>> We've done this five times now, and we've seen a bunch of startups die. About 10 of them so far.
So, not counting this batch (19), 10 out of 39 [1] startups died so far. So, the survival rate is 72%. Not bad! I know that some more YC companies might die at some point in the future, but the numbers so far seem impressive.
I don't think 72% is particularly good (I think it should be higher). I'm not sure you realise just how scary the thought of failing in front of so many hard-working people is...
I think it's certainly better then when you hear about a 10% survival rate for startups, as stereotypical as that is. But you're right, it could be better. PG mentions a 90% survival rate is possible.
"I'm not sure you realise just how scary the thought of failing in front of so many hard-working people is..."
Failure has a different meaning in Silicon Valley (kind of). There have been a couple of quiet fizzle outs from WFP that I'm sure of, and I've spoken to two of the guys from those fizzle outs since then...one is working on new ideas, and another has moved to another company (perhaps the most flexible of the bunch, in that they changed their entire business model and started from scratch during the program) from the same program that raised some money and he's happy and enthusiastic. While there is a bit of averting of the gaze when I asked how things were going, the fact that they were there at a YC event and talking about new things tells me they will probably go on to great things.
It's the folks who went back home, went back to consulting or school, who aren't going to be among the winners in the end. Which comes back to pg's assertion that just by staying in touch and staying involved you could very well guarantee success...I'm not sure if it's the cause or the effect, but I do think the folks who've stuck around and keep coming to the events and keep in touch with other YC'ers will probably do well.
There are several more that seem moribund, but we give them the benefit of the doubt, because there have been cases of startups coming back from the dead.
There were 38 before this batch, 20 new ones this summer, 1 of which immediately merged with a startup from a previous round = 19 in Cambridge.
Interesting to hear about this since many of us wonder what ends up happening. Kind of an unappealing subject -- nobody wants to read Founders at Rest, right?
I guess startups are like old soldiers, they just fade away. Anyone want memamp.com? It went to unregistered status a week or two ago.
But this was a good handling of the subject, and good for founders to hear. What I think is great about YC's structure is that it gives startups feedback and deadlines, and I agree that just getting those is enough to keep startups going. Someone should start a startup that just calls people once a week and talks with them about what they got done! It would work even better if the caller was of higher status, but it would work well enough with friends.
But seriously, for startups this would work great. Get together with a group and make a weekly appointment for each person to call another each week and chat about what they're doing, preferably with a little demo. I'm sure one of you is already thinking of how to make this a Facebook app, but I think a personal phone call would work best.
If you can't meet up try twitter or tumblr. Every day post what you've achieved that day and what you're going to do tomorrow. If you keep it up for a week you'll feel very guilty if you stop. I've got a moleskin notebook that I use for this purpose and it works great.
I would definitely read (and even buy) Founders at Rest; in Founders at Work, you get a bunch of stuff about what successful founders do, but you don't know which stuff is necessary and which stuff is coincidental. You need a bunch of negative data points to make a really correct assessment about necessary and sufficient conditions for startup success.
"People concentrate way too much on success stories without looking at the failure stories."
By what definition of "too much"? I see nothing wrong with focusing on studying the best--the ones that made it. Those are the people to emulate. Why spend your limited time studying the ones that failed? Sure, learning from mistakes is great. But I suspect I'm going to weather the storm better if I learn about mistakes from people who made it through to the other side--rather than from people who blew it and ended up bankrupt. I really don't think I'd like to be facing a problem and thinking, "Oh, wait, I read about this...it turned out horribly...we're dead!" Much better to think, "Well, Evan Williams had exactly this problem with Blogger. And look how that turned out! Just gotta keep plugging away."
Just a thought. I don't really think we need a lot of post-mortems while we're in the early stages. Maybe later when we have a huge success on our hands and want to know how to avoid becoming the next SGI (Google uses SGI internally to mean, "company that has huge success and then made huge mistakes", because Google has actually moved into nearly all of the old SGI buildings in Mountain View as SGI has atrophied into a shell of itself--seeing how business and management heavy Google has become in the past year makes me think they didn't think hard enough about SGI...).
"I see nothing wrong with focusing on studying the best--the ones that made it. Those are the people to emulate."
What if the failures are doing a lot of the same things? You just can't get a complete picture without examining the failures, too.
It's probably better to be optimistic, because being realistic is likely to simply be depressing, but still, for those curious about the system as a whole, you can't just look at success.
I started one of those YC-funded companies that "crawled off somewhere and died."
After that happened, I spent a couple of months staring at walls, feeling sorry for myself. During that time, I listened to everything at venturevoice.com, read Founders at Work, and kept thinking "man, these success stories are inspiring, but what I need right now are some goddamn failure storiesX." (If you're in the same position, I highly recommend this book: http://tinyurl.com/362eg5 )
Anyways, you're both right. Founders at Rest: Stories of Losers Who Fucked Up and Gave Up would be boring and depressing. But interviews with successful people about their failures -- e.g., Evan Williams' Blogger saga -- would be fascinating and inspiring. The classic story arc doesn't let the hero succeed right off the bat. First he hits a low point, then pulls himself up by his bootstraps.
