Yup, or put a bit differently: Timing is (almost) everything. There's usually only a short window in time where successful new tech companies can be started (maybe 1-3 years). Too early and nobody cares / buys your product, too late and you won't be able to raise enough capital to ever catch up.
Counterpoint: lots of money can be made if you're late to the party but have a great new spin on it. Assuming the party's big enough to accomodate multiple players, and not a natural winner-takes-all situation.
Not really. Early/immature tech causes early movers to overspend and be invested in the wrong things. Early, usually the tech is expensive so it's perceived to be valuable on its own. Later, when the tech has diffused and is ubiquitous, it's clear that various secondary things create the actual value.
Successful early movers realize how the value-creation is going to happen once the tech is mature, and focus on that.
Just yesterday, I was looking at a PlayStation Vita that my girlfriend’s brother scored off eBay. Released in 2011, it was Sony’s last handheld console.
Wow, looks like a smaller Nintendo Switch, I thought. He told me there’s homebrew to connect it to a larger screen.
I've sold three businesses to Idealab and the single biggest lesson I learned from Bill Gross was timing and having the means to buy yourself into the market in a short amount of time.
I like how they started laying out definitions and "theory", and then just repeated the title for 5-6 paragraphs.
I'm sure this wisdom is coming from ages of experience, and everyone respects this guy, but an outsider would have zero reason to adopt this other than "huh, that's sensible".
I think it's intuitively obvious and needs reinforcing, but obviously market isn't the "only" thing that matters. You do need a reasonably competent team and a reasonably workable product and all that requires a huge non-zero effort and a lot of wins.
One aspect of markets for relatively new technologies is that there is a dynamic related to the practicality and affordability of products and social momentum for new product categories. I suspect that things like patents sometimes play a role there also.
For example, e-ink displays. Personally I think the idea of having a photo or framed image on a wall that can display an effectively infinite number of different pictures, another one every day, is an extremely attractive proposition compared to the low-tech standard of leaving the same image there for years.
But it looks to me that the pricing for the display modules is holding that market back. Maybe because of a patent or something and not enough competition. But also, it COULD become a big thing at any time for a wealthy demographic, especially for the smaller ones say the size of a normal sheet of paper. But that depends on whether it becomes trendy. Which is partially about luck and what individual people do and how many friends they have.
> But it looks to me that the pricing for the display modules is holding that market back. Maybe because of a patent or something and not enough competition.
Nope. It is volume. In the display industry, if you're selling less than a million panels a month, then you're a niche exotic industry. E Ink is probably not even reaching 50% of that. Think about this way. E Ink in the display market is unfortunately the equivalent of a sports car in the car market. It'll only become cheap if it can defeat or be competitive with LCD/OLED displays and step up to reasonable volumes, and that's unlikely to happen just due to the physics of electrophoretics.
Did anyone learn from that post or the comments on this page? I'm struggling to extract any value, everything is sensible, but a lot of it is opinions, open to interpretation and high level "its a judgement calls". I don't think any of it is useful in practice. Not much was backed by evidence or science.
My perspective: Always just do it. If you're good enough to succeed you'll succeed, and if you're not good enough, you never were gonna succeed anyway. Of course, you need to be scientific in your approach, but nothing on this page is scientific. Apart from my perspective ;)
The first time I read this post was two years ago. I was working a problem: how to practice Japanese. I had users and revenue, but no growth. Simple maths told me my product would never grow as a startup, and I had no way out of the niche. This post helped me confirm my worry: my market is too small.
What I learned: add a filter to the problem I want to solve. Is the problem big, or is it going to be big? This is expecially important when I am working on something I am passionate about. There is confirmation bias and wishful thinking when it comes to what I love.
Now I am working on a problem I care about, and the problem is big.
This post expresses an idea that I can easily relate to, given my experience. In this sense, it is useful.
I did. As a founder, the idea I'm currently working on has required a decade of hard work to turn into a moderate success. It's a hunch of mine that the reason it's a moderate success and not a huge success is primarily due to market -- and, this article supports that hypothesis.
Although Marc doesn't present the evidence that his claims are based on, I'm sure his thesis is based on the thousands of companies he's witnessed succeed and fail.
Needless to say, next time (if there is a next), I'll spend a lot more time analyzing market before diving in head first.
I got a lot of value out of it. I have close to 40 angel investments now, and it rings true. The ones doing best (from a returns point of view anyway) are all in great markets. I have not had any great teams fail yet but a couple that were plodding along and then pivoted markets and that changed everything.
One thing I'm curious to see: if you've got a great team and run a tight ship can you take your time and eventually wait for your market opportunity?
On a side note, marketing is also hugely important for success. If you don’t know how to reach your market, it doesn’t matter how big your market or good your product is. No one will know about it.
