[HN Gopher] Taking part in Y Combinator from Europe: is it worth...
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Taking part in Y Combinator from Europe: is it worth it?
Author : adrian_mrd
Score : 145 points
Date : 2021-09-17 11:59 UTC (11 hours ago)
(HTM) web link (sifted.eu)
(TXT) w3m dump (sifted.eu)
| ro-_-b wrote:
| What I don't understand is why they complain about the high costs
| of setting up a business in the US (tens of thousands of
| dollars). Shouldn't this be pretty cheap with Stripe Atlas?
| sfe22 wrote:
| And they actually recommend using atlas in their youtube video.
| devops000 wrote:
| I don't think is worth it to give up 7% if your business has some
| revenue, and it's growing.
|
| If you haven't reached market-fit yet, then a mentorship could be
| useful if you don't have such skills in your networks.
| jsonne wrote:
| Giving up that 7% functionally doubles the valuation you can
| justify at a seed stage and saves you months in fundraising
| efforts. That time is valuable and if you plan to raise a lot
| having a low dilution matters quite a bit.
| dominik-2020 wrote:
| I think it's more complex than that. I would recommend everyone
| to join YC. It helps with customers and investors. Most likely
| your company valuation will go up more than you'd need to
| compensate for the 7%.
| melomal wrote:
| If it has revenue and is growing then I would look to get a
| loan to double down on what is working.
|
| Pay back the loan whilst increasing revenue and keep the entire
| company to yourself/team. The additional revenue can offset the
| expenses which were taken care of by the loan.
| tarr11 wrote:
| Getting a loan is very difficult unless you are profitable.
| edf13 wrote:
| Investors and Y Comb bring a lot more than just cash though
| 0xfaded wrote:
| By which time an American company will have copied your
| business model and plow 10x anything you could ever dream of
| raising in Europe into dominating your market.
| [deleted]
| long_time_gone wrote:
| Are there examples of this phenomenon? If so, please share.
| andy_ppp wrote:
| Yes, I'd like to see some examples of this, I've never
| heard of the fast follow working but happy to be
| corrected. The thing is they will not have access to your
| metrics to know the rate of growth and as we all know
| most amazing startups look like bad ideas on the surface.
| Take for example something like Substack - it should be
| easy to copy but they already have a moat in terms of
| mindshare with writers so I'd say there isn't much point.
| Basically by the time you're thinking about copying
| something that has product market fit it's already too
| late for you to be the incumbent.
| guiriduro wrote:
| Yes, that's why Google doesn't exist and Altavista rules
| world search.
| andy_ppp wrote:
| It's actually much more complex than a post on hacker
| news could summarise here, but I will say AltaVista tried
| to compete with Yahoo and add features rather than
| compete with Google.
|
| If you think Google was a fast follower you are
| incorrect. There are patterns to how these types of
| company crop up and they are about revolutions in how a
| field is done rather than "copy AltaVista" and see if you
| can catch them. Nobody succeeds at copying a company that
| has a genuine mission to accomplish.
|
| I'm not saying it's impossible to build a company that
| happens to do the same thing as say Substack but you have
| to build it for the correct reasons and fast followers
| are generally always compromised in some way.
|
| Your glib suggestion that Google, a once per decade
| company, is a follower of AltaVista really doesn't do any
| of what Google accomplished justice.
| GlennS wrote:
| The idea that Substack have a moat seems a bit
| implausible, given how new they are.
|
| Have they finished displacing Medium yet? Who in turn
| only appeared a few years ago?
|
| Have any normal people even heard of these companies?
| jacobr1 wrote:
| Substack is winning because of business model innovation,
| and also because of market timing. Their technology isn't
| really an advantage compared to legacy CMS platforms -
| how they are employing that technology is the difference.
|
| Medium went for a bottom-up approach, trying to monetize
| the content of the crowd. Substack is going for a top-
| down approach, grabbing writers with an existing large
| following and paying them top rates, which are justified
| by the conversion rates for their well-known creators.
|
| Normal people might not have heard of these companies,
| but niche audiences certainly follow some of the specific
| authors/columnists/influencers and are following them
| onto substack with paid subscriptions.