One of these days I'll write that book. Right now, though, I'm too busy working on my next startup.
Don't forget, Microsoft wasn't Bill Gates' first company.
Have you thought about writing the story of your first startup? A lot of us would be very curious to get a different perspective of the Y Combinator experience.
openCoffee club is perfect for this. Turn up every week and you'll get to know people who you respect. They'll always ask you what you're up to and what you've done since last week. The simple fact that you don't wan't to look bad in front of them is a great motivator.
Or perhaps some kind of demo party. Everyone has to present something for 10 minutes, something they've done or learnt since last week.
What makes this inspiring is the extent to which it really is analytical; it's based on his accumulated experience with startups. Someone known for careful thinking is stating that for 90% of startups that look good based on an application and a single interview, success is only a matter of determination.
It makes sense when you think about it. The yCombinator application weeds out people who are unintelligent; the interview weeds out people who are inflexible. So anyone who gets into the program is bound to be both intelligent and flexible.
What can go wrong with startups? You can work on the problem wrong, which is hopefully averted by smarts. Or you can work on the wrong problem, which is averted by flexibility and subjecting yourself to reality checks. If you've got both of those elements, the only thing that can really go wrong is that you give up before you hit upon an idea that's useful.
And it's actually been proven true by one of the YC companies that was in WFP 07 (I'm sure it's been true of others, too...pg mentions Wufoo in the essay). Paul McKellar's first run was SocialMoth.com which is fun as hell to use and crazy sticky...but got no traction and no investment. Next came Overhear.us. Also fun to use, but no traction and no investment. Then came the Facebook SocialMoth, which exploded...now he's a mini-mogul with a bunch of Facebook apps in development, and real revenues from those users. Is he rich yet? Probably not. But he's found a niche that is paying and growing rapidly, because he stubbornly kept iterating and evolving.
" It makes sense when you think about it. The yCombinator application weeds out people who are unintelligent; the interview weeds out people who are inflexible. So anyone who gets into the program is bound to be both intelligent and flexible. "
That statement is self-serving, so, whether it is true or not, it stands that there must be a better way to express what you're saying (and without speaking for YCombinator, as well.) Right now it runs the danger of scaring off a lot of applicants.
No specific college, degree, or major can define someone as a great, dedicated, productive, and fervent entrepreneur or hacker in the consumer application space.
Secondly, YCombinator isn't a one-hour Intelligence Quotient test, but a commitment far-and-above graduate school or work at any college or enterprise. The last thing Paul would want to do is 'weed out' the 'weed' who are not from great schools or 'intelligent.'
Thirdly, you're implying two things: that Paul interviews all intelligent people as of primary concern, and those who are not interviewed are therefore unintelligent.
Both of those deductions do not fit what Paul has said in the past.
It's true that every founder from YCombinator has been smart, and has at least been accepted, if not graduated from, a good, famous college. And yet, that's not what Paul states he looks for in any of his speeches, essays, or posts. In fact, he has said things in conflict to your ideas in all of those media.
I think the best way to put this is that YCombinator picks those applicants who offered a better 'package deal' than those who would be later rejected. It might be two MIT guys with experience. It could be two european guys from Cambridge with little programming experience but with a good background in a similar venture.
There are Olympians who win Gold medals in Olympic Games who have to match that performance along with others _just to qualify for the event only 4 or 8 years later._ I just watched a segment on TV about that two hours ago. I don't think it's wise to pretend there are only so many intelligent people (or good candidates) out there, that one should rest on one's laurels.
There's a difference between "Everyone who gets into yCombinator is smart" and "Everyone who doesn't get into yCombinator is not". The former is true as far as I've observed; I don't have a whole lot to go on, but I've met a couple YC applicants at startup gatherings and frequent the sites of a few more, and they all seem like sharp cookies. I never claimed the latter. There are bound to be smart people that don't get into YC. (At least, I hope so, since I've been rejected twice and have no affiliation wit yCombinator besides posting on news.YC.)
Yeah, it makes sense that you didn't mean that. I got stuck on the line that said "The YCombinator application weeds out people who are unintelligent"--which of course clearly implies that 90% of the applicants are NOT smart, unless they got to the interview stage--but the second paragraph has a great message.
Of course YCombinator founders are smart. That's why I said so. I haven't met a stupid one. But it doesn't mean that they were the only smart people, or that stupid people make bad entrepreneurs, or that a great way to judge how smart someone is is by their degree, or that a great way to predict success in the consumer app space is how 'smart' someone is. All of those assumptions go against what is preached time and time again by both Pauls, Max Levchin, and others.
And I still disagree that, based on Paul's application, essays, interviews, and speeches, that YCombinator's main filter is how smart the team is. The order is likely 1) how famous the company already is, 2) whether the team is incorporated already, 3) whether the team is bigger than one person, 4) followed by how dedicated the team is, 5) and, how smart it is. (But it's the same kind of speculation as anyone else's.)
