Student Entrepreneurs: If Peter Thiel Calls, Hang Up

http://www.linkedin.com/today/post/article/20130926030101-29380071-adult-supervision

by npalli • 13 years ago

56 78 13 years ago

boon• 13 years ago

If Peter Thiel calls you, it might make sense to at least hear him out. Slamming doors is rarely a good approach to life.

And school will always be there to go back to.

vinceguidry2• 13 years ago

I don't think it's really worth going back to school. I dropped out to join the military. (Later left that too) 10 years later, every time I think about going back I think, "why?". I've already got a job, and I make decent money. I'd learn much more, faster, by taking on more responsibilities here than I would in some sandbox environment. Unless I went to, like, Harvard or something.

maaku3• 13 years ago

... which is actually an argument for staying in school in the first place. Once you're out, the realities of life make it very difficult to go back.

auggierose• 13 years ago

Also, yes, hiring is difficult. Do you really think you are learning how to do it properly by working at Big Corp first?

zhemao• 13 years ago

Well, you will at least learn how not to do it.

thejulielogan4• 13 years ago

Not true. Rarely do you (a cog) see the hiring process (a different cog) used by your massive company (the machine). Especially when you're just out of college.

seiji7• 13 years ago

There's value in learning from how others have screwed up the world. Learn what sins not to repeat. Sometimes you can only see the brokenness from inside the system.

Some people are geniuses and can run billion dollar companies when they are 16. Other people can benefit from learning by doing for a few years. Everybody is different.

UK-AL3• 13 years ago

More to do with chaos more than anything. Some businesses get lucky, others don't.

There was study that showed that entrepreneurial success has extremely weak correlations with previous experience.

Most successful entrepreneurs that I know were terrible at first and had little experience, but there companies still succeeded.

I know experienced people that started companies, and did things right and failed.

The difference was that things were in the right place at the right time.

colinbartlett• 13 years ago

"Management is a tremendously undervalued skill on the tech startup scene, and that single fact contributes, I believe, to the failure of more companies than any other factor."

Truth.

seiji7• 13 years ago

If a company let's children be managers without any prior experience or training, the company should force all their child prodigies to at a minimum read http://www.amazon.com/Great-Danes-Barrons-Dog-Bibles/dp/0764...

rpedela4• 13 years ago

Why?

UK-AL3• 13 years ago

That's just plain offensive. If you start trying to command people like you command dogs, people are just going to disrespect you. You will have no power.

People don't react to pain/rewards like dogs do. They see through it instantly.

lincolnq• 13 years ago

Most companies fail without hiring a single non-founder! How can management be a factor in these failures?

I would suspect that poor management is a contributor to high-profile failures. But only a minor factor for startups in general. Not making something people want, and giving up too early, are far more critical problems for early-stage companies than mismanagement, and there are a lot more early-stage companies than later stage ones.

timr• 13 years ago

"Most companies fail without hiring a single non-founder! How can management be a factor in these failures?"

Most young startups fail because of founder disputes. Working closely with another person is a skill gained with time and experience, and has a lot in common with management.

rpedela4• 13 years ago

Seeing how successful companies work is extremely valuable. No company is perfect so you get to see what works and what does not. If your idea is something highly technical, then the degree (or equivalent experience) is very important. Name one highly successful company whose product is highly technical where the founder was not also technical? I cannot think of one myself.

gotrecruit• 13 years ago

apple?

rpedela4• 13 years ago

Woz was/is extremely technical. Steve also knew how to build computers although not great at it.

ebiester• 13 years ago

...Says the man who went to school when the opportunity cost wasn't a decade in debt (at the very least).

If you succeed, then you didn't need school. If you fail, then you can always go back to school afterwards. I don't see the downside of the Thiel fellowship, at least on its surface.

