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Y Combinator When No One Cared

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Re: Y Combinator When No One Cared

#111

Post by tedmiston »

jondubois wrote: post #37

It's still pretty amazing that Y Combinator worked out as well as it did. Like a lot of very successful companies, it seems like the world just fell into perfect alignment with the vision. It's interesting that acqui-hiring (as alluded to in the email) actually became a trend; even though it was later recognized to be bad idea (E.g. Yahoo's acqui-hiring tactics have failed miserably). It seems like there was a false…

It's still a great idea. Some companies just paid too much for some teams / products. Eight-figure acquihires are still weird to me.

Re: Y Combinator When No One Cared

#112

Post by tedmiston »

staunch wrote: post #20

And yet it felt completely obvious to many of us that were around since the beginning. YC, reddit, HN, and Dropbox are among the companies I definitely would have invested $1000 into, had the opportunity been available. I predict the next generation of YC will be a scalable crowdfunding company. It will look more like a startup-focused Kickstarter than seed-stage Sequoia.

Equity crowdfunding is one of those ideas that sounds super ideal and meritocratic on paper but doesn't really work in practice.

IMO this model will rarely work because of all the non-capital benefits that good investors provide. It's an overly simplistic view of what (good) investors bring to the table. Random people crowdfunding (assuming non-accredited) don't bring the same level of diligence or value.

Re: Y Combinator When No One Cared

#113

Post by santiagobasulto »

strangeloops85 wrote: post #101

After lurking for many years, I finally decided to create an account to comment on this. We were one of the companies in that first group -- alas, for various reasons, we ended up leaving after a couple of weeks (sigh). But I do remember the interview process, the first meal or two, and meeting the rest of the founders. Looking back, it's pretty cool to have (very briefly and inconsequentially) been part of that form…

Did you build your startup after all? These stories are really interesting, you should write more and share it.

Re: Y Combinator When No One Cared

#115

Post by npkarnik »

taneq wrote: post #108
vonnik wrote: post #58

It's useful to think about Jessica's comment under the original message, that YC is "mass production of startups." What it really means, I think, is that YC is comfortable with more failure than other investors. They are spreading their bets wide by making many small investments, and as they have said many times, only a small percentage of those bets need to be right. That's quite different from how most VCs invest a…

I was attending an event at a local incubator last week when it hit me - and maybe this is obvious to everyone else - that 'startup incubators' are just taking the music industry business model and applying it to entrepreneurs.

Not really, artistic talent has historically relinquished all IP rights. Incubators are more like a tax to get involved in the VC ecosystem, if anything.

Re: Y Combinator When No One Cared

#116

Post by strangeloops85 »

santiagobasulto wrote: post #113
strangeloops85 wrote: post #101

After lurking for many years, I finally decided to create an account to comment on this. We were one of the companies in that first group -- alas, for various reasons, we ended up leaving after a couple of weeks (sigh). But I do remember the interview process, the first meal or two, and meeting the rest of the founders. Looking back, it's pretty cool to have (very briefly and inconsequentially) been part of that form…

Did you build your startup after all? These stories are really interesting, you should write more and share it.

Glad to hear it's (at least somewhat) interesting! We did not build that particular startup for personal/ founder conflict reasons that were related to why we left the SFP. But I ended up having a great internship experience with a small Boston-area company that summer, and after graduating the next year, worked at a big tech co. for a little while. Then, not following what pg's advice would have been I'm sure, I decided to go get a PhD in physics/ engineering of all things. I now run a small cleantech startup based on that work, and do look back enviously at how 'simple' a software startup can be (I know, I know.. we all face The Struggle).

Jessica's article really did take me back to those quieter days in 2005!

Re: Y Combinator When No One Cared

#117

Post by clay_to_n »

freehunter wrote: post #48
rexreed wrote: post #11

What's also telling is that the program started in Boston and moved to Silicon Valley pretty quickly. In my own experience, it seems that the Boston startup scene is dying. Unless you're in life sciences. The ecosystem there seems to have given up on supporting early stage non-life sciences companies.

