17 April 2011 by Published in: rants No comments yet

One of the things that entrepreneurs do is they try to reverse-engineer other companies the way security researchers reverse-engineer software. What was it that made company X succeed? The general consensus in the startup world is that it’s the people. Not the technology, not the business plan, not the idea, but something about the founders. But that’s where the thinking seems to have stopped. What about the founders?

Well, a lot of things. But I’ve identified one thing that seems to be common across all sorts of different companies. It’s common across countries, decades, and centuries. It’s surprisingly simple: startups succeed more often when the founders want to build things.

Well, obviously. You’re not going to be very successful if you don’t build anything, are you? But that’s not what I mean. I mean people who want to build things. The person that when asked why he’s doing this, whether rich, whether poor, whether venture-funded, whether cash-flow positive, will tell you that the reason they’re doing this is because building things is fun. Not profitable. Not exciting. Not popular.

You see, there are a lot of people who really don’t like building things, or are perhaps indifferent to building things. What they want is money (or acclaim, or [insert motivator]), and building a product is the popular way to get that nowadays. I see this especially in iOS: every day, another newspaper prints another wrong rags-to-riches story and I get flooded with inquiries from people who think an iPhone app is their ticket to stardom. But they don’t really want to build something. They want to be rich. And it works out once in awhile the same way horoscopes are sometimes right. But not very often.

You know the type: the “grab a programmer out of college” idea people. Facebook for dogs. Instagram for videos. If they really wanted their product built, they would either fund it or actually learn how to build it themselves. Their ideal self is a sort of person who sits around all day and tells other people what to do and gets paid a lot of money. But it turns out that telling people what to do isn’t really a very valuable skill.

It’s common knowledge among programmers that these things don’t usually work out, but it’s uncommon knowledge why. They don’t work out because, first, building things in general is not sufficient for success. Building product A and product B might be the same amount of work, but product A might have millions more customers than product B. If you like building products, the only question is which one to do first, but if you like making money, the only question is which is the least amount of work. Secondly, people who don’t have any experience building products are the least qualified people to do it, whereas people who have built products in the past have experience and skills to draw on. And people who have built products in the past are, in general, people who like building products.

When I say “people who want to build things,” I’m not talking about people who are indifferent to money, or to acclaim, or who hole themselves up in some academic tower out of sheer interest, although all those sorts of people can be successful too. I mean people who see money as a proxy to build more things instead of seeing building things as a proxy to making money. Of course you want to make money. So that you have the resources to build more things. In fact, the motivators are so closely linked that it’s difficult to tell them apart from the outside.

I took a look at my AdWords budget this year. We spend too much, and I’m motivated to do more SEO so that we can spend less. But not just so we can spend less–so that we have the resources to build two and a half more projects a year. My native currency is in projects. It is actually more difficult to think in dollars than it is in projects. A project is a tangible thing–a fixed quantity. A dollar is a currency that goes up and down relative to the current state of the contracting market.

The fact is, software is hard. It’s always harder than anyone thinks. If you like making money, and the schedule slips a week, that’s terrible–a week of salary down the drain! But if you like building things, it’s almost good news. Because you get to spend more time building things. In this industry, slips of days, weeks, months, years are common. All schedules slip. If you like making money you will give up. If you like building things, why would anyone give up during the best part?

If you like making money, a project failure looks like this: you started with some money, X. You spent some money building the project, K. Now you have X – K, which is less than you started with. You’ve gone backwards! Pretty soon you will give up trying to get rich by building things, because you tried it twice and you’re much worse off now than when you started!

If you like building things, a project failure looks like this: you built the project, success! Nobody liked it, so now you have less resources to pursue the next project. A minor setback. It might delay the next project while you look for funding, but who in their right mind would turn down the next project? And then ten, twenty projects down the road, you have a hit, and newspapers write a rags-to-riches story ignoring the other twenty projects that were equally as rewarding but commercial “failures.”


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