Why There Aren't More Googles • Hacker News Board

Re: Why There Aren't More Googles

#121

Post by freax » Tue, Apr 15, 2008, 6:33 PM UTC

spif wrote: post #101

freax wrote: post #22

I think what's being overlooked by the article is the actual development of some good technology -- there seems to be so much focus on the exit rather than what a startup is actually doing. So many of these Web 2.0 startups seem to want to grab a piece of the pie by diverting traffic rather than growing the pie by offering something fundamentally useful.

...but if you read the rest of PG articles, you'll see that he says _exactly_ that.

...but if you look at the companies he _actually_ funds, it ain't so.

http://www.techcrunch.com/2008/03/14/y-combinator-demo-day-r...

Re: Why There Aren't More Googles

#122

Post by freax » Tue, Apr 15, 2008, 6:37 PM UTC

pg wrote: post #44

boredguy8 wrote: post #15

"Any really good new idea will seem bad to most people." This is a very true statement. The danger that I've seen is so often people think, "My idea seems bad to most people, ergo it must be good!" How do you separate the seemingly bad from the actual bad? Figure _that_ out, and you'll make something of yourself.

How do you separate the seemingly bad from the actual bad? This is basically the business YC is in. The short answer is: practice. One day I'll try writing down the long answer.

You need to take more risks, pg. You need to become... pg-13

Re: Why There Aren't More Googles

#123

Post by jagjit » Tue, Apr 15, 2008, 7:05 PM UTC

It is very interesting to learn that VCs also demonstrate herd mentality or group think when they invest. The same behaviour is also displayed by professional money/mutual fund managers.

I remember reading somewhere the statistics that VC funding during the dot-com bubble days was at its peak. So they were not any better than the individual investors in terms of assessing these dot-coms for their potential. And the common reason VCs gave for those investments was that they knew it was a bubble but they did not want to be left out of the deals.

Re: Why There Aren't More Googles

#124

Post by nehrlich » Tue, Apr 15, 2008, 7:13 PM UTC

Interestingly, I just went to a talk last week talking about how angel investors are learning to fill that gap in the funding space (http://blog.nextny.org/2008/04/11/the-insider-secrets-of-ang...). They are banding together into groups, and using a common backend platform (AngelSoft) to make it easier for angels to evaluate investment opportunities. Admittedly, the speaker was the CEO of AngelSoft, so he's biased (they've identified the funding gap as a market opportunity and moving towards exploiting it). Seems like an interesting possibility.

Re: Why There Aren't More Googles

#125

Post by gliderceo » Tue, Apr 15, 2008, 9:12 PM UTC

Monster Venture lead by Robert Monster is a very good $100,000 to $200,000 investor. He sees value early on and really lets the founders make the most of the potential startup. I know, because we are one of 18 companies he invested in 2007.

Re: Why There Aren't More Googles

#126

Post by bobwyman » Tue, Apr 15, 2008, 9:39 PM UTC

The reason there are few Googles or Microsoft's, etc. has more to do with the structure of competition and markets than it does with the factors outlined in your essay.

The reality is that the companies that grow largest are those that foster the growth of an eco-system of smaller dependent companies. The large "focal point" companies, by the nature of their particular market disruption, create opportunities for others to grow new businesses or do old businesses better. But, at the same time that they create opportunity, they limit it (intentionally or not) by ensuring increased competition for the dependent companies.

Creating opportunities means lowering barriers to entry and lowered barriers means increased competition, lowered returns and limited capacity to grow as large as the "focal point" or "platform" company that creates the opportunities.

If anything, VC's have been too liberal, not too conservative, in funding companies. I recently wrote about this at some length. Please consider reading my post at: http://bob.wyman.us/main/2008/04/liquidity-and-c.html

bob wyman

Re: Why There Aren't More Googles

#127

Post by mfmosman » Tue, Apr 15, 2008, 10:17 PM UTC

"Tip for acquirers: when a startup turns you down, consider raising your offer, because there's a good chance the outrageous price they want will later seem a bargain."

A "good chance." You're kidding, right?

Re: Why There Aren't More Googles

#128

Post by anshu_sharma » Tue, Apr 15, 2008, 10:21 PM UTC

The "another tip" part where you articulate how companies should let startups be run by founders is actually where the difficult part is. I am not sure Google would be "Google" if it was absorbed into a large company - it would be a search feature.

On that, I recall VCs telling me often when I shared an idea: "This is not a company, this is a feature". I think Search is a feature. Isn't it? So is RSS, Widgets, Contact Management (LinkedIn), etc.

Re: Why There Aren't More Googles

#129

Post by wumi » Tue, Apr 15, 2008, 10:37 PM UTC

Zoho rejected Salesforce acquisition offer.

With 600 employees in India and only 8 in Silicon Valley, making $1 million profit/ month, seems reasonable to say they could be "another Google."

Re: Why There Aren't More Googles

#130

Post by indus » Wed, Apr 16, 2008, 1:11 AM UTC

Quoting from John Battelle's book on Google,"...Page set the price at $1.6m, but Excite CEO Goerge Bell threw Vinod Kholsa out even at $750,000..". That was c.1998.