Our answer to 2, from the depths of our souls, can only be: Hell. Fucking. Yes.
Now, Paul Graham is awesome (he has left me in a state of complete conviction that LISP is the One True Way, to which I must aspire), but that’s… alot of essays. (An entire herd of alots, majestically migrating across vast prairies of prose.)
And I think our “startup” is going to be a lot different from what is normally meant by the term, so… I’ma sketch said differences, and you can tell me what you think is relevant, if you want.
Our “startup” is never going to be a publicly traded company.
We’re actually not trying to become “rich”, but to win the freedom to focus on doing nothing but work on inherently awesome projects.
Once we’ve got our prototype, we’ll be able to easily start paying the bills through… basically tutoring celebrities and other rich people part time.
(That sounds bizarre, but we’ve got an outside view on this. The whole thing has basically been done before by people who had a clumsy grasp of the theory underlying the technology, and didn’t even take advantage of basic computer programming tools to assist in the analysis. Just… stipulate this point.)
Although we also have, like, web-app subscription models we expect to get some cash flowing through...
So we going for establishing a reputation that’ll allow us to maintain our frugal lifestyle easily off of a bit of consulting-y work, and some nice monthly cashflow for web-apps etc...
But essentially we’re doing a startup for… a non-profit?
We’re basically fantasizing not about giant IPO’s, but about massive Kickstarter popularity whenever we announce a new project. And eventually creating our own university. A school that actually is for learning.
So yes, we’re obviously insane. But let’s stipulate that trying to live a “sane” life would be worse than death for us, and that the only type of advice we could possibly make use of is tips on how to kick ass at pulling off crazy things.
Ok, first of all, I wish you the best of luck in your craziness. The time to swing for the fences is when you’re young; that’s when you can afford to take a couple of risks.
Your description does narrow down the kind of advice you should be looking for somewhat; it’s true that most of PG’s essays are directed at people who are trying to follow the “standard” route of venture-capital funding to an eventual IPO or buyout. Nonetheless, his advice on how entrepreneurs should act internally, as opposed to their relations with investors, still seems relevant. Try “Relentlessly Resourceful” and “Ramen Profitable” for starters. For myself, I find that I like his writing so much that I treat his essay page a bit like the Sequences: I go back and reread them every so often. So if your taste is like mine, you’ll end up reading it all eventually; bwah-hah-hah! That said, the best stuff does tend to be in the middle—the post-YC essays are less interesting.
It seems you are going for financial independence rather than huge wealth; perhaps you are already aware of this resource, but if not, you will likely find the blog of Mr Money Mustache motivating.
And what the heck, while I’m suggesting readings anyway, go have a look at the archives of Joel on Software; as with PG, the best essays are from around 2003-2006, or so, but still very much worth reading. They don’t ahve quite the same direct relevance to your project, but Joel seems to have done something similar to what you have in mind—build a company to sufficient-for-my-needs profitability without taking venture capital—so you might find it interesting to have a look at how he thinks. In particular, now I consider it, his Strategy Letter I seems relevant to your situation.
Edit to add: And, of course, beware of insight porn! You don’t want to spend more than your lunch break or so reading these authors, excellent as they are. Get some dang work done! :)
The time to swing for the fences is when you’re young; that’s when you can afford to take a couple of risks.
I know this is the conventional wisdom, but does it really make sense? It seems like older folks would tend to be wealthier and wealthier people ought to be less risk-averse, for instance.
Young people are wealthier in “time remaining until I cannot work anymore”. What’s more, betting 100% of your liquid assets is a much smaller risk for a poor student. Further, while old people have more wealth they also have more commitments, such as children; a young person risks only his own livelihood.
Young people are wealthier in “time remaining until I cannot work anymore”.
A year wasted is a year wasted whether it’s your 21st or your 61st.
betting 100% of your liquid assets is a much smaller risk for a poor student.
Yep, but if you’re starting a business, you won’t be betting 100% of your liquid assets, you’ll be betting some fairly constant chunk of capital (living expenses for yourself + startup expenses for the business), which is likely going to be a much larger % of the liquid assets of a poor student.
Further, while old people have more wealth they also have more commitments, such as children; a young person risks only his own livelihood.
I agree that children or a mortgage should make one more risk-averse.
BTW, the reason I’m asking these questions is I’m wondering if people just get irrationally risk-averse as they age, and rationally more people should be acting like young people and taking financial risks all throughout their lives.
Then would you also agree that a dollar wasted is a dollar wasted whether you have ten, or ten million?
No, I think money is different from time this way. For example, it’s possible to have more money than you know what to do with, but having more time than you know what to do with is a rarer problem. My marginal utility for money is really high for my first few thousand dollars and then drops off. My marginal utility for time is shaped much differently… I would value 20 extra years of youthful happy life about twice as much as 10 extra years of youthful happy life. People are (rationally) risk-averse when they have small amounts of capital because their utility function for money is such that they would really like to have at least a small amount. I don’t see any corresponding effect for time (indeed, people say things like “it’s better to burn out than fade away”).
Bankruptcy is the loss of 100% of your assets.
Personal bankruptcy, yes. So young people starting businesses would run a higher risk of personal bankruptcy and the drop in credit rating that implies.
Thank you very much! You are cool and I like you and I will look into those some time! :3
I don’t think I have to worry too much about “insight porn”. The closest I get is obsessively sampling the products of the nearest thing we have to “competition”, noting details of all the ways they screw up and how to avoid those problems (and making sure to hit the few points they ever get right!)...
I’m basically forcing myself to spend these next few weeks landing some cheap-or-free rent and other pre-move preparations.
