We've run a decent company in the past. We're going to start another. We're looking for 2 or 3 co-founders. We've tried different things, posting on startup blogs but the responses were generally from people with little experience or others who were fixed on a pet project they've been working on after hours. So we created a website with info and posted a link here hoping for some constructive feedback.
I'm amused that a lot of the comments here have missed the point that this is their wishlist, not some draconian HR checkbox exercise. They come off as fairly sane to me, so I doubt they'd go "No previous exits? Don't want you."
I don't think a 13-year business with under $3M in revenue is a startup, sounds more like a lifestyle business. It's also not something VCs would be interested in. This falls under super-laid back, and not something most people on HN would likely be attracted either. The serial entrepreneurs I admire have done 2-4 businesses in 10 years, all with exits well over $50M.
I started the business as a hobby in 1995 while I completed high school.
In 1999 I met Jim and became much more focused. I didn't have the
'startup' concept until 2005 when I read Paul Graham's essay, "How to
Make Wealth". In hindsight we should have exited the company somewhere
between 2003 and 2005.
re: not something VCs are interested in - we didn't require VC money.
I do not think VC money is always necessary in starting a company. If anything
I believe it adds a layer of complexity which could hurt founders
especially with their first go at it.
re: laid back - I guess this is relative. I do know things were much
more stressful and frantic in 2001. I also know we are more focused
today and complete far more in 10 hours now than we did back then.
I think you should call this out somewhere because your about page certainly does not paint the whole story. My assumption above was simply the result of reading what is likely the most important page. A lifestyle business was my first conclusion based on your tone and sparse details.
Bad VCs add complexity and it's wrong to stereotype all of them as the same, where there is capital there is greed. Good VCs bring a ton of value outside of just money.
The entrepreneurs I admire have built long-lasting businesses that continue to pay out dividends year after year. I don't see why flipping half-baked businesses would be a more noble goal than that. Also, I don't care what VCs are interested in and don't believe even small businesses are 'super-laid back'. Besides, if you admire statistical outliers you are likely to end up with nothing.
I agree with you about building a value-focused business. However, in the context of this author's post in which they are "looking for co-founders to build, exit, and repeat"... the serial-enterprenuers I admire have done 3-4 $50M+ businesses in 10 years.
Serial entrepreneurs are necessary, they keep MBA students employed. That was just a joke. :)
I don't think flipping businesses is a model to admire.
They aren't creating any more value than some guy selling a get rich quick scheme.
And given the amount of attention DHH receives for taking the counterpoint to your argument here, I'd disagree that "most people on HN" would not be interested in this.
Generally a business goes through three stages: innovation (create and fine tune the product), growth (increase market share through marketing), and harvest (maintain large customer base). We experienced all three stages with our first company. Each stage is unique. Each requires a different mode of operation. They require different talents, different ways of thinking, and different filters for making decisions. Conventional wisdom says this is the desired course of a business. You start out small, innovate, grow a customer base into a huge corp and then harvest the rewards.
After reading Paul Graham's "How to Make Wealth" essay, we had an 'aha moment'. It's not necessary for a business to do all three stages. In fact it's not efficient and usually not desirable. Some people/companies are good at innovation, some are good at growth, and some are good are harvest. Each should focus on their strengths.
The model of creating startups and then exiting is about focusing on the innovation stage.
you have a really biased view of serial entrepreneurs, or maybe I do since they've been so generous toward us. they are world's apart from get-rich-quick guys. They build real value, quickly, and it's an extremely hard thing to do more than once, specifically in technology where innovation and speed often move in parallel. We're not talking about MLM herbal medicine schemes here.
If most HN readers were interested in lifestyle businesses, I question why they vote up so many pg, et. al. articles about the difficulties and intensity of startups. To your point however, my initial comment was presumptuous and Steve cleared it up...
Did anybody understand what the post is about? Are they funding new startups from the money they got from exit or they are they want to talk to startups to know if the exit was in the right range? No offense, but I couldn't understand the motivation of the post.
