March 2007

(This essay is derived from talks at the 2007 Startup School and the Berkeley CSUA.)

We've now been doing Y Combinator long enough to have some data about success rates.

Our first batch, in the summer of 2005, had eight startups in it.

Of those eight, it now looks as if at least four succeeded.

Three have been acquired: Reddit was a merger of two, Reddit and Infogami, and a third was acquired that we can't talk about yet.

Another from that batch was Loopt, which is doing so well they could probably be acquired in about ten minutes if they wanted to.

So about half the founders from that first summer, less than two years ago, are now rich, at least by their standards. (One thing you learn when you get rich is that there are many degrees of it.)

I'm not ready to predict our success rate will stay as high as 50%.

That first batch could have been an anomaly.

But we should be able to do better than the oft-quoted (and probably made up) standard figure of 10%.

I'd feel safe aiming at 25%.

Even the founders who fail don't seem to have such a bad time.

Of those first eight startups, three are now probably dead.

In two cases the founders just went on to do other things at the end of the summer.

I don't think they were traumatized by the experience.

The closest to a traumatic failure was Kiko, whose founders kept working on their startup for a whole year before being squashed by Google Calendar.

But they ended up happy.

They sold their software on eBay for a quarter of a million dollars.

After they paid back their angel investors, they had about a year's salary each. [1] Then they immediately went on to start a new and much more exciting startup, Justin.TV.

So here is an even more striking statistic: 0% of that first batch had a terrible experience.

They had ups and downs, like every startup, but I don't think any would have traded it for a job in a cubicle.

And that statistic is probably not an anomaly.

Whatever our long-term success rate ends up being, I think the rate of people who wish they'd gotten a regular job will stay close to 0%.

The big mystery to me is: why don't more people start startups?

If nearly everyone who does it prefers it to a regular job, and a significant percentage get rich, why doesn't everyone want to do this?

A lot of people think we get thousands of applications for each funding cycle.

In fact we usually only get several hundred.

Why don't more people apply?

And while it must seem to anyone watching this world that startups are popping up like crazy, the number is small compared to the number of people with the necessary skills.

The great majority of programmers still go straight from college to cubicle, and stay there.

It seems like people are not acting in their own interest. What's going on?

Well, I can answer that.

Because of Y Combinator's position at the very start of the venture funding process, we're probably the world's leading experts on the psychology of people who aren't sure if they want to start a company.

Our first batch, summer 2005, had eight startups; at least four succeeded. Reddit and others were acquired; Loopt could be acquired in ten minutes. So about half those founders are now rich, less than two years later. I won't predict 50% holds, but we should beat the made-up 10% figure. I'd feel safe aiming at 25%.

Even the founders who fail don't have such a bad time. The closest to traumatic was Kiko, squashed by Google Calendar after a year—yet they ended up happy, sold their software on eBay for a quarter million, and immediately started something more exciting, Justin.TV.

So here's an even more striking statistic: 0% of that first batch had a terrible experience. None would have traded it for a job in a cubicle.

The big mystery: why don't more people start startups? We get only several hundred applications a cycle, not thousands; most programmers still go straight from college to cubicle. People aren't acting in their own interest. Sitting at the very start of funding, we're probably the world's leading experts on the psychology of people unsure whether to start a company.

Y Combinator's first batch suggests half the founders got rich and none had a terrible time, yet very few people apply. The puzzle: why don't more people start startups?

There's nothing wrong with being unsure.

If you're a hacker thinking about starting a startup and hesitating before taking the leap, you're part of a grand tradition.

Larry and Sergey seem to have felt the same before they started Google, and so did Jerry and Filo before they started Yahoo.

In fact, I'd guess the most successful startups are the ones started by uncertain hackers rather than gung-ho business guys.

We have some evidence to support this.

Several of the most successful startups we've funded told us later that they only decided to apply at the last moment.

Some decided only hours before the deadline.

The way to deal with uncertainty is to analyze it into components.

Most people who are reluctant to do something have about eight different reasons mixed together in their heads, and don't know themselves which are biggest. Some will be justified and some bogus, but unless you know the relative proportion of each, you don't know whether your overall uncertainty is mostly justified or mostly bogus.

So I'm going to list all the components of people's reluctance to start startups, and explain which are real.

Then would-be founders can use this as a checklist to examine their own feelings.

I admit my goal is to increase your self-confidence.

But there are two things different here from the usual confidence-building exercise.

One is that I'm motivated to be honest. Most people in the confidence-building business have already achieved their goal when you buy the book or pay to attend the seminar where they tell you how great you are.

Whereas if I encourage people to start startups who shouldn't, I make my own life worse.

If I encourage too many people to apply to Y Combinator, it just means more work for me, because I have to read all the applications.

The other thing that's going to be different is my approach.

Instead of being positive, I'm going to be negative.

Instead of telling you "come on, you can do it" I'm going to consider all the reasons you aren't doing it, and show why most (but not all) should be ignored.

We'll start with the one everyone's born with.

There's nothing wrong with being unsure. Larry and Sergey felt it before Google, Jerry and Filo before Yahoo. The most successful startups are often started by uncertain hackers rather than gung-ho business guys; several of our best founders decided to apply hours before the deadline.