The theoretical and engineering puzzles of building the figurative machinery are just so inherently fascinating, and the joy I anticipate at watching it all run is compelling. :3
… Yes, the winner is you.
Our answer to 2, from the depths of our souls, can only be: Hell. Fucking. Yes.
Now, Paul Graham is awesome (he has left me in a state of complete conviction that LISP is the One True Way, to which I must aspire), but that’s… alot of essays. (An entire herd of alots, majestically migrating across vast prairies of prose.)
And I think our “startup” is going to be a lot different from what is normally meant by the term, so… I’ma sketch said differences, and you can tell me what you think is relevant, if you want.
Our “startup” is never going to be a publicly traded company.
We’re actually not trying to become “rich”, but to win the freedom to focus on doing nothing but work on inherently awesome projects.
Once we’ve got our prototype, we’ll be able to easily start paying the bills through… basically tutoring celebrities and other rich people part time.
(That sounds bizarre, but we’ve got an outside view on this. The whole thing has basically been done before by people who had a clumsy grasp of the theory underlying the technology, and didn’t even take advantage of basic computer programming tools to assist in the analysis. Just… stipulate this point.)
Although we also have, like, web-app subscription models we expect to get some cash flowing through...
So we going for establishing a reputation that’ll allow us to maintain our frugal lifestyle easily off of a bit of consulting-y work, and some nice monthly cashflow for web-apps etc...
But essentially we’re doing a startup for… a non-profit?
We’re basically fantasizing not about giant IPO’s, but about massive Kickstarter popularity whenever we announce a new project. And eventually creating our own university. A school that actually is for learning.
So yes, we’re obviously insane. But let’s stipulate that trying to live a “sane” life would be worse than death for us, and that the only type of advice we could possibly make use of is tips on how to kick ass at pulling off crazy things.
What does Graham have that I should read?
Ok, first of all, I wish you the best of luck in your craziness. The time to swing for the fences is when you’re young; that’s when you can afford to take a couple of risks.
Your description does narrow down the kind of advice you should be looking for somewhat; it’s true that most of PG’s essays are directed at people who are trying to follow the “standard” route of venture-capital funding to an eventual IPO or buyout. Nonetheless, his advice on how entrepreneurs should act internally, as opposed to their relations with investors, still seems relevant. Try “Relentlessly Resourceful” and “Ramen Profitable” for starters. For myself, I find that I like his writing so much that I treat his essay page a bit like the Sequences: I go back and reread them every so often. So if your taste is like mine, you’ll end up reading it all eventually; bwah-hah-hah! That said, the best stuff does tend to be in the middle—the post-YC essays are less interesting.
It seems you are going for financial independence rather than huge wealth; perhaps you are already aware of this resource, but if not, you will likely find the blog of Mr Money Mustache motivating.
And what the heck, while I’m suggesting readings anyway, go have a look at the archives of Joel on Software; as with PG, the best essays are from around 2003-2006, or so, but still very much worth reading. They don’t ahve quite the same direct relevance to your project, but Joel seems to have done something similar to what you have in mind—build a company to sufficient-for-my-needs profitability without taking venture capital—so you might find it interesting to have a look at how he thinks. In particular, now I consider it, his Strategy Letter I seems relevant to your situation.
Edit to add: And, of course, beware of insight porn! You don’t want to spend more than your lunch break or so reading these authors, excellent as they are. Get some dang work done! :)
I know this is the conventional wisdom, but does it really make sense? It seems like older folks would tend to be wealthier and wealthier people ought to be less risk-averse, for instance.
Young people are wealthier in “time remaining until I cannot work anymore”. What’s more, betting 100% of your liquid assets is a much smaller risk for a poor student. Further, while old people have more wealth they also have more commitments, such as children; a young person risks only his own livelihood.
A year wasted is a year wasted whether it’s your 21st or your 61st.
Yep, but if you’re starting a business, you won’t be betting 100% of your liquid assets, you’ll be betting some fairly constant chunk of capital (living expenses for yourself + startup expenses for the business), which is likely going to be a much larger % of the liquid assets of a poor student.
I agree that children or a mortgage should make one more risk-averse.
BTW, the reason I’m asking these questions is I’m wondering if people just get irrationally risk-averse as they age, and rationally more people should be acting like young people and taking financial risks all throughout their lives.
Then would you also agree that a dollar wasted is a dollar wasted whether you have ten, or ten million?
Bankruptcy is the loss of 100% of your assets.
No, I think money is different from time this way. For example, it’s possible to have more money than you know what to do with, but having more time than you know what to do with is a rarer problem. My marginal utility for money is really high for my first few thousand dollars and then drops off. My marginal utility for time is shaped much differently… I would value 20 extra years of youthful happy life about twice as much as 10 extra years of youthful happy life. People are (rationally) risk-averse when they have small amounts of capital because their utility function for money is such that they would really like to have at least a small amount. I don’t see any corresponding effect for time (indeed, people say things like “it’s better to burn out than fade away”).
Personal bankruptcy, yes. So young people starting businesses would run a higher risk of personal bankruptcy and the drop in credit rating that implies.
Thank you very much! You are cool and I like you and I will look into those some time! :3
I don’t think I have to worry too much about “insight porn”. The closest I get is obsessively sampling the products of the nearest thing we have to “competition”, noting details of all the ways they screw up and how to avoid those problems (and making sure to hit the few points they ever get right!)...
I’m basically forcing myself to spend these next few weeks landing some cheap-or-free rent and other pre-move preparations.
The theoretical and engineering puzzles of building the figurative machinery are just so inherently fascinating, and the joy I anticipate at watching it all run is compelling. :3