6 ms·

Startups, Role Models, Risk, and Y Combinator

112 points by gatsby 13y ago

bertil 13y ago
My experience at repeatedly starting companies is not that taking risk for yourself is hard -- if you have simple taste, enjoy coding and are articulate enough to identify a problem and conceive a solution… There is no reason to be, really. I mean: sitting on your ass wondering what to do is pretty much what anyone looking for a job does after that phone-call, and no one has described job seekers as heroes, certainly not developers. What still scares the be-jeezus out of me, and anyone I’ve met is getting someone else involved, pretending that you know your thing and making them, innocent travel companions, crash with you, unaware that it’s all shadows and illusion. I’m assuming that’s why psychopaths are so good at that stage: they can hire ten people that they can’t pay, and not care for the life of them that their baby won’t have formula to eat in two months. (I’ve seen that with my own eyes. Spoiler alert: it cries.) I am not surprised that HomeJoy founder gave her home to those first helpers: with an ounce of human decency, that must have felt like a tenth of the bare minimum she was asking from them. That discomfort must have been less that the inhumane hours. Good on her, and great for her. The fact that Sam Altman fails to see that the problem is generally others scares me.
- sama 13y ago
  this is one of the many reasons we advise startups not to hire during YC. most startups we work with wait to hire until they have raised enough money to make it reasonably safe to join them. and employees should always ask a startup how much runway they have. if they won't tell you, it's a big red flag.
  - bertil 13y ago
    Thank you so much for answering. Employees are the big point, but I have seen that fear even towards non-employees: dependent family members, partners… As someone who’s been burned (hard) by asking that question and trusting the answer many times (Fool me once…), I see as a huge opportunity an audit company that could answer that question accurately, and reasonably well for early start-up: before and after hiring you and the all the profiles being considered.
    - 2arrs2ells 13y ago
      Ask to talk to one of the company's investors if you aren't sure the founder is being upfront about runway. They should have a good handle on the company's cash position (and if they don't, that might be a yellow flag).
      - bertil 13y ago
        Not sure how the relation with investors is in the US, but I can’t imagine them even considering that in any company that I joined. In hindsight, it was a red flag, but I assume there is a cultural gap there.
        2arrs2ells 13y ago
        Depends on stage of company, but for my company (Series A, Bay Area, ~25 employees), we'd be happy to connect anyone with a job offer with our lead investor.
  - larrys 13y ago
    "and employees should always ask a startup how much runway they have. if they won't tell you, it's a big red flag." To me I remember Ronald Regan saying "trust but verify". While it's nice to get an answer to the question I think, having been in business for a long time, [1] the fact that one gets an answer is not necessarily the end of the investigation or proof of the statement. Point being that if it is important to someone (the answer) before hopping on board it would be appropriate to be shown proof of the fact. (Noting of course that it wouldn't be to difficult to fake that and also noting that you don't have any control over whether the assumptions being made will hold). Worried about insulting someone by implying that you don't trust? Figure out a creative way to put it into the appropriate words to get by that issue. [1] As a kid, before car dealers gave loaner cars, I remember my father being told by each salesman "and if your car is in for service I'll lend you mine for the day".
    - aptwebapps 13y ago
      OT, but I always thought "Respect, but don't trust implicitly" would be a more accurate, if less felicitous, way of putting it. Or at least as I understand the ideal.
gms 13y ago
"The only thing you have to know how to do is build something people want." I have actually found this to be the most difficult thing - a lack of ideas that turn out to be wanted by other people.
- jmathai 13y ago
  The most difficult thing in a startup is whatever your next big hurdle is. Ultimately, yes, you need to build something people want - a lot. But there are a series of hurdles along the way ranging from finding a co-founder/team, building the product, raising investment, acquiring users, monetization, etc. I always used to think that future problems are good to have. It's true that they're good to have since it means you've crossed the previous hurdle. But they're just as difficult, if not more difficult, than prior hurdles. This is why the mental model for startups is so important. You really do have to be relentless despite the numerous hurdles which will be placed in front of you.
  - gms 13y ago
    Yes, you are correct. I wasn't clear in that I was talking about my current hurdle.
- pdq 13y ago
  The common wisdom is, "solve your own problems". If you scratch your own itch, you can get to a solution that others will appreciate, rather than attempting to have others describe where their itch is, and how you can scratch it.
- deleted 13y ago
  [deleted]
- jw2013 13y ago
  Why not start with making something you want? If you don't know what other people want, you know exactly what pains you and just fix that. Why not even stop thinking about starting a startup when you start solving your own problem? If your product solves your own problem, find your niches to see if it bugs them also. Someone put it nicely - facebook is Mark's side project 6, probably? Of course not all startups start that way, if you don't know what others want, that is a good way to start and at worst it is a good way to sharpen your programming/non-programming skills.
skrebbel 13y ago
Call me cynical, but I tripped over this paragraph: > For example, when Adora Cheung was starting Homejoy, she would work all day as a cleaner to learn the business, drive an hour back to Mountain View, stay up as late as she could coding, then drive back to San Francisco at ~3am to beat traffic, sleep in her car, and do it again. She also gave both her apartment and her car to early cleaners so that they could partner up with Homejoy. We don’t want to delude anyone about what running a startup is like—it’s a rational decision to decide you don’t want to start a startup. What I read here is the idea that the only way to do a startup is no sleep (except a few hours in a car) and no life. 100% of your time is startup, startup, startup. Who profits most from cultivating this image? The startup founder or the VC? I seldomly see current founders / executives say that this is how they lead their lives, but somehow, VCs (like Altman) keep squeezing this image into their blog posts somehow. I don't think it's some kind of evil plot, and I like the rest of the post: it's good to be reminded that everybody started somewhere and nobody's great from the start. But I just don't believe that you can't be a successful founder and still have a life/family/healthy lifestyle.
