24 ms·

What's produced more value: Y Combinator's investments or Hacker News?

60 points by cgcardona 14y ago

gojomo 14y ago
Hard to calculate, but personally, I would gladly trade all my karma points for some shares of Dropbox.
ashray 14y ago
I think that more than hacker news, y combinator has funded reddit which has more far reaching effects and contributions. Also, wasn't HN created for y combinator people to discuss stuff ? As I see it, HN is an investment by YC because time was definitely invested in creating the community, this obviously further complicates the calculation of value considering they aren't completely independent.
narendranag 14y ago
I don't think the question makes any sense: Hacker News wouldn't exist without the eco-system YC's investments have created.
benologist 14y ago
HN is ultimately just a podium for YC companies to market themselves. I don't think there is much value to it beyond that other than a 'little reddit' kind of value. As a tech news aggregator it's just OK, a lot of stuff is mainstream fluff that digg in its early years used to be full of - you could probably replace half of HN with http://web20.originalsignal.com/ http://web20.originalsignal.com/. As a community of intelligent people ... there are some very smart and very experienced users who create companies that matter or at least matter for a while, but the average user is just here for average tech news.
- pg 14y ago
  If HN is a merely ok news aggregator that is ultimately just a podium (?) for YC cos to market themselves, why do you use it so much?
  - benologist 14y ago
    For the same reason I used forums, Slashdot, Digg and Reddit before HN - these sites start off very interesting and addictive and then they gradually appeal to a wider and wider audience and in doing so become less interesting. Or maybe it's because I'm growing (or shrinking I guess). Either way one of us is not keeping pace. If it wasn't a podium for YC companies we would see very few of them being mentioned because most of them just aren't that good a match for this audience, so it's forced.
    - robryan 14y ago
      If they aren't a good match for the audience, why are they being upvoted as much as they are? Not that all YC startups get heaps of attention on here, some pass by almost unnoticed.
      - benologist 14y ago
        YC founders' userids show up in orange to one another, and there is a page where they can see one anothers' submissions. http://news.ycombinator.com/item?id=5025168 http://news.ycombinator.com/item?id=5025168
        djt 14y ago
        But why are you still an active member then?
- mduerksen 14y ago
  > HN is ultimately just a podium for YC companies to market themselves. That's irrelevant for the question. The question is about the the value of HN regardless of its intended purpose (which is of course open to speculation). To me, your tone seems a bit derogatory. I don't know if you intend to be that way, but if you were, please don't be. HN surely takes some effort and is hugely valuable to me, and I would rather have those who keep things running feel good about it. Even if it weren't perfectly altruistic, I'd say it's still a win-win for all of us, don't you think?
ekianjo 14y ago
Note: false question which is not really answered in the said post. Too bad, I was expecting some kind of valuation of HN.
vemv 14y ago
The occasional worthwhile submission justifies reading HN regularly, but I consider the general signal/noise ratio rather low - some parameters ought to be tuned.
- intended 14y ago
  The parameters that need to be tuned are the participation types. I think the strictly technical threads probably have better SNR ratios (number of useful comments/all comments?), and the value of comments in the more generic/generalist comments has dropped. Right now, there is a thread where someone is expounding X, but no one has come in to offer him a good insightful rebuttal. I think PG himself said he has noticed a creep of mid-brow dismissals in the comments. The lack of someone who can provide a high level discussion in the marginal threads, is something I seem to be feeling more strongly. (A thread regarding something like Ortiz, or Aaron would usu. have good representation on the other hand)
pg 14y ago
That $45.2m figure was not the average valuation of all cos we've funded, but the average valuation of companies with known valuations (either by raising an equity round, being acquired, or dying, in which case the value is 0). I realize that unless something is changing, the more recent companies that don't have fixed valuations yet should have the same sort of distribution. But that quote in Wikipedia still makes me a little uncomfortable, because it's not strictly correct.
- eldude 14y ago
  Just a quick calculation leaves: $45M * 380 * 7% = $1.2B split 4 ways? Congratulations for creating so much value and giving so many of us a great community.
  - pg 14y ago
    I know you mean well, but this sort of calculation makes my hair stand on end. I'd rather leave unhatched chickens uncounted. It also doesn't account for dilution; that 7% should be more like 2-3%. Plus we had LPs for a while, who will get some of the returns. (Also we've funded 511 startups, not 380.)
    - marcamillion 14y ago
      Does this mean there are no more LPs? Did all of that stop with the latest changes with the scaling back of the guaranteed convertible note from Yuri Milner?
      - pg 14y ago
        There are no more LPs, but that wasn't connected to the switch from the Start Fund to the YC VC Program. We finished investing the last fund midway through the summer 2012 batch.
- hollerith 14y ago
  Although what you write is not false, it is little more than a distraction from the much more important fact that the $45.2m figure comes from Wikipedia, which in turn got it from a NYT article written in February of 2006. (I am not saying or implying that the distraction was intentional on your part.)
DividesByZero 14y ago
HN comes up in discussion among startup types here in Berlin a lot - it's definitely having an impact with more reach than individual YC investments, but what that impact is seems like it would be impossible to quantify. I know that I became an entrepreneur at least in part because I started reading HN in 2009.
kriro 14y ago
Without YC, HN becomes less interesting as well though. I mostly come here to read "interesting stories from the world of tech entrepreneurship" and because the filtering for good tech stuff is nice as well because the technology discussed tends to be relevant for quickly moving/agile type of companies. I don't really think it makes all that much sense to separate the two.
