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I've been in the VC-backed startup space as a lead/principal engineer or technical advisor for the last 4 years. In that time, I've worked at 1 startup that cl

I've been in the VC-backed startup space as a lead/principal engineer or technical advisor for the last 4 years. In that time, I've worked at 1 startup that closed a $100m C, one that closed a multi-million B, one that recently closed a $30m C, and one that started with a $8m seed. I've started my own startup and worked with founders of other startups on the side advising on the technical side (and once in a while building the initial PoCs). Some have failed, some have succeeded wildly, some have hit their limits of growth, some have a great product that solves an obvious problem yet get zero traction. Here is a lesson-learned as far as "copying" goes: it doesn't matter. It doesn't matter if there are 3 companies in the same domain doing the same thing; then it simply comes down to insider connections, sales, marketing, and pricing. In the end, the team that wins isn't always the one with the best product; there is a fair bit of luck and timing, marketing is super important, and having the right leadership team in place makes all the difference. The non-product aspects of a successful business are supremely underappreciated, especially by the technical folks. Bad products can become good products eventually; bad teams can rarely survive turbulence and it is so hard to tell if a team has the right "vibes" or not. So it makes sense for YC or any VC to bet broadly because the reasons why a team succeeds and another fails is so intangible with so much luck and timing involved as well that making broad bets -- even if two YC-batch companies are very similar in terms of domain and product -- is just sound business. Edit: to be clear, these are not my principles (no need to attack me personally); these are simply my observations about teams that have succeeded and teams that have floundered. I left 1 company because because in principle, I disagreed with their loose operational style in a regulated space.

