they don't want put all eggs in a single basket.
Ask HN: Why did YC fund two startups that do exactly the same thing?
11–15 of 15 posts
Re: Ask HN: Why did YC fund two startups that do exactly the same thing?
#12Why not ? Isn't competition supposed to be a good thing? Also: if you're convinced an idea is going to be big, why not bet on a few companies at the same time? This is not a horse -race.
Because it is considered sub-ethical by the rest of the industry.
How is competition "sub"-ethical? Competition drives innovation. VC's say it all the time, the IDEA is worthless without excellent implementation. I find it perfectly admirable that a VC would invest in two companies that have the same idea. It helps the VC feel more comfortable with their investment and adds enough competition that the two (or more) companies will have to do their extreme best to come out on top. The VC wins, the best company wins and the customer wins. Sounds like something Apple might consider unethical, but it's really not, it's competition.
Re: Ask HN: Why did YC fund two startups that do exactly the same thing?
#13Earlier quoted context omitted.
Because it is considered sub-ethical by the rest of the industry.
How is competition "sub"-ethical? Competition drives innovation. VC's say it all the time, the IDEA is worthless without excellent implementation. I find it perfectly admirable that a VC would invest in two companies that have the same idea. It helps the VC feel more comfortable with their investment and adds enough competition that the two (or more) companies will have to do their extreme best to come out on top. Th…
He's just stating a fact. It is considered a no-no by most people.
The most common problems happen when privileged information is exchanged between the competitors.
An example: Company A discovers a killer marketing technique that gives them a big advantage but they keep their success quiet. Then the shared VC tells Company B about it. Company A loses their competitive advantage (driving up their costs, etc).
That's one of a myriad of scenarios where information exchange can be unethical and highly damaging. The hard part is that even if your VC is 100% ethical they can easily make mistakes that cause problems.
Re: Ask HN: Why did YC fund two startups that do exactly the same thing?
#14another example:
http://www.curebit.com/
Re: Ask HN: Why did YC fund two startups that do exactly the same thing?
#15One of the founders of Picplum here.
We acquired the Picwing last year when we started Picplum. The core idea behind Picplum was based on Picwing.