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Why I’m doing it all wrong

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Conventional wisdom for doing a startup as a young entrepreneur these days is something like the following:

1.Drop out of school

2.Raise money

A year ago that’s the route that I wanted to pursue. Freshman year of college I interviewed at Y Combinator with two of my close friends: Wesley who went to Penn with me, and Ajay his best friend from childhood. 

We got rejected.

Then we made it to the wildcard round of TechStars NY. Again we ultimately got rejected.

That summer I worked at a startup and built a few cool projects including DomainPolish (which I subsequently sold). When the school year rolled around again Wesley decided to drop out. At the time, I asked him why he didn’t want to go back to school. His reply was characteristically gutsy:

“I just have a feeling that it’s all going to work out.”

That winter Wesley and Ajay applied to YC again. A week before their interview they asked me to fly out and join them for it. I decided not to go.

I remember the phone call that I got from them after they found out they had gotten in to the next YC batch. It was incredible. We had worked for such a long time to get to that point. And it had finally paid off. I couldn’t have been happier.

Again, they invited me to leave school and join them at Y Combinator. But again, I said no.

That moment is something that I’ve thought a lot about. Saying no to an offer like that from my close friends was really difficult. So was saying no to Jason Freedman.

“What if I’m missing out on building the next big thing?”

“What if I never get an opportunity like this again?”

There are a lot of big “what-ifs” in a scenario like this. And you hear from plenty of people who tell you to never turn down opportunities. “Pursue everything that’s given to you because you’ll never know where it leads,” is pretty common advice.

After a long discussion, a good friend of mine who’s running a funded company recently said to me:

“When you decide to make big things happen, let me know.”

My friend is right: I’m not swinging for the fences. I’m not suiting up to go big or go home. All my chips are not on the table.

But why? Why bootstrap in Philly when I could be in San Francisco with an awesome accelerator program under my belt, with cash in the bank?

Let’s examine this further.

“Swing for the fences”

“Scale as quickly as possible”

These are fundamental assumptions of startup building. From these come our conventional startup wisdom:

“Leave school”

“Raise money”

For a long time I accepted the “leave school and raise money” argument because I assumed that “swing for the fences” and “scale as quickly” as possible were inviolable tenets of company building. But it turns out they’re not inviolable. They’re not even tenets. They’re just a common way of thinking about how to do a startup.

And when I really sat down to examine why I wanted to leave school and raise money something became clear: I didn’t want to hit a homerun.

Actually, let me rephrase that. It’s not that I don’t want to hit a homerun, it’s just that hitting a homerun is not what I’m focused on.

While you attempt to wipe the remains of your melted cranium off of your keyboard, let me try to explain.

In order to fully understand why I’m not focused on homeruns, we have to ask a deeper question: why build a company at all?

Why do startups?

I have a few reasons. The first is, quite simply, I can’t help myself. For the last 10 years of my life my default weekend activity has been coding to build products. I can’t remember a single vacation from middle school, high school or college when I wasn’t working on a business.

But more deeply, I came to a fundamental realization about what’s gotten me to where I am:

The only thing that I’ve ever done right in my life is to doggedly pursue the things that I’m interested in. To the detriment of everything else. No matter what anyone else says.

(Aside: that last part is important. No matter what anyone else says. That’s the only way you can be a philosophy major. If you give a fuck what people think you do political science.)

Pursuing my interests regardless of what anyone says has worked well for me. I’m naturally interested in business. I’m naturally interested in coding and design. I’m naturally interested in writing.

And so my goal is this: to be able to do those things sustainably, for the rest of my life.

That, in a nutshell, is why I do this every day.

Now let’s get back to homeruns. Homeruns by definition aren’t sustainable. They’re not predictable. Sometimes you hit one, but most of the time you don’t. That part of things is mostly out of your control.

Because it’s out of my control and not sustainable, I’m not focused on it. For that matter I’m not interested in anything that’s not sustainable.

For example, I don’t think that the current funding environment is sustainable. Right now you can go out and get money for an idea in a way that you won’t be able to in 3 years. Funding can’t be counted on and so I’m not concentrated on it.

So what can be counted on?

Fundamentals.

Fundamentals don’t go out of style. They are by definition sustainable. Every successful business follows from solid fundamentals. Customers, money, funding. And that’s what I’m concentrated on.

