"Then the effects of being measured by performance would propagate all the way back to high school, flushing out all the arbitrary stuff people are measured by now. That is the future of web startups." What an impressive conclusion - I hope it happens.
This would only work if everyone in HS either expects to work on web applications or the trend spreads to all industries. That might take a little longer.
Not really. We are at a new plateau, if you want: stuff that used to be hard is now standard. So people can lift up their heads and get going with something new.
I wish acquisition was this easy. I worked at a very large bank in Emerging Technology and I pushed our group to buy 3 startups. We passed on all of them because of bureaucracy and lack of vision. Heck, the same bank passed on paypal (and tried to create their own), and now they have to compete head to head with a company that could be in house.
What Paul ignores is the fact that most people out of college are faced with seemingly insurmountable debt as a result of having to pay for an education - esp. in America (and to a lesser extent in Canada). This is one problem that will prevent startups from happening at such a rapid pace as he anticipates. In fact, most graduates want to find stable jobs to pay off their debt -- startups are not really on most graduates' radar. On a somewhat related note, Businessweek had a survey of the top ten desirable places to work for new graduates -- three were govt. agencies, one accounting firm, google, etc.
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What Paul ignores is the fact that most people out of college are faced with seemingly insurmountable debt as a result of having to pay for an education
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Yeah, but you get a 6 month grace period after school's over before repayment begins, and you usually have several financial hardship forbearances you can take to postpone repayment. Even then, you can go back to school for one semester, and reset the grace period and financial hardship forbearances.
So, you have at least 18-24 months of forbearance/deferment before you have to begin repayment, and that can be hacked indefinitely by taking 6 credits at your local community college.
I don't know why this was modded up. That's like saying if one can't pay the $20,000 credit card balance, American Express will delay charging interest as long as the user charges up $2,000/year more. I think one would be better off just paying the interest than adding $2,000 of classes that they will have to attend.
Also, free interest or low interest as "aid" is a joke. You still have to pay the entire amount you borrowed.
I think the only time your strategy makes sense is if you can pay $1,000 to enroll in community college for one semester in order to stay on your parents' health insurance from June to December, which comes out to $140/mo, and the quotes you received for health+dental+vision were $500 a month, therefore saving approximately $2,500 per semester, or $5,000 a year. (And I believe if you're from Massachusetts, you can stay on your parents insurance as long as you're a dependent in income level even if you're not a student.)
So wouldn't those people drop out earlier? If you strip out the emotional content of your post, it's quite banal: the price of a product (college) is going up, so people who buy the product (students who pay full tuition) have less money, and since money is a transportable, transferable form of freedom, they're less free.
" In fact, most graduates want to find stable jobs to pay off their debt -- startups are not really on most graduates' radar."
That's irrational. If they're already way in debt, shouldn't they want to take more risks? Why the hell would you do something boring for ten years to pay off your debt, when you could do something fun for one year and have a 10% chance of more than paying off your debt. Also, employers are impressed by people who start their own businesses.
" Businessweek had a survey of the top ten desirable places to work for new graduates -- three were govt. agencies, one accounting firm, google, etc."
Right, because Businessweek can't say "The best place for you to work is that company you start in your apartment with your pals," because 1) that doesn't appeal to BW's audience, and 2) startups are small and varied, so it wouldn't make sense. It's like taking a survey of the most popular restaurants (McDonalds, Burger King) and using that as proof that the swanky new sushi place down the street is an awful place to eat.
No those people would not drop out earlier, because they likely did not know they wanted to be startup founders until they had enough technical knowledge and/or more importantly built those relationships with students around them which led to the creation of a startup in the first place. Perhaps your experience has been different in which case I cannot argue with that.
"when you could do something fun for one year and have a 10% chance of more than paying off your debt"
For precisely that reason -- that the likelihood of success is only 10%. And it often takes more than a year to build something meaningful.
"Also, employers are impressed by people who start their own businesses."
This is not always true. It depends on the role the employee is being hired into.
So you're saying that college, while expensive, is still worth it? I don't get your argument. For a given student, either college is too expensive to be worth it, and people will drop out early, or it's cheap enough to be worth it, and people will finish. Only one of these things can be true, and there are obvious conclusions depending on which you pick. So which is it?
