We get into a mindset that this is the only way to start a business, particularly in technology. And while I think you have touched on a number of good points, as did the original poster, I think we need to come back to the reality that businesses have been started for a long time in many different ways. My father, grandfather, great grandfather, and great great grandfather have all been in business, they have all started them in different ways and in different industries. "If you start a startup, it will take over your life to a degree you cannot imagine." That is a strong and hyperbolic statement. In fact, with all respect to Sam Altman, his entire statement is quite hyperbolic.
Can a business take over your life? Absolutely not!
Can you allow a business to take over your like? Absolutely!
I have been involved in and started a number of successful businesses. I am also actively involved in my marriage (I have had exactly 1 wife, we've been together for just a bit). I have 6 kids. I go to birthday parties, soccer games, teachers meetings, and camp outs. I even volunteer at the schools.
What happens when someone wants to schedule a meeting when my wife has dinner ready? I tell them to move it.
What happens when an investor flies in and wants me to take them out for a night on the town when it's the choir performance night at the elementary school? I tell them I can't.
Have I had investors leave me because I would not play their social games? Absolutely! And I was glad that I didn't have to deal with them again.
Now, have I missed things? Yes. But I have gotten pretty good at looking at a schedule and planning around things. I want a close personal relationship with my wife and kids, so I have made that my priority.
When people ask me how I do it, I tell them honestly. I am the CEO/CTO/CIO, I make the rules for me. I am not a slave to my company nor its success.
Bang on - I couldn't agree more. Wish I could +10 this.
My version of that is that there's a difference between living to work and working to live. It's really up to you, how far you allow your business to encroach on your personal life; it's up to you how much of a workaholic you want to be.
I see my kids every morning, have breakfast with them, and drive them to school. I have dinner with them every night, albeit at 2000, and they're very young. There's a (stereotypical) North American mentality that dinner needs to be early for children, that they can't stay up late, and then there's the rest of the world. Kids can nap for an hour or two around 1630/1700, life won't end.
Call me during dinner time, and you're instantly on voicemail. Employees know it, investors know it, business partners know it. Dinner is sacrosanct, I've literally never missed dinner with family.
Some people will leave you, some people can't work that way- but that doesn't mean your company can't. Sometimes that means losing great talent, there's a shocking amount of the world that (currently) NEED their work to be all consuming. That's okay, it just means my companies aren't for them.
A shocking number of investors actually get this, and respect you for it. There's no need to dance around the 'knowing what you will not bend on' phase - because you're up front. Equally, the approach helps you focus on the time you do have. It helps you maximize the time you're using, because of the need to get what's truly important.
Businesses will come and go. Fortunes will be made and lost (hopefully made!). But you only have X years. If you want to spend them engrossed overarchingly in business, there's nothing wrong with that. If you're like @trcollinson, and others like us, then family is the priority.
This ingores the bias of investors. The original post is quoting investors, so I don't think its a speculative bias. You seem to be suggesting to ignore the wisdom of "know your customer"--and for many founders/ceos investors are as critical a customer as any (equity is just another a value added product).
If we want to look at investors through the lens of a customer, I think that we should also acknowledge that sometimes you need to fire / turn down a customer. Different investors have different expectations, and compromising fundamental beliefs about how you want to run your business in pursuit of cash is going to be a horrible experience for both you and the investor in the long run.
People join YC to get the contacts and credibility to implement this strategy. But suggesting that they have the ability to implement such a strategy before having such credibility is flawed. The conditions precedent for it to be a viable ptactical are not in place. That's all I am saying.
Chelsea Clinton or Ronan Farrow doesn't need to do Y combinator if they want to launch a startup, they have their parent's rolodexes as assets on their balance sheets. But most people are looking to "raise social capital" along with raising financial capital. And to do this, other considerations come into play.
Of course, one can always use a calculated social transgression as a form of breaking into the establishment. That's also a proven stragegy, but its not without its own risks and is really beyond the scope of what started this comment thread. But it does need to acknowledged, so that's fair.
All great points, but you are also missing the context. Altman and PG and Andreesen aren't talking about starting businesses that are generally sustainable or considered "lifestyle." They are specifically and narrowly focused on trying to build $1BN+ dollar companies that have insane growth rates in competitive markets.
You can't "miss things" in that context - especially strategic investments - because they will be picked up by competitors who will "out hustle" you.
I feel like the YC folks either haven't done a good enough job clarifying that they don't speak for "all businesses generally" or the community is assuming that they are.
All great points, but you are also missing the context.
I don't think he's missing the context, he's explicitly rejecting the assumptions behind this position.
