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Why I turned down my Y Combinator interview

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Re: Why I turned down my Y Combinator interview

#41

Post by dalbasal »

docker_up wrote: post #7

I think the biggest difference between today and 20 years ago when I first go into Silicon Valley is that most founders are generally already planning their exit. There are a lot of startups whose mentality is "get big quick enough so that we can get bought out by Google/Facebook/Amazon/etc". And unfortunately this is a legitimate play because it leads to quick payouts so it motivates founders and VCs alike. It's a f…

I think this is just an extreme boomtime mentality. Investors are cashed up, and so are the large tech companies buying these startups. Valuations are so high that building companies to flip is just too damned lucrative to do much else.

I think part of the difference between the late 90s and now (besides scale) is that small IPOs don't exist anymore. VCs need exits and once founders own n% of a $100m company, they need a way to realize those, unless they're willing to totally ignore their own financial interests.

The 1990s IPOs didn't work out well though. These companies were still longshots, and public markets lend better to lower risk-reward companies.

The second part of the problem is tech "monopolies," in the thiel sense. Google and FB's business models, for example, needs massive scale. A social network or search engine with 10% of the user's is not worth anywhere near 10% of what FB or google are worth.

So... the "highest value use" of a smaller startup is to help maintain a larger company's monopoly.

Finally, the tech space (especially consumer web stuff) just changes too fast to "build something lasting."

.. I'm not sure everything needs to be lasting. Do we even want dating apps or online loyalty programs that last a century? Maybe we just need classier ways of doing shorter horizon stuff.

Re: Why I turned down my Y Combinator interview

#42

Post by m_ke »

solarkraft wrote: post #32
m_ke wrote: post #22

These days going through Y Combinator practically guarantees success for B2B/SaaS startups. Their network is so big now that you can hit growth targets that most VCs look for just by selling to other YC companies. Then you can throw the late stage logos on your landing page and use that to lure in enterprise customers.

But the barrier to entry is still decently high. You can't just take a bullshit company, put it through YC and have it succeed.

That's true, but it's practically impossible to bootstrap a "bullshit" company and have it succeed.

If you get into YC you're guaranteed intros to anyone in their portfolio, press coverage from valley PR machines like techcrunch and will have a much easier time cold calling if you need to because you have the YC stamp of approval. You'll also have a much easier time raising on good terms because no VC is going to pass up a meeting with you.

Re: Why I turned down my Y Combinator interview

#43

Post by thisisit »

I think the amount of VC bashing in the post is unwarranted. It makes it sound like VCs make fat salaries on the backs of other people - either in form of investment or startup founder's hard work.

The fact is that some founders, including the author, feel that VC confirmation is a validation of their idea/business. So, while founders shouldn't raise huge amount of money for niche projects they do it anyways because that's how they see validation of their idea.

Re: Why I turned down my Y Combinator interview

#44

Post by foldr »

cldellow wrote: post #36
foldr wrote: post #21

Earlier quoted context omitted.

The issue is the term "native", not requiring fluency in a given language. None of those tests will certify you as having "native" fluency in English.

Yes, I should have been more detailed in my response. You're right that all of them give a quantative score, not a qualitative score like "native". There are qualitative scales where one of the labels is "native fluency". For example, the Interagency Language Roundtable has level 5 (native/bilingual fluency) which means the speaker has "complete fluency in the language, such that speech on all levels is fully accepte…

I don't think it's correct to refer to a job ad as "marketing copy". A job ad should be clear, especially with regard to potentially discriminatory requirements.

Re: Why I turned down my Y Combinator interview

#45

Post by tptacek »

docker_up wrote: post #15
isalmon wrote: post #13

Earlier quoted context omitted.

>> I think the biggest difference between today and 20 years ago when I first go into Silicon Valley is that most founders are generally already planning their exit. There are a lot of startups whose mentality is "get big quick enough so that we can get bought out by Google/Facebook/Amazon/etc". Exactly the same mentality 20 years ago, except back then it was mostly about the IPO.

Fair point. IPO was the goal during the dot-com boom/bust (I saw this all first hand as well) but at least the founders weren't looking to ditch the company right after. The VCs were of course, they're always the snakes in the grass no matter what the backstory is.