The way to deal with uncertainty is to analyze it into components. Most reluctant people have about eight reasons mixed together and don't know which are biggest; some are justified, some bogus. So I'll list them all and explain which are real.

My goal is to increase your self-confidence, but honestly: if I encourage people who shouldn't start startups, I just make my own life worse reading more applications. And instead of being positive, I'll be negative—show why most reasons you aren't doing it (but not all) should be ignored.

Hesitation is a grand tradition—the best founders are often uncertain. The way to handle it is to break reluctance into its components, which PG will list, honestly and negatively.

1. Too young

A lot of people think they're too young to start a startup.

Many are right.

The median age worldwide is about 27, so probably a third of the population can truthfully say they're too young.

What's too young?

One of our goals with Y Combinator was to discover the lower bound on the age of startup founders.

It always seemed to us that investors were too conservative here—that they wanted to fund professors, when really they should be funding grad students or even undergrads.

The main thing we've discovered from pushing the edge of this envelope is not where the edge is, but how fuzzy it is.

The outer limit may be as low as 16.

We don't look beyond 18 because people younger than that can't legally enter into contracts.

But the most successful founder we've funded so far, Sam Altman, was 19 at the time.

Sam Altman, however, is an outlying data point.

When he was 19, he seemed like he had a 40 year old inside him.

There are other 19 year olds who are 12 inside.

There's a reason we have a distinct word "adult" for people over a certain age.

There is a threshold you cross.

It's conventionally fixed at 21, but different people cross it at greatly varying ages.

You're old enough to start a startup if you've crossed this threshold, whatever your age.

How do you tell?

There are a couple tests adults use.

I realized these tests existed after meeting Sam Altman, actually.

I noticed that I felt like I was talking to someone much older.

Afterward I wondered, what am I even measuring?

What made him seem older?

One test adults use is whether you still have the kid flake reflex.

When you're a little kid and you're asked to do something hard, you can cry and say "I can't do it" and the adults will probably let you off.

As a kid there's a magic button you can press by saying "I'm just a kid" that will get you out of most difficult situations.

Whereas adults, by definition, are not allowed to flake.

They still do, of course, but when they do they're ruthlessly pruned.

The other way to tell an adult is by how they react to a challenge.

Someone who's not yet an adult will tend to respond to a challenge from an adult in a way that acknowledges their dominance.

If an adult says "that's a stupid idea," a kid will either crawl away with his tail between his legs, or rebel.

But rebelling presumes inferiority as much as submission.

The adult response to "that's a stupid idea," is simply to look the other person in the eye and say "Really?

Why do you think so?"

There are a lot of adults who still react childishly to challenges, of course.

What you don't often find are kids who react to challenges like adults.

When you do, you've found an adult, whatever their age.

2. Too inexperienced

I once wrote that startup founders should be at least 23, and that people should work for another company for a few years before starting their own.

I no longer believe that, and what changed my mind is the example of the startups we've funded.

I still think 23 is a better age than 21.

But the best way to get experience if you're 21 is to start a startup.

So, paradoxically, if you're too inexperienced to start a startup, what you should do is start one.

That's a way more efficient cure for inexperience than a normal job.

In fact, getting a normal job may actually make you less able to start a startup, by turning you into a tame animal who thinks he needs an office to work in and a product manager to tell him what software to write.

What really convinced me of this was the Kikos.

They started a startup right out of college.

Their inexperience caused them to make a lot of mistakes.

But by the time we funded their second startup, a year later, they had become extremely formidable.

They were certainly not tame animals.

And there is no way they'd have grown so much if they'd spent that year working at Microsoft, or even Google.

They'd still have been diffident junior programmers.

So now I'd advise people to go ahead and start startups right out of college.

There's no better time to take risks than when you're young.

Sure, you'll probably fail.

But even failure will get you to the ultimate goal faster than getting a job.

It worries me a bit to be saying this, because in effect we're advising people to educate themselves by failing at our expense, but it's the truth.

What's too young? One YC goal was to find the lower bound; investors seemed too conservative, funding professors when they should fund undergrads. What we mainly discovered is not where the edge is but how fuzzy it is—the outer limit may be as low as 16. Our most successful founder, Sam Altman, was 19, but he's an outlier with a 40 year old inside him. Other 19 year olds are 12 inside.

There's a reason we have a distinct word "adult." You cross a threshold, conventionally fixed at 21 but crossed at greatly varying ages. You're old enough to start a startup if you've crossed it, whatever your age.

One test is whether you still have the kid flake reflex: as a kid you can press a magic button by saying "I can't do it" and get let off. Adults, by definition, aren't allowed to flake; when they do, they're ruthlessly pruned.

The other test is how you react to a challenge. A kid crawls away or rebels—but rebelling presumes inferiority as much as submission. The adult response to "that's a stupid idea" is to look the person in the eye and say "Really? Why do you think so?" When you find a kid who reacts like that, you've found an adult, whatever their age.

