Apply with me to YC in the next 3 days and change the world
I have an awesome prototype built that brings an emerging tech to the masses and I think has a good shot at changing the world. YC has expressed interest (got to the interview as solo applicant in the last batch but decided to defer without a co-founder). This idea won't be fresh forever (there are others starting to look into it) so I want to move on this asap with the right team. But there is one thing holding me back from knocking this out of the park: I have yet to find the right co-founder.
For the past year I've met with 1 or 2 people a week, either by phone or coffee, and despite some close calls that person hasn't turned up yet. But I believe they are out there, and I'm hoping they are reading HN tonight.
Getting a "shotgun wedding" is really not ideal, but if you are the the right person then I don't care how we meet. I'm going to improve my chances of finding you any way I can.
So what is the idea?
Credit card fees are too high. In the next five years merchants are going to start moving away from paying 2.5% plus 30 cents per transaction when fast secure alternatives become available. They're going to (at first) offer them at checkout alongside traditional credit card options, and then eventually start incentivising consumers to make the switch. If Amazon has a 5% margin on a $100 text book they aren't going to give $2.00 of their $5 to Visa/MC forever.
The same thing is going to happen in mobile. Your phone is going to become your wallet, and I don't think 30 year old credit card technology is going to be powering this new ewallet when someone goes to buy a cup of coffee in 10 years. All solutions today are carrying along the legacy baggage of credit cards.
So what will this solution be? It's going to be a digital currency, like bitcoin or some derivative of it, running in the cloud with a solid api to build an ecosystem around it. It's going to spring up organically in developing countries first I think, or places without stable currencies. If you think bitcoin sucks, this isn't really the right place to get into a flame war on it. I'm making a long term bet here and when it's more clear in five years or things have evolved it will be too late to jump on this, so whoever is going to win this needs to start now. Digital currencies show some early promise but are way too difficult to use for normal people (or are proprietary and controlled by one company like facebook credits). To me this is an opportunity, and I'm in a position to start laying the groundwork for this new platform.
Here are some screenshots of the prototype: http://imgur.com/a/KSKOt It has basic send/receive functionality but is still super early stage.
In a few words, this is paypal for bitcoin. The killer app will be in disrupting transaction fees that are a tax on every transaction in our economy.
Who do I want to meet?
You must be technical, have a passion for this space, and have insane work ethic. This is going to be super fucking hard, but the payoff is that we have a non-zero chance of really changing the world in big way. This isn't another photo sharing app. Let me just stress again that you must be a deeply technical builder (I am one too). There is no room for idea people at this stage. I'm happy to share more of my background if we get in touch. (Edit: I added some of my background below).
If interested please send an email to applytoycwithmeandchangethewor@gmail.com And include (1) something awesome you've built (2) why you would be right for this and (3) a phone number and how late I can call you.
Even if you aren't the right person, please upvote this and help us meet. This post could literally form a company in the next three days.
73 comments
[ 2.9 ms ] story [ 168 ms ] threadFor now I'll just say, I've built one startup previously to profitability and 20k users. Have also worked at 2 YC companies, one as employee #2 and the other in a role that is relevant to this idea. I have a masters in CS and studied economics undergrad.
A co-founder relationship is very important, and my willingness to join you on this venture has less to do with your idea and more to do with you. Specifically:
- Who are you, and what have you done?
- What is your professional and personal experience, and what does it bring to the table in a general sense of running a startup, and in a specific sense, this idea of yours.
- Why you? I need to be able to trust my co-founder pretty much absolutely and unquestionably. What is your character and who can vouch for it?
Funnily enough, your idea and the fact that you have a prototype is a fairly minor signal compared to the above.
You must admit that the unusual nature of such an anonymous request makes it likely that people are going to dig into it, just for the sport of it.
It wasn't until AFTER you guys posted this that I went back and looked at it.
Either way, he clearly went out of his way to be anonymous, so it should be in the HN ethos to respect those wishes.
Also, there's no possible way that amazon pays the same terms as normal customers, is there?
Who pays that? The merchant. (Well, the merchant adds it to the price that everyone pays, but I digress).
Now given the option. Pay $100 with your credit card or pay $98 if paying with bitcoin, which are you going to choose.
Stripe and PayPal both are at 2.99% + $0.30, Square is at a flat 2.75%. So giving the customer the 2% discount for paying with bitcoin still yields the merchant more than had the customer paid with a credit or (signature-based) debit card transaction.