kibwen 2y ago
The problem here is not that they stole the idea, it's that they literally just took an open-source codebase and filed off the serial numbers to claim it as their own proprietary work, and they did so in the most comically inept way possible. From the OP: PearAI offers an AI coding editor. The startup’s founder Duke Pan has openly said that it’s a cloned copy of another AI editor called Continue, which was covered under the Apache open source license. But PearAI made a major misstep: PearAI originally slapped its own made-up closed license on it, called the Pear Enterprise License, which Pan admitted was written by ChatGPT.
- CharlieDigital 2y ago
  It doesn't matter so long as they didn't violate any licenses. Where the product starts and where it ends will be two totally different endpoints that are sure to diverge once they find their domain and business model.
  - mlyle 2y ago
    Starting off by making an obviously hamfisted move matters. It's a headwind to overcome. Is it possible to overcome? Sure. Yes, you can heal after shooting yourself in the foot. (And, of course, removing attribution is violating licenses). However, they're unlikely to face litigation for this. The possible legal consequences aren't the actual consequences they're likely to face.
    - pj_mukh 2y ago
      AFAICT, the attribution's been there since the beginning on their GitHub? (see: About section)[1]. I agree adding their own license was hamfisted, but honestly, if I'm funding a company I hope they would spend less than <$1 on legal and licensing initially. The first order of business is almost always proving whether your business should even exist. https://github.com/trypear/pearai-app?tab=readme-ov-file https://github.com/trypear/pearai-app?tab=readme-ov-file
      - brendoelfrendo 2y ago
        I mean, whatever floats your boat, but if I'm funding a company, I hope they've spent whatever they need to spend to determine whether or not what they're doing is legal and sensible, even if that involves spending more than $1. Cloning an open source project and having Chat-GPT write you an enterprise license is not how you "prove whether your business should even exist." It's how you scam rich people into giving you money.
      - lolinder 2y ago
        > I hope they would spend less than <$1 on legal and licensing initially They claim that they intended to make the project open source all along. Just keeping the Apache license would have been less time consuming than asking ChatGPT for one, with the added benefit of being a real license.
segmondy 2y ago
Wild take, copying matters. If you have a great idea, and no capital and I copy you and have more capital (money, social), I can deploy my capital to crush you in the market. This very idea that ideas don't matter is hogwash, you can say that idea alone is not enough, but it matters. This is why big companies sometimes get sued by the govt, they copy smaller companies ideas, add it into their already established product for free and stifle growth for the world.
- CharlieDigital 2y ago
  > If you have a great idea, and no capital and I copy you and have more capital (money, social), I can deploy my capital to crush you in the market This is precisely how our markets work and why we have a system of trademarks, patents, and copyright. Use those tools to your advantage if you are small.
  - pclmulqdq 2y ago
    So many people on sites like this hate patents and trademarks, but I have seen patents used in two ways: * In slapfights between huge companies that don't really matter. * To protect startups from copying. These things literally exist to protect startups.
    - marcosdumay 2y ago
      I have never seen anybody succeed on that second usage, and I've seen a few people try. Patents protect the party with the most money to spend.
      - pclmulqdq 2y ago
        You have almost certainly seen that mechanism in action, even though you don't realize it. The most visible way that it works is through the sale of those patents to patent trolls (usually after the company has nothing left) and the resulting big-money lawsuits against big corporations that ripped them off.
      - deleted 2y ago
whiplash451 2y ago
Your comment is interesting but seems orthogonal to the problem at hand. We are talking about a company that clearly showed bad intent and dishonesty in their attitude. And that's doing a big disservice to the AI space coming from a high-profile incubator such as YC. If you can't be a good example, you'll just have to be a terrible warning.
- CharlieDigital 2y ago
  > a company that clearly showed bad intent and dishonesty in their attitude You've described most "successful" startups. FTX, Binance, Uber, etc. The company I was in that raised a $100m C was in a real mess behind the scenes operating in a highly regulated space (one of the reasons I left; I disagreed with certain practices in principle).
- drawkward 2y ago
  Maybe the point isnt to invest in the team with the best ideas, but to invest in the most ruthless/least ethical because thats what the investors believe will win the day?
lolinder 2y ago
> bad teams can rarely survive turbulence and it is so hard to tell if a team has the right "vibes" or not. Their apology makes it pretty clear that this team doesn't have the right vibes: "We thought the license in the root repo wasn’t that important, so we just generated one that we thought was open." The license that was generated was the "Pear Enterprise License". These guys thought the license didn't matter so their instinct was to ask ChatGPT to generate one that they "thought was open" and they didn't even blink when it generated one with "Enterprise" in the title. These guys are either dishonest or completely out of their depth. https://x.com/CodeFryingPan/status/1840831339337302204 https://x.com/CodeFryingPan/status/1840831339337302204
- CharlieDigital 2y ago
  It's very possible that they have the wrong vibes and will fail; this is why any VC is smart to bet on multiple teams, even if many are building very similar products. A good portion of those teams will go nowhere and fall apart by themselves. Even the best VC-partner can't always tell how a teams vibes are from the inside until it's too late.
  - lolinder 2y ago
    Maybe you're right. I'd like to think that "are these the type of people who turn to ChatGPT for completely inappropriate things" would have made it into the VC screening process, but then again "using ChatGPT for completely inappropriate things" is practically a requirement to get funding these days.
- james_marks 2y ago
  > These guys are either dishonest or completely out of their depth. More likely both.
sbarre 2y ago
Most of this tracks with what I've seen over the years... Most VCs invest in teams first, products/ideas second.
tb1989 2y ago
[flagged]
- beepbooptheory 2y ago
  Morality, economy, something about China... Perhaps the most HN comment ever on its face, but also could you unpack either of these points? No worries if not, and I can't even decide which one I would like argued for more! I would hope, (only for the sake of the rationality of your points, please do not turn this into something about political correctness), that you are not opposing the Chinese way to morality itself. For the simple reason that it is a fundamental category error! But perhaps more profound a conceit is connecting morality to the economy. Is not our best advances in economics precisely in step with it's secularization, it's scientific nature which needs not for any old ideas of the individual and her maxims or "moral" nature? I guess, in your system here, what is this thing, economy, that could be harmed by a "lack of morality"? How do we understand it? Which came first? Why and how could there be this connection? I am far from an expert, but this seems to fly in the face of the whole spectrum of thought in this area, from Smith to Marx to Friedman. But would be very interested to understand it more if you have some literature.
  - CharlieDigital 2y ago
    Chinese have an open philosophy on knowledge and by proxy, copying that information and imitation. This goes back to the time of Confucius. Point being: it is somewhat culturally specific to be "anti-copyright". I use that in quotes because it's not exactly that; it's more like Chinese culture's default is to copy and copyright is a relatively recent legal mechanism.
stonethrowaway 2y ago
[flagged]
- throwuxiytayq 2y ago
  [flagged]
  - CharlieDigital 2y ago
    You've probably got the wrong impression. My own startups have failed partially because I'm so bad at lying -- even small white lies. Mostly my own projects are just open sourced or maintained for free for a small community of passionate users. I've realized I'm great at building software, built terrible at marketing, sales, and extracting capital.
    - throwuxiytayq 2y ago
      Well, OK, that's actually rather commendable. Still, ripping off open-source projects seems plainly scummy, and is a strong signal of a lack of actual product level competence. Hence my difficulty to find anything redeemable about your take.
  - dang 2y ago
    No personal attacks, please. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
light_hue_1 2y ago
The problem is that they took someone else's code, claimed they built it themselves, and then claimed that as evidence for the velocity and capability of their team. If they had said it's based on X. Or that they're going in a different direction. Or even that they're going in the same direction but will best that other team. Who cares? YC should bet on multiple companies in the same space. It's only logical. What bothers people is the lie. Also. They did break the terms of the license. They replaced the Apache license with their own enterprise license. They said they have the rights to relicense the code. Apache requires that they disclose the origin of the code and what modifications they made. And they lied to YC about that, they don't have any of these rights. It's not sound business to lie to investors. It's not sound business to violate licenses.
foobarian 2y ago
> Here is a lesson-learned as far as "copying" goes: it doesn't matter. There is this tendency among a subset of the tech community to look down on copying. I think this is probably coming from more junior people who recently came out of university where plagiarism is punished, or people in academia such as in PhD programs which are trained to highly value originality.
MangoCoffee 2y ago
>Here is a lesson-learned as far as "copying" goes: it doesn't matter LOL. Why is the West complaining about China 'copying' their ideas and products? It seems hypocritical. Why are Western companies crying foul about China?
spaintech 2y ago
Dang, that many startups in that short period of time, how is that plausible? I say that wholeheartedly considering the time it takes to take something from an idea to a PoC to an MVP. Don’t get me wrong, I know there are plenty of quick slap together projects out there, similar to the one been commented here, they are more like a marketing wrapper of bundles from others people’s work, which is something to be frowned upon… specially if you are technically motivated. Well, IMHO, when considering a project, knowing that you are solving for a customer demand problem is very different than from a VC minded problem. I personally would never advise or be part of such an “Arrangement.” These are my clear principles, and my success will come or fail, but my integrity will never be questioned.
- CharlieDigital 2y ago
  > Dang, that many startups in that short period of time, how is that plausible? I joined each at different stages. Some I left after short stints because the vibes were just wrong. Some failed and I could immediately tell that the vibes were off after the first bit of turbulence. I'm still at one of the startups because the vibes are good and we've got a good product and team.
deleted 2y ago
[deleted]
sobellian 2y ago
I'd say it matters. Life becomes so much harder if you have to justify why your seed/pre-seed startup has a unique advantage, but you're just ripping off the competition. Maybe you have unique hustle. That's a fairly incredible claim - especially in a crowded space like AI. I think it's at least a warning klaxon. We're entering this market by copying a competitor (not just in UI/UX, but literally byte-for-byte). How are we going to beat them? How do we ensure the same does not happen to us? AI-powered coding is such a ridiculously crowded arena. I would be pretty apprehensive. Even if I was dead-set on doing an AI startup, I would still look for a different market.
oglop 2y ago
All good points. Problem is, they didn’t attribute after the copy. And that’s literally all they had to do. Now they stand in violation of that license which I admit I don’t know what that means, but it probably isn’t good. I mean, how do you fuck up piggy-backing off open source? I’ve had many companies piggy back off my own project and it’s whatever, because they attribute to the original codebase. But it’s all whatever. Most these discussions are gonna end up in the trash over the next 5 years anyway as rationalistic machines spread more and more.

