Thursday, March 10, 2005

Protective Incompetence

The incredibly brilliant and fantastically lucid Paul Graham has coined a wonderful term: Protective Incompetence.

"I think the reason I made such a mystery of business was that I was disgusted by the idea of doing it. I wanted to work in the pure, intellectual world of software, not deal with customers' mundane problems. People who don't want to get dragged into some kind of work often develop a protective incompetence at it. Paul Erdos was particularly good at this. By seeming unable even to cut a grapefruit in half (let alone go to the store and buy one), he forced other people to do such things for him, leaving all his time free for math. Erdos was an extreme case, but most husbands use the same trick to some degree."

Hmmm, I think my wife would have to agree. It irks her to no end that I claim an inability to program the VCR.

"Protective Incompetence" comes from Paul's latest essay on how to build a startup. I heartily recommend that every prospective entrepreneur read this essay, along with Guy Kawasaki's "Art of the Start." Here are a few more nuggets:

"Financially, a startup is like a pass/fail course. The way to get rich from a startup is to maximize the company's chances of succeeding, not to maximize the amount of stock you retain. So if you can trade stock for something that improves your odds, it's probably a smart move."

"Talk to as many VCs as you can, even if you don't want their money, because a) they may be on the board of someone who will buy you, and b) if you seem impressive, they'll be discouraged from investing in your competitors. The most efficient way to reach VCs, especially if you only want them to know about you and don't want their money, is at the conferences that are occasionally organized for startups to present to them."

"I don't think the amount of bullshit you have to deal with in a startup is more than you'd endure in an ordinary working life. It's probably less, in fact; it just seems like a lot because it's compressed into a short period. So mainly what a startup buys you is time. That's the way to think about it if you're trying to decide whether to start one. If you're the sort of person who would like to solve the money problem once and for all instead of working for a salary for 40 years, then a startup makes sense."

4 comments:

Ben Casnocha said...

I agree that the article was provocative and contained some great tidbits...but his significant bias toward techies (and against business people) erodes some of his credibility in my mind. Somewhere in the article he talks about failed products, but doesn't ask the rhetorical quesiton "How many really cool technologies failed because they couldn't build a business around it?" He also takes a few hits at marketing people, and I personally believe that marketing is mostly responsible for creating a "good product."

Chris said...

There's no question that many technologists are pretty clueless when it comes to marketing. But by the same token, so are many HBS MBAs. The key is the ability to listen to the customer, and to give them what they need. I think that what Paul is driving at is that marketing doesn't require a fancy degree, just like hacking doesn't require a fancy degree. You just need persistence, insight, and the willingness to listen.

Justin K said...

I almost stopped reading (I'm glad I didn't) when he praised Google for introducing
"unintrusive keyword based ads". Google is a great company but I think they are
being given too much credit for their success. What would Google be had they
started in 1996 and competed head-on with Excite, AltaVista and Yahoo bunch while
VC's were still pumping millions into Google's search competitors?
Would Google be synonymous with search today or would they be known as a bigger
Inktomi running Yahoo's backend?

If you think about it.. the business folks that Paul derided at Yahoo were somewhat right... if not for Overture's business model, Search would have brought in no money and would not be deserving
of an elevated corporate focus.

But I digress.

Other than my issue with putting Google on the pedestal, I think it was a
very well written article that hit almost every aspect of starting and running a startup especially a bootstrapped technology startup. You had summarized nicely most of the major points but the one that got to me was his advice to deliver a simple working version 1 as quickly as possible and to be as flexible in the during the initial stages of the startup. I know of quite a few startups that are so worried that their technology
will be eclipsed by a fast approaching competitor that they try to make version 1 as
complete as possible before releasing it and as a result making the software hard
to change once the real customer feedback comes in.

The same advice was also given by the venerable Fred Brooks in his book the Mytical Man Month.
Fred proposed that every complex project be developed with a throwaway prototype (aka version 1).
He argued that it is difficult to anticipate the acutal needs of a complex software until it is actually in use, and to just deliver a working version one quickly and follow on with a well design version 2 based on the feedback you get from version 1.

Chris said...

The key innovation that Google made in the sponsored listings space is clearly separating them out from the organic search results.

While Overture pioneered the concept of sponsored listings, their practice of not distinguishing sponsored listings from organic search results kept them a niche player.