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Thanks for sharing this, Martin. I agree. But let me play a devil advocate and ask you question. Take a look at the history of the biggest startup hits like Mic

Thanks for sharing this, Martin. I agree. But let me play a devil advocate and ask you question. Take a look at the history of the biggest startup hits like Microsoft, Google, Facebook, etc. Do you really think that investor matters in these cases? Why?

acconrad 16y ago
Do you think you're at that caliber of innovation? If you're at that level, you don't even have to think about YC because your product is so compelling you don't need the help.
- generalk 16y ago
  Wrong. 1) Innovation is the wrong word: Facebook, Google, and Microsoft weren't "innovative" ideas. Social networks, search, and software were all things that people were already doing. They were successful due to a multitude of factors including talent, ability to execute, and timing. 2) Those three examples aren't YC companies, but the two more recent ones, Facebook and Google, both had to raise VC, which means convincing people that their idea is worth investing in. At no point was it obvious.
  - acconrad 16y ago
    The social network wasn't innovative - the clean, uneditable interface with a social graph was. The search engine wasn't innovative - the targetted ads was. The operating system wasn't innovative - the mass market and adoption of it was. These three companies were absolutely innovative, just not on the surface product you consume. People are missing my point; it's ridiculous to say a blanket statement like "Google, Facebook and Microsoft did it without YC, what say you, entrepreneur!" when you're evaluating them when they are already billion-dollar companies. It's the same thing as someone trolling to say "I don't have to go to college cause Bill Gates didn't!" So when you're evaluating a company that is already successful, of course they won't need the help because their products are already so compelling. Now if you say "that's not why you're getting down-voted...these products weren't born awesome, they could have used YC then" well then this argument is still flawed. Why didn't Facebook need something like YC? Well it was Feb 2004, before YC even existed. None of these companies HAD a YC to use, so it's not a comparison you can even make valid. Incubators didn't exist for MS, Google, Facebook, Apple, AOL, Netscape... Of course these people needed to hustle. But they definitely sold themselves - Microsoft was bootstrapped, and Facebook had 100,000 members in 3 months until Peter Thiel caught wind of their efforts and approached THEM. Can everyone use the help? Of course. Facebook did it without YC and could do it again without YC. 99% of entrepreneurs are not in that situation.
- clare 16y ago
  This was actually covered in the article and exactly the advantage of YC: the vast network that could take your innovation to the next level and to the mass public. I don't think innovation itself guarantees any business success, it has to be combined with the right execution, especially marketing, PR, etc. One good example is Dropbox: there were numerous companies doing the similar thing as Dropbox, but Dropbox excelled. Granted the technology of Dropbox may be better at some fronts, but to me its critical advantage is that being a YC company, it could leverage a huge network, and became viral before everyone else. As the entrance barriers for internet innovations become lower and lower, the competition to attract publicity and secure critical mass has become more intense. To me that is where YC offers the most value.
emmett 16y ago
You can be hugely successful without YC investment (or any investor). No one seriously thinks YC is necessary - nor do I understand why you'd think Martin thinks that. However, the question is whether YC can help or not. Could the Google founders have benefited from YC? Could Zuckerberg? In retrospect it was unnecessary, but that couldn't have been known at the time. And I think the answer to that question is certainly yes. All the benefits Martin enumerates in his essay apply equally to people who become very successful.
dabent 16y ago
Both Google and Facebook were funded by some pretty influential investors. Andy Bechtolsheim was one of Google's first investors and had co-founded Sun Microsystems over 10 years earlier. Peter Thiel founded PayPal and went on to fund Facebook. I'd venture to say that those companies had opportunities that might not have been present without those investors. I'm not sure who Microsoft's first investors were, but consider this. "No startup can be the next Microsoft unless some other company is prepared to bend over at just the right moment and be the next IBM." - http://www.paulgraham.com/gh.html http://www.paulgraham.com/gh.html
- bfe 16y ago
  And someone, I think maybe Marc Andreessen, said Google wouldn't have become Google without Altavista's management flying it into the side of a cliff at the right time.
  - pg 16y ago
    "It seems to me the business guys who did the most for Google were the ones who obligingly flew Altavista into a hillside just as Google was getting started." (http://paulgraham.com/bronze.html http://paulgraham.com/bronze.html) Now that I know more about the history of Google, I wouldn't phrase it so extremely, because it's unfair to Omid Kordestani and Salar Kamangar among others.
    - bfe 16y ago
      Oops, that was you too - thanks for the correction.
- deleted 16y ago
  [deleted]
pg 16y ago
Investors didn't help Microsoft (because Microsoft didn't have any) but from what I've heard they did help Google and Facebook.
- seiji 16y ago
  At Startup School 2010, didn't Ron tell a story about helping young facebook set up a partnership/press event with Apple they couldn't snag on their own?
- bloodcarter 16y ago
  Sure they did, Paul. But were they vital? That's the question.
  - netcan 16y ago
    That's possibly a misleading question when you're talking about odds. Say you play a game with odds at 20% and something raises your odds to 25%. You win. Was that thing vital?
- deleted 16y ago
  [deleted]
- rexreed 16y ago
  Microsoft did have one early venture capital investor: https://secure.wikimedia.org/wikipedia/en/wiki/David_Marquardt https://secure.wikimedia.org/wikipedia/en/wiki/David_Marquar.... They had VC investment since 1981, which was a full five years before they went public. Here's some video on the subject: http://msstudios.wmod.llnwd.net/a2294/o21/presspass/BillG/Marquardt-Investment_MBR.wmv%C2%A0 http://msstudios.wmod.llnwd.net/a2294/o21/presspass/BillG/Ma...
  - staunch 16y ago
    "Starting in November 1980, David F. Marquardt of Technology Venture Investors had discussions with Microsoft regarding a plan to change the partnership into a corporation. This resulted in Microsoft becoming Microsoft, Inc., in June 1981. The ownership and percentage of shares was divided between the principals as follows: Bill Gates 53, Paul Allen 31, Steve Ballmer 8 and Vern Raburn 4. Then in September, Technology Venture Investors purchased 5 percent of the company for $1,000,000." A history of the personal computer: the people and the technology By Roy A. Allan http://books.google.com/books?id=FLabRYnGrOcC&lpg=RA1-PA23&ots=H47U-WwcVP&pg=RA1-PA23 http://books.google.com/books?id=FLabRYnGrOcC&lpg=RA1-PA...
martinkl 16y ago
From what I know, success of a startup is influenced by many, many different facets. If you read something like "Founders at Work", you see that many startups were on the brink of failure at some point before later becoming wildly successful. In such cases, where the outcome is highly variable and very sensitive to the inputs, it's wise to have as many good cards as you can get. You can't just bet on one thing; every bit of support or advantage you can get could be the thing that makes the difference. (Sorry for the weird mixing of metaphors.)

