I was an engineer at a successful startup.

We grew, we went bankrupt, we laid off most the company, the founders kicked in enough to keep us going and we restructured to give the remaining people larger shares. We became profitable and finally sold to another company.

My payday was about $70k, which was a nice bonus, I was happy to get it. I moved on to big tech. The company withered away, the company that bought it withered away too. I think the company that bought that company might also have disappeared. The domain keeps getting renewed, but has been broken for a couple of years, and for half a decade before that was just a WordPress site hosting a scrape of some of the content that used to be on the website.

And we were one of the lucky ones.

That sucks. I know quite a few stories like that. I'm more active as an investor these days than as an entrepreneur, the projects I still run are more for fun than for income (or even potential income) and I can't tell you how happy I am that that pressure has abated somewhat.

It's annoying that even the successes tend to screw over the employees and more often than not the founders as well. Typical dilution by the time you reach series 'A' (assuming that that's all that you need to take off) is terrible and if you need more capital you end up working for banks and VCs.

If I were to start another company (which I am trying very hard to avoid) I would try extremely hard to do it without outside capital and I would do it in some boring b2b field where nobody else wants to go because it isn't sexy enough to be able to attract capital. That way you avoid several of the risks of starting a new company at once: you have a relatively safe niche, no outsider is going to jump in giving away their product just to grow market share and the people that will receive your product are going to be super happy simply because there is no alternative.

> That sucks.

Don't get me wrong; it was a good experience, as well as being good experience. I got paid a decent salary throughout, the work was frequently interesting, and my coworkers were great, not that I've done a good job of keeping in touch.

But it wasn't a life-changing payday, and even the investors mostly broke even. It was a success in that it became profitable with a couple mil in revenue, not in the VC sense.

Besides the whole period where we ran out of money, laid off half the company, and were months away from going under, the only real downside was that, as a small company, I was basically on call 24/7 to deal with problems with my part of the world. It didn't come up often but when it did it sucked.

Do opportunities like these still exist?

Private equity is buying up as many as they can (see: car washes*) but that does mean they still exist!

* https://www.wsj.com/podcasts/the-journal/why-private-equity-...

Yes, absolutely. Looking at one right now actually (NDA, so I can't tell you about it but it's a gem).

Thanks. Reading a thread like this is sobering on the one hand, but also gives the feeling of "it's all pointless and crowded" :)

The corporate world is littered with them (esp. at medium-scale), but you can't magically discover them by reading on the internet.

Feels like most of the problems in that class I’ve stumbled upon were not viable. Not because there wasn’t a need but rather because the people suffering from the problem aren’t the ones signing the cheques, and the ones signing the cheques don’t really care about making the grunts’ work easier/more efficient since that’s what they’re being paid for: to toil.

What advice could you share for discovering this kind of problems that also can also be monetized?

That’s exactly what I started: https://gitlab.com/logotype/fixparser

It’s a quite boring project, but it is niche - and there is no alternative, at least not in the JS/TS ecosystem. Many startups/crypto/financial institutions (including YC startups) uses and are paying customers of my product.

I’ve tried finding an investor (including YC) to grow the project but no-one is interested. It doesn’t matter, I’ll keep going anyway. But if someone is interested reach me at [email protected]

Hey, way to try to profit of another persons failure. Really sociopathic of you!

May I ask how you monetize this?

> no outsider is going to jump in giving away their product just to grow market share

I wonder how much innovation is being stifled by this practice. I know I have at least one very viable idea (I've shopped it around) that could result in substantial improvement to the overall Internet experience, and I'm doing nothing with it because the minute I make it available, a Big Tech company will either steal it, try to buy me out (and I don't like them so my answer will be no) and then copy/reverse engineer what I've done. So I've opted to spend my time/energy on something else.

Basically what's the opportunity cost of these uncompetitive practices for the industry and field of study as a whole?

I hear you, and still:

How many Einsteins perished in the fields or trenches? How much innovation and genius is stifled through lack of access to food, water or education?

I think that would be an area where improvements would be more impactful than trying to prevent copycats.

Ironically, that's what I decided to spend my time on instead. I was trying to decide whether to do a PhD with said technical project/idea or to do one focusing on non-programming technical skills + history for early education precisely because I think improving the education level of the general public is also a good way to improve things.

I did have a similar concerns. My answer to this situation is to embrace it, make the idea open source with copyleft licence from the start. This gives opportunity to galvanize a community find early adopters and contributors.

If BigTech gets into it, that will be a positive signal which will make idea known and make a market of customers for it. I have no need to be the first, but just be in the game.

