5 ms·

I think it's really hard to put a purely monetary value on YC, but I think it definitely does a disservice to say that the program only adds $5-10M worth of val

I think it's really hard to put a purely monetary value on YC, but I think it definitely does a disservice to say that the program only adds $5-10M worth of value. If you speak to YC alumni, you'll hear from many of them that YC made them dream bigger. There's a founder in the comments here who said YC was an "ambition multiplier" for him[1]. How do you value that? [1] https://news.ycombinator.com/item?id=32556060 https://news.ycombinator.com/item?id=32556060

swyx 4y ago
right, sure, that is a huge value. but it's not, for example, $1B worth of value. should John Carmack do YC? no. etc. the goal of rational decisionmaking is to try to convert all factors into some kind of comparable numbers, and $ is just one utility function on which to project all these nonmonetary qualities. call it "utils" if you like (https://en.wikipedia.org/wiki/Utility#Cardinal https://en.wikipedia.org/wiki/Utility#Cardinal). so fair point if you disagree with 5-10m of nonmonetary value equivalent. Is it more like 50m? 100m? what is the lowest you can make the upper bound? a fun academic question for most, but for me personally, i have been offered a $2-3m seed pre product so that suddenly became a lot more real.
- sevazhidkov 4y ago
  The problem with these monetary estimates is that they involve current valuations, which are probabilistically based on future outcomes, not enterprise value. PG once formalized YC value prop as average outcome multiplier [1]. Whatever the current valuation, would YC improve your expected outcome over lifetime of the company on 7.5%? If yes, then you should do it. [1] http://www.paulgraham.com/equity.html?viewfullsite=1 http://www.paulgraham.com/equity.html?viewfullsite=1
  - swyx 4y ago
    interesting framing. (and awfully convenient for yc/pg, haha, but fine) this feels like a second order analogue to the "ideas vs execution" debate - we know that idea is worth ~0, execution worth ~100 - but the harder question is - what is YC-fueled 3 months (where lets say you spend max 24 hours with YC partners/peers/events) + say 1-2 years worth of residual relevant connections worth vs a ~10 year hard grind on your own? not gonna get the answer here but was fun to contemplate :)
    - wawjgreen 4y ago
      to swyx: wow, i like the way you approach problems--and how you see things. Do you recommend any good books on critical thinking?
      - swyx 4y ago
        very kind. the silicon valleyite answer is annie duke's thinking in bets. get the book or crank up any of the 3000 podcast interviews she's done. the realer answer is have about ~16 years of being in love with/thinking about microeconomics. maybe do some math/linear algebra (where you get very used to projecting spaces onto different dimensions), and then make a few high stakes decisions with regards to job negotiations optimizing for cash, salary, learning value, career path, etc. but dont think for a second i have any of this figured out haha. i just write well.
        wawjgreen 4y ago
        thank you--i love a good thinking process--i have heard of duke's book and i will definitely read it. i always suspicious linear algebra was very useful in representing probabilistic outcomes and your answer confirms my hunch. ;) good day
- jrvarela56 4y ago
  Can we just, like, start a gofundme right here in HN and get in on the round? Calling dibs here.
  - swyx 4y ago
    lol i wish i know what i was starting man but you'll hear about it when i do

swyx 4y ago

right, sure, that is a huge value. but it's not, for example, $1B worth of value. should John Carmack do YC? no. etc. the goal of rational decisionmaking is to try to convert all factors into some kind of comparable numbers, and $ is just one utility function on which to project all these nonmonetary qualities. call it "utils" if you like (https://en.wikipedia.org/wiki/Utility#Cardinal https://en.wikipedia.org/wiki/Utility#Cardinal). so fair point if you disagree with 5-10m of nonmonetary value equivalent. Is it more like 50m? 100m? what is the lowest you can make the upper bound? a fun academic question for most, but for me personally, i have been offered a $2-3m seed pre product so that suddenly became a lot more real.

sevazhidkov 4y ago
The problem with these monetary estimates is that they involve current valuations, which are probabilistically based on future outcomes, not enterprise value. PG once formalized YC value prop as average outcome multiplier [1]. Whatever the current valuation, would YC improve your expected outcome over lifetime of the company on 7.5%? If yes, then you should do it. [1] http://www.paulgraham.com/equity.html?viewfullsite=1 http://www.paulgraham.com/equity.html?viewfullsite=1
- swyx 4y ago
  interesting framing. (and awfully convenient for yc/pg, haha, but fine) this feels like a second order analogue to the "ideas vs execution" debate - we know that idea is worth ~0, execution worth ~100 - but the harder question is - what is YC-fueled 3 months (where lets say you spend max 24 hours with YC partners/peers/events) + say 1-2 years worth of residual relevant connections worth vs a ~10 year hard grind on your own? not gonna get the answer here but was fun to contemplate :)
  - wawjgreen 4y ago
    to swyx: wow, i like the way you approach problems--and how you see things. Do you recommend any good books on critical thinking?
    - swyx 4y ago
      very kind. the silicon valleyite answer is annie duke's thinking in bets. get the book or crank up any of the 3000 podcast interviews she's done. the realer answer is have about ~16 years of being in love with/thinking about microeconomics. maybe do some math/linear algebra (where you get very used to projecting spaces onto different dimensions), and then make a few high stakes decisions with regards to job negotiations optimizing for cash, salary, learning value, career path, etc. but dont think for a second i have any of this figured out haha. i just write well.
      - wawjgreen 4y ago
        thank you--i love a good thinking process--i have heard of duke's book and i will definitely read it. i always suspicious linear algebra was very useful in representing probabilistic outcomes and your answer confirms my hunch. ;) good day
jrvarela56 4y ago
Can we just, like, start a gofundme right here in HN and get in on the round? Calling dibs here.
- swyx 4y ago
  lol i wish i know what i was starting man but you'll hear about it when i do