Sunday, February 14, 2010

What I learned about startups.

These thought are based on my own experiences, especially those from the past year. They are not intended as advice for you, or anyone else. Although I’m curious to hear what you think.

The main thing I learned is that you need to have a good idea. Although no one will pay you just for having a good idea, you will likewise never get much mileage out of an idea that isn’t actually useful. Furthermore, you will not come up with such an idea until you have a good understanding of the area in which you are trying to operate.

I used to think that many people had good ideas. They didn’t implement these ideas due to lack of resources, etc, or they were unwilling to implement these ideas due to laziness, etc. That may be the case, but I think that most people who try to build startups fail because they really don’t have good ideas. They may have good concepts, but not really ideas that are worth much.

For example, take the sewing machine, circa 1850. You could have said “I want to build a better sewing machine.” That would be a concept. You could even have said “I want to build a sewing machine that will work more quickly & less clumsy.” That’s still a concept. You’ve really got nothing. However, if you deconstruct a sewing machine, tinker with the parts, try to replace components and see what happens, you might decide that the machine would be greatly improved by using a flying needle, instead of a rotary one. Now that’s an idea!

This is more or less what Isaac Singer did in 1850. It didn’t hurt that Mr. Singer was an engineer, or that he was extremely OCD. But it also didn’t matter that he hadn’t spent years using a sewing machine, either. Instead, he saw a sewing machine being repaired, became intrigued with the concept of making it better, and eventually stumbled on his idea.

I think this is a template for how many good ideas come about. You need someone with a good amount of knowledge in the relevant area, combined with that same person exploring a general concept by doing specific, unguided work. It doesn’t hurt to be OCD, either.

In order to come up with a great idea, it is necessary to have deep knowledge in an area like engineering, design, organization, etc. However I’m not sure it’s possible to have a great idea without investigating some other, less valuable ideas. That takes time.

I’ve had a few friends begin what they called “startups.” However none of them had really nailed down the idea that they were actually going to implement. In the process of building their original concepts, they all realized that they should have been doing something a little differently. They should have been happy! Their second version of their concepts were most likely more valuable than the first versions. However, making major adjustments midstream can be difficult and costly. Especially for those have raised money, recruited people, or build software that they now had a personal attachment to. In all cases, this process of change and improvement led to stagnation, or to spectacular collapse.

So the conclusion is simple: if you’ve got an idea, think of it more as a concept. You probably won’t have a truly great idea until you explore that concept with specific work. Work on your concept. The concept could be anything, but it helps if you have deep (and broad) knowledge of a closely related area. But do work on your concept, regardless of what you know. You don’t have to work very hard, or very often. But you do need to explore it for a while. Some things just take time, and lots thought.

Talking to other people about your concept can be helpful. However don’t do something stupid like raise money, hire someone, or quit a job that you like, in order to work on a concept that you have fooled yourself into thinking is a well formed idea.

Edison worked on many things. Usually, he worked alone. He took pride in his failures, as he thought trying out flawed ideas got him closer to good ideas.

However even Edison got married to ideas that did not survive the test of time. He did not accept that alternating current was a viable technology. Not only did he smear Westinghouse and his company publicly over the issue, he even invented the electric chair to prove how dangerous alternating current could be. Eventually, Edison accepted that alternating current was a good way to deliver power to home and businesses, and his company started providing it. The electric chair is no longer used in the United States, though a few states still allow it.

Don’t think you have it all figured out. Don’t be a slave to your own half-baked ideas. But do work on them. Eventually, you may discover something meaningful.

So my advice (to myself) is simple: work on you ideas. Work diligently, but be flexible. Some things take time to figure out. Sometimes you need to take time off from working on something, to let your mind make more sense of it. So work on several concepts, or at least a couple variants of a singlecocept. Take vacations. Have faith in yourself, but be objective about what you have actually come up with. Most of all, don’t put pressure on yourself to have that great idea. It will come. But if it doesn’t, you should not have to explain to your parents, investors, employees, girlfriends, and moreover, to yourself, why you have committed to a great idea that you now realize isn’t so great, or wasn’t an idea at all.

Just work on your idea. And talk about it, if you find that helpful and enjoyable. But don’t make irreversible decisions or sacrifices, if you can avoid them. Don’t quit your job to work on the idea. Just work on the idea. Don’t become committed, and don’t commit anyone else, unless you actually have something worth committing to. You might be surprised how far you can go, working without outside financing, during the time that your current employer doesn’t pay you for.

Anyway, that’s my take.

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After I left my job with Google over a year ago, I was briefly involved with a friend’s startup. Despite an intriguing concept and plenty of financing, the idea failed somewhat spectacularly. My friend wanted me to come in and fix it. We had disagreements and I ended up not being involved for very log. I spoke to him much later and apparently they’d made some major changes. I hope things work out for him.

That said, my experience showed me some ways of how not to develop a concept into a startup. My friend is a creative type, and a very successful businessman. He wanted to build an online virtual community around a theme that is very important to him. I still think he had a good concept.

He hired some guys to build the interface for his community. Unfortunately, they were not qualified to build anything of the sort. They were graphics guys, and had very little idea about engineering. They in turn hired some other guys, end the whole thing ended up as a mess.

Early on, someone decided that the community’s interface would be accessible via a web browser, using Flash. I’m not sure who made that decision, but it must have been made early on. Until I came on board, I don’t think anyone asked why the decision was made. I doubt they considered many alternatives.

I’m sure that if I spoke to my friend today, he wouldn’t agree that the use of Flash was the reason that his venture had so many problems. He’s right, of course.

However, using Flash meant that the company hired (and later fired) a bunch of Flash developers. It also meant that they hired a guy to build 3D objects in Flash. They hired a contractor to build a major component of the interface, also in Flash. All of these people were difficult, and very expensive.

In the end, they produced a prototype that crashed, loaded slowly, and didn’t size properly in different browsers. Some of the graphics were beautiful, but they didn’t look good in a web browser window. Any experienced engineer could have told you that this would happen. I’m not saying that Flash is garbage, but rather that it is not well suited for what they were trying to build.

They should have build a stand alone executable that accessed the web (in Java, for example, or anything else). Not only would this have succeeded easily where Flash proved difficult, but hiring would have been much less difficult. The guys running this venture were not qualified to interview and hire engineers. However, they were further handicapped by being forced to hire “Flash developer” engineers. If they’d searched for Java engineers instead, they would have had a much larger pool to choose candidates from.

Again, this is not the reason that my friend’s venture failed. But it does show how running with a concept (posing as a well-formulated idea) can be very expensive. The concept of “let’s build a beautiful virtual world for X” was a good concept. But to build a “multimedia virtual world for X using Flash” was never a good idea.

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