That's definitely not true. There are only a few dozen unicorns, and hundreds of self-sustained businesses that "print" small amounts of money. If you join any large city's small business CEO groups (in NYC, SF, Toronto, London, etc.) you'll find a lot of one-person, bootstrapped companies that just run themselves.
It's not easy, but there are dozens or hundreds in many large cities.
One of the things I find fascinating about this article is how cyber warfare deterrence requires that you publicly show force (and thus, your cyber capabilities), which also puts you at a disadvantage against your adversary since they can learn your secrets/capabilities as a result. Very fascinating!
I'm the CEO of a 20-person startup and we've been on the brink of failure twice. Both times, our employees were never aware of it from the symptoms other people might expect (e.g., late payroll, some senior folks leaving); in fact, during such times we paid everyone ON TIME so that we wouldn't be on the hook later if things went to hell.
I would flip the question back to you:
(1) Do you trust your CEO?
(2) If you DO trust the CEO, then the only time your startup is failing is when the CEO tells you they're close to failure, running out of money.
If you DON'T trust your CEO, then your startup is also failing and #2 doesn't apply.
That's how I would think about it.
I think every startup employee has the right to ask me about runway, cash on hand, etc. I would be open with that info and have shared these metrics in the past with them.
I say this because we (a) hire MBAs, (b) hire less qualified developers for roles that do not require deep technical knowledge, (c) have motivational posters, etc... And as we grow, become profitable, and scale to 50+ people, we require these things simply to survive and thrive.
How could someone mistake that for a startup on the brink of failure is beyond me, but that's what some people seem to be writing in these comments.
> If you DO trust the CEO, then the only time your startup is failing is when the CEO tells you they're close to failure, running out of money.
The question is not really "how to know your startup is failing right now." I think it's pretty obvious when a startup is already failing.
The question is, instead, what the signs are that a startup is on the "wrong track" and will inevitably begin failing six months to a year down the line.
I've worked at several companies that were already in the "inevitably going to fail" category before I was even hired—retroactively, looking at when they took on the qualities that ended up killing them, they had those qualities for my entire tenure there (though they didn't previously had them; frequently I was hired as the replacement for the key cofounder whose departure, according to others there, signalled the beginning of the end.)
So, I don't want to know whether my startup is failing. I want to know whether a potential employer is failing, so I can avoid riding yet another startup into the ground and suffering through the inevitable cash-crunch and lay-offs. What are the warning signs, visible from the outside, that a startup is headed that way?
>I say this because we (a) hire MBAs, (b) hire less qualified developers for roles that do not require deep technical knowledge, (c) have motivational posters, etc...
I can't say this inspires very much confidence. Why does hiring MBAs mean you are successful? What exactly do they do to make you successful? On developers, if they have the knowledge for the job then they are qualified, not less qualified. This terminology is very worrisome. And motivational posters? That was a joke I guess?
And what does any of this have to do with being on the brink of failure or not? You can have a perfect team and still fail because of a bad product direction or market fit.
GP doesn't mean that those are signs of success; they mean just that those three things aren't signs the company is failing like some of the other comments suggest.
Yes. I find it amazing that people running startups apparently have a problem with this concept. How else are junior developers supposed to gain experience and be exposed to hard technical problems, get the benefit of mentorship, etc?
There is nothing wrong at all with less experienced devs working for a startup. It is one of the components for building a successful company. As your junior employees grow, they move into roles of greater responsibility.
I always see startups looking for experienced people as a company started by a couple of non-programmers, desperately seeking someone to make their products for them. It sounds like they'll be worked to death and expected to work long hours while the founder makes fluffy posts on hackernews :P
Seems accurate, though I think his point is that the overall team quality is decreasing instead of increasing. On the flipside, keeping a strong team probably means the team is always much smaller than it could be at any given stage. IMO this is well worth it and I strongly prefer a tiny team. But it could potentially decrease a valuation where company size/number of employees (especially engineers) is taken into account.
It also depends a lot on the company's strategy. If you are building a complex product then a small, highly qualified team makes sense. If your product is basic and requires a lot of customer success, you might want to hire junior devs or non-devs to do basic work (thus growing your team, but saving the senior dev time for more complex tasks).
This is a great answer. Trust is intangible, so maybe it's easy to overlook or forget.
Some of the other signals could just as easily reflect management's reading habits. It doesn't mean the other comments are wrong, but if you are looking for "early signals," be honest with yourself and hone your trust-dar.
I'll be writing a longer response in a few minutes. I am the CEO of a 20-person startup and there were a few scenarios we've had where payroll was truly late because of bank issues.
Just want to bring this up so people aren't paranoid when such things happens. They DO happen, especially now that so many startups use "cool" and "hip" startup payroll providers that also make mistakes.
