We Just Thought, 'This Is How You Start a Company in America'

As someone who has "Start a company in Tokyo" on their long-term plan, can you elaborate? I wish there was more out there about international startup hubs.

Some of the challenges or differences about Indian start ups which you might have to address are:

a) Visa related issues: This is taken for granted by applicants from EU and other visa-on-arrival countries but it's a huge Qn mark for Asians. eg: I still don't know if we're selected for interview will I have to arrange for a B1 or B2? Will we be able to get it within a month? (There's an elaborate application process with long waiting periods - US embassy is notorious for rejecting on flimsiest of reasons). If we get selected, I'm still bit unsure what visa will be applicable for the 3-4 months of incubation period. To what extent YC will be involved in visa process. What happens after that? Some of these things are not laid out upfront in YC FAQ as of now.

b) Incorporation: The more you branch out into Asian territories the more likelihood that for many startups it won't make sense to incorporate in USA. Or maybe have a dual structure with HQ + subsidiary in USA/$home country (Ours might be dual). On the other hand there are some SaaS cos who have a Delaware co just for ease of seting up merchant a/cs and ease in collecting recurring payments (We still don't have Stripe here).

I know this comes later in the picture but I think some of the uncertainty around these Qns would keep many an Asian startup from applying.

For someone in Boston, if he doesn't make the cut, he can always go back to his home and figure our whatever he wants to do after 3 months. He loses just 3 months of his time. For many of us it's not easy to decide to upend your roots/family everything for that one chance of making it big only to realise all the wind is out of your sails after 6 months due to some stupid visa/IRS issues or for that matter even FDI/tax guys back in our home countries (eg even huge cos like Amazon India with billions of dollars investment in their Indian arm, are still caught in Indian tax/FDI redtape - they're facing an ongoing struggle against authorities as well as entrenched local retail community. They are forced to operate as marketplace and still have to dance as music changes). There's a reason why we're #134 in ease of doing business and #179 in Starting a business (out of 189).

So I think a clearly thought out YC roadmap on visa/incorp in itself would be a huge bump to smart founders.

b) The type or quality of startups in India is slightly different than the typical SV co. The typical SV startup goes: Stanform/MIT grads, batchmates, started building a SaaS/app2.0 product in final-year from dorm -- where you first figure out how to get millions of users and then sometimes after SeriesA maybe think about monetisation. Many of them get acquihired, defensive acquisition before making a cent in revenue. The good startups here in India that I like are mostly revenue generating from day one. Enough to have founders earning 3x+ of his erstwhile salaried job. They might not have hockey-stick growth in millions within months. A hockey-stick chart of nonpaying users is as good as 1/3rd of same chart of solid profitable paying users I reckon.

c) The way you do due diligence has to be slightly different. Yes there are lot of smart founders but just due to our sheer numbers you'll also find more shady characters (which in absolute nos would be a huge jump from what you might encounter in SV, even if %wise same - so a perception problem), so you'll have to gradually build up your sniffing skills in other vectors and also set your internal founder-meter accordingly. Plus there's a lot more diversity here in social/living conditions hence the founder diversity that goes with it. Which also means the good founders might be disproportionately outliers on the map which YC or SV references. eg: IIT gets a huge mindshare in SV but I see more startups from non-IITians here.

There are lot of similar subtle things from an Indian founder's perspective. I know coz I've grappled with some of these until I studied and organically warmed up to an idea so strong that made me jump through all the hoops and decide to go for it.

Would be glad to discuss any further - my email is in profile. (or in person alongside YC interview :-)

This part of your very pessimistic comment is certainly true, and I would like to point out that this is the government's fault, not Silicon Valley's. People who aren't rich are legally not allowed to invest in startups. [1]

But the unstated major premise of your comment, which is wrong, is that investment in startups is some kind of magic bullet for making tons of money. This is demonstrably not the case. One of the common justifications for the law in [1] is the fact that high-risk investments like startups are not necessarily any better than traditional low-risk investments (like stocks in big companies), and (by some metrics) are worse.

