7Figures2Commas

You're missing a key point: it is possible for a founder to be obsessively focused on a business without engaging in behavior that causes employees severe agita.

Without starting a debate about the benefits or perils of work-life balance, most startup employees should recognize the following facts:

1. Startup founders are not created equal. In today's hot market, there are a lot of inexperienced and incompetent people running startups. These people can work as hard as they want and ooze passion from every pore in their bodies but at the end of the day, they're incapable of building successful businesses.

2. Statistically, most startups won't achieve an exit. At those that do, most employees don't "make lots of money."

3. Many startups offer far fewer learning experiences than employees would like to believe because misdirected hustle and hard work are encouraged and rewarded even though they are not correlated with competence and outcomes.

Here's the biggest problem with your approach: in today's market, it's a lot harder for startups to recruit and retain good employees than it is for good employees to find new employers.

Just look at the OP: he left an ostensibly good job to join a YC startup and he's already questioning the founder's behavior and competence. When he starts feeling pressured to work insane hours, or completely loses faith in the founder's sanity and competence, how long do you think it will take him to find a new employer that promises something better?

At the risk of being overly harsh, if you feel you're incapable of making "stuff happen" without sending random emails at 3 am in the morning or acting like you don't have control over your schedule and business or terrorizing your employees into believing that they need to be online at all hours, you're probably out of your depth and should be honest with yourself about your readiness to run a business with employees.

A lot of people in the startup community have deluded themselves into believing that "hard work" is the one and only key to success but by and large, successful businesses are built by doing the right things, not by running around for 18 hours a day like a chicken with its head cut off. Thanks to the funding boom, a lot of chickens with their heads cut off are running companies. Folks like the OP work for them at their own peril.

You're entitled to believe whatever you'd like, but if you want to make a convincing argument that being a part of YC is a meaningful advantage, you'll have to explain why, as I previously noted, the success of YC startups basically follows the same power law distribution you see across the Valley.

Even if one is generous and assumes this kind of behavior is typically well-intentioned, it's foolish to believe that it won't become a detriment as you grow your business.

A lot of startup founders don't think much about management principles and the importance of perception in an organization, but these things matter. When founders are emailing around the clock, many employees will come away with the perception that they're expected to be available at all hours of the day and night too. Your employees are never going to be as invested as you, so this typically creates stress and dissatisfaction for employees more than it motivates and impresses them.

As this Ask HN post demonstrates, a workaholic warrior complex is also a great way to convince your employees that you're an "i" word (insane, insensitive, imbalanced, incompetent, etc.).

> Is it normal for founders to send emails at random times all night to the team (most nights)?

In my opinion, this question is irrelevant. The only thing that matters is how the founder's behavior makes you feel.

You say that you have worked with people who are extremely effective but never seen similar behavior. You say you are concerned that the founder is too tired and may be exhibiting poor decision-making. And, perhaps most importantly, you don't feel comfortable broaching the subject with him.

It appears your gut is telling you that something is off here. When it comes to where you invest your time professionally, you can usually do far worse than to follow your intuition.

In a past life, I built a company with backing from a single investor. If you're going to go down the path of building a company that requires outside financing, you can never assume that a single investor has "enough cash" to meet your future needs.

Your investor could be a billionaire and there are still countless reasons he or she might not be able or willing to provide additional financing. Just a handful: legal problems, health problems, travel, divorce, death.

The problem is that many of the things founders assume to be advantages really aren't, or they're not as a significant as believed. In business generally, a lot of people overvalue and place too much emphasis on "advantages" that don't directly influence the metrics that matter, like sales, cost of customer acquisition, churn, etc.

> Next YC deal: Here's $120k for 7% of your company. Also, welcome to the club! People have heard of us! You now have social permission to tap the resources of several hundred companies, some of which are worth billions of dollars. You're a mortal lock on raising a round subsequent to Demo Day at a valuation which will make angels weep while happily investing. You have preferential access to every connection which matters in Silicon Valley, including top-tier VC firms, a pool of interested employees, potential acquirers, and vendors who you need good relations with. Comes with one free TechCrunch article, too!

Sigh.

YC has a lot of cachet and no doubt opens certain doors, but founders should never drink too much Kool-Aid. For all of the wonderful things YC provides, the success of YC startups basically follows the same power law distribution you see across the Valley and no founder should delude himself or herself that being part of a "club" guarantees success in today's market.

