The Paradox of “Easy Startups”
AI art by Midjourney
Build the hardest company you can think of.
There’s advice you won’t hear anywhere else.
I don’t mean hard as in “build a company with no unique advantages, many competitors, and a small market.” I mean build toward the strongest possible form of your vision.
Here’s the nuance: build toward the biggest vision you can possibly imagine – along the simplest path you can find.
Easy example: SpaceX.
A vision so big it’s interplanetary: travel to Mars. Something that’s never been done before in human history.
When they started, they took the simplest possible path toward progress. Small rockets, carrying only cargo. Then they slowly laddered up the size, scale, and complexity of the technology.
You saw the same pattern in Tesla. Each step brings them more market share in the near-term, expands their available market, and takes them a step closer to the enormous long-term vision.
(Elon is brilliant about sequenced strategies. This shows up within each of his companies and in his career as a whole. I’m working on a book on Elon, but more on that later.)
It’s a rookie mistake to think “an easier startup” will get funded more easily, be easier to build, or make more money. This is the paradox of easy startups — they’re actually harder.
Building the hardest company you can think of is, surprisingly, easier. I think there are two main reasons for this:
Bigger Market = More Capital.
Recruiting Top-Tier Talent.
Bigger Market; More Capital
As I wrote in “Good Company; Bad Investment” there can be a large divergence between a good outcome for founders and good outcome for investors. It’s a dangerous oversimplification to assume a successful company is profitable for all investors.
No one wants to invest at a $50m valuation when a company can only grow to $100m or $200m. Capital wants to see the potential for a long run of growth after they invest.
The second order effect of this is investors want to know there will be more capital available for the next round to keep the company alive if necessary. Sometimes even the anticipation of future challenges is enough to keep a startup from raising successfully in the first place.
If a company has a huge vision and a huge market — you see continued investment even at super high valuations. (Stripe, for example.)
Trying to build “an easy startup” with a “smaller, more reasonable vision” could mean it never gets started at all.
As in the SpaceX example, you DO need an extremely sane sequence of reasonable steps to iterate on product, market, and funding to reach that big vision. Know how to start small and grow big. Really big.
Recruit top-tier talent
Big Missions bring in big talent.
It’s not fashionable to say so, but some people and some teams are 100x, 1000x, or 10000x as productive as others. Recognize this, and recognize what those people want—to put their skills and efforts into the most challenging and most impactful work in the world with other people like them.
And when you have a big big mission — something visionary that inspires people, you can hire missionaries, not just mercenaries. People work smarter, longer, harder and (maybe) in tighter unison in service of a shared mission.
How much harder would you work to cure cancer, restore eyesight, or end hunger than, say, sell sugar water, condominiums, or fucking vape pens?
The best piece of this most-ambitious-startups-are-easier concept is that the rewards are bigger. The financial rewards mirror the impact. So even if you’re just out to get the bag, your biggest vision beats your “more reasonable” idea a million to one.
The risk-reward ratio of your biggest company is actually better than a modest swing.
Besides, you only have one life to live and only a few startups in you. Why waste one on a compromise?
If you are a founder who couldn’t possibly have a more ambitious vision, we’d love to invest in you. If you want to put your capital to work behind founders like that, we’d love you to invest alongside us.
Note: This post is intended for founders of technology-based, high-growth companies that require capital to derisk and get started. This is not small-business advice or even normal-business advice. It’s for the maniacs building the near-impossible, heroic, world-changing companies.