"For precisely that reason..."
Did you miss what I said above? If you're already broke, why is getting broker a problem? What do you have to lose if you have less than nothing?
Can you give me some detail on your 'depends on the role' comment? I didn't realize this; when I recruit people (IT/quant finance), employers respond more favorably to entrepreneurs than to people who worked for someone else. Where did you hear otherwise?
"So you're saying that college, while expensive, is still worth it? "
Yes that's exactly what I'm saying. You meet like-minded people there who are excited about technology - potential co-founders. You learn about technology.
I've been through 3 universities, and the relationships I have built at these institutions have helped me to this day. I'm running a startup btw.
What was the point of your original post? It looks like you were saying "It is better to have a college education than to spend that time or money in any other possible way." But you keep saying that like it's a bad thing, and talking about how college reduces your chances of starting a startup because it's so expensive. If college increases your chances of starting a startup, and you want to start a startup, your original post doesn't make sense. What were you trying to say?
I'm really having trouble following this. You're saying that your odds of success after getting an education are higher than before. But that, uh, getting an education makes it harder to start a startup. You see the contradiction.
Is this like saying "If you're going to be a programmer, you'll do better to buy a computer. But if you buy a computer, you'll have to get money, which leaves you less time to be a programmer!"?
Regarding the businessweek comment, I can only say that if the desire and willingness to start companies was a meaningful trend, it _might_ have been noted as an option.
I would disagree with this: "1) that doesn't appeal to BW's audience" starting businesses _does_ appeal to businessweeks audience. ;)
But that's not a 'place to work'. It's like having a list of the top twenty restaurants, with #3 as "Your kitchen, assuming you go to culinary school and are a talented cook and have the time to cook and..." it doesn't give any real information.
I wouldn't be surprised if BW's readers were less entrepreneurial than average. It's a magazine about big business, not about doing business.
This might be a recent policy change, but now at CWRU you need to be in the top 10% of your high school class to get the SAT scholarship. I had a high enough SAT score to qualify for one of CWRU's standard scholarships but didn't get it because I was in the top 12% of my high school class.
I wish I'd thought to consider a startup during my grace period. If I was graduating today, rather than right after 9/11, that's almost certainly what I'd do.
This is one of those ways in which being a rich kid is a huge advantage. I'm not sure if most young startup founders have rich parents, but it wouldn't be particularly surprising. Then again, maybe having rich parents makes it too easy to just coast in a cruddy job (or grad school)...
Another big advantage for Silicon Valley: Rich (from tech or real estate) parents supportive of playing around with computers instead of getting a real job.
From what I remember, college debt payments are not usually more than other expenses like food and rent. I'd bet they're rarely more than 30% of the expenditure of someone considering a startup, and thus shouldn't be a deciding factor.
I believe that more high-schoolers than before will evaluate an alternate option to college. It is these folks who will add strength to the startup numbers. The people who decide to get into college and pickup big debts have already made a decision of not wanting to do startups. Additionally,this debt seems insurmountable in the current scenario, but as things change loan financiers will factor in such changes and perhaps even build in options for doing a startup or allow for repayment to start much later than it currently does.
While Paul focuses on web based startups, I think this phenomenon will apply to more areas as technology enables individuals to create their own niche. This is already true for some sports and certain types of businesses.
Like you correctly mentioned, the debt problem is more pronounced for Americans and some other nationalities, most developing nations do not have this problem and their entrepreneurs will start startups especially in developed and lucrative markets such as the US. This inturn will force the US mechanism to adapt. This effect of globalization has already had effects in many other industries.
In the UK you graduate in June and have to start repaying your loan the following April as a percentage of your income if you earn more than GBP14,000/year. I've found that you can survive for GBP6,000/year so this shouldnt be an issue. No idea what the situation is like in the US however
Google has by far the best programmers of any public technology company. If they don't have a problem doing acquisitions, the others should have even less problem. However many Google does, Microsoft should be doing ten times as many.
I heard Carl Schramm (the economist) give a talk on Tuesday, and IIRC he said that MS buys six to ten startups per month. Most big companies are buying startups like crazy now though, even the ones you'd never expect. For example, even Proctor & Gamble buys around 100 startups per year.
