Are Y Combinator startups less Ambitious?
I want to put a decent entrepreneurial argument. We have seen many Y Combinator startups up till now and I think many had great potential and could have expanded their business and user base to match with the titans.
Why we didn't see next facebook or Digg beaters(in terms of size)? I think only Scribd, Loopt and Reddit have gone so far and they had much more potential to go further considering their business models ... or I am being a jerk? Of course I don't know the complete picture and it's too early to tell this, but I would like you to give a different dimension to this argument and tell us your opinion.
36 comments
[ 3.0 ms ] story [ 84.3 ms ] threadThere are a lot of great apps which fit this model, but they DO tend to be smaller in scope- The constraints of the model force uses to focus on their core feature offering, rather than adding everything under the sun, to appeal to as many users as humanly possible.
I do think reddit have strong business model and generates more quality contents than Digg, for this I have backing from zdnet (http://blogs.zdnet.com/web2explorer/?p=99). And Ofcourse reddit is a very much success and my favorite. Look at this data going head-to-head with StumpleUpon (http://siteanalytics.compete.com/stumbleupon.com+reddit.com/...)
In terms of backing my argument, if you think reddit have gone far than the Digg I think you should look at the compete data (http://siteanalytics.compete.com/digg.com+reddit.com/?metric...) and this argument backing that, reddit isnt that viral(http://socialnewswatch.com/digg-versus-reddit/). My point is it could have been more viral with little more effort and more to it that no other startup came close to Reddit and Scribd (http://siteanalytics.compete.com/scribd.com+reddit.com+loopt...)
And I could very well turn this post off, if everybody favors with this.
Why are people down-voting for asking a simple question? Is THAT what "25 karma" gives them?
This community seems to be getting a little too overcrowded with self-important downvoters. Sad, really. I used to like it here.
There is so incredibly much I could contribute here, but now I ask "why bother" if the community begins its inevitable slide (thanks, Tech Crunch!) into Diggland and Reddithood?
Everyone makes mistakes occasionally and gets downvoted (sometimes it's unfortunate but you can just get downvoted for expressing an unpopular opinion). But hopefully in the long run you bring positive value to the site and your comments are voted up more often than down.
Huge companies with huge success are very uncommon - that's why we can list them off the top of our heads. YC invests in a lot of companies, but not many in terms of the total number of startups in the world. So lets say that out of 10,000 startups, 1 gets huge (Google, Facebook, etc), 9 get big (Digg-sized). That's 1 in 1000. YC has invested in ~80 startups (call it 100 for easy math sake), which is 1% of the "market". 100 tries at 1 in 10,000 isn't great. Even if you say that YC companies are 10x more likely to succeed (not unreasonable given the training, motivation, selection bias, etc), 100 shots at 1 in 1,000 still isn't that good.
Becoming huge requires a lot of things - including luck and timing. No matter how much value YC adds, it can't add those two things. What it can do is increase 1) the odds of success and 2) the expected value of that success (0.1% chance of $1B, 99.9% chance of $0 isn't very appealing).
I think pg's goal isn't to create billionaires (although he wouldn't mind). His goal is to help smart hackers solve "the money problem" so they can have the freedom to pursue other productive pursuits they wish. Look at what he, rtm, and tlb have done since they sold Viaweb (Arc, YC, HN, Harvard prof, awesome homemade robots). None of that would have been done if they were working at Google for $110K/yr.
Trying to solve "the money problem" in a couple years shows an excess of ambition, especially since programmers earn decent coin in the corporate world.
If so, then I think the original premise of the comment is valid and interesting ... that "YC startups are less ambitious (perhaps by design)".
And the $$ is probably the least useful thing YC provides. If I had to guess, I'd say the most useful things they provide are (in this order):
(actually turned into its own post:
http://news.ycombinator.com/item?id=147984
"We provide ... basic business training and continuing guidance ... enables them to develop self-sustainable livelihoods ..."
http://www.microloanfoundation.org.uk/about_us.asp
Yeah, smart hackers who happen to be in US, what about us ;(
I'm sure pg would love for US immigration policies to be reformed (can you imagine him licking his chops at getting access to all the world's hackers?), but that sounds like a hard problem that makes you stupid (like programming the Win32 API).
Same argument. No lack of ambition. Just give it time.
If Google had not succeeded, it would be easy to say that they lacked ambition - they just tried a me-too search engine when Yahoo! and AltaVista were the titans. But Google caught fire and now, we all think they were audacious and ambitious to try what they did.
Ambition alone does not guarantee success: sort of a necessary-but-not-sufficient ingredient.
Also YCombinator is a king-maker but not every king can have huge empire and not everyone can become Alexander, though everyone would like to become one, but then they all have some kind of limitations which is sometimes is out of your control.
I'd say the level of ambition and the level of success is quite high with current YC companies. It's interesting how your assumption seems based on the notion that having YC backing makes success automatic, and all these guys need to do is be more ambitious and stick with it longer and they could all build the next Google, or even Digg. As pchristensen pointed out, the math doesn't back this idea at all. YC is a great benefit--it brings additional media, a lot of great guidance, and a lot of peers that you can lean on and ask for help from--but it's not going to make building a business magically easy, if you just have enough ambition.
[Sorry!]
Today's billion-dollar markets are not tomorrow's billion-dollar markets. Building a better Digg or Facebook today won't help you kill those companies. First, it would need to be an order of magnitude better to convince anyone to switch. Second, your innovation would need to be hard to duplicate. You might stand a chance if you found some way of positioning a startup for people who don't currently use the existing services, but that's a hard problem.
Predicting tomorrow's big markets is a harder problem. The existing big companies go after the big predictable opportunities with vigour and vast resources, leaving us to chase the unpredictable opportunities. Thus, we can't consciously chase the billion-dollar opportunities because we can only guess at their nature.
The thing you should be trying to identify is what are the major companies of today not doing quite right or not doing at all.
While there are a few examples of billion dollar companies being built upon already existing ideas, the market awards billions of dollars to those who destroy the reliance upon already existing technology.
A company that radically changes the way people do things for the better has a much higher probability of attaining billions in market cap than a company that comes along an provides perhaps a better user interface to an already existing service.
You go to YC to learn and to meet people. Generally our ideas aren't world shaking, but there is a reason for that. We're generally young and still trying to learn and gain experience. You wouldn't expect a YC startup to be a magic AI that can solve the world's problems. If you can do that...why would you need to go to YC? There is a different between a lack of ambition and a desire to learn.
When I started out, my first objective was to put food on the table, be self-sufficient. I have grown a bit more ambitious since ... :-)