1. http://www.sec.gov/answers/accred.htm

Occasionally a founder will get screwed by a VC. It's happened to people I know. In retrospect it's very rare that they didn't see it coming, and usually it's more complicated than just "investor screws founder." Investors have to work with the small ecosystem of each other and new startups on an ongoing basis. It's an iterated game and truly bad behavior gets you shunned. It really does.

It's actually more often that I hear that people wished they'd raised VC. I have several friends who have bootstrapped successful multi-million companies who look back over how they got there and the challenges they face now and wish they'd raised money. Yeah there are a lot of great small businesses - and bootstrapped startups - that do well without getting investors involved. But I can tell you first-hand that investors can really add value and drive entire fields much faster than they would have otherwise matured, and at the end of the day come out successful in real terms.

Founders have ways to diversify. I've executed minor equity swaps with a few friends to create a portfolio of my own. It's more "downside protection" (hopefully) than designed to replace the possible returns from my own company, but those investments have actually done really well.

It boggles the mind that in this corner of immense wealth creation and the freedom to do really whatever we want to do - if you don't want to work on something, don't start that company - what people fixate on is "investor vs founder."

Just go do it. A lot of the stuff you wrote about above really aren't things you worry about.

1. Make a small niche app.

2. Market it ferociously.

3. Don't be a slave to your job, make it the other way around.

4. Be your own #1 customer.

[1]: http://kapeli.com/dash

You may not realize that VCs are investing on behalf of the common man. Most of the LP's in VC funds are entities like pension funds who represent the common man's money.

A hundred times, this. Granted, with current technology remote is much less efficient than face-to-face collaboration. But then there is also the all-to-important courtiering side to it, which might be rather awkward to do with a telepresence robot (I guess).

I guess today you could call the Internet the city/town.

There is also something to be said about what seems to be serendipity. When there is a high concentration of people doing the same thing, you are more likely to bump into people who can help you turn your vision into a reality. This is why you hear the joke "Go to jail with a bachelor in theft, come out with a PHD in insert_high_level_crime_here."

It's something really dark in California's culture (I have lived my entire life here). From '49 to Hollywood to now Silicon Valley, its a reverberating call for people to come here and get rich quick. And in any gold rush, its always better to be the ones selling the pics and shovels than the ones buying them.

The determination behind it, on the other hand, is damned impressive.

I see a lot of smart founders give up even with a good plan. The reason? They don't have grit.

I've been on both positions. When I had no money coming in, it was always in the back of my mind and my business ideas were short-sited, not creative, and rushed. They all failed.

I go to tons of startup events where new companies are presenting and the majority of business and products I see are exactly this. I'm not sure if it's because of a lack of experience of the reasons above.

I only became successful when I had money coming in and didn't have to worry at all about it. I could focus on my business goals with a clear head. The money was a part-time consulting job. I was able to quit it after a year because I was making more with my business. It's been going strong for 2 years now.

I guess I'm different. I don't think I would ever go h ycombinator. My first business idea involves very-little up front capital, but has nice returns. I'm going to use the proceedsa to invest in my next idea, that requires some capital. My ideas are always profit-centric. If it's cool, but has little chance of making money, I don't even consider it. I consider those hobby projects I might create for fun.

Sometimes you just have to try something in order to find out whether it's working for you or not.

I'm a mix of the two. I only work on products that I know fills a void, but are also profitable.

I never once took advantage of anything in the booklet, as I was a salaryman and all of my waking hours were spoken for, which is one reason why prevailing rates for this are so low in Japan. Still, had I wanted to take advantage of the movie pass perk (50% off a ticket at a local chain), the process would have been "Call a toll-free number or log onto the website, speak with a rep for a minute, give her my membership number and the address of a local convenience store, and then consummate the transaction there." Note that at no point have I inconvenienced my HR department.

(Your offer as a perk broker to vendors is "Will you cut us a deal on N units of your service if we bring you happy, well-behaved, middle class paying customers with lots of disposable income?" The conversation goes like this: "Hello hotel chain corporate sales department. Can we buy 100 nights in your off season?" "OH YES YOU CAN." "Great! Make it worth our while." "WE CAN DO THAT." "And we'd prefer 30 day net payment terms, counting after use." "Umm could you maybe pre-pay for the whole block?" "100 nights." "30 day net it is!")