- andreasklinger 14y ago
  I agree with all of your paragraph but the first and the last sentence. HN could do very well without the YC bias. (Not saying it necessarily should) HN has build it's own credibility and community.
sbarlster 14y ago
I don't know about the YC companies but I agree that HN has been a great inspiration to me also. Got me thinking about companies and that it is possible! Thanks HN.
milep 14y ago
Without pg and Hacker News, I would still be coding Java in "enterprise", instead of Rails in startup. I would not know about Lisp, Ruby, Clojure and other cool stuff. And probably would have quit coding altogether in frustration.
tzakrajs 14y ago
This was well intentioned, no doubt. But it feels like you just jerked off pg, hn and yourself all at the same time.
tesmar2 14y ago
Age 21: Get married. Age 22: Have first kid. Age 25: Have second kid/adopt Age 27: Have third kid/adopt. Age 29: Have fourth if you want. Age 47: Start business now that kids are out of house and you have experience.
marcamillion 14y ago
I like the premise, but I felt let-down by the conclusion. Really thought you had some clever proxy to calculate the value of HN. I do agree that it is hard to quantify it exactly, but feels like you just re-hashed the Wikipedia article and copped out on the interesting part.
DanielBMarkham 14y ago
One of the other commenters brought up an interesting point: the audience for HN and the teams YC pick are completely different demographic groups. I don't think it started out that way; in fact I know it didn't. But over time we went from "watercooler for hackers" to "stuff that interests hackers" to "stuff that interests hacker wannabes" to something-else, not sure what to call it. Maybe "stuff that hacker wannabes like and most techies are interested in" That probably sounds overly-critical of HN, and I apologize if I could have said it better. I just don't think the comparison works the way this author intended it to. The key issue here is this: does HN have a progression? Is there some sort of goal where after consuming it for a while you become a better person or learn something useful about the world or yourself? (useful enough to offset the time you spend here) In YC there's a format, a goal, clear steps, and you're going somewhere. HN -- anymore? -- it's a hangout. A place you could spend all day picking up little shiny things. I believe it would be very easy to find more value added by HN, here and there. One guy learns how to program, one guy hooks up with a founder, one guy learns critical things about startups, and so on. And I think if you added up all of those cherry-picked cases, you'd probably end up with more value than YC (for some definition of the word "value"). As an aggregate, however, it's a no-brainer. YC wins. They teach teams to have a clearly-defined external goal and then teams begin a journey towards reaching that goal. (Note that you can't do this analysis with numbers. This is an entirely subjective question along the lines of "Do you like ice cream?" and should be treated as such)
- eksith 14y ago
  That's just par for the course with an evolving definition of "hacker". All forums change eventually. Sure, you can nudge it in this way or that, but there's no way to steer it in any particular direction completely so it will go wherever the crowd dictates. Think how many times you've thought about what you're about to write will be received. That hesitation is unfortunate.
- blablabla123 14y ago
  >I don't think it started out that way; in fact I know it didn't. But over time we went from "watercooler for hackers" to "stuff that interests hackers" to "stuff that interests hacker wannabes" to something-else, not sure what to call it. Maybe "stuff that hacker wannabes like and most techies are interested in" Can you put some more arguments behind that? Like: HN is having more/less articles about XYZ, therefore it's less interesting for real hackers. Also I am curious what your definition of hacker is. I have the impression that what you really mean is 'But over time we went from "watercooler for tech entrepreneurs" to "stuff that interests tech entrepreneurs" to "stuff that interests wannabe entrepreneurs" to something-else...' I was just looking at some screenshot of HN in 2008 and I have problems to see a great difference.
cs702 14y ago
If we include all the second- and third-order effects, the "value produced" by both goes far beyond the measurable financial results generated by Y Combinator's investment portfolio and the personal impact Hacker News has had on its community members. For example, many other "incubators" around the world have been inspired by, and are trying to emulate some elements of, Y Combinator's startup program. Similarly, pg's influential essays -- there's nothing else quite like them on the Web -- have inspired countless individuals around the world to become entrepreneurs and/or angel investors.
bjoe_lewis 14y ago
Well, Just hours back I attended a campus recruitment drive from a core development company(probably my last chance, in college to get in the industry) and I failed. I came home depressed of whatabouts of my future, I opened hacker news and all of a sudden, the world seems a bigger place with way more space, than it was a few minutes ago!
gwern 14y ago
When measuring Hacker News's value, you want to know its marginal value: how much it adds compared to the next best alternative, since that's how much better off you are made if Hacker News exists and how much you will lose if Hacker News ceases to exist. Hacker News and Reddit are close substitutes: if Hacker News shut down tomorrow, everyone could jump on a /r/HN subreddit and not be much worse off. So its marginal value is far smaller than a quick estimate from traffic or users would indicate.
Killswitch 14y ago
Since cgcardona had to change the location of this file, only a day after submitting it, here's the new location: http://cgcardona.github.com/2013/02/07/whats-produced-more-value--ycombinators-investments-or-hacker-news/ http://cgcardona.github.com/2013/02/07/whats-produced-more-v...
cgcardona 14y ago
Author here—I changed the name of the repo that was hosting this .md file in order to set up a github 'pages' page and it broke the url. You can find the article here: http://cgcardona.github.com/2013/02/07/whats-produced-more-value--ycombinators-investments-or-hacker-news/ http://cgcardona.github.com/2013/02/07/whats-produced-more-v...