I've seen both. The most truly pathetic thing I have seen was the rush to the bank to cash the payroll checks because certain employees knew that the account only had enough to pay a certain number of employees. Have also seen an innocent bank failure that screwed a payroll cycle. Luckily the bank covered overdrafts for the day it hosed everyone[1].
When the company is innocent, its best if the employer shows the employees the cause of the failure and be really, really oversharing so us very angry workers aren't inclined to riot.
1) at this late date, I get the feeling because the town was small enough to call around and make sure people banking at other banks didn't overdraft either instead of covering them money-wise after the fact.
When the business office people leave work 15 minutes early, then the rumor spreads and you have a parking lot of people driving like Mad Max to the bank the company uses[1], it does get pretty bad. I was an observer since I worked for someone else.
It was in the 90's and there were "personal adjustments" that occurred later on.
1) cannot drive to your bank because then the check would bounce and really do some extra fun damage - plus this was before direct deposit was available at that company
I've had actual experience of this sort in an established, relatively large company with a dedicated CFO. Worse and worse every month.
A true mistake is acknowledged, not repeated, and addressed: the opposite of what a failing company in denial does.
Interesting; and that's a shame. I guess I just mean to say that a mistake like that could legitimately be a mistake. I'd be horrified if our employees thought we were going bankrupt because our payroll system had a bug in it!
Hi Devon, thanks for writing this. Have you spent much time reading Jane Jacobs or "Seeing Like a State"? Both talk a bit about the lack of ability to truly plan cities (and even make references to chaos theory), leading them both to the conclusion that grassroots-oriented planning (i.e., making cities walkable, focusing on localized communities, etc.) will lead to healthier and better experiences for citizens.
Barcelona's superblocks[1] might be a good example of this, but we'll know in a couple of years.
Yes! My interest in cities originated from a biography on Robert Moses, and in my quest to learn more I quickly fell into the works of Jane Jacobs. Her ideas are foundational to the way I think about urban planning.
I've read excerpts of "Seeing Like a State", but not the whole thing – thanks for the reminder! I should go back and read through it further.
The superblocks project is fascinating. I'm excited to see how that pans out. Hopefully I can get myself over to Barcelona to see it in person some time soon. :)
I really want to be respectful here but your comment shows a large level of ignorance around the difference between public monopolies, public UTILITIES, public (regulated) goods, and the economics thereof. A lot of public utilities were created specifically to enforce a level of quality and compliance and protect the citizen. In situations where the quality of goods is reduced below a safe level, you should not blame lack of competition, but call it what it is: incompetence at best, corruption at worst.
I this is a little blinkered. You are making too much of merely verbal differences.
Government organisations do don't magically do what they were nominally made for. Like all providers, their work is the product of various human motitivations operating under under various kinds of control.
Approximately speaking: private providers are controlled by competition and regulation. Government organisations are controlled by politics and a command structure. Much of that is also regulation -- though sometimes under a different name.
What you call incompetence and corruption happens when those controls fail. The resulting organisation is very much like a private monpoly: it has no competitors, and the chain of bureaucratic control stops short of making anyone accountable to the public.
I typed the comment in haste and so did not emphasize any of the differences. I think the main difference has to do with which of the entity's behaviors are regulated internally vs externally. This influences whether we consider failings to be incompetence or corruption, but it scarcely matters, since there is no chance for consumers/citizens to simply choose another option.
What sorts of contaminants in drinking water are harmful? How much contamination is too much? What tradeoffs are important when determining that?
Chlorine causes cancer, but it is added to the water supply to prevent bacteria growth while the water is in transit to buildings and residences. Those closest to the treatment facility get over-chlorinated water, and (assuming enough has been added) those furthest away get bacteria-free water.
Fluoride is also sometimes added to water, but it too can cause health problems. How much is reasonable, what is the right tradeoff between the dental health benefits of fluoride and the harms? Who is to decide this?
In Flint, the pipes began leaching harmful chemicals into the water supply, but the officials ignored reports of the problem. Why weren't citizens quickly aware that the water entering their homes (and bodies) was poisonous? Because the public trusts government to do a good job and not to be corrupt.
Public health standards dictate whether an old person gets stents or a coronary bypass operation or neither. There are age limits that apply regardless of health, because of the average health of people of certain ages.
In all cases, public health guidelines are fraught with tradeoffs that inflict intentional harm, usually to conserve resources, etc.
The problem is that the public believes these guidelines to be in their individual best interest. Th public also believes that water deemed safe by regulators is actually safe to consume over the long term, when it may not actually be.
Is it safe to ride in a car with seatbelts and no airbags? Is it safe to drink city water for municipality X for 20 years? How many people will die due to not having an airbag? How many due to low level contamination in the water? Someone is making this judgment call on behalf of everyone, but due to the need to preserve their political authority, the tradeoffs and weaknesses of the approach are not surfaced. They can't say "buy a home water filter" because then they are discriminating against people too poor to do so.
