[brap]

We keep seeing this. If you had to point out the fundamental problem, what would it be?

I think it’s the disconnect. Each persona is an expert in their own field but is completely oblivious to other critical areas.

The founder knows how to raise money but doesn’t really understand the customers. The engineer knows the tech but doesn’t really understand what it takes to keep the business afloat. The salesperson knows what customers want but doesn’t really understand what’s possible to make. The investor knows the numbers but doesn’t really understand how poorly the business is run.

I suspect if you look at successful startups you’ll often see a very small (1-3) group of founders who are very close, each can do more than one thing really well, and their combined expertise means that together they have very few blindspots.

[red_admiral]

To me, the fundamental problem is what Paul Graham pointed out here: https://www.paulgraham.com/startupideas.html

"The way to get startup ideas is not to try to think of startup ideas. It's to look for problems, preferably problems you have yourself.

Why do so many founders build things no one wants? Because they begin by trying to think of startup ideas. That m.o. is doubly dangerous: it doesn't merely yield few good ideas; it yields bad ideas that sound plausible enough to fool you into working on them."

Finding a problem _you have yourself_ also increases the chance that you understand the problem space.

[whstl]

I dunno, going back to the article, at some point customers are getting exactly what they're asking for:

"their kitchens are custom-built, so they need ovens with specific dimensions. Oh, and a rotating base like the one they already have."

“My oven at home connects to the fireplace. Does yours?”

“I make a lot of wedding cakes, what have you got for me?”

“Do you have a Ramadan mode?”

Those are all problems.

But are they problems worth spending time? I dunno.

[dijksterhuis]

> But are they problems worth spending time?

They're not problems people need solved. They're problems people think they want solved. need != want.

the high street bakers needed reliability with improved efficiency at an affordable price (cost of risk). they didn't need improved efficiency, less reliability and still really expensive.

[singron]

Pre-purchase, the customers are just looking at lists of features. Post-purchase, they realize the ovens burn bread and cake 10% of the time and pizza 100% of the time, and they just want a good working oven that doesn't burn food.

It seems like most customers are returning the oven, which would normally be an extremely strong signal that there is a quality problem. In the SaaS world, the equivalent would be churn, but it's not always as straightforward since if users quit before they sign up (e.g. by reading a review or using a free trial), then they don't show up in that metric.

[throwaway7783]

In SaaS quality is one of the problems that cause churn. Value,price and politics also play a big role - now matter how good or bad the product quality is

[andyfilms1]

The key difference is the founder built a product in search of a problem to solve, rather than the other way around.

The "secret" is just to talk to people in the field they're trying to "revolutionize," and ideally observe them work. Often, people become blind to workflow problems and workarounds become normal process. They never even consider to look for a better way to do something. Those are the opportunities for founders to solve.

But what I've seen a lot is founders just arbitrarily coming up with an idea that sounds cool on paper, raising money, and only realizing too late that there is zero actual market fit.

[evolve-maz]

That's because the assumption is the new product can already do what their current product can, so the things customers ask for is the extras. It's really easy to forget that a lot of work went into "baseline" features which are assumed to be standard (in this case the not burning part).

[gmueckl]

A lot pf good products are a combination of features that customers need and use and features they think they need and ask for, but never use. But the sales wouldn't be as good without them. It's a bit comical once it becomes apparent, but it is a widespread pattern.

[cm11]

People trying to think of startup ideas aren't doing it accidentally. They don't want ovens or baked goods. They want to be a founder and/or money. I feel like PG is only right halfway (which maybe means he's not right). He's implying it's wrong to do it that way (to try to think of startup ideas), that it won't work, but geez louise has it worked. To get funded, to get rich, to get an exit. He's also helped enable that path quite a bit.

[ryanbrunner]

I've worked for startups that worked on genuine problems that had high customer demand, and there was still the problem of selling what the product could be instead of what it is. At least in my experience, it's omnipresent in B2B and has to be specifically handled regardless of how well your solution addresses a problem.