kibwen 2y ago

The problem here is not that they stole the idea, it's that they literally just took an open-source codebase and filed off the serial numbers to claim it as their own proprietary work, and they did so in the most comically inept way possible. From the OP: PearAI offers an AI coding editor. The startup’s founder Duke Pan has openly said that it’s a cloned copy of another AI editor called Continue, which was covered under the Apache open source license. But PearAI made a major misstep: PearAI originally slapped its own made-up closed license on it, called the Pear Enterprise License, which Pan admitted was written by ChatGPT.

CharlieDigital 2y ago
It doesn't matter so long as they didn't violate any licenses. Where the product starts and where it ends will be two totally different endpoints that are sure to diverge once they find their domain and business model.
- mlyle 2y ago
  Starting off by making an obviously hamfisted move matters. It's a headwind to overcome. Is it possible to overcome? Sure. Yes, you can heal after shooting yourself in the foot. (And, of course, removing attribution is violating licenses). However, they're unlikely to face litigation for this. The possible legal consequences aren't the actual consequences they're likely to face.
  - pj_mukh 2y ago
    AFAICT, the attribution's been there since the beginning on their GitHub? (see: About section)[1]. I agree adding their own license was hamfisted, but honestly, if I'm funding a company I hope they would spend less than <$1 on legal and licensing initially. The first order of business is almost always proving whether your business should even exist. https://github.com/trypear/pearai-app?tab=readme-ov-file https://github.com/trypear/pearai-app?tab=readme-ov-file
    - brendoelfrendo 2y ago
      I mean, whatever floats your boat, but if I'm funding a company, I hope they've spent whatever they need to spend to determine whether or not what they're doing is legal and sensible, even if that involves spending more than $1. Cloning an open source project and having Chat-GPT write you an enterprise license is not how you "prove whether your business should even exist." It's how you scam rich people into giving you money.
    - lolinder 2y ago
      > I hope they would spend less than <$1 on legal and licensing initially They claim that they intended to make the project open source all along. Just keeping the Apache license would have been less time consuming than asking ChatGPT for one, with the added benefit of being a real license.

