8 ms·

What I Look for In Tech Startups

94 points by jkuria 9y ago

CalChris 9y ago
> Everybody focuses on patents and the tech, yet tech matters less and less. Then why is he talking about what he looks for in Tech Startups? It doesn't seem that he's looking for Tech Startups at all. Plenty of other kinds of startups than tech startups.
- spraak 9y ago
  I don't think he means it doesn't matter at all. I think he means that the people who carry out the tech are worth a lot of discrimination. I.e. that the same technology is different based on who's pushing it.
- comstock 9y ago
  Tech, as used by investors no longer really means technology. It means a website essentially. It would rarely (in my experience) even encompass hardware. Certainly nothing requiring novel basic technology (science based startups). I don’t know why terminology is used like this. Essentially it’s like saying mail order catalogs are technology companies because they take advantage of advances in printing, telecommunications etc. I guess it’s because the process of building websites is still messy, and somewhat easy to get wrong.
  - CalChris 9y ago
    He definitely used the word patents. So I really think he means new technology when he says tech rather than websites, deployment, logistics, ....
    - comstock 9y ago
      Well, he uses the word patents in a context which suggests he doesn’t care much about patents... The examples cited in the article are mostly websites. And I think (given the title of the article) he would describe himself as a tech investor. In any case, what investors say isn’t as important as what they do. In my experience they often say they are interested in Biotech, Science based startups, or hardware. The reality is they rarely invest, and when they do, they invest in very conversative plays (aside from the occasional misguided Theranos type play). The reality is in general tech to then means “some kind of website where I understand the engagement metrics” most of the time.
  - tootie 9y ago
    I think "digital" is more accurate than "tech" now. And even then it's not always accurate. Is Uber a tech company or a taxi company? Is AirBnB tech or hospitality? Very few of the companies we call "tech startups" are actually producing tech as an output. More like they are solving technical challenges to increase efficiency or create market niches in traditional industries.
- racer-v 9y ago
  Maybe it's just easier to predict which people are going to be successful than which technologies.
- thisisit 9y ago
  I might be way off-base here but I think he means tech being the core of a startup. An example might be one of the big unicorn idea - ride sharing. Here, implementation and people which matter. Differentiating based on tech is moot.
  - Alex3917 9y ago
    > Differentiating based on tech is moot. There were many ridesharing startups before Uber, but the reason why Uber became the market leader is that they were one of the first to leverage the iPhone.
    - sidlls 9y ago
      I think what the GP means is "tech" more in the sense that whether one uses a given stack or another is moot. In this context the iPhone is a high-tech medium and not an important "tech" detail.
- richardknop 9y ago
  Anything that has a mobile app or a website is nowadays considered a tech startup. And for most of these apps it doesn’t matter too much whether the backend is written in Java or Go or .NET.
  - TeMPOraL 9y ago
    Most of those apps could we written in Klik & Play, and it wouldn't make a difference. 90% of "tech" industry is the same old CRUDs run on the cloud, with only real difference made by the people drawing layouts in different colours. (For some reason though, each company has to have its own implementation of that same CRUD.)
    - richardknop 9y ago
      > (For some reason though, each company has to have its own implementation of that same CRUD.) I think it's for talent retention / hiring reasons. They want to give engineers something to tinker with and build up their own frameworks and libraries. It's what makes working on CRUD after CRUD at least little bit more exciting. Otherwise engineers would be bored to death and would leave to different companies.
      - TeMPOraL 9y ago
        I suppose it works for the youngest. Up to the point they eventually notice they're doing the same thing at each new place, with the primary novelty being what problems did the company inflict itself this time. Personally, I am bored to death with more and more iterations of the very same. It makes enjoying the job harder (and it also makes finding an interesting job harder too).
    - MaxBarraclough 9y ago
      > For some reason though, each company has to have its own implementation of that same CRUD. Well, they're different CRUDs, no? Hacker News and Facebook both boil down to a database hooked up to a web-based front-end, but the glue in the middle isn't going to be the same.