[__MatrixMan__]

...which is why none of the best software is a product or a service. The best software is always a tool, made by people who have a problem for people who have that problem.

Occasionally the business types come along and make it worse by turning it into a product or a service. Other times they make bad products and bad services from scratch.

The people in this story are focusing at the wrong layer (as are many of us). They need to stop trying to sell ovens and start trying to sell baked goods. Maybe once they're good at that, they can also sell whatever oven they came up with along the way.

[korrectional]

Wow I never heard about his blog but just spent the last 3 hours reading it and wow its a treasure trove

[paulryanrogers]

> Finding a problem _you have yourself_ also increases the chance that you understand the problem space.

If most founders are wealthy, or even reasonably comfortable, it's possible they're too out of touch to identify a problem shared by enough people.

[teiferer]

Depends what kind of market you are going after. Mass market for end users, sure, your argument applies. But there are lots of other types too.

[willturman]

> Enterprise sales isn’t about ovens.

The handshake comes first. The requirements come later.

[__MatrixMan__]

Which is why income inequality is so insidious. The more successful your rich people are the less effective they become.

[christina97]

This may apply to B2C firms, but B2B firms are more likely to be run by people similar to them.

[terminalbraid]

> The engineer knows the tech but doesn’t really understand what it takes to keep the business afloat.

This is assuming there IS a way to keep the business afloat. It's this framing of thinking that has caused more suffering, frustration, and bad will in all the places I've worked at which are just reskins of this article.

A business is entitled to it's model but it is not entitled to success. This story which is more than just a strawman or anecdote gets it right: The engineers are doing their job the best they can with unreasonable expectations set by people who do not feel they need to be constrained by reality and just have dollar signs in their eyes. The engineers do not share the same type of blame as everyone else at the company. Their failure was enabling nonsense and greed.

[icedchai]

Yep. I've worked at a couple startups where engineering built a thing, sales was able to sell it but had to give a huge discount. The resulting economics just didn't work. But, each sale was seen on its own as a success even though the generally lost money. Often there was a discount plus some promised bespoke feature that required additional development to close the sale. There was never enough volume and often that additional engineering work never applied to another customer. Nobody wants to say "maybe this deal just isn't worth making" and move on.

In a couple of these cases, the company was ultimately sold in a fire sale. The early investors, founders, and employees got nothing. The acquisition is still celebrated as a "success", of course.

[codingdave]

> The salesperson knows what customers want

No, and neither does anyone else in these scenarios. Almost all startups are trying to build something new that they want people to want. But customers almost universally do not want your product. They don't give a crap about you or your product. What they care about is delivering their own product and/or achieving their own goals. Your product is a tool. If it is a tool that helps them for a reasonable price, they will buy it. But never be fooled into thinking "They want my product". They don't. They want an effective tool to to meeting their own needs. Your product wins when it is that tool.

[dzonga]

well said - few people realize how selfishly people(customers) are driven.

the trick to sales is to feed into that selfishness.

[msteffen]

I read somewhere that almost every very successful person’s results can be attributed to 2-3 tricks that they consistently apply to great effect.

With Elon, I think one of his is “build it as cheaply as possible, and then you can afford to only sell to people who are purely excited about the tech.” I don’t know when he learned this (I actually wonder if it was a lesson he learned from Eberhard/Tarpenning at Tesla, who were only selling the roadster to sports car enthusiasts who cared more about 0-60 than fit & finish, or range, or cost, or anything else).

Anyway, my current interpretation is that the pizza guys shouldn’t have sold to pepepizza (or friends and family, probably). I know startups do this all the time, but whenever I’ve seen it, it always seems to turn into a distraction from the Big Idea that is the company’s thesis. Then Big Customer gets hung up on ancillary requirements and Cool Startup doesn’t really get to test their thesis at all. Maybe the key is to stay small, focus on finding people who really care about the new oven tech, and size the company to that market until you’ve solved enough problems to expand to people for whom the cool tech is concern #2 or #3.