What I’m spending my time doing now is this: learning how to build a real business. And by real, I mean a business that has money coming in the door from day one. Businesses that make money can be started in any investment climate. They don’t go out of style.

That’s why we’re holed up in an office in Philly for $650 a month working 14-hours a day this summer. That’s the goal.

I think there’s a time and place for raising money. I think there’s a time and a place to go for broke. So when I’m asked why I haven’t left school and raised money this is generally my reply:

I’m going to get into the big game eventually. But right now I’m working on perfecting my crossover dribble.

I want to get good at this stuff. And I know that I can do that without leaving school, and without raising money.

Recently Wesley came back and visited me at Penn. We were sitting in a pizza place we used to go to last year before any of this happened.

“You know dude, I think what we’re doing here is running a social experiment,” he said to me. “We both started from the same place, we both have similar goals. I left school and you stayed. It will be interesting to see how this turns out.”

Interesting indeed. And somehow, I have a feeling that it’s all going to work out in the end. For both of us.

You should check out Wesley and Ajay’s startup FamilyLeaf here. Or follow me on Twitter at @danshipper.

 


20 Jun 2012, 7:27pm | 27 comments

  • Max Lynch

    Good for you! I’ve interviewed at YC a few times and was rejected each time. My new company has taken 0 investment and we are within an inch of being ramen profitable in a few months of being launched. We are not going to apply again, we are forming a value system that is more inline with 37signals, Balsamiq, etc. I am also trying to learn to get good at this stuff too. My first lesson was actually charging for something…turns out it works :)Stay focused and stay patient. Good luck!

  • Kyle

    Your story does a complete circle and has little to no point. thanks for writing it though

  • Joshua Thomas
  • BrianSoule

    It’s worth noting that creating a YC product is a great way to build those fundamentals. While the venture’s success is uncertain, the likelihood of creating a strong resume, is.Here’s hoping that your next post describes your decision to make the leap.

  • Timothy Gaweco
  • zshrm

    For those interested in so many disciplines (coding, design, business, writing), is there really any other logical choice besides a startup? I don’t think there’s a better outlet that lets you pursue all of these at once.

  • chasers

    Nothing wrong with predictable linear growth :)For every homerun there’s 1mm web based businesses out there making $50k a month and growing…

  • Dave Fecak

    Stay in the Philly market, it is continuing to grow and the local software community needs to keep people who think like you. Well written.

  • tprobotics

    Well argued. Your position makes a lot of sense and resonates with my view of the world. I too want to get to the sustainable point *then* smash it out of the park.

  • gebruike
  • ngoles

    Well said, keep them coming :)

  • PorterHaney

    “pick a pace you can keep all day, and travel at it” Yvon ChouinardChourinard wrote that in a book called climbing ice, and whole heartedly related it outdoor adventure. I really like to think about it in the real life sense of doing something you can do day in and day out for a long time, and have fun with it. Cheers to learning it at this point, and not dozens of years down the line.

  • Justin McMurray
  • Bassem

    Overall, it is an interesting read. For as long as I can remember, I’ve been trying to discover the steps of success. Quite frankly, there is not one path. There is a multitude of paths for sustainable success (and by success I mean building a sustainable, profitable business that you are passionate about). This path varies according to the person.The saying that chance comes once in a lifetime is inaccurate. Chances are quite abundant if you expose yourself to them. They vary with time, with experience, with knowledge. Every project you start is a chance, every job you get is a chance, every contact you acquire is a chance. Finding the chance that makes you happy is the difficult part.Based on the above I say 2 things:1. Do whatever your gut feeling dictates. Life is too complicated to be viewed from a deterministic angle (regardless if it is or not, we’re not capable of processing all happening events).2. Don’t ever listen to people that tell you to do X to get Y. ;)Good luck.

  • Justin McMurray

    The point is to win the game, not hit a home run. It would be great if more VCs understood this. VCs argue that only a small % of companies become ‘big’ successes (aka $1bn+), but by insisting on swinging for the fences (crash or crash through), I suspect many, many companies destroy their chances of becoming ‘smaller’ successes. All the best and keep true.

  • bthewirz

    Great Post. Worth noting though that part of the reason that VCs/Angels are egging companies to swing for the fences is that valuations have gotten so high for early stage companies (particularly coming out of YC or Tech Stars) that there is no other way to justify making these investments. When seed stage companies are able to raise $2M @ a $12-15M pre-money valuation, $50k/month is not going to cut it for very long.

