BitGeek

The main objection of the "trolls" is the strident ideology being shown. Here's one of my replies buried in the other thread:

Anybody who build their business on nights and weekends while working a fulltime job is someone who has shown a great deal of commitment. I've done this, its damn hard... its hard not to let the startup wither away because you're too busy with your day job, and its hard not to loose interest after even 3 months of spending all your time on your job or your other job with little time for anything else.

Show me someone who built thier company that way, and I'll be interested in putting money in.

YC seems to attract and be geared for, kids in college who want a summer job with the prospect of glamorous VC money afterwards. It doesn't matter to them that they might get a raw deal-- cause they don't have much invested in it in the first place. And ther's nothing wrong with that.

The problem is that these kids are so adamant and smug that this is The One True Way To Do A Tech Startup-- that making these foolish short term choices in pursuit of a billion dollar dream is obviously right... and building a net worth of $10M by building a $3M/a year real buisiness is a "lifestyle" business-- a failure in their eyes. They are naieve and strident and there is no getting thru to them because Paul Graham has them mezmerized by the tune he's playing.

YC is a great summer camp for entreprenurial college students. But all the bashing of other ways of going about it that they do are so misguided... and the focus on only high risk, low probability business models seems misguided.

Its totaly in your control... move on, stop hanging out around the YC crowd and go build your company. Don't let YC determine your fate... they had their chance and passed.

The absense of successful rejected is simply a factor of the YC propaganda engine only talking about those accepted. ITs too early for stories about the ones that got away to be well known-- hell, there aren't any real successes from the program yet (which is also because its new.)

No. If you happen to know someone with a lot of money and, much more importantly, they know you well enough to know your trustworthy, you can often get a nice deal early in the life of your startup.

But this is not-- by a long shot-- how most startups become successful.

And one thing I've learned in the last 20 years-- the people who are worth knowing-- the really valuable ones-- they are approachable. You don't need someone to make an introduction to them.

Universally people who make their living as middlement and introduction brokers are people who are selling you something you could get for free, and undermining your ability to use it at the same time (because they are selling it to others as well-- making their introduction less valuable than contacting the person cold.)

troll: Internet slang for someone who disagrees with you, but whom you cannot come up with a cogent counter argument for.

Yes, I mean "build your thing." This is NOT the "YC model". The YC model is "build a demo so you can get VC money". This is a very bad approach-- I mean, its a great approach if you're looking to get funded so that you can get a salary. ITs a terrible approach if you want to build a business that will grow fast and make you rich. The YC model has you building a demo that gets funded and instead of getting a salary from a large tech company like Google, Microsoft, Yahoo or Amazon, you get a salary from VCs. Believe it or not, as clueless as managerment at G, M, Y or A are, the VCs are even more clueless.

You're still assuming that the purpose of your company is to demo your way into a job (eg: get "big" funding.)

Sorry, I didn't mean network with your peers (if your peers are under 25). Hanging out with other YC founders is ok, but its not networking... you need to network with people who are older (assuming you're under 25)... people with other disciplines, preferably people with significant business experience. Nothing wrong with hanging out with other 25 year olds, but that's not the point.

"Without the seriously smart hackers and designers-only rule, there's no value."

I understand why you would say something like that. and I'm certainly not saying you should spend time with kids (also under 25) who spent the last four years snorting lines of coke off of hookers bellies (eg: Havard MBAs) but your coming off like Mark Zuckerberg... there are great bright valuable people in business. And you will NOT find them at a YC infest.... because these are people who are running successful companies. You need to be networking with your possible strategic partners, or the people who will be your customers or know your customers.

.....

The reason the slashdot thread is so hostile is that the cult of Paul Graham is getting a lot of press lately and its sounding more and more like its gonna end in another jonestown.

The more people associated with the program act like stepford hackers the more you're going to see "trolling" ...and the less time I'll spend here... whenever I've expressed something not %100 in line with the PG ideology, the responses have been vehemenant and identical... not counter arguments, but repetition of the ideology.

Nobody has a need for "solutions"... you use the word "solution" in your pitch, unless its saying "I've got a solution to your specfic problem and its product X" is going to lose customers.

People have learned to tune out that smarmy vague marketing junk.

