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Great little read. Uniquely portrays the cultural differences between the two schools but more importantly, shows just how different the West vs. East Coast men

Great little read. Uniquely portrays the cultural differences between the two schools but more importantly, shows just how different the West vs. East Coast mentality is when it comes to technology startups, products, innovations, etc. Not saying there isn't much "pure technology" coming out of Stanford (there most certainly is) but you get the feeling that Boston-area startups are wired to find, as Peter Thiel would say, the 0 to 1 markets vs. the 1 to n markets of globalization (the West Coast). In Boston, there appears to be a bigger emphasis on hi-tech vs. the latest subscription service or cloud provider coming from SV. But the SV culture encourages that, VC's cut checks for products with "traction" and more often than not, skip pure technology (be it medical devices, therapeutics, chemicals, hardware, and hard/expensive/timely ventures). This is rather unfortunate since we are in need of better startup companies and technologies, and they are in need of funding. There are many reasons for this (one being the "easy way out biz model replication" phenomenon used in the ammonia subscription model example in the post). And another is the lack of talent, particularly great talent going to well-funded SnapChat #4 and other similar, non-groundbreaking companies. Unfortunately, I don't see the face of venture capital changing much with regards to funding innovative and risky technologies. They of course are wired to big returns on 1/100 social company exits (most at least) and "technology" doesn't really matter (again, to most). Can you imagine SV putting money into Fairchild Semiconductor or Intel today? Won't happen. Don't let the excuses of "we infested in Barracuda and Cisco" fool you - the focus is on "how many users do you have for the latest hype driven app on the App Store." I think the major problem is the lack of risk being taken on great technology vs. the easy way out. AKA, some VCs should grow some balls and invest in the future vs. the very-near future. Being an MBA out of a top-10 school and having check writing power to fund "startups" is also a negative since a lot of these guys know the spreadsheets - NOT the silicon. But I digress. Both schools are unique in their culture but share similarities in brilliance. The best outcome is too see great business as marketing intersect with powerful technology. Then we can have real great companies on the horizon again. As a West Coast founder myself, it's actually an honor and a humbling experience to be working with people from both schools and it's clear as day just how different the mindset is.

monsterix 13y ago
... and this important little element from PG's essay on 'Inequality & Risk' [1] from 2005: "... reducing investors' appetite for risk doesn't merely kill off larval start-ups, but kills off the most promising ones especially. Startups yield faster growth at greater risk than established companies. Does this trend also hold among startups? That is, are the riskiest startups the ones that generate most growth if they succeed? I suspect the answer is yes. And that's a chilling thought, because it means that if you cut investors' appetite for risk, the most beneficial startups are the first to go..." Understanding this could mean a lot to SV VCs but then I'm sure they understand it already. [1] http://paulgraham.com/inequality.html http://paulgraham.com/inequality.html
- ForHackernews 13y ago
  "faster growth" != "most beneficial" Plenty of stupid, useless (or even just nonprofitable) companies experience meteoric growth until a fad passes.
grinich 13y ago
Venture Capital didn't actually exist when Fairchild was founded. The company was named Fairchild Semiconductor because the main funder was Sherman Fairchild of Fairchild Camera and Instrument. They were connected by a twentysomething named Arthur Rock who'd recently ditched corporate finance in NY. Rock also later invested in Intel. Much of VC actually grew out of Fairchild. Eugene Kleiner of KPCB was one of the Fairchild founders, and Don Valentine was a Fairchild sales+marketing exec before starting Sequoia. Those two firms essentially invented modern day VC investing, and you could say Fairchild was the first experiment that worked. It's also worth noting how much VC has grown since then. Intel only raised 2.5MM before going public. Technology is now much more broad, and there's more money to fund diverse companies. Back then, tech was a niche industry. Hard science is certainly still getting funded out here -- see Counsyl, LightSail Energy, etc. -- but I think lots of investors are now looking at existing industries that can be flipped via software (cue pmarca's "software is eating the world" neo-adage). The "Stanford startup" that Amir describes is moreso a tech-enabled company, rather than a hard tech company. They're both valuable, but should be seen as apples and oranges. Maybe it's because I went to MIT and am perhaps foolishly ambitious, but I personally get frustrated when I see super talented people go after easy industries. The one that comes to mind is house cleaning services. It's possible I just don't get the potential, but it's disheartening to see ultra-educated young people trying to figure out how to disrupt a low-margin industry dominated by mostly illegal immigrant workers. Not something I'd want in my epitaph I guess. The sweet spot is probably somewhere in the middle. Work with wicked smart people, have audacious goals, and focus on shipping and being relevant today. As an aside, I don't know why everyone is hating on Snapchat. They are riding a massive wave -- the social behavioral shift in how people share online -- which is really not to be underestimated. It's strategic for them to fly under the radar and be disregarded as a stupid toy right now. But if you look at the team they've gathered, see their metrics, or actually talk to Evan, you immediately know that it's something special on the order of YouTube or Twitter.

