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> What they did differently is they had a ton of money before they started it, and they decided to make a fun club for themselves. I don't get the impression t
by defen 6y ago
> What they did differently is they had a ton of money before they started it, and they decided to make a fun club for themselves.
I don't get the impression that they had a "ton" of money when they started. Sure, they were wealthy, but no more than, say, a successful doctor or lawyer. Certainly mere peanuts compared to the institutional venture capital funds that existed at the time. "Who would win? Name brand VC firms with hundreds of millions of dollars and all the right connections, or some guy who founded a mildly successful startup who now paints and writes essays for nerds?"
> The brand says you have to be really smart and nerdy, and willing to sacrifice money to prove you’re worth being in. People who can sacrifice a lot of time and money? Generally well connected, well educated, well off nerds like them. Of course it’s successful. By being the first to get that brand they set up a self-selecting system that brought them those people. Simple as that. And it only works in tech because not many other industries will gravitate towards a brand of (nerdy * altruistic).
It's always easy to say this in retrospect, but don't you find it a bit odd that you are essentially declaring that this absolutely massive pile of money and influence was just lying there untouched for 50+ years and no one noticed it until, IIRC, some kid at MIT asked pg why, if startups were so cool, he wasn't funding any?
- mej10 6y ago> I don't get the impression that they had a "ton" of money when they started. Viaweb was PG's first company, which sold to Yahoo for $49 million in 1998. Just as an FYI -- I think PG/JL/YC are great.
- defen 6y agoBut how much went to them, vs investors, taxes, etc? It's not like they started YC with $50 million.
- aprdm 6y agoeven if 10% went to them.. this is 1998.. it is a lot of money back back then (more than 99% of people will make in their life time) and is a lot of money now.
- compiler-guy 6y agoBut not a lot of money in comparison to the VCs who could have done it in 1998. Not either a lot of connections in comparison to the VCs. Ten million dollars is a lot of money, but not especially rare among financial types and tech titans. But the people who actually make something like this are much rarer.
- nwienert 6y agoI covered that in my comment with the “and” clause. I don’t deny they were radically successful at making a club. That’s my point, their success was in making an elite social group, not in any special VC strategy. The only way to replicate their success (if that’s what you define success as) would be to somehow supersede their reputation as the most desirable club.
- darawk 6y ago> That’s my point, their success was in making an elite social group, not in any special VC strategy. The only way to replicate their success (if that’s what you define success as) would be to somehow supersede their reputation as the most desirable club. The reason their particular club became elite is that they developed a reputation for helping people to succeed. And they developed that reputation by doing it, repeatedly. That is what I would call a successful VC strategy.
- jl2718 6y agoYou may not remember what VC was like at that time. $50k for 50% was the expected seed round for a 4-person new grad team with about a year under their belt in Boston. I remember thinking the YC deal was crazy good crazy early. Anybody remember what it was? I recall something like $25k for 10% in the first batch. This was enough for poverty rent and ramen for 4 people for 1 year. The only problem I had with this was that he wanted all founders to quit their job before even applying, and then getting in was tough odds.