Just look at the experience of the founder of Dating Ring (YC Winter 2014)[1]:

And so we focused on growth. For a year, my cofounders and I worked 100-hour weeks, all major holidays and weekends. We gave up social lives and had one of the most impressive graphs at the crazy 78-company Demo Day YC hosted – 60% MoM revenue growth, with 25k in revenue for March.

We had more press and name recognition than any other company there, and my pitch was named as one of the top 8 by TechCrunch.

Out of the 500 investors there, only one invested.

[1] http://advice.datingring.com/fundraising-while-female/

If you had more knowledge of agriculture, you wouldn't make an ill-informed comment like "We laugh at middle eastern countries for trying to make agricultural industries in the desert (see: Salmon Fishing in the Yemen), but we're doing the same thing in California."

The Central Valley has the largest area of Class I soil in the world. Don't know what that means? Look it up. The climate in the Central Valley is quite unique and perfect for growing a wide range of crops. Very few regions in the world have the characteristics of California's Central Valley.

This doesn't mean that water isn't a serious issue worthy of debate. But folks like you, whose knowledge of agriculture is clearly quite superficial, aren't adding anything to the debate. You conveniently ignore how important California agriculture is to our nation's food supply and seem to be willing to pretend that ag in California can just go away without consequence. In reality, it's not the farmers who stand to lose the most if a sustainable solution to this issue isn't found; it's the American people.

> “We are probably the most risk-seeking investors in the world,” said Matt Clifford, EF’s co-founder.

This is a great quote, but the reality is more like: "If we didn't start a firm that invests in companies before they exist, we wouldn't have any dealflow."

> Despite the risk-–30% of the entrepreneurs EF funds drop out without ever creating a company –Clifford said he has no difficulty finding investors for his venture firm.

Most prospective LPs can't get into top funds, but in markets like the one we have today, they don't go home. They funnel their money into second, third and fourth-tier funds. There were a lot of these in the first .com boom.

> The best way to avoid falling into the culture fit trap is to have an honest look at why someone doesn't match your expectations. Did they not match implicit or explicit expectations? If they're implicit, are they really a part of your company culture? If they are, why are they not explicit?

The reason many startups don't explicitly state their expectations around "culture fit" is that reasonable, ethical people would find them to be unacceptable. In some cases, these expectations are associated with criteria that companies are not legally permitted to use in making hiring decisions.

> I've never met the team from Zenefits, so I can't say for certain, but if they're not idiots...

The founder of Zenefits posted here on HN that "APIs == zero errors"[1]. Anybody who has worked with APIs knows this is not the case so you may be overestimating Zenefits' competence.

> Unauthorized methods of accessing your systems shouldn't exist...

Yes, scrapers should not exist.

> ADP should be figuring out a way to give Zenefits (and any other similar companies) more secure access to their platform, not cutting them off.

From the PDF:

Despite having many legitimate ways to integrate with ADP properly, Zenefits chose an unsecure and indirect approach.

> If someone wants to manage their account through a 3rd party that allegedly uses some non-standard way of accessing ADP then that's a risk they decided to take.

From the PDF:

Despite Zenefits serving less than 0.25% of the clients on our system, they had been responsible for up to 25.0% of the total user traffic (in other words, a hundred-fold times ordinary user traffic).

The Zenefits approach was not only putting excessive and unnecessary demand on ADP’s servers, but it was pulling sensitive information, including unmasked Social Security numbers and employee banking information, in a manner that did not comply with ADP’s standards for data security.

It sounds like ADP did what any company, large or small, would do when faced with a third party accessing its systems in an unauthorized and inefficient manner.

Don't worry folks. "Gurus" will have their day again. It's only a matter of time. I personally know of a large group of gurus who have been plotting their return since 2001.

You can comfortably purchase a Ferrari with far less than $100 million. In fact, there are circumstances under which you could comfortably purchase a Ferrari with well under $1 million.

What most folks don't recognize is that you can get significant leverage on savings, a solid income and a good credit score. In the case of a used exotic car, if you purchase the right make, model and year and negotiate a good deal, you can often drive the car for not much more than the total cost of, say, leasing a Mercedes. In some cases, you can even drive the car for a while for next to nothing.

