[HN Gopher] Why you should not apply to YC
___________________________________________________________________
Why you should not apply to YC
Author : georgehill
Score : 350 points
Date : 2024-04-20 18:26 UTC (4 hours ago)
(HTM) web link (twitter.com)
(TXT) w3m dump (twitter.com)
| orangesite wrote:
| This is the nub of the matter. I could have saved myself a
| decade. The only thing from YC that survived our relationship was
| the incorporation of the company.
|
| I still think there's a massive gap in the market for an ergodic
| startup community where the young ambitious people tell the
| Gen-X's to go fuck themselves with a police baton and instead
| enjoy the benefits of pooling the risks & sharing the rewards.
| MattGaiser wrote:
| I imagine the problem is how do you pool the risk without being
| able to assess with confidence who will succeed and who will
| fail? And how do you prevent freeloaders who don't expect to
| succeed wanting a share?
|
| And if you could make that determination accurately, why
| wouldn't you use it to avoid pooling risk among all but an
| extremely small pool?
| senkora wrote:
| Whatever else, it is to YC's credit that they don't censor
| criticism of themselves on their own platform.
| verticalscaler wrote:
| lol.
| Uehreka wrote:
| Nah, they don't get points for not censoring criticism of
| themselves. It would just be negative points if they did.
| wg0 wrote:
| No doubt but I additionally see it as a pretty American
| cultural trait as well.
| mizzao wrote:
| "There's no such thing as bad publicity."
| whiterknight wrote:
| Just because you see some doesn't mean they don't.
| loceng wrote:
| And don't mention a dislike for "that one thing" too many
| times.
| dang wrote:
| I don't know what one thing you're referring to, but a core
| principle of HN is to avoid repetition, and especially the
| repetition+indignation combo, which is the commonest and
| most tedious thing on the internet. So to me it sounds like
| you're referring to HN working as intended, regardless of
| what the thing is.
|
| https://hn.algolia.com/?dateRange=all&page=0&prefix=false&s
| o...
| lelanthran wrote:
| TBH, if you're already holding a product in your hands, that you
| created, it's really hard to tell if you're holding an anchor or
| lightning in a bottle.
|
| Using VC money to make that determination is kinda a no-brainer.
|
| OTOH, if you're still in the exploratory phase (I am), is it wise
| to tie yourself to the mast of a ship that is already sinking?
|
| In the latter scenario the smallbets.com proposition looks
| better.
| islewis wrote:
| It feels to me like YC's name-drop doesn't have a purpose beyond
| just attention/view grabbing, despite there being a few nuggets
| of solid reasoning sprinkled throughout the post.
|
| > That's 1.25%. To be fair, that's actually quite impressive, but
| let's say you have the stamina and willpower to go through YC
| three times in your lifetime. You'd need approximately 26
| lifetimes to hit the jackpot!
|
| This isn't the least bit unique to YC, it's just the cold reality
| of any high-growth startup.
|
| If OP had framed this as "Moonshot Startup vs Lifestyle Business"
| it would have felt more like a good faith argument. Even "Do you
| have the risk tolerance to be a founder" would have worked. But
| basing a thread titled "Why you shouldn't apply to YC" off an
| illformed assumption of the readers risk tolerance is naive at
| best (and likely malicious given OP is selling competing
| services).
| Pedro_Ribeiro wrote:
| Also that sentence on "you need to go through YC three times in
| your lifetime, so you need 26 lifetimes" is absurd. I got a
| migraine trying to understand his line of reasoning.
| romafirst3 wrote:
| The reasoning is a bit reductive, it makes sense if you think
| of success as binary (you become a billionaire or you don't,
| which in fairness is what yc and many VC firms push).
|
| Obviously you can fail to become a billionaire and make some
| non life changing amount of money and even make what to a lot
| of people is life changing, but for this outcome (which is
| still uncommon) you would be better off not trying to become
| a billionaire.
| gamerDude wrote:
| To me, this tweet seemed much more anti startup trying to grow
| big than anything anti-YC. Only using the tweet for marketing as
| mentioned at the bottom.
|
| At first, it's against dedicating your life to your startup
| (which presumably you are already doing or at least want to do)
| and then states that YC actually has a good success rate for
| unicorns.
|
| Then he talks about doing some brainstorming to find ideas and
| product market fit, but at least from my perspective YC doesn't
| advocate for this at all, but rather talking to customers,
| getting their buy in and then making something that solves
| customer problems. Aka, not brainstorming at all.
|
| And then goes on to say that YC has lots of young people rather
| than older (more likely to be successful founders). But doesn't
| do any of the data diligence on percent of founders by age by
| industry and by YC vs. not.
|
| And finally he focuses on saying that only the unicorns were
| success stories and no one else, while advocating that you should
| aim for a smaller goal. But doesn't acknowledge any data of
| companies from YC that aren't unicorns but are still operating,
| sold for less than a billion, etc.
|
| I personally think that looking from the outside that YC is not
| for everyone and is geared towards the VC route. But if you want
| those things, then these arguments aren't valid for why you
| wouldn't apply.
| pclmulqdq wrote:
| This sort of became an anti-VC rant, definitely, and also a
| little unfair to the product YC offers. It's a legitimate
| product in the market, not a scam, and the 22-year-olds who do
| it are not getting duped.
|
| My biggest issue with YC is that the deal isn't very good.
| Giving up 7-10% for $500k is pretty crappy for any company that
| has a decent shot at becoming anything good. That is why I have
| only ever applied to YC when my company ideas were very
| speculative. If you already have a network and a decent
| platform to communicate with people, as well as the motivation
| to go at it for yourself, you're giving up a huge chunk of the
| company for a pittance.
|
| If you already have the ability to go talk to a VC and an
| idea/product/company that is good enough to make it into YC,
| you don't need YC for your company. If you can sell YC on
| investing in you, you can sell your product.
|
| However, it does make sense to do YC right out of college to
| get the networking benefits and the credibility signal. That's
| why so many 22 year olds do it. It sacrifices your stake in
| your first company in exchange for helping you as an individual
| later in your career.
| boulos wrote:
| > If you already have a network and a decent platform to
| communicate with people, as well as the motivation to go at
| it for yourself, you're giving up a huge chunk of the company
| for a pittance.
|
| But that's literally the point. You suddenly get a huge
| network that would help you get through the early stages.
|
| It's certainly true that many founders would find better
| terms elsewhere. However, it's also true that most companies
| fail. So negotiating better terms usually doesn't matter
| nearly as much as making the company more successful. (The
| same rationale applies to employee equity grants)
|
| Like you said, for people with no connections, whether just
| out of school or not, it's valuable.
| mlhpdx wrote:
| Agreed. YC from my POV is attractive not for the money but
| the motivation. The peer influence (encouragement,
| competition, accountability) is what I feel would improve
| my chances of building something amazing.
|
| But I can't disagree with the Tweet's argument that what's
| good for YC (swinging for home runs) isn't good for the
| vast majority of founders (but it is what those founders
| want, and why the lottery is a thing).
| sokoloff wrote:
| There are a lot of ideas (virtually all of them) for which
| I'd give up 2-3% for $0 to go through the YC process and
| network even if I intended to bootstrap or think of the $500K
| as getting them the "other" 5% (or an ~$10M valuation).
