Ten Geek Business Myths 262
hpcanswers writes "Venture capitalist Ron Garret has posted a list of eleven (despite the title) common mistakes entrepreneurs with a technology background make. A common theme is that good ideas sell; in reality, what a customer wants sells. By extension, having a Ph.D. and holding a patent are not particularly helpful if the intended end-user does not have the same level of understanding of the widget as the creator does."
Another Microsoft screed? (Score:2)
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Re:That explains the "take me back" kiss ass, then (Score:5, Interesting)
Entrepreneurs with an idea think that money exists as a tool to bring ideas to realization, and they want their idea realized. The money to them is rather irrelevant if it's just doing the same old shit.
Business majors think that ideas exist as ways to make money, and they want their money. The realization of the idea is rather irrelevant to them if it's not the best way to make money.
At the end of the day, both can be opportunities for each other, but neither needs the other.
A brilliant idea can make a business major rich and powerful, but they can still get rich with the same old capitalist tactics they're familiar with and nary a novel idea in sight.
On the other hand, a lot of money can motivate people to support your idea and get it out into circulation, but there are other ways to motivate people than money. For an example of this, look at RMS.
It's my opinion that the best way for an individual to get their idea out there is to not only discard the existing business models, but to create models where other parties particpation is rewarding in and of itself, rather than some distasteful task they are being bribed into completing. If you can do that, it will scale globally and you don't need a dime to pay them. If you can't, you'll probably get crushed by the existing players with WAY more money than you and either be destroyed or absorbed.
Unless you're an existing player with tons of money, of course. Then you can bribe people to get behind whatever silly idea comes into your head.
Re:That explains the "take me back" kiss ass, then (Score:5, Insightful)
Kind of like a wolf telling you that you don't need to worry about fencing in your sheep.
Re:That explains the "take me back" kiss ass, then (Score:5, Insightful)
Those were all really good points in the article. I've personally stumbled into most of those traps (being the prototypical geek). Just for fun, I'll list some of my mistakes that correspond to his points:
#1 - A brilliant idea will make you rich.
In 1991, I started DataDraw as a company on the side that would sell software to make teams of programmers more productive. It's a great idea, with huge potential to benefit the whole planet. All it requires is that all those programmers out there understand how they can be more productive, care, and then take action to change. The harsh reality: they don't figure it out (go read datadraw.sf.net if you think you're really smart); they don't care (it's all just money after all); they don't like to change (show me your computer language of choice, and I'll guess your age within 5 years).
#2 - If you build it they will come.
Err... see #1. The next company I started also suffered from this problem. A friend and I started OpenASIC to solve the terrible communication problems between EDA tools. I wrote a very complex and fairly complete LPM module generator, simulator, and various readers and writers. My problem this time was that I BELIEVED what the customers were saying. Just because every major EDA and FPGA company issued press releases supporting LPM doesn't mean that they actually want anything to do with it (it's basically now an Altera specific format). Learning the difference between what a customer will buy, and what he says he will buy is key.
#3 - Someone will steal your idea if you don't protect it
I've had ideas stolen by professors and managers, and I've been stiffed by clients who decided not to pay me after they learned all they needed. The underhanded BS that happens in startups is unreal. Stop worrying about protecting your ideas, and worry about the guy who's gonna try and steal you blind.
#4 - What you think matters
I agree and disagree with this point. Many geeks imagine that if they like something, then so will customers. That's just plain wrong. However, if you actually listen to the customers, and go build what they ask for, you're sure to go broke. You have to be like Steve Jobs, and figure out that people want to pay more for a music player (not less), and that looking cool, and being bone-head easy (so dummies can use it) is what counts. You wont get average customers describing themselves as vain and stupid, but you'd better understand that most people are!
