Few people know their way around startups like Paul Graham. In 1995, as a software programmer with a CS PhD from Harvard, he co-founded Viaweb (with Robert Morris). The Internet's first application service provider. it allowed users to build and host an online store from within their own browser. Viaweb was bought three years later for nearly $50 million by Yahoo! and became the Yahoo! Store.

Graham has remained extremely active as a business essayist, programmer, and venture capitalist---leading BusinessWeek to name him to its 2008 list of The 25 Most Influential People on the Web.

First, Graham the writer. He's the author of Hackers and Painters: Big Ideas from the Computer Age (O'Reilly Media, 2004), which "explains this [computer/technical] world and the motivations of the people who occupy it. In clear, thoughtful prose that draws on illuminating historical examples, Graham takes readers on an unflinching exploration into what he calls 'an intellectual Wild West.' " (Graham is also the author of two programming books about Lisp.) On his own site, paulgraham.com, he's penned dozens of lean, insightful essays covering a huge array of business and technical ideas.

As a programmer, Graham is most recently the author of Arc, a dialect of Lisp (with which Viaweb was created). Arc entered the world in 2008 to a lot of attention and mixed reviews. He also wrote the hypothetical programming language, Blub. Earlier in the century he developed a spam filter that InfoWorld called a "stunning answer to spam e-mails."

But it's Graham's work as a VC that is of interest here. In 2005 Graham co-founded Y Combinator to provide seed funding to early-stage, technically-oriented startups. "Y Combinator is a big change from the way business is usually done in tech circles," Michael Kessler wrote in USA Today. He goes on to discuss the procedure used by traditional venture capitalists, describing it as a "clubby system of who-knows-whom...nearly impossible for a young, unconnected programmer [to break in]."

Y Combinator has changed that. The company gives valuable mentoring and limited seed money (less than $25,000) to startups that are barely out of the gate. "At Y Combinator," says the website, "our goal is to get you through the first phase. This usually means: get you to the point where you've built something impressive enough to raise money on a larger scale. Then we introduce you to later stage investors-or occasionally even acquirers." In exchange for funding, mentoring, and contacts, Y Combinator takes a small percentage of the new company, typically 2-10%. Among the companies Y Combinator has helped to start are the successful reddit, Scribd and Loopt.

At any rate, the bottom line is this: Paul Graham knows startups. So the following list, taken from his essay, "18 Mistakes That Kill Startups," is worth reading. If you want to know more, visit the original essay to read his interesting explanation about each of these 18 points.

Paul Graham's "18 Mistakes That Kill Startups"

1. Single Founder
2. Bad Location
3. Marginal Niche
4. Derivative Idea
5. Obstinacy
6. Hiring Bad Programmers
7. Choosing the Wrong Platform
8. Slowness in Launching
9. Launching Too Early
10. Having No Specific User in Mind
11. Raising Too Little Money
12. Spending Too Much
13. Raising Too Much Money
14. Poor Investor Management
15. Sacrificing Users to (Supposed) Profit
16. Not Wanting to Get Your Hands Dirty
17. Fights Between Founders
18. A Half-Hearted Effort

Written by Suzanne Rodriguez

Published by Plugin.com

Source http://www.silversoft.com/articles/2009/10/18-reasons-startups-fail-an-experts-view/