Sorry for the delay, but here's my pitch: http://www.collegeanswerz.com/pitch . I think it'll enable a more productive discussion of the viability of my website.
Also, check out http://lesswrong.com/r/discussion/lw/jmn/salary_or_startup_how_dogooders_can_gain_more/ .
I skimmed the pitch. I think you are probably correct that there is a business opportunity in this area. Nevertheless, my main view is that a good idea or business opportunity is only a small part of building a business.
Consequently, your pitch seems a bit more like a theoretical paper on a business case, such as in a class project as school. That's different from attracting consumers (who require good marketing and design, not spreadsheets) and investors (who need to believe that you in particular are capable of executing on your idea).
I will continue to recommend that you learn more about design and marketing, and ideally work with other people in those areas. Unfortunately, to fully argue this point, I would need to give extensive feedback, which would take me too much time and space to write up. I concur with the critical feedback that others have given in the thread.
A big challenge is the fact that if you are the type of person who posts on LW, then your mind is quite different from the average consumer, and you will not be very well calibrated to understand what they find attractive, usable, hearable, and valuable. Bridging this gap in perspective will take considerable work.
As for the article you link to, I agree with you there is a good expected value for you in a risky project. I will still emphasize the execution risks involved in this project. Ultimately, I think that even if you fail fast at making a successful business, you will still gain value from this project, as long as you don't burn too much time, capital, or other resources. You can always go work at someone else's startup and build skills and connections for a future startup of your own.
You could make that argument against a lot of startups.
Yes, it's probably true that there are successful startups who began with less resources than the incumbents in their industries. Yet these companies may start out with more resources than you seem to have available.
There are many business models other than launching a multi-million dollar mass consumer website that monetizes from advertising. In my view, such a business is relatively risky and resource-intensive. It seems to me that you have chosen an especially challenging business model for your first startup.
Bringing a product to a mass market is a challenge; see the examples edanm and I raised of restaurants and movies flopping because they fail to resonate with the market. The wider the market it is that you are aiming for, the harder it is to make a product that resonates with them.
So, I did not intend to sound like I was making a fully general counter-argument. I want to specifically caution founders where there is a large gap between their current resources/experience, and the demands of their business model, especially when their business model requires targeting a mass market, and they have no experience marketing to even a small or niche market.
I agree with VAuroch that this won't help much, because in general taking the inside view is a bad idea.
But if you want a few examples of places you've gone wrong - both getting a good idea, and executing a business, any business, are much harder than you imagine. For example, you wrote:
"Failure to think specifically about benefits." "The big issue here is the first bullet point. As spelled out by Eliezer's article, people are horrible at thinking specifically about the benefits that their idea will bring customers. They're horrible at moving down the ladder of abstraction. They think more along the lines of "we connect people" instead of "we let you talk to your friends". Even YC applicants (probably the best startup accelerator in the world) suffer from this problem immensely. I think that this problem is the single biggest cause of failure for startups. (They say that 90% of startups fail? Well >99% of people can't think concretely.) However, I think that it's something that could be avoided with willpower, reading the LessWrong sequences, and taking some time to practice your new habit."
Well, not thinking specifically is one issue, sure.
But the other, MUCH BIGGER issue, is that you might not know what people want. If you're building something for consumers, there's a problem in that most people don't know what they themselves want (imagine describing Facebook to someone years before it existed).
If you're selling to businesses, then you have to actually understand the business and the market. And understanding markets is incredibly difficult. That's not to say it can't be done, but it's hard even in the best case.
Remember - Some people fail at startups built to serve an industry, after working for 30 years in that industry. They still don't manage to create a product that's good enough.
As for the idea that just executing a business is so easy:
Let's say you decided to build a restaurant. You know exactly, specifically what people want, so there's no problem with finding a good idea, and you know how restaurants work. Talk to 10 restaurant owners and you'll even have a much better understanding. Hell, you're building a business that's been done millions of times before. This is the polar opposite of a startup in terms of "idea risk".
