September 20, 2014 at 19:50Startup Creation Guide, Part 1: Why You Don't Start a Startup
- Transfer
This guide is a series of classic blog posts by a person with the nickname pmarca, and in life by Mark Andreessen, the creator of the Mozaic browser, from which Netscape and then Mozilla grew up.
Links are specially given to old versions of sites that are modern to articles stored in the Internet archive.
In this series of posts I will share with you my knowledge and experience in creating high-tech startups.
My experience in this area was collected when working in three companies in which I was co-founder: Netscape, sold to America Online in 1998 for $ 4.2 billion; Opsware (formerly Loudcloud), a software company with a capitalization of about $ 1 billion; Ning , an online company providing a platform for social networks.
In general, I was lucky from the moment I arrived in Silicon Valley in 1994 to participate in the work of about 40-50 startups, while the participation was deep enough so that I knew what I was talking about. I was a member of the board of directors, a business angel, adviser, friend of many founders, and a venture investor.
So I will not only talk about those things that relate to my companies - most likely these will be stories from the life of various startups, in the fate of which I was directly involved.
My experience is based on work in Silicon Valley, on its culture, people, venture capitalists, etc. Something is useful in other parts of the world, something is not useful. Caveat emptor (http://en.wikipedia.org/wiki/Caveat_emptor)
After this explanation, let's start again: whydon't start a startup .
Startups, even after the crash of 2000, were always fanned with mysticism - everyone read how cool it is, how fun it is, investing in the future, free dinners, table football and other goodies.
Of course, startups have a lot of cool stuff . In my experience: The
ability to control your destiny. You won or lost yourself. No one tells you what to do. For people with a certain character, this is enough.
The ability to do something new is the same “clean sheet." You have the opportunity, and in fact, even the duty, to imagine a product that is not yet there, and create it, without any restrictions that are usually inherent in large companies.
The opportunity to change the world - to give people a new way of communication, a way to share information, work together, or something else that you come up with - to make the world a better place. Do you think that it will be easier for people with low incomes to lend? Launch Prosper . Do you think that there should be an unlimited number of channels on television? Launch Joost . Do you think computers should run on Unix and use open standards? Launch of Sun .
The ability to create the perfect culture and work in a dream team that you can assemble yourself. Do you want your culture to be based on people who have fun every day and who like to work together? Or a team of tough competitors who compete in both work and games? Or a team creating new technologies? Choosing you, and building the right culture is also for you.
Well, the money. A properly created startup can be very profitable. It's not just about greed - when everything works well, your team and subordinates will be provided, they will be able to support their families, send their children to college, realize their dreams - and this is really cool. If you are very lucky, you can do charity work and support other projects.
However, there are many more reasons not to start a startup .
First, understand that a startup will require you to have such emotional upheavals and stresses that you have not experienced.
You will constantly move from the euphoric consciousness that the world belongs to you, to the depressing confidence that everything is gone, and vice versa. And so in a circle. And this is only with those who are emotionally strong and stable.
So much suspense and risk in everything you do. Will the product succeed on time? Is it fast enough? Are there too many bugs? Will it be easy to use? Will anyone use it? Are competitors ahead of you? Will there be press reviews? Will there be investors? Will this promising engineer join you? Will the main interface designer leave you on Google? And so on and so forth.
Sometimes things will go well, sometimes very badly. And the stress that will crush you will increase these emotional outbursts and falls to unprecedented levels.
Fun?
Secondly, in a startup, nothing happens by itself. The founders and employees of the startup immediately face this.
In a working company, no matter how poor and demoralized, everything goes as it should. People come to work, the code is written, the interfaces are designed, the servers are supported, the markets are analyzed, prices are studied, sales go, the trash cans are carried out, etc.
There are no established procedures, rhythm, or infrastructure in a startup.
In a startup, it can easily happen that the code will not be written, the interface is not developed ...
People may not come to work, and the baskets may remain full.