There are so many of these alternative payments systems available nowadays, but none seem to really offer any benefits (or protection or increased warranties) to me over a credit card to change my personal purchasing behavior.
It will be some time before we see bitcoin used at retail, point of sale. But it really solves problems for online purchases -- for the merchant. And maybe that's where the the sweet spot is. If you want what the merchant sells and the merchant wants bitcoin (for the reasons you state -- protection from fraudulent customer chargebacks), you won't be given the opportunity to use your credit card.
That's not your job. People either will, or they won't.
I'd start by looking at how they implemented the Real in Brazil. They managed to convince an entire country to trust and use an, at the time, completely fictitious currency. There's an excellent article about it, which unfortunately I can't find.
The trick was to get people to start thinking of prices in terms of Reals, while continuing to use the original currency. If you can accomplish that, you've given your currency value.
http://www.npr.org/blogs/money/2010/10/04/130329523/how-fake...
HN Discussion: http://news.ycombinator.com/item?id=1757716
- The killer app in this space is whether you have an answer to "Why can a startup displace the incumbents?" and "How are you going to get people using this?" The answer to the second must be understandable by my dry cleaner, who would not trust bitcoin even if it were issued by the US Treasury. The prototype at this stage is probably about as useful as PayPal's first prototype (which was for a different idea, IIRC). Edit: not hating on Bitcoin, just pointing out that success here will derive in part from expanding its use beyond the core early adopters.
- Work on your writing & proofing. It may seem petty, but you're aiming big so this stuff matters. People (cofounders included) will pay attention to sloppy writing at this stage, using it as a proxy for information they don't yet have about you. Plus, when my cofounder emails senior people at major banks, will I feel compelled to rewrite the emails? Temp accounts plus poor writing => no response.
Hope this helps, and good luck.
"It's killer app will be in" => should be "Its"
"Their going to (at first) offer them" => should be "They're"
"along side" => should be "alongside"
For your dry cleaner I would say: How much do you pay now per transaction for credit cards? Would you like to pay x instead?
They probably won't care or think about digital currency, but they might think "low fees". There is value even if only a few people use it at first. Obviously that is just the tip of the iceberg, but for anyone interested happy to talk more.
Thanks for the feedback.
I think Bitcoin is awesome, but it offers users no protection - it's more of a cash replacement than a credit card replacement. This is something that might end up being difficult to handle (something to make sure users will understand).
1) When people are making money off of something, they protect that method of making money, and evolve if necessary.
2) There are intricacies to our currency that might not seem immediately obvious. People depend on the discreet nature of physical currency - it controls the entire world of corruption (a lot of movies like to use diamonds as black market currency, but in reality its too difficult to rule out man-made diamonds these days, or to quickly evaluate the worth of a lot of diamonds). Corruption does not occur solely among gangsters, but all manner of people - from the most prolific bankers to the most "reputable" politicians. Digital currency can too easily be traced.
3) The government has made little effort to create its own digital currency, despite the fact that it would save tax payers billions, negating the need for the IRS, Mint, and reduce the need for the FBI and Secret Service (which monitors counterfeiting among other things)...and the corruption associated with physical currency. You might encounter more red tape and inertia than you anticipate -- if not now then when Visa lobbies its favorite candidate to create laws that work against you.
4) Third world countries are not a great target for digital currency IMHO, unless they have prevalent technology and understanding of it.
In the U.S. we have credit cards and fixed addresses to mail bills. There's probably a billion people who don't have this. There is absolutely an opportunity in 3rd world countries to leapfrog credit card systems, which for a variety of reasons don't work in these environments.
There's a mobile phone currency company in Kenya called MPesa which is currently processing 20% of the countries GDP! There's simply no way you could get that adoption in the U.S. that fast, since you'd have to displace VISA, Mastercard, and debit cards...no easy feat.
So OP is working on a hard problem, but its doable.
I live in Somaliland. The top telecom company here, Telesom, has a mobile money transfer service here called Zaad. Basically, people setup a Zaad account at their local Telesom office and exchange their physical currency for credit in their Zaad account.
They then buy stuff at shops or send money to folks right from their mobile phone using a USSD interface. The USSD interface works like this:
1. Dial *888# 2. A prompt appears on your mobile phone. The prompts could be a menu, a request for a password or whatever 3. The user clicks reply (a context menu appears on the phone) and types in a reply. 4. Go to no. 2 until the transaction is complete.