Unfortunately investors are now all over B2B startups because they're now keenly aware of just how stacked the odds are against you in consumer products. Even YC nowadays calls consumer facing ideas "tar pits". It's also way easier for investors to pump up B2B valuations through cross pollination between portfolio companies

You listed the less-important parts of that story. The important part was what your start-up offered, how it helps the world, and whether the product(s) and the technology went on to be used by many people/organizations or not...

Comparison shopping in the aughts.

There was interesting work on crawling and search, we went bankrupt trying to provide useful tools for people to find different products and the different places to buy them, then became profitable farming our content out for SEO.

We were then bought out by a domain parker who wanted to marry our monetization with his traffic; as far as I know it didn't work, but that was when I left.

> The domain keeps getting renewed

This is a funny thing with companies that get taken over.

My dad used to run an ISP, one of the first ones in my home country. I'm talking 28.8kbit modems. The company was sold and shut down more than 20 years ago. The company that bought them out got bought out, that company then got bought and, and this repeated a few times.

The domain still keeps getting renewed, and for a while redirected to the main page of the largest IT firm in the country. I assume that, along the way of all those acquisitions, domains just kept getting transferred, and nobody knows what those domains are, but it's cheaper to just renew than to find out.

Anyway, it's a fun little reminder of the impact my dad made in this world :)

https://web.archive.org/web/19970409101251/http://www.est.is...

Thanks for the archive link. I was pumping myself up since you didn't seem to name-drop the company. I love these sort of anecdote stories.

Or it may be that the only asset of the company left is a brand and giving out the domain to the world would might make that brand unsellable in the future.

It seems insane to me that the happy path involves you getting $70k. Working in finance, I would expect that amount as a bonus in any year where I perform well and the business isn't unprofitable.

When I've spoken to people about the finance/big tech/startup trade-offs, we've often talked about the upside from startup success (outside of the Google or Instagram case) being around an order of magnitude bigger than that - in the 'pay off your mortgage' ballpark. Is this unrealistic?

I've only got an N of one under my belt, but I'd also note I wasn't a founder or even a pre-series-A employee. I believe the former got more like what you're thinking, and the latter 2x or so what I did. Also I honestly can't recall if that was a pretax or post number at this point.

But on the other end of things... it was still a nice cap on my time there. And even if it's not quit-your-job money, it was still an Everest.

(An Everest being the amount of money it takes to climb Everest, buy a luxury car or a small cabin on a lake, or any other number of reasonably achievable dreams.)

What rate is the cutoff at which people give up entrepreneurship altogether? I wonder how big has the opportunity cost of monopolies been in the past decade

That depends on the person, really. When you are younger or have rich parents you can afford yourself larger risks and that in turn has a positive effect on your chances of success. When you get older and have more responsibilities unless you have a prior success you tend to become more risk averse and so less willing to start new companies and/or make the kind of decisions that would lead to either success or complete failure. Playing it safe is an excellent way to lose against a crowd of others that can afford to take risks: some of the will get lucky and beat you, even if most of them fail.

There are older, successful entrepreneurs, one guy I knew started his first company in his mid-50's and had a massive success but he's definitely the outlier. But most successful entrepreneurs I know started their first successful company in their 20's or 30's, rarely 40's. And most unsuccessful entrepreneurs have the exact same demographic...

A couple of things that I've seen really do help, but they still require a substantial investment in time and have an opportunity cost as well: work for one of the large, well paying companies for a while, save up a nest egg and use that as a jump off point if you weren't born into capital (though the risk of becoming addicted to that income stream is real and letting go of it will not be easy). Another is to first start a regular career in order to identify pain points in some industry or other and then later use that knowledge to create a product that addresses those pain points.

But that's not the kind of thing that you can spin out far enough for a book or a TED talk. I do believe that those two will increase your chances.

+1 on the nest egg. That's how I "bootstrapped", unsuccessfully, during Covid. And I got that close, some better timing and I might be running my own fleet of two leased feeder container vessels by now (seriously so, I already had offers for those). Bad timing kicked in, my prospective launch clients project fell through, and being bootstrapped meant I didn't have anything else in the pipeline. Which brought me to the single pivot I had budget for, and that resulted in, at most, a single person consulting business. I didn't want that, realized I like running operations much more than running a company running operations, burned the allocated nest egg and went back to employment. I am almost happy ever since!

Close call. And one other thing that nobody seems to mention either: success always comes at a price. Health, family & friendships, attitude, ethics. All of those can suffer when you're successful.

> But most successful entrepreneurs I know started their first successful company in their 20's or 30's, rarely 40's.

“Research: The Average Age of a Successful Startup Founder Is 45”

https://hbr.org/2018/07/research-the-average-age-of-a-succes...

Discussion on HN here:

https://news.ycombinator.com/item?id=18212409

Yes, I saw that when it first hit.