I started a company in 1996 called FPGA Technologies, with the purpose of creating embedded FPGA IP for SoC applications. I listened to all the SoC guys complaining about rising tooling costs, and heard their very enthusiastic response to my proposed FPGA cores. So, I went and built it... and got out when I realized that the customers were wrong. FPGA cores are waaaay to big to make sense in SoC applications. Stupid vulture capitalists keep on funding these poor doomed startups that want to do the FPGA IP thing. It makes a great elevator pitch, but a lousy product. The latest is M2000, which will most likely go broke when investors get fed up with them.
#8 - I need $5 million to start my business
That's funny coming from a VC, since few VCs will consider investing in a company that needs less than $10M to go public. They often have hundreds of millions of dollars to invest, and they can't waste time tracking every $1M investment.
However, I believe there's a huge opportunity for geeks like us to get semi-rich doing non-VC funded startups. In 2000, I moved to North Carolina, and started ViASIC. We have some angel investors, but no VCs, and our investment to date has been qu
Re:That explains the "take me back" kiss ass, then (Score:4, Insightful)
I think I see the problem with your old business.
You didn't make anything available except a code download.
No documentation. No description of capabilities, purpose, performance, extensability, flexibility, etc. No examples of what the code could be used for.
Just code.
I have code that could do amazing things, but I'm trying to make it useful, documented, and have examples before I try to do anything business-related with it. Without the documentation and examples behind an attention-holding introduction, no software has a chance to do anything but bit-rot.
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Because if your idea can be "stolen" by anyone, then it's because the idea is so lame anyone can implement it and succeed.
If it's really so brilliant and so smart that it is really worth something on an by itself, then you may be the only one who "gets it" and only you would be able to move it forward.
But if you avoid any investor seeing your idea (no, they won't bother signing NDA's), you'd better be able to pull the trick on your own, because they won't help.
Name 25 brilliant ideas that has come from MS (Score:2)
Besides, the guy is giving MS a compliment (backhanded, but still a compliment).
No compliment I could see (Score:2)
I'll go for your lesser challenge of five... (Score:4, Insightful)
- Bundle your OS part with the purchase of any PC compatible machine, not just the hardware we built.
- Only license your core apps (Office, SQL Server) on non-threatening operating systems to prevent switching.
- Bundle TCP/IP connectivity with the OS.
- Bundle a web browser with the OS.
- Make LDAP accessible to mere mortals (AD).
(Of course, these five are also reasons why some people hate Microsoft.) If his target audience is techies (who value "innovation"), then it's not a compliment - period.Re: (Score:3, Informative)
At least your third point is mood. TCP/IP was bundled with a lot of other operating systems way before Microsoft Windows. For instance UNIX V3 was basicly
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You sure you worked with Trumpet Winsock? After dicking with that, Windows 95's support for TCP/IP was HUGE!
Perhaps I should have said "end user operating systems". Anyone know when MacOS first supported TCP/IP? (I'm pretty sure it was in the middle of "System 7".)
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He said many stupid things (Score:2, Insightful)
False. Microsoft bought many of the most intelligent technicians in the world from its competitors, and some of them had brilliant ideas while working for Microsoft. How Microsoft used those ideas may not have been so brilliant, but they were there.
And if they don't have any brains then it doesn't matter what they do.
What a contradiction! He spent the whole article blas
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Apple and DEC did it first, in other areas (ProDOS on the Franklins, DEC on the Alphas).
Only license your core apps (Office, SQL Server) on non-threatening operating systems to prevent switching.
AppleWorks, anybody?
Bundle TCP/IP connectivity with the OS.
Unix.
Bundle a web browser with the OS.
What was that OS I saw back in Windows 3.1 days that booted up on any comodity hardware directly into a bro
Purpose of bundling isn't for the accountants... (Score:2)
You lose even on this amount (Score:2)
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MS has a good distribution network and their products work reasonably well (if you think MS software is crap, you haven't tried a lot of software fro
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Almost true (Score:2)
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2. Microsoft DOES suck, but people say that so often that the reasons behind it get lost. The best way to say that Microsoft sucks succinctly is to stop using MS products (as I have) and use Apple or some *nix distro. I prefer Gentoo myself.
