Full Stack Startups
You cannot build an API until you've seen many specific cases play out. You need to build a site with the scale of Amazon and encounter all of the problems before you could build Amazon Web Services.
Want to reinvent agriculture? Build a new kind of farm with solar panels, robotics, and self-driving tractors.
By doing it end-to-end, you see more.
First, sometimes you see a good reason beyond tradition (eg regulatory, logistical) for legacy practices. Second, you control the adjacent layers of the stack, which may eliminate the initial problem you were trying to solve. Third, solving the whole problem builds respect in your vertical, which lets you recruit the best people. With their industry experience plus code you can become invincible. Fourth, your margins improve nonlinearly once you control the full stack. Simply having all your orders in a database from day one is transformative.
Why aren’t there more full-stack startups? Perhaps number one is recruiting difficulty. You need experts in many different areas to succeed. You must know what you don't know. A good way to get around this is to gain vocabulary. Find the best companies in your vertical. Read bios of the executives on LinkedIn. Google the new terms. Repeat. Now you know regulations, acronyms, and terms like CPT, 510(k), KOL. Repeated mentions mean higher relevance, so prioritize accordingly. Email the best people in the space. Read blogs to get context. Now you “know kung fu”--or at least know you need to hire a kung fu master.
In the near term, expect iconic full stack companies in areas like biomedicine (3DP/genomics/qself), finance (bitcoin), and aviation (drones). Uber, Lyft, Airbnb, and Tesla are just the start. Poetically, almost any vertical under regulation is ripe for an eventual full stack company. Another under-appreciated aspect is a full stack company can manage compliance more easily. Hit enter, dump the database, submit the form.
An ideal full stack startup has: 1) git or another distributed version control system at the core, 2) domain experts, 3) domain monetization knowledge, 4) a burning reason to fix things. Full stack startups can be more expensive to build than pure code startups. The best founder candidates are often 2nd time founders with domain knowledge. Finally, the best full stack founders have ambition to think big and the pragmatism to start as small as possible (but no smaller).
Since Venture Capital is driven by a power law, full stack startups are arguably easier to fund because it’s easier to envision an outcome of $1B+. $1B+ in lifetime funding doesn't phase venture capitalists, but requiring $1B+ up front is usually a bad sign. This requires pragmatic ambition–careful staging and thoughtful monetization.
*Note: This is a bonus section from The Anthology of Balaji, which was edited out of the final published version. Enjoy this section and join the email list for updates, new material, and upcoming products.
