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The thing that bothers me most about the "startup culture" that I see is not just touting revenue but constantly touting funding rounds. It's great that you're

by ebbv 14y ago

The thing that bothers me most about the "startup culture" that I see is not just touting revenue but constantly touting funding rounds. It's great that you're funded, but that has nothing to do with me, nor is it evidence that you are ever going to accomplish anything worthwhile, IMHO. It just means you convinced someone with money that you're going to put their money to good use. Their confidence means nothing to me.

emmett 14y ago
The reason startups do press releases about funding rounds is that news outlets write about them. The reason news outlets write about them is that people (like those found on Hacker News) read, upvote, and comment on those articles. Most startups would prefer to talk about their product, but that's a much harder sell as news.
- ebbv 14y ago
  That's passing the buck and refusing to take responsibility for their own actions. News places will reprint anything that will get views, and people will click through on anything sensational. So is that a valid excuse for engaging in GoDaddy-ish behavior? No. You have to take responsibility for what you choose to do. If you choose to release press releases purely about your VC funding round instead of talking about your product; that's your choice, nobody else's. And if you talk about your product and nobody is interested in it; you should take that as a sign.
  - matthewowen 14y ago
    There's a pretty big difference between being 'GoDaddy-ish' and releasing press releases about funding rounds. GoDaddy style behaviour is A Bad Thing in and of itself. The only thing that's bad about funding round press releases is that they're boring. But since people print them and are apparently interested in reading them... well, OK. Press releases about funding don't reveal a lack of moral fibre or dubious ethics. They just reveal that the organisation is savvy enough to do something that works (een if it is pointless).
    - ebbv 14y ago
      I agree there's a difference, I was just using it as an example to illustrate a point; that the fact that people will print something is not an excuse for that behavior.
  - justin 14y ago
    Startups certainly "take responsibility" for announcing and heavily publicizing their fundraising rounds. It's a strong signal that your company is on a path to success (not the only path) and you certainly want it spread as far and wide as possible. I don't care if some people think my funding announcement less valid than other industry news, or somehow "less earned." The fact that there is a market for that kind of news means that enough people derive value from it. Not all news is valuable to all people: celebrity news and financial news have two very different audiences. If an investor is accidentally exposed to celebrity news at the grocery store checkout line, is it the fault of the celebrity?
- _delirium 14y ago
  I think that's right, but I do think it's also changeable, and that there is demand for more product-focused news. Part of the problem (imo, of course) is that funding-related news is just easier journalism: reporting a funding round is often a very loose gloss on a press release, while reviewing products requires work to identify which products are worth reviewing, how they should best be approached, maybe even data analysis. I think people would read that if there were more of it, though. People on HN do vote up even fairly cursory product-focused articles when they appear, e.g. a blog post doing a comparison of Heroku and a competitor. I see the funding-related stories as more just a least-effort excuse to talk about a startup: someone (usually TechCrunch) doesn't really have the time to spare doing a proper product review, but throws out a little blurb about funding, and opens up the floor for discussion about the startup. That then gets voted up on HN because people are curious and want to discuss it, and the TC blurb presents an opportunity to do so, even if it isn't itself that compelling as an article. Now if TC gets the same hits from those low-effort articles, why would they put in Consumer Reports style work doing more in-depth product-focused reporting? I would guess there's little monetary justification for doing so, unfortunately.
tlb 14y ago
There are legitimate reasons to tout it. As a startup, it's a constant battle to convince partners, vendors, big customers and potential employees that you're growing and not going away. Announcing a funding round is very convincing in that respect. It's social proof from respected people that have done their research.
- ebbv 14y ago
  I'm not saying it's not worth being proud of. It is, for sure. But is it worthy of being industry wide news? Most of the time, no. Most of these press releases contain no actual information that would be of interest to anyone who's life is not directly affected by that money. That's my point. Sure, tell all your friends. Post on Facebook and Twitter. Great! Hell even send out a press release. But industry news sources should not be reprinting these press releases, and we should not be upvoting them, unless they have actual content beyond "Hey these guys got some money to pursue their project."
  - deleted 14y ago
    [deleted]
- photorized 14y ago
  There are also legitimate reasons to be ashamed of it. Expansion capital aside, a pre-revenue funding round is an admission of failure. Failure to convince your team to bootstrap a prototype, failure to build a product/service that's profitable right out of the gate, failure to "convince" by your product performance alone.
pg 14y ago
It's odd how this comment appears so frequently on HN and yet each time someone makes it they seem to be under the impression they're making a novel observation. It's like the comment that copying music isn't stealing, or the comment that when women say no they mean no. There may be a pattern here. Perhaps the pattern is that these statements are emptily true: they're either truisms if taken literally, or miss the point otherwise. It may be the latter disconnect with reality gives the commenter the impression that they have discovered some new insight that needs to be mentioned. I.e. a truism that was also true when applied to the world would clearly be something that everyone else also believed, and thus wouldn't be worth mentioning.
- tptacek 14y ago
  I think you may unintentionally be implying that there aren't lots of people in the "startup culture" that do in fact consider getting funding to be an intrinsically important achievement. That seems like a meme worth quashing. I agree that the comment has become very boring. It is especially annoying to see it injected into conversations that don't really involve VC funding.
  - pg 14y ago
    It's an achievement of a sort. It's kind of like winning a medal: the metal disc in itself is unimportant, but it matters because it's a sign someone was impressed with you for something. As with medals, how much it matters depends on who was impressed with you and for what. Later rounds converge on measuring revenue, which is what people who think companies shouldn't be celebrating fundraising usually think they should be celebrating instead.
    - tptacek 14y ago
      It's interesting to observe that the VC rounds that are most often casually mocked on HN --- the huge rounds like Benchmark and then DST's in Twitter --- are, as proxies for earnings expectations presumably based on some very compelling inside information, a more meaningful milestone than many of small first rounds, which are often blue-sky. As usual, even when the conventional wisdom of HN is on to something, it's for the wrong reasons and rapidly reaches the wrong conclusions.