The proliferation of startups also exposes a need for better integration. If signing up for accounts and remembering usernames/passwords for a dozen different sites is a pain, think about doing that for hundreds!
If the number of startups increases dramatically, then the people whose job is to judge startups are going to have to get better at it. I'm thinking particularly of investors and acquirers. We now get on the order of 1000 applications a year. What are we going to do if we get 10,000?
That's actually an alarming idea. But we'll figure out some kind of answer. We'll have to. It will probably involve writing some software, but fortunately we can do that.
With standardization comes bureaucracy. I dread what will happen when all this starts to become apparent to the government, and they decide that they need to "fix" some of the perceived injustices. How long before we start seeing laws regulating founder/investor relationships that look like our current laws for employers and employees? Will investors start being required to submit reports to the government to prove that their investment decisions aren't racially biased?
> Will investors start being required to submit reports to the government to prove that their investment decisions aren't racially biased?
Are you suggesting that investors should be racially biased?
I'm playing devil's advocate far further than intended for sure, but the laws regarding employment, although bureaucratic are there for very good reasons.
I think he's suggesting that they could be accused of it. Startups are disproportionately started by men, most of whom are white or Asian. Paul Graham says not to blame on malice what you can attribute to math, but other people might not see it that way.
"I'm playing devil's advocate far further than intended for sure, but the laws regarding employment, although bureaucratic are there for very good reasons."
And I don't understand what you mean about laws being proof that people feel this way. I assume that the proof that people feel a certain way is that they act that way. For example, if I think being a coal miner is too risky, I won't be a coal miner; if I think the rewards are fair compensation, I will be one. Why do you need a law to deprive me of my freedom to make those decisions?
I don't understand why you keep posting comments that begin with "I don't understand", and then proceed to make an argument about the comment that you profess not to understand.
I've found that sometimes, people refuse to say exactly what they mean because it's so absurd. So they write vague, pleasant nonsense about how "human rights trump economics." What is that supposed to mean? Economics is the study of what people want and how they get it -- how can it be 'trumped' by one set of things people want. It's a malformed argument. I wondered if the commenter would explain exactly what he was trying to say.
Want to know what else those conditions led to? death, disease, revolution, communism, fascism and war.
>For example, if I think being a coal miner is too risky, I won't be a coal miner.
Unless of course you're not in the position to make that choice. You are speaking from a position of privilege and assume all share that privilege. It leads to only a half understanding of why we've instituted the systems we have.
>Why do you need a law to deprive me of my freedom to make those decisions?
Wow, that's a warped view of freedom. Too many Ayn Rand books to be sure. If you were right in your theory, the nation you live in (assuming you're American) wouldn't exist right now. Think about that a little.
Shit. I thought death, disease, revolution, communism (read Acts), fascism (which was an attempt to revive Rome) and war all predated the Industrial Revolution. In fact, the actual research I've read (http://www.edge.org/3rd_culture/pinker07/pinker07_index.html) demonstrates clearly that those are declining as we industrialize. But I'm sure you meant to cite your own source. I'm waiting.
" You are speaking from a position of privilege and assume all share that privilege."
Pleasant nonsense. Why should my status change the validity of my arguments? I have an idea -- let's ask a black high school dropout (http://www.tsowell.com/) if he agrees with me! Then let's decide that an individual's 'privilege', whatever that means, isn't as important as making a reasonable argument backed by data.
"If you were right in your theory, the nation you live in (assuming you're American) wouldn't exist right now."
If I were right in my theory that depriving people of freedom in order to force them to make decisions they're going to make anyway (at best!) is a bad idea? I don't see how my rightness would affect American politics. Do you mean that if more people agreed with me, the world would be different? Are you confusing my perscriptions and historical descriptions? Please clarify.
I'll take a stab at this. I recently read one of Milton Friedman's books, and I liked it a lot. His pursuit of freedom is admirable, and something that I can understand. He even suggests that freedom is more important than using government power to attempt to stop racism, for instance by letting people choose not to hire black people (as an example).
