Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

A Fundraising Survival Guide

paulgraham.com

Post reply on HN
Print view View original

51–60 of 98 posts

Re: A Fundraising Survival Guide

#51

Post by netcan »

skmurphy wrote: post #44
davidw wrote: post #43

Earlier quoted context omitted.

Search, and thus Google, obviously has different economics than something like eBay: it's very easy to switch to a new search engine, and there aren't really demand-side economies of scale like there are with auctions. eBay may not have been the first auction site, but it was the first to hit a critical size, beyond which the advantage was all theirs.

Google makes money from selling ads. Advertisers want to place ads on the largest search engine sites (or one that can deliver a target audience at an effective price). It may be easy for a user to switch (although letting users know that you exist can be hard/expensive), it's less clear that advertisers will switch to a search engine with few users. Google's customers are the advertisers.

"Google's customers are the advertisers."

Technically. They do a great job of monetising search traffic but that's not the bottleneck.

Search engines win by attracting their customers' customers, users. Advertisers will follow the users.

Re: A Fundraising Survival Guide

#52

Post by pg »

noor420 wrote: post #47

So PG, you read 800 applications and invite 100 for interview. Then you invest in only 1 or 2? I hope this is not the case with other VCs.

Those aren't our numbers. Those are David Hornik's. We accept a much higher proportion.

Re: A Fundraising Survival Guide

#53

Post by pg »

apu wrote: post #15
cperciva wrote: post #3

In footnote [2]: No VC will admit they're influenced buzz. Some genuinely aren't. But there are few who can say they're not influenced by confidence. I think this wants s/influenced buzz/influenced by buzz/.

Another copy-edit near the end of point 2 (halfway through the page): "Investors rarely grasp this, but a much of what they're responding to" (there shouldn't be an 'a' before 'much')

Ok, fixed both, thanks.

Re: A Fundraising Survival Guide

#54

Post by linhares »

gojomo wrote: post #17

The very last sentence of the last footnote caught my eye: Oddly enough, the best VCs tend to be the least VC-like. I suspect that rather than being odd this is nearly tautological for any profession -- "the best X tend to be the least X-like". Professional stereotypes are set by the multitudes in the middle, not the highest-performing outliers. Further, atypical behavior can be both a cause and effect of excellence.…

When you have confidence (in other words, if you are really good and you know it), the incentive to look good goes down. You have a track record. Smart people know who you are.

Your casual remarks impress those that haven't thought things through as much as you have.

You can be yourself, using the same vocabulary and tone of voice you would use at home. On the other hand, people that are insecure or down on the status ladder have a huge incentive to impress others. Some of them will work hard to improve their situation; others will work hard to improve their looks--eventually becoming phony and disbertesque (but only the really good will be able to tell them apart; average people may be blind to it).

The mere tone of voice and choice of words tells it all. If you cannot believe they use these words and tone of voice at home, that's a good sign they're striving for the stereotype.

The other day I was interviewing this guy. He looks straight to me and talks as if we're equals (even though he's climbing that darn status ladder). His tone of voice and choice of words are informal, smoothly flowing. Finally, he brings up a thing or two I haven't thought. That's impressive; a sign that the guy _is really_ good, not posing.

He's on the team now. And poor me, for I have to keep it up to keep him on.

Re: A Fundraising Survival Guide

#55

Post by Alex3917 »

pg wrote: post #33
gojomo wrote: post #17

The very last sentence of the last footnote caught my eye: Oddly enough, the best VCs tend to be the least VC-like. I suspect that rather than being odd this is nearly tautological for any profession -- "the best X tend to be the least X-like". Professional stereotypes are set by the multitudes in the middle, not the highest-performing outliers. Further, atypical behavior can be both a cause and effect of excellence.…

I've been thinking about that. It's not true of all fields. It's true of painters, but not mathematicians. Maybe it depends on whether a field has a lot of fakers. Painting and VC both do. Math has few to none (I can't judge well enough to say for sure).

