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It's rather low to say that I tell people this because it's "optimized for the success of Y Combinator." I was saying it before we started Y Combinator. For e

by pg 14y ago

It's rather low to say that I tell people this because it's "optimized for the success of Y Combinator." I was saying it before we started Y Combinator. For example, in "How to Start a Startup" (http://paulgraham.com/start.html http://paulgraham.com/start.html): Ideally you want between two and four founders. It would be hard to start with just one. One person would find the moral weight of starting a company hard to bear. Even Bill Gates, who seems to be able to bear a good deal of moral weight, had to have a co-founder. I already knew then, both from my own experience and from watching other startups, how necessary cofounders were. Since then I've observed the trajectories of over 450 startups YC has funded. I'm even more convinced now that cofounders are necessary. And that you dismiss as "rhetoric" and offer instead one piece of anecdotal evidence that is not even conclusive yet? You do not make a very convincing case.

ryancarson 14y ago
Fair point on the timing of your essay. I didn't realize it was written before you started YC. Can you guys please release your empirical data about the success rates of YC companies, broken down by various things like market, year founded, location, number of founders, etc?
- pg 14y ago
  It would be hard to disclose the raw data without also disclosing the secrets of individual startups, but we might publish some trendlines one day. In a sense, I already do disclose such data in a general way, because whenever I write or say anything about startups, I wouldn't contradict trends I know about.
  - ryancarson 14y ago
    You could anonymize the data and release a pretty monumental study. I would imagine the PR bump would be great too. My post is not an attack on you or TechStars. It's just a counter-point to your data, based on my own personal experience.
    - pg 14y ago
      It's hard to anonymize a data set that's both small and has a lot of variation.
      - dmk23 14y ago
        I'm sure you would find a way to anonymize the data if it would result in a compelling story for YC. But as we all know so well the "startup outcomes" follow a power law. Dropbox and AirBnB make for a great YC PR, but are certainly nothing like a statistical mean outcome (aka "expected value"). I'd say it is a pretty reasonable thing to postulate that "doing things YC way" would result in a worse expected outcome for an individual founder vs. retaining control of a profitable business. If this statement is wrong please refute it with data. The way things are right now, YC is selling the "possibility" of becoming an outlier, while downplaying what "typical results" usually look like. If you were in a consumer product market it could likely break FTC rules on truth in advertising: http://www.ftc.gov/speeches/starek/nima96d4.shtm http://www.ftc.gov/speeches/starek/nima96d4.shtm EDIT / RESPONSE 1: This is not an "accusation". I am simply stating as fact that YC's model is focused on promoting its largest outlier successes (which form the bulk of YC portfolio value) while releasing no real data on the "mean outcome". Take it for what it is worth. As far as my statement about comparing "mean outcomes" it is obviously just a subjective judgement based on anecdotal evidence because there is no publicly released data from YC. EDIT / RESPONSE 2: Let's be realistic. Any VC firm can release % of IPOs, M&A and failures as well as IRR figures and exit bands. There is no reason to include any company-specific proprietary data. The only reason for YC to not give such estimates is because it would highlight the fact that most startups are nothing like Dropbox.
        karamazov 14y ago
        That's a stark accusation. Do you have data to back this up, or is this your suspicion?
        ljd 14y ago
        No, actually he can't anonymize that data. High variation might as well be a signature for a short list (under 1000) of companies. Also, his company has spent time and money to gain access to data that should help him pick emerging companies. I'm not sure why you would feel entitled to that. I'm sure they are working on some data project to help automate decisions on applicants, if not they will be eventually. That data will give them an edge when making offers. When you are in a position where asymmetrical information is working to your advantage why would anyone give that up?
  - queryly 14y ago
    The association is not same as causation. I think It would be more useful to derive or at least inference the causation of success/failure from your data. For example: if someone can't convince other people to join, how could he be able to convince customers/investors later on. This implies causation. I would love to hear more causation like this for the single founder startup. There are relationships and associations everywhere. If people look at the data between skin color and success, they will find relationship. but it doesn't mean people succeed because of their skin color. The causation is more useful information than the mere association.
  - tripzilch 14y ago
