Howdy, everybody.

It’s a beautiful day in New York.

I’ve only been here a few weeks, but Good Lord. I’m already in love with this place. I can feel my individual identity melting into an ocean of collective human energy.

New York people – is this how everybody feels their first few weeks here?

In related news, my use of the word “vibes” is up 450%.

This week’s email is short and sweet, so let's get to it!

Non-obvious things about startups

If there's anything I've learned launching startups the past 10 years, it's this:

How we talk about startups barely resembles what they're actually like.

Here are some things most people don't understand about startups…

1. Startup failure rates are way lower than most people think.

They're still brutal, but they're not 90%+. Lots of people make life-changing money by starting startups. Also, new money is pouring in and de-risking the entire ecosystem.

2. 95% of a startup's "competitive advantage" early on is just giving a shit.

Investors and founders waste way too much time talking about strategy. What matters is if founders care 10x more about a problem than a salaried employee elsewhere. If so, they’ll figure out how to win.

3. Startups don't die when they run out of money, they die when the founders run out of energy.

There is almost always a move to keep a startup alive. The hard part is staying energized through massive ups and downs. You can’t win the outer game without winning the inner game.

4. Launching a startup around an activity you love often guarantees you'll do that thing less.

If you love baking, don't start a bakery. You'll spend your time negotiating oven leases – or recruiting people who negotiate oven leases. This is The Founder's Curse.

Case in point: I failed to write my last few newsletters because I'm busy running a writing startup.

5. Startups require deep creativity.

Self-proclaimed "creative" people love to dismiss business as boring or purely pragmatic. But that misses the point… there is no right way to solve a problem, making creativity key to success. No two people could build the same company.

6. A large percentage of venture investing is Ponzi-like.

Lots of startup investors chase hype, pour cash into unsustainable growth, and trust that greater fools will follow. Unlike a Ponzi scheme, there's often real value underneath it all – it’s just absurdly overpriced.

7. In the short term, launching a startup is a terrible way to “be your own boss.”

I learned this one the hard way. It turns out that the people who run startups – specifically, startups with big ambitions – have more bosses than anybody. From Evernote's former CEO Phil Libin:

The life of most CEOs is reporting to everyone else, at least that’s what it feels like to me and most CEOs I know. If you want to exercise power and authority over people, join the military or go into politics. Don’t be an entrepreneur.

8. One of the best recruiting "hacks" is to be somebody who is great to work with.

Most people assume your startup needs to be killing it to attract talent. Nope. People bet on people, then ideas. If you're an excellent person to work with, you'll be surprised who you can recruit.

9. Beyond a certain point, a startup can only grow insofar as the leadership grows personally.

Lots of challenges that appear external are actually internal. Example: claiming there's a talent shortage won't help your company, but getting better at recruiting will.

10. Failure is massively overrated.

Shutting down a startup can be a devastating, shitty experience. It's often viewed as a "learning opportunity" to cope with the pain, not because it's actually a better way to learn. There’s zero shame in failing, but it is costly.

/Fin

That's it for now. I also published this as a tweet thread here.

Thanks to the Foster members who reviewed early drafts of this: Rajat Mittal, Dan Hunt, Theresa Sam Houghton, Steven Ovadia, Ergest Xheblati, Kushaan Shah, Lyle McKeany, Zac Thomas, Kavir Kaycee, and John Lanza.

Other Stew’s Letter Things

• Rice Mountain Update: There’s no update this week, though my buddy Joe Davy did have an idea: “put the 2,500 sodas into a giant garbage compactor and film the ensuing explosion. Mint an NFT of the video.” I’m considering it…

• Fire TikTok: This will be an entirely new category of sunburn moving forward.

• Show I am now obsessed with: I can’t believe I’m just now learning about The Shop. If you’ve ever wanted to be a fly on the wall while some of today’s greatest entrepreneurs, athletes, and musicians shoot the shit, you will love this.

• Thing I’m thinking about: The amount of insight in a good standup comedy set is on par with any great work of philosophy.

Until next week,

Stew