Monkey-read, monkey-do entrepreneurship • Hacker News Board

Re: Monkey-read, monkey-do entrepreneurship

#11

Post by chegra » Thu, Sep 02, 2010, 9:58 PM UTC

ok... I think she has a point but didn't cut to meat of things(These days people apply link-bait heavily).

I have notice that people repeat exactly what pg says and nothing else. I don't have a problem with repeating, but I think they also need to add to what he says.

I kind of carry around a formula: 95% copy and 5% innovation. Innovation should be low because it reflects taking a risk that by simply copying would mitigate. But, Innovation should never be zero as you effectively don't add anything to the community and become less competitive.

Currently, pg might have a set of belief that he has found empirically to be true. But if you consider the search for the optimal set of rules for forming a start-up, I think pg might have reach a local maximum and it is necessary for start-ups both in YC and out to search this space that defer from pg current views, so a new higher local maximum can be achieve for the entire community.(Think Particle Swarm Optimization)

Re: Monkey-read, monkey-do entrepreneurship

#12

Post by JeffJenkins » Thu, Sep 02, 2010, 11:24 PM UTC

amirmc wrote: post #2

> "A company with $200K per year revenue with a single person and no plans to “exit” would be a failure in YC" It might not be what YC is after but I don't think it they'd consider it a failure either. Am I wrong?

I asked Paul Graham about this a couple years ago at the Startup School and he didn't seem particularly concerned with whether the companies ended up exiting. I don't know to what extent that has changed since they took on outside capital.

Re: Monkey-read, monkey-do entrepreneurship

#13

Post by pg » Fri, Sep 03, 2010, 12:51 AM UTC

amirmc wrote: post #2

> "A company with $200K per year revenue with a single person and no plans to “exit” would be a failure in YC" It might not be what YC is after but I don't think it they'd consider it a failure either. Am I wrong?

There is a difference between no plans to exit, no exit occurring. No exit ever occurring is currently going to be a failure for any technology investor, because currently, at least, there is no custom of technology companies (unlike perhaps restaurants) paying dividends. Maybe such a custom will develop, but there isn't one yet, and it's not what YC is designed for.

The best illustration of the distinction between no plans to exit and no exit occurring is 37signals. Jeff Bezos's investment in them is a sign that he believes there will eventually be an exit. As far as I know he didn't insist on them paying him dividends; that would have been very unusual; so without an exit there would be no way for him to get his capital back.

We too would have bet on 37signals, because it's hard for technology companies to stay medium-sized. They either peter out, in which case exits are a moot point, or they grow so large that they either go public or eventually receive an acquisition offer the founders are willing to take.

Re: Monkey-read, monkey-do entrepreneurship

#14

Post by pg » Fri, Sep 03, 2010, 1:03 AM UTC

noodle wrote: post #3

amirmc wrote: post #2

> "A company with $200K per year revenue with a single person and no plans to “exit” would be a failure in YC" It might not be what YC is after but I don't think it they'd consider it a failure either. Am I wrong?

yeah, it wouldn't be a YC failure, it would just probably be a company YC wouldn't invest in. why would a single-person 200k/year profit company need YC? edit: this seems to me like she's confused. YC's preferences on companies that they would like to invest their time and money in doesn't necessarily equal "the best way" for all entrepreneurs under all situations and circumstances.

YC's preferences on companies that they would like to invest their time and money in doesn't necessarily equal "the best way" for all entrepreneurs under all situations and circumstances.

That is certainly true. We would never claim otherwise. YC invests in startups, and only a tiny fraction of the millions of small companies in the US are startups. Nearly all are service businesses whose prospects for growth are minimal.

Startup founders are a very small subset of entrepreneurs.

Re: Monkey-read, monkey-do entrepreneurship

#15

Post by [deleted] » Fri, Sep 03, 2010, 1:50 AM UTC

staunch wrote: post #10

jiganti wrote: post #9

Earlier quoted context omitted.

I don't think it's necessary to disagree with a certain amount of someone's work- it's more important to be able to explain exactly why you agree with or don't agree with someone. This is what really prevents you from being the proverbial sheep.

Of course you're right and that is exactly how I feel. The problem is that it's uncomfortable for me to agree so much with someone. It's very rare as well. Even with people whose opinion's I respect as highly as PG's there tends to be a lot to disagree with.