It's always true in any field where success is relative, and one's success is based on being "better" than others. For example in rowing, if you're on the same training program as everyone else then your chance of winning is basically flip-a-coin. Similarly, if you paint in the same style as others then your chances of being recognized as the best painter are basically flip-a-coin as well. Math, however, is different because you work at uncovering the properties of mathematical objects whatever they might be (so success is absolute), and you don't get credit for doing stuff that's already been done. Because of this everyone can do math the same way and still win, because how much stuff you discover is a function of you and what you're working on and not your methods.

If I had to come up with a general law on the spot, I'd say that the pressure to create new methodology is directly proportional to the similarity of recent winning outcomes in the past. I haven't fully tried to break this yet, but I'm guessing I'm pretty close to having found a natural law since it is consistent with evolution running in S-Curves.

Re: A Fundraising Survival Guide

#56

Post by pg »

tc7 wrote: post #10

"If you factor out the "bootstrapped" companies that were actually funded by their founders through savings or a day job, the remainder either (a) got really lucky, which is hard to do on demand, or (b) began life as consulting companies and gradually transformed themselves into product companies." I had to read the paragraph a few times, so I may be misunderstanding it, but why do we factor out bootstrapping through…

I'm distinguishing between companies that took no investment (truly bootstrapped) and those that merely took no outside investment.

Re: A Fundraising Survival Guide

#57

Post by asdflkj »

cperciva wrote: post #45
pg wrote: post #33

Earlier quoted context omitted.

I've been thinking about that. It's not true of all fields. It's true of painters, but not mathematicians. Maybe it depends on whether a field has a lot of fakers. Painting and VC both do. Math has few to none (I can't judge well enough to say for sure).

It's true of painters, but not mathematicians. I'm not sure about that. The words "homeless drug addict" don't exactly bring "mathematician" to mind, but thats' exactly what Erdos was, and he certainly qualified as one of the best mathematicians of the 20th century. EDIT: Oops, it wasn't methamphetamine; it was dl-amphetamine and methylphenidate. Somehow my brain squished those two together.

Erdos was a drug user, not a drug addict. He famously quit drugs for a month just to show that he was not an addict. And though he was technically homeless, he was not what most people imagine when they hear this word. He merely preferred to spend his life traveling, and had many friends everywhere (which comes with the territory if you're eminent).

His most salient characteristics--eccentricity and lack of concern for non-mathematical things--are common to most mathematicians.

Re: A Fundraising Survival Guide

#58

Post by nostrademons »

davidw wrote: post #13
tonystubblebine wrote: post #2

As a fan and practitioner of bootstrapping I was interested in the part where pg says that the delay caused by bootstrapping can be fatal to many kinds of startups. Flipping that around, are there kinds of startups where the delay is not fatal? Taking Basecamp as an example, it was released probably decades after the first project management software. Is bootstrapping best if you're going after a mature class of soft…

Depends on the economics of what you're doing: - Winner take all markets with strong positive network externalities have bit first mover advantages: eBay. - Products requiring large investments probably require investments: if you trade time for money, you might be really late to market compared with a firm that got money. - Products where it's easy to start competing and carve out a nice probably don't require much…

Kinda amusing that you picked eBay, because eBay was bootstrapped. It was one of very few startups where the founder was making more from his startup than his day job, before quitting his day job.

Re: A Fundraising Survival Guide

#59

Post by boucher »

prakash wrote: post #6

Money quote: Startups live or die on morale.

Actually, I think you wouldn't be far off the mark by saying that one of Y Combinator's most important contribution to its companies is morale. Tuesday night dinners really turned us around when we were feeling particularly demoralized.

Re: A Fundraising Survival Guide

#60

Post by nostrademons »

Consulting is the only option you can count on.

I'm curious - what's wrong with the old-fashioned "having a job and living way beneath your means"? The average grad student lives on about $15-20k/year, and often does so in a startup hub with its inflated cost of living. The average entry-level programmer can make $60-80k/year. Why not work for a year, live like a grad student, and then use the accumulated savings to fund 2-3 years of full-time development?

Post reply on HN