Highlighting Matt Maroon’s “Why Not To Do A Startup”

Some key take-aways from a blog post by Matt Maroon on “Why Not To Do A Startup”

Matt Maroon on “Why Not To Do A Startup”

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.”
Matt Maroon in “Why Not to Do a Startup“

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.”
Matt Maroon in “Why Not to Do a Startup“

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.”
Matt Maroon in “Why Not to Do a Startup“

Perhaps we should introduce the first group to the second. But this affluenza isn’t limited to startup founders.

Your Mileage May Vary

“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.”
Matt Maroon in “Why Not to Do a Startup“

I don’t think this is true: 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.

“While this is mostly true, it’s really the case against doing anything especially ambitious, not just starting startups. You could make an almost identical case against trying to write a great novel. The novelists you hear about in the press are the successful ones. Most people who try fail. It sucks up huge amounts of time regardless. The community is littered with sad, failed novelists. And are the ones who succeed satisfied? No; they just start another novel.”
Paul Graham in HN thread on Why Not to Do a Startup

Don’t Underrate The Rewards of Autonomy

Some folks win big, but many do well, especially when coupled with:

“Don’t get me wrong there are a ton of benefits to startups other than the money, and they’re written about extensively. Working for yourself is, for many people, the only way to go. I’m one of those.”
Matt Maroon in “Why Not to Do a Startup“

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.

Updates

Update Dec-12-2008: Matt Maroon wrote a good post on this same topic “A Little Better Advice” Here are some key points (bold added):

• Back when I was a B-list professional poker player I got a lot of inquiries from people I didn’t know asking me if they should go pro. A lot of other pros who were asked that question said no every time. And they weren’t really wrong to do so, because if you’re asking someone you don’t even know that question, no is at least 75% likely to be the correct answer.
• It’s not a very helpful one though. So instead of just giving them a flat out no, I asked them a bunch of questions. Do you have kids to support? How much do you need to make each month to make ends meet? Do you have enough saved up to break even for three months (or six if you’re playing live) and still have a bankroll left? What’s your win rate and sample size?
• A lot of people probably ignored everything I told them anyway, just as they would had I said no (or yes for that matter, since they were going to anyway, though they’d blame me if it went badly for them). But I know I saved a few people from a lot of agony, and ended up encouraging a few who went on to have success with it. By not advising them one way or another, but rather giving them more information, I helped anyone who I could, and I at least didn’t hurt the rest.

Update Oct 18, 2009: I removed all references to “awesome highlighter” and retained focus on Matt Maroon’s article.

Update Mon-May-29-2023 I recovered https://web.archive.org/web/20080324040614/http://mattmaroon.com/?p=340 from Archive.org

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