60 points by cgcardona 14y ago

Hard to calculate, but personally, I would gladly trade all my karma points for some shares of Dropbox.

I think that more than hacker news, y combinator has funded reddit which has more far reaching effects and contributions. Also, wasn't HN created for y combinator people to discuss stuff ? As I see it, HN is an investment by YC because time was definitely invested in creating the community, this obviously further complicates the calculation of value considering they aren't completely independent.

narendranag 14y ago

I don't think the question makes any sense: Hacker News wouldn't exist without the eco-system YC's investments have created.

benologist 14y ago

HN is ultimately just a podium for YC companies to market themselves. I don't think there is much value to it beyond that other than a 'little reddit' kind of value. As a tech news aggregator it's just OK, a lot of stuff is mainstream fluff that digg in its early years used to be full of - you could probably replace half of HN with http://web20.originalsignal.com/ http://web20.originalsignal.com/. As a community of intelligent people ... there are some very smart and very experienced users who create companies that matter or at least matter for a while, but the average user is just here for average tech news.

pg 14y ago
If HN is a merely ok news aggregator that is ultimately just a podium (?) for YC cos to market themselves, why do you use it so much?
- benologist 14y ago
  For the same reason I used forums, Slashdot, Digg and Reddit before HN - these sites start off very interesting and addictive and then they gradually appeal to a wider and wider audience and in doing so become less interesting. Or maybe it's because I'm growing (or shrinking I guess). Either way one of us is not keeping pace. If it wasn't a podium for YC companies we would see very few of them being mentioned because most of them just aren't that good a match for this audience, so it's forced.
  - robryan 14y ago
    If they aren't a good match for the audience, why are they being upvoted as much as they are? Not that all YC startups get heaps of attention on here, some pass by almost unnoticed.
    - benologist 14y ago
      YC founders' userids show up in orange to one another, and there is a page where they can see one anothers' submissions. http://news.ycombinator.com/item?id=5025168 http://news.ycombinator.com/item?id=5025168
      - djt 14y ago
        But why are you still an active member then?
mduerksen 14y ago
> HN is ultimately just a podium for YC companies to market themselves. That's irrelevant for the question. The question is about the the value of HN regardless of its intended purpose (which is of course open to speculation). To me, your tone seems a bit derogatory. I don't know if you intend to be that way, but if you were, please don't be. HN surely takes some effort and is hugely valuable to me, and I would rather have those who keep things running feel good about it. Even if it weren't perfectly altruistic, I'd say it's still a win-win for all of us, don't you think?

