And then there were three
So the third week has gone by at the same kind of blurry speed the previous two did. Feels kind of strange – in another week we’re going to be a third of the way through the Y Combinator programme (and we’re only a few weeks away from investor day – where all the YC companies pitch to a room full of VC’s and Angels) and we’re starting to feel the pressure a little. The tough thing I’m fining about the startup life is that there’s no way of knowing (at least in the eary days) whether you’re headed in the right direction. Not all startups are going to be a facebook and explode overnight – your average startup puts a lot of hours into the daily grind and hopes that when their product launches, people will want to use it. This week when we had a chat with Paul Graham about startups in general, he told us that in his experience “there is no difference between digging 100 miles away from the treasure or digging a few metres away – in both cases you end up digging dirt”. I thought that was a pretty cool way of looking at it, it makes sense that the big hits are the ones that are able to adapt their business models and persevere with them – if you keep digging you’re likely to find your treasure eventually (assuming of course there is treasure to be had i.e. you’re building something that people actually need/want).
So this issue of persistence has got me thinking a lot and it was a big theme of our YC dinner this Tuesday. The guest speaker this week was Joe Kraus, the founder of Excite (sold back in 1999 for $6.7 billion) and more recently Jot Spot which has now been acquired by Google. It’s quite rare to find someone who’s gone down both routes of taking a company public (Joe took Excite to an IPO) and also built a smaller company that’s been acquired. The one thing he continually stressed was that you have to be persistent and never give up on what you’re doing, he said there were times when he made massive fuck ups with Excite but carried on going anyway. I really don’t think you can understate the value of that advice – anyone who has been involved with a startup knows that it’s one hell of an emotional rollercoaster, some days you think you’re going to be a billion dollar company and the next you wonder what the hell you’re doing and that inevitably results in a pretty stressful lifestyle.
Why is persistence such a big issue? Well when you lay down the facts of how many startups actually suceed, it’s pretty depressing viewing. Joe said it quite emphatically, the majority of people in that room (YC HQ) were not going to suceed with the project they are currently working on. The fact of the matter is that the odds are against startups not failing, in a way you’re kind of crazy to even try and build a startup – if you’re doing anything interesting the chances are that in some way you’re competing with a much (MUCH) larger company, be it Microsoft or Google, who already have a massive user base and more funds to spend on development/marketing than you could ever dream of. So why even bother right? Well the reason I’m loving it out here is because I’m surrounded by crazy people – people who know they’re competing against the odds but they do it anyway because it’s what they want to do. There’s no tougher way of living than this, you don’t have sit down meetings with your boss every month who either pats you on the back and says “good work” or gives you exact numbers on how below your annually targets you currently are. You have to blank out all the statistics and just get on with it and that’s what YC is all about.
What I’d be interested to know are the stats for how your chances of success increase with each startup you do. You always hear about startups failing but how many times do you hear someone say “that’s my tenth straight start up and they’ve all failed”. Well for one you’d be unlikely to meet someone who had the determination to work on his tenth startup after the previous nine failed but that’s the point Joe was making (least that’s my interpretation of it) – with every startup “cycle” you learn so much. You can’t learn this stuff anywhere, it’s like riding a bike – you can read all the books you want but you can’t ride it until you actually do it for real. With every cycle you go through, you probably increase your chances of success exponentially (ok that’ a guess but I bet it’s not that far off) and if you have the persistence to carry on despite failing, sooner or later surely you’re bound to get somewhere. Now looking at that objectively, it’s one hell of a risk – you can’t tell if your startup is going to work after a few weeks. Building a company is tough an it could take a few years before you realise you’re not going anywhere. But that’s another reason why I think Silicon Valley has built its unique ecosystem. Failing is seen as a natural part of the process, I read somewhere it was described as a “badge of honour” out here. When you get a bunch of people together who are going to keep building companies until they suceed, is it really that big a surprise when you a generate such a phenomenal economy like the Valley? Only by reaching that level of persistence will you be able to recreate this place and that’s going to be tough.