They key is that you buy used, identify a good deal, put down as little cash up front as is possible (i.e. 10%) and extend the loan term out as far as you can (specialty lenders will do 72 to 120 month loans on exotic cars). If you hit the depreciation curve at the right time, you really can't lose.

You'd be surprised how many people who could pay cash for a $250,000 Ferrari still have a car note. There's really no good reason to pay cash outright in many cases.

Glad to hear it. Hope your day gets better from here!

I know Apple keeps a lot of its cash in iMattresses.

> But wouldn't they also have more responsibilities?

From https://hbr.org/2013/06/entrepreneurs-get-better-with/:

“The average age of a successful entrepreneur in high-growth industries such as computers, health care, and aerospace is 40. Twice as many successful entrepreneurs are over 50 as under 25. The vast majority — 75 percent — have more than six years of industry experience and half have more than 10 years when they create their startup,” says Duke University scholar Vivek Wadhwa, who studied 549 successful technology ventures. Meanwhile, data from the Kauffman Foundation indicates the highest rate of entrepreneurship in America has shifted to the 55-64 age group, with people over 55 almost twice as likely to found successful companies than those between 20 and 34.

The narrative of "it's hard to start a company when you have a family and a mortgage" might seem intuitive, but the data around entrepreneurship and small business ownership in this country shows that most people don't start successful businesses when they're young, single and have limited responsibilities.

> If you are an engineer, you likely graduated at 22. By the time you hit 29, you've had 7 years of real world engineering experience.

> Good enough to start your own company, in my opinion.

I don't want to discount the value of engineering experience, but this is hardly all that's required for success. One should not mistake Silicon Valley investors tripping over themselves to provide seed funding to engineers with the creation of successful businesses. A lot of the startups today aren't going anywhere, and you just don't hear a lot about the failures because employees typically aren't out of work for long when the money runs out.

As somebody who disagrees with much of what "Silicon Valley" accepts as common sense (you can read my past comments if you care), I'd suggest that startups have to be just as careful about unrealistic long-term expectations as they are about unrealistic short-term expectations. It's just as easy to fall for "If you build it they will come" as it is to convince yourself that your lack of traction will miraculously address itself if you can stay afloat long enough.

As burritofanatic noted in his comment, the fundamental question for Casetext is "What is the incentive for a user to annotate case law?" If the incentive or incentives were compelling, you would not expect a statement like "The cases are mostly barren, and the ones with annotations aren’t particularly insightful like the earlier ones from when Casetext was first announced" nearly two years in. You'd see evidence of increasing traction.

Casetext is trying to attack a very difficult market. Bloomberg invested over a billion dollars trying to do the same thing and had very limited success. Casetext has raised less than $10 million.

If you are self-employed, you can set up a solo 401(k). The $18,000 you refer to is the limit for elective employee deferrals. You can contribute 25% of your self-employment compensation (20% if you're a sole proprietor or have a single-member LLC) as an employer profit sharing contribution. In total, between employee and employer contributions, you can contribute a maximum of $53,000/year.

The great thing about a self-directed solo 401(k) is that you can purchase physical real estate in the retirement (speak to qualified counsel about the rules). Also, if you want to buy a home, you can borrow up to half of your 401(k) balance (to use as a down payment) and, if your plan allows, the repayment term for a loan used to purchase a primary residence can typically be extended beyond five years (the typical term).

> The cases are mostly barren, and the ones with annotations aren’t particularly insightful like the earlier ones from when Casetext was first announced. This problem, I absolutely understand, given that it’s a relatively new service and the amount of case law out in the wild. Having meaningful annotations for a substantial amount of cases will be a challenge compared to a discography of 90s era rap music where the number most influential tracks can potentially be narrowed down to 50.

> My money is still on Casetext to do some damage given that easy access to annotations from practitioners and academics are important to legal research.

This is a good example of how easy it is to underestimate the importance of momentum when evaluating startups.

Casetext has been around since late 2013. If "the cases are mostly barren, and the ones with annotations aren’t particularly insightful like the earlier ones from when Casetext was first announced" nearly two years later, it calls into question the model.

There are lots of opportunities in the legal market, but trying to take Westlaw and Lexis Nexis on directly is insane.

The mortgage interest deduction is for most people overrated. I believe only about half of homeowners actually claim it, and I recall that the average deduction was around $2,000/year.

Again, if your interest is in profit, real estate-related investments are hard to beat for the average person, especially if you hold them in tax advantaged retirement accounts. Also, consider that with a leveraged product like MORL, which has total annual fees of .80%, you're leveraging at an effective cost of capital you could never get as an individual.