And yet, restaurants fail ALL THE TIME. Because the execution of any business is hard. Hiring is hard. Understanding your market, TRULY understanding it, is hard and takes years of experience. Understanding how to hire and manage people is hard. The thousands of little things you do every day, are all amazingly hard. Each one takes time, each one takes experience.
But the other, MUCH BIGGER issue, is that you might not know what people want. If you're building something for consumers, there's a problem in that most people don't know what they themselves want (imagine describing Facebook to someone years before it existed).
Yes, it's very difficult to predict what people want and will actually use, especially for a solo person. Asking your friends isn't enough because they will just try to make you feel good.
To underscore your point, and try to help us calibrate risks, let's examine the risks of significantly smaller projects:
These goals are much more modest than starting a company with a mass market product, but they can still be tough for smart and talented people, and can easily use up all of someone's free time for months. And it's not guaranteed at all that someone will succeed at all in their first try at these projects.
Because executing and delivering something people give a shit about is hard. A real business is orders of magnitude more complex, risky, and time-consuming. If it's tough to make something that a couple hundred people care about, then try to imagine how tough it is to make something that tens of thousands of people care about.
Remember - Some people fail at startups built to serve an industry, after working for 30 years in that industry. They still don't manage to create a product that's good enough.
Yes. Execution is hard. Production is hard. Design and marketing are hard.
There is a big difference between class-project level execution, or demo-level execution, and professional execution that will appeal to a consumer market, especially a wide market. I believe this point has not been sufficiently emphasized in the original poster's entrepreneurship education.
Your product (rhetorical "your") is not the platonic ideal of your idea. Your project is the execution of your product. It's inseparable from the design, UI, marketing copy, and other presentational and aesthetic elements. The medium is the message.
Eventually, real consumers will face the real execution of your product, and there is an immense amount of variables involved in how they perceive it, which are really hard to predict in advance, involve the interaction of the features with design, UI, writing, etc... Predictions become really hard to make, hence, risk emerges.
And yet, restaurants fail ALL THE TIME. Because the execution of any business is hard. Hiring is hard. Understanding your market, TRULY understanding it, is hard and takes years of experience. Understanding how to hire and manage people is hard. The thousands of little things you do every day, are all amazingly hard. Each one takes time, each one takes experience.
Exactly. As another analogy, the author is like an unproven writer with a script who believe that they can make a popular movie. Or a solo game programmer believing they can make a hit game based off an idea and a demo. Yes, it's possible, but it's mega, mega risky (even creating a hit at an indie level). Even big studios with immense resource often fail at creating hits, because giving people something they want is hard, and execution/production are hard.
Instead, Prowler, which in 2013 one-quarter of graduating high school seniors created accounts on, according to Skurman, runs largely off of ad-based revenue, especially targeted advertising. It now has 21 employees (up from 17 last year), two-thirds of whom are engineers, Skurman says. The site also boasts engagement figures that stand out to advertisers, a boon Skurman hopes to duplicate with Niche. Prowler sees 1.2 million unique visitors a month, according to Skurman. Thirty-five percent of its visits come from logged in users, who are four times more engaged than non-registered users and spend 12 minutes on College Prowler. "What we need," he says, "is more traffic, and the way we get traffic is through reviews and covering big life decisions." That, and a name that doesn't call to mind a creepy guy roaming campus. With Niche, Skurman may have found both.
via http://tech.fortune.cnn.com/2013/10/10/a-website-for-rating-big-life-decisions/
It's funny, now I'm arguing for the outside view instead of the inside view :)
If they "run largely off of ad-based revenue, especially targeted advertising", and "have 21 employees", I could too. My guess is that the numbers work because they have higher CPMs because they have such a targeted audience.
My overarching point though, is that it could be monetized, not that advertising is the best way to do it. My evidence is that all my major competitors are multi-million dollar companies, and that I think I could out-do them (more users, more engaged users, better information, more brand recognition...).