[felix-the-cat]

> I read somewhere that almost every very successful person’s results can be attributed to 2-3 tricks that they consistently apply to great effect.

This entirely. I've been CTO at a handful of startups, most recently one that sold for a very large sum of money — and the successful ones are almost always led by people who keep things dirt simple: focus on the customer, execute quickly, communicate clearly, keep costs low, and keep the technology simple. That's basically it. Just a few simple things, applied relentlessly.

The ones that failed were always the total opposite — not listening to their customers, poor communication across the org, blowing their runway on "we need Google-scale infrastructure," switching languages or frameworks halfway through the project, and so on.

[ryandrake]

Every startup/SmallCo I worked for seemed to fall into this trap. Sales finally finds a BigCustomer, and the company instantly transforms from a product company into a custom engineering contractor for BigCustomer. We're no longer building our own product vision: We're cramming everything BigCustomer is asking for while they hold a carrot tied to a stick in front of us. We no longer have a general product that can be sold to anyone. We have BigCustomer's wish list and they still haven't bought more than a handful of units.

[ValentineC]

On the other hand, if they'd focus on building their core product (an oven) while taking BigCompany's money, and without listening to the multitude of smaller requests from potential customers who might not even hand over a single cent, they might have eventually gotten somewhere.

I agree that being a "custom engineering contractor for BigCustomer" might not have been the ideal outcome, but at least the entire company would have gotten some expertise, and probably be able to pivot and finally build their own thing given more resources (*cough*moreVCfunding*cough*).

[__alexs]

The problem is that people are not listening to each other. Part of this is just working together is hard, but a bigger part is that there is status associated with being "in charge" of things as founder. The desire to feel like you are controlling the outcome and people need to take instruction and direction from you rather than working together to find a path through the forest.

[cm11]

People have different strengths, but I consistently see teams that have people who are decent or better at their non-expert skills and their comments play a very small role in the discourse. Sometimes they speak up more and sometimes not, a lot of them manage to (learn to) just not care. I think there are many teams where the "expert" is not actually better at their role than the other team members.

I mostly see the leaders or the product people telling the engineers or designers that they don't understand business—implying that the latter aren't reasonable people who can advocate for things that balance the various dynamics that have been brought up in a meeting, that their view results from only considering the thing technically or aesthetically. It's a hand-wavey maneuver that's always there, said without specifics. This is particularly so given you've provided specs and designs and they rarely show business or market analysis. I've worked with many PMs to propose our work to stakeholders—they swear to the audience they've done the business work, but in preparing the presentation, they just googled a couple very broad things (one example, "the collaboration market is a $70B market"). I've worked with others, who I've tried to learn from, to show or point me to some basics of that analysis and they didn't know.

Product managers and product people in general have very little background in product management. It's not a degree or anything. Sometimes they come from backgrounds that are helpful, but we oddly have junior and entry level ones. This doesn't make that much sense, given they are formal or informal leaders of teams. What could they be bringing to the table? A (sad) exception is when access to meetings or information is gatekept, so then they're bringing that. Sometimes it's argued that PMs are good at seeing across things, but that has not been my experience. The problem with the each person is an expert in their own field is that in a lot of teams, the expert is frequently not better at their thing. The decision maker is not actually better at business or seeing across things or making decisions.

[ranyume]

Your solution is to fire CEOs, shareholders and only make employee-owned businesses? I mean I'm on board.

[dexterdog]

Sounds great until a hard decision has to be made.

[PhageGenerator]

Just because a business is employee owned that does not mean it lacks leadership.

[mpyne]

Nothing is stopping employees from banding together to create these obviously-superior businesses right now and eating the VCs' lunch. Right?

[whstl]

This is incorrect. Concentration of wealth is definitely stopping them.

Most people can’t just stop working and start working for no cash.