Please let me know what you think, because I respect your opinion.
1) How can a just-now-released essay be influential at all?
2) At least half of pg's essays are better written than this, which to me seemed a little phoned-in. It's not really an essay anyway, but a peptalk. He didn't even have the usual cavalcade of proofreaders at the bottom.
3) The most influential essay I've ever read is the first essay of "Genealogy of Morals".
I've read all of his essays too, but I guess for me in particular this one strikes a chord because:
1) I just resigned from my day job this week to pursue startup ambitions and
2) I am definitely having "oh shit what am I doing" thoughts right now.
So given the timing for me, this kind of inspiration is very moving. As far as how it is written, I would argue that the phoned-in and impulsive nature is what makes this essay so elegant. It is clean and concise, stating the idea simply: dont give up. Anyway, this is all one mans opinion so you are certainly entitled to disagree.
I think that sometimes off-the cuff speeches/essays are more influential because they aren't heavily edited and flow more like how a normal person would speak. I thought this was a great essay.
If I was a rapper, I would say "PG you the Truth, man". I wanted to say "you the shit, man", but that sounds bad although that means a good thing in music language.
It's kind of depressing to not have any real startup peer group in Pittsburgh. News.yc is serving as a kind of substitute, for me. I'm really looking forward to when we get to turn our startup's shopping cart on and ask news.yc for feedback.
You need to get to a startup hub, if you're serious. It makes a huge difference in mindset, and odds of success.
I've started companies in Houston, Austin, and now in the Valley. Austin was vastly better than Houston, but Silicon Valley is worlds apart from anything I've ever seen.
The only benefit to not being in a startup hub is that you don't have as short of a runway during that very early self-funded stage. You can live on peanuts in most parts of the country...but in the valley you will go broke fast if you don't have income or funding. So, it seems like "not dying" would be easier in places where the cost of living is very low, but I think it's probably a zombie-like existence. You also don't have to move as fast...and if you aren't moving fast at 3 months into your company, you're as good as dead.
I should also add that, given the conversations I've had with investors since being out here and the things I know now: I believe quite strongly that my previous company would have been a success had I started it (or brought it) here. Several companies with very similar implementation and business models started around the same time (and whom I actually had numerous personal interactions with--their products being deployed along-side my companies on a similar scale) here in the valley have gone on to quite nice success.
but where did you find all the hot startup action in austin?
are there any groups or communities that you frequented? any websites that you conncected with other hackers on? is austinventures really the only game in town?
It seems like austin has the free spirit startup culture, but I dont feel near the amount of startup community there as I do when I read about the valley on here and other startup oriented blogs/sites. maybe im just out of the loop tho. got any tips for an aspiring austin starterupper?
I was lucky enough to end up sharing an office with another startup, further along than mine (they had 5 million in revenues and 20 or so employees), because I did some consulting work for them and they had some spare space for a while as they grew (Austin real estate was depressed in 03 when they were negotiating and so they got a good deal on a 3/4 of a floor in the Bank of America building at the corner of 6th and Congress).
Perl mongers was also pretty interesting, though not startup-y enough. PUG (Python Users Group) also met a few times, and they were a bit more dynamic.
There's also some money in Austin. Austin Ventures is well-known and well-regarded, and they do a lot of deals. A few angels exist there, and if you're doing anything related to oil and gas or telecommunications you can find investors, if you beat the bushes. Other areas are not as well served.
But, the valley is in a class by itself. I wouldn't recommend starting up in Austin to anyone, now that I know how big the difference is between the #1 startup hub and the #5 startup hub...as pg pointed out in his article about startup hubs, the drop-off is steep. Boston is barely half as good as Silicon Valley, and everything else is likewise half as good as the next step up (I believe the list goes SV, Boston, New York, Seattle, Austin, but I might be misremembering). Might as well be in Dubuque as anywhere other than the Valley.
I'm an undergraduate in college, studying industrial engineering. I ask myself regularly what the point is, because I have absolutely no desire to work as an industrial engineer. You may remember industrial engineers as the efficiency experts from films such as Office Space and American Beauty.
So I know the thing to do is to drop out and move to the Valley. But the only socially acceptable way I had to do that was acceptance into Y Combinator, or angel funding from someone else.
So for now, my company is in Pittsburgh. It's going to be really easy to "not die" because there is absolutely no way for my company to fail because we have no expenses. Unless we get sued and can't afford to defend ourselves. While we're not dying, we should start making money. So if we have enough revenue to support a Bay Area or NYC lifestyle, we would happily move the company there, regardless of college education.
50% sounds like really good odds to me, given the payout. It depends to some extent on what it means to fail, and how long it takes to succeed. But if your odds of a substantial payout are 50%, and the length of time to get to success or failure is less than 4 years, then these are phenomenal odds.
