Have you ever noticed how few successful startups were founded by just one person? Even companies you think of as having one founder, like Oracle, usually turn out to have more. It seems unlikely this is a coincidence.
What’s wrong with having one founder? To start with, it’s a vote of no confidence. It probably means the founder couldn’t talk any of his friends into starting the company with him. That’s pretty alarming, because his friends are the ones who know him best.
But even if the founder’s friends were all wrong and the company is a good bet, he’s still at a disadvantage. Starting a startup is too hard for one person. Even if you could do all the work yourself, you need colleagues to brainstorm with, to talk you out of stupid decisions, and to cheer you up when things go wrong.
The last one might be the most important. The low points in a startup are so low that few could bear them alone. When you have multiple founders, esprit de corps binds them together in a way that seems to violate conservation laws. Each thinks “I can’t let my friends down.” This is one of the most powerful forces in human nature, and it’s missing when there’s just one founder.
Startups prosper in some places and not others. Silicon Valley dominates, then Boston, then Seattle, Austin, Denver, and New York. After that there’s not much. Even in New York the number of startups per capita is probably a 20th of what it is in Silicon Valley. In towns like Houston and Chicago and Detroit it’s too small to measure.
Why is the falloff so sharp? Probably for the same reason it is in other industries. What’s the sixth largest fashion center in the US? The sixth largest center for oil, or finance, or publishing? Whatever they are they’re probably so far from the top that it would be misleading even to call them centers.
It’s an interesting question why cities become startup hubs, but the reason startups prosper in them is probably the same as it is for any industry: that’s where the experts are. Standards are higher; people are more sympathetic to what you’re doing; the kind of people you want to hire want to live there; supporting industries are there; the people you run into in chance meetings are in the same business. Who knows exactly how these factors combine to boost startups in Silicon Valley and squish them in Detroit, but it’s clear they do from the number of startups per capita in each.
Many of the applications we get are imitations of some existing company. That’s one source of ideas, but not the best. If you look at the origins of successful startups, few were started in imitation of some other startup. Where did they get their ideas? Usually from some specific, unsolved problem the founders identified.
Our startup made software for making online stores. When we started it, there wasn’t any; the few sites you could order from were hand-made at great expense by web consultants. We knew that if online shopping ever took off, these sites would have to be generated by software, so we wrote some. Pretty straightforward.
It seems like the best problems to solve are ones that affect you personally. Apple happened because Steve Wozniak wanted a computer, Google because Larry and Sergey couldn’t find stuff online, Hotmail because Sabeer Bhatia and Jack Smith couldn’t exchange email at work.
So instead of copying the Facebook, with some variation that the Facebook rightly ignored, look for ideas from the other direction. Instead of starting from companies and working back to the problems they solved, look for problems and imagine the company that might solve them. What do people complain about? What do you wish there was?
Slowness in Launching
Companies of all sizes have a hard time getting software done. It’s intrinsic to the medium; software is always 85% done. It takes an effort of will to push through this and get something released to users.
Startups make all kinds of excuses for delaying their launch. Most are equivalent to the ones people use for procrastinating in everyday life. There’s something that needs to happen first. Maybe. But if the software were 100% finished and ready to launch at the push of a button, would they still be waiting?
One reason to launch quickly is that it forces you to actually finish some quantum of work. Nothing is truly finished till it’s released; you can see that from the rush of work that’s always involved in releasing anything, no matter how finished you thought it was. The other reason you need to launch is that it’s only by bouncing your idea off users that you fully understand it.
Several distinct problems manifest themselves as delays in launching: working too slowly; not truly understanding the problem; fear of having to deal with users; fear of being judged; working on too many different things; excessive perfectionism. Fortunately you can combat all of them by the simple expedient of forcing yourself to launch something fairly quickly.
Having No Specific User in Mind
You can’t build things users like without understanding them. I mentioned earlier that the most successful startups seem to have begun by trying to solve a problem their founders had. Perhaps there’s a rule here: perhaps you create wealth in proportion to how well you understand the problem you’re solving, and the problems you understand best are your own.
That’s just a theory. What’s not a theory is the converse: if you’re trying to solve problems you don’t understand, you’re hosed.
And yet a surprising number of founders seem willing to assume that someone, they’re not sure exactly who, will want what they’re building. Do the founders want it? No, they’re not the target market. Who is? Teenagers. People interested in local events (that one is a perennial tarpit). Or “business” users. What business users? Gas stations? Movie studios? Defense contractors?
You can of course build something for users other than yourself. We did. But you should realize you’re stepping into dangerous territory. You’re flying on instruments, in effect, so you should (a) consciously shift gears, instead of assuming you can rely on your intuitions as you ordinarily would, and (b) look at the instruments.
In this case the instruments are the users. When designing for other people you have to be empirical. You can no longer guess what will work; you have to find users and measure their responses. So if you’re going to make something for teenagers or “business” users or some other group that doesn’t include you, you have to be able to talk some specific ones into using what you’re making. If you can’t, you’re on the wrong track.
Sacrificing Users to (Supposed) Profit
When I said at the beginning that if you make something users want, you’ll be fine, you may have noticed I didn’t mention anything about having the right business model. That’s not because making money is unimportant. I’m not suggesting that founders start companies with no chance of making money in the hope of unloading them before they tank. The reason we tell founders not to worry about the business model initially is that making something people want is so much harder.
I don’t know why it’s so hard to make something people want. It seems like it should be straightforward. But you can tell it must be hard by how few startups do it.
Because making something people want is so much harder than making money from it, you should leave business models for later, just as you’d leave some trivial but messy feature for version 2. In version 1, solve the core problem. And the core problem in a startup is how to create wealth (= how much people want something x the number who want it), not how to convert that wealth into money.
The companies that win are the ones that put users first. Google, for example. They made search work, then worried about how to make money from it. And yet some startup founders still think it’s irresponsible not to focus on the business model from the beginning. They’re often encouraged in this by investors whose experience comes from less malleable industries.
It is irresponsible not to think about business models. It’s just ten times more irresponsible not to think about the product.
Not Wanting to Get Your Hands Dirty
Nearly all programmers would rather spend their time writing code and have someone else handle the messy business of extracting money from it. And not just the lazy ones. Larry and Sergey apparently felt this way too at first. After developing their new search algorithm, the first thing they tried was to get some other company to buy it.
Start a company? Yeah. Most hackers would rather just have ideas. But as Larry and Sergey found, there’s not much of a market for ideas. No one trusts an idea till you embody it in a product and use that to grow a user base. Then they’ll pay big time.
Maybe this will change, but I doubt it will change much. There’s nothing like users for convincing acquirers. It’s not just that the risk is decreased. The acquirers are human, and they have a hard time paying a bunch of young guys millions of dollars just for being clever. When the idea is embodied in a company with a lot of users, they can tell themselves they’re buying the users rather than the cleverness, and this is easier for them to swallow.
If you’re going to attract users, you’ll probably have to get up from your computer and go find some. It’s unpleasant work, but if you can make yourself do it you have a much greater chance of succeeding. In the first batch of startups we funded, in the summer of 2005, most of the founders spent all their time building their applications. But there was one who was away half the time talking to executives at cell phone companies, trying to arrange deals. Can you imagine anything more painful for a hacker? But it paid off, because this startup seems the most successful of that group by an order of magnitude.
If you want to start a startup, you have to face the fact that you can’t just hack. At least one hacker will have to spend some of the time doing business stuff.
Source : Paul Graham