- jmathai 13y ago
  I don't believe OP was implying that this is the path all startups need to take. I think he was simply using a more extreme example to convey that startups are hard. Not always that hard. But yeah, sometimes that hard.
- zaidf 13y ago
  But I just don't believe that you can't be a successful founder and still have a life/family/healthy lifestyle. You can be successful in any number of odd scenarios but that is not the norm. It is not hard to prove: if you talked to any founder that led the creation of a billion dollar enterprise from nothing, you will find an endless stream of stories such as Adora's. One of the things people fail to understand is that when you are embarking on an ambitious venture, the goal post keeps moving all the time. When you start out, you think that at a million dollar revenue, you'll be golden. Then you hit the million and now the goal post has moved to ten million dollars. And then something happens that completely threatens your whole business. Now you find yourself not just trying to grow revenue but save the entire business. In this situation, how much time you find for life/family/health will vary from founder to founder but as a rule, it is good to go in assuming the answer is "not much".
7Figures2Commas 13y ago
> The only thing you have to know how to do is build something people want. "Build something people want" is a popular mantra, but notwithstanding the fact that many entrepreneurs overestimate the potential demand for their product or service, it oversimplifies what's actually required to build a company that's likely to be successful. In the consumer market, translating popularity into dollars sufficient to support a sustainable business can be very hard. It's easy to look at companies like Snapchat, but most startups will not become so popular that they can obtain the type of funding that allows them to significantly delay the implementation of a revenue strategy. Monetizing a modestly popular consumer property that can support more than a handful of employees is still very, very difficult. In the B2B market, creating a successful business requires that you build something people want (or, more preferably, need), that you can sell and sell at a profit, and in sufficient volume. B2B sales can be difficult and slow, even if you have a great sales team and a great product, and the cost of sale can be much higher than you anticipate. If you do crack the sales puzzle in a profitable manner, scaling sales to the point at which you actually have a real business is a hurdle many startups never get past. If you look beyond the top 1% startups, you'll quickly find that Silicon Valley is littered with stagnant startups that are based on seemingly good ideas and that might even elicit comments like "I would use that!" But they're not "wanted" enough to get from great idea to great business. None of this means creating a company is a bad idea, but starting the journey with the "build something people want" mantra in mind, and little else, is more often than not a path to disappointment than success.
pskittle 13y ago
One thing I like about YC is that you'll are honest about a lot of things and invest to help the founders and company grow . However I've found out that people are the least optimistic about success in the valley . Then why the compulsion of having to move there. P.S - I'm not a YC graduate but a startup aficionado
jalonso510 13y ago
"We fund companies at all stages, from just the faintest idea to post-Series B" Does this mean that (i) YC will continue to invest in it companies up through their later rounds, or (ii) that YC will actually participate in a Series B for a company that it had no prior connection with?
- ycaspirant 13y ago
  I think what he meant to say is that YC accepts applications from companies at all stages. Once accepted to YC, all companies are given the exact same funding deal.
  - sokoloff 13y ago
    If that's the case, I think that limits YC to reasonably early stage (pre-series A) or near-death companies. It's perfectly rational to give 6% to YC of a very early company. It's almost surely plus-EV to do that. A successful company about to close a series-B? Much, much harder to imagine how YC would be plus-EV at that point.
orky56 13y ago
Although I understand this is a post by sama & for YC, I don't think that YC should be the reason you do a startup. That's what the article seemed to be insinuating to me. The hustle needed is just as impressive, if not more so, than the successful results we see.
sunjain 13y ago
Long time back I had posed a question on "Ask PG" - that how come PG does not go out and do a startup(after his initial one)? My aim was to ask if doing startup is such a "must to do" thing for certain kind of folks, then he should be doing it again, and again (and not stop after the first one and then start advising only). While I never got a direct answer to that one, he did answer this in another forum the same thing - which basically boiled down to - that doing startup is too much work, and he does not want spend his time doing that. I really do think, that doing startup is not such a sexy thing as it is portrayed it to be. I feel it is another of those things in life, where primary reason for most folks for doing a startup is that you will seem more "important" a person, after you have a successful startup. Otherwise you are just an ordinary dude with 9-5 job. I truly wonder how many folks actually do it because it is more fun and adventure, than pain and stress(most of the time). Or if the real reasons for doing startup are ever examined.
- 001sky 13y ago
  A similar story may be having kids. I'm pretty sure that most parents, of 18 year olds in college, if asked "why don't you have some more kids" would answer: "its too much work! (now)". But that is a different comment and context than asking someone who has never had kids. Some people are "serial entrepreneurs", but many aren't and that's OK. It's actually probably a good thing. Creativity (for new biz ideas) is a bit spiky and non-linear. Many serial entreprenuers are merely trend-spotters, not (0,1) type innovators. The number of the people with multiple ideas of great calibre is very, very small. Even when considered in relation to the number of founders with successful exits (already small). So you should not expect in any way for this to be the norm, IMHO.
deleted 13y ago
[deleted]