segmondy 2y ago

Wild take, copying matters. If you have a great idea, and no capital and I copy you and have more capital (money, social), I can deploy my capital to crush you in the market. This very idea that ideas don't matter is hogwash, you can say that idea alone is not enough, but it matters. This is why big companies sometimes get sued by the govt, they copy smaller companies ideas, add it into their already established product for free and stifle growth for the world.

CharlieDigital 2y ago
> If you have a great idea, and no capital and I copy you and have more capital (money, social), I can deploy my capital to crush you in the market This is precisely how our markets work and why we have a system of trademarks, patents, and copyright. Use those tools to your advantage if you are small.
- pclmulqdq 2y ago
  So many people on sites like this hate patents and trademarks, but I have seen patents used in two ways: * In slapfights between huge companies that don't really matter. * To protect startups from copying. These things literally exist to protect startups.
  - marcosdumay 2y ago
    I have never seen anybody succeed on that second usage, and I've seen a few people try. Patents protect the party with the most money to spend.
    - pclmulqdq 2y ago
      You have almost certainly seen that mechanism in action, even though you don't realize it. The most visible way that it works is through the sale of those patents to patent trolls (usually after the company has nothing left) and the resulting big-money lawsuits against big corporations that ripped them off.
    - deleted 2y ago

whiplash451 2y ago

Your comment is interesting but seems orthogonal to the problem at hand. We are talking about a company that clearly showed bad intent and dishonesty in their attitude. And that's doing a big disservice to the AI space coming from a high-profile incubator such as YC. If you can't be a good example, you'll just have to be a terrible warning.

CharlieDigital 2y ago
> a company that clearly showed bad intent and dishonesty in their attitude You've described most "successful" startups. FTX, Binance, Uber, etc. The company I was in that raised a $100m C was in a real mess behind the scenes operating in a highly regulated space (one of the reasons I left; I disagreed with certain practices in principle).
drawkward 2y ago
Maybe the point isnt to invest in the team with the best ideas, but to invest in the most ruthless/least ethical because thats what the investors believe will win the day?

lolinder 2y ago

> bad teams can rarely survive turbulence and it is so hard to tell if a team has the right "vibes" or not. Their apology makes it pretty clear that this team doesn't have the right vibes: "We thought the license in the root repo wasn’t that important, so we just generated one that we thought was open." The license that was generated was the "Pear Enterprise License". These guys thought the license didn't matter so their instinct was to ask ChatGPT to generate one that they "thought was open" and they didn't even blink when it generated one with "Enterprise" in the title. These guys are either dishonest or completely out of their depth. https://x.com/CodeFryingPan/status/1840831339337302204 https://x.com/CodeFryingPan/status/1840831339337302204

CharlieDigital 2y ago
It's very possible that they have the wrong vibes and will fail; this is why any VC is smart to bet on multiple teams, even if many are building very similar products. A good portion of those teams will go nowhere and fall apart by themselves. Even the best VC-partner can't always tell how a teams vibes are from the inside until it's too late.
- lolinder 2y ago
  Maybe you're right. I'd like to think that "are these the type of people who turn to ChatGPT for completely inappropriate things" would have made it into the VC screening process, but then again "using ChatGPT for completely inappropriate things" is practically a requirement to get funding these days.
james_marks 2y ago
> These guys are either dishonest or completely out of their depth. More likely both.

sbarre 2y ago

Most of this tracks with what I've seen over the years... Most VCs invest in teams first, products/ideas second.

