Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

My Notes on How to Start a Startup by YC

docs.google.com

Post reply on HN
Print view View original

71–80 of 86 posts

Re: My Notes on How to Start a Startup by YC

#71

Post by JMTQp8lwXL »

scottlocklin wrote: post #55
nyrulez wrote: post #52

I recently started out on this road as a solo founder [0], and out of all the given pieces of advice that YC gives, two things are the most conflicting for me: - This pressure to have a co-founder. I see that quoted as a major reasons for why startups go bust but also necessary for doing anything meaningful. I can imagine there being truth to both statements. I've seen startups go bust in my own network on both sides…

YC advice isn't optimizing to help founders at all. It's optimizing for their business model. I don't know why people think otherwise. Do you think venture capitalists are your friends? Pretty sure they're not!

Yeah, but without entrepreneurs, VC's have no opportunity to invest in the next Uber, etc.

It's in their interest to be both nice to you, and strike a good deal with you, if they want to do business with you at all.

I wouldn't want to work with a VC who couldn't be nice to me. To be firm or offer pointed criticism is fine.

Re: My Notes on How to Start a Startup by YC

#72

Post by nyrulez »

scottlocklin wrote: post #69
nyrulez wrote: post #57

Earlier quoted context omitted.

That's fascinating for me. It certainly comes across like "best for all parties" kind of advice, but only magnifies the need for clear separation of business advice that is fully aligned towards founders.

The two things you cite are great examples of pieces of advice oriented to VCs rather than founders, and you should congratulate yourself for recognizing this. They want two cofounders to test for sociability like they say, but also because it lowers their risk (if one develops problems or is a loser, the other can step up), and actually increases their leverage over the founders. I mean, one founder can always be so…

That's pretty astute. I would say VCs do hedge their risk by allocating in many options, sometimes by investing in multiple startups in the same domain or even different/opposite approaches to the same goal. But that could be classified as diversifying their risk too.

Personally I don't mind the idea of going lean in the beginning, which I think applies fairly well to early founders. The current Silicon Valley notion of throwing money at it to generate enough revenue + growth, without potentially having profit for a long time is a bit uncomfortable to me. I have a hard time distinguishing between businesses that are re-investing their income for growth and no profits (like Amazon) vs. those subsidizing their growth from VC money and having little chance of being self-sustainable in the long run (e.g. I don't know where Uber will land).

Ideally, I would like to do a venture where profits do come in even at smaller unit sizes and you can test that before you decide to go big. I am not sure if there is a term for that or if anyone thinks like that.

PS: like your blog and background.

Re: My Notes on How to Start a Startup by YC

#73

Post by radmuzom »

nyrulez wrote: post #52

I recently started out on this road as a solo founder [0], and out of all the given pieces of advice that YC gives, two things are the most conflicting for me: - This pressure to have a co-founder. I see that quoted as a major reasons for why startups go bust but also necessary for doing anything meaningful. I can imagine there being truth to both statements. I've seen startups go bust in my own network on both sides…

The old "Business of Software" forums, part of joelonsoftware.com, had lots of good advice for single founders. The term micro-ISV (independent software vendor) was very popular there. Unfortunately, it got shut down few years back.

Re: My Notes on How to Start a Startup by YC

#74

Post by scottlocklin »

nyrulez wrote: post #72
scottlocklin wrote: post #69

Earlier quoted context omitted.

The two things you cite are great examples of pieces of advice oriented to VCs rather than founders, and you should congratulate yourself for recognizing this. They want two cofounders to test for sociability like they say, but also because it lowers their risk (if one develops problems or is a loser, the other can step up), and actually increases their leverage over the founders. I mean, one founder can always be so…

That's pretty astute. I would say VCs do hedge their risk by allocating in many options, sometimes by investing in multiple startups in the same domain or even different/opposite approaches to the same goal. But that could be classified as diversifying their risk too. Personally I don't mind the idea of going lean in the beginning, which I think applies fairly well to early founders. The current Silicon Valley notion…

The "hedging" point is, VCs can't hedge away the risk of making 100 little bets which are only expected to make a mean profit of $10m each (private equity might). They need the triple bagger $1b unicorns to make up for all the firms who don't make it, or their business model falls apart. Just like with trend following. The game has negative expectations; it's only the bet sizing which makes it profitable.

I'll say it a different way: VCs don't give a shit about the company _ever_ making a profit. They give a shit about ther VC making a profit. It's not the same thing at all! VC makes a profit if they invest at good valuations and sell at much higher valuations when the company goes public. The company doesn't have to be profitable! For all they care it will never be profitable! Pets dot com made some VCs a bunch of money!

(thx for kind words -good luck with your startup!)

Re: My Notes on How to Start a Startup by YC

#75

Post by woolvalley »

scottlocklin wrote: post #69
nyrulez wrote: post #57

Earlier quoted context omitted.

That's fascinating for me. It certainly comes across like "best for all parties" kind of advice, but only magnifies the need for clear separation of business advice that is fully aligned towards founders.

