The Reality Check on making futuristic software

Ok so after a couple of posts that look at the world through rose-colored glasses, here is a nice writeup by Glenn Kelman, CEO of Redfin that offers some reality check (both in the same day too– what’re the odds?)

These are great points though — most all entrepreneurs would agree to have experienced this challenges often on a daily basis, unless you’re Jawwad Farid perhaps and can use your Reality Distortion Field to convince people leave IBM for summer projects.

This is a guest posting by Glenn Kelman, CEO of Redfin,
a company that enables people to buy homes online. He offers a
counterpoint to my posting about how easy it is to make millions of
dollars with “user-generated, long-tail, Web 2.0, social-networking,
open-source content.”

---

Last month, Guy called James Hong and Markus Frind heroes for running multi-million dollar websites like Hot or Not and Plenty of Fish in their underwear. Their stats are jaw-dropping: twelve billion page views, 380 hits per second, two hours of work a day.

Lately I’ve been thinking how hard, not how easy, it is to build a
new company. Hard has gone out of fashion. Like college students
bragging about how they barely studied, start-ups today take care to
project a sense of ease. Wherever I’ve worked, we’ve secretly felt just
the opposite. We’re assailed by doubts, mortified by our own
shortcomings, surrounded by freaks, testy over silly details. Trying to
be like James or Markus has only been counterproductive.

And now, having been through a few startups, I’m not even sure I’d
want it to be that easy. Working two hours a day on my own wasn’t my
goal when I came to Silicon Valley. Does anybody remember the old video
of Steve Jobs launching the Mac? He had tears in his eyes. And even
though Jobs is Jobs and I am nobody, I knew how he felt. I’d had the
same reaction–absurdly–to portal software and more recently to a
Redfin, a fledgling real estate website.

“The megalomaniac pleasure of creation,” the psychoanalyst
Edmund Berger wrote, “produces a type of elation which cannot be
compared with that experienced by other mortals.” Jobs wasn’t just
crying from simple happiness but from all the tinkering, kvetching,
nitpicking, wholesale reworking, and spasms of self-loathing that go
into a beautiful product. It was all being paid back in a rush.

Like the souls in Dostoevsky who are admitted to heaven because they
never thought themselves worthy of it, successful entrepreneurs can’t
be convinced that any other startup has their troubles, because they
constantly compare the triumphant launch parties and revisionist
histories of successful companies to their own daily struggles. Just so
you know you’re not alone, here’s a top-ten list of the ways a startup
can feel deeply screwed up without really being that screwed up at all.

1. True believers go nuts at the slightest provocation.
   The best people at a start-up care too much. They stay up late writing
   Jerry Maguire memos, eavesdropping on support calls, snapping at
   bureaucracy, citing Joel Spolsky on Aerons, and Paul Graham on cubes.
   They are your heart and bones, so you have to give them what they need,
   which is a lot. The only way to get them on your side is to put them in
   charge.

2. Big projects attract good people. If you aren’t
   doing something worthwhile, you can’t get anyone worthwhile to work on
   it. I often think about what Ezra Pound once said of his epic poem,
   that “if it’s a failure, it’s a failure worth all the successes of its
   age.” We’re not writing poetry, but it matters to us that we’re trying
   to compete with real estate agents rather than just running their ads.
   You need a big mission to recruit people who care about what you’re
   doing.

3. Start-ups are freak-catchers. You have to be
   fundamentally unhappy with the way things are to leave Microsoft, and
   yet unrealistic enough to believe the world can change to join a
   start-up. This is a volatile combination which can result in group mood
   swings and a somewhat motley crew. Thus, don’t worry if your start-up
   seems to have more than its fair share of oddballs.

4. Good code takes time. One great engineer can do
   more than ten mediocre ones especially when starting a project. But
   great engineers still need time: whenever we’ve thought our talent,
   sprinkled with the fairy dust of some new engineering paradigm, would
   free us from having to schedule time for design and testing, we’ve paid
   for it. To make something elegant takes time, and the cult of speed
   sometimes works against that. “Make haste slowly.”

5. Everybody has to re-build. The short-cuts you
   have to take and the problems you couldn’t anticipate when building
   version 1.0 of your product always mean you’ll have to rebuild some of
   it in version 2.0 or 3.0. Don’t get discouraged or short-sighted. Just
   rebuild it. This is just how things work.

6. Fearless leaders are often terrified. The CEO of the most promising start-up I know of recently used Hikkup
   to anonymously ask his Facebook friends if we thought his idea was any
   good. Just because you’re worried doesn’t mean you have a bad idea; the
   best ideas are often the ones that scare you the most. And for sure
   don’t believe the after-the-fact statements from entrepreneurs about
   how they “knew” what to do.

7. It’ll always be hard work. Most start-ups find
   an interesting problem to solve, then just keep working on it. At a
   recent awards ceremony, Microsoft CEO Steve Ballmer tried to think of
   the secret to Microsoft’s success and could only come up with “hard,
   hard, hard, hard, hard, work.” This is an obvious cliche, but most
   entrepreneurs remain fixated on the Eureka! moment. If you don’t
   believe you have any reliable competitive advantage, you’re the kind of
   insecure person who will work your competition into the ground, so keep
   working.

8. It isn’t going to get better–it already is. In
   the early days, start-ups focus on how great it’s going to be when they
   succeed; but the moment they do, they start talking about how great it
   was before they did. Whenever I get this way, I remember the Venerable
   Bede’s complaint that his eighth century contemporaries had lost the
   fervor of seventh century monks. Even in the darkest of the Dark Ages,
   people were nostalgic for…the Dark Ages. Start-ups are like medieval
   monasteries: always convinced that paradise is just ahead or that
   things only recently got worse. If you can begin to enjoy the process
   of building a start-up rather than the outcome, you’ll be a better
   leader.

9. Truth is our only currency. At lunch last week,
   an engineer said the only thing he remembered from his interview was
   our saying the most likely outcome for Redfin–or any startup–was
   bankruptcy, but that he should join us anyway. It’s odd but the more
   we’ve tried to warn people about the risks, the more they seem to
   ignore them. And since you have to keep taking risks, you have to keep
   telling people about them. You don’t want to be like Saddam Hussein,
   who never prepared his generals for invasion because he couldn’t admit
   he didn’t have nuclear weapons.

10. Competition starts at $100 million. A Sequoia
    partner once told me that competition only starts when you hit $100
    million in revenues. Maybe that number is lower now. But if you do
    something worthwhile, someone else will do it too. Since you can’t see
    what’s going on behind a competitor’s pretty website, it’s natural to
    assume that all the challenges we just went over only apply to your
    company. They don’t, so keep the faith.