- mathattack 9y ago
  He's hawking Sales and Marketing. Look at the layout of that friggin' page and tell me that tech (or at least design) doesn't matter!
deleted 9y ago
[deleted]
mathattack 9y ago
G&G: A hotly debated question in the tech investor community is, “What is the single most important factor for startup success?” Some say it’s the team. Some say it’s the product/market fit. Others say it’s timing. Obviously, all three are important, but if picked one single factor, which would it be? Chris: I’d say opportunity is the most important. I often meet talented entrepreneurs who put an incredible amount of time and effort into solving problems that ultimately lack real market opportunity. It’s a waste of their talents. I’d roll back on the team that’s doing something unproductive because it’s an awesome team. I will bet on an exceptional team if they’re doing something productive. By that hierarchy, the opportunity is first, people the second. I've heard this from quite a few VCs. The difference between a good and great engineer is 10x. The difference between a good and bad market is 100x.
- rdlecler1 9y ago
  This is the line used my Andreessen, but I don’t buy it. A good idea in the hands of the wrong entrepreneurs is no different than a bad market. Traction trumps everything, but when you don’t have traction you need to look at the idea good ideas often only look good in retrospect so all you’re left to evaluate is the quality of the team. Great markets are tightly bound to the quality of the idea. In fact, even though he explocitly emphasizes market the rest of the interview his focus was on the quality of the team.
  - mathattack 9y ago
    Yes. If one looks in the extreme at Google or Facebook, it took both the founder and the market. I think VCs view it easier to replace a C+ founder in an A+ market then figure out what to do with an A+ founder stuck in a C+ market. I'm not arguing the morality of this, just following on their thought process. He does backtrack on this later. The key lesson for me was to always invest in exceptional founders — you can always find the money to make subsequent investments in their companies. Money is more abundant than opportunities. I really kick myself for not having written Jeff a check when I met him. He’s a fantastic entrepreneur and I knew it – I blew it.
    - 9y ago
hguhghuff 9y ago
Sorry inappropriate deleted.
- aorloff 9y ago
  Don't forget Growth and a big and growing Market to boot !
- dang 9y ago
  Please don't post like this to HN. It just repeats the repetitive, which is most of what we're trying to avoid here. Edit: you've unfortunately posted a lot of unsubstantive comments to Hacker News. Would you please just not do that? We're hoping for either civil, substantive comments, or no comments. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
orliesaurus 9y ago
Not to sound like an asshole but we've read this type of "interviews with VCs" at least weekly lately...and they ALL say the same stuff over and over. Its all "great founders", "great market", "great team" dreamy stories.
- richardknop 9y ago
  I have the same feeling. These VC interviews all seem so alike. All of these dudes (it's mostly dudes) just repeat the same generic phrases and don't really say anything specific.
- kenning 9y ago
  If you're funding tons of weird little companies in the most disparate fields in the world, I can't imagine you get much depth in your knowledge.
- austinjp 9y ago
  Unfortunately I agree. I strongly suspect investors exhibit survivor bias, and assume causation where there is none. That's not to say it's all luck, or that they're dumb. Instead I feel they're simply unconsciously expert: they don't actually know what makes them good at what they do. Asking them how they do it elicits guesses. The fact that the guesses all sound the same suggests that either they're true, or there's an echo-chamber. There was a link posted here some months ago where an investor gave a frank account of how hard it is to invest, and how frequently he made terrible decisions and got burned, how time consuming it was, and so on. I think he actually said "don't become an investor if you want to make money, do it because you want to help people". Shame I can't find it now.
  - pascalxus 9y ago
    This reminds of the story Stevie Yeggie wrote about teaching a Chicken to play the piano. He had the chicken peck at the piano, and everytime it hit the correct key, someone would give it pellet. By this method, the chicken could memorize how to play a simple melody. But, one day, the chicken introduced a random foot kick along with a correct key peck. The pellet still needed to be given to the chicken to reinforce the melody. Ever since then, the chicken kept pecking at the keys with a foot kick.

