> It's true in any business where the primary risk is understanding what to build and not how to build it.
I really want to believe that your statement is true, but it appears to be eliding 4 dimensions into 2.
All businesses, regardless of size or type or industry, will run the risk of going out of business. Let's call this market risk [0]. Market risk is to businesses as dying is to humans, with the small difference being that businesses can postpone dying by pivoting to a different market. (Humans have not yet figured out how to postpone death and it is unlikely we ever will.)
What makes startups particularly exciting to discuss on HN is that they come with an additional challenge: technical risk.
Both risk types suffer from the what/how dilemma you pointed out: what to sell & how sell it (market risk); and what to build & how to build it (technical risk).
To mitigate technical risk is why YC strongly advises batches to camp out of SV for the first few months of the life of the company due to the agglomeration benefits -- the unusally high concentration of technical talent, relative to anywhere else in the world. This increases the odds they'd meet the kinds of technical people necessary to solve the "how to build it" part once the "what to build" part has been identified. If "how to build it" is impossible due to the laws of physics, or not yet possible due to the underlying economics, a startup can fail fast and focus on what is technically possible within the ambits of their meagre resources. With technical risks out of the way, a startup is no different from any other business.
Running a physical bookstore has nearly zero technical risk but suffers from lots of market risk due to competitive pressures from a better stocked bookstore opening next door, or from half a dozen new bookstores hoping to mop up the economic surplus rumored to be present in book selling in a highly affluent neighborhood. Or from an out-of-state competitor like an online retailer.
"What to sell" & "how to sell it" are existential questions that will always hang over the head of any business as long as there is competition.
I'd say that the primary risk of any business is understanding what to sell and how to sell it. Just ask any mom&pop bookstore that closed due to Amazon. Or Jawbone, even though they surmounted their technical risks with a ~$1bn war chest.
I really want to believe that your statement is true, but it appears to be eliding 4 dimensions into 2.
All businesses, regardless of size or type or industry, will run the risk of going out of business. Let's call this market risk [0]. Market risk is to businesses as dying is to humans, with the small difference being that businesses can postpone dying by pivoting to a different market. (Humans have not yet figured out how to postpone death and it is unlikely we ever will.)
What makes startups particularly exciting to discuss on HN is that they come with an additional challenge: technical risk.
Both risk types suffer from the what/how dilemma you pointed out: what to sell & how sell it (market risk); and what to build & how to build it (technical risk).
To mitigate technical risk is why YC strongly advises batches to camp out of SV for the first few months of the life of the company due to the agglomeration benefits -- the unusally high concentration of technical talent, relative to anywhere else in the world. This increases the odds they'd meet the kinds of technical people necessary to solve the "how to build it" part once the "what to build" part has been identified. If "how to build it" is impossible due to the laws of physics, or not yet possible due to the underlying economics, a startup can fail fast and focus on what is technically possible within the ambits of their meagre resources. With technical risks out of the way, a startup is no different from any other business.
Running a physical bookstore has nearly zero technical risk but suffers from lots of market risk due to competitive pressures from a better stocked bookstore opening next door, or from half a dozen new bookstores hoping to mop up the economic surplus rumored to be present in book selling in a highly affluent neighborhood. Or from an out-of-state competitor like an online retailer.
"What to sell" & "how to sell it" are existential questions that will always hang over the head of any business as long as there is competition.
I'd say that the primary risk of any business is understanding what to sell and how to sell it. Just ask any mom&pop bookstore that closed due to Amazon. Or Jawbone, even though they surmounted their technical risks with a ~$1bn war chest.
[0] https://brendansterne.com/2015/10/07/technical-risk-vs-marke...