My overarching point though, is that it could be monetized, not that advertising is the best way to do it. My evidence is that all my major competitors are multi-million dollar companies, and that I think I could out-do them (more users, more engaged users, better information, more brand recognition...).
But you can't put yourself in the same reference class as these companies, because it's most likely that they started out with more resources, bigger teams, more experienced founders, and/or more connections than you.
I'm not sure the typical LWer who makes it through the sequences is necessarily good at this. We've had discussions on social skills and empathy and the trouble with inferential gaps. The population (rationalist | understands potential customers) appears to be worryingly small.
I'm struggling to communicate this (let alone argue it), but I think the main problem is the inability to think specifically, not the inability to understand what it is people want. Ask yourself: once you break a demand down far enough into its components, is it still hard to say whether or not those components are things people want? Again, sorry for the poor communication; I wish I could do better. This is why I meant this article to be more of a starting point of discussion. Do you have an idea of what I mean? Could you word it better?
This is probably easier for the typical LWer, since autodidacts appear to be a non-negligible population around here, but again, much more easily said than done.
My conditions for my claim of high likelihood of success were 1) rational and 2) hardworking.
Regarding other things (hiring, cofounder, investors...) keep in mind that you just really need to satisfice, not optimize. I always try to be honest about my level of understanding, which is why I'm explicit in saying that I don't have first hand experience. But that doesn't mean I'm wrong, or naive, or idealistic. I'm judging by what I see from other first time startup founders. People who want cofounders and are hardworking and persistent usually find them. Same with investors, just keep peeling back those layers of risk. I'm talking about the chances you raise money given that you have a good idea and successfully built it. And same with hiring. Companies that have a good idea, hardworking founders, and funding rarely fail because the people they hired were so bad that they couldn't sufficiently build the product.
Just focusing on a few issues, it seems incredibly optimistic to estimate a probability of 80-90% chance of success (where success is measured in millions of dollars). The probability of each must be above 96%:
See Eliezer's comment: http://lesswrong.com/lw/jj8/why_dont_more_rationalists_start_startups/aeza. And note that I'm taking a Weak Inside View (my level of understanding isn't really strong enough to be making empirical predictions). But still, a lot of the bullet points I listed I think are >99% chance of success.
Ask yourself: once you break a demand down far enough into its components, is it still hard to say whether or not those components are things people want?
The problem is people don't want things independently of how they are presented and packaged. Design, UI, and marketing matter.
Regarding other things (hiring, cofounder, investors...) keep in mind that you just really need to satisfice, not optimize.
How do you know this? How do you know what level of optimization you need, and when satisficing is good enough?
It's good that you acknowledge that you lack experience, and that you are trying to create the starting point for a discussion. Nevertheless, a lot of your claims and hypotheses sound inordinately confident given your current level of experience and evidence. Perhaps this explains the skepticism and cautioning you are facing here.
It's possible for even rational and hardworking people to fail at execution, or to run out of money or time before they can get far enough. If you don't see why that is, then I would say that your estimate of the risks is miscalibrated. See my previous posts in this thread for more discussion.
It's also possible for rational people to be badly miscalibrated, or to start off with incorrect information, in which case their rationality is heavily bounded. As you note, there are significant cached thoughts on the subject of startups.
I'm talking about the chances you raise money given that you have a good idea and successfully built it.
OK, but how do you build your idea to a level of execution that someone will want to fund you? That's the challenge. Here are just a couple examples:
You might need a site redesign before you want to show your project to a potential investor. This will entail you bringing in an outside designer. Do you know designers who want to work with you? Do you have any ability to evaluate designers and make a good choice? Have you worked with designers before? If the answer to those questions is "no," then you have a risk of a roadblock or a subpar result. Also, you will need to spend programming time integrating with the redesign. This is time that you aren't spending developing some other aspect of your business.
You will probably have a slide presentation to show your investors. Who is going help you make it? Let's say that your designer works on it (more hours), and then you show it to a couple friends for feedback. That's still a considerable outlay in resources, and it will take time.