>the startup scene I feel like this is one of those SV bubble things, that a place has to have a "scene" in order to have startups (and only SV has a "scene"). There are thousands of successful businesses everywhere, even ones that would be considered "startups". The only difference between SV and any other city is people are willing to throw money at ideas with no chance of ever turning a profit which isn't really a…

Yes, there are local businesses everywhere. But there aren't startups (with the aim of fast growth through innovation, usually helped along by venture capital) everywhere.

The local scene matters. Most importantly, it affects the rate of people starting companies. If there are other startups around you, you can learn from them. You may not think things like accelerators, meetups, and startup-related college talks matter, but that stuff is really key for creating first-time founders.

As far as investors, it matters in angel + seed rounds, but matters far less past that (because you can fly to your investors). But having a way to access those early investors (when founders are still learning how to talk to investors, and trying to raise the money to run a company full-time) is very important.

I think it's probably a lot easier for a second-time founder to start a company outside of a "scene". But even in that case, having a larger talent pool is nice, and the convenience of being closer to investors.

All of the cities you mentioned (besides Des Moines, Iowa) have at least some sort of startup scene that I've heard of. It's a power-law distribution, but for most founders the value of moving from Des Moines to NYC, or from Boston to SV, is pretty compelling.

Re: Y Combinator When No One Cared

#118

Post by clay_to_n »

elmar wrote: post #106
freehunter wrote: post #48

Earlier quoted context omitted.

>the startup scene I feel like this is one of those SV bubble things, that a place has to have a "scene" in order to have startups (and only SV has a "scene"). There are thousands of successful businesses everywhere, even ones that would be considered "startups". The only difference between SV and any other city is people are willing to throw money at ideas with no chance of ever turning a profit which isn't really a…

"The only difference between SV and any other city is people are willing to throw money at ideas with no chance of ever turning a profit which isn't really a sign of a healthy ecosystem." And some off then even work? like Snapchat, Facebook, Twitter, AirBnB, Uber etc. Looking back to the time they where funded all these ideas look like sure lossers.

For what it's worth, Snapchat is out of LA.

Re: Y Combinator When No One Cared

#119

Post by taneq »

tedmiston wrote: post #109
taneq wrote: post #108

Earlier quoted context omitted.

I was attending an event at a local incubator last week when it hit me - and maybe this is obvious to everyone else - that 'startup incubators' are just taking the music industry business model and applying it to entrepreneurs.

It might be helpful to explain more what parts of the analogy you have in mind with that.

They operate like a music studio or production company. They take applications from (or scout out) likely-looking 'undiscovered' artists / entrepreneurs, and offer them an advance / venture capital, along with advice and other resources, to create an album / product, in return for which they take an interest (shares / rights) in the resulting product.

The details vary slightly (as the other response said, music studios typically take the rights to the album in exchange for royalties, rather than directly becoming a part-owner of the artist) but the basic model looks very similar to me.

Re: Y Combinator When No One Cared

#120

Post by rexreed »

ljw1001 wrote: post #102
danielpatrick wrote: post #69

Earlier quoted context omitted.

To counter your arbitrary experience with my own, the Boston startup scene seems to be thriving.

Yeah, it does seem fairly healthy, but one has to admit that Boston would be a very different place today if Microsoft and Facebook (and YC) had stayed. At this point Kendall Square really is all about the biotech (aside from the research offices of big west coast firms like MS, Amazon, and Google. Also troubling about Boston startups is the frequency with which the best get bought by SV companies. Seems to me that t…

You basically just said what I'm saying, but in a different way. If you're not biotech, you're not particularly interesting to the Boston VC community. Not to say that you can't start a company without VC. But if you need VC, the Boston non-biotech venture-backed startup ecosystem is dying a slow death.
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