You, as the founder, are obliged to create and configure all these systems and procedures, and make everyone row. While not even in the right direction, just row stronger to sail.
Until you do this, nothing will happen. Unless, of course, you will not do everything yourself. Have fun taking out the waste baskets.
Thirdly, you are often denied. Really often. If you have not been involved in sales, you are most likely not prepared for refusals. This is not very fun.
See Death of the Seller and Glengarry Glen Ross . That's about it.
Potential employees, potential investors, potential customers, potential partners, journalists, analysts will refuse you ... Time after time, time after time. And when they don’t refuse you, in half the cases they will call you back in a couple of days and still refuse. Start training to smile not for real.
Fourth, hiring employees is a terrible headache.
You will be surprised how many people want to "just see."
Many people want to work in a startup, but when it comes time to leave their place of residence somewhere at HP or Apple, they change their minds. It’s easy for an average engineer or manager to be tempted to become a hired employee in a startup team - you can participate in this exciting venture, while not participating in really hard work.
As the founder of a startup, it will be extremely difficult for you to find the main team. When Jim Clark decided to found the company in 1994, I was one of a dozen people from various Silicon Valley companies with whom he spoke about joining a startup that later turned into Netscape. And only I decided to say “yes” to him (mainly because I was 22 years old and there was no reason not to do this). The rest changed their minds and did not. And that was Jim Clark, an industry legend who came from the most successful Valley company of 1994 - Silicon Graphics Inc.
How easy will it be for you, what do you think?
Then, even after you sift through a bunch of people and hire someone, it will turn out to be successful in 50% of cases, and only if you will be a major specialist in hiring. I mean, more than half of people will not take root in a startup - they will be too lazy, slow, hard to climb, or just nuts. And then you have to either live with them, or fire. What do you like more?
Fifth, and may God help you, at some point you will have to hire leaders. You thought it was difficult and risky to hire subordinates - wait until you have to hire a development director, director of marketing, sales, HR, etc.
Sixth, working hours.
There was a lot of talk in the Valley about how to correlate working and free time, about how to start a startup and at the same time be able to live a normal life. Personally, I sympathize with this point of view. And I try very hard in my companies (at least in the last two) to do everything possible so that the work does not crush people. But it is so hard. The bottom line is that startups are a very expensive thing, and they require a lot of people, even in the most favorable circumstances.
Just because you want to give people a good balance of work and personal time, it is very difficult to do it when you run out of money, the product has not yet come out, you had a fight with the co-founder, and your competitor is from Menlo Park, a middle-aged company in 19 years old, comes on your heels. And so it will go almost all the time. Even if you can give this balance to your subordinates, you will not arrange it for yourself. If you're interested - yes, long working hours increase stress.
Seventh, it’s very easy for a startup culture to go the wrong way. Due to the combination of the first and second reasons. The emotional buildup affects not only you, but the whole company. It takes time to establish a working culture. So that all the people from the team understand what they are doing, what is the value of each, how do they meet challenges and adversities. In the best case, you will have constant activity created by people who gather, support each other, and together try to bring the dream closer. In the worst case scenario, you will get pessimism, bitterness, frustrated dreams, cynicism, bad morale, and depression. And you, as the founder, will not be so easy to influence all this, as it seems to you. Guess which of the two directions usually goes.
Eighth, there are so many unforeseen circumstances that can meet you on your way and give you a headache - and there is nothing you can do about them.
The collapse of the markets. Terrorist attacks. The vagaries of nature.
A startup with better funding, with a more experienced team that worked more than you, and quietly - suddenly releasing a product that instantly captures your market and deprives you of opportunities - and you did not even suspect about it.
In the best case, any unforeseen factor can block your financing, cause customers to delay payment or refuse to pay - and in the worst, close your company.
The Russian mafia (sic!) May start to launder money using your serviceAs a result, companies processing bank card payments can close your accounts.
And the most interesting. I have not even stuttered about what you need to figure out what you will have for the product, make it, bring it to the market, and stand out from the crowd.
