5 ms·

Good article, but I disagree with the Microsoft/Apple example in the beginning. MS and Apple happened to come along when the microcomputer was really starting

by brk 18y ago

Good article, but I disagree with the Microsoft/Apple example in the beginning. MS and Apple happened to come along when the microcomputer was really starting to take off, and they were able to ride that wave (while 1000's of other microcomputer startups crashed). One thing that worries me personally about starting the "stereotypical" HN startup right now, is that I think the free/fremium model is going to lose steam FAST. My prediction is that you will see more companies trying to start monetizing their web-app soon. FWIW, TipJoy is well positioned to take advantage of this if my prediction is true. Of course, I've always been a hardware/product startup hacker, but I've had a couple of rounds in software and Web 2.0 companies. So, I'm not as immersed in web-app funding cycles as some others here are. I would look to solar and certain other viable alternative energy options right now as the next major tech growth sector. I think the tech startup world needs to see more "inventions" (again, admitting my own bias). While many here may disagree with me, one of the problems with web-apps is that while they are cheap to get going (relatively speaking), I think that the saturation of non-revenue producing web-app companies, coupled with the low cost of starting them, will make many traditional VCs look elsewhere for their next investments. The web-app community needs more investors like YC, that keep the investments and process realistic.

danielh 18y ago
Indeed, there are a ton of web-apps that probably will never take off. Still, there is the big advantage that you can build a prototype almost for free. Other fields (solar, biotech, whatever) might require way more money to start. For real stuff, like machines, not for swag and parties. Having nothing than an idea, how do you convince a VC that you need a ton of money, given the current economic situation?
- robg 18y ago
  Still, there is the big advantage that you can build a prototype almost for free. As we build, this point still amazes me. If you're willing to put in the time and effort, the cost is not prohibitive. Build in spite of the VCs, not because of them. If your product is good enough, users will force them to find a path to your door. And, of course, you still have a day and a half: http://ycombinator.com/w2009.html http://ycombinator.com/w2009.html
pg 18y ago
MS and Apple happened to come along when the microcomputer was really starting to take off, and they were able to ride that wave That was the point I was making with those examples: that technology evolves independently of the stock market. So if it's time to build the Apple I or Altair Basic, do it whether the economy is good or bad.
- robg 18y ago
  After reading the Woz interview in Founders, it's obvious that he wasn't paying much attention to the stock market. He was too busy doing what he loved. Their initial business approach (cash for product) may have been produced by their times, but they didn't let that stand in the way. And that's the lesson for me. All I can control is my immediate situation. The other stuff is just noise best drowned out by hard work at things I enjoy.
- zhyder 18y ago
  Technology doesn't evolve independently of a market for it. While "make something people want" is true in any economy, the problem is that what people want changes with the state of the economy. So startup founders need to reassess the market for their products (building iPods or building pacemakers?), and I'd guess many will decide this is not the right economy for their startups, and some will now discover new opportunities. You do touch upon this a little bit in your article, where you mention startups that save customers money will succeed more in a bad economy. But I thought the more general assertion wasn't made.
  - sutro 18y ago
    I've often thought that the mantra make something people want should be amended to make something people want to pay for. It's an important distinction. It's the difference between Richard Stallman and Steve Jobs, between Linus Torvalds and Bill Gates. I have great respect for all of those individuals, but I don't look to Stallman or Torvalds for business inspiration. I don't doubt that all YC companies have made something people want, but I wonder whether all have made something people want to pay for.
iamelgringo 18y ago
one of the problems with web-apps is that while they are cheap to get going ... many traditional VCs look elsewhere for their next investments. It's not a bug, it's a feature.
- tdavidson 18y ago
  yep, that's not a problem with web-apps, that's a problem with traditional VCs...
alecco 18y ago
MS and Apple happened to come along when the microcomputer was really starting to take off There are very good waves to ride right now. For example: Cloud computing, IPv6, Energy Saving, and moving everything out there to AJAX. All of those will obsolete other technologies and most will save money.
kingkongrevenge 18y ago
> I would look to solar and certain other viable alternative energy options right now as the next major tech growth sector. Right. The next wave is further electrification, new power generation, and first world infrastructure renewal. New advanced rail and massive rail line build outs. Rebuilding sewage and water systems. Alternative energy. Revamping agriculture for expensive oil and scarce fresh water will also be a big hi-tech area. I'm sure the garage hackers will make money here and there as part of the wave, but they will be auxiliary; not like with the PC or internet booms. The main stage will be the capital intensive stuff working with actual raw materials.
- fallentimes 18y ago
  You should become a limited partner at Kleiner; they share many of your thoughts.
- ksvs 18y ago
  Why stop there? I think the next wave is that the world will revert to a mainly agricultural economy. I'm sure artisans will make money here and there (repairing plows and so on) but they will be auxiliary...
  - kingkongrevenge 18y ago
    A modern vegetable farm or hothouse operation is eight times as hi-tech as your ruby on rails site. A maglev train and its infrastructure eight times again.
davi 18y ago
I wonder if a cooler external economy might actually give a startup more time to stabilize its platform, find its market, etc. etc. before exiting. This might actually produce better startups, on average. (Here, "better" = chance of becoming profitable, and relevant to the web, for the long term; "better" != chance of cashing out for megabucks within a year or two; i.e. "better" for me as a web user.)
- netcan 18y ago
  Or for buyers?

