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The Hacker's Guide to Investors

paulgraham.com

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Re: The Hacker's Guide to Investors

#21

Post by mojuba »

Sam_Odio wrote: post #11
pg wrote: post #8

Earlier quoted context omitted.

We're determined to keep the site focused, however many users we get. We kill submissions that are egregiously off-topic.

While seeing News.YC grow is fantastic, it's a little disheartening to watch the community loose its "small town" feel. It seems that as things become bigger, the comments become more anonymous and users loose their sense of social restraint. This is actually why I left reddit. As the site grew, I became increasingly frustrated that anything I said contrary to popular opinion was mercilessly downvoted & derided, rega…

From the web site's perspective, karma is a mechanism for internal calculations, and is in no way a measurement of your intellect or morality (?) or whatever else. And karma can't be turned into money for you, so why bother at all? :)

That's why a possibility of being downvoted never stopped me from commenting, be it reddit, slashdot, or YCnews.

One lesson that I learned from reddit in particular, is that if you are interested in the topic, you should read all comments, all the way down the page, because there might be something there, in the negative karma area.

Re: The Hacker's Guide to Investors

#22

Post by mojuba »

Sam_Odio wrote: post #11
pg wrote: post #8

Earlier quoted context omitted.

We're determined to keep the site focused, however many users we get. We kill submissions that are egregiously off-topic.

While seeing News.YC grow is fantastic, it's a little disheartening to watch the community loose its "small town" feel. It seems that as things become bigger, the comments become more anonymous and users loose their sense of social restraint. This is actually why I left reddit. As the site grew, I became increasingly frustrated that anything I said contrary to popular opinion was mercilessly downvoted & derided, rega…

... and besides, I believe the karma system can be greatly improved by taking into account sub-comments.

Re: The Hacker's Guide to Investors

#24

Post by PhilipBaddeley »

mynameishere wrote: post #10

_That means they're less likely to stick you with a business guy as CEO, like VCs used to do in the 90s. If you seem smart and want to do it, they'll let you run the company_ "Let you run the company" ? Surely a single round of funding doesn't take majority ownership from the founders?

Oh yes it can! It is called the Investor Agreement. A 10% shareholder or less can control the company if the terms are in the agreement. Most agreements are not publicly available so it is difficult to know what is going on when you compare deals. Have you ever made an angel investment and then regreted that you did not have more control? VCs have. It is like who wins in the end, it all depends on the x of the VC investment. It is not what it says on the can, it is what's inside that matters.

Re: The Hacker's Guide to Investors

#25

Post by brlewis »

boris wrote: post #20

I remember a few years ago Paul was proclaiming that as the cost of starting a company keeps going down, VCs will become extinct. It is interesting to see how the perspective is changing. Now Paul says you need investors to gain advantage over competition even though, oftentimes, a startup needs very little to make a product that people want.

Even more interesting is that he reiterates the advantage of having investors in this essay, which also acknowledges the huge time-cost of funding. This implies that the benefits are worth this high cost. One could disappoint customers or fall behind competitors while engaged full-time in funding.

Re: The Hacker's Guide to Investors

#26

Post by byrneseyeview »

Sam_Odio wrote: post #11
pg wrote: post #8

Earlier quoted context omitted.

We're determined to keep the site focused, however many users we get. We kill submissions that are egregiously off-topic.

While seeing News.YC grow is fantastic, it's a little disheartening to watch the community loose its "small town" feel. It seems that as things become bigger, the comments become more anonymous and users loose their sense of social restraint. This is actually why I left reddit. As the site grew, I became increasingly frustrated that anything I said contrary to popular opinion was mercilessly downvoted & derided, rega…

"This is actually why I left reddit. As the site grew, I became increasingly frustrated that anything I said contrary to popular opinion was mercilessly downvoted & derided, regardless of the actual quality of the comment."

I hadn't noticed this. In fact, I noticed the opposite -- that well-articulated comments taking controversial views still got upvoted. It was just a stricter quality filter. And anyway, it's easy to take advantage of reddit's predilections. A while ago, I read a great George Will column, and thought it deserved to be reddited. My headline was something like "Notorious Neocon George Will actually believes that..."

I left because it was getting boring and homogeneous.

Re: The Hacker's Guide to Investors

#27

Post by pg »

boris wrote: post #20

I remember a few years ago Paul was proclaiming that as the cost of starting a company keeps going down, VCs will become extinct. It is interesting to see how the perspective is changing. Now Paul says you need investors to gain advantage over competition even though, oftentimes, a startup needs very little to make a product that people want.

VCs are not identical with investors.

Re: The Hacker's Guide to Investors

#29

Post by owinebar »

boris wrote: post #20

I remember a few years ago Paul was proclaiming that as the cost of starting a company keeps going down, VCs will become extinct. It is interesting to see how the perspective is changing. Now Paul says you need investors to gain advantage over competition even though, oftentimes, a startup needs very little to make a product that people want.

I can't tell why point 22 shouldn't be titled "Sometimes you need capital other than sweat equity". It's not clear to me why this couldn't come in the form of debt. The only type of debt I recall Paul mentioning is the convertible kind.

I mean, other than the fact you'd have to talk someone into giving you that loan at a reasonable interest rate. Talking investors into giving you the money as a bet for an astronomical interest rate would be easier for companies with no collateral. Still, if you have a revenue stream and can show how a capital expenditure would increase it, it would at least be worth considering.

Re: The Hacker's Guide to Investors

#30

Post by chmike »

mojuba wrote: post #21
Sam_Odio wrote: post #11

Earlier quoted context omitted.

While seeing News.YC grow is fantastic, it's a little disheartening to watch the community loose its "small town" feel. It seems that as things become bigger, the comments become more anonymous and users loose their sense of social restraint. This is actually why I left reddit. As the site grew, I became increasingly frustrated that anything I said contrary to popular opinion was mercilessly downvoted & derided, rega…

From the web site's perspective, karma is a mechanism for internal calculations, and is in no way a measurement of your intellect or morality (?) or whatever else. And karma can't be turned into money for you, so why bother at all? :) That's why a possibility of being downvoted never stopped me from commenting, be it reddit, slashdot, or YCnews. One lesson that I learned from reddit in particular, is that if you are…

I don't see any reason why karma couldn't be turned into money. Karma indirectly determines the value a user add to a web site. If the site generates money, karma could be used as reference value to estimate an amount of revenue share they could get back.

This is already how it works in open source even if there isn't an explicit karma value. If good developpers and contributors are detected they may get an offer for a payed mission on the project or even better a permanent job.

PG said for instance that a good karma could catch their attention. Some sort of benefit to getting a good karma.

It is preferable that karma benefit are not made public and taken for granted otherwise the system could be perverted.

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