3. There are few people who have original ideas. Implementation is what counts for me. If I like a
Quick list of the Myths (Score:5, Informative)
Myth #1: A brilliant idea will make you rich.
Myth #2: If you build it they will come.
Myth #3: Someone will steal your idea if you don't protect it.
Myth #4: What you think matters.
Myth #5: Financial models are bogus.
Myth #6: What you know matters more than who you know.
Myth #7: A Ph.D. means something.
Myth #7: I need $5 million to start my business
Myth #8: The idea is the most important part of my business plan.
Myth #9: Having no competition is a good thing.
Myth #10: After the IPO I'll be happy.
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Re:Quick list of the Myths (Score:5, Interesting)
I had a job interview for a QA position at 3Dfx a year before it went under. The interview with the QA manager went OK even though I kept asking myself if I wanted to work with someone who has a mohawk and body piercings (not exactly uber-professional). Then I had to be interviewed by the marketing hack. At that point, I did not want the job and they didn't offer the job since I had nothing to say to the marketing hack. Shortly after that, 3Dfx announced they were screwing over the board manufacturs by making their own boards to compete against them. Of course, they all jumped ship to nVidia and nVidia picked up the 3Dfx engineering team out of bankruptcy. No word on what happened to the marketing hack.
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Actually the person with a mowhawk WAS being professional. They were getting paid to do their job, making them professional. Their employer decided to evaluate them based upon their abilities, not what culture that person was a part of.
Attire cannot tell you a person's value as a worker. Sloppy dressers can be detail-oriented. Worse
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To be good manager is, among other things, to be a good diplomat. To take great pains to ensure that your own cultural peculularities don't clash with others cultural peculularities and create conflict.
A good manager should carry themself in a fashion that wouldn't shock or offend ANYONE they might
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The idea is really such a smal component. Engineers and Ph.D's tend to have a problem with this in particular. They always want the perfect product. The important part is finding the point of the marginal value curve that meets the market, then finding a way to exploit that market and excluding the competition from taking your market space. Not that the idea is the easy part, bu when compared to the rest of a business plan it is a very small
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What's that got to do with anything?
That's why they fund you.
One obvious omission... (Score:4, Funny)
You can let yourself slide back in to the "code daily, shower monthly" schedule after that seven-figure VC check is in the bank, k?
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That one's not a myth. It's something that they should be doing.
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PhDs (Score:3, Interesting)
Reality: The only thing a Ph.D. means is that you're not a moron, and you're willing to put up with the bullshit it takes to slog your way through a Ph.D. program somewhere.
I agree with the second part of this statement, but take issue with the first. I deal with PhDs all day, every day. Many of them are indeed morons who happen to have a great depth of knowledge in one miniscule area. After several years of doing this job, I've concluded that the only thing a PhD proves is that you were able to devote several years to a PhD program.
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What happens is that there is more demand for product development and that many of the PhDs end up doing it because they have to make a living somehow.
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It's called signalling (Score:2)
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And yes, I've met one or two morons in PhD programs out there... some others who are brilliant but w
Re:PhDs (Score:5, Insightful)
The PhD not only demonstrates that you are capable of thinking critically, it shows that one is able to communicate, analyze and create new "content" and make advancements. Speaking as a PhD, the job is much harder than I ever thought, though it is fun and I would not do anything differently. Having to write grants, write papers, teach, perform science, deal with administrative duties all at the same time is a much harder job than most folks realize. Of course that is just academia. If you add in work in the private sector on top of that, you have even more responsibilities (though prospects for more money). Some PhDs of course stick to industry and do quite well. That's all fine and dandy, I just like the additional challenge of academics in addition to commercial work.
Re:PhDs (Score:5, Insightful)
But there is also the point that (for some) education is a worthy pursuit in and of itself. It's value is intrinsic instead of instrumental.
