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I'm impressed with Jason's posts. He seems to be methodically working through all the misconceptions of inexperienced founders. This is an important and subtl

by pg 13y ago

I'm impressed with Jason's posts. He seems to be methodically working through all the misconceptions of inexperienced founders. This is an important and subtle one. Investors assume that if they're hearing about you first from you, you can't be any good. If you were good, they'd already have heard about you, because you'd have found a way to get introduced to them by someone they trust. Even if investors didn't start out with this bias, they'd soon learn it from experience.

pshin45 13y ago
Also, what are your thoughts on the implications of this tendency of VCs as it pertains to teams outside the Bay Area or outside the US, who may have just as much talent and hustle but are forced to work that much harder and longer to get the same intros and connections (at the opportunity cost of spending more time on product & customers)? Is there a way to bridge that gap and make the process more equitable in different geographies and networks? EDIT: Removed the first part of my original two-part question because it was less relevant to the OP.
- deleted 13y ago
  [deleted]
- beat 13y ago
  I think that's a bigger problem for finding angels than finding VC. A little angel seed fund can give a startup enough traction to register with the VCs (and afford a trip or two to Silly Valley). But in Silly Valley itself, angels are easy to find and quick to commit. Those of us out in flyover country have to deal with no local angels at all, or tire-kicking committees that want traditional 50 page five year business plans and take six months to make up their minds. And I'm sure the situation is far worse in places like India.
michaelochurch 13y ago
Investors assume that if they're hearing about you first from you, you can't be any good. If you were good, they'd already have heard about you, because you'd have found a way to get introduced to them by someone they trust. So you're admitting that they're social-proof whores who refuse to think for themselves, even about the subject matter of their own jobs? VCs should be mortally humiliated by the fact that the game they're running is, after all is counted, a feudal reputation economy-- all flashes, no substance. Yet people are surprised that VC, as an asset class, has been a stinker for the past 13 years.
- encoderer 13y ago
  Turns out most men are social proof whores. They are much more likely to date somebody who has been introduced to them by a friend they trust. Oh, and women too. C'mon. Weak argument here man. Newsflash: We trust the people that... we trust.
  - 001sky 13y ago
    Weak argument here man You're explaing why people are basically racist and xenophobic. Congrats. Unfortunaely, this makes your posture politically untenable / incorrect and dangerous. It also paints VCs with guilt by association. Because, ya know what? they are certainly sexist and racist based upon the data. Unfortunately. Bad news for this argument is tha VC cash comes from Public Pension funds and other LPs which politically cannot support such institutionalized bias against protected classes. Of course, the loophole is that VCs are not employers. So they are legally entitled to be as rascist, mysoginistic, and otherwise discriminatory as they damn well please. But don't go around publicising it.
    - encoderer 13y ago
      Uhh.... Sure? Suffice to say I find your comments so absurd that they don't even merit a rebuttal. Consider yours the last word, congrats.
      - 001sky 13y ago
        Its no more absurd then the appeal to authority from dating advice. Because if you look at the quantitative analytics on dating, they are pretty strong. They show rampant/pervasive casual racism and obvious self-segregation. The value of trust should not be underestimated, but if you're not going to go through the bother of thinking through the implications you need to hedge any sweeping proclamations.
  - nitrogen 13y ago
    They are much more likely to date somebody who has been introduced to them by a friend they trust. That's more of an availability problem, though, not a trust problem.
deleted 13y ago
[deleted]
dnautics 13y ago
Now that YC has worked with at least one nonprofit, do you have any suggestions about how this post might translate to that field?
davemel37 13y ago
This applies to all selling situations. Social validation solves the biggest emotional hurdle in selling, "convincing the buyer that they have a defensible position and won't look foolish if they make the purchase."
davemel37 13y ago
There is a perception issue every consumer asks themselves when encountering a purchase decision, "if you're so smart why aren't you rich?" This applies to every situation. For investors it's "if you are so good why couldn't you find a way to get someone I trust to vouch for you?" For a cheap product, it's "if it's so good why is it so cheap?" If you can't find a way answer the variation of this question in your situation, you will undoubtedly hit a brick wall in selling to that person. For startup ideas its ," if its such a good idea why doesn't it exist." This is actually why questions like "why now" or "what makes you different" or "how do consumers solve this problem now, without your solution" are commonly asked... If your so...why aren't you...
davemel37 13y ago
While this makes sense logically...logic has a funny way of being built on false premises and anecdotal evidence. You wrote,"Even if investors didn't start out with this bias, they'd soon learn it from experience." Considering the core value proposition, and biggest driver of YC's success is it's introductions it promises... I feel a need to question this second part of your statement purely from a potential bias perspective. It may be true, but can just as likely be built on a false assumption from anecdotal evidence.
deleted 13y ago
[deleted]
arikrak 13y ago
Why do accelerators like Ycombinator have online application forms while VC firms require intros?
- joshfraser 13y ago
  There are lots of great engineers who don't have a strong network. YC invest early so they care more about your ability to code. They'll happily hook you up with their network if you impress them. It's easier to teach an engineer business skills than teaching a business guy to code.