by brk 18y ago

danielh 18y ago

Indeed, there are a ton of web-apps that probably will never take off. Still, there is the big advantage that you can build a prototype almost for free. Other fields (solar, biotech, whatever) might require way more money to start. For real stuff, like machines, not for swag and parties. Having nothing than an idea, how do you convince a VC that you need a ton of money, given the current economic situation?

robg 18y ago
Still, there is the big advantage that you can build a prototype almost for free. As we build, this point still amazes me. If you're willing to put in the time and effort, the cost is not prohibitive. Build in spite of the VCs, not because of them. If your product is good enough, users will force them to find a path to your door. And, of course, you still have a day and a half: http://ycombinator.com/w2009.html http://ycombinator.com/w2009.html

pg 18y ago

MS and Apple happened to come along when the microcomputer was really starting to take off, and they were able to ride that wave That was the point I was making with those examples: that technology evolves independently of the stock market. So if it's time to build the Apple I or Altair Basic, do it whether the economy is good or bad.

robg 18y ago
After reading the Woz interview in Founders, it's obvious that he wasn't paying much attention to the stock market. He was too busy doing what he loved. Their initial business approach (cash for product) may have been produced by their times, but they didn't let that stand in the way. And that's the lesson for me. All I can control is my immediate situation. The other stuff is just noise best drowned out by hard work at things I enjoy.
zhyder 18y ago
Technology doesn't evolve independently of a market for it. While "make something people want" is true in any economy, the problem is that what people want changes with the state of the economy. So startup founders need to reassess the market for their products (building iPods or building pacemakers?), and I'd guess many will decide this is not the right economy for their startups, and some will now discover new opportunities. You do touch upon this a little bit in your article, where you mention startups that save customers money will succeed more in a bad economy. But I thought the more general assertion wasn't made.
- sutro 18y ago
  I've often thought that the mantra make something people want should be amended to make something people want to pay for. It's an important distinction. It's the difference between Richard Stallman and Steve Jobs, between Linus Torvalds and Bill Gates. I have great respect for all of those individuals, but I don't look to Stallman or Torvalds for business inspiration. I don't doubt that all YC companies have made something people want, but I wonder whether all have made something people want to pay for.

iamelgringo 18y ago

one of the problems with web-apps is that while they are cheap to get going ... many traditional VCs look elsewhere for their next investments. It's not a bug, it's a feature.

tdavidson 18y ago
yep, that's not a problem with web-apps, that's a problem with traditional VCs...

alecco 18y ago

MS and Apple happened to come along when the microcomputer was really starting to take off There are very good waves to ride right now. For example: Cloud computing, IPv6, Energy Saving, and moving everything out there to AJAX. All of those will obsolete other technologies and most will save money.

kingkongrevenge 18y ago

> I would look to solar and certain other viable alternative energy options right now as the next major tech growth sector. Right. The next wave is further electrification, new power generation, and first world infrastructure renewal. New advanced rail and massive rail line build outs. Rebuilding sewage and water systems. Alternative energy. Revamping agriculture for expensive oil and scarce fresh water will also be a big hi-tech area. I'm sure the garage hackers will make money here and there as part of the wave, but they will be auxiliary; not like with the PC or internet booms. The main stage will be the capital intensive stuff working with actual raw materials.

fallentimes 18y ago
You should become a limited partner at Kleiner; they share many of your thoughts.
ksvs 18y ago
Why stop there? I think the next wave is that the world will revert to a mainly agricultural economy. I'm sure artisans will make money here and there (repairing plows and so on) but they will be auxiliary...
- kingkongrevenge 18y ago
  A modern vegetable farm or hothouse operation is eight times as hi-tech as your ruby on rails site. A maglev train and its infrastructure eight times again.

davi 18y ago

I wonder if a cooler external economy might actually give a startup more time to stabilize its platform, find its market, etc. etc. before exiting. This might actually produce better startups, on average. (Here, "better" = chance of becoming profitable, and relevant to the web, for the long term; "better" != chance of cashing out for megabucks within a year or two; i.e. "better" for me as a web user.)

netcan 18y ago
Or for buyers?