Startup Archive

Q: Why are startup ideas worthless? In his essay Ideas for Startups, Paul Graham wrote: “startup ideas are not million dollar ideas, and here's an experiment you can try to prove it: just try to sell one. Nothing evolves faster than markets. The fact that there's no market for startup ideas suggests there's no demand. Which means, in the narrow sense of the word, that startup ideas are worthless.” Steve Jobs expands on this idea further: “There’s a tremendous amount of craftsmanship in between a great idea and a great product” A lot of people think that a really great idea is 90% of the work, but a great product idea will never turn out as originally conceived. You learn a lot from the details of building it and there are always tradeoffs you have to make. In this clip, Jobs tells the story of how a widowed man showed him a rock tumbler when he was little kid. He uses the rock tumbler and process of turning common stones into beautifully polished rocks as a metaphor for a team working really hard on something they're passionate about: "It's through the team--through a group of incredibly talented people--bumping up against each other, having arguments, having fights sometimes, making some noise, and working together... they polish each other and polish the ideas. And what comes out are these really beautiful stones." The key to building a great product is a great team, not a great idea. To receive posts like this with tactical advice from the world's best founders & investors, subscribe to The Startup Archive newsletter at startups.joinperch.com

Steve Jobs shares his famous rock tumbler metaphor for building great products

Larry Ellison on what made Steve Jobs great “Steve was my best friend for about 25 years. We were neighbors in Woodside and his peacock wandered onto my property and woke me up. His girlfriend had given him a peacock and I came over to complain.” Steve replied: “You don’t like that bird either?” Larry recalls how Steve made him watch 73 different versions of Toy Story: “I said I’m not coming over if you make me watch Toy Story again… Now I know the new version is 4% better than the one I saw last week, but I’m not watching this thing again. And he’d say: ‘Larry, you won’t believe how different the shadows look.’ But that was Steve. Until it was perfect. And then once it was perfect, he moved onto the next problem.” Larry believes obsessing over a product until it was perfect was a huge part of what made Steve Jobs great: “If you want to know you’re like Steve Jobs, it’s very simple. You’re unable to think about anything other than serious problems at work. That’s all you can do, and you obsess about it until you solve it. And then you move on to the next thing. And you obsess about that until you solve it… If you have that kind of obsession combined with Picasso’s aesthetic and Edison’s inventiveness, then you are the next Steve Jobs.” He continues: “Apple became the most valuable company on earth and it wasn’t even one of Steve’s goals. He wasn’t trying to be rich. He wasn’t trying to be famous. He wasn’t trying to be powerful. He was obsessed with the creative process and building something beautiful.” Video Source: The Wall Street Journal

Ben Horowitz explains why he looks for courage in the startup founders he invests in “Does the founder have the courage to build the company?… Aristotle said courage is the first virtue, and it’s really important in leadership. Integrity, honesty, and so forth - everybody has them in certain situations. But that’s not the question. The question is if it’s going to cost you your company, do you have your integrity? If it’s going to cost you your job, are you honest? If it’s going to completely embarrass you in front of everybody, do you have it then? The only way you have it then is if you have courage.” Ben continues: “Courage ends up being the foundation for a lot of what we need in an entrepreneur. I always say you need two things. You need great intelligence and great courage. And I always found as an entrepreneur my courage was tested far more than my intelligence. And I think that’s pretty universal.” Video Source: Kevin Rose

Elon Musk: “A company is a group of people that have gathered together to create a product” “If you think about it, what’s the point of a company existing? The point is that it’s a group of people that have gathered together to create a product. If the product is good, the company should exist, and if it is not good, the company should not exist. That seems fundamental to the nature of companies. Clearly then one should focus on making the absolute best product you can. Otherwise you reduce the probability of success. But a lot of companies focus on things that aren’t really to do with the product. As though a company has any basis for existing apart from doing useful things. That’s kind of strange.” Video Source: Los Angeles World Affairs Council & Town Hall

Peter Thiel: “Steve Jobs probably gets too little credit” When asked if Steve Jobs gets too much credit for the success of Apple, Thiel responds: “There are probably ways in which he gets too little credit… The founders of these companies are not divine beings - they’re not omnipotent, omniscient, or anything like that… But I think the importance of a charismatic leader who can bring out the best in people in something that is very underestimated.” Thiel named his venture fund Founders Fund to emphasize this idea: “We think that these tech companies do best when they’re led by founders…. We’re much more skeptical of the tech companies that are not founder-led. I think it’s weirdly understated as a problem… [Being founder-led is] the first approximation that would tell you which [companies] you can expect to innovate in the future and which ones won’t.” Video Source: Emergent Order

NVIDIA founder Jensen Huang: “Money is the only singular reason not to start a company“ “I hope that if I leave you with anything, money is the only singular reason not to start a company. Because starting a company has a very low probability of success. And so if that is your reason for doing it, you will likely regret the experience… You should build a company because you believe in your idea, you’re passionate about it, and you want to build something great… You have to have a perspective that’s unique and that you feel really strongly about, so you’re willing to persevere almost any challenge to make it happen.” Video Source: Stanford Online

WhatsApp founder Jan Koum: “We always had competition… But we said our destiny is in our hands” “We always had competition - like from day one. There was actually a point in time where there was a new messaging app popping up every month. And every month there was an article on TechCrunch about how this awesome new messaging app is going to take down all other messaging apps.” But the early WhatsApp team basically just ignored it: “We didn’t say anything because we didn’t want to draw attention to ourselves. We actually - on purpose - tried to stay under the radar. But it was just kind of funny to see this dog and pony show that happened with all these apps. There was PingMe. There was MessageMe. There was GroupMe. There was Kick… There were 10 different messaging apps at some point which kept getting all this publicity.” Jan and team said: “Good for you. Have all the publicity you want. We will just stay under the radar and not have any attention drawn to us.” Jan continues: “We always had competition - be it big guys like iMessage or Facebook Messenger or little guys like Kick… Even today we have apps like Telegram… But we always said that our destiny is really in our hands. We can’t worry too much about competition. We have to worry about our product and our users. And if we spend a lot of time thinking about competition or looking at competition, we’re going to fail.” Video Source: Stanford Online

Former Google CEO Eric Schmidt: “The great founders are frugal” “I can always tell when we’re dealing with a proper founder by how they are spending their money. Whenever I go to startups that have beautiful offices and really nice chairs, I cringe… The great founders are frugal. They understand that the money needs to be used precisely for certain areas. Many of the most successful founders begin with no salary at all… If you’re not prepared to live that, you don’t really understand what being a founder is like.” Video Source: Startup Grind

Naval Ravikant’s advice to startup founders: “Stay small until you’ve figured out what’s working” “Stay small until you’ve figured out what’s working. Steve Blank, who teaches at Stanford and started Epiphany among many other companies, defines a startup very nicely. He says a startup is a search for a scalable and repeatable business model. And so what you’re really doing is you’re searching, and until you’ve found that business model that you can repeat and you can scale, you should stay very, very small and very, very cheap.”