I once wrote that founders should be at least 23 and work elsewhere first. I no longer believe that. Paradoxically, if you're too inexperienced to start a startup, what you should do is start one—a far more efficient cure than a normal job, which can make you less able to start one, turning you into a tame animal who thinks he needs an office and a product manager.

The Kikos convinced me. They started right out of college, and inexperience caused a lot of mistakes—but a year later, funding their second startup, they'd become extremely formidable. There's no way they'd have grown so much at Microsoft or Google; they'd still have been diffident junior programmers.

So start startups right out of college. There's no better time to take risks than when you're young. Sure, you'll probably fail—but even failure gets you to the goal faster than a job. It worries me a bit: in effect we're advising people to educate themselves by failing at our expense. But it's the truth.

You're old enough once you've crossed the threshold into adulthood, whatever your age. And the best cure for inexperience is to start a startup—a normal job turns you into a tame animal.

3. Not determined enough

You need a lot of determination to succeed as a startup founder.

It's probably the single best predictor of success.

Some people may not be determined enough to make it.

It's hard for me to say for sure, because I'm so determined that I can't imagine what's going on in the heads of people who aren't.

But I know they exist.

Most hackers probably underestimate their determination.

I've seen a lot become visibly more determined as they get used to running a startup.

I can think of several we've funded who would have been delighted at first to be bought for $2 million, but are now set on world domination.

How can you tell if you're determined enough, when Larry and Sergey themselves were unsure at first about starting a company?

I'm guessing here, but I'd say the test is whether you're sufficiently driven to work on your own projects.

Though they may have been unsure whether they wanted to start a company, it doesn't seem as if Larry and Sergey were meek little research assistants, obediently doing their advisors' bidding.

They started projects of their own.

4. Not smart enough

You may need to be moderately smart to succeed as a startup founder.

But if you're worried about this, you're probably mistaken.

If you're smart enough to worry that you might not be smart enough to start a startup, you probably are.

And in any case, starting a startup just doesn't require that much intelligence.

Some startups do.

You have to be good at math to write Mathematica.

But most companies do more mundane stuff where the decisive factor is effort, not brains.

Silicon Valley can warp your perspective on this, because there's a cult of smartness here.

People who aren't smart at least try to act that way.

But if you think it takes a lot of intelligence to get rich, try spending a couple days in some of the fancier bits of New York or LA.

If you don't think you're smart enough to start a startup doing something technically difficult, just write enterprise software.

Enterprise software companies aren't technology companies, they're sales companies, and sales depends mostly on effort.

5. Know nothing about business

This is another variable whose coefficient should be zero.

You don't need to know anything about business to start a startup.

The initial focus should be the product.

All you need to know in this phase is how to build things people want.

If you succeed, you'll have to think about how to make money from it.

But this is so easy you can pick it up on the fly.

I get a fair amount of flak for telling founders just to make something great and not worry too much about making money.

And yet all the empirical evidence points that way: pretty much 100% of startups that make something popular manage to make money from it.

And acquirers tell me privately that revenue is not what they buy startups for, but their strategic value.

Which means, because they made something people want.

Acquirers know the rule holds for them too: if users love you, you can always make money from that somehow, and if they don't, the cleverest business model in the world won't save you.

So why do so many people argue with me?

I think one reason is that they hate the idea that a bunch of twenty year olds could get rich from building something cool that doesn't make any money.

They just don't want that to be possible.

But how possible it is doesn't depend on how much they want it to be.

For a while it annoyed me to hear myself described as some kind of irresponsible pied piper, leading impressionable young hackers down the road to ruin.

But now I realize this kind of controversy is a sign of a good idea.

The most valuable truths are the ones most people don't believe.

They're like undervalued stocks.

If you start with them, you'll have the whole field to yourself.

So when you find an idea you know is good but most people disagree with, you should not merely ignore their objections, but push aggressively in that direction.

In this case, that means you should seek out ideas that would be popular but seem hard to make money from.

We'll bet a seed round you can't make something popular that we can't figure out how to make money from.

You need a lot of determination—probably the single best predictor of success. Most hackers underestimate theirs: several who'd have been delighted to sell for $2 million are now set on world domination. The test, I'd say, is whether you're driven to work on your own projects. Larry and Sergey weren't meek research assistants doing their advisors' bidding; they started projects of their own.

You may need to be moderately smart, but if you're worried about it, you're probably mistaken. If you're smart enough to worry that you might not be smart enough, you probably are.

And starting a startup just doesn't require much intelligence. Some do—you have to be good at math to write Mathematica—but most companies do mundane stuff where the decisive factor is effort, not brains. If you think it takes brains to get rich, spend a couple days in the fancier bits of New York or LA. For something not technically difficult, write enterprise software: those aren't technology companies, they're sales companies, and sales depends mostly on effort.

Knowing nothing about business is another variable whose coefficient should be zero. The initial focus should be the product—how to build things people want; making money comes later and is easy. The evidence agrees: pretty much 100% of startups that make something popular manage to make money from it. If users love you, you can always make money somehow; if they don't, the cleverest business model won't save you.

So why do people argue? They hate the idea that a bunch of twenty year olds could get rich building something cool that makes no money. But how possible it is doesn't depend on how much they want it to be. Being called an irresponsible pied piper annoyed me, but now I see this kind of controversy is a sign of a good idea.