How many poor people live in buildings with water pipes that were grandfathered into code compliance but still create health risks? How much health risk is "reasonable" to prevent the landlord from having to replace pipes?
Similarly, regarding net neutrality, how many startups can never succeed because the "net neutral" latency is too high for the service they wanted to build?
Many of these things are minor, but across the whole spectrum of imperfectly regulated things, are all exposed to significant risk and harm. It's the things we don't tend to focus on (like what constitutes safe water) that are the most likely to harm us, and when we're grieving because a grandparent is sick we are not likely to be thinking about the standard of care that made him/her ineligible for a therapy that had a 1 in 5 chance of extending his/her life by a few years.
Institutions desire power and authority, and they often start out by doing some sort of useful service. But they are easily corrupted. One hallmark of tyranny is the creation of a top down idea of the "greater good". We must be vigilant to prevent our trusted institutions from embodying this sort of tyranny, even on issues that seem inconsequential or minor.
> A lot of public utilities were created specifically to enforce a level of quality and compliance and protect the citizen
Calling others ignorant does not help an argument. I think he had a point that when you let government control something it is the worst kind of monopoly and the quality is bound go down the drain. Whether it VA affairs, public education or IRS.
> I think he had a point that when you let government control something it is the worst kind of monopoly and the quality is bound go down the drain. Whether it VA affairs, public education or IRS.
Thats not necessarily true. Certainly outside the US there are many, many public institutions which do fantastic work. The ABC here in Australia and the BBC in the UK produce great television. The ACCC (Australian Competition and Consumer Commission) are highly regarded here, as was CSIRO before the government gutted their funding (CSIRO is an Australian government research group which invented parts of wifi).
I don't know if the reputation US government agencies have for incompetence is real or due to media spin, but the problem is obviously not inevitable. To quote Bill Clinton: "The problem with ideology is that it gives you the answer before you've asked the question".
As an Australian, aside from their news which last I checked doesn't get the same kind of views as the private companies I would disagree.
Maybe the parents enjoy ABC1 or whatever plays kids shows all day but I find the quality of their original shows to be quite poor and their flagships like QANDA have really gone off the rails in the last few years.
in Canada, the CBC was pretty great until the conservatives annihilated their budget. In that time, they lost the license to the theme of their flagship show, Hockey Nightnin Canada, and after that, the show itself. Also, they lost the rights to report the olympics, and the news is much lower quality.
its almost like public services dont work well when you defund them.
Do you have any data points of the private sector managing those things?
I only ask because I moved from government to private sector. In government we were all so frustrated that we were so inefficient and had to work with such backward technology and systems. So I left to get paid more and do things better for private industry...
I get paid more, but by god, we're about 10 years behind some of the practices we were bitching about in government, but we call everything a grand success and put out so much advertising and never admit failure and we don't really care about measuring or performance objectively.
I think there's so little cross over most people don't really know whether what they're doing it's objectively efficient...most of us in government had swallowed the line we were behind because that's what we were always told and things were objectively frustrating: so we bought that private is better. And this was despite the general observation that our private competitors generally put things out of lower quality and then arguing that we should be abolished because of our inefficiency/lack of need for us any more.
I'm not saying government is inherently more efficient than private sector, just that government involvement isn't necessarily more inefficient/desirable than private sector or deregulation.
Also, I think a part of this also has to do with the general cultural values systems a society has. Have government or private industry set up to deal with things the society genuinely doesn't value that much, and you're going to find its generally poorly done no matter who it's running the show...
> when you let government control something it is the worst kind of monopoly and the quality is bound go down the drain
[citation needed]
I think the US political climate seems uniquely poorly suited to having well-functioning government because it seems half the country is hell-bent on proving that government doesn't work.
I don't live in the US and I've only had great experiences at the driver licensing center and tax authority. My garbage gets picked up on time, the water is clean and safe to drink. Meanwhile at private services I've waited in massive lines at banks, and had poor service from telecom companies.
Water pipes are a natural monopoly anyway. It doesn't make any sense for FooWater and BarWater to build out two completely separate sets of water mains which all have to be maintained.
Whichever entity is running the water for a particular area, it's either going to be run by the state or contracted out by it. I don't know anywhere that isn't true, other than places where the water supply is so abysmal that people pay private firms to truck water around.
Completely agree. It took us to 15 people before we hired an Office Manager. Silly in hindsight, but not obvious at all, and we debated it quite a bit.
Curious if anyone is aware of usage stats for Office365 (and Excel + Excel API) in the workplace?
This sounds "neat" but nearly all of our customers do not use Office365 and I'm curious if it'll get any traction. Would be great to move away from VPA Macros or to promote Zapier in the workplace.
It's not easy, but there are dozens or hundreds in many large cities.