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This is just Google's form of semi-automatic due diligence. Instead of them having to carefully vet each startup, determine that they're actually getting work d

This is just Google's form of semi-automatic due diligence. Instead of them having to carefully vet each startup, determine that they're actually getting work done and are a real company and have at least some tiny bit of potential, they'll just defer to the accelerators and incubators to decide on that. Remember they're giving away $100,000 of credit for free, so they have to make sure it's not being squandered. I also agree that incubators and accelerators should never be seen as necessary to create a successful startup, and I don't think Google is claiming that either. This is just how they're handling risk. Remember this is a new platform for Google to make money, they're not just giving it away as charity.

mgkimsal 12y ago
"so they have to make sure it's not being squandered" Because, of course, no VC-backed company EVER wastes any money.
idlewords 12y ago
I don't dispute anything you say. But the fact that they can make this an eligibility criterion speaks to the conformism in startup culture, and the gatekeeping role of a very small establishment.
- jdoliner 12y ago
  The fact that they can make this an eligibility criterion speaks to the fact that they're giving you something you'd otherwise pay $100,000 for. If this deal is somehow keeping startups outside the gate then said startups must really have been screwed 3 hours ago when this deal didn't even exist.
  - pender 12y ago
    Most startups need all the help they can get. Google has decided to provide help only to those who have sold their souls away. Seems rather evil to me.
    - wj 12y ago
      Going through an accelerator mean you've "sold your soul"? That is a bit of a jump.
      - pender 12y ago
        Obviously I'm jumping to a point beyond the notion of a soul. Nice branding with "accelerator". What do you think one is trading for money? Even in a simple equity trade you are giving up more than just equity... you are also putting on a leash which will alter your original being. VC's and soul trading aside, it's the exclusion part that makes the deed evil. And yeah, I expected down voting from a group of people flocking to a VC forum like HN.
      - MCRed 12y ago
        In a way it is. Accelerators have become two things: Pitch training camps and old-boys networks. The focus seems to be all about polishing a pitch, and faking stats for whatever part of your business needs to be faked to show traction of some kind, so that you can pitch to the old-boy network on demo day, get some money and go to work for the accelerators backers partners. Startups long ago stopped being about building innovative business, and about VCs employing a bunch of kids to work really long hours on bad terms to make the VCs rich. I think it is a legitimate criticism-- not ad hominem-- to say the Bay Area model has produced a bunch of soulless startups. Though of course some do follow this path and still retain their souls.
        wj 12y ago
        I'm uncomfortable with your generalizations (though you did account for exceptions with your last sentence). I guess I would not be so pessimistic and give founders the benefit of the doubt that they think they are building something innovative (a word that means different things to different people). The summer YC class had a fusion startup and a fission startup if I recall correctly. That is innovation in my book. And I think most startups are trying to change the status quo even to a small extent. And why does a startup even need to be innovative? In this great talk by the founder of Asana (http://ecorner.stanford.edu/authorMaterialInfo.html?mid=3117 http://ecorner.stanford.edu/authorMaterialInfo.html?mid=3117) the point was made that while they're not curing diseases their software helps the people that are stay organized and save time.