The most valuable truths are the ones most people don't believe. They're like undervalued stocks: start with them and you'll have the whole field to yourself. So seek out ideas that would be popular but seem hard to make money from. We'll bet a seed round you can't make something popular that we can't figure out how to make money from.

Determination is the single best predictor of success, and most hackers underestimate theirs. You don't need to be especially smart, or know anything about business—just build something people want.

6. No cofounder

Not having a cofounder is a real problem.

A startup is too much for one person to bear.

And though we differ from other investors on a lot of questions, we all agree on this.

All investors, without exception, are more likely to fund you with a cofounder than without.

We've funded two single founders, but in both cases we suggested their first priority should be to find a cofounder.

Both did.

But we'd have preferred them to have cofounders before they applied.

It's not super hard to get a cofounder for a project that's just been funded, and we'd rather have cofounders committed enough to sign up for something super hard.

If you don't have a cofounder, what should you do?

Get one.

It's more important than anything else.

If there's no one where you live who wants to start a startup with you, move where there are people who do.

If no one wants to work with you on your current idea, switch to an idea people want to work on.

If you're still in school, you're surrounded by potential cofounders.

A few years out it gets harder to find them.

Not only do you have a smaller pool to draw from, but most already have jobs, and perhaps even families to support.

So if you had friends in college you used to scheme about startups with, stay in touch with them as well as you can.

That may help keep the dream alive.

It's possible you could meet a cofounder through something like a user's group or a conference.

But I wouldn't be too optimistic.

You need to work with someone to know whether you want them as a cofounder. [2]

The real lesson to draw from this is not how to find a cofounder, but that you should start startups when you're young and there are lots of them around.

7. No idea

In a sense, it's not a problem if you don't have a good idea, because most startups change their idea anyway.

In the average Y Combinator startup, I'd guess 70% of the idea is new at the end of the first three months.

Sometimes it's 100%.

In fact, we're so sure the founders are more important than the initial idea that we're going to try something new this funding cycle.

We're going to let people apply with no idea at all.

If you want, you can answer the question on the application form that asks what you're going to do with "We have no idea."

If you seem really good we'll accept you anyway.

We're confident we can sit down with you and cook up some promising project.

Really this just codifies what we do already.

We put little weight on the idea.

We ask mainly out of politeness.

The kind of question on the application form that we really care about is the one where we ask what cool things you've made.

If what you've made is version one of a promising startup, so much the better, but the main thing we care about is whether you're good at making things.

Being lead developer of a popular open source project counts almost as much.

That solves the problem if you get funded by Y Combinator.

What about in the general case?

Because in another sense, it is a problem if you don't have an idea.

If you start a startup with no idea, what do you do next?

So here's the brief recipe for getting startup ideas.

Find something that's missing in your own life, and supply that need—no matter how specific to you it seems. Steve Wozniak built himself a computer; who knew so many other people would want them?

A need that's narrow but genuine is a better starting point than one that's broad but hypothetical.

So even if the problem is simply that you don't have a date on Saturday night, if you can think of a way to fix that by writing software, you're onto something, because a lot of other people have the same problem.

Not having a cofounder is a real problem. A startup is too much for one person to bear, and every investor without exception is likelier to fund you with one. We've funded two single founders, but told both their first priority was finding a cofounder.

If you don't have a cofounder, get one. It's more important than anything else. If no one where you live wants to start a startup, move where people do. If no one wants to work on your idea, switch to one people want to work on.

In school you're surrounded by potential cofounders; a few years out the pool shrinks. You might meet someone at a conference, but I wouldn't be too optimistic—you need to work with someone to know if you want them. The real lesson: start startups young, when there are lots around.

It's no problem if you lack a good idea, since most startups change theirs anyway—in the average YC startup, 70% of the idea is new after three months, sometimes 100%. We're so sure founders matter more that this cycle we'll let people apply with no idea at all; answer "We have no idea" and if you seem really good we'll accept you anyway.

Really this codifies what we do already. We ask about the idea mainly out of politeness; what we care about is what cool things you've made—whether you're good at making things. Being lead developer of a popular open source project counts almost as much.

In the general case, here's the recipe. Find something missing in your own life and supply that need—Steve Wozniak built himself a computer; who knew so many would want one? A narrow but genuine need beats a broad but hypothetical one. Even "I don't have a date Saturday night" is something, if you can fix it with software, because lots of people have the same problem.

Not having a cofounder is a real problem—so get one, it matters more than anything. Not having an idea barely matters, since most startups change theirs; just supply a need missing in your own life.

8. No room for more startups

A lot of people look at the ever-increasing number of startups and think "this can't continue."

Implicit in their thinking is a fallacy: that there is some limit on the number of startups there could be.

But this is false.

No one claims there's any limit on the number of people who can work for salary at 1000-person companies.

Why should there be any limit on the number who can work for equity at 5-person companies? [3]

Nearly everyone who works is satisfying some kind of need.

Breaking up companies into smaller units doesn't make those needs go away.