They are specifically and narrowly focused on trying to build $1BN+ dollar companies that have insane growth rates in competitive markets.
Altman and PG and Andreesen are not building anything, they're focussed on investing in companies which have insane growth rates. That is not a fatuous cavil - that's a very different thing and sometimes puts their motivations at odds with those of company founders. An investor does not have the same incentives as someone building a company, and it's little wonder they want as many people as possible to grow fast or burn out trying.
You can't "miss things" in that context - especially strategic investments - because they will be picked up by competitors who will "out hustle" you.
Is hard work always rewarded? Is giving your life over to your company going to make it succeed? I'd argue there is a far more complex interplay of forces in the success or failure of companies - often it'll come down far more to who they know, or who their investors know, and whether they can come to the attention of the right people in order to have an exit (which just happens to be a great outcome for investors).
Founding a company is extremely hard work, often underestimated, and often all-consuming, but it doesn't have to take over your life completely, and I'm not sure it's healthy if it does. Success has many different definitions, and there are many routes to it.
I entirely see AndrewKemendo's point. But yes, you see my position correctly. In fact, I would argue that Altman, Andreesen, PG, et al. are not even "trying to build $1BN+ companies". They are investing their money in High Yield High Risk markets. And their track records and returns show this. They have funded 716 companies. 3 are worth north of $1BN. 20 are greater than $100M. [1] Their track record is amazing, but ~97% of the business's they have invested in have not "made it big", so to speak.
A good friend of mine owns a very successful real estate software company. At last estimate he is worth ~$300M. He started the company without traditional investors (his father did put in $10,000 to be fair), he owns the entire business himself. He has many "things"; cars, vacation homes, an island. He also has a wife and has very successfully raised 4 kids while building up his business.
The point I hope a few people can take away from all of this is that investors like YC and the like have one way of starting a business. It is successful for some, life changing for others, and entirely the wrong approach to business for yet a different group. There are many other ways to start a business, technical or not. grey-area, I am with you. It is not healthy to have a company consume you completely, and it is not necessary for a business to succeed. Work hard, understand your market and most importantly your customers, build a product your customers enjoy and need, and you will find success, possibly the variety that makes you $100M+.
The fact that most of the companies don't hit $1 billion is not at all relevant. That's to be expected when hunting for companies that are rare by definition (black swans). It speaks nothing to the intent of the investors.
But it makes all the difference to the companies they invest in, even the ones that don't make it big and the same goes of course for the founders of those companies.
If YC and their competitors want to maintain their pace they have to have everybody aim to swing as hard and as high as they can otherwise those successes won't be there either. If they knew up front who will succeed they would not be using this model.
I don't think he's rejecting them because he isn't saying "I'm building a slower business" or "I'm not looking for explosive growth" - things I have seen people say that indicate they know the distinction and are rejecting it.
Agreed on the building vs investing - however my point stands, they are pushing forward the mantra of MASSIVE disruptive companies.
To the rest of your points, in my opinion those factors are held ceteris paribus compared to how hard you hustle - largely because they are generally out of your control, that is unless you are hustling.
As an example, I had NO (as in zero) network in the Angel/VC startup world in D.C. 2 years ago. Now I have quite a robust network and it wasn't because I knew someone, it was because we were building something great and I went out found who was who and talked to them. It didn't take over my life, and still doesn't but it does take up as much as possible. I am after all typing on here.
"What happens when someone wants to schedule a meeting when my wife has dinner ready? I tell them to move it."
I'm curious if when you tell them to move it how you say that and if you give them a reason why?
In other words do you tell them "sorry I can't because that's when I eat dinner with the family" or "sorry I can't I have my kids soccer game" or just "that time doesn't work for me" etc?
Can a business take over your life? Absolutely not! Can you allow a business to take over your like? Absolutely!
I have been involved in and started a number of successful businesses. I am also actively involved in my marriage (I have had exactly 1 wife, we've been together for just a bit). I have 6 kids. I go to birthday parties, soccer games, teachers meetings, and camp outs. I even volunteer at the schools.
What happens when someone wants to schedule a meeting when my wife has dinner ready? I tell them to move it.
What happens when an investor flies in and wants me to take them out for a night on the town when it's the choir performance night at the elementary school? I tell them I can't.
Have I had investors leave me because I would not play their social games? Absolutely! And I was glad that I didn't have to deal with them again.
Now, have I missed things? Yes. But I have gotten pretty good at looking at a schedule and planning around things. I want a close personal relationship with my wife and kids, so I have made that my priority.
When people ask me how I do it, I tell them honestly. I am the CEO/CTO/CIO, I make the rules for me. I am not a slave to my company nor its success.