by ebbv 14y ago

emmett 14y ago

The reason startups do press releases about funding rounds is that news outlets write about them. The reason news outlets write about them is that people (like those found on Hacker News) read, upvote, and comment on those articles. Most startups would prefer to talk about their product, but that's a much harder sell as news.

ebbv 14y ago
That's passing the buck and refusing to take responsibility for their own actions. News places will reprint anything that will get views, and people will click through on anything sensational. So is that a valid excuse for engaging in GoDaddy-ish behavior? No. You have to take responsibility for what you choose to do. If you choose to release press releases purely about your VC funding round instead of talking about your product; that's your choice, nobody else's. And if you talk about your product and nobody is interested in it; you should take that as a sign.
- matthewowen 14y ago
  There's a pretty big difference between being 'GoDaddy-ish' and releasing press releases about funding rounds. GoDaddy style behaviour is A Bad Thing in and of itself. The only thing that's bad about funding round press releases is that they're boring. But since people print them and are apparently interested in reading them... well, OK. Press releases about funding don't reveal a lack of moral fibre or dubious ethics. They just reveal that the organisation is savvy enough to do something that works (een if it is pointless).
  - ebbv 14y ago
    I agree there's a difference, I was just using it as an example to illustrate a point; that the fact that people will print something is not an excuse for that behavior.
- justin 14y ago
  Startups certainly "take responsibility" for announcing and heavily publicizing their fundraising rounds. It's a strong signal that your company is on a path to success (not the only path) and you certainly want it spread as far and wide as possible. I don't care if some people think my funding announcement less valid than other industry news, or somehow "less earned." The fact that there is a market for that kind of news means that enough people derive value from it. Not all news is valuable to all people: celebrity news and financial news have two very different audiences. If an investor is accidentally exposed to celebrity news at the grocery store checkout line, is it the fault of the celebrity?
_delirium 14y ago
I think that's right, but I do think it's also changeable, and that there is demand for more product-focused news. Part of the problem (imo, of course) is that funding-related news is just easier journalism: reporting a funding round is often a very loose gloss on a press release, while reviewing products requires work to identify which products are worth reviewing, how they should best be approached, maybe even data analysis. I think people would read that if there were more of it, though. People on HN do vote up even fairly cursory product-focused articles when they appear, e.g. a blog post doing a comparison of Heroku and a competitor. I see the funding-related stories as more just a least-effort excuse to talk about a startup: someone (usually TechCrunch) doesn't really have the time to spare doing a proper product review, but throws out a little blurb about funding, and opens up the floor for discussion about the startup. That then gets voted up on HN because people are curious and want to discuss it, and the TC blurb presents an opportunity to do so, even if it isn't itself that compelling as an article. Now if TC gets the same hits from those low-effort articles, why would they put in Consumer Reports style work doing more in-depth product-focused reporting? I would guess there's little monetary justification for doing so, unfortunately.