| pclmulqdq wrote:
| Then go for it. I don't know if you've ever applied for YC,
| but it sounds like fun. I regret not doing it right out of
| college.
| bko wrote:
| The biggest thing that sours me on YC is the exclusivity.
| They gets tens of thousands of apps for something like 300
| spots. For all the criticism of artificial scarcity of places
| like Harvard, why is this different? As peter theil would
| say, competition is for losers.
|
| You shouldn't participate in games that are zero sum and they
| shouldn't pretend they have some kind of carefully thought
| out scientific method to determine who should get in. Half
| the companies I see in the batch are dog shit. A third of the
| companies are "ideas only" which is basically now an Opaque
| beauty contest. Just opt out and boycott these stupid status
| games
| robertlagrant wrote:
| > They gets tens of thousands of apps for something like
| 300 spots. For all the criticism of artificial scarcity of
| places like Harvard, why is this different?
|
| How is Harvard artificial scarcity? How could YC do this
| any other way, when they have a limited number of staff and
| a quality bar to meet?
|
| > Just opt out and boycott these stupid status games
|
| Sorry - I'm struggling to follow. Do you think YC
| membership is a status game? I thought it was a real
| program.
| arciini wrote:
| I did YC when I was 27 after trying to do a tiny bit of
| fundraising, and kinda agree with you, but I think you can
| replace "22 year old" in your comment with "anyone not super-
| well-networked in the startup scene".
|
| The truth is, even if you have pedigree (top-tier college,
| worked at FAANG and startups), the very first time
| fundraising is going to be pretty hard and annoying unless
| you've already been going to a lot of founder meetups, want
| to start something in a hot field, or have VC's in your
| personal network. This is especially true after the money
| wave from pre-2022 receded.
|
| I do feel like I probably could've raised on better terms,
| but I'm not sure it would've improved the trajectory of my
| life or expected value. YC taught me a lot about fundraising
| that I didn't know I didn't know. Compared to other VC's
| we've worked with (who have all been pretty great), YC has
| provided more specific advice to our stage, better
| technology, and a slightly better network.
| jumploops wrote:
| > One of the bad learnings you get from YC is that there's a
| formula for success, and it looks like this: First you do some
| brainstorming.
|
| This isn't how YC works at all...
|
| If this guy had gone through YC, maybe he wouldn't be trying to
| sell an online course.
| llamaimperative wrote:
| Yeah this thing is rife with "I have no clue what YC actually
| advocates"
| brigadier132 wrote:
| Let me give the other side of this because I used to believe this
| too
|
| I'll start with the most important first
|
| 1. When you take YC money you get to pay yourself. You wont be
| paying yourself FAANG money (if that's still achievable nowadays
| who knows) but you are paying yourself to build a company you own
| the majority of. So yes, they want you to dig to the center of
| the earth to find gold but you are being paid to do so.
|
| 2. I don't think starting a niche startup is meaningfully easier
| than starting a startup seeking uber growth. While a tech startup
| might require more up front knowledge I don't think startup ceos
| are working harder than the baker that's waking up at 4 am every
| day.
|
| 3. YC has a very good success rate and I think it's related to
| services they provide founders and the network.
|
| I think if your business falls into the category of hyperscale
| startup and you are a first time founder I really think YC is
| worth it. They seem to have a system that works.
| bruce511 wrote:
| I concur that the system works.
|
| The point of the article is who does it work for?
|
| Personally, I agree with you. If you're just coming out of
| college this is a great way to get a couple years of salary and
| a chance to work on whatever you like. Give it a few years, if
| it doesn't work out it hasn't really cost anymore than a post-
| grad course in terms of time.
|
| Basically you can view the whole program as a simple "job" with
| pay, with a 1% chance of going big. That's probably worth
| taking a punt on.
|
| 99% will fail, so frankly I wouldn't spend more than 5 years on
| this path, but if you're young you can afford that time.
|
| Honestly this approach seems a lot more attractive than putting
| up my own life savings to start a business. Or working without
| income for a year or whatever.
| computerdork wrote:
| And a startup doesn't need to make 1 billion per year to be a
| success. How about one that makes 100 million? or even 10
| million? If the company is sold, the founders will be rich
| (not ultra rich, but have a million or more).
|
| And, for ycombinator, the number of "startup exits" is: 351
| (according to this page:
| https://explodingtopics.com/blog/startup-stats). Am no expert
| at startups, but this may mean that out of the 4000 that when
| through ycombinator, ~9% where valuable enough for investors
| to take profit. That sound pretty good to me.
| mlhpdx wrote:
| I hope, perhaps against mainstream opinion, that the myopic
| focus on the young will be proven flawed.
|
| I see the launches and highlights YC posts on LinkedIn and
| elsewhere and see no one like me, yet am confident I would
| both benefit from it and be more likely to build something
| amazing than the majority (that being a particularly
| uninformed opinion, since I know only a few personally).
| tossandthrow wrote:
| yes, you are correctly taking alternatives into consideration
| here.
|
| while the author is Tru about the reasoning they fail to
| elaborate on the alternative.
|
| take a job with youghly the same pay as working in your own
| startup? that would seem terrible.
|
| obviously, if you have opportunity with a much higher expected
| pay, then that should be the go to opportunity.
| DVassallo wrote:
| Taking a job is indeed an alternative. You pay yourself, but
| you get little control on what you work on (apart from
| choosing which company to work for). However, you can usually
| leave easily with a 2 week notice without many downsides.
|
| Getting accepted into YC is quite similar to getting a job.
| You get paid (less), but you get more control on what you
| work on. Even though technically you have full control, you
| don't really do that for moral and ethical reasons. You will
| want to do things that have a chance of paying off big time,
| because that's why your investors trusted you with their
| money. And if you get fed up, it's not as easy to leave. What
| about your investors? What about your reputation? Will you
| want to let these people down? Etc.
| yinser wrote:
| From the man who said MKBHD was irresponsibly criticizing a
| "nascent" tech project that has hundreds of millions in funding
| and built a dud
| DVassallo wrote:
| I said MKBHD was irresponsible for using a highly sensational
| headline (worst product ever reviewed) when he has such as
| large influence. I never said what you're implying.
| sneak wrote:
| You're going to need to substantiate "irresponsible" a lot
| more than "he said an opinion that he actually factually
| holds to a lot of people".
|
| Who was harmed? What was the source of that harm? What was
| the moral or ethical failing that caused the harm?
|
| I think you have cause and effect mixed up.
| pb7 wrote:
| Sometimes the truth is sensational. I hope you know you lost
| at least one long time follower after your recent stretch of
| engagement farming. You've fallen off. Good time to lay off
| the tweets and look inward.
| mslt wrote:
| Please explain how someone whose job is to share their
| opinion is being irresponsible for sharing their opinion.
| fizx wrote:
| Ehhh, there's pros & cons, just like anything else.
|
| Maybe some VCs want you to dig to the bedrock, but not all, and
| everything in life is a negotiation.
|
| I look at YC as grad school for entrepeneurs. You'll learn a ton,
| build a network, and have a good time for a while. Unlike grad
| school, there's direct upside, and you won't have to take out
| loans or live off the lab stipend.
|
| Now would I go to grad school at 40? Maybe, but the calculus is
| certainly different than at 20.
|
| YC is clearly good for something. You really have to figure out
| how to make it work for you.