This is so true. One of the startups I was involved in had the best team imaginable, and their product was vastly superior to the existing alternatives, but the market was already saturated so they had to grind out their sales for over a decade.
The next startup had a few really horrible people on the team, and they succeeded in spite of that fact. Eventually though larger macroeconomic conditions soured for them (ie the market evaporated) and the company failed.
I think the main factor is luck. It's like a sword in an online game. You can add critical chance to it by maximizing stats but it's always capped. If you have good team stats, good product stats and good markets stats, you just improve your chances. By how much? Impossible to compute in real life, in a game that would be +15%, so every few hits (products in our case) you will blow a critical. So let's just call it luck in the end.
After building 3 products/companies from scratch and working on countless others from small side projects to massive unicorn success stories, I can't deny the luck factor, but it rubs me the wrong way when people focus on it as an explanation of success.
For one thing, luck is not really a single factor, rather it's the sum effect of all the chaos and entropy in human systems. Any given instance of luck (eg. IBM licensing MS-DOS in 1981 because they didn't foresee the market value of software) is just one-off serendipity unrelated to all other instances of luck. In a tautological sense luck is definitely the most important thing because if it wasn't, a given opportunity would be obvious and already exploited.
But my true critique is more personal—luck is by definition is something which one has no agency over. Some use this as a mental crutch to justify sour grapes about their own lack of success. However by focusing on luck and thinking of it as the end-all-be-all, one can easily lose sight or motivation to do the things under their control, which, ironically, could improve their luck.
The better mental model I believe is to focus on your base qualities: develop hard skills, a work ethic, systems understanding, and relationships. No one is great at everything, but within these broad categories are many valuable traits, and by combining a few of them you can open the door to novel opportunities. By doing so, you are primed for luck (although you still may need to recognize and seize it), and will be in a much better position than someone whose mental energy was on the things outside of their control.
I think the main factor is momentum. People underestimate just how brutally hard it is to do literally anything when you aren’t already doing it regularly.
Luck plays a huge role in early momentum. So does money and previous experience and a growing market. They all fade sharply as you get established.
It’s still not a particular helpful frame to evaluate startup success. In some ways it’s a tautology, momentum comes from momentum. But I still think it’s probably more descriptive than most of the original post.
That’s why the best startup advice is often so frustratingly vague. Stay focused, pick the right collaborators, release the first version as quickly as possible. They’re all dancing around the same basic idea which is you need to get the flywheel moving at basically any cost.
Luck is not a factor here, in that you have no control over it. This conversation is about what factors you can control are the most important. Which ones reduce the amount of Luck you need.
No one is saying you can reduce Luck out of the equation, but choosing the right Time to be in the right Market seems to matter more than anything else.
I don't believe luck is a significant factor. The number of entrepreneurs who have second and third companies with successful exits effectively demonstrates that someone can consistently do the right things to win, react to challenges in the right ways, and repeat their success. If luck was a significant factor that would not happen.
- He uses team (i.e., a balanced and cohesive unit), when he really means "team" (i.e., a collection individuals on the same payroll). Put another way, talent is not synonymous with team.
- This differentiation is important because Team is far more likely to find p/m fit than "team". Put another way, unless the market is new / created then it's there...sitting...waiting. Then the question is: Who finds it first? Answer: The most able team.
I think the main factor is being already rich or being born into a rich/influential family. A lot of problems startups have suddenly disappear when you can ask your dad for a small loan of 1 million dollars or ask your mum for a meeting with the chairman of IBM. Not saying this is the only factor but this "Great Filter" that weeds out those who don't have money or contacts helps others to develop their business with less competition.
I feel like this is commonly believed by people with neither money nor startup experience. Sometimes it's even believed by people with money, who feel it absolves them of the need to have startup experience, and then their startup fails. Hell, could swear I've worked for a couple of these guys.
Money - lots of money, $1M basically just gives you the freedom to tinker on your own time - basically gives you the ability to hire other people to do the actual work of serving customers. If you want a successful startup, you need to know which customers, what work, and how it should be done, in a way that nobody else has figured out yet. An employee is not going to figure it out for you; if they could do that, they'd be off starting their own business. If your competitive advantage is that you have more money than everyone else, you will still fail; people who lack money are unaware of just how much money is floating around in capital markets and how little that differentiates you. Conversely, if you do have a unique insight into an untapped market that's more profitable than any existing way of doing things, financiers will be falling over each other to give you money and take a slice of those profits.
In my experience, the key reagents to a successful startup are information, insight, timing, luck, connections, and technical skills, in that order. This is largely reiterating the thesis of the article - "market matters most" - but in terms where it's the entrepreneur's job to find an untapped market, at precisely the moment in time when it's ready to be tapped.