I'm sure they did a great job at researching that but it really does not match my experience at all. And I see a lot of start-ups (up to 50 / year) from the inside, at least a few hundred founders if not a 1000+ by now over the last 15 years. The bulk of the successful ones is late 20's to mid 30's.

This might be an illusion or a strong bias.

The younger ones are not alone ( the successful 45/50+ parents/mentors/etc are supporting them financially and more ).

Otherwise, without the experience of your 20s and 30s you cannot understand the world, you haven't build the network you need to succeed ( I am my own example), basically you cannot manufacture you "luck".

There might be something interesting here.

- people in the VC entrepreneur world are seeing mostly 20s and 30s be successful

- VC world is, as one previous commenter put it, swing for the bleachers

- researchers are saying average age of success is 45, so more than half are 40+

This seems to perhaps indicate (though needs research) that

- those 40+ prefer bootstrapped businesses

- bootstrapped businesses are over half the successful entrepreneurs, so tend to be more successful

Many things could be wrong with this:

- different definitions of successful

- research bias

- geographical bias

However, it's something that seems to bear investigation.

And if true, what is it that is driving the budding entrepreneur to think that to be more successful they need to seek VC funding, when it may actually be the opposite. Would you rather take a 1 in 1m shot at 1m/yr, or a 1 in 10k shot at 300k/yr? Numbers made up in the question of course, research needed to figure out what they are.

> But most successful entrepreneurs I know started their first successful company in their 20's or 30's, rarely 40's.

Jeff Bezos?

This is a myth. It is purported because most of the 30+ entrepreneurs are not vocal about their successes.

Bezos was 30.

38

Bezos was born in 64, he's a year older than I am and Amazon was started in 1993.

You can do the math for yourself.

Bezos once said in an interview that he was 38 when he started Amazon, after leaving DEShaw as a manager.

You really don't know when to give up do you? You're wrong, end of story.

> Entrepreneurship is like one of those carnival games where you throw darts or something. > Middle class kids can afford one throw. Most miss. A few hit the target and get a small prize. A very few hit the center bullseye and get a bigger prize. Rags to riches! The American Dream lives on.

> Rich kids can afford many throws. If they want to, they can try over and over and over again until they hit something and feel good about themselves. Some keep going until they hit the center bullseye, then they give speeches or write blog posts about "meritocracy" and the salutary effects of hard work.

> Poor kids aren't visiting the carnival. They're the ones working it.

-madaxe_again, https://news.ycombinator.com/item?id=15659076

it's really not. There are all kinds of entrepreneurs and most are not making weird iphone apps, but more conventional businesses that do somewhat work or fail. Rich kids don't necessarily do many throws, as they have the money to push even an unsuccessful idea for a long time. VCs may be the ones throwing darts. And poor kids do go to the carnival, you don't often see rich people going there.

>One problem is not just the influencers peddling their books and their bullshit, it's also the eco-system that sells the dream itself.

The word 'influencer' is already a red flag. Personally wouldn't touch anything with that word in it with long pole. It won't be too long before that word is morphed into another buzz word.

I'm not sure defeat needs to be "expected" anymore...

I have friends with a string of successes under their belts. My own track record is ~half the companies I advise get from garage to series A, and I've had three IPOs and numerous acquisitions.

My rules of thumb:

- do something with big impact. "Make no little plans. They have no magic to stir men's blood and probably will not themselves be realized." - Daniel Burnham: https://en.wikipedia.org/wiki/Daniel_Burnham

- answer this question honestly: "why now?" i.e. why couldn't this have been done last year or last decade.

- answer this question honestly: "why me?" i.e. am I really the best person in the world to do this?

- check that your competitive position or margins are strong enough you won't have a zillion competitors causing margins to compress. For example, 15 minute food delivery is tough. For example, don't launch a CPG product on Amazon without a strategy to deal with knockoffs!

- check that your regulatory position isn't so crazy that you'll get shutdown before demonstrating outrageous value.

- create an elevator pitch of one or two sentences and see if a majority of legit prospective buyers get excited.

hope this helps!

A few of my friends have done startups, and I have noticed something really important about the "why me" question: it seems to be THE determiner of how much you can actually capture from starting up a company. The questions of product/market fit and timing determine whether a company in the space ought to exist. The "why me" question tells you how much your startup can capture independent of the money and work of other people, and how much of that reward you will get.

Since then, I started up a company that I think I am uniquely qualified to run, but we'll see if we get there.

Yeah, some of this just feels like advice some folks are going to have to learn first-hand, the hard, raw way. "Don't fall for parasocial bs touted on social media" is the new "make backups, seriously!111".