That got me to thinking though. While I'm attracted to the sentiment of freedom above all else, what I think is missing in his equation is that communities tend to be sort of self-reinforcing. It would be very difficult, if it were accepted by others to not hire black people, to be the first one to do so. Now, laws against that kind of discrimination don't change the way people feel, nor make their racist sentiments go away overnight. However, they do drive those thoughts underground, and break the cycle of "we've always done it that way" by making it no longer acceptable. And with time, that improves the climate and makes it easier for attitudes to change.
At least that's one thought that came to mind. I really admire Friedman's purity of thought, but think that perhaps it's a bit naive. It would certainly be an interesting subject to discuss in person with a person of that libertarian mindset.
Just imagine the level of job candidates you could be selecting amongst if you were the only one hiring from a population as big as the black community. In any competitive field, employers are fairly limited in how 'racist' they can be in their hiring practices without setting themselves up for a fall.
Sure, but there are a lot of fields that aren't really that competitive (where you simply hire cheap laborers who basically work about the same), and where the pressure to conform may be higher than the pressure to find an employee that is 2% better than the next guy.
Even then, widespread aversion to hiring from one of two equally productive groups creates a big incentive to break the mold. And that incentive will only keep increasing as long as no one steps out. In the limit case, you pretty much have access to an 'unlimited' pool of free labor. This line of reasoning does presuppose a reasonably free country, though.
The government does not have an interest in impeding entrepreneurs or the formation of new businesses. The goals are usually the opposite, as can be seen with the various govt incentives and programs in place to help aspiring business owners.
I dont foresee increased regulation to be a big problem. Hindering the development of new businesses would be shooting the economy in the foot.
by "don't qualify," i mean i'm not really into the game the same way as the companies ycombinator seems to fund. for example, i'm not that excited about writing web apps, it just doesn't appeal to me. i think there are important sectors that could benefit from a bunch of startups that paul has completely written off, because he thinks it's less lucrative, i guess. well, i'm willing to take a LOT less money to do something i'm actually interested in, rather than learning ruby on rails, say.
this is paul's world. i like reading about the energy and creativity involved in web startups. i personally think that narrowing the field to just web startups is short-sighted, but that's not my call to make, certainly not here.
Okay. It might make your argument more compelling. You're making a judgement that Web 2.0 startups are relatively bad -- it would be nice to know what they're relatively bad compared to.
Web apps are probably the most common because the barrier to entry is very low, but the field really seems to be more "software" rather than "only web apps". Xobni is desktop software, Loopt is mobile software, Justin.tv is (as I understand it) a mix of hardware and web streaming.
Interestingly, those also seem to be some of the higher profile projects.
Prediction: Angel investors will ink deals with VCs to create an official pipeline. For example, let's say KPCB agrees to fund at least one Techstars company per year in exchange for first pick or something like that. That's the way elite prep schools interface with certain Ivy's, and it seems to work out for both of them. Of course startups will never get as locked down as colleges because there will always be more money than good investments, at least for the foreseeable future.
I always assumed the prep-school -> ivy connection was informal, much like the one between certain software companies and cs programs. For instance, Yale takes 10 kids from andover every year because they know all about how smart the 10 smartest kids from andover are from previous experience.
Most of them are informal, but not all. Here are a few situations where an Ivy would offer guaranteed admissions:
1) The university promises admission the top student from the Japanese language program of a certain high school each year. Situations like this often arise from alumni putting crazy earmarks on the donations to their colleges.
2) The university guarantees admission to a certain percentage of state residents each year in exchange for state funding.
3) The university wants to buy more land but the town tries to block the deal because it doesn't want the property taken off the tax roll. The university brokers a deal guaranteeing admission to a certain number of students from the local HS in exchange for the land.
4) A top prep school comes to some more formal agreement with a university for purely strategic reasons.
Situation #1 seems to be the most common in terms of connections to prep schools, although it's hard to say since the relationships aren't exactly published.
The unexpected Ted Stevens reference at the end really made me grin. I find Stevens so hilarious and horrifying at the same time.
I was surprised to find it in a PG essay, but on reflection it seems really appropriate in context. Though it did distract me enough that I had to read the last section twice.