|
| Is that a moat, or will they jump to the next platform? A
| few have been poached by the NYT and other venues, so
| maybe the moat isn't that big.
| andy_ppp wrote:
| Ask any writer you know about substack, they have mind
| share that the competition will struggle to catch. It's a
| moving target remember, first you have to launch, then
| you have to get a load of a-list writers on your
| platform, then you have to figure what new thing is going
| to get you users. This will take you at least 6 months
| maybe longer. By then Substack should be at least 6
| months ahead of you maybe more.
| jbrownbridge wrote:
| I'm no expert here but I thought it was the other way
| around. I remember seeing Rocket Internet clone several
| US based startups in the European market successfully.
| Either in selling them back to the original startup or
| dominating the market e.g. Zalando
| andy_ppp wrote:
| I worked for Rocket Internet for 6 months one year and if
| you get beaten by them you deserve to lose. You can
| safely forget about them if you are good.
| jack_riminton wrote:
| I was approached by Rocket internet to be a CEO of one of
| their companies and after asking me the type of company I
| wouldn't be interested in (I said "health/beauty, B2C")
| they still went on to offer me the role of CEO of a B2C
| teeth straightening company
|
| Utterly bizarre, they weren't listening to a word I said
| yet wanted me to lead one of their companies?!
| devops000 wrote:
| Sometime this happened. I would prefer to own 100% of a
| smaller but profitable company instead of 5% of a high-
| growth/negative profits and starving for the next funding
| to survive.
| adventured wrote:
| There are many scenarios.
|
| There is also: 5% of a high growth, negative profit,
| thriving company that can rather trivially raise
| additional capital to keep pushing growth faster.
|
| Hundreds of start-up companies have fit that model over
| the last 10-20 years.
|
| See: Facebook, Airbnb, Zoom, Twilio, Square, Stripe,
| DigitalOcean, Cloudflare, Fastly, DocuSign, Teladoc,
| Datadog, Coinbase, Etsy, Lyft, Uber, DoorDash, Pinterest,
| Twitter, Snapchat, Okta, Zscaler, Hubspot, CrowdStrike,
| Palo Alto Networks, Splunk, Workday, ServiceNow, The
| Trade Desk, Snowflake, Roku, Unity Software, MongoDB,
| Robinhood, Palantir, Roblox, Veeva Systems, Wayfair,
| Peloton, UiPath (Romania originally), Anaplan, Qualtrics,
| Asana, RingCentral, Zendesk, Dropbox, Appian, Bumble,
| Smartsheet, Stitch Fix, C3 AI, Affirm, JFrog, Box,
| BigCommerce, Sumo Logic, FireEye, Qualys.
|
| Along with dozens of other prominent and smaller
| companies. And although not US companies, Shopify,
| Atlassian, Elastic, Wix, MercadoLibre and Spotify are
| also in that same bucket (and were funded by US venture
| capital). China also has a ton of thriving companies
| funded in a similar model (Alibaba, Pinduoduo, ByteDance,
| Didi, JD, Tencent, etc).
|
| These are significant companies that all followed that
| model - to one degree or another - and have IPO'd in the
| past decade (even Tesla's IPO was just 11 years ago, they
| exist courtesy of the same model).
|
| Salesforce lost money for a very long time. They were
| founded in 1999, and didn't reliably turn an operating
| profit until just a few years ago. In a few years they'll
| be larger than SAP.
| moneywoes wrote:
| Salesforce already beats SAP in market cap though no?
| VBprogrammer wrote:
| Surely the aim of the game is not to be left holding the
| bag when the music stops. In that situation you would
| need to be making sure your own financial position no
| longer depended upon that of the continued success of the
| company.
|
| Not saying that is a good way to run a business or the
| one I would personally prefer.
| streetcat1 wrote:
| What, where ? Can you give a concrete example where an
| American company copied European company?
|
| I.e. facebook cannot even copy snapchat and they have
| INFINTE resources, and 2B users.
|
| Also, Markets today are so huge, nobody dominating
| anything.