monsterix 13y ago

... and this important little element from PG's essay on 'Inequality & Risk' [1] from 2005: "... reducing investors' appetite for risk doesn't merely kill off larval start-ups, but kills off the most promising ones especially. Startups yield faster growth at greater risk than established companies. Does this trend also hold among startups? That is, are the riskiest startups the ones that generate most growth if they succeed? I suspect the answer is yes. And that's a chilling thought, because it means that if you cut investors' appetite for risk, the most beneficial startups are the first to go..." Understanding this could mean a lot to SV VCs but then I'm sure they understand it already. [1] http://paulgraham.com/inequality.html http://paulgraham.com/inequality.html

ForHackernews 13y ago
"faster growth" != "most beneficial" Plenty of stupid, useless (or even just nonprofitable) companies experience meteoric growth until a fad passes.

grinich 13y ago

Venture Capital didn't actually exist when Fairchild was founded. The company was named Fairchild Semiconductor because the main funder was Sherman Fairchild of Fairchild Camera and Instrument. They were connected by a twentysomething named Arthur Rock who'd recently ditched corporate finance in NY. Rock also later invested in Intel. Much of VC actually grew out of Fairchild. Eugene Kleiner of KPCB was one of the Fairchild founders, and Don Valentine was a Fairchild sales+marketing exec before starting Sequoia. Those two firms essentially invented modern day VC investing, and you could say Fairchild was the first experiment that worked. It's also worth noting how much VC has grown since then. Intel only raised 2.5MM before going public. Technology is now much more broad, and there's more money to fund diverse companies. Back then, tech was a niche industry. Hard science is certainly still getting funded out here -- see Counsyl, LightSail Energy, etc. -- but I think lots of investors are now looking at existing industries that can be flipped via software (cue pmarca's "software is eating the world" neo-adage). The "Stanford startup" that Amir describes is moreso a tech-enabled company, rather than a hard tech company. They're both valuable, but should be seen as apples and oranges. Maybe it's because I went to MIT and am perhaps foolishly ambitious, but I personally get frustrated when I see super talented people go after easy industries. The one that comes to mind is house cleaning services. It's possible I just don't get the potential, but it's disheartening to see ultra-educated young people trying to figure out how to disrupt a low-margin industry dominated by mostly illegal immigrant workers. Not something I'd want in my epitaph I guess. The sweet spot is probably somewhere in the middle. Work with wicked smart people, have audacious goals, and focus on shipping and being relevant today. As an aside, I don't know why everyone is hating on Snapchat. They are riding a massive wave -- the social behavioral shift in how people share online -- which is really not to be underestimated. It's strategic for them to fly under the radar and be disregarded as a stupid toy right now. But if you look at the team they've gathered, see their metrics, or actually talk to Evan, you immediately know that it's something special on the order of YouTube or Twitter.