7 ms·

Am I missing something here? You can get $$$ and top quality advice for an _idea_ and then just turn around and say "bored now - let's do something else"? And

by edent 12y ago

Am I missing something here? You can get $$$ and top quality advice for an _idea_ and then just turn around and say "bored now - let's do something else"? And then, so it seems, when that idea runs out you just say "uhhh... let's do this instead!" So, what are the YC people investing in? Two guys who seem pretty smart? I appreciate that you might need to pivot from "a social network for dogs" to "a social network for pets" or even "a dog training forum" - but this just seems like they were given investment for one idea, then immediately dropped it to do something else. Or, like I say, have I missed something vital?

andrelayer 12y ago
The only part you're missing is that PG has said many times in the past that they invest mostly in the team and that many teams that go through YC end up changing their idea slightly or completely. So the beginning of this situation doesn't seem very unusual, just that they never actually figured it out.
- femto113 12y ago
  I can accept this rationale for investing in teams over ideas, but when did "pivoting" go from meaning "a modest change in direction" (e.g. switching the target market for your SASS product from consumers to enterprise, or making what was initially a secondary feature a primary one) to "start over from scratch with an entirely unrelated idea"? Seems like another term is needed--"flailing" perhaps?
  - _delirium 12y ago
    A least in the YC model, that seems to be a common definition of "pivoting". A bunch of their companies end up pursuing products bearing very little resemblance to the idea they were accepted on. If anything they seem to view being too attached to your idea as the bigger negative.
  - wpietri 12y ago
    Normally I use the term "leap" for the latter. You're completely correct that the original meaning of the term was specific. Eric Ries originally wrote, "I want to introduce the concept of the pivot, the idea that successful startups change directions but stay grounded in what they've learned. They keep one foot in the past and place one foot in a new possible future. Over time, this pivoting may lead them far afield from their original vision, but if you look carefully, you'll be able to detect common threads that link each iteration. By contrast, many unsuccessful startups simply jump outright from one vision to something completely different. These jumps are extremely risky, because they don't leverage the validated learning about customers that came before." [1] Sadly, the term is getting killed by Semantic Diffusion [2]. Precisely because people want to dignify their flailing with a fancy-sounding word. [1] http://www.startuplessonslearned.com/2009/06/pivot-dont-jump-to-new-vision.html http://www.startuplessonslearned.com/2009/06/pivot-dont-jump... [2] http://martinfowler.com/bliki/SemanticDiffusion.html http://martinfowler.com/bliki/SemanticDiffusion.html
  - untog 12y ago
    It doesn't seem that rare. The creators of Reddit joined YC with a pitch for ordering delivery food through your phone.
  - jlarocco 12y ago
    Yeah, that almost seems like a bait and switch scam.
  - drumdance 12y ago
    pg called Soylent "the biggest pivot in YC history" "Affordable wireless networks" somehow became a food company. http://blog.soylent.me/post/51007573199/the-biggest-pivot-in-yc-history http://blog.soylent.me/post/51007573199/the-biggest-pivot-in...
    - jimbokun 12y ago
      That's an odd one, but still something with an empirical basis for the decision. If I remember correctly, the creator of soylent invented it for his own needs, blogged about it, then was stunned by the amount of interest. In this case, it seemed like the idea kept changing before they had even figured out much about it, or had any evidence to justify a different direction.
zacharycohn 12y ago
"So, what are the YC people investing in? Two guys who seem pretty smart?" Yes, actually. Under the assumption that smart people can adapt and change as situations demand. Someone with "a good idea" who is not smart is tied to that good idea. If it turns out not to be a good idea, or the environment changes and they need to adapt... I'd rather bet on the smart people.
deleted 12y ago
[deleted]
wpietri 12y ago
