6 Months, $90,000 and (Maybe) a Great Idea • Hacker News Board

Re: 6 Months, $90,000 and (Maybe) a Great Idea

#11

Post by richcollins » Sun, Feb 28, 2010, 5:03 PM UTC

akadien wrote: post #8

richcollins wrote: post #6

Anyone else sick of drawn out human interest stories at the beginning of news articles? WRT to the article: Most E.I.R.’s receive a monthly stipend of up to $15,000 to sit and think for about six months. That is a horrible way to create successful products. Good entrepreneurs take action as much as they deeply ponder ideas.

Maybe that gives them time to develop an idea into homerun for the VC firm, whereas bootstrap entrepreneurs have to hit singles and doubles at first to survive.

Any anecdotal evidence of this? Most home runs that I know about are from scrappy, resourceful founders that discovered something simple through experimentation that scaled into a huge company.

Re: 6 Months, $90,000 and (Maybe) a Great Idea

#12

Post by akadien » Sun, Feb 28, 2010, 5:37 PM UTC

richcollins wrote: post #11

akadien wrote: post #8

Earlier quoted context omitted.

Maybe that gives them time to develop an idea into homerun for the VC firm, whereas bootstrap entrepreneurs have to hit singles and doubles at first to survive.

Any anecdotal evidence of this? Most home runs that I know about are from scrappy, resourceful founders that discovered something simple through experimentation that scaled into a huge company.

No. I'm speculating and conjecturing on the intent of a six month EIR tenure.

Re: 6 Months, $90,000 and (Maybe) a Great Idea

#13

Post by pedalpete » Sun, Feb 28, 2010, 7:46 PM UTC

chris123 wrote: post #5

ahk wrote: post #3

Earlier quoted context omitted.

I think it's unlikely that a VC would want to compete with an existing startup. If they had an idea relevant to one of the startups it's more likely that they would just give it to the startup and/or start funding them for it.

VCs are all about competing with existing startups. That's the #1 most used play in their playbook (same with YC and angels). See the paragraph of most TechCrunch posts about any new startup and you will see a list of similar ones that came before. For example: http://techcrunch.com/2010/02/18/cardpool-wants-to-buy-and-s...

Yes, there is a herd-mentality where VC's will fund start-ups to enter a newly found market, but I believe what ahk is referring to, is that a VC would not create a company to compete with a company they've been pitched.

There are many reasons that most responsible VC's would not do this. #1 being that if they are pitched effectively, they have somebody right there with the knowledge, passion and initiative to get going on the company. Additionally, it could be detrimental to the VC's reputation to be seen as taking ideas from pitches.

At the same time, I've heard from a few VC's that they are constantly hearing VERY similar pitches for the same ideas again and again. The chance that you are bringing something completely unique is small. This is often why VC's will talk about investing in the people, rather than the idea. Along with the fact that start-ups will often completely change their product before it sees the light of day.

Re: 6 Months, $90,000 and (Maybe) a Great Idea

#14

Post by pedalpete » Sun, Feb 28, 2010, 7:49 PM UTC

richcollins wrote: post #11

akadien wrote: post #8

Earlier quoted context omitted.

Maybe that gives them time to develop an idea into homerun for the VC firm, whereas bootstrap entrepreneurs have to hit singles and doubles at first to survive.

Any anecdotal evidence of this? Most home runs that I know about are from scrappy, resourceful founders that discovered something simple through experimentation that scaled into a huge company.

Doesn't the article give the anecdotal evidence? Data domain and Zimbra are some big number acquisitions. Also, consider the number of companies that VC's are pitched via non-EIR's vs pitched by EIR's, and I would say the numbers are favorable if not equal that an EIR is as good as a scrappy and resourceful founder.

Re: 6 Months, $90,000 and (Maybe) a Great Idea

#15

Post by mos1 » Sun, Feb 28, 2010, 11:27 PM UTC

PostOnce wrote: post #10

richcollins wrote: post #6

Anyone else sick of drawn out human interest stories at the beginning of news articles? WRT to the article: Most E.I.R.’s receive a monthly stipend of up to $15,000 to sit and think for about six months. That is a horrible way to create successful products. Good entrepreneurs take action as much as they deeply ponder ideas.

I like to think that hunger and need help drive people to success. If you're making 15K a month, you probably aren't waking up nights struggling with the desperate urge to figure out something profitable. I know a lawyer who was probably the most driven person I'd ever known, until she graduated law school. Hasn't taken an upwardly-mobile action since she got the job 16 years ago.

My reaction to success is to aim higher, and fire again.

I was going to say that my efforts are uncorrelated to my wallet, but I don't think that's true; I think they're inversely correlated.

I hate to cite a second anecdote as rebuttal, but I don't have any controlled studies available :-)