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The Future of Web Startups

piranha526

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Aug 20, 2007
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A great read about startups

Read the entire essay: http://www.paulgraham.com/webstartups.html
I liked it!

Some examples are below from essay:

"If startups become a cheap commodity, more people will be able to have them, just as more people could have computers once microprocessors made them cheap. And in particular, younger and more technical founders will be able to start startups than could before."
We often tell startups to release a minimal version one as soon as possible, then let the needs of their users tell them what to do next. In essense, let the market design the product. We've been doing the same thing ourselves. We think of the techniques we're developing for dealing with large numbers of startups as like software. Sometimes it literally is software, like Hacker News and our application rating system.
"If the best hackers all start their own companies after college instead of getting jobs, that will change what happens in college. Most of these changes will be for the better. I think the experience of college is warped in a bad way by the expectation that afterward you'll be judged by potential employers."
One of the most obvious changes will be in the meaning of "after college," which will change from when one graduates from college to when one leaves it. If you're starting your own company, why do you need a degree? We don't encourage people to start startups during college, among other things because it gives them a socially acceptable excuse for quitting, but the best founders are certainly capable of it. Some of the most successful companies we've funded were started by undergrads.
The greatest value of universities is not the brand name or perhaps even the classes so much as the other students you meet there. If it becomes common to start a startup after college, people may start consciously trying to maximize this. Instead of focusing on getting internships with companies they want to work for, students may start to focus on working with other students they want as cofounders."
Another thing I see starting to get standardized is acquisitions. As the volume of startups increases, big companies will start to develop standardized procedures for acquisitions, so they're little more work than hiring someone.

Google is the leader here, as in so many areas of technology. They buy a lot of startups— more than most people realize, because they only announce a fraction of them. And being Google, they're figuring out how to do it efficiently.
It might seem that if startups get cheap to start, it will mean the end of startup hubs like Silicon Valley. If all you need to start a startup is rent money, you should be able to do it anywhere.
 

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Bilgefisher

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When I tell students grades don't matter, they look at me like I have a duck on my head. An internship while in school will land you a job quicker then a 3.8 GPA.

The problem with having a degree, many folks are not seeing the rewards they saw 20 years ago. The price difference is also huge. I think Newt Gingrich showed a report where someone would be better of financially if they just invested that money for college and took a lower paying job, then the debt encountered from student loans. The higher paying job does not affect this to greatly.

When I was working for an Engineering firm recently, I was making more then the fellow next to me who had a masters degree and a year longer at the firm. I merely have a bachelors. I could have landed that job without the degree. Its all about experience. I just don't think a college degree is the right way to go at the time being.
 

JScott

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When I tell students grades don't matter, they look at me like I have a duck on my head. An internship while in school will land you a job quicker then a 3.8 GPA.

The problem with having a degree, many folks are not seeing the rewards they saw 20 years ago. The price difference is also huge. I think Newt Gingrich showed a report where someone would be better of financially if they just invested that money for college and took a lower paying job, then the debt encountered from student loans. The higher paying job does not affect this to greatly.
I think it really depends on the type of degree you're pursuing, as well as the type of job you expect once you graduate. I would certainly agree that for a liberal arts degree, the money is likely to be worth more invested than the degree is worth. But, the value of a technical degree (in many, though not all fields) is enormous, and goes a long way towards paying itself off very quickly in terms of salary and opportunity after school.

As someone who has hired and managed hundreds of people for some very big software and Internet companies, I can say with some authority that a degree from a decent school will go a long way in getting you in the door, and will also go a long way towards getting you in the door at the right level/salary.

What a lot of people don't understand is that starting level/salary is a very good indicator of success in the corporate world. The difference between coming in as a "Junior Software Developer" and a "Senior Software Developer" can make a huge difference in both salary and advancement, which directly impacts long-term success. And if those coming in without college degrees haven't "proven themselves" yet, and will likely end up on the lower end of the salary/title range. And it's an uphill battle from there.

Don't get me wrong, there are *lots* of tremendously successful people in the tech world who have no college degree, but those people would have been successful either way. And there are a lot of tremendously successful people with a college degree who also would have been successful either way. Those are the top 20% that are destined for success. It's the group in the middle (the other 80% of us) who could go either way -- success or failure -- and every advantage (or disadvantage) can go a long way towards deciding whether it will be success or failure.

If you're in the 20%, college won't help you much. If you're in the 80%, college can make a huge difference between success and failure.

Btw, I think Marc Andreessen (founder of Netscape) has a great take on education:

http://blog.pmarca.com/2007/10/the-pmarca-guid.html

When I was working for an Engineering firm recently, I was making more then the fellow next to me who had a masters degree and a year longer at the firm. I merely have a bachelors. I could have landed that job without the degree. Its all about experience. I just don't think a college degree is the right way to go at the time being.
That likely means you are in the 20%. Most people aren't...
 

Sid23

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Jscott, rep ++ for that blog. Very interesting viewpoints and information.
 
