Startups: Quick and Dirty or Built to Last?

Several years ago, I rented a small house on the San Francisco Bay peninsula. The landlord was a very nice person, but she didn't want to spend a penny more than she had to for anything. In the mid-90's, she built a large house and installed the cheapest double-pane windows she could find. Typically, good windows that are properly installed last at least 25 years, but most of the internal vapor seals on the windows that she installed had broken in less than 10 years. The result was moisture and fogging between the panes that was impossible to remove. She was thinking about selling the house and knew that she could never get a good price with those windows, so she had to replace all of them.

There are times when you should spend money now in order to avoid having to spend more money later; the windows in that house are a good example. By installing good-quality windows when the house was built, the landlord could have avoided the hassle and expense of replacing them a few years later. However, there are also times when it's appropriate to spend the least amount possible building a "disposable" solution.

Software and Internet services startups have to make this same choice all the time: Spend a lot of money up front to get high-quality code that can be used for a long time, or go the cheap and dirty route and get something out that works but will have to be replaced quickly?  The answer depends on what stage your startup is in. If you're just getting started and you're still trying to determine if the opportunity you've targeted is real and your technical solution will work, cheap and dirty is best. You're almost certainly going to throw out your code once, if not multiple times, before you're got the right product/market fit. Once you've got your product/market fit right, you can begin replacing "temporary" code with higher-quality, more maintainable code (I hesitate to say "permanent". because no code should be permanent.)

There are always situations where getting it right the first time is essential, especially in applications used for mission-critical or life-and-death situations. However, for most early-stage startups, cheap and dirty is the way to go, at least at the beginning.

Entrepreneurship is a life choice, not a job choice

I was looking at the websites supporting the various entrepreneurial programs at my alma mater, Northwestern's Kellogg School of Management. There seemed to be a lot of activity until the current recession began, but since then, things have slacked off dramatically--not surprising considering the economy.

However, entrepreneurial programs at the graduate level have always had something of a checkered history. Most MBA students gravitate to the careers that pay the most. For years, that was consulting and then investment banking. In the mid- and late-90's, entrepreneurship programs took off and became the most popular programs at some schools. I suspect that the majority of those students didn't pursue entrepreneurship because they had a burning desire to found and run their own companies; rather, they saw an opportunity for quick wealth if they could take their companies public or flip them to an acquirer. When the dot-com economy collapsed, interest in entrepreneurship programs dwindled, and investment banking once again took over. (Today, I have no idea what MBA students are gravitating to.)

I believe that entrepreneurship is a life choice, not a job choice. You're either driven to create and build companies or you're not. You can teach the nuts and bolts of creating and building businesses, but not the mindset. In fact, the skills needed to be a successful entrepreneur are rarely taught in MBA programs. Graduate business programs are designed to create specialists--a student will be exposed to all the important disciplines, but they're expected to specialize in one or, as I was able to do, at most two. You graduate as a finance or marketing specialist, but to be a successful entrepreneur, you have to be a generalist. You must be functionally competent in a lot of areas, including product development, sales, marketing, finance, accounting, hiring, legal issues and a lot more.

I would gently suggest to anyone looking at entrepreneurship as a "get rich quick" opportunity that you're out of your mind. I was raised in an entrepreneurial family--my parents owned a retail store, and my father often said that he was in business for himself because he was unable to work for anyone else. It was a very difficult life for them, although they made sure that my sister and I had everything we needed. For 30 years, they were always one bad Christmas season away from disaster. They survived because they were driven to survive.

For you to really be successful, you have to be driven to build a business on your own, not on someone else's payroll. No graduate program can put that drive into your blood. It's either there or it's not.

The Entrepreneurial Challenge

2010 has just begun, and depending on who you talk to, we're either still in the Great Recession, or it recently ended. Either way, there are millions of people in the U.S. and around the world who will remain unemployed or underemployed even after the economy recovers. As a society, we have both a moral and economic imperative to help these people get back on their feet. As a country, the U.S. can't survive with a hollowed-out manufacturing base, and having Wal-Mart or McDonald's as employers of last resort helps no one.

I believe that the end of the Great Recession presents a tremendous opportunity for individuals who want to start their own businesses. For many people, entrepreneurship will represent their best, or even their only, means of getting back on their feet financially. The challenge for those of us who have spent most of their careers in Silicon Valley and other entrepreneurial centers is to bring that startup culture to people who need it.

We've got the tools to spread ideas quickly and inexpensively; we need to use them to encourage new businesses, no matter where they're located. We also need to adapt our philosophy and techniques to the needs of entrepreneurs outside the major technology and business centers. It's far more likely that these new entrepreneurs will start a restaurant than a software company, and very few of them are ever going to have a business that's likely to go public. We need to help them build sustainable, profitable businesses that will allow them to make a good living and support themselves and their families.