tlb 14y ago

There are legitimate reasons to tout it. As a startup, it's a constant battle to convince partners, vendors, big customers and potential employees that you're growing and not going away. Announcing a funding round is very convincing in that respect. It's social proof from respected people that have done their research.

ebbv 14y ago
I'm not saying it's not worth being proud of. It is, for sure. But is it worthy of being industry wide news? Most of the time, no. Most of these press releases contain no actual information that would be of interest to anyone who's life is not directly affected by that money. That's my point. Sure, tell all your friends. Post on Facebook and Twitter. Great! Hell even send out a press release. But industry news sources should not be reprinting these press releases, and we should not be upvoting them, unless they have actual content beyond "Hey these guys got some money to pursue their project."
- deleted 14y ago
  [deleted]
photorized 14y ago
There are also legitimate reasons to be ashamed of it. Expansion capital aside, a pre-revenue funding round is an admission of failure. Failure to convince your team to bootstrap a prototype, failure to build a product/service that's profitable right out of the gate, failure to "convince" by your product performance alone.

pg 14y ago

It's odd how this comment appears so frequently on HN and yet each time someone makes it they seem to be under the impression they're making a novel observation. It's like the comment that copying music isn't stealing, or the comment that when women say no they mean no. There may be a pattern here. Perhaps the pattern is that these statements are emptily true: they're either truisms if taken literally, or miss the point otherwise. It may be the latter disconnect with reality gives the commenter the impression that they have discovered some new insight that needs to be mentioned. I.e. a truism that was also true when applied to the world would clearly be something that everyone else also believed, and thus wouldn't be worth mentioning.

tptacek 14y ago
I think you may unintentionally be implying that there aren't lots of people in the "startup culture" that do in fact consider getting funding to be an intrinsically important achievement. That seems like a meme worth quashing. I agree that the comment has become very boring. It is especially annoying to see it injected into conversations that don't really involve VC funding.
- pg 14y ago
  It's an achievement of a sort. It's kind of like winning a medal: the metal disc in itself is unimportant, but it matters because it's a sign someone was impressed with you for something. As with medals, how much it matters depends on who was impressed with you and for what. Later rounds converge on measuring revenue, which is what people who think companies shouldn't be celebrating fundraising usually think they should be celebrating instead.
  - tptacek 14y ago
    It's interesting to observe that the VC rounds that are most often casually mocked on HN --- the huge rounds like Benchmark and then DST's in Twitter --- are, as proxies for earnings expectations presumably based on some very compelling inside information, a more meaningful milestone than many of small first rounds, which are often blue-sky. As usual, even when the conventional wisdom of HN is on to something, it's for the wrong reasons and rapidly reaches the wrong conclusions.