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He lost me with the whole "make founders take on massive personal debt to survive" tweet. Removing that particular stressor, particularly from people from poore
by kemayo 6y ago
He lost me with the whole "make founders take on massive personal debt to survive" tweet. Removing that particular stressor, particularly from people from poorer backgrounds who lack the access to that kind of credit is how we get a better sampling of ideas.
- lifeformed 6y agoYeah, he calls it a "filtering function"... yes, to filter out people without safety nets.
- czbond 6y agoNot a filtering function - I know of a few founders who scrapped by on Medicaid and food stamps for years to build a successful business by they had no savings
- KoftaBob 6y agoBut why put founders through that added stressor if YC easily has the resources to prevent it?
- czbond 6y agoThey don’t know at onset if a company deserves that much money. $25k is enough to see what people can accomplish in 3 months - maybe they take less equity. Most companies either have wrong leaders, wrong market, wrong skills, wrong business ideas but big dreams. That amount is enough to filter through the above.
- tfehring 6y agoThe fact that it's an imperfect filtering function doesn't mean that it's not a filtering function.
- eggsnbacon1 6y agoyeah a lot people can't do that. Specifically anyone caring for someone, so like 50% of adult population. A huge proportion of adults are caring for a parent or child. Its also impossible if you have any health problems, or need to save for retirement or have student loan debt. Its really only possible if you're young and healthy, so this would filter out probably 80% of adult population
- aty268 6y agoWhy not? Lot's of people live off and raise families off of food stamps + medicaid. That's how I was raised. No reason you couldn't also throw building a company in the mix.
- codegeek 6y agoYou could but it gets much harder that way and the likelihood of you failing goes up significantly. It is more risk averse to the VCs to cut a decent size check which ensures founders are not struggling for basic needs and can actually focus on the startup.
- thebean11 6y agoGee why not throw two companies in and another child for good measure? The point isn't that it's impossible, but it seems like you're advocating strife for strife's sake.
- willcipriano 6y agoIf I am going to struggle and have my family live off food stamps, you can be sure some VC isn't getting a dime if it all works out in the end.
- carterklein13 6y agoWhat is it if not a filtering function? It is a filtering function and it's the wrong filtering function. Like others have said, it filters out anyone with a great idea who is unwilling to put their lives in danger, or more importantly the lives of people dependent on them.
- thephyber 6y agoSounds like privatizing the gains and socializing the losses to me.
- czbond 6y agoI’d suggest the opposite. One who is used to living off $1k a month for 1-2 years have an upper hand on founders used to a more cushy lifestyle. Or even having no income and almost broke for years like many successful founders I know of.
- bendergarcia 6y agoJust because someone is broke does not mean they don’t have Safety net. It’s easy to make no money when you can always move back home or get support from family. But if you have no safety net (financial family support), then not making money is a really difficult thing to try.
- JimDabell 6y agoThere’s a significant trade-off here – it can result in overvaluing money in comparison to time / effort. If you’ve been scraping by for a while, you train yourself to always pick the cheapest option, which often isn’t the best option. I’ve seen several founders waste time and effort trying to work around shortcomings in cheap / free tools or implementing something themselves when spending an insignificant amount of money would make the problem go away immediately.
- czbond 6y agoI don't disagree with that as a side effect; in the end, the only thing that matters for a company is runway of the founders.
- opportune 6y agoIt’s not really possible to live in $1k a month as a single adult in the Bay Area unless you are somehow living rent free. Even if you rent a room in a terrible area out in the boonies, the cost of getting to/from the parts of the Bay Area with the tech industry will push you over. I agree nobody needs a cushy lifestyle when starting a company but as a single adult in the Bay Area you need at least $2k/month after taxes to live. And somehow you need to get someone to rent to you with an income that low. Not everybody is lucky in having a nearby relative they can live with for free.
- thefabs 6y agoYeah, fully agree. Founding a company is stressful enough. The idea that adding existential threat is helping is ridiculous to me.
- 95_JL_OK 6y agoPerformance under pressure can be better at times, but there's diminishing returns. Applying pressure is good, but if the pressure is too great, then you start to get the reverse effect. When the pressure leads to anxiety rather than focus, then you've lost any possible improvement that stress can lead to. A deadline is useful to help ensure work gets done. If the deadline is set to 3 hours from now, however, and realistically you need 4 or so to get it done, the pressure is going to have the inverse effect. It would likely just demoralize the team.
- s_dev 6y agoCompletely agree with the OP of the twitter thread. pg once coined the phrase .. ramen profitable. I deeply agree with that concept. Cover bills but all those frills and cushy "living wage" nonense needs to go while the startup is finding its feet.
- eloff 6y agoDepends on what stage of life you're in. Ramen profitable works for a 20-something just out of college. It does not work for a married middle-aged person potentially with kids. It's a lot harder to start a startup once you get to that stage of life because of this and other reasons.
- s_dev 6y agoThose 20 somethings as potential founders was what other investment companies overlooked and partly made YC new and different. That was one of their innovations. Before YC investment companies were always looking at uni professors and execs dropping out of corporations. Changing this focus -- to focus on older more experienced invidividuals is changing YC imo. Less social justice more hackery/building stuff people might like would be a positive move for YC and the audience. I don't think we're in such a climate to discuss this though.
- FalconSensei 6y agoOr anyone that has to buy insulin...
- whymauri 6y agoNo, you need to be ready to die for your YC-backed startup according to some fascinating takes in this thread. Funny this gets flagged but not the comments insinuating that life-ruining risk should be acceptable* for founders who aren't wealthy. * Not just acceptable, preferred! Amazing!
- softawre 6y agoIs making it easier for a middle-aged person to start a startup something that YC has to care about? There could be a separate organization that focused on that.
- _curious_ 6y agoIt's the right idea but the wrong tool. Debt is actually the enemy of the founder/entrepreneur IMO...but building equity in yourself through moonlighting, side hustle, etc - is a better pathway. This is known as hard work = 60-80 hrs/week combined type of stuff. Debt will creep up and crush you eventually, do not go into debt to "fund" your startup.
- jamespollack 6y agohow the hell do you post this and then also another comment that says nobody should pay their developers? which is it? don't go into debt, or don't get paid?!
- ryanSrich 6y agoDon't let that sully the remainder of his points, which were spot on.