Since I began my PhD studies, I have worked (all expenses paid) on three continents, including taken my family on a semester-long assignment to Europe, and influenced national policy. I'm actually putting off defending my prospectus for a week because I have to meet with the National Academies to finish up a report with them. Because I've made the right connections (and I would like to think I'm proficient at my work), I'll leave school with very little debt (I'll owe about as much on my car as on my student loan).
If I had to go into industry and I never used my advanced degree for anything in the professional world, I would still consider my graduate work worthwhile. In fact, I would still consider the last six years of my life the best of my life.
That said, I do know a great deal of PhDs who are, in fact, morons.
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~BWJones
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#1: Hubris. #2: Laziness (Score:5, Insightful)
Hubris is a trait of engineers that makes them strive for greatness in their products. After all, you can't really have good pride if you're constantly getting negative reactions to your stuff. However, it also leads to a close-mindedness and tunnel-vision in regards to other technologies and solutions. A good businessman must be able to survey the market and understand the positioning of his product. Someone who thinks that they have such a great solution that it is applicable to any and all problem domains is selling snake oil. See Netscape and Sun's Java for two examples of solutions that were billed as much more than they realistically were.
Laziness is a good trait for engineers because it forces them to seek efficient, easily-implementable solutions to everyday problems. Automating tasks is absolutely essential to creating value in a company. However, the business side of running a business is not reduceable to a script. There are serious tradeoffs that must be weighed all the time in order to guide a business down the road to success. These can't be automated. The laziness trait leads engineers to seek easy solutions when they should be seeking difficult-to-find synergies. Well-designed software is modular with simple interfaces. Well-run businesses are well-integrated and derive their strength from business units coordinating with each other, not simply acting as a pipeline from one end to another.
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Someone who thinks that they have such a great solution that it is applicable to any and all problem domains is selling snake oil.
Yeah, but selling snake oil can be profitable.
However, the business side of running a business is not reduceable to a script.
This is very true. I once worked for an engineering firm, and the guy in charge used to be an engineer. They were constantly looking for ways to automate their business processes, which was fine, except that they wanted to do it to the point where the
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There are serious tradeoffs that must be weighed all the time in order to guide a business down the road to success.
Then you said:
Digging with a shovel instead of your hands isn't lazy, it's smart.
I'd just like to take a moment to point out that if digging is the lifeblood of your business, and you think you can improve worker efficiency by spending time/money inventing a shovel, then that qualifies as a "serious tradeoff" and would mean that the "lazy engineer" is actually more like the "effici
Myth #11 (Score:5, Funny)
Re:Myth #11 (Score:5, Funny)
Why should I believe you? Do you have a Ph.D?
- RG>
#1 is right (Score:5, Interesting)
No a brilliant idea will make some other company rich because a single person doesn't have the capacity to make a full item. I've had many ideas that made other people rich in my life. I never run out of them. But I still live in the boonies
The Boonies? (Score:2)
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shocking (Score:2)
I am really attempting to act suprised.
Re:shocking (Score:5, Insightful)
A lot of people on Slashdot will complain that it takes too much memory, is heavy on the CPU, doesn't have enough settings/parameters, have DRM in store-bought songs.
Normal users see a pretty program that's easy to use, that does everything that they want, including buying a single tune for 0.99$ on an otherwise 10-20$ CD. Add "connect cable to sync iPod automatically without doing anything else" and you've got a winner.
When the linux community finally understands that (too many) choices are bad (and that automated everything isn't evil), linux on the desktop will be a real viable alternative. In the meantime, OS X is the only real-world alternative to Windows.
Now let's sit back and see my score go to "flame/troll" by some linux user that doesn't see (or doesn't want to see) the point I'm making here.
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You're still missing the point. It's not about only wanting either chocolate or vanilla. She could pick any other 29 flavors, but she prefers to only have to decide between chocolate and vanilla. She prefers less choices, it's less complicated/faster to take a decision. That's the whole point. Less choices. Too many = overwhelming.
If she goes to Baskin Robins, the other 29 choices ar
One exception to #1: Patents (Score:2)
Just don't count on it paying for retirement..