Need photography on your site? You either need to work with a photographer, or acquire stock photos. This requires money, taste in photography (or an advisor who does), and time spent picking photos. That's not super expensive, but it all adds up.
Merely getting a basically acceptable presentation and demo will cost a significant amount of your time. Either you need to make your designer a co-founder (which would be a tough sell since the project is so green and you have a lack of experience), or you need to pay them. You have a limited budget of time and money.
I'm sure you are motivated and enthusiastic to spend those things, but it is risky to throw money into a project that has significant team risks (since you have no team, no experience building teams, and you yourself are inexperienced at development), and market risks (just having a good idea doesn't mean that your execution of it will appeal to a market: see edanm's restaurant analogy).
Can you see why I say that it's at least plausible that you will run out of resources before you can peel back enough layers of risk to sufficiently impress co-founders and investors? It's possible for you to pull it off, sure, but the execution risks are much greater than you think, because execution is way more important than you have been led to believe. If you show that you underestimate the significant execution risks in a project like this, that itself would be a red flag to a potential investor, who can't count on you to surmount risks that you don't fully appreciate.
I would encourage you decide a point where you will cut your losses if you don't succeed, put your site on your resume, and then go be a web developer at someone else's startup until you have the skills, knowledge, and connections to try your own startup again. Your enthusiasm is a good quality, but realize that it's very possible for you to run out of resources before you can satisfactorily execute on your project to get the next level of co-founders or investors.
A lot of people are commenting on the feasibility of clearing all these hurdles, but I've got a different reason for steering clear. (It's the same reason I avoid jobs on Capitol Hill, though I live in DC). Startups require a heckuva lot of time at their inception. The thing I'm buying instead is time with my friends.
I'm in my 20s, I make enough to have a reasonable standard of life and to save/give, but not enough to retire dramatically early, by any means. My work doesn't follow me home after work, it's not the main focus of my attention, and that's just the way I like it.
I'll also add that investing a lot of your 20s into a really time-consuming job (startups, i-banking, Capitol Hill) may really slow down your chance to date and discern marriage with a partner. Again, not a tradeoff I wanted to make.
I came to similar conclusions. Seriously attempting a startup would be very time-consuming and stressful. The original poster doesn't understand why this is, because he miscalculates the execution, production, marketing, and team risks involved in his project. But unless he has a serious financial safety net, he will soon start burning through the limited resources of his money, time, and energy, which could hurt his social development.
Personally, working at an early-stage startup has a much higher expected value for me than trying to run my own thing.
I understand what you're trying to do, but have you considered that even those young women who aren't "upset" by the inclusion of that question might straight away, on the front page of your site, get the impression that this site is not for them?
I've considered it, but I figure that the value of having it outweighs this. I don't see it as something that is strong enough to draw too many people away from the site. Maybe it'd be a good idea to remove it from the front page though to be safe. What do you think?
I assume women comprise roughly half your intended target audience.
Yup, even more.
(Not to mention - are there really systematic differences in "how hot the girls are" between colleges??)
I don't know. I don't see how anyone would know without having access to a site like mine.
For the record, I don't think it should be insulting that people care about appearance. I wish I didn't care about it, but I do (it isn't fair because it's not something you can control. however, pretending that you don't care is poor instrumental rationality). I get the sense that it's human nature, and you can't really help it. That's not to say that you think someone has some sort of lower "worth" if they aren't as attractive. It's just to say that more attractive people => better chances of finding a girl/boyfriend, and more fun hooking up. It has nothing to do with respect or social/intellectual interaction, just romantic/lustful.
Furthermore, would you agree that if you succeed, at some point you might be interested in developing a relationship on some semi-official level with colleges - for example, you have a student rep at the college who drums up people to provide answers for you? Student unions can be pretty touchy about discriminatory type stuff. (Edited to clarify that by use of the word "touchy" I don't mean to imply disagreement with them.)
