> What each of the companies had in common was that they built something that was useful, created a feedback loop of getting user feedback and iterating on the product, and kept at their startups long enough for the market they were in to mature.
> I deeply believe that if three recent college grads (and one dropout) could turn an online reality tv show into a billion dollar company then literally anyone can be successful online.
Not anyone, but far more people than currently are. The only problem is that very few people get the opportunity required.
How many teams get help from YC followed by millions of funding from other investors? How many can spend 5 years working on a project that isn't profitable? As a percentage of people, it's far below 0.1%.
When there's a scalable YC alternative (like equity crowdfunding, maybe) we'll see just how many good technology businesses are possible. It seems nearly unlimited, if you're aiming for Star Trek.
I think there are tens of thousands of 2-10 person teams that are waiting for an opportunity to show us what they have.
If it's impossible, it's only because few people have the psychological makeup to delay gratification for years.
The most surefire way to be able to spend 5 years working on a project that isn't profitable is to spend 5 years saving 50% of your salary. How do you save 50% of your income for 5 years? Get a job paying double the median income (~80th percentile [1]) and live like the median person. Or get a job paying at about the 60th percentile ($65K) and live like someone making half that (~30th percentile). Both of them are eminently achievable for many Americans - by the numbers, 20% for the former and 40% for the latter.
Most people don't do this because they feel like they must be better than the people who make half of what they do, and so blow the excess income on a lifestyle that doesn't really make them happier but certainly makes them look better. If you don't give a shit about others thinking that you're a pauper, you can amass a good amount of freedom, power, and yes, money without anyone knowing.
And if you keep that up long enough, you can just retire. I retired at the age of 40 by saving about 70% of my take-home salary as a manager of a group of engineers in Silicon Valley.
I will never go back to a cubicle in Silicon Valley. Never.
Some people can pull this off. Most people can't save 50% of their household income. Very few people with families can follow this advice, and that's a lot of good people.
That's a pretty passive attitude to take. One amazing thing about software projects, for a technical person, is that you don't have to wait around to find someone to give you money to play with.
I was suggesting the reason more people (especially non-technical people like the author) don't have successful startups.
But it's also true that creating something like Twitch is nearly impossible without funding. They could not have bootstrapped it for 5 years because it was/is not profitable, even though it might be a great long-term business.
There are many more self-sustaining business ideas out there than are being explored today, mostly for cultural reasons.
For every slow-burn success like Twitch there are likely a hundred niche businesses that could earn a modest profit immediately, but are not large enough to interest funding parties or starry-eyed founders.
"Survive" is the one bit of advice that, by definition, is immune to survivorship bias.
Basically, Justin is saying "the ones that survived are the ones that survived". It's stating the painfully obvious, however it's a simple contrast to the normal "strategic" advice.
Thanks for this. That PG article was sobering for me. All the while reading it, I had Shawshank's "Get busy living or get busy dying" playing in my head. :-(
"I deeply believe that if three recent college grads (and one dropout) could turn an online reality tv show into a billion dollar company then literally anyone can be successful online."
There are so many things wrong with drawing that conclusion.
No there really isn't. Justin is getting at a truth about startups: "If you can just avoid dying, you get rich." Paul Graham wrote that 8 years ago (http://paulgraham.com/die.html), and I wonder if it was (subconsciously?) an inspiration to this post by Justin? My guess is that it's actually more likely that Justin feels this truth intuitively. I believe that this is a truth that is so fundamental to startups that if I could ask founders only one question when investing, it would be, "When will you give up?"
Not dieing is ofcourse the key which is where the luck must kick in big time. I think most startup don't die because founders give up but rather because there are no real options left, just strong desire for not dieing is not enough. One key thing Justin mentions is being in growth market. What if you realize after 5 years that your user base for purple coat wearing alternate movie lovers isn't a growth market? The next logical step would be pivot which is technically a death followed by another cycle - if you have funding leftover. Justin.TV itself was on the verge of folding up because of inability to pay for bandwidth and if Twitch idea hadn't occurred at right moment (aka huge luck) then no one would have known them now. Luck has played huge part in probably every startup Justin has mentioned. For example, Reddit would have perhaps never taken off if Digg didn't screwed up with its redesign. Also all of those startups were immensely blessed by social network of Y and pg which average joe founder would not have and that itself reduces dependency on being lucky.
Having said all that, I think Justin has put the simple success receipe quite succinctly in this article: Produce, get feedback and iterate. Doing this enough number of times in growth market can produce very likely success. That's beautiful, powerful, compact advice.
I totally agree with the post, but it goes beyond just startups it applies to anything you are trying to achieve in life.
Are you trying to; learn to play the piano, climb a mountain, loose weight, be a racer car driver and so on? It pretty much applies to anything that you are trying to achieve where the obstacle is just you. If you just survive, just do it for one more day. Just one more....everyday, you will succeed.
I heard Justin talk about this at a conference a couple of years ago and it's one of the few pieces of advice I have taken to heart.
Yeah...it's akin to saying "I believe that [extreme outliers happen], then [they define the general rule]." Their outcome is wonderful, and I'm happy for them, but it's so many sigmas from the norm they may as well be Toyota consultants from the 90s.
He's not saying everyone will be successful, he simply means there's nothing innately special about people who are successful and you shouldn't rule yourself out because you don't think you're [insert adjective here] enough. You need to be a moderately smart person who works hard, follows the right formula and gets a little lucky. You might still fail but it's definitely worth a shot.
> I deeply believe that if three recent college grads (and one dropout) could turn an online reality tv show into a billion dollar company then literally anyone can be successful online.
Not anyone, but far more people than currently are. The only problem is that very few people get the opportunity required.
How many teams get help from YC followed by millions of funding from other investors? How many can spend 5 years working on a project that isn't profitable? As a percentage of people, it's far below 0.1%.
When there's a scalable YC alternative (like equity crowdfunding, maybe) we'll see just how many good technology businesses are possible. It seems nearly unlimited, if you're aiming for Star Trek.
I think there are tens of thousands of 2-10 person teams that are waiting for an opportunity to show us what they have.