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After Credentials

paulgraham.com

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Re: After Credentials

#41

Post by cstejerean »

pg wrote: post #10
aristus wrote: post #4

I think Paul is treading ideas with some interesting implications for him, personally. He is the head of an organization that funds companies on the basis of a written & oral exam, whose principal selling point is the transmission of "credentials" upon the kids they pick. Part of it is the kids' merit, but part of it is YC's past success. People go to YC for many of the same reasons people went to Stanford -- past se…

Some of what you say is true, but it's not true that the principal value of YC is the brand name. The YC brand has little weight to the customers of a startup, and without those it quickly dies. YC's principal value is the advice we (and the other YC startups) offer. The part you're right about is that "admission" to YC is structurally a lot like college or grad school admissions. The difference, though, is that our…

Access to funding and marketing continue to matter a lot for most startups. Since web products are so easy to change and refine in response to feedback the initial quality of a product doesn't matter too much. As long as you can get users to provide feedback and funding to stay alive while you refine the idea you have a much higher chance of success. I'd argue that YC provides both: more attention and better access to funding, particularly because YC's track record at picking winners. The better you get at picking winners the more important the YC brand becomes.

Re: After Credentials

#42

Post by fallentimes »

aristus wrote: post #4

I think Paul is treading ideas with some interesting implications for him, personally. He is the head of an organization that funds companies on the basis of a written & oral exam, whose principal selling point is the transmission of "credentials" upon the kids they pick. Part of it is the kids' merit, but part of it is YC's past success. People go to YC for many of the same reasons people went to Stanford -- past se…

We're (TicketStumbler) a pretty good example of a startup that hasn't really been affected by being a YC company. [1]

I did YC because it seemed interesting and I needed a good excuse to quit my job. [2] Tom was bored and wanted to get out of Ohio.

When we launched on Techcrunch, we were met with widespread apathy. Techcrunch readers, by and large, weren't our target market and didn't give two shits about a ticket site. We expected this to happen, and it was still cool to be featured on Techcrunch anyways :). We weren't creating a new platform or becoming the next facebook - we were just solving a simple problem (finding tickets).

The investors we met with didn't care that we were with YC (many didn't even know), they cared that we were making money in an expanding market.

Also, our most targeted/best traffic has been from places that didn't know/didn't care who YC was (e.g. Ticketnews.com, Thrillist). Same situation for our users.

Finally, as Paul alluded to, the YC name can only do so much for you, if you don't have a good product none of it matters.

[1] - I'm only talking about the YC brand name/credentials, not the program itself, which certainly had a positive impact on TicketStumbler.

[2] - When much of your family lives in Detroit and has been recently or is, unemployed, it's difficult to say your ditching a cushie 60k per year job to do a startup. Having "backing" makes it much easier.

Re: After Credentials

#43

Post by jackchristopher »

Paul, how much of the conclusion did you decide on before starting the essay?

It felt more like an attempt to convince us, rather than a revelation to yourself. Not that that's bad, but you didn't seem excited.

What were your diffs?

Re: After Credentials

#44

Post by [deleted] »

pg wrote: post #27
cstejerean wrote: post #26

Earlier quoted context omitted.

Certainly, once you get some momentum your startup will survive or die based on how good it is. But if I hear cperciva correctly, had it not been for his credentials lots of users might not have even tried tarsnap to begin with, and I assume that would also translate into far less users a year from now, even though the product would be the same.

I assume that would also translate into far less users a year from now That's the mistake. The number of users you get long term depends more on the "interest rate" than the size of the initial seed. E.g. Google.

[deleted]

Re: After Credentials

#45

Post by cperciva »

pg wrote: post #10
aristus wrote: post #4

I think Paul is treading ideas with some interesting implications for him, personally. He is the head of an organization that funds companies on the basis of a written & oral exam, whose principal selling point is the transmission of "credentials" upon the kids they pick. Part of it is the kids' merit, but part of it is YC's past success. People go to YC for many of the same reasons people went to Stanford -- past se…

Some of what you say is true, but it's not true that the principal value of YC is the brand name. The YC brand has little weight to the customers of a startup, and without those it quickly dies. YC's principal value is the advice we (and the other YC startups) offer. The part you're right about is that "admission" to YC is structurally a lot like college or grad school admissions. The difference, though, is that our…

College admissions officers do not, as far as I know, follow up on the careers of the people they accept and see how they did.