I'm not sure. I'll have to acquire more information and think about it. It does seem like something that is rather likely though (schools can help me get answerers, mentors, representatives). I would have to make sure that their involvement isn't biasing my site though. As for the "discriminatory stuff", it doesn't seem worth trading comprehensiveness of my site for colleges involvement.
I've considered it, but I figure that the value of having it outweighs this. I don't see it as something that is strong enough to draw too many people away from the site.
I would caution you against the Typical Mind Fallacy and believing that other people will perceive writing the way you do.
In projects I've seen, the founders and marketing people worked on marketing copy, and spent a lot of time fine-tuning the messaging. As as programmer and a LW reader, it is unlikely that you are well-calibrated about marketing and messaging (similar to how the typical marketing person would be miscalibrated about web development). Getting feedback from others is important to avoid biases in this area.
I am a web programmer / designer. I work at a startup, and I have attempted several (failed) website projects. I will offer an "inside view" from my own experience.
My main failed website was a cool idea. Everyone said it was cool. Everyone said they would use it. So I spent months building the functionality. Then I started working on the design and UI. As a newbie to design, the web design and UI sucked. The site was useable, but nobody cared except a couple friends. The Facebook page got around 5-10 likes. I realized that the design sucked and it would take a rewrite to improve it, but I couldn't justify the time expenditure.
I tried a more content-oriented site as another project. My graphic/web design skills were better, so I was no longer embarrassed to send the site around to people I knew. Most of my friends read anything I posted on the site, but I couldn't very far outside my friend circle in audience. Ran out of energy to promote the site to a wider audience. Final metrics: 70 likes for the FB page, a few Twitter followers, 100 hits a day from Google (mostly bounces), and a few cents from affiliate links (and this was not because someone bought one of the products from my site... it's because they happened to buy a washcloth and I somehow got affiliate credit for that).
In the end, these projects weren't total failures. I picked up some great skills, and they were good for my resume or showing friends. Could I have pushed them further with more effort? Yes, but I couldn't justify that investment. Similarly, seeking funding would have been silly because even though the ideas were cool, any investor would have (correctly) perceived that I didn't have the experience/skills to execute. For instance, I didn't know much about marketing or design. Even if an investor threw money at me, I wouldn't even know how to get good value out of hires. An investor would probably prefer investing in a team who already has made at least some progress in nailing down the design and marketing.
Theoretically, I could have sought co-founders to do some of the work (e.g. designers, writers, other developers), but why should someone talented want to work with me on a project that wasn't their own vision, where I didn't have great skills at execution, and when I didn't have the budget to hire them? Personally, I wouldn't want equity in someone's solo project that's really not very far along, unless some of these are true: (a) I know this person's ability to execute beyond demo-level, (b) there are other talented people involved, (c) I've had input from the start. Even if the idea sounds good on paper.
Like you, I absorbed lots of optimistic messages about startups, and "minimal viable products." Though some other friends told me that "execution" of an idea is necessary: a good idea is not sufficient.
I failed in the early stages of execution. My first project failed (mainly) because of the execution of the design and UI. Those turned out to be pretty hard. Design is a serious business. For me, it took a learning curve of 6-12 months to create anything that wasn't ghastly and broken-looking.
My second project (mainly) failed because I couldn't promote it and create content in a time efficient way. Writing content was time-consuming. Then posting it places was also time-consuming. Yet it I didn't promote the site, then I didn't have motivation to create content, and if I didn't have content, then I had nothing to share. The lack of motivation was not a lack of willpower, it was me correctly observing that I didn't have any remotely time-efficient way of converting my time into users.
In the end, I realized that for the projects to be successful, I not only needed good ideas, but I needed high-level execution. But professional-level execution in the area of graphic design, web design, writing, and marketing is serious business. There were simply not enough hours in a day for me to learn all of those disciplines at a pro-level. This was not a problem that I could have solved with a little more willpower or time.
If it was so easy for for full stack / backend web programmers to throw up brilliant minimum viable products and create million dollar companies, then this would happen all the time and there would be no need for professional designers and marketing people to exist. But those people do exist. That is evidence that those disciplines are serious business.