| ttul wrote:
| Join a CEO group and set up a cross-holding of stock between the
| companies in the group. Now you're all digging for gold at the
| same time. You don't have to be a VC and you also don't have to
| be that person with 26 lifetimes to spare.
| StressedDev wrote:
| The problem with this is VCs give you money, and some (like
| YCombinator) also give you advice. The CEO group gives you no
| money. Also, how do you prevent parasites from entering your
| CEO group?
| hahahacorn wrote:
| In each section I got maybe 1/3rd of the way through before
| reading something that was just so wrong and exposed his lack of
| knowledge and skipped to the next section.
|
| Which is a bummer! I got excited by the title but disappointed by
| the content.
|
| I'd love opinions from people who have actually gone through YC
| and their arguments against applying to YC.
| flappyeagle wrote:
| This dude is posting for clout or something.
|
| In one thread he gets into histrionics about an overfunded VC
| hardware startup getting a bad review and in another thread he
| criticizes the existence of such companies.
| andrewmcwatters wrote:
| This post is an ad.
| kumarm wrote:
| This is the same guy who went viral criticizing MKBHD last week
| right? Here is a good information on what is happening:
| https://news.ycombinator.com/item?id=40060554 from that
| discussion.
|
| There is incentive to take a public view that is anti current (or
| trend or popular or right) thing to do that makes you go viral.
| alangibson wrote:
| I came here to point this out.
|
| I'm automatically skeptical when this came from the author of
| one of the dumbest tweets I've ever read.
| loceng wrote:
| Pointing this out seems to popular in comments, and doesn't
| seem to add anything to the conversation.
| sneak wrote:
| Part of being an interesting contrarian is that you have to
| actually be right about stuff. Simply espousing the opposing
| view to the popular view is going to be wrong more often than
| not.
| bschmidt1 wrote:
| Hahah he's like "YC is a big scam" but when you keep scrolling...
|
| > I charge you a one-time payment of $375, and you get access to
| my community
|
| It basically invalidates the entire post. Maybe some good points
| were made about investing _in general_ but they should be
| delivered by someone who doesn 't run an Andrew Tate style self-
| help scheme, and shouldn't be advertised in the very post
| criticizing YC of being inauthentic.
|
| YC is infinitely more prestigious and well-connected than this
| guy's $375 program - and how dare he talk about YC coming after
| my "personal economy" when he's charging $375 for "access to a
| community". Last I checked HN is free and I bet there's a lot
| more valuable info here than that self-help nightmare forum.
|
| Furthermore, we know YC is exclusive. But the fact that YC is so
| Ivy League and startup focused is also why HN is not just a
| random subreddit, or some Twitter hatefluencer pyramid scheme.
| nostrebored wrote:
| There are few people I think are as consistently wrong as Daniel
| Vassallo. His writings on cloud are an exercise in fanaticism,
| and it looks like he's turned that failed venture into yet
| another course.
|
| People selling you courses and community are mostly grifters.
|
| The content here has nothing to do with YC in particular, and
| makes a few interesting claims:
|
| 1. YC founders are all young, impressionable 20yos
|
| 2. YC encourages you to make up problems to solve
|
| 3. That an exit less than a billion dollars is a failure
|
| All of which are easily dismissed by watching actual content from
| YC.
|
| 4. That a 1.25% chance of creating a company worth more than a
| billion is a bad outcome
|
| Honestly what an opportunity!
| ec109685 wrote:
| 5. Saying YC doesn't encourage businesses to pivot or explore
| until they find product market fit.
| doctor_eval wrote:
| Yeah this one got me. I have nothing to do with YC but I was
| hired to consult to a couple of really nice young guys who
| were YC alumni. They worked their asses off doing All The
| Right Things - talking to customers, reaching out to people
| with deep experience :) - and when they realised it wasn't
| going to work out, they pivoted right away.
|
| This is the exact opposite of digging in one place for the
| rest of your life, and as someone who has done a few
| startups, I was super impressed by their attitude and their
| ability to let go (even though I was out of a gig!)
|
| I think they're going to do great whatever they do, and at
| least some of that will be because of what they learned at
| YC.
| mlhpdx wrote:
| Has YC published age demographics for batches somewhere I've
| missed? They've talked a bit about it, but I haven't seen hard
| numbers.
| fuzztester wrote:
| >4. That a 1.25% chance of creating a company worth more than a
| billion is a bad outcome
|
| Slight logical problem, or unclear or poor wording here:
|
| A chance is quite different from an outcome.
|
| The first is in the future (chance), while the second is in the
| past (outcome).
|
| A (1.25% or other) chance means something _may_ happen.
|
| An outcome means something _did_ happen.
|
| Also, a 1.25% chance in the past does not in the least imply
| the same chance in the future. See stock trading, for example.
| fuzztester wrote:
| To make it more clear, you were talking as though a chance is
| actually an outcome.
|
| >4. That a 1.25% chance of creating a company worth more than
| a billion is a bad outcome
| htk wrote:
| "1. YC founders are all young, impressionable 20yos"
|
| Exactly the demographic he's targeting with his "courses".
| Easier prey for his engagement farming.
| worik wrote:
| Helpful comment
|
| > People selling you courses and community are mostly grifters
|
| "Mostly". It could be argued that that is the purpose of HN
|
| I do not know, but I am glad of it
|
| And I'm not buying
|
| (Absolutely not complaining)
| the_real_cher wrote:
| 7% of your company for 500 Grand startup money a Network on a
| moonshot idea?
|
| that's unbelievably good!
|
| If he finds this bad... then he finds venture capital and bank
| lending bad in general.
| holoduke wrote:
| Good? My two startups were 2m for 5% shares. Pretty standard.
| the_real_cher wrote:
| The fact that you can get such large amounts of money for
| such a small amount of equity in general is good.
|
| what were your startups?
| jameslevy wrote:
| First money in at a 40M valuation? Assuming this is pre-seed,
| that seems like the investor is taking on a lot of risk based
| on the distribution of outcomes.
| dazh wrote:
| My understanding is that the standard deal is more like $2MM
| at 20%. Raising that at 5% is an insanely good ideal.
| abeppu wrote:
| Hmm, I think this criticism maybe has a kernel of truth, but
|
| - I think the "ergodicity" concept is kind of being abused. As I
| understand the term, ergodicity describes systems whose dynamics
| cause them to eventually visit all states in a way that lines up
| with some probability distribution. In MCMC one uses this to
| argue that a chain that runs long enough can be used to generate
| samples from a distribution.
|
| - But the response to his actual concern I think should be
| something more like income pooling. E.g. my understanding was
| there was some movement towards this for minor league baseball
| players, who have a modest chance of really large incomes. I
| think poker players also make similar arrangements. But
| critically, pools make sense when all the participants in each
| pool have pretty equivalent odds of making getting a large
| payout. With very early founders of course smart, reasonable
| people could have wildly different ideas of who is in equivalent
| tiers. - You could try to ask a bunch of informed
| investors to rate or rank, and hope that average estimates are
| good -- but if those investors don't also have the opportunity to
| invest in a way commensurate with their ratings, they have no
| incentive to be accurate.
|
| https://www.npr.org/2019/10/25/773532516/some-baseball-playe...
| kyleyeats wrote:
| Confusingly, this tweet is about why you _should_ join YC.