112 points by gatsby 13y ago

My experience at repeatedly starting companies is not that taking risk for yourself is hard -- if you have simple taste, enjoy coding and are articulate enough to identify a problem and conceive a solution… There is no reason to be, really. I mean: sitting on your ass wondering what to do is pretty much what anyone looking for a job does after that phone-call, and no one has described job seekers as heroes, certainly not developers. What still scares the be-jeezus out of me, and anyone I’ve met is getting someone else involved, pretending that you know your thing and making them, innocent travel companions, crash with you, unaware that it’s all shadows and illusion. I’m assuming that’s why psychopaths are so good at that stage: they can hire ten people that they can’t pay, and not care for the life of them that their baby won’t have formula to eat in two months. (I’ve seen that with my own eyes. Spoiler alert: it cries.) I am not surprised that HomeJoy founder gave her home to those first helpers: with an ounce of human decency, that must have felt like a tenth of the bare minimum she was asking from them. That discomfort must have been less that the inhumane hours. Good on her, and great for her. The fact that Sam Altman fails to see that the problem is generally others scares me.

sama 13y ago
this is one of the many reasons we advise startups not to hire during YC. most startups we work with wait to hire until they have raised enough money to make it reasonably safe to join them. and employees should always ask a startup how much runway they have. if they won't tell you, it's a big red flag.
- bertil 13y ago
  Thank you so much for answering. Employees are the big point, but I have seen that fear even towards non-employees: dependent family members, partners… As someone who’s been burned (hard) by asking that question and trusting the answer many times (Fool me once…), I see as a huge opportunity an audit company that could answer that question accurately, and reasonably well for early start-up: before and after hiring you and the all the profiles being considered.
  - 2arrs2ells 13y ago
    Ask to talk to one of the company's investors if you aren't sure the founder is being upfront about runway. They should have a good handle on the company's cash position (and if they don't, that might be a yellow flag).
    - bertil 13y ago
      Not sure how the relation with investors is in the US, but I can’t imagine them even considering that in any company that I joined. In hindsight, it was a red flag, but I assume there is a cultural gap there.
      - 2arrs2ells 13y ago
        Depends on stage of company, but for my company (Series A, Bay Area, ~25 employees), we'd be happy to connect anyone with a job offer with our lead investor.
- larrys 13y ago
  "and employees should always ask a startup how much runway they have. if they won't tell you, it's a big red flag." To me I remember Ronald Regan saying "trust but verify". While it's nice to get an answer to the question I think, having been in business for a long time, [1] the fact that one gets an answer is not necessarily the end of the investigation or proof of the statement. Point being that if it is important to someone (the answer) before hopping on board it would be appropriate to be shown proof of the fact. (Noting of course that it wouldn't be to difficult to fake that and also noting that you don't have any control over whether the assumptions being made will hold). Worried about insulting someone by implying that you don't trust? Figure out a creative way to put it into the appropriate words to get by that issue. [1] As a kid, before car dealers gave loaner cars, I remember my father being told by each salesman "and if your car is in for service I'll lend you mine for the day".
  - aptwebapps 13y ago
    OT, but I always thought "Respect, but don't trust implicitly" would be a more accurate, if less felicitous, way of putting it. Or at least as I understand the ideal.

gms 13y ago

"The only thing you have to know how to do is build something people want." I have actually found this to be the most difficult thing - a lack of ideas that turn out to be wanted by other people.