Existing needs would probably get satisfied more efficiently by a network of startups than by a few giant, hierarchical organizations, but I don't think that would mean less opportunity, because satisfying current needs would lead to more.

Certainly this tends to be the case in individuals.

Nor is there anything wrong with that.

We take for granted things that medieval kings would have considered effeminate luxuries, like whole buildings heated to spring temperatures year round.

And if things go well, our descendants will take for granted things we would consider shockingly luxurious.

There is no absolute standard for material wealth.

Health care is a component of it, and that alone is a black hole.

For the foreseeable future, people will want ever more material wealth, so there is no limit to the amount of work available for companies, and for startups in particular.

Usually the limited-room fallacy is not expressed directly.

Usually it's implicit in statements like "there are only so many startups Google, Microsoft, and Yahoo can buy."

Maybe, though the list of acquirers is a lot longer than that.

And whatever you think of other acquirers, Google is not stupid.

The reason big companies buy startups is that they've created something valuable.

And why should there be any limit to the number of valuable startups companies can acquire, any more than there is a limit to the amount of wealth individual people want?

Maybe there would be practical limits on the number of startups any one acquirer could assimilate, but if there is value to be had, in the form of upside that founders are willing to forgo in return for an immediate payment, acquirers will evolve to consume it.

Markets are pretty smart that way.

A lot of people look at the rising number of startups and think "this can't continue." Implicit is a fallacy: that there's some limit on how many there could be. No one claims a limit on how many can work for salary at 1000-person companies; why a limit on how many can work for equity at 5-person ones?

Nearly everyone who works is satisfying some need, and breaking companies into smaller units doesn't make those needs go away—satisfying current ones only leads to more. We take for granted things medieval kings would have called effeminate luxuries, like buildings heated to spring temperatures year round. There's no absolute standard for material wealth—health care alone is a black hole. People will want ever more, so there's no limit to the work available.

The fallacy usually hides in "there are only so many startups Google, Microsoft, and Yahoo can buy." But the list of acquirers is far longer, and Google is not stupid. Big companies buy startups because they've made something valuable—and why limit that, any more than the wealth individuals want? If there's value to be had, acquirers will evolve to consume it. Markets are pretty smart that way.

The idea that there's a limit on the number of startups is a fallacy. Human wants are unbounded, so the work—and the appetite of acquirers—has no fixed ceiling either.

9. Family to support

This one is real.

I wouldn't advise anyone with a family to start a startup.

I'm not saying it's a bad idea, just that I don't want to take responsibility for advising it.

I'm willing to take responsibility for telling 22 year olds to start startups.

So what if they fail?

They'll learn a lot, and that job at Microsoft will still be waiting for them if they need it.

But I'm not prepared to cross moms.

What you can do, if you have a family and want to start a startup, is start a consulting business you can then gradually turn into a product business.

Empirically the chances of pulling that off seem very small.

You're never going to produce Google this way.

But at least you'll never be without an income.

Another way to decrease the risk is to join an existing startup instead of starting your own.

Being one of the first employees of a startup is a lot like being a founder, in both the good ways and the bad.

You'll be roughly 1/n^2 founder, where n is your employee number.

As with the question of cofounders, the real lesson here is to start startups when you're young.

10. Independently wealthy

This is my excuse for not starting a startup.

Startups are stressful.

Why do it if you don't need the money?

For every "serial entrepreneur," there are probably twenty sane ones who think "Start another company?

Are you crazy?"

I've come close to starting new startups a couple times, but I always pull back because I don't want four years of my life to be consumed by random schleps.

I know this business well enough to know you can't do it half-heartedly.

What makes a good startup founder so dangerous is his willingness to endure infinite schleps.

There is a bit of a problem with retirement, though.

Like a lot of people, I like to work.

And one of the many weird little problems you discover when you get rich is that a lot of the interesting people you'd like to work with are not rich.

They need to work at something that pays the bills.

Which means if you want to have them as colleagues, you have to work at something that pays the bills too, even though you don't need to.

I think this is what drives a lot of serial entrepreneurs, actually.

That's why I love working on Y Combinator so much.

It's an excuse to work on something interesting with people I like.

11. Not ready for commitment

This was my reason for not starting a startup for most of my twenties.

Like a lot of people that age, I valued freedom most of all.

I was reluctant to do anything that required a commitment of more than a few months.

Nor would I have wanted to do anything that completely took over my life the way a startup does.

And that's fine.

If you want to spend your time travelling around, or playing in a band, or whatever, that's a perfectly legitimate reason not to start a company.

If you start a startup that succeeds, it's going to consume at least three or four years. (If it fails, you'll be done a lot quicker.)

So you shouldn't do it if you're not ready for commitments on that scale.

Be aware, though, that if you get a regular job, you'll probably end up working there for as long as a startup would take, and you'll find you have much less spare time than you might expect.

So if you're ready to clip on that ID badge and go to that orientation session, you may also be ready to start that startup.

12. Need for structure

I'm told there are people who need structure in their lives.

This seems to be a nice way of saying they need someone to tell them what to do.

I believe such people exist. There's plenty of empirical evidence: armies, religious cults, and so on.

They may even be the majority.

