nothing, was on food stamps as a teenager).
|
| Brian Chesky of AirBnB (child of social workers, attended
| RISD).
|
| Sergey Brin of Google (parents were professors, but
| emigrated from the Soviet Union with nothing. Attended
| University of Maryland).
|
| Marc Andreesen of Netscape, Loudcloud, Ning, and a16z
| (parents worked for Land's End and a seed company, grew up
| in cornfields of Iowa, attended UIUC).
| Hydraulix989 wrote:
| RISD is a very prestigious art school though?
|
| Also, add Chad Hurley co-founder of YouTube to the list:
|
| (Public school in rural red county Pennsylvania, Indiana
| University of Pennsylvania for college)
| nytesky wrote:
| $10k on recreational electronics is not something most
| middle class parents would entertain.
| whytai wrote:
| Palmer Lucky?
| nytesky wrote:
| Well, from Wikipedia his dad worked at a car dealership,
| but they lived quite well, with a stay-at-home mom,
| sailing lessons, and gobs of money on equipment. That
| sounds fairly well to do.
|
| "As a child he was homeschooled by his mother, took
| sailing lessons,[7] and had an intense interest in
| electronics and engineering.[3][8] He took community
| college courses at Golden West College and Long Beach
| City College[5] beginning at the age of 14 or 15, and
| started attending courses at California State University,
| Long Beach[1] in 2010.[6] He wrote and served as online
| editor for the university's student-run newspaper, Daily
| 49er.[9]
|
| During his childhood and teenage years, Luckey
| experimented with a variety of complex electronics
| projects including railguns, Tesla coils, and lasers,
| with some of these projects resulting in serious
| injuries.[1] He built a PC gaming "rig" worth tens of
| thousands of U.S. dollars[8] with an elaborate six-
| monitor setup.[10] His desire to immerse himself in
| computer-generated worlds led to an obsession with
| virtual reality (VR)."
| exolymph wrote:
| What, middle class normalcy doesn't count, you're
| specifically looking for destitute children who went on
| to make millions? Seeking a Horatio Alger story? It's not
| exactly surprising that grinding poverty doesn't yield a
| lot of unicorn founders. Not sure why you'd think that
| was a reasonable expectation or litmus test.
| [deleted]
| ilaksh wrote:
| I agree that easy to access funding of some sort is a huge
| factor. However, I still think that, given access to funding,
| the point made by the article stands. Wherever your funding
| comes from. Because there is a huge difference in the size and
| enthusiasm of different markets and that is a massive factor in
| sales.
|
| But good point. Many of these articles seem to take things like
| money and contacts for granted.
| nostrademons wrote:
| I feel like this is commonly believed by people with neither
| money nor startup experience. Sometimes it's even believed by
| people with money, who feel it absolves them of the need to
| have startup experience, and then their startup fails. Hell,
| could swear I've worked for a couple of these guys.
|
| Money - lots of money, $1M basically just gives you the freedom
| to tinker on your own time - basically gives you the ability to
| hire other people to do the actual work of serving customers.
| If you want a successful startup, _you need to know which
| customers, what work, and how it should be done_ , in a way
| that nobody else has figured out yet. An employee is not going
| to figure it out for you; if they could do that, they'd be off
| starting their own business. If your competitive advantage is
| that you have more money than everyone else, you will still
| fail; people who lack money are unaware of just how much money
| is floating around in capital markets and how little that
| differentiates you. Conversely, if you _do_ have a unique
| insight into an untapped market that 's more profitable than
| any existing way of doing things, financiers will be falling
| over each other to give you money and take a slice of those
| profits.
|
| In my experience, the key reagents to a successful startup are
| information, insight, timing, luck, connections, and technical
| skills, in that order. This is largely reiterating the thesis
| of the article - "market matters most" - but in terms where
| it's the entrepreneur's job to _find_ an untapped market, at
| precisely the moment in time when it 's ready to be tapped.
| hnhg wrote:
| Money gives you more throws of the dice, and often with
| 'better' dice.
| Frost1x wrote:
| Interesting to see this down-voted. This is absolutely
| correct. Many like to pretend money and capital don't give
| a competitive advantage when that's entirely far from the
| truth.
|
| I think few people truly believe money _guarantees success_
| and that 's rarely claimed from my experience. There are
| plenty of other factors that need to be met to start a
| successful business, but if you have money, those other
| factors can be focused on more intensely and you'll be less
| hamstringed on factors like timing and time to market,
| innovation/added value, network effects/marketing, and so
| on.
