A Student's Guide to Startups

_(This essay is derived from a talk at MIT.)_

Till recently graduating seniors had two choices: get a job or go to grad school. I think there will increasingly be a third option: to start your own startup. But how common will that be?

I'm sure the default will always be to get a job, but starting a startup could well become as popular as grad school. In the late 90s my professor friends used to complain that they couldn't get grad students, because all the undergrads were going to work for startups. I wouldn't be surprised if that situation returns, but with one difference: this time they'll be starting their own instead of going to work for other people's.

The most ambitious students will at this point be asking: Why wait till you graduate? Why not start a startup while you're in college? In fact, why go to college at all? Why not start a startup instead?

A year and a half ago I gave a [talk](hiring.html) where I said that the average age of the founders of Yahoo, Google, and Microsoft was 24, and that if grad students could start startups, why not undergrads? I'm glad I phrased that as a question, because now I can pretend it wasn't merely a rhetorical one. At the time I couldn't imagine why there should be any lower limit for the age of startup founders. Graduation is a bureaucratic change, not a biological one. And certainly there are undergrads as competent technically as most grad students. So why shouldn't undergrads be able to start startups as well as grad students?

I now realize that something does change at graduation: you lose a huge excuse for failing. Regardless of how complex your life is, you'll find that everyone else, including your family and friends, will discard all the low bits and regard you as having a single occupation at any given time. If you're in college and have a summer job writing software, you still read as a student. Whereas if you graduate and get a job programming, you'll be instantly regarded by everyone as a programmer.

The problem with starting a startup while you're still in school is that there's a built-in escape hatch. If you start a startup in the summer between your junior and senior year, it reads to everyone as a summer job. So if it goes nowhere, big deal; you return to school in the fall with all the other seniors; no one regards you as a failure, because your occupation is student, and you didn't fail at that. Whereas if you start a startup just one year later, after you graduate, as long as you're not accepted to grad school in the fall the startup reads to everyone as your occupation. You're now a startup founder, so you have to do well at that.

For nearly everyone, the opinion of one's peers is the most powerful motivator of all—more powerful even than the nominal goal of most startup founders, getting rich. \[[1](#f1n)\] About a month into each funding cycle we have an event called Prototype Day where each startup presents to the others what they've got so far. You might think they wouldn't need any more motivation. They're working on their cool new idea; they have funding for the immediate future; and they're playing a game with only two outcomes: wealth or failure. You'd think that would be motivation enough. And yet the prospect of a demo pushes most of them into a rush of activity.

Even if you start a startup explicitly to get rich, the money you might get seems pretty theoretical most of the time. What drives you day to day is not wanting to look bad.

You probably can't change that. Even if you could, I don't think you'd want to; someone who really, truly doesn't care what his peers think of him is probably a psychopath. So the best you can do is consider this force like a wind, and set up your boat accordingly. If you know your peers are going to push you in some direction, choose good peers, and position yourself so they push you in a direction you like.

Graduation changes the prevailing winds, and those make a difference. Starting a startup is so hard that it's a close call even for the ones that succeed. However high a startup may be flying now, it probably has a few leaves stuck in the landing gear from those trees it barely cleared at the end of the runway. In such a close game, the smallest increase in the forces against you can be enough to flick you over the edge into failure.

When we first started [Y Combinator](http://ycombinator.com) we encouraged people to start startups while they were still in college. That's partly because Y Combinator began as a kind of summer program. We've kept the program shape—all of us having dinner together once a week turns out to be a good idea—but we've decided now that the party line should be to tell people to wait till they graduate.