Now the question seems to be, based on this, will you alter the application process for YC? It currently seems to me to be more reliant on "have you often have you got on base," than, "are you swinging for the bleachers?" criteria. I hope you experiment a bit and share the results!
Black Swan Farming
261–270 of 321 posts
Re: Black Swan Farming
#262Earlier quoted context omitted.
0) It's very nice to see you change your position. First, "you did nothing wrong". Then, after I pointed out that you did, indeed, do something wrong, turns out you did it because "you were attacked strongly". This is a common behavior in elementary school, and not an acceptable mode of conduct in adult age, especially from a technical Ph.D. 1) There are plenty of people on HN who don't bow down before VCs. See patio…
My first comment on this thread was down voted to -4 quickly. That post did nothing seriously wrong on the HN rules. Since only a few users are able to down vote, that down voting had to be heavily or entirely from HN mods. For more evidence, the down voting was well before any responding comments. That is chicken sh!t behavior from the mods. So I was attacked, and not for anything I did wrong. Then I responded and d…
> Since only a few users are able to down vote, that down voting had to be heavily or entirely from HN mods.
This site has been running for more than five years. Trust me, the overwhelming majority of users who can downvote aren't mods, they're not even regular participants in the conversation; they're probably mostly lurkers who submit decent articles.
Your comments are mostly flip, and provide little value. That's why they get downvoted; you're trying to be funny and by the community standards you're not.
Re: Black Swan Farming
#263The secret
of creating wealth
is identifying a solution
that will improve the world
and is not evident
before it does.
Re: Black Swan Farming
#264The counter-intuitive nature of startup investing is a big part of what makes it so interesting to me. In most aspects of life, we are trained to avoid risk and only pursue "good ideas" (e.g. try to be a lawyer, not a rock star). With startups, I get to focus on things that are probably bad ideas, but possibly great ideas. It's not for everyone, but for those of us who love chasing dreams, it can be a great adventure…
This is probably true also for evaluating entrepreneurs where blindest is even greater (I call it "young white male syndrome"). It seems like if an entrepreneur is a little different (black, hispanic, women, little eccentric, older, etc.) he/she need to act and behave like "white young male" in order get noticed and funded. However, in that case he/she might be hiding the characteristics which will make them "rock st…
Ageism, racism, and sexism all in one, impressive. And what stereotypes do you attribute to that demographic which are unique and oppressive to others? Seems to me the only thing in question here is creativity and ambition.
Re: Black Swan Farming
#265Earlier quoted context omitted.
"a million dollars a year for you" was a limit given in mixmax's comment, and Marc also use that. So I'm just curious if Patrick was really meaning that he can without pausing name 50 non-VC backed lifestyle product companies that are making $1M in salaries and profits for their founders, or that he meant that he can name 50 companies that are generally well-off, and are making e.g. a few thousand dollars per year fo…
Any multi-person consultancy in our industry can easily be doing $1MM. Most companies that build and ship product can easily consult, so, any of those companies that continue to ship product for multiple years should cause you to ask how much more than $1MM they must be making. "Salaries and profits" is an awfully weird metric, since salary is the #1 cost factor both for consultancies and product companies. Maybe you…
Maybe my English is causing problems here (I'm not a native speaker). Of course there is a huge amount of lifestyle companies doing millions in revenue.
But that's not what founders themselves earn. Founder's personal salary and a slice of pure profits that are not reinvested to company growth can be considered a total that founders "earn" in lifestyle businesses.
Even with this metric, of course there is a lot of lifestyle internet companies in the world that do over $1M per founder. I'm just interested if Patrick meant that he can name 50 companies (presumably from his network) that are doing this well.
Re: Black Swan Farming
#266Earlier quoted context omitted.