Yes, as others have pointed out, market timing matters, but these days any market that is obviously a good one will get flooded with a ton of competitors, and with many of these markets consolidating to "winner takes all" status, most of those competitors will fail (or, perhaps more optimistically, get acquired).
I think the winner-take-all nature of many of these hot markets is something more apparent now than it was in 2007.
> One highly successful software entrepreneur is burning through something like $80 million in venture funding in his latest startup and has practically nothing to show for it except for some great press clippings and a couple of beta customers — because there is virtually no market for what he is building.
The startup scene has changed significantly the last 10 years.
Thalmic labs/north failed as a startup but they still managed to get acquired and celebrated as a success story.
[+] [-] jcfrei|4 years ago|reply
[+] [-] arbuge|4 years ago|reply
[+] [-] johbjo|4 years ago|reply
Successful early movers realize how the value-creation is going to happen once the tech is mature, and focus on that.
[+] [-] tediousdemise|4 years ago|reply
Wow, looks like a smaller Nintendo Switch, I thought. He told me there’s homebrew to connect it to a larger screen.
Timing is everything.
[+] [-] marban|4 years ago|reply
https://ted2srt.org/talks/bill_gross_the_single_biggest_reas...
[+] [-] highfrequency|4 years ago|reply
[+] [-] jvanderbot|4 years ago|reply
I'm sure this wisdom is coming from ages of experience, and everyone respects this guy, but an outsider would have zero reason to adopt this other than "huh, that's sensible".
I think it's intuitively obvious and needs reinforcing, but obviously market isn't the "only" thing that matters. You do need a reasonably competent team and a reasonably workable product and all that requires a huge non-zero effort and a lot of wins.
[+] [-] alisonkisk|4 years ago|reply
[+] [-] ilaksh|4 years ago|reply
For example, e-ink displays. Personally I think the idea of having a photo or framed image on a wall that can display an effectively infinite number of different pictures, another one every day, is an extremely attractive proposition compared to the low-tech standard of leaving the same image there for years.
But it looks to me that the pricing for the display modules is holding that market back. Maybe because of a patent or something and not enough competition. But also, it COULD become a big thing at any time for a wealthy demographic, especially for the smaller ones say the size of a normal sheet of paper. But that depends on whether it becomes trendy. Which is partially about luck and what individual people do and how many friends they have.
[+] [-] robinsoh|4 years ago|reply
Nope. It is volume. In the display industry, if you're selling less than a million panels a month, then you're a niche exotic industry. E Ink is probably not even reaching 50% of that. Think about this way. E Ink in the display market is unfortunately the equivalent of a sports car in the car market. It'll only become cheap if it can defeat or be competitive with LCD/OLED displays and step up to reasonable volumes, and that's unlikely to happen just due to the physics of electrophoretics.
[+] [-] maxwell|4 years ago|reply
https://www.nfx.com/post/why-startup-timing-is-everything
https://www.ted.com/talks/bill_gross_the_single_biggest_reas...
etc.
[+] [-] unknown|4 years ago|reply
[deleted]
[+] [-] throw14082020|4 years ago|reply
My perspective: Always just do it. If you're good enough to succeed you'll succeed, and if you're not good enough, you never were gonna succeed anyway. Of course, you need to be scientific in your approach, but nothing on this page is scientific. Apart from my perspective ;)
[+] [-] pototo666|4 years ago|reply
The first time I read this post was two years ago. I was working a problem: how to practice Japanese. I had users and revenue, but no growth. Simple maths told me my product would never grow as a startup, and I had no way out of the niche. This post helped me confirm my worry: my market is too small.
What I learned: add a filter to the problem I want to solve. Is the problem big, or is it going to be big? This is expecially important when I am working on something I am passionate about. There is confirmation bias and wishful thinking when it comes to what I love.
Now I am working on a problem I care about, and the problem is big.
This post expresses an idea that I can easily relate to, given my experience. In this sense, it is useful.
[+] [-] fairity|4 years ago|reply
Although Marc doesn't present the evidence that his claims are based on, I'm sure his thesis is based on the thousands of companies he's witnessed succeed and fail.
Needless to say, next time (if there is a next), I'll spend a lot more time analyzing market before diving in head first.
[+] [-] breck|4 years ago|reply
One thing I'm curious to see: if you've got a great team and run a tight ship can you take your time and eventually wait for your market opportunity?
[+] [-] sk5t|4 years ago|reply
Luck and connections, too, friend.
[+] [-] nowherebeen|4 years ago|reply
[+] [-] going_to_800|4 years ago|reply
[+] [-] woeirua|4 years ago|reply
The next startup had a few really horrible people on the team, and they succeeded in spite of that fact. Eventually though larger macroeconomic conditions soured for them (ie the market evaporated) and the company failed.