  - jiggy2011 12y ago
    This deal makes things worse for non accelerated/VC'd startups because now they're competing with companies who not only have funding but also have $100K in free hosting.
    - ThomPete 12y ago
      exactly! In effect subsidizing the very startups who have the money to pay for hosting. Absurd.
    - rch 12y ago
      It could also improve the value proposition for lower tier accelerators that might have a mentor network but lack the resources to support the infrastructure requirements of the most promising participants. If implemented properly, it should improve the visibility of regional players.
    - nostrademons 12y ago
      If a one-time $100K credit is the difference between success or failure in your business model, you have a pretty weak business model.
      - jiggy2011 12y ago
        If you're trying to validate an idea, not having to worry about hosting costs for the first year or so could be a big deal. Especially if you're planning to sell out later to a larger company who has so much infrastructure already that hosting is practically free.
        nostrademons 12y ago
        Hosting costs for validating an idea run about $10-20/month, not $10-20K/month. Get a shared webhost or VPS and run things on a single box. Even if you are using every programming productivity trick in the book (dynamic languages, 3rd party libraries, RDBMSes, etc.), there is no reason whatsoever why serving 20-100 users should cost $100K. Google had indexed the whole web and was serving most of the Stanford campus before they got their first check for $100K.
  - MCRed 12y ago
    Nope. I would never pay $100k to Google as a startup, because there are more efficient ways to deploy that money. I would, however, consider taking $100k in free hosting from google as a startup because making it free eliminates the cost consideration in hosting choices. It's not keeping us out of the gate, it just that it reinforces the redefinition of startup to be "Silicon Valley VC type". EG: 37 Signals would never have qualified, but they were a startup.
    - mncolinlee 12y ago
      If you're actually spending $100k on hosting, one would hope you're making at least ten times as much. Otherwise, your engine of growth is fundamentally broken and you need to pivot.
ryanjshaw 12y ago
OK how about they give away $95k of credit and spend the $5k difference on due diligence? Now obviously to some extent I'm being facetious as of course the economics don't work exactly like this, but Microsoft's BizSpark offers Azure credits and has managed to be free for years without abuse being a significant issue. It seems likely that if Google made available an offering of, say, $100/mo with strings similar to BizSpark attached that it'd still be attractive to at least a few startups.
- claar 12y ago
  Partly because $100k credit likely costs them $5k in the first place..
  - skj 12y ago
    If someone actually spends all 100k of the credit, there is no doubt that the electricity involved cost more than 5k. There are certainly margins, but if the margin was 95%, then as Bezos says, "Your margin is my opportunity."
blauwbilgorgel 12y ago
Google has another program for startups without funding or accelerator program access. https://developers.google.com/startups/ https://developers.google.com/startups/ I applied and received $500 in credit for free (also free access to online training and local events). To get 100k in credit would of course be nice, but I would have no way to spend that much in a year. In the light of this two-tier startup program already existing a lot of comments in this thread become uninformed. Stop looking a gift horse in the mouth (unless it is a Trojan).

