Interesting to see how this aged. By my reckoning:<p>1 (Single Founder) - people just ignore this one, more or less.<p>2 (Bad Location) - this one became a horrifying monster that devours everything it touches.<p>3 (Marginal Niche) - probably the biggest killer, then and now.<p>4 (Derivative Idea) - meh. People worry about this too much. Is there an unserved market?<p>5 (Obstinacy) - on point. Serve the market.<p>6 (Hiring Bad Programmers) - This one also became a horrifying monster. Graham says "In practice what happens is that the business guys choose people they think are good programmers (it says here on his resume that he's a Microsoft Certified Developer) but who aren't." Darkly hilarious in hindsight.<p>7 (Choosing the Wrong Platform) - meh. People use fucking backend Javascript now.<p>8 (Slowness in Launching) - Pretty valid.<p>9 (Launching Too Early) - maybe, I guess.<p>10 (Having No Specific User in Mind) - absolutely important. You have to be serving a market.<p>11 (Raising Too Little Money) - this pendulum has swung way over the other way now.<p>12 (Spending Too Much) - Yes. (Hiring too much. Stop trying to feel like an important funded company.)<p>13 (Raising Too Much Money) - Something of a subtle point, but still an important one - especially now that you can get too much money thrown at you more easily.<p>14 (Poor Investor Management) - of course.<p>15 (Sacrificing Users to (Supposed) Profit) - I'll just note that Graham writes that Google puts users first. Hindsight!<p>16 (Not Wanting to Get Your Hands Dirty) - Graham means with sales work. Very much true.<p>17 (Fights Between Founders) - This is why you vest, I guess. Graham was still down on founder vesting at the time.<p>18 (A Half-Hearted Effort) - I mean, why put in more of an effort if you have a route to fail upward?
In the Wrong Platform section he mentions how the new PayPal CEO wanted to switch the company to Windows and “Fortunately for PayPal they switched CEOs instead.” That CEO they gave the boot? Elon Musk.<p>It was probably still a good decision and maybe we wouldn’t have spaceX or Tesla without that change, but still hilarious!
The REAL mistakes that kill startups:<p>1. Not solving a real problem - Product / market fit<p>2. Raising Too much money - Growing beyond ability for the market to support<p>3. Hiring the wrong people<p>4. Too much founder ego<p>5. Too much founder inexperience combined with a lack of a
desire to learn<p>6. Focusing too much on investor needs vs. customer needs<p>7. Spending too much money<p>8. Perfect is the enemy of good - Start small, think big, iterate often.<p>I think single founder issues, so-called "bad location" issues, derivative ideas are not really issues at all. The top 7 will kill you even if you have great locations. And there are many examples of great business started by sole founders outside the high expense "prime" locations.
> PayPal only just dodged this bullet. After they merged with X.com, the new CEO wanted to switch to Windows — even after PayPal cofounder Max Levchin showed that their software scaled only 1% as well on Windows as Unix. Fortunately for PayPal they switched CEOs instead.<p>It’s pretty funny to see that in 2006 Elon Musk didn’t even deserve a mention of his name. How things have changed...
Hiring bad programmers is so common it's crazy. Most hacker news types probably won't know this, but there are so many startups out there than aren't VC backed and they have a limited dev budget. They try and hire who they think is good, spend all their money on programmer salaries, and then what get's built is a total turd. They never get traction because they keep failing to launch. Company dies. All too common.
Very insightful, as with most of Paul’s work. But it also shows a very specific mindset. In my opinion #15 was wrong back than and is even more obviously wrong now in 2020.<p>The idea that you have to build first and monetize later has barely worked for some and forced many many many others to sell at no gain or close. We mostly saw the successful ones, but what happened recently with the likes of wework is causing that perception to shift.<p>#16 though is super important, and not just from the programmer direction. A good founder needs to understand the moving pieces of their startup, regardless of whether they have the training for that or not. I’m not saying they should be the ones to lead the effort on something they have no clue about, but they should be able to understand it. This is critical for single founders and important for multiple founders who make decisions together.