If you're one of these people, you probably shouldn't start a startup.

In fact, you probably shouldn't even go to work for one.

In a good startup, you don't get told what to do very much.

There may be one person whose job title is CEO, but till the company has about twelve people no one should be telling anyone what to do.

That's too inefficient.

Each person should just do what they need to without anyone telling them.

If that sounds like a recipe for chaos, think about a soccer team.

Eleven people manage to work together in quite complicated ways, and yet only in occasional emergencies does anyone tell anyone else what to do.

A reporter once asked David Beckham if there were any language problems at Real Madrid, since the players were from about eight different countries.

He said it was never an issue, because everyone was so good they never had to talk.

They all just did the right thing.

How do you tell if you're independent-minded enough to start a startup?

If you'd bristle at the suggestion that you aren't, then you probably are.

This one is real. I wouldn't advise anyone with a family to start a startup—not that it's a bad idea, but I won't take responsibility for it. I'll tell 22 year olds to start startups; so what if they fail. But I'm not prepared to cross moms.

What you can do with a family is start a consulting business and gradually turn it into a product business. The odds are very small—you're never going to produce Google this way—but at least you'll have an income. Another way to cut risk is to join an existing startup; being one of the first employees is a lot like being a founder. The real lesson, again, is to start young.

This is my excuse. Startups are stressful—why do it if you don't need the money? For every "serial entrepreneur" there are twenty sane ones thinking "Start another company? Are you crazy?" I always pull back, because I don't want four years consumed by random schleps. What makes a good founder so dangerous is his willingness to endure infinite schleps.

There's a problem with retirement, though. I like to work, and one weird problem of getting rich is that the interesting people you'd like to work with aren't rich—they need to pay the bills, so to have them as colleagues you have to work too. That's why I love Y Combinator: an excuse to work on something interesting with people I like.

Not being ready for commitment was my reason for most of my twenties. I valued freedom and wouldn't commit to anything taking over my life the way a startup does. That's fine. But be aware: a regular job will eat just as long, with much less spare time than you expect. So if you're ready to clip on that ID badge, you may be ready to start that startup.

I'm told some people need structure—a nice way of saying they need someone to tell them what to do. If you're one of them, you probably shouldn't start a startup, or even work for one. In a good startup, no one tells you what to do—till the company has about twelve people, that would be too inefficient. Each person should just do what they need to.

If that sounds like chaos, think about a soccer team: eleven people work together in complicated ways, yet only in emergencies does anyone tell anyone else what to do. A reporter once asked David Beckham about language problems at Real Madrid, with players from eight countries; he said it was never an issue, because everyone was so good they never had to talk. How do you tell if you're independent-minded enough? If you'd bristle at the suggestion that you aren't, you probably are.

A family to support is a real reason; independent wealth and unreadiness for commitment are PG's own honest excuses. Needing structure—someone to tell you what to do—means a startup isn't for you.

13. Fear of uncertainty

Perhaps some people are deterred from starting startups because they don't like the uncertainty.

If you go to work for Microsoft, you can predict fairly accurately what the next few years will be like—all too accurately, in fact.

If you start a startup, anything might happen.

Well, if you're troubled by uncertainty, I can solve that problem for you: if you start a startup, it will probably fail.

Seriously, though, this is not a bad way to think about the whole experience.

Hope for the best, but expect the worst. In the worst case, it will at least be interesting.

In the best case you might get rich.

No one will blame you if the startup tanks, so long as you made a serious effort.

There may once have been a time when employers would regard that as a mark against you, but they wouldn't now.

I asked managers at big companies, and they all said they'd prefer to hire someone who'd tried to start a startup and failed over someone who'd spent the same time working at a big company.

Nor will investors hold it against you, as long as you didn't fail out of laziness or incurable stupidity.

I'm told there's a lot of stigma attached to failing in other places—in Europe, for example.

Not here.

In America, companies, like practically everything else, are disposable.

14. Don't realize what you're avoiding

One reason people who've been out in the world for a year or two make better founders than people straight from college is that they know what they're avoiding.

If their startup fails, they'll have to get a job, and they know how much jobs suck.

If you've had summer jobs in college, you may think you know what jobs are like, but you probably don't.

Summer jobs at technology companies are not real jobs.

If you get a summer job as a waiter, that's a real job.

Then you have to carry your weight.

But software companies don't hire students for the summer as a source of cheap labor.

They do it in the hope of recruiting them when they graduate.

So while they're happy if you produce, they don't expect you to.

That will change if you get a real job after you graduate.

Then you'll have to earn your keep.

And since most of what big companies do is boring, you're going to have to work on boring stuff.

Easy, compared to college, but boring.

At first it may seem cool to get paid for doing easy stuff, after paying to do hard stuff in college.

But that wears off after a few months.

Eventually it gets demoralizing to work on dumb stuff, even if it's easy and you get paid a lot.

And that's not the worst of it.

The thing that really sucks about having a regular job is the expectation that you're supposed to be there at certain times.

Even Google is afflicted with this, apparently.

And what this means, as everyone who's had a regular job can tell you, is that there are going to be times when you have absolutely no desire to work on anything, and you're going to have to go to work anyway and sit in front of your screen and pretend to.

