I'm glad he made the leap from school tests to funding tests, as it seemed to be a thinly veiled analogy from the start. I'm disappointed, though, that he didn't take the final step and admit that money itself is also a poor, hackable test.
Funding, growth, usage -- these are all still one level removed from something worthwhile or beneficial. Cigarettes have amazing usage numbers even in 2019.
I'm waiting for the entrepreneur who will say he doesn't care how much money he makes or how many customers he has, only that it's worthwhile and needed doing.
> I'm waiting for the entrepreneur who will say he doesn't care how much money he makes or how many customers he has, only that it's worthwhile and needed doing.
This is literally all of open source software. The problem here is that you're waiting for an entrepreneur to say this, which is the wrong kind of person to expect this from.
Possibly. But for a little while, I did hear about "lifestyle businesses", i.e., the idea that you could be financially sustainable in tech without needing massive growth.
And these days, I think most of the open source software I use was actually contributed by a corporation.
Be careful of believing what you hear. There are still plenty of lifestyle businesses, they just don't seek out or receive much publicity.
The media buzz is dominated by mostly-not-very-good VCs and mostly-not-very-good startups trying to find and impress each other. The VC market is designed to seek out the "unicorn" companies whose value will grow 1000x, and so the companies that might be that and try to look like that get the most buzz. There's nothing wrong with starting or funding that kind of company, but it's not for everyone, and it certainly isn't all that's out there.
It's still viable to start a smallish lifestyle business that produces enough money for yourself and doesn't take a ton of work to keep going, but will never grow to be 1000x the size. It's just fine if that's what you want to do too, but know that such businesses usually don't market too much, either for customers or investors. They don't want VCs, and VCs don't want them either.
Is it not because rent keeps going up while "entrepreneurs" use their work with minimal attribution and certainly no financial contribution to get rich? The same "entrepreneurs" who then act entitled to free support from the same developer struggling to pay the rent?
I think they're really just trying to solve the problem of "how do I afford to eat while still supporting software used by Facebook to make billions of dollars"?
I think this is an excellent point. I really agree with pg's thesis, but I think it would be worthwhile for him to go more in depth into the "edge cases" he talks about in passing, mainly because I think these edge cases actually bolster his thesis, not detract from it.
Companies like Theranos and WeWork succeeded for a short while because they tried to "hack the test". E.g. Theranos hacked the metrics of "buzz", "investment amount", "notable people on your board", but they didn't actually have a working product. Adam Neumann certainly "hacked the test" to the tune of a billion plus dollars, but WeWork certainly didn't succeed (I'd note there is still a critical difference between Theranos and WeWork in that customers actually really like the product WeWork provides, the question is just can they provide it profitably).
I think hacking the test can get you so far in the startup world, but eventually reality rears its head and what matters is whether you can provide a product people want, profitability.
One quick note on your cigarettes example. The problem here is that companies are giving people what they want, they've just figured out how to "hack the test" so to speak with respect to what the human body wants. This is basically the case with all addictive substances - there is essentially a hackable part of the human "desire" subsystem that people have taken advantage of.
Theranos issue was not lack of product. Their problem was massive fraud going effectively demanded from top levels.
Framing it as lack of product is unfair to all startups who lacked good product, hacked buzz, got investment, got notable people and then did not committed fraud.
Plus it suggests that Theranos fraud is result of not having product. The same people would be engaging in unethical conduct with product too.
Disagree. "Not having product", when you say you DO have product, and are very specific about the capabilities of said non-existent product, is the actual definition of fraud.
What's about homeopathy? It is advertised to have medical benefits, presumably has none, and is a multi-billion business, with many companies which exist for decades and decades.
For any non-trivial product there's information asymmetry problem, so pretty much everything is hackable, but to different extents.
You are implying that PG thinks money is all important - but he doesn’t think that.
PG: if you had to boil it down to one quality to look for, authenticity would be the most important one. “You’re looking for people who are real friends,” he said to Chang. “Not just for people who got together for the purposes of this startup. You don’t want people who were in it just for the money.
He also talks about how that startup founders that are more interested in the product or the challenge of building a business, make buttloads of cash as a side-effect.
And YC funds nonprofit startups too?
Also from another 2004 PG essay:
“””Money Is Not Wealth
If you want to create wealth, it will help to understand what it is. Wealth is not the same thing as money. [3] Wealth is as old as human history. Far older, in fact; ants have wealth. Money is a comparatively recent invention.