acconrad 16y ago

Do you think you're at that caliber of innovation? If you're at that level, you don't even have to think about YC because your product is so compelling you don't need the help.

generalk 16y ago
Wrong. 1) Innovation is the wrong word: Facebook, Google, and Microsoft weren't "innovative" ideas. Social networks, search, and software were all things that people were already doing. They were successful due to a multitude of factors including talent, ability to execute, and timing. 2) Those three examples aren't YC companies, but the two more recent ones, Facebook and Google, both had to raise VC, which means convincing people that their idea is worth investing in. At no point was it obvious.
- acconrad 16y ago
  The social network wasn't innovative - the clean, uneditable interface with a social graph was. The search engine wasn't innovative - the targetted ads was. The operating system wasn't innovative - the mass market and adoption of it was. These three companies were absolutely innovative, just not on the surface product you consume. People are missing my point; it's ridiculous to say a blanket statement like "Google, Facebook and Microsoft did it without YC, what say you, entrepreneur!" when you're evaluating them when they are already billion-dollar companies. It's the same thing as someone trolling to say "I don't have to go to college cause Bill Gates didn't!" So when you're evaluating a company that is already successful, of course they won't need the help because their products are already so compelling. Now if you say "that's not why you're getting down-voted...these products weren't born awesome, they could have used YC then" well then this argument is still flawed. Why didn't Facebook need something like YC? Well it was Feb 2004, before YC even existed. None of these companies HAD a YC to use, so it's not a comparison you can even make valid. Incubators didn't exist for MS, Google, Facebook, Apple, AOL, Netscape... Of course these people needed to hustle. But they definitely sold themselves - Microsoft was bootstrapped, and Facebook had 100,000 members in 3 months until Peter Thiel caught wind of their efforts and approached THEM. Can everyone use the help? Of course. Facebook did it without YC and could do it again without YC. 99% of entrepreneurs are not in that situation.
clare 16y ago
This was actually covered in the article and exactly the advantage of YC: the vast network that could take your innovation to the next level and to the mass public. I don't think innovation itself guarantees any business success, it has to be combined with the right execution, especially marketing, PR, etc. One good example is Dropbox: there were numerous companies doing the similar thing as Dropbox, but Dropbox excelled. Granted the technology of Dropbox may be better at some fronts, but to me its critical advantage is that being a YC company, it could leverage a huge network, and became viral before everyone else. As the entrance barriers for internet innovations become lower and lower, the competition to attract publicity and secure critical mass has become more intense. To me that is where YC offers the most value.