The two things you cite are great examples of pieces of advice oriented to VCs rather than founders, and you should congratulate yourself for recognizing this. They want two cofounders to test for sociability like they say, but also because it lowers their risk (if one develops problems or is a loser, the other can step up), and actually increases their leverage over the founders. I mean, one founder can always be so…

I think Calacanis said it best: https://calacanis.com/2019/02/11/what-is-a-startup-vs-a-life...

VCs are optimizing for the unicorn, and there is nothing wrong going for the non unicorn either. It's just you shouldn't go for VC financing. If you make a business that hires 50 people and throws off $10 million a year to you, you'll probably make more than most founders ever will anyway after 3 years of that business.

Re: My Notes on How to Start a Startup by YC

#76

Post by scottlocklin »

JMTQp8lwXL wrote: post #71
scottlocklin wrote: post #55

Earlier quoted context omitted.

YC advice isn't optimizing to help founders at all. It's optimizing for their business model. I don't know why people think otherwise. Do you think venture capitalists are your friends? Pretty sure they're not!

Yeah, but without entrepreneurs, VC's have no opportunity to invest in the next Uber, etc. It's in their interest to be both nice to you, and strike a good deal with you, if they want to do business with you at all. I wouldn't want to work with a VC who couldn't be nice to me. To be firm or offer pointed criticism is fine.

I dunno bro, did you read anything I said?

In business people can be perfectly nice and at the same time completely ruin your life. In fact, that's standard practice.

I'm telling you to be wary of VC advice on how to start a startup, basically because VC advice is entirely self serving; it's not designed to help you. It's designed to help them.

Re: My Notes on How to Start a Startup by YC

#77

Post by JaumeGreen »

ryanwaggoner wrote: post #36
JaumeGreen wrote: post #16

Earlier quoted context omitted.

> The problem is that there are so many blatant counterexamples and contradictory narratives that the advice ceases to be helpful. Because there's no set of instructions that will work for sure. What one needs to success with a startup is several of these: work hard, work smart, connections, piles of money, idea, marketing, good timing and luck. You can have most of them and not triumf, you can have only a pair and s…

This is a great comment. I’m not sure marketing belongs in the list though. It’s critical but it’s a part of execution and overlaps with several other items on the list. Just stood out to me. I’d also challenge the last paragraph. I don’t think anything on this list matters as much as working hard. Literally every single successful business owner I’ve ever known has worked their ass off, usually for many years. For m…

IMHO working hard (or sometimes just working smart) is a prerequisite for a startup to be great. But it's one of the things that matter less.

There are plenty of people working as hard as they can, that doesn't mean their starup will work out. They might be working on the wrong problem, they might have bad sales/virality, they might be doing a great product but too soon/late for the market, someone bigger might be fighting for the same market, they might just be unlucky.

Without the hard work there is no startup, for sure. But fetishizing it leads to the whole "you were not working enough/you didn't want it enough" toxic concept of people only getting what they deserve. Life is not fair, good people have bad things happen to them from time to time, bad people sometimes have good things happen to them, hard working people don't always succeed.

Re: My Notes on How to Start a Startup by YC

#79

Post by scottlocklin »

woolvalley wrote: post #75
scottlocklin wrote: post #69

Earlier quoted context omitted.

The two things you cite are great examples of pieces of advice oriented to VCs rather than founders, and you should congratulate yourself for recognizing this. They want two cofounders to test for sociability like they say, but also because it lowers their risk (if one develops problems or is a loser, the other can step up), and actually increases their leverage over the founders. I mean, one founder can always be so…

I think Calacanis said it best: https://calacanis.com/2019/02/11/what-is-a-startup-vs-a-life... VCs are optimizing for the unicorn, and there is nothing wrong going for the non unicorn either. It's just you shouldn't go for VC financing. If you make a business that hires 50 people and throws off $10 million a year to you, you'll probably make more than most founders ever will anyway after 3 years of that business.

I have a pal who made a Unicorn. He got a nice condo out of it! His next one was a non-unicorn and he made vastly more when he sold it, as he had most of the equity.

Re: My Notes on How to Start a Startup by YC

#80

Post by JMTQp8lwXL »

scottlocklin wrote: post #76
JMTQp8lwXL wrote: post #71

Earlier quoted context omitted.

Yeah, but without entrepreneurs, VC's have no opportunity to invest in the next Uber, etc. It's in their interest to be both nice to you, and strike a good deal with you, if they want to do business with you at all. I wouldn't want to work with a VC who couldn't be nice to me. To be firm or offer pointed criticism is fine.

I dunno bro, did you read anything I said? In business people can be perfectly nice and at the same time completely ruin your life. In fact, that's standard practice. I'm telling you to be wary of VC advice on how to start a startup, basically because VC advice is entirely self serving; it's not designed to help you. It's designed to help them.

> I dunno bro, did you read anything I said?

This type of comment isn't really productive to make. Yes, I read what you said. Because I replied to it.

My point is that I wouldn't work with somebody who wouldn't treat me reasonably-- I wouldn't accept their VC money.

I don't understand how VC advice can be self-serving, though, since in order for them to get a return on their money, your business has to take off. And you don't give up 100% of the company. So you win too. I view it as mutual, in that regard.

If you lose, they lose money. If they invest in you, they don't want to lose.

Post reply on HN