Cost of Living
My is gearing up to submit to the ycombinator winter round, and we are having a small amount of trouble to see how to fit 4 months into 5000 per person? Especially when 2 of the guys are married.
this is the budget i have for the south bay area:
housing 600
internet 50
electricity 100
food 1050 35$ per day
water 40
entertainment 100
cost 1940
any advice would be great to see how this would work, but right now it seems like we would need money just to win ycombinator, which for those of us in Milwaukee, the VCs/ Angels alone might be worth it.
52 comments
[ 218 ms ] story [ 562 ms ] threadHave you checked housing advertisements?
I agree that the food is really high. If you are really trying, the one time cost of a rice cooker and a 10 lb bag of Basmati rice from Costco will go a long way, as will bag lunches instead of going out. If you try, food can really cost very little.
2-3$ for breakfast (egg, cereal, organic milk) lunch will cost (12$) at any reasonable panera, etc... and if i get something else cheap for the day, that means another day i can invite someone to lunch for a networking opportunity. that leaves me with ($10-$20) for dinner. eating just noodles does not work for me, i need to get some sort of carnivorous delight for a meal at least once a day, fish is like 6$ a pound and then you have veggies on top of that if you cook at home, or a sushi tray is like 8$-12$ for a small one.
At 28, I can not live like a freshman college student any more. I just can't think on 1800 calories of carbs. I need a more well balanced diet.
Am i wack for thinking this? I know the average age of YC is 25, and on our team we are all 27/28, with a few younger and a few older helping on the side lines.
Why spend $12 on panera when you can make a chicken breast sandwich for $4?
And it's worth noting that cooking for yourself doesn't always save time. After you consider preparation and cleanup, sometimes it consumes more.
It can also be stressful if you don't have a nice kitchen, or if you have to share your kitchen with others. Although probably one of the benefits of having founders living together is optimizing your kitchen.
You can always stick to the basics. Ramen takes ~10 minutes for boiling water and clean up. Chicken breast takes 2 minutes to season, 14 minutes to cook and clean. Tuna takes no effort right out of the can. Boil or steam vegetables for about 5 to 10 minutes. Rice or oatmeal are cheap sources for carbs.
With these ingredients, you can eat well for under $10 / day where I live (Providence, RI). Just make sure you invest in a good spice rack.
how much do you loose by not meeting new people?
I go out to talk to people while i work, most of our team does not, they are introverts, but I need to be the extrovert for the group, plus if these guys are bringing their wives or traveling back and forth, they can spend some of the food budget.
Is this essential networking or is it talking to someone else while being away from work? (No, the waitron doesn't count.)
How many outside networking meals do you think you should have per person-week? (The answer probably depends on the team-member, but it's never 21 because some of those meals should be with other team-members and for some team-members the number is probably around 2.)
As far as your diet "requirements", are they really different from those of a grad student?
BTW - If you're paying for every networking meal, you're doing it wrong.
That may be true, but are you really lacking in opportunity if you're in a decent startup?
>i can invite someone to lunch for a networking opportunity
Is this "networking" for the startup, you, or is it a euphemism for a social life?
Let me suggest a test. Networking involves enough pre-meeting prep to enable a non-trivial agenda. Post-networking, there will be a debriefing to evaluate whether you achieved your goals and possibly what to do about it. You may not achieve said agenda every time, but if you do, that will often result in work that you have to do for the startup. If it rarely does, then either you're not very good at networking or you're not networking for the startup.
So, let's hear more about the value of this networking to the startup.
sometimes those deliverables are true, and sometimes i do it more casually than maybe i should. in milwaukee its about real relationships, in the valley i would think more people understand simple networking.
It comes down to how badly you want the experience. Look at it this way: Grad school at Stanford is ~40k/year, not including living expenses. Making whatever sacrifices necessary to experience ycombinator should be significantly less, but the experience and contacts most likely will dwarf what you are most likely to gain from a top tier graduate program in Engineering. Is it worth the investment? I can't speak for anyone but myself when I say "Absolutely."
I agree that the knowledge and contacts are what you guys should be going for. Running on savings and forgetting about the money is the only strategy I can figure that works for us "high maintenance" entrepreneurs. If I apply, I'll just make sure I have money in savings to run for six months or so first.
You lose a lot of time, time that would otherwise be spent working on your startup. Time that is important when you are trying to cram as much as possible into a 10 week timeframe.
I've worked 3-6 month projects where every minute was slinging code. And I regularly put my house and family on the line for my business.
I already have a business. I show companies how to run technology teams. I'm just looking to move into startup country because I like that environment more than the suit and tie world. I've led 5-person startup teams, and I've led 40-person rearchitecture groups. I like the startup teams a lot better.