| igammarays wrote:
| More VC money is NOT always better. Instagram, WhatsApp,
| and other unicorns were built with extremely small teams.
| Latest case in point: Mailchimp, built with 0 VC funding.
| goohle wrote:
| Yep, lot of investor money can contribute to bankruptcy:
| WeWork, Katerra, etc.: https://www.bloomberg.com/opinion/
| articles/2021-06-08/katerr...
| pedalpete wrote:
| Instagram had raised over $57M in VC funding before being
| acquired. https://en.wikipedia.org/wiki/Timeline_of_Insta
| gram#:~:text=....
| andy_ppp wrote:
| I always just think about the investors you get access to if
| you do YC, and the network of people. I think if you are on an
| exponential growth curve but want the YC experience I think it
| would be worth discussing that 7%, I believe it's not set in
| stone and exceptions can be made. Why wouldn't YC want a
| smaller percentage of something that was clearly already going
| to be huge...
|
| And as for the 7% I'd say you might get that back with more
| funding for less equity if you're already one of the larger
| companies by demo day, lots of investors will throw money at
| you.
| rjzzleep wrote:
| I think it's worth looking at the leaked emails from when
| Google acquired YT.
|
| They didn't acquire it because they thought their tech was
| great or that they had a great product. They acquired it
| because a) the team was local and b) because sequoia invested
| in it.
|
| https://twitter.com/TechEmails/status/1433837480449613839
| redis_mlc wrote:
| > They didn't acquire it because they thought their tech
| was great or that they had a great product.
|
| Well, the actual fact is that Youtube was a great product
| with twice as many features as Google Videos as documented
| in the San Jose Mercury News diagrams published at the
| time. And growing faster.
|
| So however Google discussed (underestimated) it at the
| time, Youtube was not only a credible product, but a better
| one, which was understood by Google, if unstated.
|
| IOW, Google might have been arrogant about the difficulty
| of building a similar product, but that doesn't change
| reality that they didn't.
|
| > They acquired it because a) the team was local and b)
| because sequoia invested in it.
|
| That might be what the initial reasons were. But after
| Youtube won the eyeballs, Google paid a market rate for
| network effects and eyeballs to monetize at 1000x their
| initial valuation estimate.
|
| Also, Sequoia's funding meant that Youtube would continue
| to grow exponentially and stay ahead of Google Videos. So
| it's true that SV VCs are incestuaous across boards, but
| their funding also in reality builds out competitors.
|
| Similar situations are when Microsoft also chased Hotmail
| and Facebook as they climbed in value, far greater than MS'
| initial valuations and offers.
|
| Ballmer actually tried to motivate Zuck by saying he could
| buy a private jet if he took MS' offer. It's one of the
| most Ballmer things I've ever heard. The second-most is
| when he said he'd stay on the board for a year but bought a
| sports team instead - taking his toys and going home.
| dang wrote:
| Discussed here:
|
| _Larry Page: "I think we should look into acquiring
| YouTube" (2005)_ -
| https://news.ycombinator.com/item?id=28424339 - Sept 2021
| (245 comments)
|
| FWIW I think their reasoning must have changed drastically
| in the year between those initial emails and when they
| actually acquired Youtube. The emails suggest $10-15M as a
| price. They ended up paying $1.65B, which shocked everyone
| at the time (and now seems small). The difference is that
| in that year, YT grew exponentially. So this is actually an
| example of a high-growth win; indeed it's one of the
| classic examples.
|
| This sequence of tweets kind of confirms that:
|
| https://twitter.com/JGamblin/status/1433847336459964420
|
| https://twitter.com/jhuber/status/1433863045613174784
|
| https://twitter.com/JGamblin/status/1433865429932462083
|
| https://twitter.com/jhuber/status/1433866494752935938
|
| (the last one is the important one but the sequence is
| amusing)
| dang wrote:
| FWIW I'm pretty sure YC just offers a standard deal and
| doesn't make exceptions. For one thing it's way too hard to
| manage negotiations when working with so many startups (they
| fund close to 800 a year these days, and consider many more).