jmathai 13y ago
The most difficult thing in a startup is whatever your next big hurdle is. Ultimately, yes, you need to build something people want - a lot. But there are a series of hurdles along the way ranging from finding a co-founder/team, building the product, raising investment, acquiring users, monetization, etc. I always used to think that future problems are good to have. It's true that they're good to have since it means you've crossed the previous hurdle. But they're just as difficult, if not more difficult, than prior hurdles. This is why the mental model for startups is so important. You really do have to be relentless despite the numerous hurdles which will be placed in front of you.
- gms 13y ago
  Yes, you are correct. I wasn't clear in that I was talking about my current hurdle.
pdq 13y ago
The common wisdom is, "solve your own problems". If you scratch your own itch, you can get to a solution that others will appreciate, rather than attempting to have others describe where their itch is, and how you can scratch it.
deleted 13y ago
[deleted]
jw2013 13y ago
Why not start with making something you want? If you don't know what other people want, you know exactly what pains you and just fix that. Why not even stop thinking about starting a startup when you start solving your own problem? If your product solves your own problem, find your niches to see if it bugs them also. Someone put it nicely - facebook is Mark's side project 6, probably? Of course not all startups start that way, if you don't know what others want, that is a good way to start and at worst it is a good way to sharpen your programming/non-programming skills.

skrebbel 13y ago

Call me cynical, but I tripped over this paragraph: > For example, when Adora Cheung was starting Homejoy, she would work all day as a cleaner to learn the business, drive an hour back to Mountain View, stay up as late as she could coding, then drive back to San Francisco at ~3am to beat traffic, sleep in her car, and do it again. She also gave both her apartment and her car to early cleaners so that they could partner up with Homejoy. We don’t want to delude anyone about what running a startup is like—it’s a rational decision to decide you don’t want to start a startup. What I read here is the idea that the only way to do a startup is no sleep (except a few hours in a car) and no life. 100% of your time is startup, startup, startup. Who profits most from cultivating this image? The startup founder or the VC? I seldomly see current founders / executives say that this is how they lead their lives, but somehow, VCs (like Altman) keep squeezing this image into their blog posts somehow. I don't think it's some kind of evil plot, and I like the rest of the post: it's good to be reminded that everybody started somewhere and nobody's great from the start. But I just don't believe that you can't be a successful founder and still have a life/family/healthy lifestyle.

jmathai 13y ago
I don't believe OP was implying that this is the path all startups need to take. I think he was simply using a more extreme example to convey that startups are hard. Not always that hard. But yeah, sometimes that hard.
zaidf 13y ago
But I just don't believe that you can't be a successful founder and still have a life/family/healthy lifestyle. You can be successful in any number of odd scenarios but that is not the norm. It is not hard to prove: if you talked to any founder that led the creation of a billion dollar enterprise from nothing, you will find an endless stream of stories such as Adora's. One of the things people fail to understand is that when you are embarking on an ambitious venture, the goal post keeps moving all the time. When you start out, you think that at a million dollar revenue, you'll be golden. Then you hit the million and now the goal post has moved to ten million dollars. And then something happens that completely threatens your whole business. Now you find yourself not just trying to grow revenue but save the entire business. In this situation, how much time you find for life/family/health will vary from founder to founder but as a rule, it is good to go in assuming the answer is "not much".