In Canada, one of the strongest selling points of universities is what fraction of their students got a job in a related field within X years of graduation -- so at least here, institutions do track this sort of data.

In addition, there's a lot of work done to validate admissions processes based on the success of students during their undergraduate years; universities have extensive "black books" which tell them how a student graduating from high school X compares to a student graduating from high school Y given the same nominal high school marks (here in Canada, admissions are done primarily based on high school marks -- we don't have any equivalent to SATs).

Re: After Credentials

#46

Post by geebee »

I agree with much in the essay, but it's interesting that PG used law as an example of an organization that broke from the deferred compensation principle.

Most "elite" law firms actually do pay by seniority. An associate is generally paid according to the number of years he or she has been with the firm. And while the salaries for young lawyers is very high, they are actually (often) working for the potential of becoming partner - a reward for work done earlier in life. This is the essence of deferred compensation.

Law firms also tend to be more impressed with credentials than almost any other segment of the economy. The pecking order of law schools would surprise many people from the engineering world. Of course, some schools do have stronger reputations (for good reason), but in law, Harvard > Columbia > Cornell. Students accepted to a school higher in the chain will prefer that school by a wide margin. Whereas engineering students, especially at the grad level don't tend to have an MIT > Stanford > Berkeley kind of mentality... they'd be more interested in how their research interests match up with faculty in that area.

I think Law, Medicine, and other professions will be the holdouts against the trend away from school-based credentials. It's probably no surprise - these are the few sectors of the economy that can actually ban someone (with the full weight of government behind them) from practicing based on degrees and exams.

The question is, when will the tide overtake them (if ever)? Will the opportunities in a free market eventually become so appealing that only second-rate people will seek out the credentialed industries?

I'm not joking here. Law school is three years, but we all know that people learn at different rates. I suspect that some people could learn the material in a few months, whereas others would need six years, and some would never be able to learn it at all. The requirement of a 3 year degree most definitely sends some of the brightest folks into other fields where they can leverage their exceptional ability to learn quickly (software seems to be a favorite field for these people).

Re: After Credentials

#47

Post by apu »

smanek wrote: post #13

I honestly don't think that 'cram schools' are particularly effective. I taught for the Princeton Review for a while ($20+/hr when I was 18 sounded pretty good). In my experience, the average student would only gain about an extra 50 points the SAT (relative to what they would have gained studying on their own). If memory serves, a standard deviation (on the old 1600 point test) was usually in the neighborhood of a 1…

In India they seem to make a huge difference. Friends and relatives who went to "IIT Preparation Courses" (6-12 months, at a boarding school, for getting into one of the IITs, the top technical colleges in the country) usually did vastly superior to others (of similar ability) who did not.

Re: After Credentials

#48

Post by nazgulnarsil »

retyred wrote: post #21
jbert wrote: post #9

If large organisations are less efficient: - why do they survive? - if they survive despite all, why do we permit them? If the market was regulated to set a cap on the size of a single company's workforce (or some other metric, perhaps market capitalisation), we'd also avoid the 'too big to fail' problem we have at the moment. Not to mention quasi-monopolistic practices like large chains killing off small local compe…

this entire "lots of small firms are the future" meme is probably just wrong. paul graham knows a lot about websites but very little about the rest of the economy. show me the ten person company that can produce the equipment to generate and transmit electricity. or food production. where are all the ma and pa grocery stores? and banking...we have fewer banks now than ever and the number is still dropping. and PCs...…

I have to disagree. it is true that the only reason we see small companies in the tech sector is that it is a young market that is still changing. but this change will continue, all indications are that tech will only change faster in the future. this means that the tech sector will perpetually act as if it were a new market.

Re: After Credentials

#49

Post by mindslight »

aaronsw wrote: post #38

The left likes credentials? The right doesn't like intergenerational transmission of income? These aren't any left or right I recognize. Who is PG thinking of?

That second to last paragraph sticks out like a sore thumb and should be removed, imho.

'left' and 'right' are pretty meaningless terms, their origins being the antithesis of American ideals. That paragraph says more about pg's political self-identification than anything else.

Re: After Credentials

#50

Post by DThrasher »

One important factor Paul left out was the ability to terminate bad employees. If an organization can't get rid of poor performers at reasonable cost, due to restrictive labor contracts or tenure for example, the organization will have to put much more effort into screening candidates.
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