I had similar questions based on this: "In college I had started an ed-tech company, ClassOwl, that raised nearly a million in seed funding. My two cofounders and I attended StartX, an incubator affiliated with Stanford, but ultimately decided to finish our degrees instead of pursuing the startup dream." Am I understanding that right? Twice in two years this guy took other people's money for something and then quit? I know we are in another bubble, but this really worries me. What, as an industry, are we doing if recent graduates see their basket of choices as "a) go to grad school, b) work at a big tech company, or c) attend a prestigious startup accelerator"? On the one hand, I love entrepreneurs, and think that anybody who feels the calling should be supported in doing it. But on the other, I really feel like it is a calling, like being an artist or a religious missionary. People who are the kind of people who will be happy taking one of life's default choices should probably just go do that. If people are becoming entrepreneurs because they see it as another convenient, high-status, high-reward option, then I think we're doing something pretty wrong. And kudos to Charlie Guo for being honest like this. It's sure not easy, but it's very valuable to the rest of us.
- _delirium 12y ago
  Unless there's some kind of actual contract (leave before X years and you have to return Y% of the funding), I don't think that should be very surprising. People start on something (even a funded something) and then change to other things all the time, if their interests change or another opportunity arises. For example, a portion of the people who win $30k/year National Science Foundation graduate research fellowships take a year or two of the funding, and then decide a PhD isn't for them. Some of those people, after taking $30k or $60k in PhD fellowship funding, leave grad school to start a company instead. I don't think it should be that surprising that people might go the other direction as well, taking $30k in Y Combinator funding, trying a startup for a bit, and then deciding to leave the startup and go to grad school instead.
  - untog 12y ago
    A research fellowship is not seed funding, though. YC doesn't "give" people $30k, it invests $30k in their business.
solve 12y ago
> So, what are the YC people investing in? Two guys who seem pretty smart? The fully loaded market rate for "two guys who seem pretty smart" in Silicon Valley is somewhere between $200,000 to $300,000 per year -- at regular day jobs. Even boring regular employers invest a ton of money in people just based on an interview. Remember this, when thinking about all of the investors who are always demanding tons of up-front proof and traction from founders. Regular day jobs generally require you to do nothing up front, except showing up to an interview. Firing within the first year is relatively rare. In many ways, regular day job employers are a lot less risk averse than investors!
- encoderer 12y ago
  > The fully loaded market rate for "two guys who seem pretty smart" in Silicon Valley is somewhere between $200,000 to $300,000 per year Each
  - guelo 12y ago
    Bullshit.
    - michaelrwolfe1 12y ago
      Recruiting costs, signing bonus, salary, health care, insurance, taxes, equipment, office space, software subscriptions, expenses. I've been at 5 startups, and we always budgeted 200-250k per hire per year
- aerovistae 12y ago
  Well of course! The hiring managers at "Regular day job employers" aren't dispensing their own money, and the company they work for is already established and likely doesn't have any shortage of money with which to "take risks."
- jerguismi 12y ago
  Recruitment is quite a different to investing. First of all, the upside-risk is pretty much eliminated from the employee, usually. And the employees can be fired. Yep, I guess that it is somewhat rare, but at least there is that possibility.
TheGrassyKnoll 12y ago
CS degree from Stanford == clout in the startup community
- unknownian 12y ago
  Stanford is really a great school, but I hope that isn't generally the determining factor here. Many other universities have great CS departments with strong entrepreneurial programs on the side. (MIT, Berkeley, Harvard, Columbia, etc). edit: I guess Stanford grads apply in much higher numbers than most other colleges.
drawkbox 12y ago
It is a calculated risk, some end up like this and others make Reddit (who also pivoted), Dropbox or Twitch. Since you only need a few really big winners the net can only catch but a few and it can still be a successful process. It is really timing as well, even if you have the right people at the time it might not work out. Personally it seems you would want more of a track record for investment, but it is a risk YC is willing to take for the big fish as they have a much bigger net + filter with smaller investments. YC essentially pans for gold way upstream right in the blue stream before the blue ocean way before the red ocean.
ryanSrich 12y ago
> So, what are the YC people investing in? Two guys who seem pretty smart? Standford CS grads.
myth_buster 12y ago
> So, what are the YC people investing in? Two guys who seem pretty smart? In a lot of talks by VCs, Seed funds and incubators posted on YT, they have said that they invest in people. It's been said that people with entrepreneurial spirit will keep coming with ideas & executions and the said VCs/Seed Funds/Incubators want to build relationships that span across these ventures.