ekianjo 14y ago

Note: false question which is not really answered in the said post. Too bad, I was expecting some kind of valuation of HN.

vemv 14y ago

The occasional worthwhile submission justifies reading HN regularly, but I consider the general signal/noise ratio rather low - some parameters ought to be tuned.

intended 14y ago
The parameters that need to be tuned are the participation types. I think the strictly technical threads probably have better SNR ratios (number of useful comments/all comments?), and the value of comments in the more generic/generalist comments has dropped. Right now, there is a thread where someone is expounding X, but no one has come in to offer him a good insightful rebuttal. I think PG himself said he has noticed a creep of mid-brow dismissals in the comments. The lack of someone who can provide a high level discussion in the marginal threads, is something I seem to be feeling more strongly. (A thread regarding something like Ortiz, or Aaron would usu. have good representation on the other hand)

pg 14y ago

That $45.2m figure was not the average valuation of all cos we've funded, but the average valuation of companies with known valuations (either by raising an equity round, being acquired, or dying, in which case the value is 0). I realize that unless something is changing, the more recent companies that don't have fixed valuations yet should have the same sort of distribution. But that quote in Wikipedia still makes me a little uncomfortable, because it's not strictly correct.

eldude 14y ago
Just a quick calculation leaves: $45M * 380 * 7% = $1.2B split 4 ways? Congratulations for creating so much value and giving so many of us a great community.
- pg 14y ago
  I know you mean well, but this sort of calculation makes my hair stand on end. I'd rather leave unhatched chickens uncounted. It also doesn't account for dilution; that 7% should be more like 2-3%. Plus we had LPs for a while, who will get some of the returns. (Also we've funded 511 startups, not 380.)
  - marcamillion 14y ago
    Does this mean there are no more LPs? Did all of that stop with the latest changes with the scaling back of the guaranteed convertible note from Yuri Milner?
    - pg 14y ago
      There are no more LPs, but that wasn't connected to the switch from the Start Fund to the YC VC Program. We finished investing the last fund midway through the summer 2012 batch.
hollerith 14y ago
Although what you write is not false, it is little more than a distraction from the much more important fact that the $45.2m figure comes from Wikipedia, which in turn got it from a NYT article written in February of 2006. (I am not saying or implying that the distraction was intentional on your part.)

DividesByZero 14y ago

HN comes up in discussion among startup types here in Berlin a lot - it's definitely having an impact with more reach than individual YC investments, but what that impact is seems like it would be impossible to quantify. I know that I became an entrepreneur at least in part because I started reading HN in 2009.

kriro 14y ago

Without YC, HN becomes less interesting as well though. I mostly come here to read "interesting stories from the world of tech entrepreneurship" and because the filtering for good tech stuff is nice as well because the technology discussed tends to be relevant for quickly moving/agile type of companies. I don't really think it makes all that much sense to separate the two.

andreasklinger 14y ago
I agree with all of your paragraph but the first and the last sentence. HN could do very well without the YC bias. (Not saying it necessarily should) HN has build it's own credibility and community.

sbarlster 14y ago

I don't know about the YC companies but I agree that HN has been a great inspiration to me also. Got me thinking about companies and that it is possible! Thanks HN.

milep 14y ago

Without pg and Hacker News, I would still be coding Java in "enterprise", instead of Rails in startup. I would not know about Lisp, Ruby, Clojure and other cool stuff. And probably would have quit coding altogether in frustration.

tzakrajs 14y ago

This was well intentioned, no doubt. But it feels like you just jerked off pg, hn and yourself all at the same time.

tesmar2 14y ago

Age 21: Get married. Age 22: Have first kid. Age 25: Have second kid/adopt Age 27: Have third kid/adopt. Age 29: Have fourth if you want. Age 47: Start business now that kids are out of house and you have experience.

marcamillion 14y ago

I like the premise, but I felt let-down by the conclusion. Really thought you had some clever proxy to calculate the value of HN. I do agree that it is hard to quantify it exactly, but feels like you just re-hashed the Wikipedia article and copped out on the interesting part.

