Paul Graham wrote a new thought-provoking essay. Why to Not Not Start a Startup. Yes, a double negative. He’s coming from a venture company that invests in startups. It’s a long read but do take some time out to go through it.
Unfortunately, as much as I’d like to take his advice, I can’t do it at the moment. I’m not not not starting a startup.
Know nothing about business – Unfortunately this is not true in the Philippines.
Paul says, “I get a fair amount of flak for telling founders just to make something great and not worry too much about making money. And yet all the empirical evidence points that way: pretty much 100% of startups that make something popular manage to make money from it.” We know that the opportunity to do this are limited: for software products, nobody wants to pay for software and if you want to sell it abroad, payment options are limited. The same e-commerce limitations for for websites.
He continues, “And acquirers tell me privately that revenue is not what they buy startups for, but their strategic value. Which means, because they made something people want.” Acquirers or venture investors/capitalists in the Philippines are also few and far between. I don’t know the nature or scope of their activities today. How about selling your company to foreign companies? I’m sure there are a lot of legal issues there that a couple of Pinoy geeks in a garage couldn’t handle.
Conclusion: You need to know about business because you’re going to run the whole thing yourself. No exit strategy. I don’t have experience there. I’m not even sure whether I have the interest.
The Independently wealthy reason is an interesting contrast. In Paul Graham’s world, having reached wealth would be a reason not work. But in the Philippines, where startups have to fund themselves and there is no angel investor community to be found, it’s the independently wealthy (or, those who have wealthy parents/relatives) who can join the startup game. Even if I got started and put up a one-man team, I don’t have the cash to live for months while building the product.
Finally, No idea. I’ve had lots of ideas that are doable solo, but have no commercial viability. I have lots of ideas now, and am working on them, but they need a team to execute and money to fund and test the market. These, I get from employment. Product development is expensive. I guess one reason I have a job is that the ideas I can potentially produce something for the stakeholders.
I think having no idea is a reason why a number of people work on solo outsourced jobs as freelancers. The idea and the direction come from abroad, and the local folks implement it. They can earn this way due to the salary differences between the Philippines and the hiring country. But, they don’t get the multiplier effect that a successful product brings – after the initial R&D, they can sell additional copies of the software product, or get additional users for the web service.
To put this in context, here’s a TechCrunch interview with Paul Graham. I would also like the congratulate the Ernst & Young Philippine Entrepreneurs of the Year – they overcame these obstacles.