There are people on Dribbble who spend all day making colored buttons. Users will want to click on their colored designer buttons, not on the ugly buttons designed by backend developers. There are people who spend all day writing copy and agonizing over wording and getting it just right. The average web programmer simply doesn't have the background or taste to evaluate design and writing unless they invest some time into learning those disciplines, which is hard when the backend has bugs that need fixing (just like the average designer or writer would be lost if they tried to make a web service).
Yes, a small team of talented people can wear multiple hats. But to get other people (either co-founders or investors) interested, they have to believe the project has some chance of success, not just success at sounding cool.
My conclusion is that people other than close friends do not give a shit about demo-level website functionality, unless the idea immensely out-of-this-world amazing. It takes design (graphics, UI), and marketing (copywriting, messaging, social media, promotion, etc...) to get people to give a shit.
In addition to a good idea, you need to show proof of execution/production/connections to get people to join your team. Then your team collectively must hit another critical mass of execution/production/connections to get funding (assuming, of course, that the tech/functionality is great). Why would a talented designer or marketer want to join the team unless the other parts of the production/execution are going well? A good idea is NOT enough.
My experience here is consistent with the "outside view" being correct: that many startups will fail or never get off the ground. Despite being a talented and motivated person, and despite making some demos of cool ideas, I ran face-first into a wall, and that wall was execution, production, and marketing. I decided to pull the plug on those projects instead of trying to rope co-founders and investors into projects that were unlikely to succeed. My projects weren't at the execution/production level to attract the right sort of people to improve the execution/production.
Nowadays, I work at an early-stage startup. I get to work on a team with other talented people. And I'm learning about the other sides of business, tech, marketing, design, and media where I lacked experience. I'm also making connections with people who could potentially advise me if I tried to start my own thing in the future. This is a much better use of my skills than trying to build a business myself.
= f037147d6e6c911a85753b9abdedda8d){kind=logo}
= 27d567bc2d48d9f40e9ccc20ea370b15)
= b715d02e85f7b3b4ae65ca3d3e450868)
Subscribe to RSS Feed
Thanks for the response.
All "execution means", is 1) raising the money I need to pay for people to answer questions at all schools on the site, 2) market this to high school students, 3) get enough momentum to raise a series A, and 4) hire the right people to help me expand. At least that should get me to be a player in the market.
I agree that I'm no expert in design/marketing, but I think I could do a good enough job at them to get me to a point where I could hire experts.
Yes. And these are all challenges with significant risks. My claim is that is that it will be hard to build significant momentum prior to getting a level of design and marketing which is significantly beyond your current ability as someone with a programming background. Even if you pay people to provide your site with good content, your visitors will not appreciate that content if is housed in unattractive design, except perhaps for some viewers who find your content so compelling that they are willing to overlook the design.
I could be wrong about this, of course (and your analytics will tell you the answer), but if I am right, then you will need to get help with design and marketing prior to steps 2) and 3). Getting either training, or significant help, or contractors, or co-founders, would need to be incorporated into your plan sooner rather than later.
This seems like an empirical question... and leaving it up to chance sounds like a risky prospect when your money and time is on the line. Given that you admittedly lack experience in design and marketing, it seems like you would be uncalibrated to estimate how much experience in those areas you need to attract funding and co-founders.
To give you some more background about why I emphasize marketing and design so much: in some deals where I've seen companies get funded, a big part of the funding was showing design documents and marketing strategies to potential investors. Also, I often see experienced and serial entrepreneurs worrying about the marketing success of consumer products they are working on. Being scared is a rational attitude given the uncertainty of the mass market and what people will respond to, which is why I'm trying to scare you a little bit about the risks you are facing.
Becoming good at either design or marketing (let alone both) coming from a tech background is at least 6+ months of work to produce non-amateurish work. Perhaps there is some way that you can get help or guidance in those areas in the very near future.