2013-08-09

Co.Labs

Do You Need An Idea To Start A Company?

In today’s news scrum, the staff debates Dustin Moskovitz’s contention that entrepreneurship alone isn’t enough to justify starting up.



Today’s News Scrum Discussion: "These Silicon Valley Titans Think You Probably Shouldn’t Start a Company," by Marcus Wohlsen on Wired.

This comment by Dustin Moskovitz is a bunch of bullshit:

According to Moskovitz, the biggest problem in Silicon Valley culture is the fantasy that entrepreneurship is something you aspire to, in and of itself. “It’s total nonsense,” Moskovitz said. “I’m not really sure where it comes from, but every time I meet someone who says ‘I really want to be an entrepreneur’ but has no idea what they want to do, I really just think: ‘This person is totally aimless.’”

There’s nothing aimless about the assertion that you want to work for yourself. In his book Hackers and Painters, Paul Graham defines a startup founder—I’m paraphrasing here—as someone who wants to move faster than an existing organization is equipped to move. In other words, he explains, startup founders are focused on working at high velocity, or the measurement of productivity over time. Instead of earning (say) $2 million over the course of 30 years at a full-time job, they want to make the same amount in (say) two or three years.

The most appealing way to work at high velocity, for most people, is to start their own venture. College kids who aspire towards entrepreneurship are simply expressing a need to work hard on something they are passionate about and make progress quickly, rather than giving over 30 years of their lives before retirement. Is it so bad to aspire to an exciting career where you’re in control? I don’t think it’s aimless at all. — Chris Dannen


I have to disagree with Chris on this one. The glamorization of entrepreneurship, and tech startups in particular, is a problem for the whole industry. 10 years ago when I came to Amsterdam to work for a Dutch startup, I barely knew what that was. The idea of starting your own company was just not part of the culture in Europe even among developers. Now you get hundreds of people turning up for Hackers and Founders Amsterdam, which is not a problem in itself, but more and more of those people are “startup wannabes” rather than people with serious technical or business skills or a real drive to create something meaningful. They just want to put “founder” on their business cards. When people trained as lawyers are aspiring to start companies, you know there’s a gold rush of some kind going on.

One of my favorite entrepreneurs is the late Anita Roddick, the founder of the Body Shop and a true business revolutionary. She said “I often get asked to talk about entrepreneurship—even by hallowed institutions like Harvard and Stanford—but I’m not all convinced it is a subject you can teach. How do you teach obsession, because more often than not it’s obsessions that drive an entrepreneur’s vision?” This ties in exactly with Moskovitz’s view that you should not start a company unless there is no other way to implement your idea.

Only if no one else has started to build that thing should someone head down the startup path: “That should be almost the only way that entrepreneurs come into existence,” Moskovitz said. “And that’s not what’s happening.”

Ciara Byrne

I can’t put it much better than Ciara. She wins this scrum. The only thing I’ll say is that Chris is nitpicking here. Moskovitz isn’t saying people shouldn’t pursue entrepreneurship, he’s saying they should see it as a means to an end they want to achieve rather than an end in and of itself. In fact, right after the passage Chris quotes, Wohlsen summarizes:

You shouldn’t want to start a company just for the sake of starting a company, he said. You should want to start a company because you believe in an idea.

And he’s right. Too many startups are solutions in search of problems. Given the quote Ciara cites, I’m sure Moskovitz would agree with Chris and Graham that if you believe you can solve a pressing problem faster and better than existing organizations, you should start a company rather than joining one.

But it’s nonsense to throw out Moskovitz’s level-headed argument that it can, at times, be better to come together to solve a problem than to go it alone. After all, the core of entrepreneurship is about solving problems as efficiently as possible. We shouldn’t blind ourselves to the fact that sometimes the most efficient way forward is to combine efforts just because we love the idea of working for ourselves. — Gabe Stein


In today’s news scrum, we all gang up on our editor and get fired. I basically agree with Ciara and Gabe on this. The best businesses are the ones that genuinely improve some part of our everyday lives, not ones that try to manufacture a need—what Gabe calls “solutions in search of problems.” Consequently, if you’re starting a tech company, you really need to believe in what you’re doing and not just be out there to make a buck.

