Why I turned down my Y Combinator interview • Hacker News Board

Re: Why I turned down my Y Combinator interview

#51

Post by jasode » Thu, Mar 21, 2019, 4:06 PM UTC

rsweeney21 wrote: post #46

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.

>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.

Yes but other financing options such as crowdsourcing (e.g. Kickstarter, or blockchain initial coin offerings), or charging consumers via subscription payments ... all have their disadvantages compared to VCs.

Another factor that may handicap your business is how your competition is financed. E.g. if your competition has $10 million in VC money but your business sticks to "bootstrapping" out of principle to stay anti-VC, you will be outspent in scaling out and may fail anyway.

Really, the critical advice is to be smart about analyzing the VCs and their financial terms before accepting their money. If VCs don't make sense for your particular business, don't do it.

Re: Why I turned down my Y Combinator interview

#52

Post by CalChris » Thu, Mar 21, 2019, 4:07 PM UTC

malvosenior wrote: post #14

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…

You can thank Sarbanes-Oxley for this. Edit: For further context: It used to be that a technology company could go public and provide an exit to investors. After the dot com crash, Sarbanes-Oxley regulations made it much more difficult to IPO. It has many administrative requirements, greatly increases run rate to support and raises the finanical bar significantly to which companies can go IPO. The VC model however re…

That is a reasonable take but then you can also blame Sarbanes-Oxley on the likes of pets.com. SO is 2002 and while it was unquestionably a reaction to the dot com era and bust, it was also a reaction to Enron and others. Hell, it was passed and signed in the Bush administration.

Yeah, SO raised the bar to get into (and stay in) the public markets. Maybe regulation minded Congress had a point there. In any case, this correction didn't prevent private MA. Moreover, VCs still get their funds funded. So SO hasn't killed any golden gooses.

Maybe we should have corrected something in 2008. We certainly un-corrected Glass-Steagall in 1999.

Re: Why I turned down my Y Combinator interview

#53

Post by throw8585851 » Thu, Mar 21, 2019, 4:22 PM UTC

thisisit wrote: post #43

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…

>It makes it sound like VCs make fat salaries on the backs of other people

B..but that's what they're doing

They're betting with demands

Re: Why I turned down my Y Combinator interview

#54

Post by rsweeney21 » Thu, Mar 21, 2019, 4:25 PM UTC

jasode wrote: post #51

rsweeney21 wrote: post #46

Earlier quoted context omitted.

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.

>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. Yes but other financing options such as crowdsourcing (e.g. Kickstarter, or blockchain initial coin offerings), or charging consumers via subscription payments ... all have their disadvantages compared to VCs. Another factor that may handicap your business is how your comp…

Exactly. Venture capital is not bad. There are pros and cons.

Re: Why I turned down my Y Combinator interview

#55

Post by xiphias2 » Thu, Mar 21, 2019, 4:30 PM UTC

kerng wrote: post #25

Over the years there was a shift from let's change the world by creating great technology to let's make a quick buck. The motivation seems to have changed, and its showing...

I believe ,,let's change the world'' was most of the time a way for employers/shareholders to make employees work insane hours.

Elon Musk is changing the world, works insane hours, but still lives the billionaire lifestyle by lending against his Tesla stock, while the other employees just get the insane hours part.

Re: Why I turned down my Y Combinator interview

#56

Post by tin7in » Thu, Mar 21, 2019, 4:31 PM UTC

"Venture capital gets so much attention in the media that it’s easy to forget that it’s not actually necessary."

I'm running a small bootstrapped company and am helping a friend's project with fundraising. Some of my friends are also VCs in London, so I see both sides of the table. Very often I am part of discussions about fundraising with founders who barely have any traction with their products but are obsessed with fundraising.

I wish there are more stories about actual product building instead of people closing funding rounds.

Re: Why I turned down my Y Combinator interview

#57

Post by scarface74 » Thu, Mar 21, 2019, 4:31 PM UTC

ausjke wrote: post #47

rememberlenny wrote: post #39

Earlier quoted context omitted.

> 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.

What bold move are they taking if they are using other people’s money?

Re: Why I turned down my Y Combinator interview

#58

Post by stevoski » Thu, Mar 21, 2019, 4:39 PM UTC

tin7in wrote: post #56

"Venture capital gets so much attention in the media that it’s easy to forget that it’s not actually necessary." I'm running a small bootstrapped company and am helping a friend's project with fundraising. Some of my friends are also VCs in London, so I see both sides of the table. Very often I am part of discussions about fundraising with founders who barely have any traction with their products but are obsessed wit…

If you are looking for people who discuss startups they are building without VCs and fundraising, some of us are here: https://discuss.bootstrapped.fm

Re: Why I turned down my Y Combinator interview

#59

Post by luckydata » Thu, Mar 21, 2019, 4:42 PM UTC

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…

You must be young because the quick flip was always the most common strategy. You just noticed?

Re: Why I turned down my Y Combinator interview

#60

Post by JabavuAdams » Thu, Mar 21, 2019, 4:49 PM UTC

lnsru wrote: post #48

JabavuAdams wrote: post #34

Earlier quoted context omitted.

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?

I don't sell any. I just went back to school for Physics and am finishing up first course on EM. I'd like to simulate and build motors from scratch.