94 points by jkuria 9y ago

> Everybody focuses on patents and the tech, yet tech matters less and less. Then why is he talking about what he looks for in Tech Startups? It doesn't seem that he's looking for Tech Startups at all. Plenty of other kinds of startups than tech startups.

spraak 9y ago
I don't think he means it doesn't matter at all. I think he means that the people who carry out the tech are worth a lot of discrimination. I.e. that the same technology is different based on who's pushing it.
comstock 9y ago
Tech, as used by investors no longer really means technology. It means a website essentially. It would rarely (in my experience) even encompass hardware. Certainly nothing requiring novel basic technology (science based startups). I don’t know why terminology is used like this. Essentially it’s like saying mail order catalogs are technology companies because they take advantage of advances in printing, telecommunications etc. I guess it’s because the process of building websites is still messy, and somewhat easy to get wrong.
- CalChris 9y ago
  He definitely used the word patents. So I really think he means new technology when he says tech rather than websites, deployment, logistics, ....
  - comstock 9y ago
    Well, he uses the word patents in a context which suggests he doesn’t care much about patents... The examples cited in the article are mostly websites. And I think (given the title of the article) he would describe himself as a tech investor. In any case, what investors say isn’t as important as what they do. In my experience they often say they are interested in Biotech, Science based startups, or hardware. The reality is they rarely invest, and when they do, they invest in very conversative plays (aside from the occasional misguided Theranos type play). The reality is in general tech to then means “some kind of website where I understand the engagement metrics” most of the time.
- tootie 9y ago
  I think "digital" is more accurate than "tech" now. And even then it's not always accurate. Is Uber a tech company or a taxi company? Is AirBnB tech or hospitality? Very few of the companies we call "tech startups" are actually producing tech as an output. More like they are solving technical challenges to increase efficiency or create market niches in traditional industries.
racer-v 9y ago
Maybe it's just easier to predict which people are going to be successful than which technologies.
thisisit 9y ago
I might be way off-base here but I think he means tech being the core of a startup. An example might be one of the big unicorn idea - ride sharing. Here, implementation and people which matter. Differentiating based on tech is moot.
- Alex3917 9y ago
  > Differentiating based on tech is moot. There were many ridesharing startups before Uber, but the reason why Uber became the market leader is that they were one of the first to leverage the iPhone.
  - sidlls 9y ago
    I think what the GP means is "tech" more in the sense that whether one uses a given stack or another is moot. In this context the iPhone is a high-tech medium and not an important "tech" detail.
richardknop 9y ago
Anything that has a mobile app or a website is nowadays considered a tech startup. And for most of these apps it doesn’t matter too much whether the backend is written in Java or Go or .NET.
- TeMPOraL 9y ago
  Most of those apps could we written in Klik & Play, and it wouldn't make a difference. 90% of "tech" industry is the same old CRUDs run on the cloud, with only real difference made by the people drawing layouts in different colours. (For some reason though, each company has to have its own implementation of that same CRUD.)
  - richardknop 9y ago
    > (For some reason though, each company has to have its own implementation of that same CRUD.) I think it's for talent retention / hiring reasons. They want to give engineers something to tinker with and build up their own frameworks and libraries. It's what makes working on CRUD after CRUD at least little bit more exciting. Otherwise engineers would be bored to death and would leave to different companies.
    - TeMPOraL 9y ago
      I suppose it works for the youngest. Up to the point they eventually notice they're doing the same thing at each new place, with the primary novelty being what problems did the company inflict itself this time. Personally, I am bored to death with more and more iterations of the very same. It makes enjoying the job harder (and it also makes finding an interesting job harder too).
  - MaxBarraclough 9y ago
    > For some reason though, each company has to have its own implementation of that same CRUD. Well, they're different CRUDs, no? Hacker News and Facebook both boil down to a database hooked up to a web-based front-end, but the glue in the middle isn't going to be the same.
mathattack 9y ago
He's hawking Sales and Marketing. Look at the layout of that friggin' page and tell me that tech (or at least design) doesn't matter!