"We now get on the order of 1000 applications a year. What are we going to do if we get 10,000? That's actually an alarming idea. But we'll figure out some kind of answer. We'll have to. It will probably involve writing some software, but fortunately we can do that."
The company that manages to blend digital identity and reputation with the information power of networks is probably going to be the next MS. I've been interested in this problem for a long time now. Someone should really submit a proposal as a YC idea.
> Acquirers will also have to get better at picking winners.
Hrm... one of the things that makes markets work so well is that it brings "the wisdom of crowds" to bear, and doesn't require small, homogeneous groups to attempt to pick winners. So something about that section raises a flag in my head - if there are more startups in the future, maybe more of them will have to go it alone, instead of this "easy out" of being bought?
Many influential and smart guys like Paul are saying that starting your own company today got a lot cheaper, but what does it mean in practice?
While it depends on a nature of the business you are starting, in many cases "build something quick" advice does not work as well as advertised IMO: for most non-trivial ideas "something quick" still means a few months of full time commitment which means tens of thousands of dollars that many "younger nerdish" founders still do not have.
I guess what I am saying is that a million dollars is no different from fifty thousand when that's the money you need but do not have. Sure it probably easier to find an external investor with 50 grand, but is it really? Especially for "nerdier" types?
This is why YComb exists, but that is only about 30 deals a year.
Great post, as usual, there is one point though - assuming that all the best will move to the startup hubs is like efficient markets hypothesis i.e. not really. They would move in a rational world but there are many seemingly irrational reasons that you can find world class people in obscure places anywhere in the world and, moreover, they are content to stay there. I am talking from personal experience, in my previous (vertical) search startup my chief programmer was world-class and had results to prove it, has since produced another world-class (Facebook) app and has not set foot in US ever. Similarly in my current search startup, I have some really great young kids. So the moral is that sure, the ratio of world class people is higher in startup hubs, but the rest of the world is so much bigger :) that many more are still out there ...
Yet another essay on startups, by PG... It appears that essays tend to be cheaper to make, as time goes on, too (thanks to, you know, copy/paste). I couldn't find any ideas here that hadn't been expressed elsewhere in your writings or wasn't self-evident. We want more crazy controversial stuff, like the last (brilliant) one on philosophy!
Ideas for new subjects:
- "google is dead";
- "how to fund painters";
- "all things considered, java rocks";
- "vaporware, or why I gave up arc";
- "return of the web 1.0"
There are plenty of weird ideas that only wait for PG to write clever stuff on them! Seriously, I don't know why people like FOWA, whoever that is, actually pay you to listen to the same old story...
Ok, let's prentend I didn't write the stupid suggestions (which i still find funny). The fact remains, this essay is basically a compilation of ideas already expressed by PG, who needs to know that some of his fans are disappointed... Mod it up, if you want good writing!
Where is the evidence that Google has the best programmers? Certainly if you look at Google's acquisitions, they all stagnate post Google. Picasa was a pretty good product -- two years ago when Google bought it. Since then it's added a button to upload photos to Blogger. Gmail had a pretty good feature set for Web-based mail -- two years ago when it rolled out. Since then? etc.
Paul, you always speak of acquisition of a startup by a big company. What possibilities exist for startups merging? Is it common, or do you expect it to be?
I know a couple other startups in my town (one of your big 3) who do similar things to my startup. Thanks to the public (link-happy!) structure of the web, we already let people go from one to the other: a loose ad-hoc integration. Will this be the future of cooperative web software development?
It is if they do it a couple times. Ever try folding a piece of paper in half 5 times? It's how Google might have formed, if they had started acquisition instead of interview-hiring sooner.
"And being Google, they're figuring out how to do it efficiently."
pg, I am a little alarmed by this flat recognition that is awarded to Google. It might be actually true. But its not an optimal way to think about things in the long run. As a teen ager I was a Michael Jackson fan, It took me a good while longer than other people to realize that he has turned into shit.
That's not a comment about how successful or cool Google may be, it's a comment about their management and corporate culture.
It's like saying "And being Wal-Mart, they're figuring out how to squeeze the last nickel out of their suppliers." It's just how they're interested in doing things.
