Insight From Dropbox: Failure Is Not The Worst Outcome, Mediocrity Is

This post reminds me of Paul Buchheit's definition of startup advice:<p>Limited Life Experience + Overgeneralization = ADVICE<p>The argument posed by the author looks good so long as he selectively chooses his examples (dropbox in this case). There's far too much chaos in startups to ever know what the best possible outcome is, so a founder can never come to the proposed conclusion of mediocrity (in fact, there's so much gray area that any conclusion is really just a reflection of founder confidence).

around 9 years ago I started a startup with three other guys. One of them left pretty quickly because he'd rather keep his daytime job, the three of us presed on. After around two years two of us thought that this particular startup wasn't worth pursuing, because it would never take off big-time. We'd basically missed our window of opportunity.<p>So we gave our shares to the last guy, and he's still running the company today - 9 years later. We've gone on to do other things, which are arguably more exciting, while he still sits around with two employees and tries to squeeze every penny out of the business while going nowhere.<p>Leaving was one of the best decisions I ever made. Leave or shut the company down if it enters a quagmire.

There's something about this that makes me slightly uncomfortable. It seems to me that there's a very fine line between perseverance and mediocrity (probably the same fine line between self-belief and self-delusion). I can, for instance, think of a number of startups that 'languished in mediocrity' ... until they got acquired. Blogger and Gravatar, for instance.[1]<p>Has anyone a better measurement for knowing when it is mediocrity and when it is perseverance?<p>[1] Funnily enough, both acquisitions freed up the respective founders to do bigger, better things: Evan Williams to Twitter, and Tom Preston-Werner to Github.

I definitely don't regret shutting down Tipjoy. I think about opportunity cost a lot, and the cost of not shutting down was huge.<p>This comment is somewhat ironic because I'm with Dropbox now. It really is a great company.

The insight in slightly more detail:<p>&#62; The reason mediocrity sucks more than failure is very simple: Failure lets you move on, mediocrity stalls you and keeps you from reaching your potential.

I think the real insight here is that Dropbox solved an unsexy fundamental problem in a huge market. Dropbox is actually exactly what Drew's original YC application said it would be. (Aside: not all initial ideas suck. Some are good and just take a lot of work to execute).<p>If Drew had carried on working on the test prep idea, it would have probably grown into something bigger within the broader education market, which seems to be popular with a lot of startups now.<p>To achieve huge success with Accolade, the product would have to expand out into new areas, unlike Dropbox, where the basic product itself caters to a huge market.

What's wrong with running a business indefinitely with modest growth? There are tens and thousands of small businesses all over the world that survive for years and years and their owners genuinely enjoy running them.

That remembers me the history of Angry Birds creators: Should they have stop after 6 years without a huge success ?<p><a href="http://thestartupfoundry.com/2011/03/11/angry-birds-overnight-success-only-took-8-years/" rel="nofollow">http://thestartupfoundry.com/2011/03/11/angry-birds-overnigh...</a><p><a href="http://news.ycombinator.com/item?id=2314532" rel="nofollow">http://news.ycombinator.com/item?id=2314532</a>

I think that's fine if you spend other people's money. For boot strapped I'll always go for mediocre instead of failure.

SAT preparation may be a <i>"Super-competitive category, and it was going to be hard to differentiate."</i> But you could say the same thing about online storage. I guess differentiating, and building something special, comes down to the ability and creativity of the entrepreneur, and knowing yourself enough to know whether you've hit a dead end or not.

This seems to go along with the "fail fast" philosophy that has been so popular recently.

I agree with this. In retrospect, I'm so glad I failed because of the time it saved me. The only thing worse than a failed startup is a funded failed startup, because the latter takes up 4+ years of your life, which is why it's interesting reading about Drew's exp with the SAT prep idea. Failure is totally worth it so long as you learned from those golden mistakes and are improving yourself to give yourself an edge the next time around.<p>I think the worst startup founders are the ones who go from one idea to the next without really thinking about what went wrong or what they need to do differently in order to improve their chances of winning. They think mere repetition is going to make them lucky.<p>Conversely, I think the best startup founders are the ones who are persevering and determined enough to not stop taking chances, but they're also continually investing more time in training and improving themselves to get an edge. Failure for them is a great learning experience. Max Levchin had four failed ventures before PayPal.

I understand the glamor of writing posts like this -- Yeah! Look at us (or them). We/they don't even care about money. It's all about building something incredible...<p>You won't often find these types of posts from people or about people who aren't wildly successful already.

The article fails to mention that the online storage space itself was considered quite competitive at the time. Yet Drew Houston was able to pull it off. It's a bigger space than SAT prep, but given the right entrepreneur, either could have been successful.<p>Chris Dixon had thoughts on this in an earlier posting: <a href="http://cdixon.posterous.com/dropbox-and-why-you-should-invest-in-people" rel="nofollow">http://cdixon.posterous.com/dropbox-and-why-you-should-inves...</a>

I quit my full-time corporate job to create a start-up exactly a year ago. Worked without a salary for 9 months but had a vision. Product tested, launched and closed a Series A round of funding.<p>The goal now is to continue to work towards the best idea. The original idea got us here, now we need to keep growing it and pursing it - not get comfortable where we are. It's important to put goals to see where we'll be a year from now to take the company from here to great.

Thanks for the article it's given me a bit to think about. I've been running a web design business for 5 years and I would say it's well and truly stuck in that word you used. But it's hard to know whether you are the smart + entrepreneurial type or just a small business operator and it's hard to know what else to do as well. Thanks for the post though it's food for thought

Dharmesh, are you saying it would be a bad thing to have a world with many profitable startups much smaller than Dropbox?

Stories like this underscore the caveats to the idea that determination is the most important (controllable) factor in startup success. I think it is, but the right strategy is often to abandon a bad or mediocre company to focus on one that can be great. Don't fall into the trap of determination for determination's sake.

Mediocrity is not only a worse-case in startups. A 'comfortable' standard of living, a 'comfortable' desk job which pays the bills and doesn't encourage much development... <i>that's</i> the worst.

I think Rovio might disagree. Google might also.