| Maybe there are exceptions (I don't know) but they'd be
| extremely rare.
| andy_ppp wrote:
| Fair play, I just seem to remember reading it somewhere
| that it wasn't set in stone. Maybe that's either changed or
| I misunderstood what I read or I'm remembering wrong (tried
| to Google for it but no luck). Clearly your knowledge of
| the matter takes precedence and my comments around the 7%
| should be disregarded.
| dang wrote:
| Actually I don't know any more about it than you do :) -
| other than I vaguely remember a couple cases where
| founders tried to negotiate the 7% and just ended up
| coming across as irritating. But probably they didn't
| have the goods to justify it...if it's big enough, why
| not? but in that case maybe it wouldn't make sense to
| apply to YC in the first place.
| andy_ppp wrote:
| I mean it depends, maybe you are bad at getting equity
| and don't have a feel for what a good deal is. Also I
| would think having the catharsis of people who have
| suffered through exponential growth and your company
| nearly dying many times would be very helpful. If there's
| a choice between doing YC and having great examples who
| have done it all before I'd personally be happy with the
| 7% just knowing I had people to reach out to with the
| same war stories.
| officialchicken wrote:
| Everything is becoming more remote friendly, YC isn't fighting
| against that trend. And their track record and prestige speaks
| for itself. "It's not what you know but who you know". But why
| ask that question on this site? Do you honestly believe someone
| will say 'No', give credible information, and not be down-voted
| or shouted over to oblivion?
| probably_wrong wrote:
| > _Hundreds of pages of paperwork to register the company in the
| US_
|
| This called my attention, as I imagine that a US-registered
| company with European founders would be a headache. Is this a
| requirement for YC companies? If so, could someone explain why? I
| can imagine several plausible reasons, but I'd like to know what
| the official one is.
| motives wrote:
| Its so investors can leverage the massive tax breaks available
| when investing in US based startups. Hence why YC also lets you
| found in tax havens like the Cayman Islands. Note this is
| probably not the official reason, as it's generally frowned
| upon internationally to encourage tax avoidance.
| sgrove wrote:
| The simpler, less cynical answer is that it's not just a US-
| based company, it has to be a Delaware-based company.
|
| This is because all of the laws around founding, investing,
| selling, etc. a company are extremely well-trodden in
| Delaware, and there are very few question marks as to how
| some strange eventuality or disagreement might be handled.
|
| Since startups are already incredibly difficult, this is a
| way of normalizing away some of the weird situations that
| could cause a startup to fail (and likely would never cause
| them to succeed), so that everyone is putting energy into the
| real unknown unknowns around the startup.
| motives wrote:
| My take is indeed probably more cynical and you're very
| correct about Delaware being well-trodden, but it does
| raise the question why the FAQs mention a bunch of well
| known corporate tax havens [0](Cayman Islands and
| Singapore) and not other well-trodden territories such as
| the UK, which has a really straightforward and efficient
| ecosystem surrounding startup law and incorporation
| (SeedLegals etc.) and plenty of history to extrapolate
| from. Also the FAQs mention nothing about having to be in
| Delaware, perhaps they should be updated?
|
| [0] - https://www.ycombinator.com/faq#q25
| sgrove wrote:
| It's an interesting question, but I suspect that there
| are other, easier ways of normalizing companies from
| those regions to be Delaware-based (or something that
| prevents it, perhaps in Singapore's case, not sure),
| whereas outside of those there's really only this nuclear
| "company flip" option.
|
| YC _hates_ anything specialized about a company re: this
| sort of thing - hence no special deals, etc., so I 'd bet
| more on other normalization factors rather than no
| normalization.
| borski wrote:
| This is the correct answer. Delaware corporation law is
| extremely well tested in courts and understood, which is
| what makes it attractive.
| black_13 wrote:
| Taking part in y combinator is it worth it.
| gootler wrote:
| Nope.