tb1989 2y ago

[flagged]

beepbooptheory 2y ago
Morality, economy, something about China... Perhaps the most HN comment ever on its face, but also could you unpack either of these points? No worries if not, and I can't even decide which one I would like argued for more! I would hope, (only for the sake of the rationality of your points, please do not turn this into something about political correctness), that you are not opposing the Chinese way to morality itself. For the simple reason that it is a fundamental category error! But perhaps more profound a conceit is connecting morality to the economy. Is not our best advances in economics precisely in step with it's secularization, it's scientific nature which needs not for any old ideas of the individual and her maxims or "moral" nature? I guess, in your system here, what is this thing, economy, that could be harmed by a "lack of morality"? How do we understand it? Which came first? Why and how could there be this connection? I am far from an expert, but this seems to fly in the face of the whole spectrum of thought in this area, from Smith to Marx to Friedman. But would be very interested to understand it more if you have some literature.
- CharlieDigital 2y ago
  Chinese have an open philosophy on knowledge and by proxy, copying that information and imitation. This goes back to the time of Confucius. Point being: it is somewhat culturally specific to be "anti-copyright". I use that in quotes because it's not exactly that; it's more like Chinese culture's default is to copy and copyright is a relatively recent legal mechanism.

stonethrowaway 2y ago

[flagged]

throwuxiytayq 2y ago
[flagged]
- CharlieDigital 2y ago
  You've probably got the wrong impression. My own startups have failed partially because I'm so bad at lying -- even small white lies. Mostly my own projects are just open sourced or maintained for free for a small community of passionate users. I've realized I'm great at building software, built terrible at marketing, sales, and extracting capital.
  - throwuxiytayq 2y ago
    Well, OK, that's actually rather commendable. Still, ripping off open-source projects seems plainly scummy, and is a strong signal of a lack of actual product level competence. Hence my difficulty to find anything redeemable about your take.
- dang 2y ago
  No personal attacks, please. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

light_hue_1 2y ago

The problem is that they took someone else's code, claimed they built it themselves, and then claimed that as evidence for the velocity and capability of their team. If they had said it's based on X. Or that they're going in a different direction. Or even that they're going in the same direction but will best that other team. Who cares? YC should bet on multiple companies in the same space. It's only logical. What bothers people is the lie. Also. They did break the terms of the license. They replaced the Apache license with their own enterprise license. They said they have the rights to relicense the code. Apache requires that they disclose the origin of the code and what modifications they made. And they lied to YC about that, they don't have any of these rights. It's not sound business to lie to investors. It's not sound business to violate licenses.

foobarian 2y ago

> Here is a lesson-learned as far as "copying" goes: it doesn't matter. There is this tendency among a subset of the tech community to look down on copying. I think this is probably coming from more junior people who recently came out of university where plagiarism is punished, or people in academia such as in PhD programs which are trained to highly value originality.

MangoCoffee 2y ago

>Here is a lesson-learned as far as "copying" goes: it doesn't matter LOL. Why is the West complaining about China 'copying' their ideas and products? It seems hypocritical. Why are Western companies crying foul about China?

spaintech 2y ago

Dang, that many startups in that short period of time, how is that plausible? I say that wholeheartedly considering the time it takes to take something from an idea to a PoC to an MVP. Don’t get me wrong, I know there are plenty of quick slap together projects out there, similar to the one been commented here, they are more like a marketing wrapper of bundles from others people’s work, which is something to be frowned upon… specially if you are technically motivated. Well, IMHO, when considering a project, knowing that you are solving for a customer demand problem is very different than from a VC minded problem. I personally would never advise or be part of such an “Arrangement.” These are my clear principles, and my success will come or fail, but my integrity will never be questioned.

CharlieDigital 2y ago
> Dang, that many startups in that short period of time, how is that plausible? I joined each at different stages. Some I left after short stints because the vibes were just wrong. Some failed and I could immediately tell that the vibes were off after the first bit of turbulence. I'm still at one of the startups because the vibes are good and we've got a good product and team.

deleted 2y ago

[deleted]

sobellian 2y ago

I'd say it matters. Life becomes so much harder if you have to justify why your seed/pre-seed startup has a unique advantage, but you're just ripping off the competition. Maybe you have unique hustle. That's a fairly incredible claim - especially in a crowded space like AI. I think it's at least a warning klaxon. We're entering this market by copying a competitor (not just in UI/UX, but literally byte-for-byte). How are we going to beat them? How do we ensure the same does not happen to us? AI-powered coding is such a ridiculously crowded arena. I would be pretty apprehensive. Even if I was dead-set on doing an AI startup, I would still look for a different market.

oglop 2y ago

All good points. Problem is, they didn’t attribute after the copy. And that’s literally all they had to do. Now they stand in violation of that license which I admit I don’t know what that means, but it probably isn’t good. I mean, how do you fuck up piggy-backing off open source? I’ve had many companies piggy back off my own project and it’s whatever, because they attribute to the original codebase. But it’s all whatever. Most these discussions are gonna end up in the trash over the next 5 years anyway as rationalistic machines spread more and more.