And, by the way, his two examples are off the mark-- lowes advertises products. Google doesn't advertise but when they do talk about their service they talk about the products.... the specifics of the product.

I am constantly amazed at the number of people who put vague bs on their sites.

I can't count the number of times I've gone to a website where I thought they might have a solution to a problem I'm having (specific) or a need I have (again, specific) and seen a lot of vague bullshit that left me wondering, or unable to determine exactly what it is they do.

You don't even need to be in Silicon Valley. I've gone thru the process there and in Seattle. Its not hard to get funding... if you know what you're doing.

The replies on slashdot disagreed with YC ideology, but that does not make them pure garbage. Slashdot is read by an older (more experienced) crowd than news.yc. It would be a good idea to understand some of where they are coming from-- after all they were around during the last boom when the average YC foundre was not yet a teen!

People whose business it is to fund companies are always lookng for good companies. IF the person who is looking to invest is a good person-- then you will have no trouble getting in touch with them-- if your idea is good.

People who don't quite know how to start a business may need coaching before they can communicate... and remember, of course that %95 of the people who represent VC funds in the Bay Area (and anywhere else) are flatline idiots.

so, think of it as a test of their intelligence, whether they get your idea, rather then your worth.

Also it seems to be common that people think that "connections" are important-- they aren't. Not at all.

You often hear the advice "get someone who knows them to introduce you"... that's if you're chasing money. But don't chase money. Build your think, network with your peers, and the money will chase you. Because your peers will say "damn that's cool" and the money will hear it.

Hell... why do you think VC firms hire all the MBA fools from HARVARD who know nothing about technology and whose only education at harvard was doing lines of coke off the bellies of hookers? their only purpose is to find deals.

Of course, I get modded down to -1. Its really easy to mod down someone who disagrees with you, much easier to do so than to actually think about what they said.

The smartest %30 of china is greater than the entire US population.

The 1% of chinese population that is the smartest is a far greater number than the %1 of US population that is smartest. Both are the same proportion, but there are far more smarts in china because they have far more people... and the smartest %1 is drawn from a bigger pool.

But go ahead, believe what is convenient. Its the american way ... and why america is not long going to be the dominant country, financially or technologically.

If you're smart, you'll be looking at the rest of hte world, instead of being xenophobic.

Its a great deal for a blog or anything normal...

If you need the bandwidth though, you can go to S3. Easily you could host your html at their site and then use S3 for the big files ($0.20/GB BW cost, $0.15GB storage cost at S3).

I think site pricing is based on the theory that people think that bandiwth is expensive and they are afraid of using too much-- so Dreamhost offers huge bandwith in their plans--- but they won't actually let you use it. Most places are like this... which makes nearlyfreespeach.net a really good-- honest and straightforward-- choice.

Amazon's uptime is not that great. In fact, Amazon is probably one of the worst run "engineering" companies around. They hire bright people (generally) they just don't make them managers.

Before I left, my manager (after a reorg) was a totally incompetant jerk whose prior training was a degree in "criminal justice". He knew nothing about software development, and had been at amazon his whole career- 7 years managing programmers.

I am amazed that they have only a few days of downtime a year.

I wouldn't be using S3 myself, except that (contrary to advertisements) its not run on the same "proven" infrastructure as their ecommerce platform-- but a new one built by a seperate team, and that team isn't hobbled by the incompetance that has built up over the years on the ecommerce engineering side.

I've figured out what that odor is... I couldn't quite put my finger on it for the longest time, but now that I've identified it, its very distinct.

Its smug.

"everything I've seen and heard so far"

Of people on this planet in the %99 of achievement-- intelligence and creativity-- China has far more than the US.

Ok, you've just heard different, and if you think about it, its mathematically true.

Apple just ordered 500 million 4GB flash chips from Samsung, this is on top of their long term contract with Samsung. This is far more than can be accounted for by the iphone or ipod demand (And are expected to be shipped by the end of this year.)

Intel announced Robson technology awhile ago, which ships in their "Santa Rosa" platform which is scheduled to ship in May - this month.

Apple has gone a bit longer than usual in releasing laptops... they are overdue for both MacBooks and MacBook pros.

On June 11th Steve Jobs will be giving the keynote at WWDC.