| dustingetz wrote:
| Here's a hot take, not sure if it's right:
|
| YC's 7% is the difference between founders vs VCs having control
| after two rounds assuming good growth. The issue is that the best
| startups like early stage MS Amazon Google Facebook don't need
| help attracting access and information. The 90% failed startups
| get the merit badge which will help you in your future career as
| a non-founder. And then there's good startups like Roam, which YC
| is not smart enough to detect. What's left is controversials like
| Airbnb, which never exists without YC. Are you Airbnb? And is YC
| smart enough to see that?
| aerosmile wrote:
| I would group this together with two other statements I heard
| that seem logical on the surface but ignore the reality of the
| market:
|
| "Why raise a seed round of more than $1.3M? If I can't build a
| business with 1.3M, then it's not a business worth building!"
|
| "What's the problem with [name of a top tier VC fund] being in
| my seed round? If they actually choose not to do our A round,
| then it's not a good business to start with!"
|
| The problem with all these statements is that you're looking at
| this from an overly idealized perspective where things always
| happen for a reason and there are no oh-shit moments. But the
| real world is messy and sometimes not rational. Perhaps your VC
| won't take your A simply because they already did two As that
| same year, and they are stretched beyond their limits. And
| perhaps your bigger competitor will sue you and suddenly your
| $1.3M will no longer be enough (at that point it's too late to
| raise again).
|
| So going back to your original statement "best startups don't
| need help attracting access and information" - so you're saying
| best startups always go from bootstrapped to a high valuation A
| without any seed checks in between? I mean, even Google took a
| bunch of seed checks, and it doesn't get more disruptive than
| two Stanford PhDs building a better search engine with patented
| IP. By the time all those seed checks, lower-than-otherwise
| valuation, and various not-super-clean deal terms (was Eric
| Schmidt really necessary and how much did he cost in cash and
| equity?) are factored in, the YC route turns out to be net
| positive even for the best startups with first-time founders.
| The only exception might be a serial founder with a prior exit
| and strong VC connections, eg Max Levchin.
| jjj3j3j3j3 wrote:
| Run away from Europe! It has no future. The place is too
| socialistic, that means lazy people will live taking money from
| the others. There is already an army of non-working people who
| gets social benefits for years or decades. The downfall of the EU
| is inevitable just like the downfall of the soviet union was
| inevitable. It is a construct that cannot exists for a prolonged
| period of time and will collapse some day.
| tluyben2 wrote:
| I did Antler in the EU recently: going in pretty much thinking it
| would not be beneficial, but it was. So going to say yes: for the
| mentoring and contacts it will be, even if you already have a
| bunch of startups under your belt.
| the-dude wrote:
| Did you get funded? Can I contact you? ( you are Dutch right? )
| nkotov wrote:
| Love this article. I had a chance to go through YC S20 and it's
| been life changing for me. As someone who lives in a non-target
| city (Charlotte, NC) and with no connections to SV and not having
| a fancy degree, getting into YC opened so many doors for me. As a
| first-time founder, the 7% that YC takes seems like almost
| nothing when in return you get access to very valuable
| information and network. If I was to start a new company again,
| I'd still apply for YC again.
| poorjohnmacafee wrote:
| Definitely understand the appeal for first time founders, and
| founders who are early in their careers so don't have contacts
| in the industry they are building products for, but having gone
| through an accelerator myself, I can't really imagine going
| through an accelerator a second time. Maybe for second time it
| still makes it easier to get introductions for b2b customers?
| But the accelerator I went through also taught a ton of
| strategies/tools for getting early customers without depending
| on just other companies in the network using each others
| products.
| corry wrote:
| There are many reasons - (1) the halo effect for future
| rounds of funding, not to mention Demo Day itself; (2) access
| to absolute god-tier advisors in areas that even though
| you're not a first-timer, you may not have experience with
| (e.g. you founded a B2B SaaS company before but now are
| trying a B2C thing); (3) help with hiring (YMMV on this).
| Also the nature of a highly focused sprint for 90 days to see
| if something is ready to take-off can be a great forcing
| function too (maybe on its own that's not compelling enough,
| but across these various items it seems reasonable to do it
| again).