|
| You're working at a disadvantage in most other aspects
| needed for a successful business if you don't have a
| certain baseline of capital to work from. Often times more
| capital infusion beyond that baseline can help. There are
| certain problems addressed by startups that throwing money
| at no longer helps and you can reach diminishing returns.
| That's a nice problem to have.
|
| To your point, money can buy you a Monte Carlo (or MCMC for
| 'better') approach to market exploration for your
| businesses products/services. You can try, fail, and adapt.
|
| For many without piles of money, starting a business can
| afford only one failure (if they're that lucky) in their
| lifetime. No retries with refinements.
| guerrilla wrote:
| > gives you the freedom to tinker on your own time -
| basically gives you the ability to hire other people to do
| the actual work of serving customers
|
| "just"? Seems like you identified it as a main factor just
| like the parent. It's like the difference between necessary
| and sufficient but put in terms of probability instead: it
| significantly increases the chances that it's even possible
| to make an attempt. It's clearly not sufficient though, as
| you both point out though.
| nostrademons wrote:
| People significantly overestimate the amount of money
| needed to make an attempt, and then overestimate the amount
| that additional money helps, though. It's cheaper to found
| a startup than most people think; your chances of success
| are lower than you think, and the chances of some rich
| person being successful are lower than everyone (usually
| including the rich person) thinks.
|
| I started my first startup with $30K, saved up from 2 years
| of working at someone else's startup. That bought me a year
| and a half of tinkering time and 4 shots at goal. It'd cost
| more now, particularly with Bay Area prices (I was in
| Boston), but we're talking about $100K, not $1M.
|
| If you want to make an attempt, go work for a FAANG or one
| of the recently-public tech companies for 2 years, live
| like a grad student, and bank the difference. Then work for
| somebody else's startup for a year to see what life outside
| a big corp is like, then you should have 2-3 years saved up
| if you haven't increased your living expenses. If you can't
| get a job at a FAANG, unicorn, or one of the other leading
| companies in your field, you're probably not ready (in
| terms of knowledge and technical skills) to found a
| startup. Once you do you're looking at ~$200K/year in total
| comp, which saves up really fast if you're still living
| like peers who make $60-70K/year.
| alisonkisk wrote:
| If you startup isn't something like a search engine,
| peeing a FAANG interview is nowhere near the right
| filter. Being a good founder is probably anyo correlates
| to being a whiteboard coding worker bee
| dzonga wrote:
| > If you can't get a job at a FAANG, unicorn, or one of
| the other leading companies in your field, you're
| probably not ready (in terms of knowledge and technical
| skills) to found a startup.
|
| that's an overstatement right there. real life evidence
| points otherwise. lots of companies are founded on the
| humble crud stacks - php, django, rails etc where the
| founders or engineers hardly knew what they were doing.
|
| however yeah, I agree having runway by cutting expenses
| buys you a lot of time to tinker around.
| robocat wrote:
| > If you want to make an attempt
|
| Work in a company with more than 50 people. Spend your
| time learning who are the two people that bring 80% of
| value to the business. Join those two when they go off to
| start their own business, which they choose to do because
| they are grossly underpaid at their current company
| relative to their impact.
| claytongulick wrote:
| I've personally seen the opposite effect.
|
| I've seen startups run by children of very wealthy people that
| failed because they didn't fundamentally understand the value
| of the dollar, or what reasonable spending should look like
| during lean startup times.
|
| I've seen the repeated loans of a million dollars, and believe
| it or not, a million doesn't go very far in startup world. If
| you don't have revenue to offset your burn, you'll be in
| endless raise land.
|
| This can only go on for so long, regardless of your family's
| money situation.
|
| Conversely, I've seen several startups succed that were run by
| folks who did the obligatory teenage time working a counter at
| McDonald's (or equivalent). Part of their success was their
| ability understand and control costs, especially their
| lifestyle while in early stages.
|
| I've run into many people who want to get into entrepreneurship
| but are unable to because their lifestyle bills are so high,
| they'd require a salary level that no reasonable investor is
| willing to pay during founding.
| JamesBarney wrote:
| Being rich helps because you can spend 10 years not making
| money trying to start something.
|
| People way overestimate how much contacts help.