No competition. (Score:5, Interesting)
He should take a look at a company called Microsoft. Creating a no-competition environment seems to have worked out well for them.
Two words: iPod and iTunes
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"Two words: iPod and iTunes
Both of those markets alr
Re:No competition. (Score:4, Informative)
Actually those are really bad examples.
the Ipod wasn't close to the first music player. ITunes wasn't the first online music store.
Apple just really did a great job of taking two existing ideas and implementing them well.
What the guy missed was.
"Great ideas will not make you rich. Great implementation of great ideas will make you rich."
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That is pret
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The iPod was in competition with Creative's players when it was released - Creative had been releasing MP3 players for god knows how long before the iPod.
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As to Microsoft, you even used the key words, "creating a no competition environment." They didn't enter a market with no competition, they removed that competition which was there.
iTunes: Certainly not the first music player on the market, nor was the iTMS the first music store. They didn't have a lack of competition, what they had was *bad* competition, which is what TFA says one wants.
iPod: Same deal as with iTunes
Re:No competition. (Score:4, Informative)
Microsoft had many early competitors. They have competitors now.
iPod and iTunes were not new ideas. There were other MP3 players, there were other music managing applications, and there were other music download services. What Apple did was deliver a product that simply better than what the competition was offering at the time. Apple had competition when the introduced these things, they also have competition now.
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Others have pointed out the flaw in your argument there. I think a better criticism of the point in TFA would be to say that new niches are created all the time by the advent of new technologies (e.g. the mp3 player market you hint at). However, even getting there first does not guarantee success - in fact it probably only encourages someone else to
The article talks a lot about the author (Score:4, Insightful)
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-Big memory and fast hardware (the same as Java/C#, but LISP competed in the time C was king, so was too slow for its time).
-You don't need to have a traditional GUI -or- you have the $3000 bucks for a commercial license.
-You don't need threads -or- you have the $3000 bucks for a commercial license.
-You're a good coder (but LISP makes you better).
As most programs are either GUI desktop applications, or are
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``-You don't need to have a traditional GUI -or- you have the $3000 bucks for a commercial license.''
``-You don't need threads -or- you have the $3000 bucks for a commercial license.''
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11! (Score:2, Funny)
Beem there, done that... (Score:5, Interesting)
- Sales team. The first person you'll ever need is the VP for sales. Then you'll need a good, experienced sales team. No matter how expensive they are, these people will make or break a business. I ended up leaving my job and joining a startup precisely for this reason.
- Time frame and financial needs. One thing all startups underestimate is the need for quality assurance. Generally, testing for defects takes more time than assembling a product. Thus, the time to market should be at least tripled and the cost doubled from what you expect.
- Intellectual property. True, patent protection is overrated. However, there are thousands of inventors and companies waiting to sue your ass off if you infringe on their patents. More important than filing your patent is to research whether you infringe on others' patents or not, and settle any licensing issues. This will get very costly, and in this case getting good lawyers is worth their weight in gold. We pay roughly $5000 per patent examined, but they decreased the number of patents we thought we would license from 40 to 2.
- Company share. Many inventors don't want to relinquish control over the company, and want to maintain a majority stake at any cost. Most investors wouldn't agree with that, with a good reason - a researcher running a company is recipe for disaster. And as the classic saying goes, it's better to have 5% of $100 million than 100% of nothing.
- IP ownership. I talked about infringing on others' IP already, but what about the inventor's IP? The inventor must transfer all the rights to the invention to the company. Otherwise, the inventor will exercise undue influence over the business, and sooner or later (rather sooner) this will create conflicts between the inventor and the management.
There are plenty more rules of the game, but this game is too flexible to make any of them universal. The best thing is to give over your technology to a seasoned entrepreneur and just ride along.Re:Beem there, done that... (Score:4, Informative)
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Very close... however, all good engineers with program management experience know that actual cost = estimated cost * pi.