If you are trying to start a traditional sustainable company, in many ways, it's easier to do during a downturn. This was basically the message of PG's recent leaked "bad times" email: "The startups that really get hosed are going to be the ones that have easy money built into the structure of their company: the ones that raise a lot on easy terms, and are then led thereby to spend a lot, and to pay little attention…
Interesting. That's completely the opposite of what I was taking away from PG's essay; My takeaway from the essay was that investors want you to swing for the fences; in my mind, that means not worrying about profitability early on. I mean, twitter didn't introduce advertising at all until they were absolutely huge. I had the impression that facebook was similar (though I could be off; I'm not a regular user of faceb…
I get the feeling from PG's other essays that he regards Google, Facebook, Twitter, etc. as the extreme outliers that succeeded in defiance of the "rule of revenue," not because of it.
Re: Black Swan Farming
#267Am I the only one to notice that both AirBnB and DropBox actually have a viable business model and a real way to make money? I think this would be a good metric. I mean think about it, if you're a startup and your only strategy is to burn money making an awesome product that's free, how on earth are you going to return 1000x on investment?
I have no idea, but isn't that exactly what Facebook and Google did?
When Google launched, being ad supported was still highly lucrative. It was a different time.
Re: Black Swan Farming
#268Earlier quoted context omitted.
I think the difference here is the assumption for failure rather than success for. The subprime bubble existed due to leverage - fancy models said that defaults were unlikely, so rather than extend loans from their own assets, banks decided to double (or triple, or quadruple...) down and lend out multiples of their own total assets. The models were wrong and they blew up. This is quite different from assuming a high…
The comparison I'm trying to draw is about why the models were wrong. Subprime lenders planned for failure too; after all, this is why the loans were subprime , it was expected that a number of them would default. All of this is built into the business model: charge high interest rates on all the loans, to subsidize the cost of some expected number of failures. The problem is that when the business grew and everyone…
> The fatal mistake was assuming that the same percentage of mortgages would blow up when subprimes were 10% of the market, because the process of going for 1% to 10% means writing many more loans and extending credit to buyers who should never have been buying houses in the first place.
There's another problem - the "market share" of subprime loans was underreported by Fannie and Freddie (and they were the largest single buyer of the relevant securities). So, even if your model of forclosures depended on the share of subprime mortgages and was perfect, you got the wrong results because the inputs were wrong.
Re: Black Swan Farming
#269There's a pretty interesting lesson for potential YC candidates, particularly the ones that get turned down, here. When you interview a startup and think "they seem likely to succeed," it's hard not to fund them. And yet, financially at least, there is only one kind of success: they're either going to be one of the really big winners or not, and if not it doesn't matter whether you fund them, because even if they suc…
> If your startup ends up making you a million dollars a year you will probably be very happy and rightfully call yourself a success. I see this a lot from various corners of the startup ecosystem, particularly 37 Signals and their followers. The problem is that it's not really true, by which I mean there are not very many examples of it begin true, and there is an excellent reason to believe that it may never be tru…
There's a huge world of $M businesses out there outside of the narrow Techcrunch-oriented ad-driven consumer internet biz. I did consulting for a while and met tons of small niche companies making millions for crappy software (and often crappy service). Long ago a guy at MSR told me they wrote up business ideas for Bill Gates' Think Weeks. He said it was easy to come up with lots of $100M ideas, but no one cared. MS needs $1-10B ideas to make it worth their while.
The reason I'm not rich is because these niches are hard to break into. It's all about enterprise sales to obscure niches. In fact, we need a dating event to pair enterprise sales people and tech founders. I tried enterprise sales, but within a month I wanted to kill myself. It takes a special breed of human to do that.
Re: Black Swan Farming
#270Hi, I'm with Atlantic.Net cloud so I speak with startups quite frequently.
In terms of dialing up risk, I think you're looking @ it backwards. You have a finite life, which means you are slowly eroding to zero. You have nothing to lose by taking risk because you are already eroding towards zero.
Even worse, the remaining days you have left are a greater percentage of the remaining days in totality of your existence, so therefore each day is eroding FASTER than the previous one.
So, relatively speaking, you should be increasing risk over time in any case because the rate at which you are eroding is accelerating.
Basically, rather than looking @ risk as what you have to lose, really its about what you have to gain. There isn't any true risk because the end game is the same.