| lbriner wrote:
| I think it is fair to say that YC are not just "an
| accelerator", they have a massive pool of investors and
| advisors. I too was in an accelerator but although famous,
| was nowhere near as potent as YC.
|
| Sure, there are things that you get frustrated at (like some
| 20 year old telling you, at 40, how to do finance, when you
| would rather be building) but it sounds like the biggest
| thing is the culture and being prepared to delegate a lot of
| what you think you know to the way YC tell you to do it. I
| think a lot of Entrepreneur types don't like being told that
| their way is not correct!
| fairity wrote:
| > If I was to start a new company again, I'd still apply for YC
| again.
|
| Once you go through YC once, you have access to all the
| information and alumni community in perpetuity (via Bookface).
| I think it's natural to want to go through YC again as a form
| of reciprocation (for all the value you received the first
| time), but you might find that the value-maximizing route is to
| take capital from other sources if you go to bat again.
| nkotov wrote:
| I'd apply not just for that but the access to group partners
| who know your business in and out is worth a lot to me. There
| were several instances where I needed advice from people who
| had experience my group partners helped.
| aerosmile wrote:
| The challenge of a random company posting about their
| experience at YC is the same as what you'll hear about HBS -
| it's always anecdotal and tied to the personal outcome of the
| writer. Are there people who spend a shit ton on HBS and don't
| return that investment soon enough? Sure. Would it make sense
| to go to HBS? Depending on where you net out, it can be the
| best or the worst investment you've ever made.
|
| The nice thing about YC is that you're not investing your cash,
| but equity. If you have the right
| business/team/timing/execution, then the cost of equity will be
| high, but you'll do better than you ever expected so it's all
| good. And if you don't do well, then your equity wasn't worth
| much to start with, and you essentially got the HBS experience
| for free without any of the debt.
| samb1729 wrote:
| By HBS do you mean Harvard Business School?
| aerosmile wrote:
| Yep
| ironmagma wrote:
| > Bookface is YC's knowledge base, and it answers 80% of the
| questions a founder can have about building and selling a
| product, be it to clients, candidates or investors. It's the most
| valuable content I've ever read.
|
| Something tells me this information isn't so scientifically based
| and cited as it could be. I wonder just how much of this
| contributes to the business monoculture we see today.
| polote wrote:
| When you are accepted at YC you are already a team which is
| autonomous and capable. With or without Bookface information
| things will not change much. Maybe you can save an afternoon
| because the information is easier to access and already
| curated. But nothing life changing for sure.
|
| What really is important is connection to other people, when
| you are starting a B2B saas companies for example the people
| you are talking with on BookFace, are all potential customers,
| and can make your first customers easier to find.
| aerosmile wrote:
| If the advice at YC was the same as what you get at HBS, we
| would have plenty of people who know how to scale but not how
| to start. And no, the art of starting something is neither well
| researched nor well understood, beyond of what you'll learn at
| YC. They really have formulated that field better than anyone
| else, however scientifically (or not) that knowledge was
| created.
| DoreenMichele wrote:
| Social things are inherently hard to study "scientifically."
|
| Business is an inherently social phenomenon. Going to people
| who know something about business because they have firsthand
| experience with business seems to be an industry gold standard
| for how you pass on useful knowledge.
| edouard-harris wrote:
| The advice on Bookface certainly isn't scientifically based in
| the strict sense of having been compiled through double-
| blinded, controlled studies. But the writer and publisher of
| this content (the YC team) has both 1) intimate access to the
| largest single dataset of startups that has ever existed; and
| 2) an extraordinarily strong financial incentive to give
| consistently excellent advice to its portfolio companies.
|
| That doesn't mean their advice is always right, but it does
| mean they have both the capability to quickly discover when
| they're wrong, and a powerful motivation to quickly correct
| their mistakes. So at any given time, we should expect the
| advice YC gives its portfolio companies to be pretty good.
|
| Given that, it's worth considering whether what's perceived as
| "business monoculture" might actually be better described as
| "set of business practices that have been shown to actually
| work pretty well in the real world".