DanielBMarkham 14y ago

One of the other commenters brought up an interesting point: the audience for HN and the teams YC pick are completely different demographic groups. I don't think it started out that way; in fact I know it didn't. But over time we went from "watercooler for hackers" to "stuff that interests hackers" to "stuff that interests hacker wannabes" to something-else, not sure what to call it. Maybe "stuff that hacker wannabes like and most techies are interested in" That probably sounds overly-critical of HN, and I apologize if I could have said it better. I just don't think the comparison works the way this author intended it to. The key issue here is this: does HN have a progression? Is there some sort of goal where after consuming it for a while you become a better person or learn something useful about the world or yourself? (useful enough to offset the time you spend here) In YC there's a format, a goal, clear steps, and you're going somewhere. HN -- anymore? -- it's a hangout. A place you could spend all day picking up little shiny things. I believe it would be very easy to find more value added by HN, here and there. One guy learns how to program, one guy hooks up with a founder, one guy learns critical things about startups, and so on. And I think if you added up all of those cherry-picked cases, you'd probably end up with more value than YC (for some definition of the word "value"). As an aggregate, however, it's a no-brainer. YC wins. They teach teams to have a clearly-defined external goal and then teams begin a journey towards reaching that goal. (Note that you can't do this analysis with numbers. This is an entirely subjective question along the lines of "Do you like ice cream?" and should be treated as such)

eksith 14y ago
That's just par for the course with an evolving definition of "hacker". All forums change eventually. Sure, you can nudge it in this way or that, but there's no way to steer it in any particular direction completely so it will go wherever the crowd dictates. Think how many times you've thought about what you're about to write will be received. That hesitation is unfortunate.
blablabla123 14y ago
>I don't think it started out that way; in fact I know it didn't. But over time we went from "watercooler for hackers" to "stuff that interests hackers" to "stuff that interests hacker wannabes" to something-else, not sure what to call it. Maybe "stuff that hacker wannabes like and most techies are interested in" Can you put some more arguments behind that? Like: HN is having more/less articles about XYZ, therefore it's less interesting for real hackers. Also I am curious what your definition of hacker is. I have the impression that what you really mean is 'But over time we went from "watercooler for tech entrepreneurs" to "stuff that interests tech entrepreneurs" to "stuff that interests wannabe entrepreneurs" to something-else...' I was just looking at some screenshot of HN in 2008 and I have problems to see a great difference.

cs702 14y ago

If we include all the second- and third-order effects, the "value produced" by both goes far beyond the measurable financial results generated by Y Combinator's investment portfolio and the personal impact Hacker News has had on its community members. For example, many other "incubators" around the world have been inspired by, and are trying to emulate some elements of, Y Combinator's startup program. Similarly, pg's influential essays -- there's nothing else quite like them on the Web -- have inspired countless individuals around the world to become entrepreneurs and/or angel investors.

bjoe_lewis 14y ago

Well, Just hours back I attended a campus recruitment drive from a core development company(probably my last chance, in college to get in the industry) and I failed. I came home depressed of whatabouts of my future, I opened hacker news and all of a sudden, the world seems a bigger place with way more space, than it was a few minutes ago!

gwern 14y ago

When measuring Hacker News's value, you want to know its marginal value: how much it adds compared to the next best alternative, since that's how much better off you are made if Hacker News exists and how much you will lose if Hacker News ceases to exist. Hacker News and Reddit are close substitutes: if Hacker News shut down tomorrow, everyone could jump on a /r/HN subreddit and not be much worse off. So its marginal value is far smaller than a quick estimate from traffic or users would indicate.

Killswitch 14y ago

Since cgcardona had to change the location of this file, only a day after submitting it, here's the new location: http://cgcardona.github.com/2013/02/07/whats-produced-more-value--ycombinators-investments-or-hacker-news/ http://cgcardona.github.com/2013/02/07/whats-produced-more-v...

cgcardona 14y ago

Author here—I changed the name of the repo that was hosting this .md file in order to set up a github 'pages' page and it broke the url. You can find the article here: http://cgcardona.github.com/2013/02/07/whats-produced-more-value--ycombinators-investments-or-hacker-news/ http://cgcardona.github.com/2013/02/07/whats-produced-more-v...