|
| We've had meeting with all types of influential people in our
| industry who were friends or relatives of a founder and they
| just haven't been that helpful.
|
| Our most valuable contacts are people we met along the way,
| because they really believe in the product. And that means so
| much more than oh your the son of an ex coworker and you have a
| startup you want to tell me about during lunch.
| jollybean wrote:
| It's not a prerequisite, but up to upper-middle-class and it
| helps, but not much beyond that.
|
| Rich kids are not starting good startups. They're not coming
| from mega mansions driving ferraris. Their parents are
| professionals, they live in what look like 'normal homes', like
| 'TV homes'. Usually stable family environments.
|
| They didn't have to worry about stuff and if they got into an
| Ivy League school they were surely going to go.
|
| If they got into trouble, the risk was dampened.
|
| So 'privileged' but not 'spoiled rich'.
|
| Basically - enough money for the 'good things' that money can
| get you, while avoiding the 'negative' stuff.
|
| Most founders did not use their parents millions to get the
| business going.
| lordnacho wrote:
| Good point, but it seems to be more towards who gets to start
| the startups that succeed, rather than what startup succeeds. I
| think the point in the article is that the startups that
| succeed tend to be in hot markets.
|
| It's clear that people who have more personal runway get more
| chances at trying to find the right market.
| jvanderbot wrote:
| I like how they started laying out definitions and "theory", and
| then just repeated the title for 5-6 paragraphs.
|
| I'm sure this wisdom is coming from ages of experience, and
| everyone respects this guy, but an outsider would have zero
| reason to adopt this other than "huh, that's sensible".
|
| I think it's intuitively obvious and needs reinforcing, but
| obviously market isn't the "only" thing that matters. You do need
| _a reasonably competent team_ and _a reasonably workable product_
| and all that requires a huge non-zero effort and a lot of wins.
| alisonkisk wrote:
| The important lesson here is that all success requires being
| successful. If your project does not succeed, then it's doomed.
| johnnycerberus wrote:
| I think the main factor is luck. It's like a sword in an online
| game. You can add critical chance to it by maximizing stats but
| it's always capped. If you have good team stats, good product
| stats and good markets stats, you just improve your chances. By
| how much? Impossible to compute in real life, in a game that
| would be +15%, so every few hits (products in our case) you will
| blow a critical. So let's just call it luck in the end.
| nthj wrote:
| If this were true, humanity would have stopped inventing new
| games to play the day that dice were discovered.
| onion2k wrote:
| I don't believe luck is a significant factor. The number of
| entrepreneurs who have second and third companies with
| successful exits effectively demonstrates that someone can
| consistently do the right things to win, react to challenges in
| the right ways, and repeat their success. If luck was a
| significant factor that would not happen.
| ClumsyPilot wrote:
| >"The number of entrepreneurs who have second and third
| companies"
|
| If that were true, I would expect each next conpany to be
| much more succesfull as the person accumulates capital,
| network and skills.
|
| Instead what I've seen (and i do not study this as my day
| job) is that someone has a very successfull startup, and then
| creates a few 'meh' companies.
|
| Peter Thiel never replicated his success, Elon's Boring
| Company and Hyperloop are unimpressive, Mark Zukerberg or
| Blly G never surpassed their initial success.
|
| This leads me to conclude that with the right skill, funds
| and connections you can create a business, but to have
| explosively growing startup is really not a repeatable
| process
| onion2k wrote:
| _Peter Thiel never replicated his success, Elon 's Boring
| Company and Hyperloop are unimpressive._
|
| Thiel's Palantir is a $40B company. That's a long way shy
| of PayPal but its certainly quite successful. Musk has had
| moderate success with Tesla and SpaceX.
|
| They might not have surpassed PayPal (yet) but they are
| both doing successful second and third businesses.
| noofen wrote:
| It could be both. Some people are better at others at
| identifying market currents. From the outside, we call it
| "luck," because how else would you explain it? I'd imagine a
| lot of it is based on gut-feeling after months of research /
| interaction with the market.
| johnnycerberus wrote:
| The more you win, the more you are going to win. The more you
| lose, the more you are going to lose. If you win one time
| people will treat you differently than if you lose. Easier to
| get capital. Psychologically it will affect you and others
| around you. Win twice, and this will escalate, people will
| literally be in awe over you. People will literally do
| whatever you will tweet. There is also an extremely low
| chance that you are always going to win in your lifetime,
| many books will be written about you while a huge graveyard
| of entrepereneurs that were more capable than you have
| written on their tombstones: "But what have I done wrong?".
