121–130 of 321 posts
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a guy 'radiates "winner"'? Really? I sincerely hope you're being flippant and don't mean that as a serious answer.
I mean it. Have you met either of them? They both seem unstoppable.
Quoth pg: It would hurt YC's brand (at least among the innumerate) if we invested in huge numbers of risky startups that flamed out. Paul, you're sounding like a venture capitalist who is worried about whether he can find investors for his next fund. I would posit that the people whose opinions you should care about are potential founders ; and that their primary concern is themselves , not the performance of a fund…
It would hurt founders' perceptions but wouldn't actually decrease any individual founder's chances of success. YC would just accept a bunch of people who aren't likely to get funded. What would happen if you split up the batches into two groups, YC Classic and YC Black Swan, and placed founders into the groups post-interview? People who were placed in YC Classic could continue to have the expectation of ~100% demo d…
While a theme was that the outsized returns can come from ideas which sound bad, it doesn't necessarily say that all outsized returns come from bad-sounding ideas.
Not only that, but I think reading the essay will show that the outsized returns are not known until several years after demo day.
Sometimes bad ideas are just bad ideas. In the Venn intersection between bad-sounding-ideas and good-ideas - the 'bad sounding and not good' is a much bigger area.
To me, the entire essay is about making sure that institutionally, the bad-sounding-but-ultimately-good ideas are not left out. Trying to further identify and silo them at application stage would be even more fraught.
The counter-intuitive nature of startup investing is a big part of what makes it so interesting to me. In most aspects of life, we are trained to avoid risk and only pursue "good ideas" (e.g. try to be a lawyer, not a rock star). With startups, I get to focus on things that are probably bad ideas, but possibly great ideas. It's not for everyone, but for those of us who love chasing dreams, it can be a great adventure…
You mentioning rock stars make me wonder if being a scout for a record label is similar. A band that's going to define a new genre or movement will sound nothing like anything currently popular, so it seems you have to identify the things that sound nothing like what's popular but that sound like what will be popular. The returns aren't as dominated by just a few big successes, though. Although I suppose one-hit wond…
Publishers, from what I can tell, have the same problem. One thing that I'm struck by is how many novels that we now consider classic, or novelists who we now consider important, barely scraped into publication. Tolkien famously saw Lord of the Rings in print because of Rayner Unwin, the then nine-year-old (I think) son of a publisher liked LOTR. John Barth and William Goldman have both written about how close they were to pursuing other opportunities—a PhD and insurance, IIRC. A Confederacy of Dunces was only published after O'Toole killed himself. Melville's poetry was self-published IIRC. Virginia Woolf needed to start her own press.
There are probably others with similar stories.
Not only that, but I have to wonder who barely didn't make the cut. Given the large number of writers who skated into print, there must be at least an equally large group who "should" have, but left no marks on history sufficiently legible to trace.
I think about these issues a lot for two reasons. The first is that I've had many close calls with literary agents, all of whom eventually said, "I like you, but not in that way." The second is the technological environment: now that ebooks mean self-publishing is much more pragmatic than it used to be, people who really want to publish have a means of going outside the conventional system. Some power-law-style stars have already emerged (Amanda Hocking, the 50 Shades of Grey author). Others probably will. Maybe I'll be one. But if I'm not, I don't think I'll be too bothered: I mostly want to write.
Yeah, 99% of self-published books are probably un- or poorly edited dreck, but that 1% count for a lot.
(A side note: I wrote about this a little more at the bottom of this post: http://jseliger.wordpress.com/2012/07/29/links-the-time-for-...).