    > In a sense, I already do disclose such data in a general way, because whenever I write or say anything about startups, I wouldn't contradict trends I know about. That's a bit circular, if people would question the things you write or say about startups, you'd tell them they are backed by empirical data, then when someone asks for this data you tell them its implied by the things you write or say about startups. I can totally understand why most of that data is hard or impossible to disclose, that's obvious. But you can't cite secrets as evidence, all you can do is say "trust me, I know what I'm talking about". You can't have your cake and eat it too. Obviously no one is questioning the existence of that data, nobody's suggesting you're cooking it up, they're just wondering if they'd spot the same patterns in it as the ones you perceived to be there. To sum it up, whenever you write or say anything about startups, the only thing you disclose about such data in a general way, is the conclusions that you drew from it, what you perceived (not "know") to be a trend, which is probably useful and very valuable, but is something entirely different than the data itself.
chimi 14y ago
It's also rather low to hate on the OP's startup because it doesn't fit your definition of great success. You do that a lot and it's not nice. In the realm of startups -- single-founder or not -- Treehouse may very well be well above average. There are thousands of single founder companies out there. Your system is biased and your predilection toward group founded companies may self-fulfill your prophecy. In a way, you're like the coach or owner of an NFL team telling kids to stay in school and do well in sports because they may be a pro-baller some day, when really, they need to hit the books if they want a positive outcome in the average end. Noam Wasserman wrote about plenty of reasons to be a solo-founder in his book, "The Founder's Dilemma." Some people would rather be king and your proposed path of group founded companies going on to VC fueled greatness is not the map for kings. http://hbr.org/2008/02/the-founders-dilemma/ar/1 http://hbr.org/2008/02/the-founders-dilemma/ar/1
- pg 14y ago
  You do that a lot and it's not nice. For example?
  - chimi 14y ago
    There have been several threads like this pop up from time to time arguing that there are successful paths outside group founded vc backed avenues. I've seen people list a number of great startups that didn't take your proposed path and you knock them because they don't meet your criteria for successful company. I'll look for a thread, I can't think of any search terms that would lead me to one at the moment. I'm not saying that your data doesn't support your hypothesis, but I think you need to recognize the plethora of examples of single founded companies that achieve great success and know better than to apply to ycombinator because you don't like single founder applicants. As someone else said above, success is relative and people deserve their success even if it isn't a billion dollar IPO or 10x cash out that may, in the end, have left them with less money than they'd make over the life of a smaller achievement through some other path, be it group founded, bootstrapped, or whatever. My point is, there is a lot of greatness to be had that doesn't meet your standard and it'd be nicer to recognize greatness that doesn't follow your rules than to knock it because it is a counterpoint.
koide 14y ago
I think there are (at least) two parameters needing concrete definition: 1) What is success? 2) What's the ratio of solo startups that achieve the level defined in 1). As has been mentioned, either an exit of a few million or a stream of a million of profit a year for a couple of years are more than enough to many potential founders. That's the parameter I'm missing when you say cofounders are necessary. Necessary to achieve what, exactly?
- ryancarson 14y ago
  I agree. It'd be awesome if PG would release the data they have on the outcomes of YC companies. There would be a lot we could all learn from it. This would also allow everyone to come to their own conclusions.
  - rdl 14y ago
    The #1 piece of data I wish pg would release is a comprehensive (if anonymous) survey of every YC founder "would you do YC again?" and the related "would you recommend YC to a friend doing a startup?". (although as a control, "If you were doing another startup, and couldn't get into YC again for that business, would you still go ahead with it?")
keeptrying 14y ago
PG, I always wanted to ask you. What do you mean by "moral weight" exactly? Thanks.
- jcampbell1 14y ago
  It is a word play on "moral support". e.g. a cofounder provides moral support when external pressures are high. Bill doesn't seem like the type to need "moral support" because he can alone handle a high "moral weight".
deleted 14y ago
[deleted]
huhtenberg 14y ago
> Since then I've observed the trajectories of over 450 startups YC has funded. ... many of which may be a result of your inherit selection bias. Starting a company "that gets really big" is hardly a success criteria that an average first-time entrepreneur has in mind. You might not like how Ryan expressed it, but he's right - do not let the lack of a co-founder stop you from starting a company. It's a non-issue. If you have this option - great, if not - fine, and there are several upsides to it.

