Great point. The long-term survival of a business distills down to being able to bring in more money than it costs you to produce a product. It's such a simple concept, but it's easy to forget when you're swept up in the excitement of coding and engineering an idea you're excited about.
Ironically, it's the most ambitious engineers who tend to make the mistake of doing too much engineering work before trying to validate the product. I can't count how many times I've signed up to follow ambitious engineers' startup ventures that turn into years of highly-detailed marketing updates for products that never seem to get any closer to materializing. These are the startups that fizzle out 2-3 years later with blog posts blaming the industry, the timing, the economy, or other external factors for their failure.
In reality, most of them could have determined their market fit, or lack thereof, much faster by launching a smaller version early and iterating with customer feedback.
We like building things, and making them fast and powerful and efficient.
The customer doesn't care about any of that though. They just want something that helps them.
What happens is that most of the time making something fast, powerful and efficient implies so much resources that the ambitious engineer can not complete the project in time.
Customers prefer something that works today, even with limited functionality that something perfect that only works inside the mind of the engineer.
That is the reason Steve Jobs said no so many times, because this way his company could ship products in time.
That in engineers mindset problem: It is painful to say No, like the song says, we "want it all".
Only if the thing being fast, powerful and efficient actually solves their problem better.
Is that really the most common problem? I would probably be one of those engineers (if I'd start a business) and I'm a lot more afraid to sell something that doesn't exist yet than the other way around. Because now in addition to your usual problems you have legal obligations to deliver a product. I think this is one of the reasons for the crazy crunch culture of many startups.
Instead of selling a fake MVP product it is probably more healthy to be upfront to customers and let them pay for your development time like a consultant... And then repeat the work faster for different customers until you can spin the process out into a actual product.
In the case of the startups you describe I always imagine they have great sales and marketing people but no actual product, and thus survive only until the VC money dries up...
> Instead of selling a fake MVP product it is probably more healthy to be upfront to customers and let them pay for your development time like a consultant
Careful, no one is advocating selling "fake" products. The key is to develop a minimal product that can be sold. It has to work, though. Fraud will sink a startup very quickly.
From there, you can contract with additional customers to expand the product to meet their needs. This is more difficult than it sounds, though, as you'll quickly be torn between working on what's best for the product as a whole, and what's best for an individual customer's unique needs.
I've seen many startups go down this path with best intentions, but ultimately become contracting shops with a single customer. That's fine if that's your goal, but it's painful when the contracts dry up and you don't have a product that appeals to the mass market.
The most common problem, if you're a really talented engineer, is that you could work for a big company and be paid more in a single year than your business will bring in for its entire lifetime.
Conversely what you really find is, the people running 20+ person companies with tens of millions in investor money to bring in only $1m in revenue a year - they lacked the talent, actually, to just make the money at a big company. That you should start with the assumption that capitalism works, and that the person doing this thing is not stupid but just shut out from a better opportunity.
So maybe you're a really talented engineer but you are foreign so you'd need an H1-B to work for Google. Or maybe you're a former product manager from Microsoft who didn't quit, but was laid off, so you really can't just go and make the money.
A transplant surgeon brings in about $1m in revenue per day for heart transplants. There is no risk there, there is unlimited demand for heart transplants. It's just extremely hard to become a transplant surgeon, it is extremely competitive, much more competitive than making a website. While I'm not suggesting every startup CEO is just a washed-out up-and-coming surgeon, there is other stuff they may have washed out from broadly, like just medicine itself, that led them to chase the worse economics of where they are.
I have met some people who implicitly or even explicitly claimed they were above being an employee but I think they weren’t being honest about their actual employment prospects.
BTW, raising tens of millions for one million in revenue doesn't happen that often.
Odds are you'd make more money taking a job at BigCo, live like you only needed half what you're making, and invest that extra money into the public market. This isn't as fun though.
Do they not then own at least a share of the IP? You'd be lucky to find a customer that takes you on as a consultant but lets you keep the IP you develop during that time.
? Not trying to be argumentative but that doesn't seem ironic to me at all. I would expect the most ambitious engineers to think that simply building the thing would be enough.
If you need to build for years to release something [1], it's less likely that you're addressing a real need. The best products can start dead simple, even ugly, but still solve the problem.
[1] Deep tech is the obvious exception here.
Asking for sales up front means you have to face that right away. It's better for the business but harder for the founder.
I remember when I was an undergraduate physics student, looking forward to grad school and idolizing all the famous physicists. My adviser, who was not the most soft and cuddly type of guy, always pushed this type of hyper-alpha stuff on me, even telling me that he himself only sleeps 2-3 hours per night just so that he can do more physics. It really does damage to you and your self image, and I don't think the advice he gave me was really meant to help me as much as it was meant to help him feel superior.
Anyway, a bit later in life now I look back and realize that there are so many times when I've idolized a certain way of living / doing things that are actually not productive at all but rather just feed that same type of alpha-image.