I personally would need to save up for a while & pay down some debt before even trying to apply. But I would never knock the idea of cutting ramen-noodle checks to YC founders. It's at the very least much better (for the probably outcome of the business) than cutting filet-mignon checks.
That's the thing about getting married and having kids: it makes your life a lot more complicated. Personally I don't mind living out of an apartment and eating noodles for 3 or 4 months. I could even skip a couple months on the mortgage if I had to. But when they start taking away things your family needs to survive, like a house, then that's not eating steaks, that's starving. While I have no problem gambling my family's assets on my business, I don't feel it is morally right to actually lose everything they have.
Now if it was just me, that's a different story. At one point in my life, due to a fire when I was in my 20s, I lost everything I had. In a way, it's a totally liberating experience. Most people really don't need all that crap they surround themselves with every day.
That's why I replied to the article. I can see both sides of the story. Most young single guys don't need a lot of money (especially with Web applications) to make a go of it. The numbers get bigger with a wife, and they get even bigger with kids. That's not wanting Filet Mignons, that's just life.
I've got myself into sticky situations befre re: money, and have had to get out of them myself.
All of the money-managing books & articles I've ever read say that one of the most important decisions you'll ever make re: your financial future is the spouse you get married to.
The right one could be a net positive (moral support, financial support, etc), while the wrong one could lead to disaster in your financial life.
Kids? Now that's a whole different story...!
If you have decent savings, then great. Planning is always key, but taking risks are where people make themselves in life...
Higher overhead may not make someone a worse risk, but it does make them more expensive. That has consequences.
Is your participation worth twice as much as that of someone with half the overhead? If not, why should YC pay for your overhead?
As someone once said, "The universe is not here to please you."
No it's not. But neither am I here to please the universe.
I'm just saying that it's not a lot of money. Perhaps it is to you. I can make that money as pocket change in a very short amount of time in my normal consulting business. If YC wants to pay 10 bucks for their team members, more power to them. Not my call. They've got their math to do and I've got mine. Even families have profit/loss statements and break-even points. Their rates have consequences. After all the universe is not here to please them either, right?
Apply to YC and let's hypothetically assume you get in.
Spend 20% of your time making this ridiculous amount of money you can make doing consulting, the rest on your startup.
Problem solved. =) In all seriousness though, didn't Xobni have to do something like this for a while? (side consulting)
But you can't do both at the same time. Good one-on-one consulting (or anything, for that matter) requires you to be 24/7 thinking of your client and their problems, not yours. Perhaps other guys are better at multi-tasking among completely different things. To me, you've got to pour your heart and soul into it, or it's not worth doing. That's just the OCD-kinda guy I am :)
My biggest problem isn't the savings, it's the team. I chose to live in a really rural area, which is great for kicking back after getting off a jet from somewhere, but really sucks wind when it comes to meeting and forming teams. I'm waiting for one of these YC groups to help us hermit schmucks out with some good team-formation software.
Whether or not it is a "lot of money" is irrelevant. The relevant question is "Is it enough to meet YC's goals?" Maybe Markham's non-participation gnaws at PG, but I'm guessing that it doesn't.
BTW - The vast majority of YC particpants are foregoing significant income and the lifestyle that goes with it, a lifestyle not unlike Markham's. Why is only the latter worthy of consideration?
However, we have established that Markham can easily self-fund at the level that he requested from YC. I look forward to seeing the result.
For the record, I'm not saying I could do anything. I'm not saying PG or anybody else stays up at night worrying about my participation or lack of it.
You know nothing of my lifestyle, and you don't know me. I didn't post in here to make any kind of comment on YC, PG, or anybody else. I only wanted to point out that the cost of living is a factor for other people in whether they participate or not. That's it.
BTW, it's not a question of "is it enough to meet YC's goals" It's a question of whether it is enough to meet both parties' goals. That's the way business works -- both parties have capabilities and needs. Business is when there is a trade between these capabilities and needs. It's never a one-way street.
You are totally focusing on the wrong things - think about the application, your product, and your team (not in that order actually). Worry about the other stuff once you get in.
- Visiting/bringing wives is nice, but keep in mind that apart from the expense, your cofounders won't really be seeing them all that much.
-Make sure all or a majority of your founders can move. If they can't you've just given YC an easy way to move on to the next application..
Right now I am on a 3 month notice monthly lease, and I have a roommate that is planing on leaving in the spring. I have verbally committed to him to stay till march, it would be really sh*tty of me to leave him early and to also not give my landlord proper notice, especially since we work in a professional environment together.
So if i am going to be decent and honest, i will need to support my $800 Milwaukee, habit until march just to keep the peace.
Of course, it might be that the only way to win, is to just think of yourself. I would rather not live in such a world, and so often times I am willing to support the consequences of being decent to people and friends. It has tended to pay off for me in the long run.