Of course, it's not just money - you "pay" in other ways. If it takes, say, 4 years to get to the success or failure point, then some people will have worked for over 12 years with grim determination and still never quite nail it. I wonder if this is a memory-less process (ie., how does a previous failure affect your future attempts?). Wisdom and exhaustion in equal parts, I'd suspect, and only one side is going to win.
I'm on my second startup. My first was a "failure" by some definitions of failure (it paid the bills, bought me a 350Z, and worked me nearly to death for seven years...it never really stopped being a service business despite my attempts to convince myself that I was selling products--I consider it a failure, but I learned a lot).
"Wisdom and exhaustion in equal parts, I'd suspect, and only one side is going to win."
Agreed. I'm just stubborn enough to keep trying. I'm also lucky enough to have a fantastic business partner, which I didn't have the first time around (I should have brought him on back then...he was already doing contract work for me on a regular basis).
This time around I put much tighter time constraints on myself. I'm not giving myself 7 years to figure out if I have a failure on my hands. Every 6 months I evaluate where we are, and if I don't see clearly how to get to the next level, it's time for a serious change. So far, that hasn't happened...wisdom gained from the previous startup seems to have allowed me to avoid most pitfalls.
Vote this guy up, he's smart. I, too, will never do a startup alone, as it's just too draining to do so.
At the same time, it's exactly what someone should do who's starting out, if they can't get funding or a team together. Try to get all three for as long as it takes.
Except that for many people outside the club, what he says won't be true, since many people outside the club aren't actually that smart, and, worse, aren't actually working in a market where there is obviously something to be had.
I really like that description. I think the phrase "luck, pluck, and virtue" has been permanently grafted into my brain ever since reading Ragged Dick in HS. That and, "I seen my opportunities and I took 'em."
Though not religious, I would compare him to Paul the Apostle, wiping the scales from his eyes after that talk to the Harvard kids to spread the startup gospel from city to city...
> We're taking on some consulting projects, but we're going to keep working on the startup.
All good if you're single, but what if you've got a wife and family and just need the cash? (Okay, feel free to say you shouldn't start a startup with a family, but it's too late... :-)
You could work from home and be interrupted by the daughter, no? I have thoughts in that direction if we have kids. Not going to be easy, but at least one person is working a stable job that earns money, and if you can carve out time between the interruptions, you can get something done. Obviously I don't have kids and don't know what I'm talking about. Maybe it's even worse than I imagine!
This can still be a totally inspiring essay for that situation.
The real threat posed by taking on consulting is not what it does to your time; seeking funding would eat up lots of time as well. The threat is what it does to your determination. When the startup seems hopeless you can easily drop it and make consulting your focus.
If you're determined enough, you'll come up with a plan to maintain that determination even if consulting goes well and the startup goes terribly.
Absolutely! Sometimes I think that I'm "startup cursed" because I find it so easy to pound the pavement and rustle up a few bucks. Ironically, what is an asset in the real world is a liability in the startup world. I haven't completely turned my back on other income while I code my startup, but I have to look at it very carefully. All other activities must pass an additional acid test: "What will this endeavor contribute to my startup?" If I don't have a good answer, I pass on it and get back to coding.
I have two kids, my wife works, I used to work at a high tech company and we had to save up for a couple of years before going the startup route. Now it is all startup -- so that is good.
We gave up a lot financially to be here. If you have kids and a family it does take a lot more work, but it is not impossible. Just work it out with your wife.
>All good if you're single, but what if you've got a wife >and family and just need the cash?
This is doable, you need to be able to at least get your application developed and maintain hosting for it, but work also for others so you can have an income. This is what I have done at least.
I thought my system would develop revenue right away, but the number of sign ups it took to create a paying customer cost more then what I could afford and natural search traffic was just not coming fast enough.
So I gave it away free so I could figure out the money part later. Not to mention the system wasn't very mature, it needed a revision to bring the quality up and then what seemed like months of bug fixing.
Out of my biding my time, putting out incremental improvements, and building good repore with the users I have discovered instead of putting out a generic product, success will come from taloring very specific products out of my generic product. Using my application as sort of a platform of generic parts to build a system for a particular market.
Having kids, wife, things have still worked out fine.
Fear of humilation and fear of failure is also the most significant thing to overcome in terms of applying to Y Combinator at all. I'd far rather be rejected from the start, having failed at the application process, than to get into the program and disappoint everyone.
This is probably among the most operational focussed essay I have read from PG on startups. Its so true - nothing focuses the human mind more than deadlines and public statements to live upto. I go around telling everyone I know, including people at work that I want to start a company and it has a very subconcious effect on me, when people are constantly asking me so whats happening on your startup front.
Also very good point about how peers motivate each other. When I am sitting in my weekly target meetings and see that my peer did 110% of his target and i did only 95%, it immediately triggers me to go and re-examine my methods.
Finding motivation from my peers and making lots of little mental deadlines have been two of my "secrets" to maintaining very high levels of output while feeling great for all these years. It's great advice.
