<story><title>The bar for success in our industry is too low</title><url>http://37signals.com/svn/posts/1890-the-bar-for-success-in-our-industry-is-too-low</url></story><parent_chain></parent_chain><comment><author>mrshoe</author><text>There&apos;s a reason for this phenomenon. It might be misguided in this particular case, but there is a reason that it exists. It&apos;s the same reason that everyone here loves businesses based on technology. It&apos;s the same reason that VCs are willing to invest millions of dollars in nascent companies which will, in all likelihood, fail in the near future. It&apos;s the same reason I spend my evenings working on my own startup.&lt;p&gt;The reason is scalability.&lt;p&gt;My dad was always shocked that investors valued the last startup I worked for in the tens of millions of dollars while we were losing money. He&apos;s worked in construction his whole life for firms that do on the order of $100MM in revenue per year. Like all construction firms, however, their margins are razor thin. Their revenue doesn&apos;t grow much faster than their costs (employees and materials, primarily).&lt;p&gt;A construction company that loses money is not going to be worth $50MM any time soon. A tech company with similar financials &lt;i&gt;might be&lt;/i&gt;. A tech company might take a while to get their technology right. But when they do, they can leverage it. Their revenues can grow &lt;i&gt;far faster&lt;/i&gt; than their costs. Software as a product scales better than just about anything I can think of. Software businesses often go from slightly in the red to huge annual profits in very little time.&lt;p&gt;Everyone in tech is trying to find the Next Big Thing. This includes us (entrepreneurs), the media, and investors. In the case of the media, they&apos;re just trying to be the first ones to break the next big story, as usual. Just like investors, if they want to succeed, they have to be willing to take risks. They have to bet on companies that look like they have potential. Sometimes they&apos;re wrong. But in those rare cases where it pays off, it usually pays off big.&lt;p&gt;Other industries lack this quality. In other industries 1 success is not going to make up for 10 failures. In technology you make money by picking winners before everyone else. It&apos;s somewhat of a crap shoot. But the bar is low because the potential reward is high.</text></comment>
<story><title>The bar for success in our industry is too low</title><url>http://37signals.com/svn/posts/1890-the-bar-for-success-in-our-industry-is-too-low</url></story><parent_chain></parent_chain><comment><author>edw519</author><text>&lt;i&gt;It still blows me away that David’s talk at Startup School 2008 was met with such enthusiasm (I know David was surprised too).&lt;/i&gt;&lt;p&gt;The content of his talk was not the main reason that it was met with such enthusiasm.  (What he talked about was obvious and no one would disagree.)&lt;p&gt;It was his delivery that made it such a bit hit.  His passion and conviction was easy to see.  We could have easily read the talk on-line, but we go to these things to get the &quot;whole story&quot;, the things that words alone do not convey.  What a pleasure it was to see someone in his position so enthusiastic about his work.  It&apos;s hard &lt;i&gt;not&lt;/i&gt; to get caught up in the moment.&lt;p&gt;(The fact the he&apos;s the author of Rails and his liberal use of the f word to make his point also helped.)</text></comment>