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Bilgefisher

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Very valid points. I don't disagree either. For some people the college degree is the way to go. Especially if your dream job requires that degree. There is no substitute for experience though. Many employers simply won't talk to you without that degree, but experience will land you that job over someone's school name or GPA. (with the same degree of course).

On a slightly different note, a journeyman electrician makes $20/hr starting.(no degree) An electrical engineer starting pay is $21/hr. Heck my buddy works for Woodward Governor R&D and makes only $2 less an hour then then electrical engineers in the same department. He has no degree. Most of them have a 5 year bachelors or higher. His Air Force experience landed him the job. Instead of going broke while learning, he was payed to do so.

JScott, I think you are absolutely correct.(great link btw) I just feel that many higher institutions of learning are not putting out quality employees and not giving them enough real world experience while charging more now (cost per income ratio) then they ever had. I think there are better ways to be successful. I also think that that study that shows a person can retire with more if they simply invested the cost of their education is a truly disheartening.
 

JScott

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I just feel that many higher institutions of learning are not putting out quality employees and not giving them enough real world experience while charging more now (cost per income ratio) then they ever had.
Unfortunately, this is the real key to the whole discussion of whether an education is worthwhile. You are absolutely correct that most institutions these days don't do a very good job of preparing students for the real world, and that's the biggest argument for why a degree doesn't really matter.

If schools were doing their job, I would argue that everyone should get a degree, but based on our educational system (from my perspective), most people will get very little out of school that they couldn't get by just studying the texts (which is too bad, because school *could* offer so much more).
 

Bilgefisher

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Unfortunately, this is the real key to the whole discussion of whether an education is worthwhile. You are absolutely correct that most institutions these days don't do a very good job of preparing students for the real world, and that's the biggest argument for why a degree doesn't really matter.

If schools were doing their job, I would argue that everyone should get a degree, but based on our educational system (from my perspective), most people will get very little out of school that they couldn't get by just studying the texts (which is too bad, because school *could* offer so much more).
100% agreed!
 

Talkintoy

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School does not teach everyone how to make money is because government has thier own business system theyre running which is us employees paying them taxes. If they teach everyone to make money then noone would be paying them thier taxes that they so want. Our economy needs the money spent to go around and recycle. Some people realize this but most dont know why they're working all thier life. They think its work then play instead of work and play harder not knowing the difference between the 2.
 

JScott

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School does not teach everyone how to make money is because government has thier own business system theyre running which is us employees paying them taxes. If they teach everyone to make money then noone would be paying them thier taxes that they so want. Our economy needs the money spent to go around and recycle. Some people realize this but most dont know why they're working all thier life. They think its work then play instead of work and play harder not knowing the difference between the 2.
Ummmm...the gov't (in the U.S., at least) gets paid taxes regardless of whether money is made as an employee or as a business owner. In fact, business generally pay *more* taxes than individuals, so the gov't has no incentive to keep people out of the wealth-creation mindset.
 

Talkintoy

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If thats the case then why need to have a business? There's loopholes business owners can use but not for employee. Employees pay a lot more taxes and cant do anything about it, but business owners can write off before they can be taxed.
 

kimberland

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Back to Chris' point about lower barriers to entry...
The issue of course with lower barriers to entry
is that it is darn easy to get squashed by competition.
Gotta pair that low capital cost with a unique selling proposition.
That's the difficulty.

Universities/Colleges are such a great place
to find future team members
because it is one environment where people with different backgrounds
(finance, marketing, engineering, etc)
all mix together.

Once you graduate,
you have to work harder to find someone outside your field.
 

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lucas

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I went to college and never finished. I don't regret it in the slightest.
 

JScott

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I went to college and never finished. I don't regret it in the slightest.
Unfortunately, a sample of one is statistically insignificant (I learned that in college :))...

I'm sure you can find millions of people who didn't go to college and don't regret it. Just like you can find millions of people who went to college and quite glad they did.

It's a personal decision, and there's nothing wrong with either decision...
 

lucas

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Of course. I was just expressing agreement with the article. I feel that college is overrated. I feel that many of the millions of people who are glad they went to college would be just as happy (or even happier) if they had not.

There are certain technical fields (things like medicine, advanced sciences, et al.) where college is incontrovertibly necessary.

But I think the subjects of financial literacy, and building wealth through the creation of value (businesses, real estate) would serve most people better than calculus. Yet they seem to be somewhat neglected in most institutions.
 

MJ DeMarco

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But I think the subjects of financial literacy, and building wealth through the creation of value (businesses, real estate) would serve most people better than calculus. Yet they seem to be somewhat neglected in most institutions.
Sounds like something I'd say ... Speed++++++++ for the new guy!
 

michael515

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It's been said that college grooms students for corporate life. I bet they'll always be neglecting the real wealth building principles in institutions. If they get you to think too independently -what do you need them for? College is a business.

As for low barrier's to entry it doesn't mean that they'll be successful. Creating a business and building a wildly successful are two completely different animals. I don't think most people have the business savvy and courage to do the later.

Knowledge is power but only if it's applied effectively - that's the tough part.
 

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