| History is full of young men on boats, in the wilderness and in
| formation to have a small chance at glory. All of those guys were
| giving up a lot more than a 7% stake, and eating worse than
| ramen, and living worse than a cramped apartment.
|
| The reason you shouldn't do YC is simpler. It commits you to the
| VC track. Whatever you build is eventually going to suck because
| of enshittification.
|
| YC = VC
|
| If the VC thing doesn't bother you then try for YC _for sure_. It
| is overwhelmingly the best way to do that unless you 're a rich
| kid who can leverage his connections. And even if you are that
| rich kid it's still the best way.
| dang wrote:
| > It commits you to the VC track.
|
| That's not true. YC always supports what founders want to do.
| If founders don't want to raise VC, YC supports them in that
| choice.
| kyleyeats wrote:
| I didn't mean it as a top-down thing but as an aligned goals
| thing. If you do this you're basically paying a 7-10% tax on
| everything you do, forever, without the hyper-growth to
| justify/offset it. It's like selling out to Hollywood and
| then only doing bit roles. If you do YC, you _should_ take
| VC. You would be stupid not to. I mean, YC _is_ VC, right? It
| 's a consistency thing.
|
| No-YC and no-VC makes sense. Yes-YC and yes-VC makes sense.
| Yes-YC and no-VC does not make sense.
| lettergram wrote:
| We applied to YC and were rejected, which was probably good for
| us (less dilution, etc.). That said, you get some pretty unfair
| advantages being a YC company.
|
| My cofounder has 20 years in the industry and I have a solid tech
| background with a track record of success. We had leads at the
| time; a demo product, etc. We raised without YC and have been
| doing well.
|
| One of competitors (little experience, no product, no customer
| leads) got into YC. Immediately they were considered credible.
| They are getting effectively the same interest with nothing and
| that's what YC offers. They are good at branding and offer you
| their brand, advice and network. All of which is well worth the
| cost if you have nothing to start with.
|
| Now ultimately the best product will win and I'm confident in
| ours. That said, for someone starting out with little network or
| connections it's worth YC.
| rgbrenner wrote:
| This is a repost from the authors blog before the W24 deadline:
|
| https://news.ycombinator.com/item?id=37869760
| dang wrote:
| Thanks! Macroexpanded: _Why you shouldn 't join Y Combinator_ -
| https://news.ycombinator.com/item?id=37869760 - Oct 2023 (320
| comments)
|
| The fact that this was reposted only 6 months later makes this
| unequivocally a dupe by HN's standard (see
| https://news.ycombinator.com/newsfaq.html). Normally we would
| mark it as such, which removes a thread from HN's front page.
|
| I'm not going to do that, though, because the principle
| described here is more important: https://hn.algolia.com/?dateR
| ange=all&page=0&prefix=false&qu....
|
| "We moderate less, not more, when YC or a YC startup is the
| story" is the first rule of HN moderation. That does not mean
| we don't moderate at all--that would be too big a loophole. But
| we always moderate less than we otherwise would.
|
| A related principle is that we trust readers to be smart enough
| to make up their own minds. Between this thread and the one I
| posted yesterday
| (https://news.ycombinator.com/item?id=40091622) I think HN
| commenters are doing a good job of that.
| redbell wrote:
| Surprisingly, the OP of this twitter thread is the same as the
| link above!
| georgehill wrote:
| Yes, you noticed. Although I very much disagree with Daniel's
| post, it is always good to have two different perspectives.
|
| Respect to Dang for not taking it down.
| ec109685 wrote:
| It's annoying he doesn't even revise when he is clearly wrong,
| e.g. around the idea that YC doesn't encourage pivots:
| https://news.ycombinator.com/item?id=37870099
| benatkin wrote:
| This comment in the thread is in disagreement with your
| point:
|
| > As a former employer for a YC funded company that was shut
| down against the founder's wishes, forced to via the investor
| board; I can say that this article does not universally
| wrongly characterize the YC experience.
|
| I have heard of YC doing pivots, so "dig a hole in the same
| spot until you reach the boiling magma" doesn't characterize
| it either. However, that doesn't make YC look good from the
| perspective of a founder wanting to be in control. What I
| remember hearing from YC is of cases where a partner tells
| you to pivot, not where they let the founders decide to pivot
| themselves.
|
| Edit: I realized the main comment linked to jibes with what I
| was saying:
|
| > The overwhelming feeling is: be humble in the face of
| reality, try something and try to try it in a way that you
| can assess whether it's working -- quickly/cheaply -- then
| try something new.
|
| ...try something new that's recommended by the YC partner(s)
|
| I am more positive than negative on YC though. There is no
| perfect balance between being too hands-on or too hands-off
| for a startup accelerator.
| pclmulqdq wrote:
| I've always been sort of leery of the idea of pivots, because
| a pivot for a company really doesn't make a lot of sense to
| me unless it's more of a course correction, and/or heavily
| utilizes the company's built-up IP (eg Slack, the famous
| pivot from a gaming company to a productivity tool that they
| made for themselves).
|
| What would make more sense for everyone is for the company
| "pivoting" to simply shut down, return the unused money to
| the investors, and reincorporate to do the new thing. That
| new thing would then go get investment for itself from
| investors who are more aligned with the new mission.
| Lerc wrote:
| I can see pivots being worthwhile for existing investors if
| the business needs more investment. If the pre-pivot is a
| worthless thing you own 7% of, it would be better to inject
| another bundle to own 14% for a new thing instead of
| starting afresh and owning 7% of nothing plus 7% of a new
| thing.
| elwell wrote:
| This tempted me _to_ apply. I feel like all the arguments came to
| the opposite conclusion that the facts should lead one to.
| llamaimperative wrote:
| That's what motivated reasoning (for clout, in this
| particularly sad case) will do to ya!
|
| You should apply. Worst case scenario you'll have spent a few
| hours tightening your thinking about what you're trying to
| achieve.
| loceng wrote:
| Care to share examples?
|
| Accelerators can be a great fit for some people at a certain
| stage of their life, development, or understanding of these
| systems; it really depends on what your end goal is too.
| whiterknight wrote:
| His comparison to the military is weird. It's well known that
| from a strict money to time exchange it's not a great deal. But
| the target market is also 19 year olds who don't have social
| capital, not Harvard undergrads. So yes, improving your future
| options and skills is a greater value than cash.
|
| That's true of YC too.
| levocardia wrote:
| "You shouldn't take a ~5% chance of getting $500,000; you should
| take a 100% chance of losing $375!"
| dzogchen wrote:
| If your YC startup fails you can possibly still pivot or try
| again. I don't understand his thesis at all.
| bearjaws wrote:
| So I bit on this guys ad. First red flag? Using GumRoad. Which is
| basically course grift central. Immediately you have the option
| to buy other courses from his recommendations (with a coupon of
| course!)
|
| What a joke. He has only made 16 videos out of the hundreds
| listed in the "Course".
|
| It's hilarious how EVERYONE is trying to sell courses, and none
| of them are good.
| redbell wrote:
| > _It 's hilarious how EVERYONE is trying to sell courses, and
| none of them are good._
|
| This is, unfortunately, a real business for many..
|
| Creator Courses: Selling Dreams as Products:
| https://youtu.be/ZmixszMNFgM
|
| The Rise of Fake Gurus: https://youtu.be/L9Gpr7PEnbs
| robocat wrote:
| I think this "tweet" is totally unbalanced. And I think he misses
| some of the significant downsides.