by pg 13y ago

pshin45 13y ago

Also, what are your thoughts on the implications of this tendency of VCs as it pertains to teams outside the Bay Area or outside the US, who may have just as much talent and hustle but are forced to work that much harder and longer to get the same intros and connections (at the opportunity cost of spending more time on product & customers)? Is there a way to bridge that gap and make the process more equitable in different geographies and networks? EDIT: Removed the first part of my original two-part question because it was less relevant to the OP.

deleted 13y ago
[deleted]
beat 13y ago
I think that's a bigger problem for finding angels than finding VC. A little angel seed fund can give a startup enough traction to register with the VCs (and afford a trip or two to Silly Valley). But in Silly Valley itself, angels are easy to find and quick to commit. Those of us out in flyover country have to deal with no local angels at all, or tire-kicking committees that want traditional 50 page five year business plans and take six months to make up their minds. And I'm sure the situation is far worse in places like India.

michaelochurch 13y ago

Investors assume that if they're hearing about you first from you, you can't be any good. If you were good, they'd already have heard about you, because you'd have found a way to get introduced to them by someone they trust. So you're admitting that they're social-proof whores who refuse to think for themselves, even about the subject matter of their own jobs? VCs should be mortally humiliated by the fact that the game they're running is, after all is counted, a feudal reputation economy-- all flashes, no substance. Yet people are surprised that VC, as an asset class, has been a stinker for the past 13 years.

encoderer 13y ago
Turns out most men are social proof whores. They are much more likely to date somebody who has been introduced to them by a friend they trust. Oh, and women too. C'mon. Weak argument here man. Newsflash: We trust the people that... we trust.
- 001sky 13y ago
  Weak argument here man You're explaing why people are basically racist and xenophobic. Congrats. Unfortunaely, this makes your posture politically untenable / incorrect and dangerous. It also paints VCs with guilt by association. Because, ya know what? they are certainly sexist and racist based upon the data. Unfortunately. Bad news for this argument is tha VC cash comes from Public Pension funds and other LPs which politically cannot support such institutionalized bias against protected classes. Of course, the loophole is that VCs are not employers. So they are legally entitled to be as rascist, mysoginistic, and otherwise discriminatory as they damn well please. But don't go around publicising it.
  - encoderer 13y ago
    Uhh.... Sure? Suffice to say I find your comments so absurd that they don't even merit a rebuttal. Consider yours the last word, congrats.
    - 001sky 13y ago
      Its no more absurd then the appeal to authority from dating advice. Because if you look at the quantitative analytics on dating, they are pretty strong. They show rampant/pervasive casual racism and obvious self-segregation. The value of trust should not be underestimated, but if you're not going to go through the bother of thinking through the implications you need to hedge any sweeping proclamations.
- nitrogen 13y ago
  They are much more likely to date somebody who has been introduced to them by a friend they trust. That's more of an availability problem, though, not a trust problem.

deleted 13y ago

[deleted]

dnautics 13y ago

Now that YC has worked with at least one nonprofit, do you have any suggestions about how this post might translate to that field?

davemel37 13y ago

This applies to all selling situations. Social validation solves the biggest emotional hurdle in selling, "convincing the buyer that they have a defensible position and won't look foolish if they make the purchase."

davemel37 13y ago

There is a perception issue every consumer asks themselves when encountering a purchase decision, "if you're so smart why aren't you rich?" This applies to every situation. For investors it's "if you are so good why couldn't you find a way to get someone I trust to vouch for you?" For a cheap product, it's "if it's so good why is it so cheap?" If you can't find a way answer the variation of this question in your situation, you will undoubtedly hit a brick wall in selling to that person. For startup ideas its ," if its such a good idea why doesn't it exist." This is actually why questions like "why now" or "what makes you different" or "how do consumers solve this problem now, without your solution" are commonly asked... If your so...why aren't you...

davemel37 13y ago

While this makes sense logically...logic has a funny way of being built on false premises and anecdotal evidence. You wrote,"Even if investors didn't start out with this bias, they'd soon learn it from experience." Considering the core value proposition, and biggest driver of YC's success is it's introductions it promises... I feel a need to question this second part of your statement purely from a potential bias perspective. It may be true, but can just as likely be built on a false assumption from anecdotal evidence.

deleted 13y ago

[deleted]

arikrak 13y ago

Why do accelerators like Ycombinator have online application forms while VC firms require intros?

joshfraser 13y ago
There are lots of great engineers who don't have a strong network. YC invest early so they care more about your ability to code. They'll happily hook you up with their network if you impress them. It's easier to teach an engineer business skills than teaching a business guy to code.