You have yet to meet all the risks in the core business of your company, and more on that in the next article.
Part 2
Links are specially given to old versions of sites that are modern to articles stored in the Internet archive.
In this series of posts I will share with you my knowledge and experience in creating high-tech startups.
My experience in this area was collected when working in three companies in which I was co-founder: Netscape, sold to America Online in 1998 for $ 4.2 billion; Opsware (formerly Loudcloud), a software company with a capitalization of about $ 1 billion; Ning , an online company providing a platform for social networks.
In general, I was lucky from the moment I arrived in Silicon Valley in 1994 to participate in the work of about 40-50 startups, while the participation was deep enough so that I knew what I was talking about. I was a member of the board of directors, a business angel, adviser, friend of many founders, and a venture investor.
So I will not only talk about those things that relate to my companies - most likely these will be stories from the life of various startups, in the fate of which I was directly involved.
My experience is based on work in Silicon Valley, on its culture, people, venture capitalists, etc. Something is useful in other parts of the world, something is not useful. Caveat emptor (http://en.wikipedia.org/wiki/Caveat_emptor)
After this explanation, let's start again: whydon't start a startup .
Startups, even after the crash of 2000, were always fanned with mysticism - everyone read how cool it is, how fun it is, investing in the future, free dinners, table football and other goodies.
Of course, startups have a lot of cool stuff . In my experience: The
ability to control your destiny. You won or lost yourself. No one tells you what to do. For people with a certain character, this is enough.
The ability to do something new is the same “clean sheet." You have the opportunity, and in fact, even the duty, to imagine a product that is not yet there, and create it, without any restrictions that are usually inherent in large companies.
The opportunity to change the world - to give people a new way of communication, a way to share information, work together, or something else that you come up with - to make the world a better place. Do you think that it will be easier for people with low incomes to lend? Launch Prosper . Do you think that there should be an unlimited number of channels on television? Launch Joost . Do you think computers should run on Unix and use open standards? Launch of Sun .
The ability to create the perfect culture and work in a dream team that you can assemble yourself. Do you want your culture to be based on people who have fun every day and who like to work together? Or a team of tough competitors who compete in both work and games? Or a team creating new technologies? Choosing you, and building the right culture is also for you.
Well, the money. A properly created startup can be very profitable. It's not just about greed - when everything works well, your team and subordinates will be provided, they will be able to support their families, send their children to college, realize their dreams - and this is really cool. If you are very lucky, you can do charity work and support other projects.
However, there are many more reasons not to start a startup .
First, understand that a startup will require you to have such emotional upheavals and stresses that you have not experienced.
You will constantly move from the euphoric consciousness that the world belongs to you, to the depressing confidence that everything is gone, and vice versa. And so in a circle. And this is only with those who are emotionally strong and stable.
So much suspense and risk in everything you do. Will the product succeed on time? Is it fast enough? Are there too many bugs? Will it be easy to use? Will anyone use it? Are competitors ahead of you? Will there be press reviews? Will there be investors? Will this promising engineer join you? Will the main interface designer leave you on Google? And so on and so forth.
Sometimes things will go well, sometimes very badly. And the stress that will crush you will increase these emotional outbursts and falls to unprecedented levels.
Fun?
Secondly, in a startup, nothing happens by itself. The founders and employees of the startup immediately face this.
In a working company, no matter how poor and demoralized, everything goes as it should. People come to work, the code is written, the interfaces are designed, the servers are supported, the markets are analyzed, prices are studied, sales go, the trash cans are carried out, etc.
There are no established procedures, rhythm, or infrastructure in a startup.
In a startup, it can easily happen that the code will not be written, the interface is not developed ...
People may not come to work, and the baskets may remain full.
You, as the founder, are obliged to create and configure all these systems and procedures, and make everyone row. While not even in the right direction, just row stronger to sail.