mgkimsal 12y ago

"so they have to make sure it's not being squandered" Because, of course, no VC-backed company EVER wastes any money.

idlewords 12y ago

I don't dispute anything you say. But the fact that they can make this an eligibility criterion speaks to the conformism in startup culture, and the gatekeeping role of a very small establishment.

jdoliner 12y ago
The fact that they can make this an eligibility criterion speaks to the fact that they're giving you something you'd otherwise pay $100,000 for. If this deal is somehow keeping startups outside the gate then said startups must really have been screwed 3 hours ago when this deal didn't even exist.
- pender 12y ago
  Most startups need all the help they can get. Google has decided to provide help only to those who have sold their souls away. Seems rather evil to me.
  - wj 12y ago
    Going through an accelerator mean you've "sold your soul"? That is a bit of a jump.
    - pender 12y ago
      Obviously I'm jumping to a point beyond the notion of a soul. Nice branding with "accelerator". What do you think one is trading for money? Even in a simple equity trade you are giving up more than just equity... you are also putting on a leash which will alter your original being. VC's and soul trading aside, it's the exclusion part that makes the deed evil. And yeah, I expected down voting from a group of people flocking to a VC forum like HN.
    - MCRed 12y ago
      In a way it is. Accelerators have become two things: Pitch training camps and old-boys networks. The focus seems to be all about polishing a pitch, and faking stats for whatever part of your business needs to be faked to show traction of some kind, so that you can pitch to the old-boy network on demo day, get some money and go to work for the accelerators backers partners. Startups long ago stopped being about building innovative business, and about VCs employing a bunch of kids to work really long hours on bad terms to make the VCs rich. I think it is a legitimate criticism-- not ad hominem-- to say the Bay Area model has produced a bunch of soulless startups. Though of course some do follow this path and still retain their souls.
      - wj 12y ago
        I'm uncomfortable with your generalizations (though you did account for exceptions with your last sentence). I guess I would not be so pessimistic and give founders the benefit of the doubt that they think they are building something innovative (a word that means different things to different people). The summer YC class had a fusion startup and a fission startup if I recall correctly. That is innovation in my book. And I think most startups are trying to change the status quo even to a small extent. And why does a startup even need to be innovative? In this great talk by the founder of Asana (http://ecorner.stanford.edu/authorMaterialInfo.html?mid=3117 http://ecorner.stanford.edu/authorMaterialInfo.html?mid=3117) the point was made that while they're not curing diseases their software helps the people that are stay organized and save time.
- jiggy2011 12y ago
  This deal makes things worse for non accelerated/VC'd startups because now they're competing with companies who not only have funding but also have $100K in free hosting.
  - ThomPete 12y ago
    exactly! In effect subsidizing the very startups who have the money to pay for hosting. Absurd.
  - rch 12y ago
    It could also improve the value proposition for lower tier accelerators that might have a mentor network but lack the resources to support the infrastructure requirements of the most promising participants. If implemented properly, it should improve the visibility of regional players.
  - nostrademons 12y ago
    If a one-time $100K credit is the difference between success or failure in your business model, you have a pretty weak business model.
    - jiggy2011 12y ago
      If you're trying to validate an idea, not having to worry about hosting costs for the first year or so could be a big deal. Especially if you're planning to sell out later to a larger company who has so much infrastructure already that hosting is practically free.
      - nostrademons 12y ago
        Hosting costs for validating an idea run about $10-20/month, not $10-20K/month. Get a shared webhost or VPS and run things on a single box. Even if you are using every programming productivity trick in the book (dynamic languages, 3rd party libraries, RDBMSes, etc.), there is no reason whatsoever why serving 20-100 users should cost $100K. Google had indexed the whole web and was serving most of the Stanford campus before they got their first check for $100K.
- MCRed 12y ago
  Nope. I would never pay $100k to Google as a startup, because there are more efficient ways to deploy that money. I would, however, consider taking $100k in free hosting from google as a startup because making it free eliminates the cost consideration in hosting choices. It's not keeping us out of the gate, it just that it reinforces the redefinition of startup to be "Silicon Valley VC type". EG: 37 Signals would never have qualified, but they were a startup.
  - mncolinlee 12y ago
    If you're actually spending $100k on hosting, one would hope you're making at least ten times as much. Otherwise, your engine of growth is fundamentally broken and you need to pivot.

ryanjshaw 12y ago

OK how about they give away $95k of credit and spend the $5k difference on due diligence? Now obviously to some extent I'm being facetious as of course the economics don't work exactly like this, but Microsoft's BizSpark offers Azure credits and has managed to be free for years without abuse being a significant issue. It seems likely that if Google made available an offering of, say, $100/mo with strings similar to BizSpark attached that it'd still be attractive to at least a few startups.

claar 12y ago
Partly because $100k credit likely costs them $5k in the first place..
- skj 12y ago
  If someone actually spends all 100k of the credit, there is no doubt that the electricity involved cost more than 5k. There are certainly margins, but if the margin was 95%, then as Bezos says, "Your margin is my opportunity."

blauwbilgorgel 12y ago

Google has another program for startups without funding or accelerator program access. https://developers.google.com/startups/ https://developers.google.com/startups/ I applied and received $500 in credit for free (also free access to online training and local events). To get 100k in credit would of course be nice, but I would have no way to spend that much in a year. In the light of this two-tier startup program already existing a lot of comments in this thread become uninformed. Stop looking a gift horse in the mouth (unless it is a Trojan).