My experience is that there was a fairly brief window in which founders believed an IPO was a plausible way to flip a company, and that before, during, and after that, the more common objective was to build a company to flip to some other firm that already had done an IPO. When we started our multicast company in early 1999, none of us believed for a second that an IPO was in our future, and our VC pitches (mostly guided by the VCs, some of whom ended up funding us) were almost entirely about who might end up buying us.

Re: Why I turned down my Y Combinator interview

#46

Post by rsweeney21 »

jasode wrote: post #24

>Venture backed companies only have about a 1% chance of reaching a $1B valuation. [...] I’m sorry, but you aren’t the 1. You are the 99 and your startup isn’t going to become a unicorn. [...] Why play a game that has such terrible odds of winning? Because people have always liked to pursue things that interest them regardless of the odds . (cue Han Solo's "Don't tell me the odds!" ) Why do aspiring writers work on n…

There are many ways to bootstrap consumer facing websites and other businesses that require a lot of early capital, you just have to be creative. I'm just trying to get people to think outside the "VC is the way" mindset because it burned me and because the experience wasn't what was promised.

Re: Why I turned down my Y Combinator interview

#47

Post by ausjke »

rememberlenny wrote: post #39
docker_up wrote: post #7

I think the biggest difference between today and 20 years ago when I first go into Silicon Valley is that most founders are generally already planning their exit. There are a lot of startups whose mentality is "get big quick enough so that we can get bought out by Google/Facebook/Amazon/etc". And unfortunately this is a legitimate play because it leads to quick payouts so it motivates founders and VCs alike. It's a f…

> I just don't think I would get excited working for someone I know with that short term of a mentality. This. I was recently the first full-time hire at a seed funded company that was in the right place and the right time. They grew to 10 people over a few months, and I loved the people I was working with. Knowing that the founders had a 10-40x equity stake larger than mine made it nearly impossible to feel invested…

That.

Until you become a founder yourself and know how hard it has been might change your mind. Otherwise we're all just employees. One big difference is that founders take bold moves and risks. I also consider this is capitalism at work.

Re: Why I turned down my Y Combinator interview

#48

Post by lnsru »

JabavuAdams wrote: post #34
lnsru wrote: post #6

Good luck bootstrapping biotech or robotics company! Of course it’s better to be sole owner, but it does not work when building product takes years.

What about subcomponents? I.e. becoming a supplier for these industries? Can you bootstrap an actuator company?

I am currently analyzing how to launch robot affector business in Germany. With physical goods I must be present during sales pitch, video is not enough. It collides with my current corporate job, but it is doable. What kind of actuators do you sell?

Re: Why I turned down my Y Combinator interview

#49

Post by _bxg1 »

I'm not an economist, but the SV economy (which has become a nontrivial chunk of the US economy) just doesn't seem like it can keep doing this forever. The driving ethos is to throw everything related to building a sustainable business out the window, in the interest of cashing-out as fast as possible. Slash-and-burn capitalism. That's not how you create jobs. That's not how you grow an economy. That's how a few people get very rich very quickly. "Move fast and break things", as it were.

Re: Why I turned down my Y Combinator interview

#50

Post by chubot »

Joel Spolsky wrote about this 16 years ago:

https://www.joelonsoftware.com/2003/06/03/fixing-venture-cap...

The fundamental reason is that VCs do not have goals that are aligned with the goals of the company founders. This creates a built-in source of stress in the relationship. Specifically, founders would prefer reasonable success with high probability, while VCs are looking for fantastic hit-it-out-of-the-ballpark success with low probability.

...

Even though the second model has a lower expected return, it is vastly preferable to most founders, who can’t diversify away the risk, while VCs who invest in dozens of businesses would prefer the first model because it has a greater return. This is just Econ 101; it’s the same reason you buy car insurance and Hertz doesn’t.

Though to be fair, he also explained why he took VC for StackOverflow at Startup School 2012. Basically this:

https://www.joelonsoftware.com/2000/05/12/strategy-letter-i-...

tl;dr StackOverflow has a network effect and needed to scale fast.

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