How about this: If you are in the YC club, you and your cofounders, the idea, prototype, business model, user base have passed muster. Your team is in a startup hub like SFO/BOS. You will have the backing, connections and resources of YC.
Otherwise, the qualifiers that apply to any other startup in general, apply.
before you follow the herd and blindly down mod my comment:
you dont have to get into YC to succeed, but understand he was talking at an exclusive event - the final YC dinner.
Also understand the odds. He picks teams most likely to succeed. If he rates odds of success as 1/2 (or whatever the article said), and the odds of getting in are 20/400, then the odds of success for you and me, those who didnt get in, is 1/40. Which is 2.5% and vibes with I recall that people generally say that startup odds are 2%.
Ok, I don't want to come off as whining, but I'm just really curious: who downmodded this comment and why? Usually when I get a downmod it's on a statement that's at least somewhat controversial, and I don't understand why this one would be. I can't figure out why anyone except possibly juwo would want to downmod it, and I know it wasn't him because you can't downmod replies to your own posts.
EXACTLY. That is my general point - Don't be naive!
If this article was intended as an internal memo, then it would be that - an internal memo. If people at YC meet up all the time I'm sure they could have many opportunities to discuss these issues at their "dinners" ... BUT INSTEAD its being pasted on the web.
SO PLEASE, stop the apologetics with this "You need to be qualified for this message". No, you need to be someone on the internet to read this. That is the only qualification. I didn't type a password to get to read this, I don't know Paul, I'm not in YC (and I never "applied").
And as for being smart and flexible ... again. Stroking the egos of young, naive kids who think they have some special predestiny to succeed just because they have good ideas (or not), can put together some code and really, really want it badly.
I got news for you. THIS ... IS ... A ... BUSINESS. You're being encouraged to "step up and endure" not because they like you and want to be your friend. Or because they think you'll make it. They want $$$. Then they'll be your friend. What if your idea never pans out? What happens to those people, because statistics-wise, you're more likely to wind up like them then the next Larry Page. Do they still get invited to YC dinners? Does Paul still call them up on their birthdays? Or are they given the ol' "Thank you, come again (when you have another good idea) ... now please leave?" I don't know. I never read about that. Maybe I'm wrong. But I dont' see a link to "guys who tried, failed for whatever reason, no matter how hard they tried, and are meeting on Wednesdays as a support group to motivate each other until they figure out the next idea while they're working at Starbucks."
Everybody loves you and invites you to dinner when you're making it. When you fail, you're a stupid loser and nobody likes you.
JUST LOOK AT THE CULT-LIKE WORDING of some of these comments ... "this is 'not for everybody' ... it's only for 'smart and flexible' people."
Right. It's not for everyone - just the "chosen". "The few, the proud, the "smart and flexible."
So if you disagree, by implication you're stupid and rigid? How can you not see this black-and-white 2-bit late night infomercial aspect.
"With my system, you too can buy billions of dollars in real-estate with no money down! All you have to do is be very very serious and committed to success! But - this is not for everbody! This is only for "smart and flexible peope. And if you quit your job and risk your career in the next 60 minutes, we'll send you this free pen! Operators are standing by!"
For a more broadly targeted, more nuanced version[1] of this I found The Dip, by Seth Godin, quite helpful.
Like this essay, the book gives much advice of the "don't give up" type. But the book also mentions some cases when you should quit: you should quit activities that are a cul-de-sac, those in which you are not committed to become the best, or that don't help you become the best at what you most want to do. The rationale is that current society rewards the very best, ignoring the rest, out of proportion with actual quality/merit. I'm oversimplifying of course.
Obviously, PG doesn't think any of the YC startups is in a cul-de-sac, so he can dispense with that exception and tell all of them to just push forward. If anything, he warns the folks not to 'unquit' school and other attention/commitment escape valves.
[1] Edit: I was focusing on the "don't give up, don't lose focus" part. This essay has other big theme, shame as a motivator, which is not touched in The Dip.
I wish I had known about Octopart before reading this essay. I needed a part a couple weeks ago that I had no idea what the technical term for it was, my best guesses lead to things that were totally wrong, and the company that made it was now under a different name, and I could find no trace of the device or anything similar on their online catalog. Oh, and my predecessor, who bought the thing in the first place, 'picked it up at a garage sale'. The correct part from the correct (newly named) company was the first result from Octopart when I tried it just now.
I totally agree with your niche market strategy and writing about stuff people care about, stickability is vital too! Thanks for these great ideas, Its a shame my deep passion is gobbled with my (NONPROFIT) star trek sci fi blog! A source of income would help run it!!
Tell that big company, with that cool project, you changed your mind X commit your life to startups X and move back to SF. If you don't you are going to lose that unusable VIP pass to her pants ; )
A big part of why The Woz was so eager to hack up a PC was to show it off to his peers at The Homebrew Computer Club. Once he got a reputation for being smart it must have been a lot of motivation to maintain and improve that reputation.
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[ 4.4 ms ] story [ 231 ms ] threadHmm.. I wonder if writing can help one to think through software design faster, too.