|
| He is moaning about Venture Capital, not YC. You can use the YC
| money and _bootstrap_. Although obviously YC is pushing the
| Venture Capital drug and will filter for Venture Capital seeking
| founders /opportunities.
|
| My experience of an incubator showed me that incubators disable
| founders. Incubators put back into school where the teachers tell
| you they know everything. Many mentor relationships are dangerous
| too. It damages your psyche and is hard to escape the desire to
| get the best advice/mentoring. Learning to be a founder is all
| about making your own good and bad decision. The right attitude
| is hard to maintain, and hopefully YC builds it (no idea if it
| does). Get advice but learn how to ignore most of it (even
| geniuses get most things wrong).
|
| 7% for $500k is a great deal if you use it carefully: use the
| network and experience to your advantage and you should get more
| than an extra 7% growth. Take care that other flashier startups
| don't steal your star employees.
|
| YC gets preferential shares, but founders get common shares: so
| alignment is wrong. YC has the financial incentive to team up
| with Venture Capitalists against founders. Not saying they do,
| but it is a _bad_ signal that YC gives.
|
| You need to watch YCs behaviour with the few winners to learn the
| outcomes for YC versus founders - on average only the few winners
| matter financially. The final results for the reddit.com IPO are
| really weird given reddit was in the first YC batch:
| https://archive.is/https://www.businessinsider.com/who-got-r...
| (Sam Altman had 9% ownership).
|
| Finally, PG has written multiple essays about how startups need
| to shoot for the moon. I have seen zero information come out from
| YC about median returns for founders, or an analysis of the $
| earned against the time invested for the vast majority of
| founders (the ones that do not successfully start unicorns). Some
| light on this subject from YC would be welcome. Too much of the
| external YC writing is clearly self-serving while saying they
| help founders (the whole VC industry is like this though).
|
| I am in New Zealand so I have little experience with YC (watched
| one guy from here accept and flame out - but I had a bad signal
| about him anyway).
| ec109685 wrote:
| Previous discussion (coincidently 6 months ago):
|
| https://news.ycombinator.com/item?id=37869760
| SeattleAltruist wrote:
| TL/DR: Don't bother trying to go big, even if you believe in your
| idea, because difficulty. Instead, pay me $375 for performatted
| business platitudes and chat with a bunch of randos.
| SeattleAltruist wrote:
| TL/DR: Don't try to go big, even if you believe in your idea,
| because its hard. Instead, cough up $375 for templated business
| platitudes and chat rooms with randos.
| extr wrote:
| I think all the disagreement is just a matter of demographics. If
| you are 22 and time is on your side, go nuts. The intangible
| benefits of YC (networking, etc) have time to pay off. It's not
| like you would have been making insane money at BigCorp anyway
| that early in your career. You can afford some income
| instability. No real downside, just be realistic about your
| chances of a huge exit/unicorn status.
|
| But for "everyone else", it makes zero sense. You have kids?
| You're mid/late career? Forget about YC/VC funding. Much better
| ways to spend your time and effort.
| dnissley wrote:
| What are those better ways to spend time and effort?
| extr wrote:
| It depends on your goals, but this is David's core point. If
| your goal is an independent income stream or building a
| business, at many (most?) life stages, shooting for the moon
| is not practical - too risky to put all your eggs in one
| basket. Too many ways to fail and waste years. You're better
| off diversifying your bets, not dissimilar to VCs themselves.
| Try small ideas and scale them up if they work/seem
| promising.
|
| And of course if your goal is just building wealth and having
| security, maybe working for a BigCorp is indeed the better
| choice of time/effort. You can make a lot of money in FAANG
| and get a dynamite family healthcare plan + retirement
| contributions to boot.
| andrewfromx wrote:
| My first thought looking at https://smallbets.com/ is to clone it
| and populate it with AI bots pretending to be the other members.
| In fact, if my little AI clones are good, it's not even that
| unethical. Long as they provide the same $375 worth of value and
| the customer doesn't want a refund?
| primitivesuave wrote:
| This is a very strange use of "ergodicity", which would be more
| suitable for an essay titled "How every possible startup idea
| will be tried at least once". Using a probabilistic term to
| describe deterministic activity (i.e. choosing where to dig,
| checking the soil, giving up if no treasure is found) indicates
| to me that the author is reaching for some high-minded
| mathematical justification for his perspective.
|
| The native ad for a $375 course further erodes credibility, and
| his recent statement that Youtube product reviewers like MKBHD
| should feel compelled to protect the fortunes of a VC funded
| company appears quite hypocritical [1].
|
| 1. https://twitter.com/dvassallo/status/1779928354118111278
| DVassallo wrote:
| I never said or implied in any way MKBHD or other reviewers
| should feel compelled to protect the companies they review.
| a_wild_dandan wrote:
| > YC will proudly tell you that you are more likely to end up
| with a billion dollar business if you join them. That may be
| true. What they're more reluctant to tell you is that only about
| 50 companies met that expectation out of the 4,000 or so that
| went through their program. That's 1.25%. To be fair, that's
| actually quite impressive, but let's say you have the stamina and
| willpower to go through YC three times in your lifetime. You'd
| need approximately 26 lifetimes to hit the jackpot! See the
| problem now?
|
| No. Those are frankly astonishing odds, and success exists on a
| spectrum between the extrema of abject failure and a billion-
| dollar business. Framing outcomes as one of two, mutually
| exclusive states feels disingenuous. (Also, minor nit: that's not
| how probability works.)
|
| I'm ignorant of the startup space, so the author's conclusions
| might be generally accurate. I don't know. But the piece sets off
| red flags for me, so I'm distrustful of it. Kudos for introducing
| me to the concept of ergodicity, though!
| Retric wrote:
| Being nominally a billion dollar VC backed company isn't
| success until you've got a 7 figure exit, it's just a number
| someone made up.
|
| So sure, you can have a "successful" exist without becoming a
| unicorn, but that doesn't mean the odds end up very good or you
| wouldn't have been better off financially working for Google.
| mattmaroon wrote:
| Surely someone must have the statistic on how many YC
| companies had an exit/are still running, right? I bet it
| beats the industry average by a long shot.
| themanmaran wrote:
| It varies by cohort and age of companies. But the 10 year
| average is:
|
| - 58% alive
|
| - 8% acquired
|
| - 34% dead
| hcks wrote:
| Pretty sure 7 figures would be a massive failure in that case
| gizmo wrote:
| Also consider that out of those 4000 startups many are not
| unicorns _yet_. The long term percentage might be closer to
| 2.5%. And the latest batches have many AI startups which I
| suspect will have an ever greater unicorn success rate.
| worik wrote:
| > And the latest batches have many AI startups which I
| suspect will have an ever greater unicorn success rate.
|
| I am resolutely of the opposite opinion
|
| In two decades AI will be incredible business
|
| It will be clusterfucks and graveyards in the meantime
|
| I am very moved by the dot com comparison
|
| One or two huge successes, and bleached bones and "WTF were
| you thinking" spread thickly
| jmduke wrote:
| OP has a history of railing against YC, largely for engagement's
| sake:
|
| https://twitter.com/search?q=from%3Advassallo%20YC&src=typed...