There's no reason why you can't be successful on your own terms, even if that means taking the weekend off, being a solo founder, or whatever. Sure, I get that startups are hard and draining, but (not to lean too heavily on cliches) there's a difference between working hard and working smart and more often than not I think these types of alpha-founders are glorifying busyness.
It's always fascinating to see people make claims like this, despite all evidence showing that it's impossible to maintain. Some extreme genetic outliers may be able to sustain performance with around 5 hours of sleep per night, but no one is going to last very long on 2-3 hours per sleep each night.
Going all the way down to 2 hours of sleep is doable for short bursts, but it will catch up with even the genetic outliers before long.
Many of these people are just exaggerating for effect. If you have poor time management, poor accounting for where you spend your time, and an erratic sleep/wake schedule, it's easy to get confused about actual sleep durations. Some people also use stimulants excessively during the week and then crash on weekends, but they'll only tell you about the nights where they barely slept.
Some people learn to normalize sleep deprivation and coast on a diet of frequent naps. If you take 30-90 minute naps a couple times a day you can coast for a long time on 2-3 hours in bed at night, but you're still sleep deprived. Those weird polyphasic sleep schedules that claim to reduce your need for sleep are simply normalizing sleep deprivation and masking it with naps throughout the day.
Finally, there's a common phenomenon where people misperceive some of their sleep time as being awake: https://en.wikipedia.org/wiki/Sleep_state_misperception This is a common explanation when people claim they didn't sleep at all on a certain night. It's not uncommon for people to claim extreme insomnia, but then sleep 6+ hours as soon as their sleep is objectively monitored.
In short: You can't trust self-reported sleep times. Especially not when someone feels they have something to gain by claiming minimal sleep.
I've read a lot of sleep studies, and besides some non-scientifically published variations on Buckminster Fuller's 30 minute nap every six hour sleep schedule I haven't read about someone getting such low amounts of sleep.
On another note, I can't be the only person who finds this kind of bragging to just fail to register, or even to backfire. Am I meant to be impressed by how poorly they've arranged their weekly routine in terms of work/life balance?
This is even a problem in the sciences! Everyone wants to kick the can (getting feedback on their pet hypothesis from reality) down the road & play with their shiny, awesome tech/math in the meantime.
"The great tragedy of science - the slaying of a beautiful hypothesis by an ugly fact." Thomas Huxley
What is hard is keeping mistakes/ignorance marginally less fatal than the ground you gain in your successes... forever.
In my very limited recent case, I produced a Kindle booklets series earlier this year (20 academic literature reviews) and started selling some through targeted ads on Amazon.com, at $0.03 per click, on top of a very few thousand visualizations per day.
Ramen profitable, but a platform to start from for small incremental updates in the mid- to long- term, hopefully.
Exactly. In fact, it's not even about the product. You need to solve somebody's problem in a way that they are willing to pay for. The product is just how you choose to do that. The designs and code and engineering decisions and artwork etc. etc. aren't for the customer, they're for you. What the customer is paying you for is solving their problem.
There are lots of tools people on appreciate when they are gone, and getting people to pay for them takes a much better salesman than I'm used to having available.
The full-time employment entity is your own company (if you are the founder) or your full-time employer and there could be other companies or individuals to whom you work for part-time (1 day a week, adhoc days/hours, weekends etc) and you are paid for that work.
You have two things to consider:
1. Make sure it is legal (for example if you are on certain types of work-permit visa in some countries it might be illegal to work for anyone other than the work visa sponsor).
2. Make sure you don't have conflict in your employment contract clauses (many full-time employment contracts have clauses that prevent you from working for others even for part-time without explicit permission from the full-time employer).
Usually if you ask your full-time employer, they may permit you to do one-off consultations to other companies (and get paid for it) if they think it would not take your focus away from your FTE work and if there is no conflict of interest or potential to reveal trade-secrets (example: if that other company is a competitor etc).
I’d love to check it out. I bet others here would as well.
Make a product that people want and are willing to pay for.
The product may be in what appears to be a crowded field. Identify niche opportunities or cases where an established leader is doing a poor job.
It's fine to do some consulting on the side to pay the bills. Of course it will take time away from the product you are building; just be able to recognize when it's too much and scale back consulting or turn off the spigot completely once product sales take off.
It's fine to work according to your own schedule and needs, not some idealized '100 hours/week' VC fantasy schedule.
Investors don't care about you, they care about their returns. As you don't fit the pattern of what they expect for a successful startup, they will either ignore you or make very unreasonable demands - find a co-founder, work twice as hard, follow this or that model. Ultimately, it's a waste of time at best, a loss of control and failure at worst.
Once you have cashflow, offload certain business tasks to pros who can do it better and cheaper than attempting it yourself. Hire when you have sufficient cashflow + cushion.
Take pride in what you are building, the customers you attract, and the skills you are learning.