This link has been bookmarked by 46 people . It was first bookmarked on 31 Jul 2006, by Kevin Wen.
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13 Feb 18
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Gradually it dawned on us that instead of trying to make Web sites for people who didn't want them, we could make sites for people who did.
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30 Nov 17
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We expected to divide them into two categories, promising and unpromising. But we soon saw we needed a third: promising people with unpromising ideas.
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The Artix Phase
We should have expected this. It's very common for a group of founders to go through one lame idea before realizing that a startup has to make something people will pay for. -
The Still Life Effect
Why does this happen? Why do good hackers have bad business ideas? -
If you're going to spend years working on something, you'd think it might be wise to spend at least a couple days considering different ideas, instead of going with the first that comes into your head. You'd think. But people don't.
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Part of the problem is that big projects tend to grow out of small ones.
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you come up with a random idea, plunge into it, and then at each point (a day, a week, a month) feel you've put so much time into it that this must be the idea.
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Plunging into an idea is a good thing. The solution is at the other end: to realize that having invested time in something doesn't make it good.
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If it's hard to change something so simple as a name, imagine how hard it is to garbage-collect an idea. A name only has one point of attachment into your head. An idea for a company gets woven into your thoughts. So you must consciously discount for that.
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Plunge in, by all means, but remember later to look at your idea in the harsh light of morning and ask: is this something people will pay for? Is this, of all the things we could make, the thing people will pay most for?
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Muck
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One of the most valuable things my father taught me is an old Yorkshire saying: where there's muck, there's brass. Meaning that unpleasant work pays. And more to the point here, vice versa. Work people like doesn't pay well, for reasons of supply and demand.
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I was still ambivalent about business. I wanted to keep one foot in the art world. Big, big, mistake. Going into business is like a hang-glider launch: you'd better do it wholeheartedly, or not at all.
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What I mean is, if you're starting a company that will do something cool, the aim had better be to make money and maybe be cool, not to be cool and maybe make money.
It's hard enough to make money that you can't do it by accident. Unless it's your first priority, it's unlikely to happen at all. -
Hyenas
When I probe our motives with Artix, I see a third mistake: timidity. If you'd proposed at the time that we go into the e-commerce business, we'd have found the idea terrifying. Surely a field like that would be dominated by fearsome startups with five million dollars of VC money each. -
Once we actually took the plunge into e-commerce, it turned out to be surprisingly easy to compete.
So why were we afraid? We felt we were good at programming, but we lacked confidence in our ability to do a mysterious, undifferentiated thing we called "business." In fact there is no such thing as "business." There's selling, promotion, figuring out what people want, deciding how much to charge, customer support, paying your bills, getting customers to pay you, getting incorporated, raising money, and so on. And the combination is not as hard as it seems, because some tasks (like raising money and getting incorporated) are an O(1) pain in the ass, whether you're big or small, and others (like selling and promotion) depend more on energy and imagination than any kind of special training. -
Artix was like a hyena, content to survive on carrion because we were afraid of the lions. Except the lions turned out not to have any teeth, and the business of putting galleries online barely qualified as carrion.
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A Familiar Problem
Sum up all these sources of error, and it's no wonder we had such a bad idea for a company. We did the first thing we thought of; we were ambivalent about being in business at all; and we deliberately chose an impoverished market to avoid competition. -
the first is by far the biggest problem. Most of the groups applying have not stopped to ask: of all the things we could do, is this the one with the best chance of making money?
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Why did so few applicants really think about what customers want?
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They're good at solving problems, but bad at choosing them.
But that, I'm convinced, is just the effect of training. Or more precisely, the effect of grading. To make grading efficient, everyone has to solve the same problem, and that means it has to be decided in advance. -
It would be great if schools taught students how to choose problems as well as how to solve them, but I don't know how you'd run such a class in practice.
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Copper and Tin
The good news is, choosing problems is something that can be learned. -
The hard part about figuring out what customers want is figuring out that you need to figure it out. But that's something you can learn quickly.
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compared to the sort of problems hackers are used to solving, giving customers what they want is easy.
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once you apply that kind of brain power to petty but profitable questions, you can create wealth very rapidly.
That's the essence of a startup: having brilliant people do work that's beneath them. Big companies try to hire the right person for the job. Startups win because they don't—because they take people so smart that they would in a big company be doing "research," and set them to work instead on problems of the most immediate and mundane sort. -
A hacker who has learned what to make, and not just how to make, is extraordinarily powerful.
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[5] It's much easier to sell services than a product, just as it's easier to make a living playing at weddings than by selling recordings. But the margins are greater on products. So during the Bubble a lot of companies used consulting to generate revenues they could attribute to the sale of products, because it made a better story for an IPO.
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[6] Trevor Blackwell presents the following recipe for a startup: "Watch people who have money to spend, see what they're wasting their time on, cook up a solution, and try selling it to them. It's surprising how small a problem can be and still provide a profitable market for a solution."
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[7] You need to offer especially large rewards to get great people to do tedious work. That's why startups always pay equity rather than just salary.