by pg 14y ago

ryancarson 14y ago

Fair point on the timing of your essay. I didn't realize it was written before you started YC. Can you guys please release your empirical data about the success rates of YC companies, broken down by various things like market, year founded, location, number of founders, etc?

pg 14y ago
It would be hard to disclose the raw data without also disclosing the secrets of individual startups, but we might publish some trendlines one day. In a sense, I already do disclose such data in a general way, because whenever I write or say anything about startups, I wouldn't contradict trends I know about.
- ryancarson 14y ago
  You could anonymize the data and release a pretty monumental study. I would imagine the PR bump would be great too. My post is not an attack on you or TechStars. It's just a counter-point to your data, based on my own personal experience.
  - pg 14y ago
    It's hard to anonymize a data set that's both small and has a lot of variation.
    - dmk23 14y ago
      I'm sure you would find a way to anonymize the data if it would result in a compelling story for YC. But as we all know so well the "startup outcomes" follow a power law. Dropbox and AirBnB make for a great YC PR, but are certainly nothing like a statistical mean outcome (aka "expected value"). I'd say it is a pretty reasonable thing to postulate that "doing things YC way" would result in a worse expected outcome for an individual founder vs. retaining control of a profitable business. If this statement is wrong please refute it with data. The way things are right now, YC is selling the "possibility" of becoming an outlier, while downplaying what "typical results" usually look like. If you were in a consumer product market it could likely break FTC rules on truth in advertising: http://www.ftc.gov/speeches/starek/nima96d4.shtm http://www.ftc.gov/speeches/starek/nima96d4.shtm EDIT / RESPONSE 1: This is not an "accusation". I am simply stating as fact that YC's model is focused on promoting its largest outlier successes (which form the bulk of YC portfolio value) while releasing no real data on the "mean outcome". Take it for what it is worth. As far as my statement about comparing "mean outcomes" it is obviously just a subjective judgement based on anecdotal evidence because there is no publicly released data from YC. EDIT / RESPONSE 2: Let's be realistic. Any VC firm can release % of IPOs, M&A and failures as well as IRR figures and exit bands. There is no reason to include any company-specific proprietary data. The only reason for YC to not give such estimates is because it would highlight the fact that most startups are nothing like Dropbox.
      - karamazov 14y ago
        That's a stark accusation. Do you have data to back this up, or is this your suspicion?
      - ljd 14y ago
        No, actually he can't anonymize that data. High variation might as well be a signature for a short list (under 1000) of companies. Also, his company has spent time and money to gain access to data that should help him pick emerging companies. I'm not sure why you would feel entitled to that. I'm sure they are working on some data project to help automate decisions on applicants, if not they will be eventually. That data will give them an edge when making offers. When you are in a position where asymmetrical information is working to your advantage why would anyone give that up?
- queryly 14y ago
  The association is not same as causation. I think It would be more useful to derive or at least inference the causation of success/failure from your data. For example: if someone can't convince other people to join, how could he be able to convince customers/investors later on. This implies causation. I would love to hear more causation like this for the single founder startup. There are relationships and associations everywhere. If people look at the data between skin color and success, they will find relationship. but it doesn't mean people succeed because of their skin color. The causation is more useful information than the mere association.
- tripzilch 14y ago
  > In a sense, I already do disclose such data in a general way, because whenever I write or say anything about startups, I wouldn't contradict trends I know about. That's a bit circular, if people would question the things you write or say about startups, you'd tell them they are backed by empirical data, then when someone asks for this data you tell them its implied by the things you write or say about startups. I can totally understand why most of that data is hard or impossible to disclose, that's obvious. But you can't cite secrets as evidence, all you can do is say "trust me, I know what I'm talking about". You can't have your cake and eat it too. Obviously no one is questioning the existence of that data, nobody's suggesting you're cooking it up, they're just wondering if they'd spot the same patterns in it as the ones you perceived to be there. To sum it up, whenever you write or say anything about startups, the only thing you disclose about such data in a general way, is the conclusions that you drew from it, what you perceived (not "know") to be a trend, which is probably useful and very valuable, but is something entirely different than the data itself.

