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Monkey-read, monkey-do entrepreneurship

ambershah.com

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Re: Monkey-read, monkey-do entrepreneurship

#21

Post by AmberShah »

staunch wrote: post #8

Her point about thinking for yourself is condescending. She's hardly alone in believing that she's a critical thinker that evaluates advice objectively. Everyone thinks that about themselves. No one thinks they're a monkey. Regarding the post she's replying to, she didn't provide any evidence that she's succeeded while ignoring the advice of experts. Her one example (which was 75% of her post) would be more convincin…

The point about cofounders is semantics, but considering he hasn't done anything besides cheerlead since I beta launched, nor does he care about this idea except that it's mine makes him NOT a cofounder, in my opinion. I knew sone would disagree that's why I felt it only fair to mention it. I also provided 3 examples of people accepted as single founders who recieve very real help from their significant other or friends beyond cheerleading.

I also agree with PG more than I agree with most people. The dude is smart and I'm happy to learn from him. It's the premise that I shouldn't sway from his advice that I was rejecting.

My experience doesn't qualify as success yet but more as 'so far ao good' but there are plenty of single founders who are so that condition is already satisfied.

Re: Monkey-read, monkey-do entrepreneurship

#22

Post by AmberShah »

pg wrote: post #14
noodle wrote: post #3

Earlier quoted context omitted.

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 min…

This is interesting to me. I consider what I have a startup, but what is the distinction? I'm not sure what about the $200K statement makes me an entrepreneur and not a startup. I'm assuming we are talking about scalable tech business, not consulting.

EDIT: Updated for clarity.

Re: Monkey-read, monkey-do entrepreneurship

#23

Post by AmberShah »

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…

What I read about VC's definitely leads me to believe that you should have an exit plan and be on the same page with them about it. If I wanted to tell them, come back in 5-10 years and I'll think about it, that would be a problem. Perhaps it is not true or perhaps a seed fund like YC is different.

Re: Monkey-read, monkey-do entrepreneurship

#24

Post by AmberShah »

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,…

Could this be accomplished by paying company management a low but reasonable wage and having them also get paid dividends? That way they'd be motivated to have more profits and get more money through dividends themselves. I suppose in the 101 semi-legit ways there's probably still a way around this.

Re: Monkey-read, monkey-do entrepreneurship

#25

Post by patio11 »

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,…

If you do not trust management, they can act to detriment of investors even without dividends. All they have to do is pay themselves market wages, for the right value of "market", rather than investing in growth. Or they can run company like it was Japanese, where it exists to buy perks for employees off their own taxable income. (The four star chef is for recruiting! Honest!)

This is a two way street, since investors have an incentive to push for swinging for the fences even when a bunt would be life changing for the founders. Consider a two man team who hits a million in sales, but seems to stall out (say, ran out of channel, but has good ongoing relationships with customers). Pivot and risk company to hit ten million, which would justify exit, or continue executing and make two families rich with little risk? Not hard to see dynamic.

Re: Monkey-read, monkey-do entrepreneurship

#26

Post by ahoyhere »

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.

Yes, but the PG message - and the message of other VCs - is not "Well, here's one valid way to make a lot of money (with investment and an exit), but you can also make lots of money with a SaaS."

It's "This is the way to do business."

That's the issue.

Re: Monkey-read, monkey-do entrepreneurship

#27

Post by garply »

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,…

Why would you do business with, let alone invest in, people whom you did not trust?

Re: Monkey-read, monkey-do entrepreneurship

#28

Post by hammmatt »

It is sort of a catch 22 for her to say how silly it is to have a co-founder when you are young and unproven. If you are capable of doing it yourself, then yes, of course you should. However, many people who are capable of doing themselves may not be ready to handle all of the aspects, especially if it is their first time out.

There are a few lessons that I have taken from browsing HackerNews over the last year. Two of them come to mind.

The first is that it is not simple to do everything involved in creating a startup. Even if you know what you are doing. There are factors to hinder great products and great people, from reaching the consumer.

The second is that there is no shortage of great ideas for startups. The real bottle neck seems to be the execution of great ideas.

If you are capable of doing it by yourself, but you take on a partner, you do lose out financially or you could create complications. But no one ever said it had to be your last startup. You can always take on of the great new ideas and branch out again.

Even if it is a disaster, you will discover that you can do it alone.

Or the other scenario, you discover that you work well together. Now, you have have too much brain power, time, energy and money. These resources are incredibly useful at expanding your startup, starting a second, or just making life easier.

I like her cynicism about everything she reads. That is just a normal part of rationality. Even if it is aimed against the mighty Paul Graham. However, I have to disagree with her assertions. I believe teams are greater than the sum of their parts, even if team member can do all work alone.

Re: Monkey-read, monkey-do entrepreneurship

#29

Post by AmberShah »

hammmatt wrote: post #28

It is sort of a catch 22 for her to say how silly it is to have a co-founder when you are young and unproven. If you are capable of doing it yourself, then yes, of course you should. However, many people who are capable of doing themselves may not be ready to handle all of the aspects, especially if it is their first time out. There are a few lessons that I have taken from browsing HackerNews over the last year. Two…

By the way, I didn't say cofounders are silly, just that I choose not to have one right now. It's a choice often met with disdain from a certain group of people: "you will definitely fail". Others have already proven that single founder can work, the test now is whether I can.

Re: Monkey-read, monkey-do entrepreneurship

#30

Post by pg »

AmberShah wrote: post #22
pg wrote: post #14

Earlier quoted context omitted.

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 min…

This is interesting to me. I consider what I have a startup, but what is the distinction? I'm not sure what about the $200K statement makes me an entrepreneur and not a startup. I'm assuming we are talking about scalable tech business, not consulting. EDIT: Updated for clarity.

I don't know what you're doing, but consulting is not the only way to have limited growth prospects. A company could also be making a product for a niche market (and not be doing it merely as a way to get started engaging with users). I believe some people call these niche software companies MicroISVs.
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