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14 Sep 15
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Sum up all these sources of error, and it's no wonder we had such a bad idea for a company. We did the first thing we thought of; we were ambivalent about being in business at all; and we deliberately chose an impoverished market to avoid competition.
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We expected the most common proposal to be for multiplayer games. We were not far off: this was the second most common. The most common was some combination of a blog, a calendar, a dating site, and Friendster. Maybe there is some new killer app to be discovered here, but it seems perverse to go poking around in this fog when there are valuable, unsolved problems lying about in the open for anyone to see. Why did no one propose a new scheme for micropayments? An ambitious project, perhaps, but I can't believe we've considered every alternative. And newspapers and magazines are (literally) dying for a solution.
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But that, I'm convinced, is just the effect of training. Or more precisely, the effect of grading. To make grading efficient, everyone has to solve the same problem, and that means it has to be decided in advance. It would be great if schools taught students how to choose problems as well as how to solve them, but I don't know how you'd run such a class in practice.
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Do you suppose Google is only good because they had some business guy whispering in their ears what customers wanted? It seems to me the business guys who did the most for Google were the ones who obligingly flew Altavista into a hillside just as Google was getting started.
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That's the essence of a startup: having brilliant people do work that's beneath them. Big companies try to hire the right person for the job. Startups win because they don't—because they take people so smart that they would in a big company be doing "research," and set them to work instead on problems of the most immediate and mundane sort. Think Einstein designing refrigerators.
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06 Dec 14
Jordan GoldmanThis summer, as an experiment, some friends and I are giving seed funding to a bunch of new startups. It's an experiment because we're prepared to fund younger founders than most investors would. That's why we're doing it during the summer-- so ev...
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17 May 14
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So the biggest cause of bad ideas is the still life effect: you come up with a random idea, plunge into it, and then at each point (a day, a week, a month) feel you've put so much time into it that this must be the idea.
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How do we fix that? I don't think we should discard plunging. Plunging into an idea is a good thing. The solution is at the other end: to realize that having invested time in something doesn't make it good.
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Plunge in, by all means, but remember later to look at your idea in the harsh light of morning and ask: is this something people will pay for? Is this, of all the things we could make, the thing people will pay most for?
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So why were we afraid? We felt we were good at programming, but we lacked confidence in our ability to do a mysterious, undifferentiated thing we called "business."
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80% of MIT spinoffs succeed provided they have at least one management person in the team at the start. The business person represents the "voice of the customer" and that's what keeps the engineers and product development on track.
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And compared to the sort of problems hackers are used to solving, giving customers what they want is easy. Anyone who can write an optimizing compiler can design a UI that doesn't confuse users, once they choose to focus on that problem. And once you apply that kind of brain power to petty but profitable questions, you can create wealth very rapidly.
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That's the essence of a startup: having brilliant people do work that's beneath them. Big companies try to hire the right person for the job. Startups win because they don't-- because they take people so smart that they would in a big company be doing "research," and set them to work instead on problems of the most immediate and mundane sort. Think Einstein designing refrigerators. [7]
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09 Apr 13
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Why does this happen? Why do good hackers have bad business ideas?
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The second mistake we made with Artix is also very common. Putting galleries on the Web seemed cool
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Meaning that unpleasant work pays.
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We erred ridiculously far on the side of safety. As it turns out, VC-backed startups are not that fearsome. They're too busy trying to spend all that money to get software written
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of all the things we could do, is this the one with the best chance of making money?
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Maybe there is some new killer app to be discovered here, but it seems perverse to go poking around in this fog when there are valuable, unsolved problems lying about in the open for anyone to see.
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They're good at solving problems, but bad at choosing them.
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the effect of grading. To make grading efficient, everyone has to solve the same problem, and that means it has to be decided in advance
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If you want to learn what people want, read Dale Carnegie's How to Win Friends and Influence People
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A hacker who has learned what to make, and not just how to make, is extraordinarily powerful
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24 Sep 12
Konstantinos"It's very common for a group of founders to go through one lame idea before realizing that a startup has to make something people will pay for. In fact, we ourselves did."
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25 Jan 12
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17 Mar 10
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02 Mar 10
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13 Dec 09
Jac ZehackWe should have expected this. It's very common for a group of founders to go through one lame idea before realizing that a startup has to make something people will pay for. In fact, we ourselves did.
business startup ideas paulgraham entrepreneur entrepreneurship creativity management llc fromdelicious
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28 Jul 08
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30 Nov 07
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25 Jan 07
alex de carvalhoSum up all these sources of error, and it's no wonder we had such a bad idea for a company. We did the first thing we thought of; we were ambivalent about being in business at all; and we deliberately chose an impoverished market to avoid competition.
business culture development funding innovation inspiration reference research startup tips
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10 Apr 05
Amy GahranThis applies to content, too: "biggest cause of bad ideas is the still life effect: you come up with a random idea, plunge into it, and then at each point (a day, a week, a month) feel you've put so much time into it that this must be the idea.
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biggest cause of bad ideas is the still life effect: you come up with a random idea, plunge into it, and then at each point (a day, a week, a month) feel you've put so much time into it that this must be the idea.
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07 Apr 05
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04 Apr 05
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