|
| (I have never applied to YC -- my closest affiliation is that I
| reviewed YC applications for prospective applicants while at
| Stripe -- but I do find engagement farming really annoying.)
| StressedDev wrote:
| What is engagement farming?
| grayhatter wrote:
| fancy clickbait
| dylan604 wrote:
| For example, your comment
| minimaxir wrote:
| Two common implementations of engagement farming are a) very
| contrarian/misinformed opinions to bait people to respond
| negatively and b) simple Q&A prompts like "What opinion about
| AI would get people mad at you?" which encourage people to
| respond. The organic discussion (positive or negative) is
| generally favored algorithmically so it gets boosted, and in
| the case of Twitter, there is a monetary incentive to do so,
| as Twitter Blue accounts can earn revenue from tweet views.
|
| The tweet author performed the former very recently and
| caused a news cycle by complaining about MKBHD's Humane Pin
| review with a bizarre take:
| https://daringfireball.net/linked/2024/04/16/vassallo
| pessimizer wrote:
| It used to be called "trolling," before trolling was
| redefined to "publicly disagreeing with important people."
| It's maximizing the ratio between the characters you type and
| the characters typed in response to you.
| hunter2_ wrote:
| Is an ideal response one so thoroughly perfect that nobody
| has anything to say after it? Or is leaving some room for
| continuation good until it's excessively so?
| baubino wrote:
| The problem is being more concerned with the response
| than with what one is typing.
| arciini wrote:
| I personally also strictly disagree with their feedback: "try
| many small things, experiment, tinker, and build a portfolio of
| multiple income streams".
|
| This is very much the indie-hacker route, but honestly, if you
| have one thing that's working out, it's usually better
| financially (though maybe less fun if you like purely doing
| engineering/product work) to try to grow it than to build a
| portfolio.
|
| As someone who went through YC, but started out more on the
| indie-hacker side, I want to mention that going through YC in
| particular does not close the door to just continuing to build
| a successful, growing business without raising one round after
| the other.
|
| I think some indie-hacker influencers encourage this kind of us
| vs. them thinking about VC's, and the truth is somewhere in
| between.
|
| I know of many businesses who have decided (either by choice or
| through a lack of fundraising options) that the ideal way to
| grow and scale their business after YC is to not fundraise.
| It's something that YC partners explicitly acknowledge. They
| understand that an alive business can continue to grow, whereas
| a dead business is just dead.
| mylons wrote:
| i don't think you understand his point at all. tinker until
| you find that thing. maybe keep tinkering after. a single
| source of income is very fragile.
| loceng wrote:
| So what do you suggest, suppressing or censoring dissenting
| voices?
|
| Your comment also doesn't add anything to the conversation,
| does it?
| minimaxir wrote:
| There may be a pertinent ulterior motive to the tweet thread,
| which is relevant to the discussion.
| bko wrote:
| I'm curious if that analogy actually makes sense. Why would you
| pay people to dig their entire lives in one spot? Why wouldn't
| you just do the more efficient way and have founders mine their
| own 100 yard fields?
|
| I agree the incentives of VC want are to swing for the fences
| and they get the benefit of diversification. I just don't think
| the analogy works...
| pb7 wrote:
| I had followed him for years and recently stopped (and even
| blocked) because he's become a prolific engagement farmer.
| Given how pointed his takes have become, there is little chance
| he's changed in so little time to become this opinionated. I
| doubt he believes much of what he writes about. When all you do
| is sell courses, no publicity is bad publicity. It's all a
| numbers game and he knows it.
| paganel wrote:
| So you're more connected to YC than 99% of the people
| commenting in here, I don't think that your viewpoint can be
| seen as objective.
| jmduke wrote:
| To be clear, I reviewed applications _on behalf of Stripe
| Atlas customers applying to YC_, not on behalf of YC. (I have
| never chatted with anyone in YC, besides presumably on Hacker
| News.)
| alecco wrote:
| With all the retail investor mania of lately and so much money on
| tech people, perhaps we could do a sort of startup Olympics with
| bets.
|
| Founders and teams could publish their terms and what they offer
| in stock. It could be a decreasing function of price of shares
| with early birds getting cheaper shares. And open source due
| diligence. Make it a big show to get free promotion for the
| startups and opportunities.
|
| But the SV VCs would probably try to sabotage it and Wall St.
| would probably throw their SEC attack dogs. Perhaps it could
| thrive in a less compromised country like Singapore or
| Switzerland.
| computerdork wrote:
| The tweet is saying that only 1.25% make it to a billion, but a
| startup doesn't need to make 1 billion to be a success. How about
| one that makes 100 million? or even 10 million? At these levels
| of revenue, if the company is sold, the founders will still be
| rich (not ultra rich, but have a million in the bank or more).
|
| And, for ycombinator, the number of "startup exits" is: 351
| (according to this page:
| https://explodingtopics.com/blog/startup-stats). Am no expert at
| startups, but this may mean that out of the 4000 that when
| through ycombinator, ~9% where valuable enough for investors to
| take profit. That sounds like a decent success rate for me (think
| I read that the success rate of ycombinator startups is similar
| to that of the rest of tech).
| wilde wrote:
| Same engagement baiter who said product reviewers should all be
| shills. Nothing of value here.
| andrewstuart wrote:
| Some of his point might be true, BUT:
|
| If you have a great idea, if you are onto something, then the
| best chance of success comes from having resources to execute,
| credibility and to share the endeavor with others who are
| literally invested in the outcome.
| gardenhedge wrote:
| all you need to read: "I charge you a one-time payment of $375,
| and you get access to my community, which includes live
| workshops, recorded classes, a group chat, and a few other
| things."
| JaggerFoo wrote:
| Points for using the term "Non-Ergodic". I wish it were used more
| often.
|
| The post is well written, mostly cohesive, and with a willingness
| to express ideas counter to the status quo.
| paulcole wrote:
| S-tier move by YC to promote this nonsense to the front page to
| make the pro-YC post from the other day look less sketchy.
| ChrisMarshallNY wrote:
| I'm not really a fan of posting rants.
|
| Not because I don't have about 10,000 foaming-at-the-mouth rants
| in me, but because I don't feel it's professional, which is an
| indicator that I'm not very "new school," in my approach.
|
| It's actually pretty on the point, but I'm not sure that I'd get
| "Don't Apply to YC" as the result of reading it; just that I
| should calibrate my expectations and approaches. I probably would
| find other alternatives, if I was a "lots of small squares"
| digger, but that's me. I'm not a rich serial entrepreneur, so I
| guess my opinion isn't particularly relevant.
|
| This part stuck out to me:
|
| _> The second bad lesson from YC is the focus on the upside.
| Because if there's any formula for success in business, it's to
| focus relentlessly on staying in the game rather than on hitting
| it big. Focus on the downside, and let the upside take care of
| itself._
|
| I think that's critical, but seldom actually practiced, these
| days.
|
| I have a friend that is a marvelously smart person, who has
| created a great product, that he is planning to market and sell
| for thousands of dollars. It's likely that he'll get it.
|
| But the real test is what happens after the sale. We need to
| determine things like service, support, parts, and reliability.
|
| Things shouldn't break easily, and if they do, we should be
| prepared to handle the calls. They may be irate calls, if the
| device costs a lot of money.