Re:Beem there, done that...(BRAVO) (Score:3, Insightful)
Or they'll do both. They'll sell what doesn't exist in order to get the business going, and the development team will have to try and keep up. You will succeed, as long as the development team can do this. But you will reach a point where you grow a little bit too quickly, and sales starts to promise too much
Patent Protection (Score:2, Interesting)
But he just reiterates what I've read in many other places (although he puts a different spin on it).
I've read that you are essentially protected, as an inventor, by the act of inventing. You have created the work on which other things may try to be based, but you are protected by virtue of the fact that you first created it. The patent puts some extra
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Dept Tag? (Score:2)
Ignore him, build something you like (Score:2)
Build something or sell a service you like. Don't base the product on *just* you and your buddies, but if you do no like what you are making or providing, you'll hate yourself. Feeling good about yourself and having someplace worth going to every morning is worth much more than getting rich from an IPO. There will be plenty of opportunities to do something you don't like even when making a product you love. One of the best thi
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Unless you have investors in which case, at least ethically, you're locked in for the ride. Note that this can mean five or ten years in a "zombie" company struggling along. Even if you think your next big idea is the shit, you still get to deal with a product nobody wants and the tech support nightmare you created for yourself because you took the kings' shilling while it seemed like a good idea.
Word to the wise: sometimes fai
On the Money (Score:2)
Most of the dot com failures can be directly attributed to people beliving many of these myths.
Idiotic at best. (Score:2)
Humans are contradictory in nature, hence bussiness too.
It reminds me of a quote from the Simposons.
Judge: Lisa Simpson, for lying under oath I sentence you to life in exile in Monster Island.
(Judge whispers)don't worry the existence of Monster Island is a myth.
-Lisa running away from Godzilla and Mothra through the Jungle -
Lisa: I though that Monster Island was a myth!
Person running away: Actually Monster Island is a peninsula!
The only myth is
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O...k.... then. As a newly enlightened member of the prolitereate I would like to subscribe to your newsletter -- I find your ideas intriguing.
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That's the point. ANYTHING with "certain" sales/marketing knowledge could take off quickly. A beautiful woman with "certain" sales/marketing knowledge, a comic book artist with "certain" sales/marketing knowledge, a mousetrap builder, a garbage collector, a carpenter, a plumber... even a web designer with "certain" sales/marketing knowledge can take off quickly.
Of course, no program, PhD
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I've taken classes from PhD's who had outside businesses in their field. Bar none, they were assholes who routinely violated university ethics to get ahead.
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Never underestimate how apathetic your customers are to the minutiae of your product or ser
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Clearly, you've never worked in technology marketing. It is very difficult to find out what customers want - even when you ask them, they don't give you correct answers. And if your Shiny New Thing is really revolutionary - well, then it gets even more difficult as consumers can't figure out how to integrate it into their lives. I worked with one of the first companies to sell voice mail, and one
It's as easy as what you say (Score:2)
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Re:Everything they taught you in school is wrong (Score:4, Insightful)
First and foremost "Success" is ultimately an abstraction. It's highly subjective. Academia's merit-based system quantifies "success" in a manner which is inconsistent with the real world.
Generally speaking, you can't take a test and as a result, make yourself happy or financially secure or loved in any substantive sense.
Plus, in the academic world, showing up is a major factor, which won't cut it in the real world if you really want to advance.
For the purpose of illustration, let's say success is point B and you are point A. In school, you get to point B by sitting on a vehicle that is on a track that is clearly headed towards point B. All you basically have to do is keep your hands and arms inside the car, push a little, and you'll get there. Compare this with the real world, where point B is never in one spot for very long -- it moves around, and there aren't really any reliable maps or means of transportation. You're left alone to get there, and everyone that was on your academic ride is now a competitor and less-motivated to help you. This is why so many people come out of college and don't know what the hell to do. College doesn't teach resourcefulness as much as it teaches compliance. The typical academic skillset does not lend itself well towards entrepeneurial pursuits.
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See Myth #4.