Last week Apple announced that they would be shipping laptops with LED based displays "later this year". Such a change will require a design change in the laptop- eg: a new formfactor. It might be like the aluminum books now, not really a new looking formfactor compared to the Titanium powerbook-- but thuroughly new internally.

Thus, I think the odds are very good that new laptops will be announced on June 11th and that the difference will be significant enough that its worth waiting a month before buying your mac.

Did you try running under parallels?

Anyway, 5 years ago, getting Linux running on a Powerbook was really easy... I would think it would be better now, not worse...

You're giving me rumor and second hand inuendo and no stats. You say you can't remember them offhand, but I don't think you ever heard any-- that weren't made up on the spot.

The fact of the matter is, there are many very successful startups in Seattle, Portland, Chicago, New York, Boston, Houston, Dallas, Los Angeles, etc. etc. etc.

People in the BAY AREA think that the BAY AREA is necessary for success for a startup.

But they are not taking from any kind of a scientific knowledge.

Its just provincial arrogance.

There's a lot of irony there, but I don't know how to make you see it.

I know you beleive that, but just look at the number of startups using MySQL.

Well, you know what they say-- those that can, do. Those that can't, teach. This goes doubly for entrepreneurship "classes".... though maybe I'm too harsh and that guy had actually started a business.

In terms of the number of millionaires or centi-millionaires in this country-- the vast majority of them got that way with "lifestyle businesses".

The problem is that the term "lifestyle business" is just derogatory-- it has no meaning.

Who are you to say that lifestyle businesses are not focused on growth? Or that they cant' grow fast and change large numbers of people's lives?

There's a big difference between a restaruant and craigslist.

enki-

You need to set up a forum for prospective YEurope startups to communicate about the idea. I don't think this discussion is going to happen on this thread.

If %50 of the value of YC is the fact that they require startups to locate in Boston or SF, then any startup who doesn't get into YC can get %60 of the benefit by simply relocating.

Seriously, I hope that %50 of the "benefit" of YC is not moveing to an expensive location where every resource you could need for a business is constrained.

I've seen no evidence that locating outside of SF or MA reduces your chances of success. (Though this is often claimed, of course.)

Man, I'm amazed at the bitching here... Someone's trying to help foster startups in europe! The horror! There's no way it can be decent, right? Jesus.....

Its not like the idea of doing early stage funding is that new, nor is the idea of havign an application form new. Ok, so the questions may not be original-- but that's flattery, its not like the YC form is a trade secret!

Getting startups together for a fixed period in a fixed place is relatively new, and seems to be a YC idea. Ok, so what does it mean when others emulate this? IT means they think its a good idea! How does this hurt YC?

YC is evangelizing a different approach to early stage funding. Now others are emulating the idea-- there is no way in hell that this can be a bad thing!

This is called success!

Do y'all who were rejected by YC hate the fact that there are now other options?

Or do you think that these people are going to steal all the "good" startups from YC diminishing their pool?

This article highlights an area of confusion, I think. Of course, any new business is a startup. So, even your aunts diner that is opening soon is a startup.

But when we talk about a "startup" here generally we're talking about a technology startup, or mroe specifically, a web oriented technology startup.

But we're not necessarily talking about: Funding, organization, theoretical growth rates, etc, for that company.

So, I think the term "lifestyle business" should be banned or rejected by this community. Its a derogatory term used to apply to people who are chosing to go a different path, with the implicit assumption that that path is lame (eg: low growth, low chance of getting rich.)

There are certainly a lot of choices that founders have to make with regards to whether they are building a real business or not (EG: something sustainable that will make them rich even if a $10B+ company doesn't buy them in 24 months... rather than something that's a feature built to flip to someone with a real product offering.) ... and funding, location, team size, team composition (eg: when to hire marketing or sales people), etc are all independant of whether you're building a business.

You could bootstrap a company built to flip, or you could use VC money to do it. You can use VC money to build a real business, or you can bootstrap a real business.

But I believe, strongly, that building a real business is the only way to go-- its the most likely path to getting flipped, and its the way you will end up with something more than an adrenaline hangover after 24 months.

I hope this is making sense...

In summary, focusing on the business is the path to success... and recognizing all of these choices (including who to take money from) have advantages and disadvantages for the business case. For instance, one option might make great short term financial sense but be damaging in the long term-- if its a build to flip situation then you don't care about the long term. But in making that choice, you're risking the flip taking longer than expected....