| ironmagma wrote:
| If it works, it's science. If it doesn't work, it's not
| science. That's not the part I'm concerned about -- it seems
| much less important whether a given practice will net you
| money, than whether said practice is actually a good thing to
| do. The business types have difficulty distinguishing "good
| advice" and "advice that makes you rich right now" as it is.
| btilly wrote:
| _If it works, it 's science. If it doesn't work, it's not
| science._
|
| That's the worst criteria that I've ever seen for science.
| Placebos work, but aren't science. And even if you do
| science perfectly, you aren't guaranteed of success. And
| most advice that you encounter will work for some people
| but not others. Does that make whether or not it is science
| depend on the audience?
|
| No, science is a particular process and methodology
| supported by a set of norms that enable us to continue
| building a fact based picture of reality. Doing science
| gets good results. But science is not defined by the
| quality of its results.
| [deleted]
| ironmagma wrote:
| This is obviously a matter of deep and extensive
| philosophical debate, and I'll admit my definition isn't
| perfect, but to address your comment:
|
| > And most advice that you encounter will work for some
| people but not others. Does that make whether or not it
| is science depend on the audience?
|
| The question is whether or not it works in aggregate,
| i.e. for most people to whom the advice could apply. If
| it doesn't, then we would say it's not scientifically
| sound advice.
|
| > science is a particular process and methodology
| supported by a set of norms that enable us to continue
| building a fact based picture of reality.
|
| Science is not one process or methodology; there is the
| scientific method, but not all science uses it. For
| example, paleontologists cannot form an experiment to
| test a hypothesis of what killed the dinosaurs. But
| science can still give us a fairly accurate picture of
| what probably killed them.
| lotsofpulp wrote:
| I think there is a spectrum of how "science-y" a claim
| is, based on how much or how rigorous use of the
| scientific method is used to come to the conclusion.
|
| Sort of like this comic:
|
| https://xkcd.com/435
| dang wrote:
| Please edit out swipes from your posts here. Your comment
| would be just fine without the first sentence.
|
| https://news.ycombinator.com/newsguidelines.html
| sealeck wrote:
| > If it works, it's science. If it doesn't work, it's not
| science.
|
| I would suggest that "science" is loosely based around the
| idea that objective truth can be derived through collection
| of empirical evidence by attempting to reject null
| hypotheses.
|
| Of course it is incredibly limited and we ascribe credit to
| "science" for a lot of things which are not "science".
| sfink wrote:
| From what I've seen, YC will always advise going for a high-
| growth, high-risk strategy, and their advice and knowledge
| base will always push in that direction because that's what
| is best for YC.
|
| That _might_ be what 's best for a given founder or company,
| but it may very well might not be. You will have to be
| proactive and assertive in what works for you to avoid being
| bullied into the standard YC/Silicon Valley gamblers'
| playground point of view.
| aerosmile wrote:
| I would love to see where you've seen that. Ramen
| profitability is one of the most often quoted principles at
| YC. It's easy to make assumptions and pad them with "from
| what I've seen," but it's not helpful to other founders.
|
| Are there instances where it makes sense to step on the
| gas? Of course. Are YC valuations high, leading to large
| rounds and plenty of liquidity? Yes. And yet, nobody at YC
| will tell you to scale before you find your PMF.
| sfink wrote:
| That's fair, since I am not a founder and have no direct
| personal experience with YC (nor interest in gaining
| such). My "from what I've seen" is based on reading HN,
| talking to a friend who was accepted into YC but turned
| it down, and pg's essays. As such, I will confess that
| this is a bit of an uninformed cheap shot -- but given
| the confirmation bias of current and "successful"
| founders and the political/social pressure on all
| founders, I'm not sure this viewpoint would be exposed if
| it existed.
|
| I furthermore admit that my opinion is heavily influenced
| particularly by that last component; I find pg's
| seemingly rational exhortations of "how to be successful"
| to be slanted and self-serving. They are excellent
| logical argumentative essays that assume a limited
| definition of success and guide the reader inexorably to
| the best way to achieve that particular flavor of success
| while ignoring (and subtly implying the nonexistence of)
| others. I may be inferring too much about YC's actual
| behavior from what I glean from those (otherwise
| excellent) essays.
