I work in a company that has 5-10 employees, nobody is working their ass off and there’s steady income and gradual growth. Our CEO is not a millionaire, but he enjoys his work and the company he works for. There is no plans for fast growth or VC funding.
Can anyone explain to me where does this obsession with VC funding and huge growth come from? I feel like if you grow your company by more then 50% YOY you will end up with a totally different company culture, and you might end up hating your own company.
What did you expect? Us all talking about the successful McDonald’s franchisee in Wichita, Kansas?
You’re consuming news from a portion of the overall economy where there are high stakes, big bets and a lot of money involved. Outsized, massive multi-billion dollar outcomes are the name of the entire game.
That’s why you get that feeling.
And even if you fail you write some blog posts, do the speaking circuit and end up with another high paying role in a startup, VC or a services company (Government, Co-working space, law firm...)
Long hours, millions or billions in cash, high risk, high reward - it's so much more exciting than building a steady business that pays its way and keeps some number of people gainfully employed while providing a genuinely useful product/service.
On HN "startup" means the kind of business whose ambition is to be a household name, used by millions of people if it's in the consumer space, or all the major customers if it's in B2B.
That kind of thing tends to require a business that grows a lot while generally not making free cash, which is why it needs outside investors. Those investors see a lot of these firms and this is one take on the accumulated learnings.
Startup is not same as new company or new tech company.
http://www.paulgraham.com/growth.html
> A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of "exit." The only essential thing is growth. Everything else we associate with startups follows from growth.
Venture capital is high-risk and high-reward, and investors won't gamble millions without a chance for a massive return.
Massive returns usually happen at large scale.
If you want more companies like yours and fewer like, say, Twitter, then venture capital would need to be a charity.
Gavin Belson is not a fictitious character; he is literally the snapshot of a typical investor.
It's a real shame that building a company has become about racing to the cash (with very little conscious reasoning as to why) and not about building meaningful products, services, and teams that will be around for the long-term.
As a guy running a "tiny" company that just did a little over 100K in revenue its first year, I couldn't be happier. There's only three of us (two of which are contractors) and the current goal is to intentionally limit our team size to no more than 20 over the next few years.
There also companies/people who think they need an exit strategy, rapidly iterate and grow, get multiple rounds of funding from VCs or angels, then sell it to one of the bigger tech companies. There are so many examples of these types of companies. You only need to visit Techcrunch or one of many tech news sites.
There are other types too. The company I work at, we do put in great work, have steady growth. We did get funding from VCs but working towards self-sufficiency. Funding was necessary to keep the company alive, while delivering great value to our customers. In the end it comes down to what kind of a culture you want to set for the company and what you think will be good for the company and the employees.
Contrary to many responses, the drive for growth is a consequence of human psychology and hence how things evolve in business. Humans are fundamentally dissatisfied creatures, and this translates into ever-increasing hunger for profit in businesses.
As a business owner, you cannot decide in isolation that you want to not grow because that decision is impacted by your competitors and customers. If your competitors decide to grow really big, your small business will get threatened. This is exactly what's happening with Amazon. A mom-and-pop shop may be happy not growing, but it's at the risk of not existing at all.
Earlier I had similar thoughts of "why grow", but now I understand better. I wrote about this in a blog post: https://growth.wingify.com/startup-complacency-the-flip-side...
It's true that a certain kind of business culture encourages this thinking and disparages slow growth or - worse - static but healthy profits.
But that's propaganda, not reality, and the economy is the worse for it. Steady businesses contribute far more in jobs, personal freedom, and social opportunity than unicorns do.
I have successfully run a consultancy for fourteen years. This is very bootstrappable, but does not scale well. Conversely, one cannot make the next Tesla using one's own capital.
I thought, “The dry cleaner down the street he a competitor advantage by memorizing the face and account number of every customer. Even if they don’t scale beyond one shop, they’re an entrepreneur”
Single proprietor businesses generally don’t hire PR firms to hype themselves up. That’s why it’s not in the press.
Don't let the hype/marketing make you think otherwise.
To answer your question, you have to understand how VCs operate. How they raise money from other institutional investors, rich folks etc and how they need to return that money in a finite time (4-5 years) Everything comes down to money for that reason.
(I'm not affiliated with them in any way, just a fan of the product and someone who sympathizes and agrees with their views.)
Startups need an exit strategy.
Employees want to work 5-10 years max and end up with millions to retire peacefully while working in an intense environment which serves as the story of their accomplishment for the lifetime.
Then they plan to follow their other life goals like going on a world tour with the family or watch their kids growing up or creating their own small lifestyle business. It can be anything.
The key realization is that most employees do not want to work for you just because they have found themselves in such place.
When I was new in the industry, I put a lot of blood/sweat into building a company. Today, I can't force myself to put the same amount of efforts even if I want to.