So, build a business.

PS-- Justification for this long post: I was recently talking to a startup, and they are totally focused on being acquired within the next 18 months. Thats their plan. Their only plan. Every decision they make is with that assumption, and they are going to be in a world of pain 24 months from now if they aren't acquired in that time period. Worse, I think that if the followed a the right strategy, between 18 and 48 months from now they'd grow from a $250M business to a $4B business.

I've just unsubscribed from the venture hacks feed. Two articles of bad advice in two days... and I am not interested in getting VC money anyway.

Too much time would be spent debunking their self-serving misinformation, and nothing to be gained....

I've been subjected to meetings without chairs. The problem is, there are some people for whom standing is not much of a burden and they go on and on. So, I was forced to stand there at this daily mandatory meeting while people talked about stuff that was not relevant to the work I was doing for 30 minutes.

If you want to have a standing meeting, that's fine, and it can be good-- but I think the rule should be no meetings can ever be mandatory, and anyone can leave any meeting at anytime. If the person calling the meeting doesn't have an agenda compelling enough to get people to show up, then the meeting shouldn't happen anyway.

I will no longer stand (literally) for mandatory meetings. (Which is, just another of the daily things I am thankful for about being my own boss.)

IF they were doing that much business, they shouldn't have taken venture capital--- but they, like most entreprenuers and people who get bad advice-- don't account for the real cost of venture capital.

That real cost is $24B in this case.

A quickly growing business can get funding from a variety of sources, many of which will take %6 payment, not require %600 and force you out of the business.

....but it sure is interesting to see all the different ways that VCs try to screw people-- re-vesting is something I saw in the past, and it didn't make sense to me then, but I have since come to understand just how asinine it is.

What would you do with $5M anyway? Would that cover your salary for a year? Or for 50 years?

I'd like for people to realize that venture capital is not a fantasy, it is a nightmare.

If you're a founder and you're vesting, you already have failed math and really should go work for someone else. :-)

Seriously, you founded the company and earned the shares... you paid for the investment when you were dilluted by the shares issued to the VC.

Any VC that asks you to re-vest is just double dipping, wants more power, and wants to be able to more easily push you out of the company.

The people behind venturehacks are VCs, they are posting from the perspective of wanting to be able to double dip like other VCs.

(and anyway, its 2007-- you don't need venture capital.)

38, Started multiple companies in the past, worked for a dozen startups to boot, my co-founder is also my life partner, no kids, no roots.

Going to live in bulgaria or somewhere like that, live cheap, grow fast, hire local talent.

How does this compare to the age distribution of applicants?

Ah, I see venture hacks isn't really on the side of the entrepreneur after all.

Any VC that asks you to vest your shares is a VC who is trying to steal from you.

The business pre-money valuation is value you created. Your ownership of that is property you have EARNED.

When you take VC money, they get a percentage of the company, and your ownership is diluted, but at the same time the value of the company goes up, as it now has more cash assets in the bank. The end result is immediately post money the value of your shares should be about the same as pre-money, only the ownership percentage of the company is less.

This is fair, and this is the consideration you give up in exchange for their investment.

However, if they ask you to also re-vest your shares, are asking you to give up you property (and your voting power) in the hope that you will "Earn them back"... which first assumes you hav eto earn them (eg: it is a losss of property if you don't own it anymore) and secondly assumes that they won't have pushed you out. While your shares are vesting you can't vote them, which gives the VC even more power.

Finally, they are not giving you consideration for these shares you're putting in jeapardy and so they are simply asking you to give them something for nothing. The investment they are making is already paid for by you in the dilution you are experiencing.

There is absolutely no reason for a founders shares to re-vest.

If your ownership in the company is not enough to ensure your interests are aligned with the VCs (Who really can't do much to make the company do well, but you can.) then the VCs wouldn't be investing-- period. So the alignment of ownership excuse is patently absurd.

No reputable VC will ask you to vest your shares. Only a thief would do that-- you own the shares, and asking you to give them up for nothing is trying to take advantage.

If a VC wants to put you on a vesting schedule to keep you incentivized.... let him offer you shares out of his pool to vest into.

Anything else is exceedingly greedy on the part of the VC.