by edent 12y ago

andrelayer 12y ago

The only part you're missing is that PG has said many times in the past that they invest mostly in the team and that many teams that go through YC end up changing their idea slightly or completely. So the beginning of this situation doesn't seem very unusual, just that they never actually figured it out.

femto113 12y ago
I can accept this rationale for investing in teams over ideas, but when did "pivoting" go from meaning "a modest change in direction" (e.g. switching the target market for your SASS product from consumers to enterprise, or making what was initially a secondary feature a primary one) to "start over from scratch with an entirely unrelated idea"? Seems like another term is needed--"flailing" perhaps?
- _delirium 12y ago
  A least in the YC model, that seems to be a common definition of "pivoting". A bunch of their companies end up pursuing products bearing very little resemblance to the idea they were accepted on. If anything they seem to view being too attached to your idea as the bigger negative.
- wpietri 12y ago
  Normally I use the term "leap" for the latter. You're completely correct that the original meaning of the term was specific. Eric Ries originally wrote, "I want to introduce the concept of the pivot, the idea that successful startups change directions but stay grounded in what they've learned. They keep one foot in the past and place one foot in a new possible future. Over time, this pivoting may lead them far afield from their original vision, but if you look carefully, you'll be able to detect common threads that link each iteration. By contrast, many unsuccessful startups simply jump outright from one vision to something completely different. These jumps are extremely risky, because they don't leverage the validated learning about customers that came before." [1] Sadly, the term is getting killed by Semantic Diffusion [2]. Precisely because people want to dignify their flailing with a fancy-sounding word. [1] http://www.startuplessonslearned.com/2009/06/pivot-dont-jump-to-new-vision.html http://www.startuplessonslearned.com/2009/06/pivot-dont-jump... [2] http://martinfowler.com/bliki/SemanticDiffusion.html http://martinfowler.com/bliki/SemanticDiffusion.html
- untog 12y ago
  It doesn't seem that rare. The creators of Reddit joined YC with a pitch for ordering delivery food through your phone.
- jlarocco 12y ago
  Yeah, that almost seems like a bait and switch scam.
- drumdance 12y ago
  pg called Soylent "the biggest pivot in YC history" "Affordable wireless networks" somehow became a food company. http://blog.soylent.me/post/51007573199/the-biggest-pivot-in-yc-history http://blog.soylent.me/post/51007573199/the-biggest-pivot-in...
  - jimbokun 12y ago
    That's an odd one, but still something with an empirical basis for the decision. If I remember correctly, the creator of soylent invented it for his own needs, blogged about it, then was stunned by the amount of interest. In this case, it seemed like the idea kept changing before they had even figured out much about it, or had any evidence to justify a different direction.

zacharycohn 12y ago

"So, what are the YC people investing in? Two guys who seem pretty smart?" Yes, actually. Under the assumption that smart people can adapt and change as situations demand. Someone with "a good idea" who is not smart is tied to that good idea. If it turns out not to be a good idea, or the environment changes and they need to adapt... I'd rather bet on the smart people.

deleted 12y ago

[deleted]

wpietri 12y ago

I had similar questions based on this: "In college I had started an ed-tech company, ClassOwl, that raised nearly a million in seed funding. My two cofounders and I attended StartX, an incubator affiliated with Stanford, but ultimately decided to finish our degrees instead of pursuing the startup dream." Am I understanding that right? Twice in two years this guy took other people's money for something and then quit? I know we are in another bubble, but this really worries me. What, as an industry, are we doing if recent graduates see their basket of choices as "a) go to grad school, b) work at a big tech company, or c) attend a prestigious startup accelerator"? On the one hand, I love entrepreneurs, and think that anybody who feels the calling should be supported in doing it. But on the other, I really feel like it is a calling, like being an artist or a religious missionary. People who are the kind of people who will be happy taking one of life's default choices should probably just go do that. If people are becoming entrepreneurs because they see it as another convenient, high-status, high-reward option, then I think we're doing something pretty wrong. And kudos to Charlie Guo for being honest like this. It's sure not easy, but it's very valuable to the rest of us.