The idea is to raise money fast, hire experienced people for ancillary services and develop the application in a way so that it is able to hold up till IPO. Defer all costs (application maintenance, vendor lockins, IP infringement risks) for post IPO. Create the Hype around the product which gets you eyeballs, subscriptions, MAU and other metrics which translates into the valuation. Once you've caught market attention, the solution can always get more love post IPO.
The market pressure to produce returns post IPO results in the broad application of the company's IP, resources, and talent. This might spin up new industries.
Once the employees have cashed their equity, it's up to them to stay (if they are enjoying the position) or leave (if they've other life goals).
A lifestyle business, won't be able to achieve this for each of their employees. Even very few startups achieve this for most of their employees.
Nopes, founders want millions by (ideally) using technology to disrupt a market and gaining from the windfall.
VC want millions/billions by betting money on such founders.
They both agree to buy talent by promising employees a share of the windfall.
Employees don't start out thinking "hey I want millions, let me join this unknown company".
They usually start out "I need a good, well paying job where I do interesting work."
Edit: spelling
This sounds like either it is an extremely unrealistic expectation or it's extremely unfair.
I know lots of smart people who worked for at least 10 years in very intense startup environments and got essentially nothing out of it. Often, they have to fallback on a life of contract work for huge boring corporations.
> In addition, if people are working less than 8-10 productive hours per day, then they are clearly not being as productive as they could be.
I almost dismissed the book as a "yet another VC-driven, work-your-people-to-burnout story" but really, there's more to that. I've found it an excellent read so far and it's very concise, it wastes zero space on nonsense. I realized that I don't have to agree with everything an author writes to be able to get value out of a book. Warmly recommend you check it out.
"Our team knows this isn’t a 9-5 company. We stay as long as it takes to get the job done."
“Let’s just wait across the street from your company’s parking lot and watch the front door."
"a first trickle of employees left. I asked, “Are these your VPs and senior managers?” He nodded looking surprised and kept watching. Then after another 10-minute pause, a stream of employees poured out of the building like ants emptying the nest. Rahul’s jaw dropped and then tightened. Within a half-hour the parking lot was empty."
If you’re an engineer not all of your productive hours are writing code.
You'd be surprised how much more you can squeeze out your day.
From my experience, a lot of a founder's time is spent in non deep work. Taking calls, traveling, talking to users, understanding user feedback, writing product features and coding up some or most of the features. So the actual deep work is perhaps very limited - in desiging features and coding them up. How do you measure founder producivity when the tasks are so varied. IMHO such a measurement exercise is futile.
You're not that special folks, you have to work to get paid like everyone else.
10 hour work days IS outrageous. Maybe it's common in this industry, but that doesn't make it any less wrong.
And considering that most tech jobs are exempt, this is just a way of getting you to work more hours for the same amount of pay.
During the last century, we all agreed that a 40 hour work week was the standard. Let's keep it that way. I don't want founders and VC creeps prying the overton window in their favor.
More than half the time is spent BSing, coffee breaks, lunch, browsing the internet.
Our culture equates presence with productivity.
I think the main problem is that founders often don't have clear rules when they are 'working'. Especially, it is very hard to quantify the 'readiness' aspect of their work.
Nevertheless, in my opinion there is nothing wrong in trying to achieve the 8 hours per day (mixed focus work) while trying to explicitly define non-working hours to get the required rest.
I have been there and done that - made good £££ from the first boom in 2000. Since then tried a couple of startups all of which failed, for one reason or another. Sadly we did burn through quite a lot of investor £££ in the process and gained no personal value other than experience.
What I think I have learned is that building a small business with around 5-10 people and making a regular salary of £200k a year is a much more enjoyable existence than trying for the millions and never quite getting there.
Working for a large corp, contracting etc is depressing (other than doing it abroad which was fun for a few years and allowed me to travel in my 30's).
We now have a funky office, a very tight team of devs. I guess in some ways I modelled on what Joel did.
After everything, I have learned "bootstrap" + "lifestyle business" is the best route to have a happy and productive life. Our business is a digital agency - mostly wordpress sites for SME market, a few apps etc. Its regular and good money. it is no way as interesting as some of the "startup" ideas we tried over the years, but no VC still on my shoulder anymore :)
But what if you get there?
If all one thinks about is the math, they'd take the chance at 100M, because it is a higher number when multipled by the probability. But you can't pay a mortgage with a probability, and some folks want a mortgage (or other lifestyle features).
When I was younger (I know how this sounds) I read "The Lean Startup" and drank the Koolaid. I was feeling like a failure because I wasn't building the next big thing (tm) although I had an IQ of 152 and wrote code since ages. I think that some aspects of the startup bubble can be seriously bad for mental health. I've learned to accept myself and the world and cut the bullshit and "will to power"-esque thinking. Sometimes I still have feelings of unmet potential, but fortunately I now understand that a fast-growing startup is one of many solutions (and sometimes not even a solution at all). I can now learn to allow myself to find peace.
