Paul Graham Why a “hairdresser” cannot be a startup. Part 1

Original author: Paul Graham
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If you write code or even create your own company, then it is definitely must read and must have for you.
There are many definitions of the word “startup”, the simplest and, in my opinion, the right one was created by Paul Graham, namely, “startup = growth”.

We bring to your attention a free translation , any additions to the wellcome.

Since the article is quite voluminous, for convenience we divided it into three logical parts.

So, part one.

Startup is a company created for rapid growth. This means that not all companies founded from scratch can call themselves startups. It does not matter the scope of work, technology, attracting investment, product output - growth is the basis of all the fundamentals, and everything related to the concept of “startup” is somehow connected with growth in the first place.
Perhaps this is the main idea that needs to be learned before opening a startup. If there is growth, everything else will certainly fall into place. It should be your compass and, at the same time, the determining factor in making decisions.

In order to understand the difference between various new businesses, consider the main difference, which is often overlooked. Every day, millions of new companies open around the world. Most of them represent the service sector - restaurants, hairdressers, etc. - And it’s not startups (exceptions, as we know, are everywhere, but still): a hairdresser is not designed for accelerated growth, while search engines exist for this only. Startups simply have a different purpose than ordinary small businesses. To feel the difference, think about the purpose of mahogany seedlings compared to bean sprouts ?!

If all companies had a similar fate, and their success depended on the efforts spent and the luck of the founder, we would not need a separate category for “special companies”. We could just talk about more successful and less successful businesses, however, startups differ from similar companies in their basic structure, if you want, DNA. Google is not some kind of “hairdresser” whose owner was more hardworking than everyone else. Google was originally different ...

For rapid growth, a startup should produce a product that will certainly be in demand on the world market. This is another difference between Google and the standard "hairdresser."
Rapid growth means a) the production of what many want, b)the ability to serve all customers, regardless of distance, time, etc. At stage “a” all “hairdressing salons” function successfully (each of us needs a haircut from time to time). The problem lies elsewhere: the business of the “hairdresser”, as a rule, is “tied” to the locality, which means that people from remote areas will most likely not go far for a new haircut.

* In order not to be misleading, we explain: we are not talking about a large number of users of the service, but about a large market (the number of customers multiplied by their purchasing power). The most important thing here is not to fall into the trap: the high purchasing power of a limited number of “buyers” will turn you from a startup to a consulting company.

At the same time, writing software that can easily cope with condition “b” may run into problem “a”: even open access to the program for learning the Tibetan language in Hungary can be leveled out by low demand for such a product.

Large companies are severely limited by conditions a and b. Strong and promising startups - no.

The limitations that a traditional business has, paradoxically, protect it. Returning to the example of a hairdressing salon: opening it, you are likely to compete only with hairdressers in your area. The search engine will compete with the whole world!

The secret to success is simple:When starting a startup, think about something that did not previously exist, because when you enter the global market, you must realize an idea that never occurred to anyone before you. Sometimes it seems that in order to search for such an idea, conscious, long, purposeful brain work is needed, however, as practice shows, in fact, everything happens not at all like that: the founders of successful startups are simply “other” people with a “different” way of thinking, therefore in those things that seem ordinary to an ordinary person, a startup finds something of his own, something that everyone “missed” - the next big thing. The funny thing is that fateful decisions are usually made subconsciously by startup leaders.

Another difference between successful founders of startups is that they are able to answer very different inherently questions: a combination of technological literacy and skill with the ability to apply this literacy in a timely and appropriate way to solve a wide range of problems. Yesterday's “bad” idea may turn out to be ingenious simply because the technological world is changing too rapidly, and with it the needs are changing and new problems arise. For example: the young Stephen Wozniak wanted a personal computer, which for 1975 was a very unexpected desire. Technological literacy came to his aid, because Steve, not only wanted a PC, he also knew HOW to make it. The problem he solved ultimately resulted in a product that Apple today sells to millions of people on the planet. Plus, Steve was ahead of his contemporaries:

The same story happened with Google: Larry Page and Sergey Brin wanted to explore the Internet. Unlike most experts, they had enough competence and knowledge to assess all the imperfection of the existing "search engines", as well as opportunities for their improvement. Over the next few years, the problem of Page and Green became universal, and already everyone, not even the most demanding user, with a naked eye saw the weaknesses of search engines. However, Google in this matter has already come too far from just emerging competitors.

Using these examples, one of the interconnections between the idea for a startup and existing technologies can be traced: abrupt changes in a certain area reveal problems on the one hand and, on the other, provide ample opportunity to solve them! Another connection follows from this: in the process of solving new problems, startups create new technologies, which closes the circle of continuous development.

To be continued…

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