To someone who likes work, as most good hackers do, this is torture.

In a startup, you skip all that.

There's no concept of office hours in most startups.

Work and life just get mixed together.

But the good thing about that is that no one minds if you have a life at work.

In a startup you can do whatever you want most of the time.

If you're a founder, what you want to do most of the time is work.

But you never have to pretend to.

If you took a nap in your office in a big company, it would seem unprofessional.

But if you're starting a startup and you fall asleep in the middle of the day, your cofounders will just assume you were tired.

At Microsoft you can predict the next few years all too accurately; in a startup, anything might happen. If uncertainty troubles you, I can solve it: your startup will probably fail. Seriously, that's not a bad frame—hope for the best, expect the worst. In the worst case it's at least interesting; in the best case you might get rich.

No one will blame you if it tanks, so long as you made a serious effort. I asked managers at big companies, and they'd all rather hire someone who'd tried a startup and failed than someone who spent the time at a big company. There's stigma to failure in Europe, say—but not here. In America, companies, like everything else, are disposable.

One reason people out in the world a year or two make better founders is they know what they're avoiding: if the startup fails they'll have to get a job, and they know how much jobs suck. Summer jobs at technology companies aren't real jobs—software companies hire students hoping to recruit them later, so they're happy if you produce but don't expect it.

A real job after graduation is different—then you earn your keep, working on boring stuff: easy compared to college, but demoralizing once the novelty wears off. And that's not the worst. The thing that really sucks is being expected to be there at certain times—which means there'll be times you have no desire to work and must go in anyway and pretend to. To someone who likes work, as most good hackers do, this is torture.

In a startup you skip all that. There's no concept of office hours; work and life mix, and no one minds if you have a life at work. As a founder, what you want to do most of the time is work—but you never have to pretend. If you napped at a big company it would seem unprofessional; if you fall asleep mid-day at a startup, your cofounders just assume you were tired.

If uncertainty scares you, here's certainty: it will probably fail, and no one—employers or investors—will hold a serious failure against you. The real point: a regular job is worse than you think.

15. Parents want you to be a doctor

A significant number of would-be startup founders are probably dissuaded from doing it by their parents.

I'm not going to say you shouldn't listen to them.

Families are entitled to their own traditions, and who am I to argue with them?

But I will give you a couple reasons why a safe career might not be what your parents really want for you.

One is that parents tend to be more conservative for their kids than they would be for themselves.

This is actually a rational response to their situation.

Parents end up sharing more of their kids' ill fortune than good fortune.

Most parents don't mind this; it's part of the job; but it does tend to make them excessively conservative.

And erring on the side of conservatism is still erring.

In almost everything, reward is proportionate to risk.

So by protecting their kids from risk, parents are, without realizing it, also protecting them from rewards.

If they saw that, they'd want you to take more risks.

The other reason parents may be mistaken is that, like generals, they're always fighting the last war.

If they want you to be a doctor, odds are it's not just because they want you to help the sick, but also because it's a prestigious and lucrative career. [4] But not so lucrative or prestigious as it was when their opinions were formed.

When I was a kid in the seventies, a doctor was the thing to be.

There was a sort of golden triangle involving doctors, Mercedes 450SLs, and tennis.

All three vertices now seem pretty dated.

The parents who want you to be a doctor may simply not realize how much things have changed.

Would they be that unhappy if you were Steve Jobs instead?

So I think the way to deal with your parents' opinions about what you should do is to treat them like feature requests.

Even if your only goal is to please them, the way to do that is not simply to give them what they ask for.

Instead think about why they're asking for something, and see if there's a better way to give them what they need.

One reason a safe career may not be what your parents want: parents are more conservative for their kids than for themselves. It's rational—they share more of their kids' ill fortune than good fortune—but erring on the side of conservatism is still erring. Reward is proportionate to risk, so by protecting kids from risk, parents unknowingly protect them from rewards.

The other reason is that, like generals, parents are always fighting the last war. They want a doctor partly because it's prestigious and lucrative—but less so than when their opinions formed. In the seventies, a doctor was the thing to be: a golden triangle of doctors, Mercedes 450SLs, and tennis. All three vertices now seem dated. Would they really be unhappy if you were Steve Jobs instead?

So treat your parents' opinions like feature requests. Even if your only goal is to please them, don't just give them what they ask for; think about why they're asking, and find a better way to give them what they need.

Parents are excessively conservative for their kids and fight the last war—a doctor isn't what it was in the seventies. Treat their wishes like feature requests: find the need behind the request.

16. A job is the default

This leads us to the last and probably most powerful reason people get regular jobs: it's the default thing to do.

Defaults are enormously powerful, precisely because they operate without any conscious choice.

To almost everyone except criminals, it seems an axiom that if you need money, you should get a job.

Actually this tradition is not much more than a hundred years old.

Before that, the default way to make a living was by farming.

It's a bad plan to treat something only a hundred years old as an axiom.

By historical standards, that's something that's changing pretty rapidly.

We may be seeing another such change right now.