I suppose that writing consists of actual programming, though.
So, not counting this batch (19), 10 out of 39 [1] startups died so far. So, the survival rate is 72%. Not bad! I know that some more YC companies might die at some point in the future, but the numbers so far seem impressive.
[1] The following article quotes 58 companies funded in all: http://dondodge.typepad.com/the_next_big_thing/2007/08/paul-...
Perhaps that's an obvious point, but I think it's an important one.
Failure has a different meaning in Silicon Valley (kind of). There have been a couple of quiet fizzle outs from WFP that I'm sure of, and I've spoken to two of the guys from those fizzle outs since then...one is working on new ideas, and another has moved to another company (perhaps the most flexible of the bunch, in that they changed their entire business model and started from scratch during the program) from the same program that raised some money and he's happy and enthusiastic. While there is a bit of averting of the gaze when I asked how things were going, the fact that they were there at a YC event and talking about new things tells me they will probably go on to great things.
It's the folks who went back home, went back to consulting or school, who aren't going to be among the winners in the end. Which comes back to pg's assertion that just by staying in touch and staying involved you could very well guarantee success...I'm not sure if it's the cause or the effect, but I do think the folks who've stuck around and keep coming to the events and keep in touch with other YC'ers will probably do well.
There were 38 before this batch, 20 new ones this summer, 1 of which immediately merged with a startup from a previous round = 19 in Cambridge.
I guess startups are like old soldiers, they just fade away. Anyone want memamp.com? It went to unregistered status a week or two ago.
But this was a good handling of the subject, and good for founders to hear. What I think is great about YC's structure is that it gives startups feedback and deadlines, and I agree that just getting those is enough to keep startups going. Someone should start a startup that just calls people once a week and talks with them about what they got done! It would work even better if the caller was of higher status, but it would work well enough with friends.
But seriously, for startups this would work great. Get together with a group and make a weekly appointment for each person to call another each week and chat about what they're doing, preferably with a little demo. I'm sure one of you is already thinking of how to make this a Facebook app, but I think a personal phone call would work best.
P.S.: "Francisco."
>>I'm sure one of you is already thinking of how to make this a Facebook app, but I think a personal phone call would work best.
Actually, my first thought was meetup group in a certain area.
By what definition of "too much"? I see nothing wrong with focusing on studying the best--the ones that made it. Those are the people to emulate. Why spend your limited time studying the ones that failed? Sure, learning from mistakes is great. But I suspect I'm going to weather the storm better if I learn about mistakes from people who made it through to the other side--rather than from people who blew it and ended up bankrupt. I really don't think I'd like to be facing a problem and thinking, "Oh, wait, I read about this...it turned out horribly...we're dead!" Much better to think, "Well, Evan Williams had exactly this problem with Blogger. And look how that turned out! Just gotta keep plugging away."
Just a thought. I don't really think we need a lot of post-mortems while we're in the early stages. Maybe later when we have a huge success on our hands and want to know how to avoid becoming the next SGI (Google uses SGI internally to mean, "company that has huge success and then made huge mistakes", because Google has actually moved into nearly all of the old SGI buildings in Mountain View as SGI has atrophied into a shell of itself--seeing how business and management heavy Google has become in the past year makes me think they didn't think hard enough about SGI...).
What if the failures are doing a lot of the same things? You just can't get a complete picture without examining the failures, too.
It's probably better to be optimistic, because being realistic is likely to simply be depressing, but still, for those curious about the system as a whole, you can't just look at success.
After that happened, I spent a couple of months staring at walls, feeling sorry for myself. During that time, I listened to everything at venturevoice.com, read Founders at Work, and kept thinking "man, these success stories are inspiring, but what I need right now are some goddamn failure storiesX." (If you're in the same position, I highly recommend this book: http://tinyurl.com/362eg5 )
Anyways, you're both right. Founders at Rest: Stories of Losers Who Fucked Up and Gave Up would be boring and depressing. But interviews with successful people about their failures -- e.g., Evan Williams' Blogger saga -- would be fascinating and inspiring. The classic story arc doesn't let the hero succeed right off the bat. First he hits a low point, then pulls himself up by his bootstraps.
One of these days I'll write that book. Right now, though, I'm too busy working on my next startup.
Don't forget, Microsoft wasn't Bill Gates' first company.
Reasons #2, 7, 8, 14, 16, and 18. ;-)
Or perhaps some kind of demo party. Everyone has to present something for 10 minutes, something they've done or learnt since last week.
Perhaps opencoffee should have a culture of demoing every week. You show up, you get scrutinized, but it's all for the best.
That's relieving to hear.
What can go wrong with startups? You can work on the problem wrong, which is hopefully averted by smarts. Or you can work on the wrong problem, which is averted by flexibility and subjecting yourself to reality checks. If you've got both of those elements, the only thing that can really go wrong is that you give up before you hit upon an idea that's useful.