I might be missing some obvious sarcasm, though!

[mpyne]

The worker-owned businesses that are more effective will do a better job of concentrating wealth though, as they don't have to pay investors back dividends or participate in stock buybacks.

Software in general is a field quite compatible with initial self-funding, in ways you can't say for other industries.

But even still, investors threw away gobs of money on clearly unsustainable businesses like NFTs, and capitalism in general is happy to sell people the rope they will use to hang capitalists, so it's not even impossible to find investors if you absolutely need them.

Pair the lack of ongoing payments to investors or lenders with the superior execution of worker-led organizations, and companies such as these should pretty clearly mop up their competitors saddled with non-value-added executive management and non-value-added investors.

That is, assuming these roles don't provide any value to companies.

[ryanbrunner]

There's some natural experiments that show that this happens, and is successful, when funding dries up a little. The early to mid 2000s were marked by a huge amount of bootstrapped companies that were quite successful. But VCs can distort a market to a huge degree and have huge effects on the labour market and even things like sales by preferring insider deals and introductions that it can crowd out smaller companies who can't outspend the VC-led companies.

[whstl]

> The worker-owned businesses that are more effective will do a better job of concentrating wealth though, as they don't have to pay investors back dividends or participate in stock buybacks.

That’s only close to possible if we start with the assumption that all businesses are billion dollar businesses.

This is also unrelated with the possibility to bootstrap a business without money.

[singpolyma3]

CEOs are employees...

[sarchertech]

Except that they usually sit on the board and frequently chair the board.

[post-it]

The fundamental problem is that reality has a surprising level of detail (as described in an article by the same name). The founder is the same kind of guy that believes the government should just get rid of inefficiencies.

[riazrizvi]

Fundamentally they are not sufficiently attached to the people's reason for using an oven. They are only attached to the goal of staying alive and making money. And when the balance shifts slightly more to the users need, the whole operation and reason for existing in every one in the company shifts in a way that makes it look like a rare and weird company that people generally don't have a frame of reference for. Most people wouldn't recognize such an entity if they saw it at this founding stage. It all starts with the right founder/s.

[eapressoandcats]

It seems to start with the fact that the founder doesn’t understand the business domain at all:

How do people actually buy ovens? What actually matters for customers, not what do they say matters? Who are the competitors and why do you think you can actually do better than them in at least some niche? What culture actually works for an oven producing company?

[lsaret1257]

Isn’t a large part of fundamental problem the lack of clarity and mental discipline to stay focused on MVP and if it’s clear it’s necessary then pivot but still stay focused? It seems clear to me that real problem is lack of focus and discipline.

[gedy]

Yes, but the subtle issue I've seen in companies is "MVP" easily ends up interpreted as: "add this one small thing since it's quick and easy to implement". Then before they know it you've got this mousetrap-like product that goes in all sorts of directions.

[carbonguy]

A fundamental problem (let's not assume there's just one!) is this thinking right in the first paragraph:

> ... if he sells a new oven to the country’s pizza makers, pastry chefs, and bakers, he only needs to capture 10% of the market to become a billionaire.

i.e. the founder assumes that "ovens" is a single $10b-sized market, and it isn't, because reality has a surprising amount of detail (as sibling comment also notes).

You could interpret this whole story as a saga of very inefficient oven market(s) research, the end result of which is the forum post at the end:

> On the forum an old user warns “Make sure that you support rotating bases day 1”.

[lucas_t_a]

> I think it’s the disconnect. Each persona is an expert in their own field but is completely oblivious to other critical areas.

its because the story just makes that assumption.

[stickfigure]

Balance the power between business, engineering, and sales. I suspect this is at least partially why PG likes founders with an even equity split.

[charm137]

There are two fundamental problems: one is the inability to admit mistakes and shed the false aura of omniscience in front of customers, investors or employees. The second (almost a corollary of the first) is overpromising and, as a result, underdelivering because those who face the customers/investors want to appear infallible.