| But it wasn't their fault, they actually did whatever it was
| in their power. They were fooled and led to ruin by
| randomness.
| AbrahamParangi wrote:
| It seems odd to me to simultaneously hold the view that
| luck is the dominant factor and advantages (like being
| lucky once) are incredibly important.
|
| If advantages are important doesn't it follow that
| advantages like intellect, wisdom, or courage might be
| decisive?
| tjs8rj wrote:
| You have to consider the problem from first principles.
|
| A startup is always: creating value by addressing a need
| for a group of people.
|
| Skill and luck weave through all of this. Finding the
| group of people? Maybe you strategize and seek those out,
| often they end up being the group you're a part of or
| adjacent to (luck or skill?). How about finding that need
| for that people, and an important need too? If you have
| past experience maybe you know where to look, maybe you
| know how to filter the opportunities better and what to
| focus on. The process of creating value? Maybe you went
| into a discipline seeking those skills specifically for a
| startup, or you just happen to know people with the
| necessary skills to execute.
|
| Overall: it's a hard problem with constantly changing
| rules and strategies, and often you end up competing with
| other smart and talented people. Skill stacks the odds,
| but the problem is so complex that what we call luck is
| just the lack of deep understanding of the problem.
|
| There is probably a set of steps that you could take one
| after the other that guarantees you'd make $1 billion
| dollars. Figuring that out is so difficult and complex
| and changing that thus far the best one can do is be as
| skilled and hardworking as possible, optimizing where you
| can, but even that doesn't guarantee the solution: hence
| luck. The whole thing IS a skill problem, but it's so
| complex that all the parts we can't fit in the equation
| we just call luck.
|
| Serial founders have gone farther in deciphering that
| "luck" into skill, so luck is less of a factor for them.
| dasil003 wrote:
| After building 3 products/companies from scratch and working on
| countless others from small side projects to massive unicorn
| success stories, I can't deny the luck factor, but it rubs me
| the wrong way when people focus on it as an explanation of
| success.
|
| For one thing, luck is not really a single factor, rather it's
| the sum effect of all the chaos and entropy in human systems.
| Any given instance of luck (eg. IBM licensing MS-DOS in 1981
| because they didn't foresee the market value of software) is
| just one-off serendipity unrelated to all other instances of
| luck. In a tautological sense luck is definitely the most
| important thing because if it wasn't, a given opportunity would
| be obvious and already exploited.
|
| But my true critique is more personal--luck is by definition is
| something which one has no agency over. Some use this as a
| mental crutch to justify sour grapes about their own lack of
| success. However by focusing on luck and thinking of it as the
| end-all-be-all, one can easily lose sight or motivation to do
| the things under their control, which, ironically, could
| improve their luck.
|
| The better mental model I believe is to focus on your base
| qualities: develop hard skills, a work ethic, systems
| understanding, and relationships. No one is great at
| everything, but within these broad categories are many valuable
| traits, and by combining a few of them you can open the door to
| novel opportunities. By doing so, you are primed for luck
| (although you still may need to recognize and seize it), and
| will be in a much better position than someone whose mental
| energy was on the things outside of their control.
| lordnacho wrote:
| It's luck, but when rolling what though? Article says you want
| to luck into a massive market rather than be lucky with the
| right people or product.
| CPLX wrote:
| I think the main factor is momentum. People underestimate just
| how brutally hard it is to do literally _anything_ when you
| aren't already doing it regularly.
|
| Luck plays a huge role in early momentum. So does money and
| previous experience and a growing market. They all fade sharply
| as you get established.
|
| It's still not a particular _helpful_ frame to evaluate startup
| success. In some ways it's a tautology, momentum comes from
| momentum. But I still think it's probably more descriptive than
| most of the original post.
|
| That's why the best startup advice is often so frustratingly
| vague. Stay focused, pick the right collaborators, release the
| first version as quickly as possible. They're all dancing
| around the same basic idea which is you need to get the
| flywheel moving at basically any cost.
| maxwell wrote:
| Market _timing_.
|
| https://www.nfx.com/post/why-startup-timing-is-everything
|
| https://www.ted.com/talks/bill_gross_the_single_biggest_reas...
|
| etc.
| [deleted]
___________________________________________________________________
(page generated 2021-05-01 23:00 UTC)