emmett 16y ago

You can be hugely successful without YC investment (or any investor). No one seriously thinks YC is necessary - nor do I understand why you'd think Martin thinks that. However, the question is whether YC can help or not. Could the Google founders have benefited from YC? Could Zuckerberg? In retrospect it was unnecessary, but that couldn't have been known at the time. And I think the answer to that question is certainly yes. All the benefits Martin enumerates in his essay apply equally to people who become very successful.

dabent 16y ago

Both Google and Facebook were funded by some pretty influential investors. Andy Bechtolsheim was one of Google's first investors and had co-founded Sun Microsystems over 10 years earlier. Peter Thiel founded PayPal and went on to fund Facebook. I'd venture to say that those companies had opportunities that might not have been present without those investors. I'm not sure who Microsoft's first investors were, but consider this. "No startup can be the next Microsoft unless some other company is prepared to bend over at just the right moment and be the next IBM." - http://www.paulgraham.com/gh.html http://www.paulgraham.com/gh.html

bfe 16y ago
And someone, I think maybe Marc Andreessen, said Google wouldn't have become Google without Altavista's management flying it into the side of a cliff at the right time.
- pg 16y ago
  "It seems to me the business guys who did the most for Google were the ones who obligingly flew Altavista into a hillside just as Google was getting started." (http://paulgraham.com/bronze.html http://paulgraham.com/bronze.html) Now that I know more about the history of Google, I wouldn't phrase it so extremely, because it's unfair to Omid Kordestani and Salar Kamangar among others.
  - bfe 16y ago
    Oops, that was you too - thanks for the correction.
deleted 16y ago
[deleted]

pg 16y ago

Investors didn't help Microsoft (because Microsoft didn't have any) but from what I've heard they did help Google and Facebook.

seiji 16y ago
At Startup School 2010, didn't Ron tell a story about helping young facebook set up a partnership/press event with Apple they couldn't snag on their own?
bloodcarter 16y ago
Sure they did, Paul. But were they vital? That's the question.
- netcan 16y ago
  That's possibly a misleading question when you're talking about odds. Say you play a game with odds at 20% and something raises your odds to 25%. You win. Was that thing vital?
deleted 16y ago
[deleted]
rexreed 16y ago
Microsoft did have one early venture capital investor: https://secure.wikimedia.org/wikipedia/en/wiki/David_Marquardt https://secure.wikimedia.org/wikipedia/en/wiki/David_Marquar.... They had VC investment since 1981, which was a full five years before they went public. Here's some video on the subject: http://msstudios.wmod.llnwd.net/a2294/o21/presspass/BillG/Marquardt-Investment_MBR.wmv%C2%A0 http://msstudios.wmod.llnwd.net/a2294/o21/presspass/BillG/Ma...
- staunch 16y ago
  "Starting in November 1980, David F. Marquardt of Technology Venture Investors had discussions with Microsoft regarding a plan to change the partnership into a corporation. This resulted in Microsoft becoming Microsoft, Inc., in June 1981. The ownership and percentage of shares was divided between the principals as follows: Bill Gates 53, Paul Allen 31, Steve Ballmer 8 and Vern Raburn 4. Then in September, Technology Venture Investors purchased 5 percent of the company for $1,000,000." A history of the personal computer: the people and the technology By Roy A. Allan http://books.google.com/books?id=FLabRYnGrOcC&lpg=RA1-PA23&ots=H47U-WwcVP&pg=RA1-PA23 http://books.google.com/books?id=FLabRYnGrOcC&lpg=RA1-PA...

martinkl 16y ago

From what I know, success of a startup is influenced by many, many different facets. If you read something like "Founders at Work", you see that many startups were on the brink of failure at some point before later becoming wildly successful. In such cases, where the outcome is highly variable and very sensitive to the inputs, it's wise to have as many good cards as you can get. You can't just bet on one thing; every bit of support or advantage you can get could be the thing that makes the difference. (Sorry for the weird mixing of metaphors.)