[+] [-] johnnycerberus|4 years ago|reply
[+] [-] dasil003|4 years ago|reply
For one thing, luck is not really a single factor, rather it's the sum effect of all the chaos and entropy in human systems. Any given instance of luck (eg. IBM licensing MS-DOS in 1981 because they didn't foresee the market value of software) is just one-off serendipity unrelated to all other instances of luck. In a tautological sense luck is definitely the most important thing because if it wasn't, a given opportunity would be obvious and already exploited.
But my true critique is more personal—luck is by definition is something which one has no agency over. Some use this as a mental crutch to justify sour grapes about their own lack of success. However by focusing on luck and thinking of it as the end-all-be-all, one can easily lose sight or motivation to do the things under their control, which, ironically, could improve their luck.
The better mental model I believe is to focus on your base qualities: develop hard skills, a work ethic, systems understanding, and relationships. No one is great at everything, but within these broad categories are many valuable traits, and by combining a few of them you can open the door to novel opportunities. By doing so, you are primed for luck (although you still may need to recognize and seize it), and will be in a much better position than someone whose mental energy was on the things outside of their control.
[+] [-] CPLX|4 years ago|reply
Luck plays a huge role in early momentum. So does money and previous experience and a growing market. They all fade sharply as you get established.
It’s still not a particular helpful frame to evaluate startup success. In some ways it’s a tautology, momentum comes from momentum. But I still think it’s probably more descriptive than most of the original post.
That’s why the best startup advice is often so frustratingly vague. Stay focused, pick the right collaborators, release the first version as quickly as possible. They’re all dancing around the same basic idea which is you need to get the flywheel moving at basically any cost.
[+] [-] lordnacho|4 years ago|reply
[+] [-] nthj|4 years ago|reply
[+] [-] jimmySixDOF|4 years ago|reply
Luck is not a factor here, in that you have no control over it. This conversation is about what factors you can control are the most important. Which ones reduce the amount of Luck you need.
No one is saying you can reduce Luck out of the equation, but choosing the right Time to be in the right Market seems to matter more than anything else.
[+] [-] onion2k|4 years ago|reply
[+] [-] unknown|4 years ago|reply
[deleted]
[+] [-] tlogan|4 years ago|reply
[+] [-] dang|4 years ago|reply
The Pmarca Guide to Startups, part 4: The only thing that matters (2007) - https://news.ycombinator.com/item?id=14412463 - May 2017 (17 comments)
[+] [-] chiefalchemist|4 years ago|reply
- He uses team (i.e., a balanced and cohesive unit), when he really means "team" (i.e., a collection individuals on the same payroll). Put another way, talent is not synonymous with team.
- This differentiation is important because Team is far more likely to find p/m fit than "team". Put another way, unless the market is new / created then it's there...sitting...waiting. Then the question is: Who finds it first? Answer: The most able team.
[+] [-] p-sharma|4 years ago|reply
[+] [-] nostrademons|4 years ago|reply
Money - lots of money, $1M basically just gives you the freedom to tinker on your own time - basically gives you the ability to hire other people to do the actual work of serving customers. If you want a successful startup, you need to know which customers, what work, and how it should be done, in a way that nobody else has figured out yet. An employee is not going to figure it out for you; if they could do that, they'd be off starting their own business. If your competitive advantage is that you have more money than everyone else, you will still fail; people who lack money are unaware of just how much money is floating around in capital markets and how little that differentiates you. Conversely, if you do have a unique insight into an untapped market that's more profitable than any existing way of doing things, financiers will be falling over each other to give you money and take a slice of those profits.
In my experience, the key reagents to a successful startup are information, insight, timing, luck, connections, and technical skills, in that order. This is largely reiterating the thesis of the article - "market matters most" - but in terms where it's the entrepreneur's job to find an untapped market, at precisely the moment in time when it's ready to be tapped.
[+] [-] hn_throwaway_99|4 years ago|reply
I think the winner-take-all nature of many of these hot markets is something more apparent now than it was in 2007.
[+] [-] xyzzy21|4 years ago|reply
[+] [-] deadcoder0904|4 years ago|reply
Who was he talking about? Anyone has any clues?
[+] [-] codemac|4 years ago|reply
[+] [-] gumby|4 years ago|reply
[+] [-] vishnugupta|4 years ago|reply
[+] [-] gjvc|4 years ago|reply
[+] [-] gerikson|4 years ago|reply
[+] [-] latenightcoding|4 years ago|reply
[+] [-] unknown|4 years ago|reply
[deleted]
[+] [-] s17n|4 years ago|reply
I think this is wrong, should be: "When a lousy team meets a great market, a competitor wins."
[+] [-] jhugo|4 years ago|reply
[+] [-] spiritplumber|4 years ago|reply