Startups

It’s worth discussing the difference between growth and grind mindsets. Growth is the process of learning, improving, and evolving–ideally in an upward trajectory. Conversely, grind is working hard, often to the point of exhaustion or burnout. The former is aspirational; the latter is…something else. I think most people are taught to grind rather than grow.

I’ve noticed a trend amongst startups (particularly those in the financial-ish space) which amounts to some variation of “hey guys, maybe we can get customers if we use memes?”. This is not dissimilar to the “viral” craze of the early 2010s in startup land, where a number of companies raised mountains of VC cash entirely on some silly app gaining millions of users overnight.

I saw a discussion on Reddit about entrepreneurship recently that got me thinking. What’s the point of being an entrepreneur when the odds of success are incredibly low? This is especially true if you’re low on resources or clout. For me, the reason I want to be an entrepreneur is simple: I have valuable skills and I want to work on things that I care about.

One of the hard truths in startups, especially VC funded startups, is that perception matters more than reality. Many people are able to raise vast amounts of money at high valuations on little more than excitement about the prospect of a viable business some time in the future. Most VCs earn their living from fees, and they earn more in fees when valuations go up, followed by subsequent funding rounds, with larger amounts of capital invested.

I really wanted to be a founder of a successful startup (where successful to me means the company can pay its own bills, and pay employees well). However the reality hasn’t matched my ambition and I’ve decided to find a job like a regular chump. I assumed that with work ethic, skills, persistence, and plenty of trial and error I could eventually find success.

Starting any company is hard. Startups are even harder. If you want to start a company but don’t have a business idea, then the first step is figuring out what to build. Is this…a startup idea? The main difference between a small business and a startup is your level of ambition, and how much money you can raise.

Dopamine is a chemical in our brains associated with good feels. Rather than explaining it myself, I’ll share a quote from the book “The Righteous Mind: Why Good People Are Divided by Politics and Religion”, (pp. 102-103): All animal brains are designed to create flashes of pleasure when the animal does something important for its survival, and small pulses of the neurotransmitter dopamine in the ventral striatum (and a few other places) are where these good feelings are manufactured.

I don’t like making predictions, but one prediction I do have is that many future big companies will be what I call “skin in the game startups” (you heard it here first). Having skin in the game simply refers to sharing risk and rewards with a counterparty. In startupland, angel investors have skin in the game: they give money to founders to help them start a business in exchange for equity with the hope that the business will become more valuable in the future.

Make something people want Y Combinator has a famous motto: make something people want. The first reference I could find to that motto was this blog post from Paul Graham. I think it’s a great motto: people will pay for things they want, thus you can make a business out of it.