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Letter To A Young Programmer Considering A Startup

Stashed in: Founders, 106 Miles, Venture Capital!, Startup Lessons, startup, Startups, Letters

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"Startups are the new big company. They are, as I’ll describe below, the field offices of a large distributed workforce assembled by venture capitalists and their associate institutions."

Thoughtful and thought provoking:

Startups are part of the system, not a rebellious wrench in the cogs.

The funding for startups – that is, the money that pays your prospective salary – comes from somewhere. Wealthy individuals and institutions invest in startups as just another asset class. The futurist Bruce Sterling recently quipped that “start-ups are full of [young] people working hard to make other people rich – Baby Boomer financiers mainly”. While that might be an overly general and cynical take it’s by no means untrue.

In broad strokes and excluding areas like biotech, venture-backed startups are a machine into which relatively small amounts of capital are inserted in one side and, ideally, quite a lot more comes out the other. (In actuality, this machine doesn’t seem to work anymore, though the effectiveness of VC as an asset class and VCs themselves is certainly up for debate). The salient point, though: what’s in the middle of the machine is you. You make it go.

The machine doesn’t care about you. In fact, the machine is designed with the understanding that most startups will fail, or at most offer unremarkable returns to investors. The majority of the companies in many VC portfolios are acknowledged duds. One or two “10x” companies prop up most portfolios. At best, startup founders who fail get another pull of the slot machine. At worst, their failures drive them to desperation.

There is nothing inherently disruptive about a venture-backed startup. The startup system is just another system; an alternative to the corporate ladder with just as many rungs to climb. Some startups may end up dramatically reshaping a market, but then so might an incumbent player or an active regulator.

I disagree with the conclusion below.  Startups need to be in your blood.  If you get too focused on what the hypothetical company might do, you could miss your opportunity.  Startups are a confluence of ideas and execution that come together in one magical moment of luck in order to be successful.  Never fall in love with a single startup, never fall in love with a single idea.  It's the uncertainty, the ability to always be executing, and managing risk that help.  A good entrepreneur should have a whole stable of great ideas and manage them like like a pipeline. 

"I recently interviewed a young man. I asked him where he wants to be in four years. “Running my own company,” he said without hesitation. I asked why. “Because entrepreneurship is in my blood,” he replied. There was no mention of what his hypothetical company would do, what problem it would solve for people. His goal was business for the sake of business. That’s what he had gone to school for, after all."

I see your point, but his point is that anyone who goes into a startup with the belief that s/he wants to be running something, without any clear idea of what that something might be, is missing something.

Note the original source is al3x:

And this quote is awesome:

"A startup is just a means to an end. Consider the end, and don’t seek to revel in the means. What do you care about? Who do you want to help? Does a startup make meeting your goals easier or harder? Where will it leave you when your goal is met? Where will it leave you if it isn’t?"

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