The only mistake that kills startup is running out of money. Every other piece of advice is hand-wavy at best and lacks context. For example - How much is too much to raise? How much is too little? What constitutes a bad programmer?
> Many of the applications we get are imitations of some existing company. That's one source of ideas, but not the best. If you look at the origins of successful startups, few were started in imitation of some other startup. Where did they get their ideas? Usually from some specific, unsolved problem the founders identified.<p>I’m not sure if I’d agree with that point. Google were not the first search engine, Facebook was not the first social network, etc.<p>I mean, for a user perspective, Google literally worked like other search engines at the time. You enter your phrase, see results.<p>Of course the results were better than Yahoo, the user-interface cleaner, etc. But that’s definitely incremental value for the user, not a whole new category of product.
I bet many of you have read all of Paul's essays, I thought I have read this one. I didn't know this one exists until today. Many of the points in 2006 are still hold true
Shameless plug - I put (almost)all PG essays in podcast form here:<p><a href="https://www.roderick.io/feed/pg" rel="nofollow">https://www.roderick.io/feed/pg</a><p>This is the rss(xml). In most podcast apps you can add a podcast by url.
I'm gonna take a stab at assessing the relevance of the mistakes to a self-bootstrapper:<p>1. Single Founder: Plenty examples of successful bootstrappers on Indiehackers. There are also plenty of failed bootstrappers, but you likely won't hear about them obviously. The reasons pg listed for single founder failure is still valid for a bootstrapper though - it's a very lonely journey.<p>2. Bad Location: this is important for a different reason: as a bootstrapper relying on their own savings, I'd say location with low cost of living and fast Internet is the most ideal.<p>3. Marginal Niche: bootstrappers target niches since they're not focused on hyper-growth like conventional startups do.<p>4. Derivative Idea: not that big of a deal. Derivative ideas are pretty common amongst bootstrappers. You spend less time finding product/market fit if you work on popular/derivative ideas - but of course you'll also run into plenty of competitors.<p>5. Obstinacy: yeah, big killer. Be willing to adapt is sound advice regardless of your situation. The question is when do you know things aren't working well, or you just need to push a little more? Talk to users.<p>6. Hiring Bad Programmers: Definitely a killer. For bootstrappers who work alone, the question becomes am I skilled enough to build the product within a realistic scope and timeframe?<p>7. Choosing the Wrong Platform: people tend to use whatever they're most skilled at/comfortable with. It's still important that you do a survey of what's available out there before you commit, and always have a realistic migration plan when your success outgrows your initial scope.<p>8. Slowness in Launching: bootstrappers are big on the idea of MVPs and launching fast, but in practice, this is hard. Perfectionism is the bane of those who failed to launch.<p>9. Launching too Early: valid, but I imagine this is less of a problem for bootstrappers since you likely don't have much attention at the initial launch anyway.<p>10. Having No Specific User In Mind: totally valid.<p>11. Raising too little money: irrelevant.<p>12. Spending too much: I can't speak for all bootstrappers, but if you're bootstrapping from your own savings you're likely to be more careful with your spending.<p>13. Raising too much money: irrelevant.<p>14. Poor investor management: irrelevant.<p>15. Sacrificing Users to Supposed Profit: bootstrapped companies have to be profitable from day 1. There's no investor money to keep you going. I believe a good trade-off can be achieved here.<p>16. Not Wanting to Get Your Hands Dirty: yeah, arguably the most important one. Only way to deal with this is to constantly reach out to people and talk to them.<p>17. Fights Between Founders: totally valid, but irrelevant to single founder bootstrappers (plenty of these).<p>18. A half-hearted effort: a killer, for sure. But you don't necessarily have to quit your day job. Ideally, work part time as a consultant/contractor, and work on your business the rest of the time. It comes down to self (and time) management.
Here are relevant thoughts from 10 years later by another well-known venture capitalist (and 2x founder) Mark Suster: <a href="https://bothsidesofthetable.com/how-to-decrease-the-odds-that-your-startup-fails-e0fc13213792" rel="nofollow">https://bothsidesofthetable.com/how-to-decrease-the-odds-tha...</a>.