In point 1 where Paul states there will be a lot of startups because it's cheap to startup, I have to wonder where is the demand side of the equation. Is there enough demand for whatever it is these startups are/will be doing? Hearing more about that would be very interesting; I'd love to see a world with many many more startups.
The different thing about the web is that a biz doesn't need to be physically close to its customers. In fact, there frequently aren't any advantages to being close to said customers (or it's impossible to be close to all of them because they're spread out).
However, there are still advantages to a biz being close to itself and its resources.
The combination of those to things means that startup hubs will become stronger.
Forgiving the possibility of alternate spellings I'm unaware of (e.g., "color" vs. "colour"), and despite the fact that I wish I had more to contribute, I would like to file a:
Pedantic Typo Report
The Future of Web Startups, Section 2. Standardization.
172 comments
[ 363 ms ] story [ 1272 ms ] threadI know of one company that already has this, with a different title.
...because we've inspired everyone to do startups. There will be nobody else to hire :)
We're back to the pre-industrial revolution era. Where everyone didn't hire anyone and had their own backyard industry.
Woohoo!
Yeah, but you get a 6 month grace period after school's over before repayment begins, and you usually have several financial hardship forbearances you can take to postpone repayment. Even then, you can go back to school for one semester, and reset the grace period and financial hardship forbearances.
So, you have at least 18-24 months of forbearance/deferment before you have to begin repayment, and that can be hacked indefinitely by taking 6 credits at your local community college.
Also, free interest or low interest as "aid" is a joke. You still have to pay the entire amount you borrowed.
I think the only time your strategy makes sense is if you can pay $1,000 to enroll in community college for one semester in order to stay on your parents' health insurance from June to December, which comes out to $140/mo, and the quotes you received for health+dental+vision were $500 a month, therefore saving approximately $2,500 per semester, or $5,000 a year. (And I believe if you're from Massachusetts, you can stay on your parents insurance as long as you're a dependent in income level even if you're not a student.)
" In fact, most graduates want to find stable jobs to pay off their debt -- startups are not really on most graduates' radar."
That's irrational. If they're already way in debt, shouldn't they want to take more risks? Why the hell would you do something boring for ten years to pay off your debt, when you could do something fun for one year and have a 10% chance of more than paying off your debt. Also, employers are impressed by people who start their own businesses.
" Businessweek had a survey of the top ten desirable places to work for new graduates -- three were govt. agencies, one accounting firm, google, etc."
Right, because Businessweek can't say "The best place for you to work is that company you start in your apartment with your pals," because 1) that doesn't appeal to BW's audience, and 2) startups are small and varied, so it wouldn't make sense. It's like taking a survey of the most popular restaurants (McDonalds, Burger King) and using that as proof that the swanky new sushi place down the street is an awful place to eat.
No those people would not drop out earlier, because they likely did not know they wanted to be startup founders until they had enough technical knowledge and/or more importantly built those relationships with students around them which led to the creation of a startup in the first place. Perhaps your experience has been different in which case I cannot argue with that.
"when you could do something fun for one year and have a 10% chance of more than paying off your debt"
For precisely that reason -- that the likelihood of success is only 10%. And it often takes more than a year to build something meaningful.
"Also, employers are impressed by people who start their own businesses."
This is not always true. It depends on the role the employee is being hired into.
"For precisely that reason..."
Did you miss what I said above? If you're already broke, why is getting broker a problem? What do you have to lose if you have less than nothing?
Can you give me some detail on your 'depends on the role' comment? I didn't realize this; when I recruit people (IT/quant finance), employers respond more favorably to entrepreneurs than to people who worked for someone else. Where did you hear otherwise?
Yes that's exactly what I'm saying. You meet like-minded people there who are excited about technology - potential co-founders. You learn about technology.
I've been through 3 universities, and the relationships I have built at these institutions have helped me to this day. I'm running a startup btw.
Is this like saying "If you're going to be a programmer, you'll do better to buy a computer. But if you buy a computer, you'll have to get money, which leaves you less time to be a programmer!"?
I would disagree with this: "1) that doesn't appeal to BW's audience" starting businesses _does_ appeal to businessweeks audience. ;)
I wouldn't be surprised if BW's readers were less entrepreneurial than average. It's a magazine about big business, not about doing business.