PG, In part you are correct, but you are making some huge mistakes and, in a saying from my past, are "straining over gnats and forgetting elephants". > That's made harder by the fact that the best startup ideas seem at first like bad ideas. I've written about this before: if a good idea were obviously good, someone else would already have done it. That's likely true from what you and Silicon Valley see, but that's j…
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I think you might have not been down voted as much if you had written less sarcastically and with more practical solutions (versus ideological). The solutions you are offering are so general that by following this high-level point of view we can solve world peace, world energy and world poverty and still make the evening tea. You see HN is mostly a community of "doers", and though the ideas you presented might have m…
> The solutions you are offering are so general that by following this high-level point of view we can solve world peace, world energy and world poverty and still make the evening tea. Nonsense. I'm talking applied research. There's rock solid, highly developed, high quality education for that called a Ph.D. in applied physics, applied science, applied math, the mathematical sciences, and many fields of engineering.…
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Off-topic, but something I've been chewing on lately: what's it like to have your every written (or spoken!) word analyzed by a bunch of people? Esp. people that you end up having some form of contact with. It seems like it would be difficult to just have a public conversation about a topic. Do you think about that much when you write?
It's pretty grim. I think that's one of the reasons I write fewer essays now. After I wrote this one, I had to go back and armor it by pre-empting anything I could imagine anyone willfully misunderstanding to use as a weapon in comment threads. The whole of footnote 1 is such armor for example. I essentially anticipated all the "No, what I said was" type comments I'd have had to make on HN and just included them in t…
At least some of the people who are questioning you are probably doing so out of intellectual curiosity, rather than animosity. You probably know that intellectually, but for many people—including me—it's sometimes hard to remember that in the heat of the reading moment.
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This seems to suggest the decision to fund has less to do with the idea and more to do with the founders. We already knew that. Does this also mean that the "big winners" will not come merely from a pool of what appear to be bad ideas, but from a subset of that pool: bad ideas put forth by founders the VC thinks are impressive? That too, seems somewhat obvious. Taking it one step further, can you separate the "idea"…
Yes -- this is why, for example, we (at A16Z) have such a strong bias towards technical founders with strong personalities, typically with a background of accomplishment of some reasonably strong form (even if very young). You have to screen at the founder level since there are too many bad ideas from less qualified founders otherwise.
Have you ever experimented with an opposing strategy? (Funding "non-technical" founders with "weak" personalities.)
Probably not, lest you would risk your reputation. Hence, you might not have evidence to show that this approach would not yield suffcient numbers of "big winners" to justify the investments. For example, if someone sugested the hypothesis that from a set of a given size of non-technical founders with weak personalities, some "big winners" will emerge, could you disprove that? If you wanted to be scientific, you would have to test it, repeatedly.
From my intepretation, I think one of the points in the pg essay is that human "intuition" will only take you so far toward the "big rewards". By its very nature it steers us away from the counterintuitive and protects us from taking what others would perceive as unreasonable risks. It will stop you from adopting a strategy that no one else is using that might get you labelled as foolish (but, as history shows us time and again, might actually yield an enormous reward).
In hindsight we'll continue to see that some of the biggest winners would have been viewed as unreasonable risks by many VC. Foresight won't allow us that vision. So-called intuition will stop you from investing in a "big winner". Hard to accept, but true.
But many startups exit without making it big and return 2-3X to their investors. If the median startup were doing 3X, you'd be making a great return. I don't hear much about this strategy. It would be interesting to look at the remainder of YC's portfolio with Dropbox and Airbnb removed to see what that distribution looks like.
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Yes, Dropbox was in the Google category of bad ideas: there were already lots of similar things. Success turned out to depend on execution. Dropbox was the first application of its type that worked sufficiently well. But that sort of thing is hard to predict.
My recollection of Drew's YC app was that it was posted on HN before he applied to YC and it received wide acclaim, so I went and Googled it: http://news.ycombinator.com/item?id=8863 Turns out my memory was only half right. DropBox had many people that loved the idea and thought it would revolutionize filesharing. It also had a large number of people who pointed out all the reasons why it wouldn't work. I wonder if t…
To be fair, it's not actually possible to present a new idea on this forum (or any forum with technical-minded people), without getting a flood of reasons why it won't work.