It's very telling. HN can be an unforgiven environment for specific topics such as problems with pride, ego and self-reflection. But on the other hand, it's just a downvote.
For the loudest voice in the room problem, speaking order that starts from the most junior and ends with the most senior member is the best (I think it's sometimes used in military). When junior members speak first it's easier for them when the boss has not given his opinion.
How do you handle situations when you see a need for this but don't want to step on the toes of others? From my experience, some people react poorly to hearing that type of feedback or approach, and while I try my best to avoid those working environments it does happen from time to time. In those situations, I try to encourage, inspire, and explain why it's important.
If you need a junior to senior round, to make sure your juniors speak their own opinion, you frankly have really big issues in my eyes.
The key is to make an environment where people will share ideas and work on improving them as a team or a unit regardless of their status/position. At least if that is your goal.
You do this by using honesty, assertion and openness. If there are parts of the decision making that aren’t up for discussion, then you make sure everyone understands that and then you let them discuss the rest while making sure everyone understands that being polite and affirming is required for good team work, even if someone thinks an idea or opinion is bad.
I realize tech companies are notoriously bad at this. The army reference, and the fact that it’s getting any sort of traction here is a good example of this. The junior to senior strategy makes a lot of sense in the army, but that is an environment where you own 100% of the decision making as a XO, and you’re not using the method to make a decision, because you’ve already made it, you are simply asking your crew for opinions to make sure there isn’t an angle you have missed. Not only that, but you’ll often be asking people who come from different teams and may not know each other very well, in an environment where you’re under a lot of pressure. That’s almost the exact opposite of what you are doing in any private sector meeting.
If you’re a CEO who’ve gathered all your middle managers to figure out how to trim the staff by 20%, by all means go junior to senior, but if you’re trying to brainstorm something with a team of developers, just don’t.
Disclaimer: I’m Scandinavian, management may be more authoritative in America than it is here.
If the only way to talk is to admit that you're more junior than everyone else who hasn't spoken, then you won't stick your two bob in unless you actually have something important to say.
So, are people expected to be in the office for 12+ hours a day? Nobody is 100% productive from the moment they step in the door, every day. The fact that the author even wrote the number 10 here makes me a bit angry.
I'm only about 1/4 of the way through, does he have a section on employee burnout?
Between meetings, chatty coworkers, meals, coffee breaks, and just periodic mental fatigue, I think 5-6 hours of productivity is a much more feasible goal for an 8-hour work day.
Another classic is Ron Howard's Apollo 13. One of the few movies that depict the engineers as heroes. An inspiring watch for the whole team. And Damien Chazelle's upcoming Neil Armstrong biopic might make for a similar outing.
Crisis management, perhaps more so than innate technological superiority, can yield distinct competitive advantage. And this is where actually learning from precisely the type of case study found in the YC network makes sense. Knowing that you can stay calm, slow time, take deep breaths, and react rationally because others have dealt with far more on their plate than you ever will.
I'll share an anecdote. A small independent media outlet once got wind of a redesign I was working on and reported the story. The client was incensed as they were planning a full marketing rollout and had "lost the narrative". We were still months from launch. But rather than get into a blame game and lose more time. I suggested a soft, beta launch with media blitz immediately. After a week of jamming to polish our working prototypes for general availability, we were public facing, with laudatory feedback and the client appearing on CNBC ;)
Weeks later, as it turns out, it was revealed I was in fact the source of the leak. An unscrupulous reporter had called my office posing as a contract employee of the client and asked about a meeting time and place. In replying that it would be at my office that afternoon, they had confirmation that in fact the redesign was in progress!
> To encourage 8-10 productive hours, serve dinner 8-10 hours after morning stand-up.
As a person who enjoys life outside of work, the idea of having a job where they were serving me dinner every day is baffling. Different strokes for different folks, I guess.
They serve dinner every day where I work. I simply go home earlier than that. Nothing happens. It’s quite simple really.
On days where I happen to need to stay late, it’s a really nice convenience. For people who go to the gym after work and come back to eat, they save money by grabbing a quick dinner meal at work.
Yes, but there's an inherent, almost clear expectation in this treatise that you do in fact, 'eat it' or at least stay those hours.
If you're staying >10 hours at the office the least they can do is get you dinner, but when it starts to be a cultural expectation it's going to be a long term problem.
The way most equity is shared - if you are working 10-12 hours a day and the company is not growing wildly, i.e. looking like a Unicorn - it's probably not worth it, and you've drunk too much koolaid.
Koolaid and hard work are good, but I think the goal is kind of 'self aware Koolaid' ...
I had to laugh at this. Setting aside only 5-10 minutes a day for your closest confidant and life-partner? Good luck with that marriage.