_delirium 12y ago
Unless there's some kind of actual contract (leave before X years and you have to return Y% of the funding), I don't think that should be very surprising. People start on something (even a funded something) and then change to other things all the time, if their interests change or another opportunity arises. For example, a portion of the people who win $30k/year National Science Foundation graduate research fellowships take a year or two of the funding, and then decide a PhD isn't for them. Some of those people, after taking $30k or $60k in PhD fellowship funding, leave grad school to start a company instead. I don't think it should be that surprising that people might go the other direction as well, taking $30k in Y Combinator funding, trying a startup for a bit, and then deciding to leave the startup and go to grad school instead.
- untog 12y ago
  A research fellowship is not seed funding, though. YC doesn't "give" people $30k, it invests $30k in their business.

solve 12y ago

> So, what are the YC people investing in? Two guys who seem pretty smart? The fully loaded market rate for "two guys who seem pretty smart" in Silicon Valley is somewhere between $200,000 to $300,000 per year -- at regular day jobs. Even boring regular employers invest a ton of money in people just based on an interview. Remember this, when thinking about all of the investors who are always demanding tons of up-front proof and traction from founders. Regular day jobs generally require you to do nothing up front, except showing up to an interview. Firing within the first year is relatively rare. In many ways, regular day job employers are a lot less risk averse than investors!

encoderer 12y ago
> The fully loaded market rate for "two guys who seem pretty smart" in Silicon Valley is somewhere between $200,000 to $300,000 per year Each
- guelo 12y ago
  Bullshit.
  - michaelrwolfe1 12y ago
    Recruiting costs, signing bonus, salary, health care, insurance, taxes, equipment, office space, software subscriptions, expenses. I've been at 5 startups, and we always budgeted 200-250k per hire per year
aerovistae 12y ago
Well of course! The hiring managers at "Regular day job employers" aren't dispensing their own money, and the company they work for is already established and likely doesn't have any shortage of money with which to "take risks."
jerguismi 12y ago
Recruitment is quite a different to investing. First of all, the upside-risk is pretty much eliminated from the employee, usually. And the employees can be fired. Yep, I guess that it is somewhat rare, but at least there is that possibility.

TheGrassyKnoll 12y ago

CS degree from Stanford == clout in the startup community

unknownian 12y ago
Stanford is really a great school, but I hope that isn't generally the determining factor here. Many other universities have great CS departments with strong entrepreneurial programs on the side. (MIT, Berkeley, Harvard, Columbia, etc). edit: I guess Stanford grads apply in much higher numbers than most other colleges.

drawkbox 12y ago

It is a calculated risk, some end up like this and others make Reddit (who also pivoted), Dropbox or Twitch. Since you only need a few really big winners the net can only catch but a few and it can still be a successful process. It is really timing as well, even if you have the right people at the time it might not work out. Personally it seems you would want more of a track record for investment, but it is a risk YC is willing to take for the big fish as they have a much bigger net + filter with smaller investments. YC essentially pans for gold way upstream right in the blue stream before the blue ocean way before the red ocean.

ryanSrich 12y ago

> So, what are the YC people investing in? Two guys who seem pretty smart? Standford CS grads.

myth_buster 12y ago

> So, what are the YC people investing in? Two guys who seem pretty smart? In a lot of talks by VCs, Seed funds and incubators posted on YT, they have said that they invest in people. It's been said that people with entrepreneurial spirit will keep coming with ideas & executions and the said VCs/Seed Funds/Incubators want to build relationships that span across these ventures.