We recently sold our company. Our goal now is to try and meet up with a group of two or three founders, people in a situation similar to ours, who have have worked together and founded a successful startup in the past. It's our hope to work together on a new startup.
Note: insisting that your co-founders have "completed an exit" is not going to make you any friends here, because you're suggesting that you're better than others less experienced or less fortunate who have not.
Success is obviously preferable to failure, and we all believe that we're talented to a degree that gives us a high enough likelihood of success for startups to be worth pursuing. However, this sort of extreme personalization of results is not attractive.
Strongly disagree. It might be unattractive to SOME, but it's probably attractive to the people they are filtering for, who (among other things):
- Are proven to be able to build a business
- Probably have the cash to actually work for equity INDEFINITELY. Most people have a very finite amount of time they can work for equity before they start getting hungry and have to pick up a day job or some consulting work.
- Probably don't need startup education... i.e. they know about the highs, the lows, the shifting landscapes, etc.
- Aren't currently deeply engaged with another project.
Personally, I'm still iffy on the "founder personal ad", whatever the filter. It's like advertising for a wife... I think it'd be better to advertise that you're interested in "dating" and seeing where it leads. But if you're going to go this route, veteran founders with a track record seems like an obvious filter.
As someone whose closest proximity to a successful exit was a bunch of stock options in failed dot.com Linuxcare, I don't take umbrage at the requirement. They want to use that as a filter, let them. They'll miss out on some good people, but that's their choice, and as good as any in terms of screening people.
Yeah, it is difficult to know exactly how to go about it. As Jim said
above we ran into the problem of too much noise when we presented the
idea locally.
No one wants to be excluded. On the same breath, when I started out I
had many preconceived notions about the best way to run a company based
on what I thought was common sense. Only by trying things and tracking
the results was I able to see that the right approach wasn't always
intuitive. I understand things now that I couldn't have known without
the actual experience of starting the company and taking it
through to the exit. I'd prefer to start the next venture
with people already at that stage, if possible.
All that said, we're really most interested in people who are good
friends; who have worked closely together and understand each other
very well.
If you pose a general question to a startup crowd "Are you interested in joining a startup" you get everyone and their grandmother responding. The "completed an exit" requirement acts as a filter. We're hoping it will improve the signal to noise ratio.
"Are you interested enough in a startup to be willing to work for X months for mostly equity, knowing full well that the project has a risk of failure?"
Yeah, I know what you're saying. However, we often fool ourselves about what we're capable of. If someone has developed a startup and completed an exit and they're prepared to go at it again, that speaks much louder than someone who claims they are willing but has never done it.
What's obnoxious about "completed an exit" is that talented people can fail to meet this for reasons that aren't their fault. Possibly the VC wanted to aim for an IPO, they failed because of the downturn, and now they haven't "completed an exit". I know of stories like this.
I wouldn't bat an eye if you said you were looking for people with substantial entrepreneurial experience. I just think the specific criterion of "completed an exit" is obnoxious. It sounds like you think you're too good to talk to people who are talented but haven't had their break yet.
- Wealth (exit = cash = ability to work for equity for an indeterminate period)
- Availability (recent exit = not currently engaged with another project)
The first is the biggie. I'd say 99.9% of people on HN can't say "I will eschew all paying work for up to 2 years and can toss a few hundred grand of my own money in if we need a cash infusion".
Of course, the recent exit thing is a problem, too. Most buyers lock in the founders for 1-2 years, so recent exiteers will have golden handcuffs.
That's a great deal (makes sense for an ISP)! But if you're looking for software entrepreneurs who are coming free, it might mean people who sold 2 or 3 years ago, depending on the business.
We've run a decent company in the past. We're going to start another. We're looking for 2 or 3 co-founders. We've tried different things, posting on startup blogs but the responses were generally from people with little experience or others who were fixed on a pet project they've been working on after hours. So we created a website with info and posted a link here hoping for some constructive feedback.
Do you have any other suggestions?