C1D• 13 years ago

Agreed. It's at the least worth a try and if you fail not only can you go back to school but the fact that Peter Thiel, Co-Founder of Paypal believed in you will at least do you some good, reputation wise.

jeffasinger• 13 years ago

There are plenty of school options that involve much lower debt than that. You don't need to go to a school that costs $50k a year, there are plenty of alternatives.

enraged_camel4• 13 years ago

There are plenty of alternatives, but do they provide the same quality of education for your degree of choice?

jmduke2• 13 years ago

...Says the man who went to school when the opportunity cost wasn't a decade in debt (at the very least).

I got a great college education and graduated with a level of debt that I paid off in less than a year, through a mix of need-based grants, merit-based scholarships, working 15 hrs/wk, and a lower overall tuition because it was a public school. (There's also the growing trend of 2&2 programs, which in retrospect seems like an even better choice.)

I'm not necessarily arguing that the value of college outweighs its costs (for me, though, it certainly did), but to say that the opportunity cost is at least a decade in debt is invalid.

enraged_camel4• 13 years ago

Perhaps it has not occurred to you that you were an outlier who was able to qualify for grants and scholarships and also had a (presumably decent-paying) part-time job. Not to mention living in a state with a decent school for your degree of choice.

But, I mean, let's get real. Take a good public school like University of Washington. 4-year tuition comes to $160,000 - if you life with parents [1]. Are you telling me that this is not a crippling amount of debt for a lot of people?

[1]http://admit.washington.edu/Paying/Cost#freshmen-transfer

chasing2• 13 years ago

Hi! Five years as an undergrad! No debt!

kippn_it_real• 13 years ago

There seems to be a consensus here that all big corporations are inept and the all that you can learn from them is what not to do. Only ~5% of startups are successful while 100% of big corporations were at one point. If you can't learn anything from Big Corp you aren't trying.

hobs• 13 years ago

Yeah, I encourage people to go work for one for a year or two to learn all the stupid things they do and the ways they are vulnerable. Also to understand why you should love what you are doing now.

Fomite2• 13 years ago

Agreed - hell, if they are inept, you can learn how you went from "Successful Industry Leader" to "Cumbersome, Lumbering Dinosaur" - and avoid that same path with your startup.

tptacek2• 13 years ago

There's a valid point in here about the way the structure of the Thiel program, with its strain of radical individualism, might blind new entrepreneurs to the idea that most of them shouldn't be CEOs. I think more entrepreneurs should try to grok this idea. Even people who are "born leaders" don't necessarily belong in the CEO role, because CEOs need to be more than leaders. They often also need to be moderating influences, level-headed, execution-focused, and accountable. I've been in startups since I was 18 years old, and have started multiple companies, and would not hire me as a CEO.

Unfortunately, the article makes that point by inflating the importance of management theory and by suggesting that college is somewhere you go to pick up a trade. So, someone else should try to write the good article that makes the CEO point.

DanielBMarkham• 13 years ago

Yes, this would be a really good article if it made a completely different point.

tptacek2• 13 years ago

If I'm mistaken, and it's not trying to make the "CEO argument" I was playing with upthread, you could correct my mistake using evidence. I read the article and I don't think I'm mistaken, but would love to be surprised.

Otherwise, I'm not sure of the point of your comment.

polarix• 13 years ago

In some sense, though, most of these situations do see the founders learning management on someone else's dime.

It's just a segmented capital super-structure, rather than a traditional corporate system.

tobyjsullivan• 13 years ago

I appreciate the article and the point of view but I have to disagree completely with his recommendation that you spend your years working for someone else before you launch your own business.

He talks about working for a company after finishing college to learn about how they operate and do business. You know what I learned in the five years after college I worked for a company as a dev? A whole lot about software development. Nothing about hiring (beyond what I gleaned while interviewing), basics of management and nothing about marketing or sales. You know what I learned in the first few months of trying and failing to launch a business? A heck of a lot about everything, including a lot more about software development.

Working in my trade for a few years out of school made me very good at what I do but it certainly did not make me a very good entrepreneur.

enraged_camel4• 13 years ago

I'm the exact opposite. I started in a tech support role and learned the value of proper customer service, then transferred to a sales engineering role and learned how to analyze a customer's needs and match them with the correct product offering. From a management side, just by looking at how my company is managed, I learned how not to manage a company. Every time a coworker got treated like crap, I told myself I would never treat my employees like that when I have my own company.