1. They took basically zero risks before, so it would not be "more".
2. And screw up their credit history/get creditors chasing them?
> So wouldn't those people drop out earlier?
Because they couldn't predict the future? Not everyone who does a startup knew their path since they were 2 years old.
While Paul focuses on web based startups, I think this phenomenon will apply to more areas as technology enables individuals to create their own niche. This is already true for some sports and certain types of businesses.
Like you correctly mentioned, the debt problem is more pronounced for Americans and some other nationalities, most developing nations do not have this problem and their entrepreneurs will start startups especially in developed and lucrative markets such as the US. This inturn will force the US mechanism to adapt. This effect of globalization has already had effects in many other industries.
I actually think Microsoft does.
You have software to rate the applications?
If the number of startups increases dramatically, then the people whose job is to judge startups are going to have to get better at it. I'm thinking particularly of investors and acquirers. We now get on the order of 1000 applications a year. What are we going to do if we get 10,000?
That's actually an alarming idea. But we'll figure out some kind of answer. We'll have to. It will probably involve writing some software, but fortunately we can do that.
Are you suggesting that investors should be racially biased?
I'm playing devil's advocate far further than intended for sure, but the laws regarding employment, although bureaucratic are there for very good reasons.
"I'm playing devil's advocate far further than intended for sure, but the laws regarding employment, although bureaucratic are there for very good reasons."
What is that reason?
That's what our society has decided, therefore employment laws, while imperfect, have good reason.
For reference, see 19th century factory conditions.
If not, why the distinction?
I'm not sure we need laws that commit them to be though for the simple fact that it would be very hard to actually enforce those laws.
Employers are a completely different situation, and thus are bound to a different set of expectations.
See also: http://online.wsj.com/article/SB118134633403829656.html?mod=...
And I don't understand what you mean about laws being proof that people feel this way. I assume that the proof that people feel a certain way is that they act that way. For example, if I think being a coal miner is too risky, I won't be a coal miner; if I think the rewards are fair compensation, I will be one. Why do you need a law to deprive me of my freedom to make those decisions?
>For example, if I think being a coal miner is too risky, I won't be a coal miner.
Unless of course you're not in the position to make that choice. You are speaking from a position of privilege and assume all share that privilege. It leads to only a half understanding of why we've instituted the systems we have.
>Why do you need a law to deprive me of my freedom to make those decisions?
Wow, that's a warped view of freedom. Too many Ayn Rand books to be sure. If you were right in your theory, the nation you live in (assuming you're American) wouldn't exist right now. Think about that a little.
" You are speaking from a position of privilege and assume all share that privilege."
Pleasant nonsense. Why should my status change the validity of my arguments? I have an idea -- let's ask a black high school dropout (http://www.tsowell.com/) if he agrees with me! Then let's decide that an individual's 'privilege', whatever that means, isn't as important as making a reasonable argument backed by data.
"If you were right in your theory, the nation you live in (assuming you're American) wouldn't exist right now."
If I were right in my theory that depriving people of freedom in order to force them to make decisions they're going to make anyway (at best!) is a bad idea? I don't see how my rightness would affect American politics. Do you mean that if more people agreed with me, the world would be different? Are you confusing my perscriptions and historical descriptions? Please clarify.
That got me to thinking though. While I'm attracted to the sentiment of freedom above all else, what I think is missing in his equation is that communities tend to be sort of self-reinforcing. It would be very difficult, if it were accepted by others to not hire black people, to be the first one to do so. Now, laws against that kind of discrimination don't change the way people feel, nor make their racist sentiments go away overnight. However, they do drive those thoughts underground, and break the cycle of "we've always done it that way" by making it no longer acceptable. And with time, that improves the climate and makes it easier for attitudes to change.
At least that's one thought that came to mind. I really admire Friedman's purity of thought, but think that perhaps it's a bit naive. It would certainly be an interesting subject to discuss in person with a person of that libertarian mindset.