7Figures2Commas 13y ago

> The only thing you have to know how to do is build something people want. "Build something people want" is a popular mantra, but notwithstanding the fact that many entrepreneurs overestimate the potential demand for their product or service, it oversimplifies what's actually required to build a company that's likely to be successful. In the consumer market, translating popularity into dollars sufficient to support a sustainable business can be very hard. It's easy to look at companies like Snapchat, but most startups will not become so popular that they can obtain the type of funding that allows them to significantly delay the implementation of a revenue strategy. Monetizing a modestly popular consumer property that can support more than a handful of employees is still very, very difficult. In the B2B market, creating a successful business requires that you build something people want (or, more preferably, need), that you can sell and sell at a profit, and in sufficient volume. B2B sales can be difficult and slow, even if you have a great sales team and a great product, and the cost of sale can be much higher than you anticipate. If you do crack the sales puzzle in a profitable manner, scaling sales to the point at which you actually have a real business is a hurdle many startups never get past. If you look beyond the top 1% startups, you'll quickly find that Silicon Valley is littered with stagnant startups that are based on seemingly good ideas and that might even elicit comments like "I would use that!" But they're not "wanted" enough to get from great idea to great business. None of this means creating a company is a bad idea, but starting the journey with the "build something people want" mantra in mind, and little else, is more often than not a path to disappointment than success.

pskittle 13y ago

One thing I like about YC is that you'll are honest about a lot of things and invest to help the founders and company grow . However I've found out that people are the least optimistic about success in the valley . Then why the compulsion of having to move there. P.S - I'm not a YC graduate but a startup aficionado

jalonso510 13y ago

"We fund companies at all stages, from just the faintest idea to post-Series B" Does this mean that (i) YC will continue to invest in it companies up through their later rounds, or (ii) that YC will actually participate in a Series B for a company that it had no prior connection with?

ycaspirant 13y ago
I think what he meant to say is that YC accepts applications from companies at all stages. Once accepted to YC, all companies are given the exact same funding deal.
- sokoloff 13y ago
  If that's the case, I think that limits YC to reasonably early stage (pre-series A) or near-death companies. It's perfectly rational to give 6% to YC of a very early company. It's almost surely plus-EV to do that. A successful company about to close a series-B? Much, much harder to imagine how YC would be plus-EV at that point.

orky56 13y ago

Although I understand this is a post by sama & for YC, I don't think that YC should be the reason you do a startup. That's what the article seemed to be insinuating to me. The hustle needed is just as impressive, if not more so, than the successful results we see.

sunjain 13y ago

Long time back I had posed a question on "Ask PG" - that how come PG does not go out and do a startup(after his initial one)? My aim was to ask if doing startup is such a "must to do" thing for certain kind of folks, then he should be doing it again, and again (and not stop after the first one and then start advising only). While I never got a direct answer to that one, he did answer this in another forum the same thing - which basically boiled down to - that doing startup is too much work, and he does not want spend his time doing that. I really do think, that doing startup is not such a sexy thing as it is portrayed it to be. I feel it is another of those things in life, where primary reason for most folks for doing a startup is that you will seem more "important" a person, after you have a successful startup. Otherwise you are just an ordinary dude with 9-5 job. I truly wonder how many folks actually do it because it is more fun and adventure, than pain and stress(most of the time). Or if the real reasons for doing startup are ever examined.

001sky 13y ago
A similar story may be having kids. I'm pretty sure that most parents, of 18 year olds in college, if asked "why don't you have some more kids" would answer: "its too much work! (now)". But that is a different comment and context than asking someone who has never had kids. Some people are "serial entrepreneurs", but many aren't and that's OK. It's actually probably a good thing. Creativity (for new biz ideas) is a bit spiky and non-linear. Many serial entreprenuers are merely trend-spotters, not (0,1) type innovators. The number of the people with multiple ideas of great calibre is very, very small. Even when considered in relation to the number of founders with successful exits (already small). So you should not expect in any way for this to be the norm, IMHO.

deleted 13y ago

[deleted]