If your goal is truly to profit, buying a single property is far from ideal. You don't need to buy a house to profit from these markets. You can buy any number of REITs that own single and multi-family properties, mortgage REITs, homebuilder stocks, closed-end funds with exposure to real estate, leveraged products like ETFs and ETNs, etc. Most of these securities produce income.

As an extreme example, there's a UBS ETN with the ticker MORL that tracks a global mortgage REIT index. It offers 2x leverage. It currently has a 20%+ yield and distributions are paid monthly. Is there risk? Sure. But unlike a house, you can exit your position with a few keystrokes.

The great thing about investing in real estate through securities like this is that when the market slows or changes trend, you can sit on the sidelines or go short.

Are you trying to explore building a business, or are you trying to get into an incubator? If the former, taking on a co-founder is likely to be counterproductive because you don't believe there's a real need, at least yet.

While I won't suggest that incubator programs are incapable of delivering value, if your target is Western customers and one of your biggest challenges is reaching them and establishing credibility, that's a very specific challenge. You might want to consider that there are ways you can try to address that directly because there's no guarantee an incubator in the Middle East will be positioned to help you much on this front.

Places like San Francisco and Palo Alto have their own little bubbles too.

I haven't heard of Pipeline, but whenever I'm in Miami I enjoy "co-working" at LIV. Friday nights are the best.

Videos would be great. Suggestions:

For Hosts:

How to Violate Your Lease Agreement by Renting Out Your Apartment the Right Way

Dealing with Cockroach Infestations

For Guests:

How to Clean Up Properly After an Orgy

How to Blend In at an Apartment Community You Don't Belong At

Dear sir or madam,

You have been chosen to potentially receive a large sum of cash.

Before I explain, I realize this note comes out of the blue. I lead the investment fund for Nelson Titi Ayodele, former king of the Republic of Democratic People's Republic of the Outer and Inner Congo. He has been frustrated that the market for startup investments is so competitive and dealflow is hard to come by. His family is relying on him to make investments in the next Instagrams and Chatsnaps so that he can build a new hospitals to treat victims of the war on 32-ounce sodas.

So, over the past few months, we've been scraping LinkedIn and the Crunchbases, putting together lists of people who work in the technology industry at top companies. We know that many of them are tired of making their bosses rich, so instead we would like to make you rich.

According to our advanced statistical analysis, if we offer you a large sum of cash to start a company, you are 1000.5% more likely to start a company.

Of the thousands of people who work in the tech industry in SF or NY who might want to start a tech company, we have selected you to receive this special offer because you are the best but your urgent reply is necessary. To accept this offer, you must attend a special dinner at which time we will discuss the deposit of a large sum of money into the bank account of a Delaware corporation we form on your behalf. The cost of the dinner is just $500 of your time.

I look forward to your acceptance of this offer.

Sincerely,

Brother Dr. Peter Dikeibo

Chief Officers of the Investments Committeee

Ayodele LP

You're confusing the subject of potential with the subject of valuation. If Snapchat goes public at a valuation anywhere near its current private market valuation, the revenue potential will be more than built in to the valuation, with minimal discount for risk I might add.

As a public equities investor, this is entirely unappealing unless you believe that Snapchat could deliver a multiple far in excess of comps like Facebook and Twitter and at a time when valuations are already so rich.

At this point in the cycle, I do not believe it would be wise to be chasing an issue that has retail investor appeal but minimal revenue. If you're bullish on social, you could do a lot worse than to invest in the company that has the best working model.

Snapchat reportedly has minimal revenue, and is already discovering that advertisers aren't going to pony up $100 CPMs[1].

When Facebook went public, it was already generating more than a billion dollars in revenue a quarter. When Twitter went public, it was generating well over $100 million a quarter.

There is no doubt that Snapchat is an important platform and can generate revenue - perhaps significant amounts of it - but it has a long way to go before it can justify a public market valuation anywhere near its current private market valuation.

For comparison, Twitter is currently worth about $23 billion and generated more than $400 million in revenue last quarter.

Snapchat, in its current state, might be an interesting public market investment at a few billion. Above that, there are much better risk-reward opportunities.

[1] http://recode.net/2015/05/08/snapchat-lowered-its-ad-rates-f...