In Defense of Starting a Bad Business

Quit listening to VCs for entrepreneurship advice

About 3 months ago, I decided that it was time for me to build The Leverage. Like any sane founder, I talked to various confidants about my idea. I yearned for a business newsletter that was beautiful, insightful, and tasteful—and felt that the world would yearn for it too. Most of my friends liked the idea, but one friend who is an investor at a Tier-1 VC fund hated it.

“Why would you waste your time doing that? You’re talented enough to do something big and important. Go change the world.”

His comment took my breath away. It also filled me with self-doubt and concern. Maybe I was making a mistake? It would feel amazing to make a difference. This sentiment, that bigger is better, of outcome over input, is so common among technologists. Take a16z, one of the most important VC funds of our time. In an interview on the founding of the firm, Andreessen and Horowitz argued that,

“It is just as hard to start a small boutique thing that means nothing in the world and build it as it is to build a world dominating monster. It's no more work to do the latter, so we were never interested in anything but the latter.”

Now these men are far richer (and far balder) than me so take this thought for what it is worth— but deciding that a company is valuable to start because of how much your work is worth is stupid. 99% of startups fail. If we are all doing the same amount of work, shouldn’t the point be to actually enjoy what we are doing? To make a product that you think the world deserves?

When we focus excessively on scaling, on profit margins, on hiring, we miss the point of founding—and life, really. Which is to find meaning in our daily tasks.

Founders can create their own jobs and do these daily tasks themselves, which means they are even more blessed than the regular populace. You can create any company you want! Which is to say, when God gives you a blank canvas, why do you choose to paint B2B SaaS if that’s not what you want? You can have that answer! It just has to be a better one than “I can make lots of money.” When my friend meant “go change the world” he meant go build a big company, not one that mattered to me.

It is why I believe that starting a “bad business” like The Leverage is a good idea. Sure, I could be earning lots more doing something else, but I love to write. I love to agonize over ideas. I love the smell of the paper as I flip through some obscure reference text. I love that I get to directly connect with all of you, my readers. I’m not interested in empire or wealth, I’m interested in paying my bills and spending every minute of my time on labor that brings me delight. I may never change the world, but my company makes my world—and the world of my customers—that much richer and more beautiful.

The bad company problem likely originates in VC math. Too many founders are trained to look at market size or profit margin first. They see an opportunity that is large, or a company that could be highly profitable, and think “good enough.” This is because the early stages of any endeavor are risky. There has to be a large return to invest in something that early. It should create a 100x exit scenario. But that math isn’t the same as founder math. Founders, in my experience, tend to mistake “investing in” for “worth doing.”

The Leverage would not exist if I didn’t write it. Craft doesn’t come to be ex nihilio. The default state of the world is decay, AI slop, and moral rot. A “bad business” can still be a righteous endeavor. I believed that my product should exist in the world. And when I made it, the world agreed. 34,000 of you have told me that you want this to exist. You can feel it in your bones when a company is created because the founders genuinely want it to exist.

Being outcome-oriented is a mental disease. A plague. A pestilence. It strips the minute, daily beauties from around us and forces us to postpone happiness for “some day.” “I’ll enjoy the company once I fix growth.” “I’ll enjoy work once I’m post-money.” Maybe, just maybe, this is deeply unhealthy. I think part of the reason so many founders burn out, go through divorce, and have health problems is that there is a soul-deep misalignment between their tasks and their desires.

The answer is so simple—the way to enjoy work is to do work you enjoy. The way to like your company is to make one you desperately want to exist. I don’t know why it has to be more complicated than that.