Why Should I Start a Startup?

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 Why Should I Start a Startup? 

by Michael Seibel

A lot of people ask themselves this question.

They often mull over one or more of the following facts:
The vast majority of startups are not successful
For talented technical people, it’s relatively easy to get a job and make a large salary
Large companies offer opportunities to work on very difficult problems that often only occur at scale

My answer to why you should start a startup is simple: there is a certain type of person who only works at their peak capacity when there is no predictable path to follow, the odds of success are low, and they have to take personal responsibility for failure (the opposite of most jobs at a large company).

Here is how I learned this about myself.

High School

My public school from 6th to 12th grade was aggressively tracked. Early on students were placed in the gifted track or the regular track. Gifted kids got better teachers, more interesting coursework, and more often than not were accepted to the top universities. I was smart but not smart enough to be considered “gifted” so I was put into the regular track. What became clear to me by 8th grade was that once I was tracked regular there was no easy way to reverse the decision. That pissed me off and motivated me to break into the higher track. I worked hard to be the smartest kid in my regular classes, my parents and I had to lobby my teachers for recommendations to more advanced classes, and I needed to excel at the electives and clubs dominated by gifted students (constitutional law and model UN). By junior year I had succeeded but my motivation didn’t stop. Instead of wanting to be as good as the kids in the gifted track, I realized that I could be better. While everyone else practiced violin I became a varsity athlete. When others did community service half heartedly, I joined the rescue squad as a cadet riding ambulances and helping people in my town and spent a summer volunteering in my municipal court. By the end of high school all of this hard work paid off. I got great grades, took a bunch of AP classes, and got into every college I applied to except Harvard (Thank God – Go Yale!).

College

Then I got kicked out of Yale. Let me tell you what happened. Yale is the epitome of establishment and in its liberal arts environment I didn’t feel like I was learning anything of practical value (Political Science major). Over a couple years I lost all interest in classes, stopped attending, and low grades quickly followed. I didn’t want to be an academic and it felt like that was all Yale was preparing me to do. By senior year my poor grades resulted in me being kicked out of school. About 2 months after being kicked out of school I suddenly felt pissed off again. I realized that my school, some of my friends, and even some of my family members thought I would never graduate from college. My motivation came back instantly. I worked my way into great job at UPenn where I got to work on issues in government and politics and even help TA a constitutional law class and visit the supreme court in session (my friends found it funny that the Yale dropout got to TA at UPenn). When my year was through I went back to school, got A’s, made some great friends (Justin Kan was one of them), and graduated in the 2005 class.

Justin.tv / Twitch.tv

Doing startups was never my plan but looking at my history in high school and college I really needed to be an underdog in order to motivate myself to succeed. Startups are the classic underdog, 99% of the time – they fail. This was so motivating that I didn’t even need to believe in our first idea to stay excited (remember… we started as an online reality TV show). Throughout almost all of the history of Justin.tv and Twitch we were expected to lose. We were funded by YC in 2007 but it wasn’t nearly as well known as it is today and most investors ignored us. After demo day no matter how hard we tried we could only raise $180k in angel investment. As we built our business we couldn’t attract the highest ranked VCs, couldn’t hire the most sought after engineers, and were constantly fighting to just stay alive at a time when video startups were considered horrible cash combusting businesses with no ability to monetize. On 5 separate occasions over 5 years we almost died. Once receiving a bandwidth bill for more money than we had in our bank account, once needing a loan from Justin and Emmett, and once having less than 2 months of runway and $1m in monthly expenses. All of these adversities were exactly what we needed to stay hungry. We couldn’t be killed, we wouldn’t go away, and 8 years after we started we succeeded.
So for those of you who are interested in tech (especially folks who work at big companies or are applying to work big companies), you should ask yourself these questions:
Do I like being the underdog?
Do I seek the hard challenges that most people shy away from?
Do I thrive when I take personal responsibility for success or failure?
If you answer yes three times, then maybe starting a startup is for you. The many jobs at big companies cannot offer you this experience. For many people, the longer they work at a big company making a large salary, the higher their personal expenses rise, and the lower their chances will be of starting a startup, even if that is their eventual goal.

I cannot promise that doing a tech startup will make you rich (in fact the odds are against you becoming rich), but I can promise that it is one of the most challenging things you can choose to do. It will push you past your limits, force you to learn faster, and maybe show you that once in a while the impossible is possible.

Thanks to Craig Cannon, Adora Cheung, Aaron Harris, Daniel Gross, and Daniel Gackle for reading drafts of this essay. text here.