Matt Maroon wrote a very thought provoking post on “Why Not to Do a Startup” a little over four weeks ago that I have been meaning to write about. He opens provocatively:
I’ve been doing a lot of thinking about startups lately, and I’ve come to realize that they’re really not for most people, probably even most people who attempt them.
I am reminded of Sramana Mitra‘s quote in the Real VCs of Silicon Valley that “The truth is, start-up-land is littered with mavericks, iconoclasts, dropouts and misfits.” (As I read that quote again I think to myself, yes, that’s me, these are my kind of people).
There are a number of people floating around the Valley whose lives are a pretty sad story. Every startup they joined tanked, every one they passed on went public. They went without salary for years, and even when they had one, it was pretty low.
It’s always the one that got away that is successful (probably because so many can get away for every one you take part in).
Even sadder are the people whose startups succeeded but still aren’t happy, because they never learned that there is more to life than making money.
Perhaps we should introduce the first group to the second. But this affluenza isn’t limited to startup founders.
The biggest problem with startups..is the variance. Startups tend to be fairly binary, with you making either a very large amount off of them or nothing at all.
I think this is actually not true, and while many fail, there is a large spectrum of outcomes. Even among founding teams. Even among venture backed founding teams, which I think is the population Matt is describing. Matt’s entire post should probably be required reading for all YCombinator, TechStars, etc.. applicants, because it makes a lot of points that will make founders uncomfortable but that have to be acknowledged and managed.
Some folks win big, but many do well, especially when coupled with:
Benefits to startups other than the money..Working for yourself.
We see a lot of bootstrappers who run “small successful” software firms who are about as happy as they would have been in “a real job.” Some break out and some fail, but many fall into a fairly large middle ground: they achieve modest success but stay below the radar screen of most observers. It’s one of the reasons we facilitate the Bootstrapper Breakfasts as a service to the startup community.
Update Oct 18, 2009: removed all references to “awesome highlighter” and retained focus on Matt Maroon’s article.