What would have happened if I had started a business straight out of college? Presumably, I'd have made a whole bunch of dumb mistakes, some of which could have cost me the business. I would have failed a bunch of times and learned things the hard way. Most importantly, I might have become demotivated and given up entirely. Which is actually what happens to most people.

I'd say that the past five years I've worked for a company (my first one out of college) have allowed me to find myself in terms of confidence, skills and purpose. I feel like I'm a much better, much more stable place for starting something on my own.

thejulielogan4• 13 years ago

Agreed. Being elsewhere for a few years, finishing school before that, doesn't guarantee you'll learn the managerial skills required to be a CEO.

michaelt2• 13 years ago

No doubt it depends on the company - did you ask to be trained in management?

I know at my employer some people don't aspire to cease being developers and start being managers (which is fine) so they don't get trained to be managers (which is also fine).

RougeFemme2• 13 years ago

I agree that working for another company doesn't always make you a good entrepreneur. But I do think that, depending on the size of the company, the dynamics and your role within the company you can learn, for free, a lot about what not to do, particularly regarding the basics of management. And regarding hiring, you can learn, what you actually want/value during the interview and in an employee vs. what you think you want.

szany• 13 years ago

This is good advice, because the right sort of person to be a Thiel fellow would read this and scoff anyway.

thejulielogan4• 13 years ago

He reduces the entire situation to two options. What I've learned from being in a startup? There are never just two options. His article does students a massive disservice by creating just an A or B scenario.

npalli2• 13 years ago

“I'm a crotchety old guy. I worry about all these new companies. I'm glad that they're easier to start, but the problem is, they're just as hard to finish as they have always been”

This is a great observation from Mike Olson. I think a lot of people who are dropping off to start on the entrepreneurial path vastly underestimate the difficulty of building a company to a point where they can sell or IPO or get just get a good return. Lot of the startup-lore is built around expectation of success that has vastly diminished in the last few years and we will soon find a lot of people who are thirty-five, have worked through three-four failed startups and nothing to offer to the broader world.

If you look at number of seed accelerators in the US[1], we have about 175. Every year about 3000 companies are formed and a vast number of them fail. Take the top accelerator in the country (perhaps the world). YCombinator. It has funded about 550 companies, pg is rightfully proud of the value created. However, if you took out the top 10 of them I suspect 99% of the value goes away. I remember just AirBnB and Dropbox making 75% of the value. Think about it, even if you came out of YC, you have a 2% chance of success. That means if you even if you join a startup accelerator in Middletown, USA your chance is probably 0.5% and if you don’t even get to join a accelerator it is probably even less (0.1%?)

I suspect a lot of people still think there is a 5% chance you will succeed in a startup. That was the case 15 years back. With a 5% success rate, you could possible iterate to a better than even odd of success if you went through 3-4 startups. If you were told you have a 0.1% chance of success, it is more of a random crapshoot. What is it that you will learn and show after 3-4 attempts?

The other option of going to college, working for a big company and the associated payoff hasn’t changed much. If the startup option is now 50 times riskier, you need to think hard about your choices. Maybe you are an optimist, that’s OK but don’t default to choices.

[1] http://www.seed-db.com/accelerators

wellboy4• 13 years ago

You can gain more "experience" before you try to do your own thing, however the more experience you gain, the worse you become at creating the next billion dollar startup. For every year that you don´t start your own business, your capability to think large and taking risks and your resourcefulness dramatically declines.

That´s the reason why none of the four horsemen in tech, Google, Apple, Amazon or Facebook were founded by founders over 30.

Looking at all the other billion dollar startups Microsoft, Dropbox, Airbnb, Twitter, Instagram, Waze, Paypal, Tumblr none of their founders were over 30. See a pattern? There are probably billion startups who were founded by founders older than 30, but there are very few.