And it's actually been proven true by one of the YC companies that was in WFP 07 (I'm sure it's been true of others, too...pg mentions Wufoo in the essay). Paul McKellar's first run was SocialMoth.com which is fun as hell to use and crazy sticky...but got no traction and no investment. Next came Overhear.us. Also fun to use, but no traction and no investment. Then came the Facebook SocialMoth, which exploded...now he's a mini-mogul with a bunch of Facebook apps in development, and real revenues from those users. Is he rich yet? Probably not. But he's found a niche that is paying and growing rapidly, because he stubbornly kept iterating and evolving.
That statement is self-serving, so, whether it is true or not, it stands that there must be a better way to express what you're saying (and without speaking for YCombinator, as well.) Right now it runs the danger of scaring off a lot of applicants.
No specific college, degree, or major can define someone as a great, dedicated, productive, and fervent entrepreneur or hacker in the consumer application space.
Secondly, YCombinator isn't a one-hour Intelligence Quotient test, but a commitment far-and-above graduate school or work at any college or enterprise. The last thing Paul would want to do is 'weed out' the 'weed' who are not from great schools or 'intelligent.'
Thirdly, you're implying two things: that Paul interviews all intelligent people as of primary concern, and those who are not interviewed are therefore unintelligent.
Both of those deductions do not fit what Paul has said in the past.
It's true that every founder from YCombinator has been smart, and has at least been accepted, if not graduated from, a good, famous college. And yet, that's not what Paul states he looks for in any of his speeches, essays, or posts. In fact, he has said things in conflict to your ideas in all of those media.
I think the best way to put this is that YCombinator picks those applicants who offered a better 'package deal' than those who would be later rejected. It might be two MIT guys with experience. It could be two european guys from Cambridge with little programming experience but with a good background in a similar venture.
There are Olympians who win Gold medals in Olympic Games who have to match that performance along with others _just to qualify for the event only 4 or 8 years later._ I just watched a segment on TV about that two hours ago. I don't think it's wise to pretend there are only so many intelligent people (or good candidates) out there, that one should rest on one's laurels.
Of course YCombinator founders are smart. That's why I said so. I haven't met a stupid one. But it doesn't mean that they were the only smart people, or that stupid people make bad entrepreneurs, or that a great way to judge how smart someone is is by their degree, or that a great way to predict success in the consumer app space is how 'smart' someone is. All of those assumptions go against what is preached time and time again by both Pauls, Max Levchin, and others.
And I still disagree that, based on Paul's application, essays, interviews, and speeches, that YCombinator's main filter is how smart the team is. The order is likely 1) how famous the company already is, 2) whether the team is incorporated already, 3) whether the team is bigger than one person, 4) followed by how dedicated the team is, 5) and, how smart it is. (But it's the same kind of speculation as anyone else's.)
Please let me know what you think, because I respect your opinion.
1) How can a just-now-released essay be influential at all?
2) At least half of pg's essays are better written than this, which to me seemed a little phoned-in. It's not really an essay anyway, but a peptalk. He didn't even have the usual cavalcade of proofreaders at the bottom.
3) The most influential essay I've ever read is the first essay of "Genealogy of Morals".
It can, obviously, be very influential to one reader...and instantly. Time is irrelevant once it reaches that one reader.
1) I just resigned from my day job this week to pursue startup ambitions and
2) I am definitely having "oh shit what am I doing" thoughts right now.
So given the timing for me, this kind of inspiration is very moving. As far as how it is written, I would argue that the phoned-in and impulsive nature is what makes this essay so elegant. It is clean and concise, stating the idea simply: dont give up. Anyway, this is all one mans opinion so you are certainly entitled to disagree.
The most influential, well-written paragraph I've ever read!
I've started companies in Houston, Austin, and now in the Valley. Austin was vastly better than Houston, but Silicon Valley is worlds apart from anything I've ever seen.
The only benefit to not being in a startup hub is that you don't have as short of a runway during that very early self-funded stage. You can live on peanuts in most parts of the country...but in the valley you will go broke fast if you don't have income or funding. So, it seems like "not dying" would be easier in places where the cost of living is very low, but I think it's probably a zombie-like existence. You also don't have to move as fast...and if you aren't moving fast at 3 months into your company, you're as good as dead.
im from austin, live in dallas short term now
but where did you find all the hot startup action in austin?
are there any groups or communities that you frequented? any websites that you conncected with other hackers on? is austinventures really the only game in town? It seems like austin has the free spirit startup culture, but I dont feel near the amount of startup community there as I do when I read about the valley on here and other startup oriented blogs/sites. maybe im just out of the loop tho. got any tips for an aspiring austin starterupper?
Perl mongers was also pretty interesting, though not startup-y enough. PUG (Python Users Group) also met a few times, and they were a bit more dynamic.
There's also some money in Austin. Austin Ventures is well-known and well-regarded, and they do a lot of deals. A few angels exist there, and if you're doing anything related to oil and gas or telecommunications you can find investors, if you beat the bushes. Other areas are not as well served.