[deleted]

Re: Monkey-read, monkey-do entrepreneurship

#16

Post by staunch » Fri, Sep 03, 2010, 2:33 AM UTC

pg wrote: post #13

amirmc wrote: post #2

> "A company with $200K per year revenue with a single person and no plans to “exit” would be a failure in YC" It might not be what YC is after but I don't think it they'd consider it a failure either. Am I wrong?

There is a difference between no plans to exit, no exit occurring. No exit ever occurring is currently going to be a failure for any technology investor, because currently, at least, there is no custom of technology companies (unlike perhaps restaurants) paying dividends. Maybe such a custom will develop, but there isn't one yet, and it's not what YC is designed for. The best illustration of the distinction between n…

FYI: 37 signals is an LLC and pays out their profits at the end of each year. So Bezos is getting a check once a year (though obviously that's not why he invested).

Re: Monkey-read, monkey-do entrepreneurship

#17

Post by pg » Fri, Sep 03, 2010, 2:54 AM UTC

staunch wrote: post #16

pg wrote: post #13

Earlier quoted context omitted.

There is a difference between no plans to exit, no exit occurring. No exit ever occurring is currently going to be a failure for any technology investor, because currently, at least, there is no custom of technology companies (unlike perhaps restaurants) paying dividends. Maybe such a custom will develop, but there isn't one yet, and it's not what YC is designed for. The best illustration of the distinction between n…

FYI: 37 signals is an LLC and pays out their profits at the end of each year. So Bezos is getting a check once a year (though obviously that's not why he invested).

Wow, I didn't realize that. It will be interesting to see how this turns out.

Re: Monkey-read, monkey-do entrepreneurship

#18

Post by dood » Fri, Sep 03, 2010, 5:17 AM UTC

pg wrote: post #17

staunch wrote: post #16

Earlier quoted context omitted.

FYI: 37 signals is an LLC and pays out their profits at the end of each year. So Bezos is getting a check once a year (though obviously that's not why he invested).

Wow, I didn't realize that. It will be interesting to see how this turns out.

Can you imagine a future where investors somewhat like yourselves (if not necessarily YC) invest considering their expectation to likely be a combination of dividends and some possibility of exit?

Or perhaps better phrased, do you see dividends playing a role in angel/YC-like investment decisions anytime in the nearish-term?

Re: Monkey-read, monkey-do entrepreneurship

#19

Post by pg » Fri, Sep 03, 2010, 5:39 AM UTC

dood wrote: post #18

pg wrote: post #17

Earlier quoted context omitted.

Wow, I didn't realize that. It will be interesting to see how this turns out.

Can you imagine a future where investors somewhat like yourselves (if not necessarily YC) invest considering their expectation to likely be a combination of dividends and some possibility of exit? Or perhaps better phrased, do you see dividends playing a role in angel/YC-like investment decisions anytime in the nearish-term?

It seems very, very unlikely. Dividends have been done before. They were how "startups" used to pay investors back in the railroad days. But the rates had to be set in advance. Without preset rates, investors would have to trust company managements not to skim profits (which there are 101 semi-legit ways to do) and claim there were none to return. And while a railroad could predict profits with reasonable certainty, how could a tech startup?

Re: Monkey-read, monkey-do entrepreneurship

#20

Post by dood » Fri, Sep 03, 2010, 6:33 AM UTC

pg wrote: post #19

dood wrote: post #18

Earlier quoted context omitted.

Can you imagine a future where investors somewhat like yourselves (if not necessarily YC) invest considering their expectation to likely be a combination of dividends and some possibility of exit? Or perhaps better phrased, do you see dividends playing a role in angel/YC-like investment decisions anytime in the nearish-term?

It seems very, very unlikely. Dividends have been done before. They were how "startups" used to pay investors back in the railroad days. But the rates had to be set in advance. Without preset rates, investors would have to trust company managements not to skim profits (which there are 101 semi-legit ways to do) and claim there were none to return. And while a railroad could predict profits with reasonable certainty,…

Makes sense, thanks. Seems a shame that there is no reasonable way to invest in the companies which have good potential for growth and profit, but have no clear exit.