In the interest of rounding things out, I will criticize one thing Moskovitz said:

But Moskovitz told the crowd not to be fooled by Valley success stories into thinking startups are the best way to maximize their financial returns. The 100th engineer at Facebook, he said, made “way more money” than 99 percent of startup entrepreneurs ever will.

That’s probably very true, but it’s positing two non-options against each other: get rich by founding a company and get bought out/go public or by being the 100th engineer at a Facebook or Google. The truth is very few people are going to get there and make the kajillions of dollars they’re after, on either route. Which brings me back to why if you start a company you should believe in it—because chances are it’s not going to make you rich, so that belief may be all you’ve got. — Jay Cassano


I'm going to have to go along with the majority here, because Moskovitz's statements really hit home with me. I'm what I would call a "reluctant entrepreneur" right now. Earlier this year I started a company—and spent tons of my own savings to do so—to prototype and bring to market a piece of health hardware I've always wanted to exist, but one that no one has ever made. I decided I had waited long enough, and if I want to see it, it's up to me.

Becoming a reluctant entrepreneur has been been one of the most rewarding things I’ve ever done in my life. But, it's also been a time- and money-consuming headache like you would not believe. I would never advise anyone else to do the same unless they were doing it for the reasons I am, which Moskovitz so eloquently stated:

“It’s much better to start with: ‘I really want to manifest this. I want to bring this into the world.’”

For me, that journey will either end with riches or with one working prototype that I'll be able to use all for myself. Either way, I'll be glad I did it. If you can't say the same about your idea, don't do it. It's not worth the time and money. — Michael Grothaus


I’ve only got $0.02 to offer, and four minutes to express it. As Gabe cited:

You shouldn’t want to start a company just for the sake of starting a company. You should want to start a company because you believe in an idea.

“You shouldn’t start a company because you want to get rich,” is another way to put this.

Because, as Jay and Michael have articulately put it, you probably won’t. The only reason obsessive entrepreneurism makes sense is if you want to create something you believe in. Otherwise, aspiring to be an entrepreneur is like saying you’re a “money-hungry amateur.” As I see it, you can only be an entrepreneur—or a writer—about something. — Taylor Beck


[Image: Flickr user Joel Kramer]




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1 Comments

  • Anthony Reardon

    Fascinating.

    At face value, I think entrepreneurship alone isn’t enough to justify starting up. It kind of goes without saying that you need to have an idea of what you are going to do, an understanding of the context of the business, and a value proposition that can really take hold with your target market. At the same time, there are all these startups out there that have these things in mind, but seem to be missing the essential difference. I don't think it's so much the aimless entrepreneur that wants to start a company to say they did, but rather the ones that really think they know what they are doing.

    The VC guys kind of fuel that but just because someone gets financed, sells out, or goes public doesn't mean they actually have a connection to the lifeblood of what really makes a company work. Every one of those scenarios is fundamentally arrived at on the basis of speculation. Tech is still trying to figure out how to make money off social, and in most cases it's little more than having a hook to get popular, and thus be able to sell ads. Popularity can be quite superficial and momentary in this environment, and actually says very little about the merits of what you have to offer. I also find online advertising models to be very speculative too.

    There's something to be said about having entrepreneurial drive even if you don't have the idea to start with. If you really have that drive, you are going to be compelled to figure out what you can do, to learn the dynamics of your field, and discover the realities that decide success or failure. Entrepreneurs with nothing don't have much choice but to find a job working for someone else, and that is a great way to get a foundation to move forward with. However, you ultimately learn more by taking the risks upon yourself.

    So I think if you are confident enough to run with an idea, you should go for it. You might learn, for instance, it's smarter to keep your day job until you've proven the merits of your idea before you go all in. Catastrophic fails are a beautiful thing though, because when you put it on the line, you don't have a choice but to push yourself beyond normal thresholds and grow. If you totally screw up, then the lessons will hit you hard, and you'll incorporate those for sure into your next try.

    On a deeper level, I actually have to say entrepreneurship alone "is" enough to justify starting up. You'll learn.

    Best, Anthony