Unpopular opinion, I just don't understand this whole reasoning and this whole startup mythology thing.
So what he said is that if its a viable, sustainable business that the founder wants to do, that adds value to society, but there is no exponential growth on the horizon, then it should be shut down.
Because (and he said it explicitly), the only thing that makes a startup truly a startup is the exponential growth and nothing more.
This is just crazy, exponential growth is extremely rare in business and only happens in situations like the way Facebook grew, by upon sign up getting the whole list of email contacts of the new user, and sending invitations to join Facebook to all of them.
Most of the times in business, linear growth is what happens. what's wrong with a 20 employee company that adds a ton of value to society, operates for 30 years and gives the founder and family a comfortable life, isn't that more than enough and worthwhile pursuing?
Exponential growth is impossible to predict and only comes by accident, it's like chasing the rainbow.
Just focus on building a real business that you really want to dedicate your life to, preferably borrowing as little money as possible if it all, how about that?
I agree. I want to add that nothing is set in stone, either. One can build a business slowly, without crazy growth and crazy amounts of VC money, and five years later start growing exponentially (with or without VC money) for multitude of reasons. Or the other way around.
To new founders: The most important thing is that you believe that this is something worth working on, that you have a good financing strategy and that you (most of the time) like working on it.
Now, that doesn't mean ignore feedback and advice, but just make sure that you know why you are doing it. Make sure your financing strategy fits with your business strategy and your character as well. It might make sense to not pursue VC funding now, but maybe later. Or never.
Hanging out on HN, watching YC videos and reading their essays can be misleading. Think about why YC says what they say (might they have a self-serving motivation ;-))
The coolest thing about being an entrepreneur is that you can and must think for yourself.
He wrote this: "For instance – if you enjoy working with your co-founders on a business that produces positive cash flows but is not growing, you probably shouldn’t shut down"
Because, by the definition yc uses, it's not a "startup".
It's a "small business" - nothing wrong with that, autonomy is great (e.g. The "E-myth" (Entrepreneur) is that people start businesses to get rich, when most just don't want a boss), it's just that yc doesn't fund them.
I don't think this is an unpopular opinion really, but that you are getting a bit hung up on the semantics.
Most businesses that you start, are not "startups". And that's good, for all the reasons you outline. It's ok to look at companies that are trying to find exponential short term growth as a different thing, and talk about when to pull the plug if you aren't going to achieve that.
The more interesting question I think is when you should try to initiate that sort of company, vs "a viable, sustainable business the founder wants to do", as you put it.
It comes down to accepting VC money and the expectations that go along with it. Obviously a sustainable business is a great thing, but if you're taking millions from investors they want a return.
> So what he said is that if its a viable, sustainable business that the founder wants to do, that adds value to society, but there is no exponential growth on the horizon, then it should be shut down.
I have a big problem with this.
From my point of view, most "exponential" startups are simply those startups that stayed alive long enough to be around when something shifted and left them in the right place at the right time to take advantage of the exponential that they now found themselves in.
I watched this in the "dot-bomb". The companies that "won" were big enough to actually mobilize enough resource at the problems but small enough to still react quickly. That generally meant that you needed to be "alive" for several years--they had enough infrastructure and the people to make use of it but not so many that they were too sclerotic when the shift happened.
Most "overnight" successes are 5+ years in the making.
Maybe it's like your parents, if you are happy making sangrias at $3.50 per hour and can pay your rent, but they want you to start using your medical degree and open a practice.
Maybe it's within everyone's power, who could do the first part, to make an exponential-growth startup. Just like most anyone with a medical degree can start working as a doctor.
It's not a perfect analogy, but is what I thought of.
I think the crux of the issue is that if you set out to create a startup and you end up with a viable business that isn't really growing, it isn't really a good business in most cases.
There are people who intentionally start other kinds of businesses. These are often called lifestyle businesses. They tend to be structured differently than the kind of business that attracts VC money.
Since a Venture Capitalist typically does more than lend you money, it's a huge drain on their business for you to keep plugging along, calling on them for advice, etc and they can't divest because you aren't worth enough.
There's nothing wrong with starting a different kind of business. But if you set out to have something grow rapidly and you attracted talent based on the idea that this would be an exciting venture and you attracted investors based on that and you don't follow that path, it creates a lot of problems.
Think of like borrowing money to build a mansion, then building a little shack in the woods. You might be happy with the little shack in the woods, but the bank can't repossess your little shack and sell it for anything remotely resembling the amount they lent you.
So now you have some problems. You have legal and financial obligations you can't really meet.
where does medtech / biotech / synthetic biology / drug development fit into this thinking too? Especially now YC are pushing into Bio. Long R&D timeline. Long path to revenue. Huge scaleability for those who get it right?
So what he said is that if its a viable, sustainable business that the founder wants to do, that adds value to society, but there is no exponential growth on the horizon, then it should be shut down.
Because (and he said it explicitly), the only thing that makes a startup truly a startup is the exponential growth and nothing more.
This is just crazy, exponential growth is extremely rare in business and only happens in situations like the way Facebook grew, by upon sign up getting the whole list of email contacts of the new user, and sending invitations to join Facebook to all of them.
Most of the times in business, linear growth is what happens. what's wrong with a 20 employee company that adds a ton of value to society, operates for 30 years and gives the founder and family a comfortable life, isn't that more than enough and worthwhile pursuing?
Exponential growth is impossible to predict and only comes by accident, it's like chasing the rainbow.
Just focus on building a real business that you really want to dedicate your life to, preferably borrowing as little money as possible if it all, how about that?