For instance, last night I ate a chicken breast ($1), mashed potatoes (instant kind - $2), and green beans (can - $1.50), with a can of Coke ($0.25)... a decent meal for $4.75.
However, about $2K a month is pretty close to average living expenses, no matter where you cut back.
here is my breakdown
housing: 1100
internet: 0 (upstairs neighbors let me leech, coffee shops)
electricity: 0 (covered in rent)
food: 300 (burritos, cook at home, burger/pizza on weekends)
water: 0 (included in rent)
entertainment: 100 (beer)
gym: 60
cost: 1560
if you live in the south bay, you forgot car, car insurance, parking and/or caltrain.
I am strongly in the camp of planning for the reality of the situation. when it comes to entertainment, its less than 5% of the budget, i think this seems fair. That is 2 dates at the movies, 2 nights of drinks, or one SCCA race a month.
as for food, i might be able to get by on ramen, but i might also miss out on other opportunities if i was out and about.
also, unlike many of the teams applying we nearly have a product ready to role now, for us this is all about the networking and so our strategy is quite a bit different than the make it go strategy, for us this is about a life style shift, its about committing to the start up and if that means moving to silicon valley, this might be the kick in the pants to do it. From my stand point that means that the wives will most likely move too. They may not move at first, but i suspect they will want to move out there.
If you want to see a demo of our app in adobe air. you can find it at: http://s3.derby.adobe.socialhelix.net/zcalendar.air
Our goal is to start serving two customers by jan'08, which would be before we leave, and have a revenue potential of $1,000 - $20,000 a year depending on how well our app works.
You can see an early demo we did for one of our customers last year at http://info.socialhelix.com
Our biggest fear is how do we scale our application, do we have all of the kinks worked out, will the security model of the web keep shifting, etc...... How can we do this full time?
Just recently some of our team finished paying off their weddings and cars. I am just trying to figure out what it will cost us to go out there so we can make a decision on what our next move is.
There's a reason so many startups form in grad student housing.
The reason startups form in grad student housing is the grad students, not the housing.
I think grad student housing does help focus. You can get meal plan and not have to spend time going to the grocery store so much; you tend to interact much more with other people who are also focused on similar problems and random friends don't drop by and try to drag you off on some irrelevant adventure.
I have a problem with that sort of thing. I have to be a bit brutal when I'm really deep in something. The keeping-in-your-head essay really hit the nail for me.
I am now living in the bay area and here are some hard numbers
our 3brdm is $3350 a month, and it fits 4 people snug but comfortably. So that is about $1200 a bedroom.
Internet is included, but you might expect to pay a bit more than $50 a month.
food well, eating at Mel's Dinner will run you $12 for a meal, and about $2.50 for a drink, and another $2 for tip, or about $17 for a dinner meal. Milk is between $4-$8 a gallon, and ground beef is $3 a pound. Cereal is about the same cost, and Starbuck's Coffee, is the same price in SF as it is in MKE or Chicago. Bagels at Noah's will run you about $2.50 for a bagel with cream cheese, and lunch will run about $8 a person without getting a drink.
You will be using a laundry mat, and it will cost you $2 a load to wash, and $1-$2 to dry them, so $3-4 in total at the brainwash laundry mat.
Beer is about $5-$6 in most of SF, but last night I was in the mission drinking micro brews for $3-4 a beer. On another occasion in north beach I paid $11 for a beer in a plastic cup.
The AMC theater on VanNess is $10.50 a person and matinées are $8.50 a person.
The bus will take you anywhere for $1.50 a trip, with a transfer that is good for ~2 hours+ depending on how the driver tears the transfer ticket. The BART is about $5 to Berkley, or SFO and a bit more if you want to go to Freemont or to Palo Alto, etc.. CalTrain is a bit more expensive and runs about $10 for a trip between Sunnyvale and like SF. Taking a cab between the Mission and say "the Richmond" will run about $10-20, and where I live its about $10.
Oh, parking is a bitch. Expect to pay $200-$400 a month more for rent or a separate parking space.
Living in SF you will also save money for heating and cooling costs, because the weather is so temperate.
There are at least 5-10 tech events a week, so you will have to choose wisely which ones you are going to go to and during the week its not pleasant getting between Sunnyvale, Palo Alto, and Mountain View and SF proper.
Living in the Mission is probably the cheapest and has the best transportation options for a tech entrepreneur, but pacific/laurel heights and the richmond have their advantages too. potrero hill is a great area but pricier than others.
if you are going to try to save on rent by being a bit farther out in the city, make sure you are near a bus line that runs regularly, at night many of the buses really reduce their schedule, but for example lines like the 38 will run fairly late with 7 min intervals, and then 20 min in the late night.