|
| That's where I have about 35 years of expertise. I've spent my
| entire adult life, making things that last, and can be serviced,
| if they break. 26 of those years, were at a top-shelf company,
| producing some of the world's finest optical equipment (expensive
| as hell, but worth it). A lot of the software we wrote, was to
| work around hardware deficiencies, or add service points.
|
| So I was giving him tips like "What happens if you get dirt in
| this fan?", or "How do you test the firmware?", or "I'm not sure
| that part should be printed with that kind of plastic," etc.
|
| I was politely told to fuck off, and stop being a "dream-killer."
|
| So I keep my mouth shut, and I won't say "I told you so," when
| things go south. Instead, I'll help him to clean up the mess,
| because that's what friends do.
| eightturn wrote:
| I sell onions on the internet, and I approve this message.
| DVassallo wrote:
| I'm waiting for your onions!
| Animats wrote:
| If you just want to make money, one of the most successful
| strategies is to learn how to manage, via MBA or otherwise, find
| a company that's losing money primarily because of management
| problems, and take it over on some deal where you get a cut of
| the improvement. Turnarounds can be very profitable for all
| concerned, and the success rate is reasonably high, maybe 50%.
| siliconc0w wrote:
| Getting into YC is probably one of the few cases where it does
| make sense to go the traditional VC route. It's like getting into
| an elite-level school. Most colleges are crazy expensive to the
| point that the value proposition of a degree starts to look
| tenuous even for STEM degrees.
|
| However a degree at an elite school still has _some_ currency
| plus benefits like a network of equally hard working, smart, and
| likely well connected peers that is pretty valuable.
| kayo_20211030 wrote:
| Nothing is more tedious that a po'd pedant. OP is a person who
| fell in love with the word "ergodic", and just both couldn't let
| it go; and even then uses it badly. If you want to say "unfair",
| or "inequitable", just say that. It's simpler and more honest and
| doesn't make you look like a jargon spouting smarty-pants. What
| on earth does "non-ergodic" even mean to a normal reader? Even
| after that, OP buries the lede. Put what you want to say in the
| first paragraph. Otherwise everyone is so bored by the time you
| get to it they just don't care. It's Twitter, not the New Yorker.
| Any New Yorker editor worth their salt would have reversed it.
| Apply or don't apply to YC, but don't base your decision on
| whether it's ergodic or not. Who on earth knows what that means?
| DVassallo wrote:
| It's entirely different than unfair. Communism would be a
| fully-ergodic system, but it's also very unfair and
| undesirable.
| hintymad wrote:
| > But that's not how you find business opportunities in the real
| world. You can't just say I'm going to pivot, and suddenly a good
| opportunity lands on your lap from heaven. You get good ideas by
| embracing randomness for a long time, until something looks like
| it has a fighting chance of paying off. The pivot idea you were
| forced to come up with is extremely unlikely to be one.
|
| This is in general true, but I fail to see how that's against the
| idea of pivoting as advocated by YC. We find out interesting
| pivoting ideas by doing, and one of the most effective way is to
| get ideas by exploring adjacent areas while we invest deeply into
| an area the we are are interested in. That is, we discover by
| doing. Is that what the startups do?
| wuj wrote:
| I disagree with OP. Treat YC as a school where you learn and
| network. It is not a zero-sum game. If you made it big, you've
| hit the jackpot. If not, you still gained valuable experience and
| skills applicable to the industry and other areas of life. It's
| like going to a college. If you didn't find a job right out of
| college, it doesn't mean you've wasted four years of your life.
|
| The expected value of doing a startup is very high when your
| career is just starting. You are well-educated with very
| marketable skills. You don't have people depending on you. If you
| are building something and picking up transferable skills, all
| while being surrounded by the most driven people (and paid), I
| don't see why someone wouldn't try their luck with YC (or any
| other startup incubators).
| xpe wrote:
| My goal in this comment is to vet Daniel Vassallo's section on
| ergodicity. I follow and agree with the setup:
|
| > First, you have to understand a very important concept: in some
| systems, what's best for a group is not necessarily what's best
| for the individuals who make up the group. In other words, the
| total wealth of a group of people could be increasing, while
| almost everyone making up that group could be seeing their wealth
| diminish.
|
| But do the following sentences follow? Do they even make sense?
|
| > When this happens, we say we have a non-ergodic system. If the
| system was ergodic, what's happening to the collective would also
| translate to all individuals.
|
| I'm pretty sure these sentences don't follow. I am struggling to
| think of even a charitable interpretation that would make such a
| connection. This is not out of a lack of interest -- I would like
| to see a connection. I think I'm more willing than many to find
| such connections; I have studied EE, physics, SwEng, CompSci,
| economics, and more. But, alas, I see no connection -- and not
| even a plausible path to explore to find one.
|
| So, after reading only this much of Mr. Vassallo's writing, my
| BS-detector alarm bells are ringing. I'm going to go read
| https://plato.stanford.edu/entries/ergodic-hierarchy/ instead.
|
| Please let me know if I'm missing something. I am genuinely
| trying to be rational and open to good arguments. I admit that
| I'm developing a gut-level distaste for Daniel's writing, but I
| don't want this to unfairly bias me about a possible insight on
| ergodicity here.
|
| P.S. Maybe even though Mr. Vassallo's writing is a stretch, there
| is a reasonable point to be made? Could someone make it
| succinctly without the baggage of his larger claim?
| MichaelDickens wrote:
| I recently spent some time looking into ergodicity and my
| conclusion was that people who write about "ergodicity" in a
| non-academic setting generally have no clue what they're
| talking about and they're just using the term to make it sound
| like their reasoning is more rigorous than it actually is.
| alphabet9000 wrote:
| you shouldn't join that guy's $375 thing.
|
| whoa, that was easy, can you believe i just saved you $375?
|
| if you're feeling generous for my saving you a WHOPPING $375, i
| only ask for a small small tip request of $3. win win for both of
| us. i saved you some cash, and now you've got $372 in your
| pocket. :handshake:
| balls187 wrote:
| The key issue I take away is the success rate: 1.25% and assuming
| that fact is accurate, I suggest the following:
|
| If the goal of your company is to be a billion dollar business,
| then I would say that just applying for and getting into YC is
| enough, and you should not join YC.
|
| YC apparently is very good at picking winners, but not
| necessarily _making_ winners--being selected by YC means you have
| a higher chance of of succeeding, but attending YC does not.
|
| However, I would expect that there are tangible and non-tangible
| benefits for going through YC that are not readily apparent when
| looking solely at becoming a billion-dollar business, and those
| would be the reason to join YC should they matter to your
| startup.
| tlogan wrote:
| This post seems to hint at a larger conversation about the
| accessibility of opportunities like YC for people from different
| economic backgrounds.
|
| While it might be easier for those with financial safety nets to
| take entrepreneurial risks, perhaps there should be more
| discussion on how to make such opportunities more inclusive. How
| can organizations like YC ensure that everyone, not just the
| financially privileged, have the chance to innovate and succeed?
| Havoc wrote:
| The guy seems to like hot takes to get attention
| neilv wrote:
| > _One of the bad learnings you get from YC is that there's a
| formula for success, and it looks like this: First you do some
| brainstorming. Then you come up with a good idea that can scale
| to a billion dollars_
|
| What if we have an unusual social media idea for which _the
| reason it works_ also means it stops working once it 's worth a
| billion dollars?