| dang wrote:
| That's not quite accurate. YC's approach has always been to
| encourage founders to do what's best for them. This was
| actually something that sharply distinguished YC from the
| rest of the investment world in the beginning. Industry
| insiders couldn't believe that YC would leave money on the
| table when the founders wanted to do something else. I
| remember one person talking about puzzling over the
| paperwork going "why would they do this?" Even today, when
| things have shifted in a founder-friendly direction (thanks
| in part to YC), it still stands out that way.
|
| You're right that YC's business depends on high-growth
| wins. But YC knows perfectly well that only a few of the
| startups it funds will reach that state. Where the two
| outcomes--high-growth win vs. what the founders want--end
| up conflicting, YC has always advised the latter.
|
| If you think about it, there isn't a conflict anyhow,
| because no startup is going to become a high-growth win if
| the founders feel it doesn't work for them. What works for
| founders _is_ what 's best for YC, generally speaking, and
| the company has been organized around that principle from
| the beginning. Founders that want to be a high-growth win,
| and show progress, get a lot of help with that, but people
| aren't pushed to do that if they don't want to. The
| optimization is global, not local.
|
| (Btw, although I work for YC, I refer to it in the third
| person when describing the investment business because I'm
| not really part of the investment business and have mostly
| just observed it as an outsider - albeit inside the wall,
| if that makes sense.)
| fairity wrote:
| One thing that's bothered me is that YC doesn't actively
| help its founders pursue early exits. YC will support
| your decision to take an early exit if you find one, but
| they rarely help you find your way to one.
|
| There's a whole world of PE that will acquire business
| for 5-15x EBITDA, but you won't hear anyone at YC talking
| about that even though those sort of outcomes are life
| changing for first-time founders.
|
| Curious about your thoughts there.
| lifeisstillgood wrote:
| Tell us more about this world of PE - honestly it's the
| first I have heard of it.
|
| My understanding of the world was bootstrap - bought by
| mom and pop outfit or slightly larger competitor vs VC -
| series A-Z or burn out
| [deleted]
| edouard-harris wrote:
| > YC will always advise going for a high-growth, high-risk
| strategy
|
| I agree that this is indeed YC's bias, but it's incorrect
| that they will always advise founders in this direction.
| That claim is inconsistent both with my direct personal
| experience as a YC founder, and also with the experiences
| of other YC founders who I know intimately and have spoken
| to about these sorts of questions.
|
| The fundamental reason claims of "being bullied" and
| similar are incorrect is that there's another major
| component to YC's incentives. Namely, YC loses out on an
| enormous number of great startups if there's even the
| slightest justified perception that they do anything close
| to bullying their founders.
|
| YC's time horizon is naturally long: their biggest
| investments pay off over a 7-12 year time scale and almost
| all of their portfolio is extremely illiquid at any given
| time. That means they're especially culturally sensitive to
| actions that carry the risk of long-term negative effects,
| even if those actions also have positive short-term
| effects. Bullying founders into risking it all is just such
| an action, so they'd default to avoiding it even if it
| worked (which, by and large, it does not).
| bpodgursky wrote:
| You might be shocked how much true information is not peer-
| reviewed.
| ironmagma wrote:
| Probably not. Having citations is simply (a la Wikipedia) a
| reasonable-enough proxy for being "actually researched" as
| opposed to arbitrary fluff.
| sealeck wrote:
| I would argue that this is a bit like suggesting that
| "having bricks complying with [some safety standard] is a
| reasonable-enough proxy for being 'actually structurally
| sound' as opposed to liable to collapse and kill you in the
| middle of the night"
| lbriner wrote:
| The ultimate skill of the CEO is looking at what is and isn't
| working and adapting. If you read an article A about how Air
| BnB worked out by visiting every customer and taking photos,
| you have to decide whether that translates to your business as
| a way to fix your troubles or not.
|
| I think the use-case is more based on company X struggling with
| a particular problem (e.g. how do you please the mass market)
| and finding someone who has faced the same problem and learned
| some stuff along the way.
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