I've read a lot of economic history, and I understand the startup world pretty well, and it now seems to me fairly likely that we're seeing the beginning of a change like the one from farming to manufacturing.

And you know what?

If you'd been around when that change began (around 1000 in Europe) it would have seemed to nearly everyone that running off to the city to make your fortune was a crazy thing to do.

Though serfs were in principle forbidden to leave their manors, it can't have been that hard to run away to a city.

There were no guards patrolling the perimeter of the village.

What prevented most serfs from leaving was that it seemed insanely risky.

Leave one's plot of land?

Leave the people you'd spent your whole life with, to live in a giant city of three or four thousand complete strangers?

How would you live?

How would you get food, if you didn't grow it?

Frightening as it seemed to them, it's now the default with us to live by our wits.

So if it seems risky to you to start a startup, think how risky it once seemed to your ancestors to live as we do now.

Oddly enough, the people who know this best are the very ones trying to get you to stick to the old model.

How can Larry and Sergey say you should come work as their employee, when they didn't get jobs themselves?

Now we look back on medieval peasants and wonder how they stood it.

How grim it must have been to till the same fields your whole life with no hope of anything better, under the thumb of lords and priests you had to give all your surplus to and acknowledge as your masters.

I wouldn't be surprised if one day people look back on what we consider a normal job in the same way.

How grim it would be to commute every day to a cubicle in some soulless office complex, and be told what to do by someone you had to acknowledge as a boss—someone who could call you into their office and say "take a seat," and you'd sit!

Imagine having to ask permission to release software to users.

Imagine being sad on Sunday afternoons because the weekend was almost over, and tomorrow you'd have to get up and go to work.

How did they stand it?

It's exciting to think we may be on the cusp of another shift like the one from farming to manufacturing.

That's why I care about startups.

Startups aren't interesting just because they're a way to make a lot of money.

I couldn't care less about other ways to do that, like speculating in securities.

At most those are interesting the way puzzles are.

There's more going on with startups.

They may represent one of those rare, historic shifts in the way wealth [blocked] is created.

That's ultimately what drives us to work on Y Combinator.

We want to make money, if only so we don't have to stop doing it, but that's not the main goal.

There have only been a handful of these great economic shifts in human history.

It would be an amazing hack to make one happen faster.

The last and most powerful reason people get jobs: it's the default, powerful precisely because it operates without conscious choice. It seems an axiom that if you need money you get a job—but this tradition is barely a hundred years old; before it, the default was farming. It's a bad plan to treat something a century old as an axiom.

We may be seeing another such change right now—the beginning of a shift like the one from farming to manufacturing. When that began, around 1000 in Europe, running off to the city would have seemed crazy. Serfs were forbidden to leave, but there were no guards; what stopped them was that it seemed insanely risky. Leave your land? Leave everyone you knew for a city of strangers? How would you live, if you didn't grow your own food?

Frightening as that was, it's now our default to live by our wits. So if a startup seems risky, think how risky it once seemed to your ancestors to live as we do. Oddly, the people who know this best are the ones telling you to stick to the old model—how can Larry and Sergey say you should be their employee, when they didn't get jobs themselves?

We look back on medieval peasants and wonder how they stood it: tilling the same fields forever, under lords and priests they had to acknowledge as masters. One day people may look back on a normal job the same way. How grim to commute to a cubicle and be told what to do by a boss who could say "take a seat," and you'd sit! Imagine having to ask permission to release software.

That's why I care about startups. They aren't interesting just as a way to make money—I couldn't care less about other ways, like speculating in securities. Startups may represent one of those rare, historic shifts in the way wealth [blocked] is created. There have only been a handful in history, and it would be an amazing hack to make one happen faster.

The most powerful reason people take jobs is that it's the default—a tradition barely a century old. We may be at a historic shift, like farming to manufacturing; starting a startup only seems as risky as cities once seemed to serfs.

Notes

[1] The only people who lost were us. The angels had convertible debt, so they had first claim on the proceeds of the auction. Y Combinator only got 38 cents on the dollar.

[2] The best kind of organization for that might be an open source project, but those don't involve a lot of face to face meetings. Maybe it would be worth starting one that did.

[3] There need to be some number of big companies to acquire the startups, so the number of big companies couldn't decrease to zero.

[4] Thought experiment: If doctors did the same work, but as impoverished outcasts, which parents would still want their kids to be doctors?

Thanks to Trevor Blackwell, Jessica Livingston, and Robert Morris for reading drafts of this, to the founders of Zenter for letting me use their web-based PowerPoint killer even though it isn't launched yet, and to Ming-Hay Luk of the Berkeley CSUA for inviting me to speak.

Comment on this essay.

On the Kiko auction, the only people who lost were us: the angels held convertible debt and had first claim, so Y Combinator got only 38 cents on the dollar. The best way to find a cofounder might be an open source project—but those lack face-to-face meetings.

Some big companies have to exist to acquire startups, so their number couldn't fall to zero. And a thought experiment: if doctors did the same work but as impoverished outcasts, which parents would still want their kids to be doctors?

Footnotes on the Kiko auction, open source as a way to find cofounders, the need for some big companies as acquirers, and a thought experiment about doctors.