|
| (Specifically, once it's that valuable, it's too high visibility,
| and is hit with too much adversarial manipulation, destroying
| what was most valuable about it. Then it's just a generic
| property, little different than the competition.)
|
| (Obviously, HN itself has had better success and longevity than
| most, despite its rising visibility. OTOH, the Reddit front page
| seemed to get taken over ages ago, and then they still had to
| chill for more than a decade before IPO.)
| petersumskas wrote:
| This is from the "honest reviews are unethical" whinger.
| jjmarr wrote:
| Let's just assume the facts are as he says in the most charitable
| interpretation. You either have a 1.25% chance of a $1 billion
| company and a 98.75% chance of a $0 billion company. The expected
| value of a 1.25% chance of $1 billion is $12.5 million, so treat
| that as an (unrealistic) lower bound on your company's valuation.
|
| There's no real explanation of _why_ that isn 't a good deal for
| an entrepreneur. You don't get to keep all that, but $500,000
| dollars from YC for a 7-10% stake of companies (as others have
| said) with an expected value of $12.5 million is a deal that
| gives YC a maximum of $725,000 in value, given that 10% of $12.5
| million is $1.25 million.
|
| The question to ask is whether being part of YC adds $725k in
| value to your company; i.e., is it the _cause_ of those startups
| being worth that much? Based on what others are saying in the
| thread, this seems to be true, but I 'd love to know if people
| who were a part of YC felt like the assistance was worth that
| much.
|
| My point is that it's difficult to believe that the average
| wealth of the entrepreneur is worse off by joining YCombinator
| even assuming all of the facts proposed in the thread are true.
| 7e wrote:
| YC adds almost no value. They capture all of the startups that
| would have been founded anyway (and many that wouldn't, because
| they are idiotic ideas) and tax them. Then, inevitably, some of
| those hit it big and YC takes the credit. Does the doctor that
| delivered Steve Jobs at the hospital get to claim credit for
| Apple? They don't. But YC does. They're a doctor that has
| talked their way into delivering all the babies in the city,
| and taking a tax on their future income as adults.
|
| The average wealth of the entrepreneur is actually maximized by
| having them go into a career in FAANG and not launching a
| startup at all--or launching a startup from a stronger position
| with a real VC that values their company at more than $7M. A
| $7M valuation in today's tech world is an absolute joke. It's
| scandalous the exploitation that's going on here.
| worik wrote:
| > YC adds almost no value
|
| For some definition of "almost"
|
| I am not in the market, but if I were 22 in San Fran doing
| what I was doing when I was 22 in Auckland, I can see tonnes
| of value
|
| Networking and mentoring mainly
| worik wrote:
| I found that refreshing. Unfair, of course. They are flogging
| their own very different product
|
| I really take to the point of moderate success.
|
| If I am going to have huge billion dollar success it is going to
| have to find me because I seek satisfaction, and I am satisfied
| with much less
|
| I am a worker. I like working. I like working for other people, I
| like getting paid a nice big fat salary. I would like it bigger!
| But I like my job, i like my boss, I like my work, mostly, and
| that is a fabulous way to live.
|
| Satisfaction!
|
| Being a billionaire does not sound any better
| graycat wrote:
| After reading the OP:
|
| (1) Business Is Okay: For the neighborhood I grew up in, a big
| fraction of the houses were owned and occupied by families of
| owners of businesses. (a) Drove into the country, met with
| farmers, evaluated and bought their cotton, and sold it to, say,
| companies making medical bandages. (b) Bought junked auto parts,
| renovated them, sold them to auto parts stores. Later bought,
| developed, sold real estate. (c) Had a warehouse next to a rail
| line, got big shipments of beer, sold smaller quantities to bars
| and convenience stores. (d) Sold, installed new tires to people
| with flat tires. (e) Ran a trade magazine for the trucking
| industry.
|
| For more, not in my neighborhood but not far away, (f) opened a
| sit-down seafood restaurant, built relatively modest houses,
| started a national motel chain. (g) Sold jewelry to jewelry
| stores. I dated the owner's daughter -- they lived in a nice
| house and neighborhood and helped a cousin -- prettiest human
| female I ever saw, still in love with her. (h) Bought medium
| trucks with no _beds_ , installed tanks, custom, e.g., for water,
| fuel oil, gasoline, .... For this last, I tutored the owner's son
| in high school math -- their house was really, REALLY nice!
|
| It does appear that in the nicer neighborhoods, the fraction of
| house owners that were successful business owners was high.
|
| Conclusion: "The business of America is business". To get
| important things done, America wants and needs successful
| businesses. The successful businesses are not flukes. Necessarily
| there WILL be successful businesses. The business owners were
| ordinary Americans, not geniuses, not venture funded.
|
| (2) Key. To have a successful business, build something people
| want, like, need, and don't have (loose quote from some
| YCombinator source).
|
| (3) Opportunity. Exploit the sudden revolution in productivity in
| our civilization, i.e., computers and the Internet. IBM helped
| automate the routine work of the accounting departments of major
| businesses -- good PI (productivity increase). PCs killed off the
| typewriters -- big PI. Email, big PI. Web, huge PI; also great
| for information, knowledge, entertainment, maybe soon making
| dense cities less important.
|
| (4) Cheap. In both historical and even absolute terms, current
| computers, the Internet, and the digital phone network are cheap,
| really cheap, just dirt cheap. E.g., I got new 8 core processor
| with a standard clock speed of 4.0 GHz for $100 -- can spend more
| than that on a family restaurant dinner; can come close on
| flowers for Valentine's Day. What are the recent numbers, 18
| trillion bytes in a standard 3.5" size??? Big, big, big, big,
| huge PI steps up from history back to punched cards, ledgers,
| quill pens, etc. Are the PI opportunities already fully
| exploited?
|
| What to do? Get a good computer with good software tools, a good
| Internet connection, write some software that will let some
| people get something they want, need, like, etc. faster, cheaper,
| better, easier, etc. and get users and/or _customers_ (e.g.,
| advertisers), and revenue. OWN the software. And, go ahead, own
| 100% of the business, as just an LLC (limited liability company):
| Soooo, "Look, Ma, no BoD meetings!!!". Can't be fired. Have
| minimal involvement with lawyers.
|
| VCs? Do they write the software for/with you? Nope. Do they
| really know what way to please a lot of people that will make a
| successful business? Nope. Do you need their $500 K to pay for
| your computer(s) and Internet connection? Likely not. Can a sole,
| solo founder be successful? Example 1: Plenty of Fish, one guy,
| sold out for $500+ million.
|
| Central Point: For better financial security, you need to own
| some/all of a successful business, AND the economy MUST have a
| lot of successful businesses. Every major US city has lots of
| such successes -- they are NOT rare.
| throwaway5959 wrote:
| Why does this guy keep getting so much attention on Hacker News?
| Isn't this the same guy that tried to shame MKBHD (an actual
| small business owner/founder)? He's clearly just engagement
| farming, probably for his "course".
| ch33zer wrote:
| He started by getting the deadline date wrong so not off to a
| strong start
|
| Actual: Apr 22 at 8pm PT
|
| Him: The deadline for YC S24 is tomorrow (tweet from 11:25 AM PT
| Apr 20, 2024)
|
| Probably because this is just a repost as mentioned in sibling
| comments.
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