But, the valley is in a class by itself. I wouldn't recommend starting up in Austin to anyone, now that I know how big the difference is between the #1 startup hub and the #5 startup hub...as pg pointed out in his article about startup hubs, the drop-off is steep. Boston is barely half as good as Silicon Valley, and everything else is likewise half as good as the next step up (I believe the list goes SV, Boston, New York, Seattle, Austin, but I might be misremembering). Might as well be in Dubuque as anywhere other than the Valley.
So I know the thing to do is to drop out and move to the Valley. But the only socially acceptable way I had to do that was acceptance into Y Combinator, or angel funding from someone else.
So for now, my company is in Pittsburgh. It's going to be really easy to "not die" because there is absolutely no way for my company to fail because we have no expenses. Unless we get sued and can't afford to defend ourselves. While we're not dying, we should start making money. So if we have enough revenue to support a Bay Area or NYC lifestyle, we would happily move the company there, regardless of college education.
Of course, it's not just money - you "pay" in other ways. If it takes, say, 4 years to get to the success or failure point, then some people will have worked for over 12 years with grim determination and still never quite nail it. I wonder if this is a memory-less process (ie., how does a previous failure affect your future attempts?). Wisdom and exhaustion in equal parts, I'd suspect, and only one side is going to win.
"Wisdom and exhaustion in equal parts, I'd suspect, and only one side is going to win."
Agreed. I'm just stubborn enough to keep trying. I'm also lucky enough to have a fantastic business partner, which I didn't have the first time around (I should have brought him on back then...he was already doing contract work for me on a regular basis).
This time around I put much tighter time constraints on myself. I'm not giving myself 7 years to figure out if I have a failure on my hands. Every 6 months I evaluate where we are, and if I don't see clearly how to get to the next level, it's time for a serious change. So far, that hasn't happened...wisdom gained from the previous startup seems to have allowed me to avoid most pitfalls.
At the same time, it's exactly what someone should do who's starting out, if they can't get funding or a team together. Try to get all three for as long as it takes.
If we can be recipients of messages like this, I don't think any of us not funded by YC should feel like we're outside the club.
> We're taking on some consulting projects, but we're going to keep working on the startup.
All good if you're single, but what if you've got a wife and family and just need the cash? (Okay, feel free to say you shouldn't start a startup with a family, but it's too late... :-)
I don't think most startup founders with families are looking at the same picture of success as those right out of college.
The real threat posed by taking on consulting is not what it does to your time; seeking funding would eat up lots of time as well. The threat is what it does to your determination. When the startup seems hopeless you can easily drop it and make consulting your focus.
If you're determined enough, you'll come up with a plan to maintain that determination even if consulting goes well and the startup goes terribly.
We gave up a lot financially to be here. If you have kids and a family it does take a lot more work, but it is not impossible. Just work it out with your wife.
This is doable, you need to be able to at least get your application developed and maintain hosting for it, but work also for others so you can have an income. This is what I have done at least.
I thought my system would develop revenue right away, but the number of sign ups it took to create a paying customer cost more then what I could afford and natural search traffic was just not coming fast enough.
So I gave it away free so I could figure out the money part later. Not to mention the system wasn't very mature, it needed a revision to bring the quality up and then what seemed like months of bug fixing.
Out of my biding my time, putting out incremental improvements, and building good repore with the users I have discovered instead of putting out a generic product, success will come from taloring very specific products out of my generic product. Using my application as sort of a platform of generic parts to build a system for a particular market.
Having kids, wife, things have still worked out fine.
Also very good point about how peers motivate each other. When I am sitting in my weekly target meetings and see that my peer did 110% of his target and i did only 95%, it immediately triggers me to go and re-examine my methods.
In other words, the warm encouraging phrases have qualifiers - you have to figure out what they are and if they apply to you.
Otherwise, the qualifiers that apply to any other startup in general, apply.
you dont have to get into YC to succeed, but understand he was talking at an exclusive event - the final YC dinner.
Also understand the odds. He picks teams most likely to succeed. If he rates odds of success as 1/2 (or whatever the article said), and the odds of getting in are 20/400, then the odds of success for you and me, those who didnt get in, is 1/40. Which is 2.5% and vibes with I recall that people generally say that startup odds are 2%.
Like this essay, the book gives much advice of the "don't give up" type. But the book also mentions some cases when you should quit: you should quit activities that are a cul-de-sac, those in which you are not committed to become the best, or that don't help you become the best at what you most want to do. The rationale is that current society rewards the very best, ignoring the rest, out of proportion with actual quality/merit. I'm oversimplifying of course.
Obviously, PG doesn't think any of the YC startups is in a cul-de-sac, so he can dispense with that exception and tell all of them to just push forward. If anything, he warns the folks not to 'unquit' school and other attention/commitment escape valves.
[1] Edit: I was focusing on the "don't give up, don't lose focus" part. This essay has other big theme, shame as a motivator, which is not touched in The Dip.
http://thingsilearned.wordpress.com/2007/07/09/the-dangers-o...