Until you do this, nothing will happen. Unless, of course, you will not do everything yourself. Have fun taking out the waste baskets.
Thirdly, you are often denied. Really often. If you have not been involved in sales, you are most likely not prepared for refusals. This is not very fun.
See Death of the Seller and Glengarry Glen Ross . That's about it.
Potential employees, potential investors, potential customers, potential partners, journalists, analysts will refuse you ... Time after time, time after time. And when they don’t refuse you, in half the cases they will call you back in a couple of days and still refuse. Start training to smile not for real.
Fourth, hiring employees is a terrible headache.
You will be surprised how many people want to "just see."
Many people want to work in a startup, but when it comes time to leave their place of residence somewhere at HP or Apple, they change their minds. It’s easy for an average engineer or manager to be tempted to become a hired employee in a startup team - you can participate in this exciting venture, while not participating in really hard work.
As the founder of a startup, it will be extremely difficult for you to find the main team. When Jim Clark decided to found the company in 1994, I was one of a dozen people from various Silicon Valley companies with whom he spoke about joining a startup that later turned into Netscape. And only I decided to say “yes” to him (mainly because I was 22 years old and there was no reason not to do this). The rest changed their minds and did not. And that was Jim Clark, an industry legend who came from the most successful Valley company of 1994 - Silicon Graphics Inc.
How easy will it be for you, what do you think?
Then, even after you sift through a bunch of people and hire someone, it will turn out to be successful in 50% of cases, and only if you will be a major specialist in hiring. I mean, more than half of people will not take root in a startup - they will be too lazy, slow, hard to climb, or just nuts. And then you have to either live with them, or fire. What do you like more?
Fifth, and may God help you, at some point you will have to hire leaders. You thought it was difficult and risky to hire subordinates - wait until you have to hire a development director, director of marketing, sales, HR, etc.
Sixth, working hours.
There was a lot of talk in the Valley about how to correlate working and free time, about how to start a startup and at the same time be able to live a normal life. Personally, I sympathize with this point of view. And I try very hard in my companies (at least in the last two) to do everything possible so that the work does not crush people. But it is so hard. The bottom line is that startups are a very expensive thing, and they require a lot of people, even in the most favorable circumstances.
Just because you want to give people a good balance of work and personal time, it is very difficult to do it when you run out of money, the product has not yet come out, you had a fight with the co-founder, and your competitor is from Menlo Park, a middle-aged company in 19 years old, comes on your heels. And so it will go almost all the time. Even if you can give this balance to your subordinates, you will not arrange it for yourself. If you're interested - yes, long working hours increase stress.
Seventh, it’s very easy for a startup culture to go the wrong way. Due to the combination of the first and second reasons. The emotional buildup affects not only you, but the whole company. It takes time to establish a working culture. So that all the people from the team understand what they are doing, what is the value of each, how do they meet challenges and adversities. In the best case, you will have constant activity created by people who gather, support each other, and together try to bring the dream closer. In the worst case scenario, you will get pessimism, bitterness, frustrated dreams, cynicism, bad morale, and depression. And you, as the founder, will not be so easy to influence all this, as it seems to you. Guess which of the two directions usually goes.
Eighth, there are so many unforeseen circumstances that can meet you on your way and give you a headache - and there is nothing you can do about them.
The collapse of the markets. Terrorist attacks. The vagaries of nature.
A startup with better funding, with a more experienced team that worked more than you, and quietly - suddenly releasing a product that instantly captures your market and deprives you of opportunities - and you did not even suspect about it.
In the best case, any unforeseen factor can block your financing, cause customers to delay payment or refuse to pay - and in the worst, close your company.
The Russian mafia (sic!) May start to launder money using your serviceAs a result, companies processing bank card payments can close your accounts.
And the most interesting. I have not even stuttered about what you need to figure out what you will have for the product, make it, bring it to the market, and stand out from the crowd.
You have yet to meet all the risks in the core business of your company, and more on that in the next article.
Part 2