Zaad has exploded in growth in the 2 or 3 years it's been around and has freaked out a lot of other businesses here who suddenly got a scary new popular competitor. The best part of Zaad is that you don't need a smartphone or internet connectivity to use it. Literally any mobile phone works with it. Even an old-school Nokia 3310.
Telesom isn't the first country to come up with this idea. If I'm not mistaken, the first company was a Kenyan company called Safaricom and their product is called M-Pesa. It has 6 million subscribers using it.
Imagine 6 million folks sending transactions and getting a tiny cut out of every transaction. M-Pesa is huge.
For anybody who'd like to get a feel for how well the existing players in this market are executing, take a look at Zaad's site: http://www.zaad.net/
Also, take a look at this site: http://hadhwanaag.com. It's the most popular news website in Somaliland. I'm pretty sure someone can make a pretty penny just by setting up a nice themeforest-based theme for many of the country's websites.
The hard part will be convincing them their website looks atrocious.
http://airtelmoney.in/wps/wcm/connect/airtelmoney/airtelmone...
I think companies like Venmo, Dwolla and Square (or even PayPal) are well-positioned to becoming credit card alternatives.
So: why Bitcoin/a separate currency?
Venmo: You have a venmo balance. Initially, money is brought in from a CC, but they just moved to Bank Accounts. Payments are fast because it's just venmo balance --> venmo balance most of the time.
Square: They control apps on the merchant (register, square) and the client (card case, now pay with square), rendering a physical credit card useless. At some point they connect to your bank account as well (or open their own bank).
I think having a niche currency is just another barrier to success. Not saying that you shouldn't proceed with this opportunity, but you're far from the only player in the space who realizes the magnitude of the opportunity and sees what the future looks like.
Yes, you read that correctly.
There are laws that state that anything that can be used to facilitate money laundering OR threaten the US economy is illegal.
Don't get me wrong though, I'm one of the most active Bitcoin fans I know, I think the concept is unbelievable. I just wanted you to know that there might be some additional legal barriers as you can gain traction.
Stay hungry, stay foolish.
That being said, there there's still monetary policy to consider. In South Africa, for instance, I suspect Bitcoin would face legal challenges given the strict monetary regulations imposed by the Reserve Bank. Somebody earlier in the thread mentioned MPESA - a mobile payments solution in Kenya, which is also available in South Africa. MPESA grew quickly but growth has a ceiling because it cannot be used for business-to-business transactions, or even for a very class number of business-to-consumer transactions, as the transaction volume limit imposed by the Reserve Bank in these sorts of schemes makes it feasible only for individuals to use.
http://www.scribd.com/doc/86764784/Diepenbrock-BitcoinReport...
Due note that the paper was written in April of 2011. However, this shouldn't change any aspects of the legal analysis.
If you have any more questions, or just want to talk, let me know!
One thing people sometimes don't realize about financial services apps is it is not just the quality of the app that matters, it's how they deal with fraud (chargebacks). This alone destroy most early starters. PayPal succeeded where others failed because they started out trying to solve the problem of online fraud and then pivoted to become an e-wallet.
For next batch, I applied as lone founder with no-idea, if you did not get in, seems like I might have similar fate.
The real solutions, in my opinion, have to use real currencies or they will face a severe risk of death by regulation.
* Use for illegal activities.
* Problems with controlling capital flow across national borders.
* Problems with estimating money supply in an economic system etc.
You cannot, for example, pay some shady person for a handgun with FB credits or food coupons. From what I can tell, your currency will make that possible. If this transaction happens with a regular bank account (through creditcard or bank transfer), the bank will be able to point the police to the person involved. Will you also be able to do this? The price for reliably collecting, holding, updating such information is quite high.
Email me at allhailarnold@gmail.com and I will introduce you to him.
YC does occasionally accept sole-founders who plan to find someone else, as far as I know (I may be wrong) they've never accepted a team which was put together by strangers for the purpose of YC.
YC places a huge emphasis on team (over everything else in the application) and team dynamics play an important part in that. They need to know the team won't fall apart when under pressure as that's one of the main reasons startups fail. If you pair up with someone you've never worked with, then neither you or YC have any indication how the team dynamics will work.