The less experience you have, the more likely you are to create the next billion dollar company. If you start your startup after 30, it's very unlikely that you will be able to make it into a $1B startup.

tensor3• 13 years ago

This is abhorrent ageism, and completely wrong.

Peter Thiel, 31, Paypal, 37, Palintar. Larry Elison, 33, Oracle. Reid Hoffman, 35, Linked In. Evan Williams, 35, Twitter. Mark Pincus, 41, Zynga. Arianna Huffington, 54, Huffington Post.

Can we stop making things up? Maybe five minutes of research would be good? You know, there is a place they teach these things.

wellboy4• 13 years ago

Founders that had had successful startups before don't count.

That's why I was referring to "experience BEFORE you try to do your own thing."

And yes there are a few startup founders that were older than 30, I give you Larry Ellison.

However none of the 4 horsemen had founders >30, plus the other founders except for Peter Thiel had already sold their previous startups.

Regarding Palantir, they had Peter Thiel as a cofounder, I don't give you that one.

tlogan• 13 years ago

Good point but it could also that very talented people are so bored with their 9-to-5 job and they will be bored to death if they are forced to wait till their 30s to start their own company.

On the other hand, not so talented people (like me) might need a little of learning before jumping into entrepreneurship.

The trick is that when you are in 20s you might be either stupid or super intelligent but you will not know that.

wellboy4• 13 years ago

You don't need experience to start a startup, you get the experience by doing a startup.

And you don't get the BS experience in big companies, you get it in its purest form from the market itself, not compromised by any company politics BS.

npalli2• 13 years ago

Additional data points:

Jeff Bezos over 30 when he started Amazon

Marc Benioff 34 when he started Salesforce.com

Peter Thiel was 32 when he took over Paypal (his first startup)

Adobe founders were over 40

Cisco founder was over 30

Intel founders were close to 40 when they started the company

All are huge companies worth tens if not hundreds of billions of dollars.

Even Apple first iteration was 90 days from bankruptcy when Steve Jobs (aged 42) took over. At this point, his startup NEXT was not very successful.

You seem to think $1B is some gigantic amount in the grand scheme of things. If you step beside tech, there are hundreds of examples. Take the example of Chobani yogurt. Started by a 33-year-old Turkish immigrant in 2005, the founder is a billionaire today. Companies started by founders older than 30 is the norm and will become so in tech too. Only in tech this foolish idea keeps persisting that only people under 30 do big things.

jasonwatkinspdx• 13 years ago

This is an important point, but it also shouldn't be overstated. There are many examples of where professional managers lacking passion and personal interest in a business's market have hindered more than helped.

As Thiel often says a variety of ways, copycat behavior is unlikely to produce success in a high risk/reward context like a startup. You need an information advantage, and often that advantage is someone who knows their own itch very well.

I also hate that the meme for this has become "adult supervision." It's such a patronizing and self-aggrandizing description.

avty• 13 years ago

Wow, what a de-empowering article. Good luck guys.

argumentum• 13 years ago

The best way to learn, anything, is by trying, failing and iterating. This is true (for me at least) in programming and otherwise. I generally believe you should stay in school, and more importantly stay learning technical stuff (whether undergrad, grad school or in a technically challenging job). It's the best way to get ideas, and more importantly find people to work with (if you want to start a company). So I do harbor doubts about the Thiel Fellowship (though I happen to know quite a few talented kids in the program, and think it's working well for most of them).

However, you will not learn how to be a Founder/CEO without being a Founder/CEO. Some have a natural ability at this, but 99% of even the best CEOs probably just have the ability to learn quickly on their feet. By the time their mistakes might be noticed, they've already learned and corrected them.

The only thing you'll learn by working your way up the corporate ladder is how to work your way up the corporate ladder. The stuff about learning how to work hard is BS. If you want to do a startup and hope things will happen for you, you probably believe in an all-powerful being that has a plan for you.

Student Entrepreneurs: If Peter Thiel Calls, Hang Up

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