The Inside Story of Entrepreneurship
The great liability of the engineer compared to men of other professions is that his works are out in the open where all can see them. His acts, step by step, are in hard substance. He cannot bury his mistakes in the grave like the doctors. He cannot argue them into thin air or blame the judge like the lawyers. He cannot, like architects, cover his failures with trees and vines. He cannot, like the politicians, screen his shortcomings by blaming his opponents and hope the people will forget. The engineer simply cannot deny he did it. If his works do not work, he is damned. - Herbert Hoover
This is a guest chapter by Glenn Kelman. He is the CEO of a company called Redfin that enables people to buy homes online. I include it here to provide the inside story of a startup from someone who is in the middle of the fray right now.
Lately, I've been thinking how hard, not how easy, it is to build a new company. Hard has gone out of fashion. Like college students bragging about how they barely studied, startups today take care to project a sense of ease. Wherever I've worked, we've secretly felt just the opposite. We're assailed by doubts, mortified by our own shortcomings, surrounded by freaks, testy over silly details.
And now, having been through a few startups, I'm not even sure I'd want it to be easy. Working two hours a day on my own wasn't my goal when I came to Silicon Valley. Does anybody remember the old video of Steve Jobs launching the Mac? He had tears in his eyes. And even though Jobs is Jobs and I am nobody, I knew how he felt. I had the same reaction – absurdly – to portal software and more recently to Redfin, a fledgling real estate Web site.
“The megalomaniac pleasure of creation,” psychoanalyst Edmund Berger wrote, “produces a type of elation which cannot be compared with that experienced by other mortals.” Jobs wasn't just crying from simple happiness but from all the tinkering, kvetching, nitpicking, wholesale reworking, and spasms of self-loathing that go into a beautiful product. It was all being paid back in a rush.
Like the souls of Dostoevsky who are admitted to heaven because they never thought themselves worthy of it, successful entrepreneurs can't be convinced that any other startup has their troubles, because they constantly compare the triumphant launch parties and revisionist histories of successful companies to their own daily struggles. Just so you know you're not alone, here's a top ten list of the realities of startups.
True believers go nuts at the slightest provocation. The best people at a startup care too much. They stay up late taking support calls, snapping at bureaucracy, citing Joel Spolsky on Aerons, and Paul Graham on cubes. They are your heart and bones, so you have to give them what they need, which is a lot. The only way to get them on your side is to put them in charge.
Good people need big projects. If you aren't doing something worthwhile, you can't get anyone worthwhile to work on it. I often think about what Ezra Pound once said of his epic poem, The Cantos,”... if it's a failure, it's a failure worth all the successes of its age.” We're not writing poetry, but it matters to us that we're trying to compete with real estate agents rather than just running their ads. You need a big mission in order to recruit people who care about what you're doing.
Startups are freak-catchers. To join a startup, to leave a Microsoft, you have to be fundamentally unhappy with the way things are and unrealistic enough to believe the world can change. This is a volatile combination that can result in group mood swings and a motley crew, so don't worry if your startup seems to have more than its fair share of oddballs.
Good code takes time. One great software engineer can do more than ten mediocre ones, especially when starting a project. But great engineers still need time: Whenever we've thought our talent, sprinkled with the fairy dust of some new engineering paradigm, would free us from having to schedule time for design and testing, we've paid for it. To make something elegant takes time, and the cult of speed sometimes works against that. “Make haste slowly.”
Everybody has to rebuild. The shortcuts you have to take and the problems you couldn't anticipate when building version 1.0 of your product always mean you'll have to rebuild some of it in version 2.0 or 3.0. Don't get discouraged or shortsighted. Just rebuild it. This is simply how things work.
Fearless leaders are often terrified. The CEO of the most promising startup I know of recently used to anonymously ask his Facebook friends if we thought his idea was any good. Just because you're worried doesn't mean you have a bad idea; the best ideas are often the ones that scare you the most. And don't believe the after-the-fact statements from entrepreneurs about how they “knew” what to do.
It's always hard work. Most startups find an interesting problem to solve and then just keep working on it. At a recent awards ceremony, Microsoft CEO Steve Ballmer tried to think of the secret of Microsoft's success and could only come up with “hard, hard, hard, hard, hard work.” This is an obvious cliché, but most entrepreneurs remain fixated on the Eureka! Moment. If you don't believe you have any reliable competitive advantage, then you're the kind of person who will work your competition into the ground, so keep working.
It's not going to get better – it already is. In the early days, people in startups focus on how great it's going to be when they succeed, but the moment they do, they start talking about how great it was before they did. Whenever I get this way, I remember the Venerable Bede (a Benedictine monk born in the late seventh century) complained that his eight-century contemporaries had lost the fervor of seventh-century monks. Even in the darkest of the Dark Ages, people were nostalgic for... the Dark Ages. Startup folks are like medieval monasteries: always convinced that paradise is just ahead or that things only recently got worse. If you can begin to enjoy the process of building a startup rather than the outcome, you'll be a better leader.
Truth is the only currency. At lunch last week, an engineer said the only thing he remembered from his interview was our saying the most likely outcome for Redfin – or any startup – was bankruptcy, but that he should join us anyway. It's odd, but the more we've tried to warn people about the risks, the more they seem to ignore them. And since you have to keep taking risks, you have to keep telling people about them.
Competition starts at $100m. A Sequoia partner once told me that competition only starts when you hit $100 million in revenues. Maybe that number is lower now. But if you do something worthwhile, someone else will do it, too. Since you can't see what's going on behind a competitor's pretty Web site, it's natural to assume that all the challenges we just went over only apply to your company. They don't, so keep the faith.
I've started four companies and served on boards of directors of three others, and Kelman speaks the truth. Don't get us wrong: Starting an organization is a wonderful experience, but it's also a difficult and scary one. If it were easy, more people would do it, and that means more competition. Also, only the things that scare you make you stronger.
(taken from Guy Kawasaki's book Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition pages 11-14)