The other thing that really struck me from Joe’s talk was the concept of luck. He admitted that his position had a great deal to do with luck – he happened to be interested in computers at a time when the Internet bubble was in full swing and he made a lot of money as a result. Not everyone is going to have that luck and ultimately I suppose you just have to accept that. But I think it’s like rolling a dice, every now and then some lucky sod is going to roll a six on their first attempt. Others will get it on their fourth while others might take ten – the point is sooner or later you will roll a six as long as you keep on playing.
Something else Joe was adamant about is people – you cannot build a successful company without the right people. It’s strange but from running boso I think one thing I’ve realised is that when running a startup, there are a load of different distractions that seem like they’re going to make or break you. For us it was probably worrying that we hadn’t raised any investment yet or got enough PR/marketing to generate awareness. The thing is that without a solid base of talent, those things are kind of irrelevant. There is a bit of circularity here I suppose – getting good people can be easier when you have investment/PR/users but unless you’re in the lucky position where you’ve started out with a group of amazing people (going to be quite unlikely if this is your first startup, more likely if this is your second/third) you need to get those people sooner rather than later. Joe’s words were “Hire slow, fire fast – don’t ever compromise on someone because bad/mediocre people will drag your company down and kill it”. On that theme we’ve had some good news on our personal front – we’re now working with one of the guys from YouOs to build our new product. It fills the biggest skills gap we had i.e. product development and we’re excited about how it’s going to pan out – his name is Srini and he’s ex-Stanford and Oracle (but more importantly for me, he’s got experience of a startup). We’ve waited a long time to bring someone on board but now we have, we’re delighted and we’re glad we didn’t compromise (in hacking terms Srini would be an uberhacker). He actually started out giving Kul and I hacking lessons (we’re determined to learn the basics so we understand all aspects of our business) and we took it from there.
So moving away from general startup musings into more what’s gone on in my week in the Valley. Well on Wednesday I met the lead developer on Flock (social web browser) who popped into the Obvious offices. It’s funny because I use Flock as my primary web browser and he was quite surprised to see someone doing that, we had a chat and when I mentioned a few bugs I’d been having he made sure I sent him emails with more details. In his words, getting reproducable bugs from users was invaluable and it’s something we’ve seen from boso this last week. Traffic has really picked up at Brighton University after the head of technology there made it the de facto marketplace for the university and she has sent us a lot of emails this past week highlighting all the problems/quirks with the site. That kind of information is like gold dust – even having focus groups or staged beta tests do not compare to having someone go through your site of their own free will.
Then on Friday we met up for some drinks with Chris Sacca, head of special initiatives at Google. We first met Chris at an event in the Oxford Business School back in November (they do a Silicon Valley comes to Oxford event each year) and he asked us to keep in touch when we came out here. It was a great night and we ended up (bizzarely) playing old Atari games and drinking beer until 2am. From a blogging perspective though, what was really interesting was the fact that here we were with a guy who has a high level position at Google having a very open chat over drinks and we’d only met him once before. I have to say I’m just not used to that level of openness/friendliness from back home – to put it quite bluntly back home I could never imagine meeting up with a high level exec from any UK company after a brief convo at an event a few months ago. It just wouldn’t happen, maybe their PA would reply with a 15 minute timeslot they had available but beers at their apartment on a Friday? I think not. You can hold all the “networking” events you like, hell hold them four times a day every day, but you’re never going to get the same network effect as there is in the Valley until you have that kind of openess. Sometimes you just have to say fuck it, those guys seem kinda interesting and I’m going to find out more about what they’re doing at some point. Maybe they’ll turn out to be duds and it’ll have been a waste of my time but unless you have that mentality it’s tough to build networks that have any real meaning/purpose.
Ok I think this post is already far too long. I just wanted to say thanks to everyone who’s emailed me saying they’re finding the posts interesting, the number of readers seems to be growing daily so I’m glad/surprised people are actually reading this ridiculously long things!
Over and out.