deleted 9y ago

[deleted]

mathattack 9y ago

G&G: A hotly debated question in the tech investor community is, “What is the single most important factor for startup success?” Some say it’s the team. Some say it’s the product/market fit. Others say it’s timing. Obviously, all three are important, but if picked one single factor, which would it be? Chris: I’d say opportunity is the most important. I often meet talented entrepreneurs who put an incredible amount of time and effort into solving problems that ultimately lack real market opportunity. It’s a waste of their talents. I’d roll back on the team that’s doing something unproductive because it’s an awesome team. I will bet on an exceptional team if they’re doing something productive. By that hierarchy, the opportunity is first, people the second. I've heard this from quite a few VCs. The difference between a good and great engineer is 10x. The difference between a good and bad market is 100x.

rdlecler1 9y ago
This is the line used my Andreessen, but I don’t buy it. A good idea in the hands of the wrong entrepreneurs is no different than a bad market. Traction trumps everything, but when you don’t have traction you need to look at the idea good ideas often only look good in retrospect so all you’re left to evaluate is the quality of the team. Great markets are tightly bound to the quality of the idea. In fact, even though he explocitly emphasizes market the rest of the interview his focus was on the quality of the team.
- mathattack 9y ago
  Yes. If one looks in the extreme at Google or Facebook, it took both the founder and the market. I think VCs view it easier to replace a C+ founder in an A+ market then figure out what to do with an A+ founder stuck in a C+ market. I'm not arguing the morality of this, just following on their thought process. He does backtrack on this later. The key lesson for me was to always invest in exceptional founders — you can always find the money to make subsequent investments in their companies. Money is more abundant than opportunities. I really kick myself for not having written Jeff a check when I met him. He’s a fantastic entrepreneur and I knew it – I blew it.
  - 9y ago

hguhghuff 9y ago

Sorry inappropriate deleted.

aorloff 9y ago
Don't forget Growth and a big and growing Market to boot !
dang 9y ago
Please don't post like this to HN. It just repeats the repetitive, which is most of what we're trying to avoid here. Edit: you've unfortunately posted a lot of unsubstantive comments to Hacker News. Would you please just not do that? We're hoping for either civil, substantive comments, or no comments. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

orliesaurus 9y ago

Not to sound like an asshole but we've read this type of "interviews with VCs" at least weekly lately...and they ALL say the same stuff over and over. Its all "great founders", "great market", "great team" dreamy stories.

richardknop 9y ago
I have the same feeling. These VC interviews all seem so alike. All of these dudes (it's mostly dudes) just repeat the same generic phrases and don't really say anything specific.
kenning 9y ago
If you're funding tons of weird little companies in the most disparate fields in the world, I can't imagine you get much depth in your knowledge.
austinjp 9y ago
Unfortunately I agree. I strongly suspect investors exhibit survivor bias, and assume causation where there is none. That's not to say it's all luck, or that they're dumb. Instead I feel they're simply unconsciously expert: they don't actually know what makes them good at what they do. Asking them how they do it elicits guesses. The fact that the guesses all sound the same suggests that either they're true, or there's an echo-chamber. There was a link posted here some months ago where an investor gave a frank account of how hard it is to invest, and how frequently he made terrible decisions and got burned, how time consuming it was, and so on. I think he actually said "don't become an investor if you want to make money, do it because you want to help people". Shame I can't find it now.
- pascalxus 9y ago
  This reminds of the story Stevie Yeggie wrote about teaching a Chicken to play the piano. He had the chicken peck at the piano, and everytime it hit the correct key, someone would give it pellet. By this method, the chicken could memorize how to play a simple melody. But, one day, the chicken introduced a random foot kick along with a correct key peck. The pellet still needed to be given to the chicken to reinforce the melody. Ever since then, the chicken kept pecking at the keys with a foot kick.