One of the ironies for me of people who slave away with the hope of scoring the jackpot, is that they often justify it by telling themselves and others what they'll do once they're financially independent, when in reality you can probably do most of those things now already.
Want to travel the world? You can travel worldwide for a year for about $10k to $20k.
If you have a wife and family, they're alive now. There's no guarantee they'll be alive even tomorrow, or that you'll be.
Delayed gratification and sacrificing some of the present for the future are both definitely good and necessary, but should be done within due measure.
Or take shorter vacations for very little money. I’ve recently discovered the world of “travel hacking”. There are many blogs[1] that outline ways to optimize travel reward points programs and greatly reduce travel costs.
There are other reasons as well to work hard. Some people enjoy the prospect of potentially denting the universe a bit. But yes, if financial gratification and financial gratification alone is the goal it's a tad silly.
Different people have different priorities and tastes in life. When I tried working 3 day workweek (I could afford a 40% salary hit), I became really bored really fast, and spending so much time with my spouse quickly got me to a divorce.
Having people that you love in your life is nice, but I personally don't love that much to spend majority of life with them. I'd rather do something interesting and productive, like work, instead.
Where is the data on this?
The only public exit / ipo yc has had to date was a solo founder.
>> ...the data shows that solo founders rarely succeed. The emotional burden is just too high.
I am a solo founder and yeah, I completely agree with this. I severely underestimated the emotional burden of going it alone. I am in a much better state now, but it was definitely a struggle. If I had to do it over again this is the main thing I would change - be more open towards and work harder towards finding a co-founder.
A solo founder who ticks all the boxes will beat an equally skilled team every time
Most people don't tick all the boxes, so generally speaking you are better off starting with a co-founder
I point this out because this document skips all that. It says so in the first page - this is written by someone who targets young founders in SV. Quite a narrow niche. This document is one specific playbook, for that specific niche.
Sure, young founders in SV may want this. And if you do, too, the info is good for you. But there is more than one way to run a company, more than one desired outcome, and more than one set of answers in what you should be doing.
https://docs.google.com/document/d/1ZJZbv4J6FZ8Dnb0JuMhJxTnw...
https://www.filedropper.com/foundertoceomattsbookforstartups...
PS: the link doesn’t work without cookies or in anon mode.
But YC application FAQ states that this is not true. Although practically speaking from speaking to other startups, I have noticed that only startups with co-founders made it to the final round. This is just based off my experience and talking to other startups
That's the core dynamic IMO... then add on the emotional burden part to that and it makes even more sense.
But then again a bad cofounder fit could actually lead to MORE emotional burden too... so obviously it all comes down to specifics.
Yep, very insightful. I hope I never work for this guy
'her company' for the abstract founder's business is just as wrong as 'his'.
The solution is the firmly established use of the singular "They": https://en.wikipedia.org/wiki/Singular_they
The singular "They" has literally been used in the English language since the 14th century, and its usage is well-understood. Any English teacher who dissuades you from its use should be stripped of their credentials, because "they" are an idiot.
This is most effectively done on a paper note, passed between classmates, so that there is plausible deniability if they say no /s
"If we were to make the offer" is de-facto an offer, it's just not official, and though there might be a legal difference between an 'if we made it' and 'actual offer' ... for all intents and purposes, it's the same. It's the start of the negotiation.
A half-smart negotiator would simply say: "Yes, if you included moving expenses" or whatever they would say otherwise.
The Google Doc has all editing disabled at the moment, but does anyone know if the author would welcome improvements to the text?
My problem with including it at all is that, as he said in a preceding chapter, he is in a unique position to shoot down myths that technical founders believe about VCs and the converse, so the book presents a great opportunity to do the same about the myth of closed tickets as an engineering metric, particularly since it is largely well-written and will reach a much wider audience than his coaching may permit.
Am I the only one that immediately thought about employees as the Clueless on the Gervais Principle[1]?
It looks to me like they need to sell this dream of exiting big for people to sacrifice everything for the company. However everyone forgets how absurdly low the chances of winning the lottery is.
It's essentially the carrot on the stick.
Maybe I'm wrong and it's easy to win on this "game"? I'd love to see some data on how many actually become millionaires after killing themselves on the startup grinder.
I'd love to know some of your's book suggestions for aspiring Tech Founder-CEO.
Someday/Maybe
Schedule a guitar lesson
Order the book Getting Things Done by David Allen
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Man, this guy really gets me.
I was under the impression that the accepted gender-neutral pronoun to use in this case would be "they". Any idea why "she"/"her" is used? Is this a new phenomenon?
> Who am I? Why am I writing this book?
I coach tech startup CEOs (and tech investors) in Silicon Valley, most of whom are young technical founders. They include the CEOs of Coinbase, AngelList, CoinList, TrustToken, Bolt, Shogun, Speechify, etc.