chimi 14y ago

It's also rather low to hate on the OP's startup because it doesn't fit your definition of great success. You do that a lot and it's not nice. In the realm of startups -- single-founder or not -- Treehouse may very well be well above average. There are thousands of single founder companies out there. Your system is biased and your predilection toward group founded companies may self-fulfill your prophecy. In a way, you're like the coach or owner of an NFL team telling kids to stay in school and do well in sports because they may be a pro-baller some day, when really, they need to hit the books if they want a positive outcome in the average end. Noam Wasserman wrote about plenty of reasons to be a solo-founder in his book, "The Founder's Dilemma." Some people would rather be king and your proposed path of group founded companies going on to VC fueled greatness is not the map for kings. http://hbr.org/2008/02/the-founders-dilemma/ar/1 http://hbr.org/2008/02/the-founders-dilemma/ar/1

pg 14y ago
You do that a lot and it's not nice. For example?
- chimi 14y ago
  There have been several threads like this pop up from time to time arguing that there are successful paths outside group founded vc backed avenues. I've seen people list a number of great startups that didn't take your proposed path and you knock them because they don't meet your criteria for successful company. I'll look for a thread, I can't think of any search terms that would lead me to one at the moment. I'm not saying that your data doesn't support your hypothesis, but I think you need to recognize the plethora of examples of single founded companies that achieve great success and know better than to apply to ycombinator because you don't like single founder applicants. As someone else said above, success is relative and people deserve their success even if it isn't a billion dollar IPO or 10x cash out that may, in the end, have left them with less money than they'd make over the life of a smaller achievement through some other path, be it group founded, bootstrapped, or whatever. My point is, there is a lot of greatness to be had that doesn't meet your standard and it'd be nicer to recognize greatness that doesn't follow your rules than to knock it because it is a counterpoint.

koide 14y ago

I think there are (at least) two parameters needing concrete definition: 1) What is success? 2) What's the ratio of solo startups that achieve the level defined in 1). As has been mentioned, either an exit of a few million or a stream of a million of profit a year for a couple of years are more than enough to many potential founders. That's the parameter I'm missing when you say cofounders are necessary. Necessary to achieve what, exactly?

ryancarson 14y ago
I agree. It'd be awesome if PG would release the data they have on the outcomes of YC companies. There would be a lot we could all learn from it. This would also allow everyone to come to their own conclusions.
- rdl 14y ago
  The #1 piece of data I wish pg would release is a comprehensive (if anonymous) survey of every YC founder "would you do YC again?" and the related "would you recommend YC to a friend doing a startup?". (although as a control, "If you were doing another startup, and couldn't get into YC again for that business, would you still go ahead with it?")

keeptrying 14y ago

PG, I always wanted to ask you. What do you mean by "moral weight" exactly? Thanks.

jcampbell1 14y ago
It is a word play on "moral support". e.g. a cofounder provides moral support when external pressures are high. Bill doesn't seem like the type to need "moral support" because he can alone handle a high "moral weight".

deleted 14y ago

[deleted]

huhtenberg 14y ago

> Since then I've observed the trajectories of over 450 startups YC has funded. ... many of which may be a result of your inherit selection bias. Starting a company "that gets really big" is hardly a success criteria that an average first-time entrepreneur has in mind. You might not like how Ryan expressed it, but he's right - do not let the lack of a co-founder stop you from starting a company. It's a non-issue. If you have this option - great, if not - fine, and there are several upsides to it.