Wealth is the fundamental thing. Wealth is stuff we want: food, clothes, houses, cars, gadgets, travel to interesting places, and so on. You can have wealth without having money. If you had a magic machine that could on command make you a car or cook you dinner or do your laundry, or do anything else you wanted, you wouldn't need money. Whereas if you were in the middle of Antarctica, where there is nothing to buy, it wouldn't matter how much money you had.
> I'm waiting for the entrepreneur who will say he doesn't care how much money he makes or how many customers he has, only that it's worthwhile and needed doing.
Closest to this today might be Elon Musk, maybe...but there are other complexities there?
> I'm waiting for the entrepreneur who will say he doesn't care how much money he makes or how many customers he has, only that it's worthwhile and needed doing.
I believe this is the role of the nonprofit sector.
I think it's PG who mentioned it in some other essays, but "non-profit" and "company" can be seen as different ways to make things happen, a different models of getting society's help with bringing your visions into the real world. Non-profits tend to depend on other people's generosity; for-profits have to earn their money directly. Both have to care about money to some extent, as money is the lifeblood of all large-scale endeavors in this world.
All of that is orthogonal to doing something worthwhile. There's plenty of non-profits that exist primarily to make money for the founders. Conversely, there's e.g. Elon Musk and SpaceX, which is a successful for-profit with an explicit, unchanging, non-monetary terminal goal: making humanity multiplanetary, by bringing down the costs of space so that it's economical to venture there and colonize Mars (you can argue whether that's worthwhile, but I think it's well proven that Musk/SpaceX are honestly pursuing space, not money).
An entrepreneur to my mind (en-gb native) is "a person who takes on the risk and reward of a new business venture, particularly a novel business (in the geographically area they are in)".
What matters is not whether one starts a company, but why. A company is a way to get money and manpower to help one realize their goals. The important question is, what are their goals? Making money? Or building a product? Unfortunately, most companies are about the former (despite what their marketing copy says).
Pretty hard for companies to not skew very heavily towards being about making money when people require money for food, shelter, and healthcare (at least in the states).
Unless the people involved are in a financial state where they are not dependent on revenue from the company, or we divorce survival from capital, I doubt it's really possible for "not making money" to disappear as a terrifying core motivator for every business and every employed person regardless of whether their marketing copies are disingenuous.
I'm not saying companies should not make money. I'm talking about instrumental vs. terminal values. Money can and should be viewed as means to an end, as instrumental for achieve the company's purpose - be it feeding people, making good tools or getting them to space. But very often it becomes terminal - the company's purpose becomes making money, and what they do becomes means to an end. The entire structure becomes reversed.
Like Wozniak? Twitter launched without a business plan, Jack was on the Colbert Report in the 2000s saying he'll figure out how to monetize it eventually. I really question how much Uber cares about money recently...
An entrepreneur is somebody looking to start a company in my mind. I didn’t look up a definition, though.
Regardless, Jack knew he needed to make money eventually is what that shows. Uber may be foolish in its attempts to make money, but it absolutely is trying to in the long term.
There are other people that intend to swindle people (make money for themselves, not the company).
There are other reasons to start a company, but then you have an expensive hobby. If all you ever do is blow money you didn’t earn (your inheritance) starting businesses that fail, at best you are going to be called a failed entrepreneur.
The real final step is admitting that the "worthwhile and needs doing" judgment in your head is also a test, which isn't always more reliable than the tests you face in university or the test of money.
Those metrics reveal something intrinsic though. Take cigarettes.
They're bad, not liked, etc etc. The usage in 2019 reflects something deeper: their effectiveness, perhaps a cohort effect and the difficulty of quitting, and a certain value proposition.
There's a term I'm perhaps misusing which is: revealed preferences.
This statement is perhaps a stretch but maybe what paul meant is that learning history for history's sake is helpful but learning potentially untrue test patterns (aka launching on a tuesday to try to maximize funding) is not.
This might not get a lot of traction but it seems your last sentence describes the Ayn Rand novel where the guy spends years toiling in anonymity versus his peer who is "fake" and successful, where the value is in the work itself.
Funding, growth, usage -- these are all still one level removed from something worthwhile or beneficial. Cigarettes have amazing usage numbers even in 2019.
I'm waiting for the entrepreneur who will say he doesn't care how much money he makes or how many customers he has, only that it's worthwhile and needed doing.