  • Jonathan Murray

    The ‘raise a lot of money and swing big’ is very much a silicon valley way of thinking. It’s not necessarily wrong, but it’s definitely not the only way, and not the right path for every entrepreneur / business.I had a lot of smart people tell me early on that my last company was a waste of my time because the opportunity wasn’t large enough. Large enough for whom though? Hearing all that feedback was incredibly discouraging when I was starting, but I passionately believed that I was right about the opportunity and the value we could create, even if it may never be a billion dollar business. So, I hired a co-founder, recruited a very small core team, worked 24×7 for 18 months, and we were acquired. At the time we sold, we actually had pretty reasonable Series A terms sheets on the table, but we decided selling was the right path, for a number of reasons. Many (definitely not all) silicon valley investment types would probably look at that and the amount we sold for and assume the company was a failure. I had a lot of people question not going the VC route at the end and trying to blow it out. I would have done it if I thought it was right for the business, but it was not. And I now own a few houses, my kids are in private school, and I just don’t worry about the shit I worried about 10 years ago. My life is radically different and better. AND I had an incredible experience, learned a ton, and am a far better entrepreneur now than I was when I started. Now I’m back at it, and swinging even bigger this time, with that experience (and added confidence) under my belt. We actually just did YC, raised money, and are going for a massive opportunity. But I think it’s right this time, for this founding team, for this opportunity. The best professional advice I ever received was from Chris Moore at Redpoint Ventures. He told me a few years before my first startup to think about my career as a process, and not to be so focused on just jumping to the end point. For me, this was the right advice at the right time. I wouldn’t be where I am today had I not accumulated a number of experiences along the way. Everyone’s different. Explore your passions, but also be true to yourself. Know who you are and what you want. And surround yourself with smart people to bounce things off – but just be sure to treat it only as input. No one can tell you what you should do.Also, there’s just no shame in creating something that’s ‘smaller’. You are right to not give a shit what other people think (and it probably helps that you’re in Philly in that regard). There are a ton more buyers at $10MM or $20MM than there are at $250MM or $500M. Hell, even an exit for a couple million can really change your life (with the right cap table). If you raise a shit ton of money because “that’s how things are done”, you are most likely shutting off any early exit (at least, in a way that will be meaningful for you). So, just be sure it’s the right thing for you and your business, and don’t focus too much on what other people think is the right path.

  • Pwntifex
  • Pwntifex

    Exceptional article. I’m currently on my third company. Both of my first two ultimately failed, one was bootstrapped and one was VC backed. Looking back on those past experiences and learning from them, I would choose the bootstrapped route every time, even though I lost my own money on it. That’s not to say I’ll never take VC money, but only if the circumstances actually warrant it.Along the way I’ve reached the same conclusions as you about… well everything. Sustainability, life, it’s meaning for me, what I want out of it, and most importantly, the “why” behind the things I do. It took me 10 years of startups to really get to the “why”. I guess you started at it younger than I did, but I am impressed/envious you’ve reached such incredible insights (at least they are to me) already as a sophomore in college. It’s not the path for everyone, but it is for me and I’m grateful I’m on it now. You’ve got a long, brilliant, rewarding life ahead of you. And it will work out alright… for all of us.

  • Minnelow

    Every young person needs to start up their own businesses and learn as early as possible what works, what doesn’t work, and how to build good products. This is invaluable in a shaky economic future where maintaining as much flexibility and options is critical. You should join up with other startups and learn on somebody else’s dime first. The good thing about technology is that it is easier today to get a new business off of the ground than it was a few decades ago. Modern dynamic programming languages and frameworks, the ability to outsource the most monotonous of tasks from accounting to legal help to customer service, even social media (see http://www.buyfacebookfansreviews.com for example to see the sheer number of companies that do nothing other than promote social media pages for startups), make it possible so that a lone person working part time can take on giants within important niches. That’s the kind of thing that would not have been possible decades ago. So I think the continued thrust of technical growth is positive for entrepreneurship and it will be easier. But I think that it will always be much riskier to actually make the sacrifices necessary to launch a business and not everybody will choose to go that route even though they should consider this option more frequently.

  • JB

    Let’s not overlook the one accomplishment that has seemed to elude WD during his college career – an Intramural Football Championship.

  • Michael

    I recently read Mastery by George Leonard. The thoughts you express in this post are completely in line with the path in the book. Did you read it?

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