I dont foresee increased regulation to be a big problem. Hindering the development of new businesses would be shooting the economy in the foot.
i'd love to be on the bandwagon already, but i don't meet a lot of the qualifications. if the bar is lowered just a LITTLE bit, i am so there.
by "don't qualify," i mean i'm not really into the game the same way as the companies ycombinator seems to fund. for example, i'm not that excited about writing web apps, it just doesn't appeal to me. i think there are important sectors that could benefit from a bunch of startups that paul has completely written off, because he thinks it's less lucrative, i guess. well, i'm willing to take a LOT less money to do something i'm actually interested in, rather than learning ruby on rails, say.
this is paul's world. i like reading about the energy and creativity involved in web startups. i personally think that narrowing the field to just web startups is short-sighted, but that's not my call to make, certainly not here.
Interestingly, those also seem to be some of the higher profile projects.
i'm personally more drawn to "real" software that runs on desktops and servers. web stuff is nice, but it doesn't fit the way i think as a programmer.
I haven't spent one penny or any time on/in college!
1) The university promises admission the top student from the Japanese language program of a certain high school each year. Situations like this often arise from alumni putting crazy earmarks on the donations to their colleges.
2) The university guarantees admission to a certain percentage of state residents each year in exchange for state funding.
3) The university wants to buy more land but the town tries to block the deal because it doesn't want the property taken off the tax roll. The university brokers a deal guaranteeing admission to a certain number of students from the local HS in exchange for the land.
4) A top prep school comes to some more formal agreement with a university for purely strategic reasons.
Situation #1 seems to be the most common in terms of connections to prep schools, although it's hard to say since the relationships aren't exactly published.
I was surprised to find it in a PG essay, but on reflection it seems really appropriate in context. Though it did distract me enough that I had to read the last section twice.
The company that manages to blend digital identity and reputation with the information power of networks is probably going to be the next MS. I've been interested in this problem for a long time now. Someone should really submit a proposal as a YC idea.
Hrm... one of the things that makes markets work so well is that it brings "the wisdom of crowds" to bear, and doesn't require small, homogeneous groups to attempt to pick winners. So something about that section raises a flag in my head - if there are more startups in the future, maybe more of them will have to go it alone, instead of this "easy out" of being bought?
While it depends on a nature of the business you are starting, in many cases "build something quick" advice does not work as well as advertised IMO: for most non-trivial ideas "something quick" still means a few months of full time commitment which means tens of thousands of dollars that many "younger nerdish" founders still do not have.
I guess what I am saying is that a million dollars is no different from fifty thousand when that's the money you need but do not have. Sure it probably easier to find an external investor with 50 grand, but is it really? Especially for "nerdier" types?
This is why YComb exists, but that is only about 30 deals a year.
The whole essay is based on this idea. But Paul gives no reasons, why there should be a such a trend.
Cheap CAD tools, cheap custom boards, processized manufacturing.
Most people drastically underappreciate how much China has helped innovation in this regard.
Ideas for new subjects:
- "google is dead";
- "how to fund painters";
- "all things considered, java rocks";
- "vaporware, or why I gave up arc";
- "return of the web 1.0"
There are plenty of weird ideas that only wait for PG to write clever stuff on them! Seriously, I don't know why people like FOWA, whoever that is, actually pay you to listen to the same old story...
And oh, the part about ideas for new subjects... ok. I am wondering why I didn't downmod you now.
I know a couple other startups in my town (one of your big 3) who do similar things to my startup. Thanks to the public (link-happy!) structure of the web, we already let people go from one to the other: a loose ad-hoc integration. Will this be the future of cooperative web software development?
Sure they can merge, but this is not an "exit". As far as I know, the purpose of a startup is a successful exit of some type.
pg, I am a little alarmed by this flat recognition that is awarded to Google. It might be actually true. But its not an optimal way to think about things in the long run. As a teen ager I was a Michael Jackson fan, It took me a good while longer than other people to realize that he has turned into shit.
It's like saying "And being Wal-Mart, they're figuring out how to squeeze the last nickel out of their suppliers." It's just how they're interested in doing things.
ak
However, there are still advantages to a biz being close to itself and its resources.
The combination of those to things means that startup hubs will become stronger.
Pedantic Typo Report
The Future of Web Startups, Section 2. Standardization.
"In essense, let the market design the product."
"essense" vs. "essence"
That is all.