How Y Combinator Is Remaking Silicon Valley in Its Image
gigaom.com
gigaom.com
Who knows, maybe one day.
The write-up in this piece nicely captures what occurred at this conference. For a few of my notes of the event, see http://news.ycombinator.com/item?id=1560091.
Why? Because of Farmville. Because no one in their right mind could have predicted Farmville's success. And that's the learning. If you're good, you might be able to guess singles and doubles, but no one can guess the homeruns.
Incidentally, Farmville was not a crazy bet -- the game was a clone of a Chinese casual game called Happy Farm that was seeing insane traction in China. The US innovation was hooking it up to the non-transparent mobile subscription services that Zenga got nailed for later.
They have a business model that requires payment for anything but the most trivial uses (which is great, they'll be profitable, but it is a definite brake on growth). Hard to do that soft of thing without charging for it, and as soon as the price goes over $0 the market is much smaller.
It's a much bigger decision to pay at all than it is to pay $10 or $20.
Software companies in the valley have gotten along just fine charging for services and software with only giving users a token free trial. Microsoft and Oracle are doing just fine.
If you want to look at the big players on the web, there are far more public companies charging for services then there are whose main product is free. Akamai, Sales Force, Amazon, Ebay, NetFlix, Omniture (now adobe) I could go on and on.
When talking about public companies who give their primary service away for free, I can only think of 4examples with market caps over a billion: Google, Yahoo, IACI, and sometimes Monster.
There is a lot of hype about free, thanks especially to Chris Anderson's highly accessible book and influence, but if you look at the results and who really made it big (not 100 million dollar exit big, but multi billion dollar market cap big), starting with a business model where you charge your customers is the best way to achieve that.
The consumer space is growing (more devices and users) and the enterprise space is wide open. I can see Dropbox going after Sharepoint et al.
You're right, it might not be enough to be the next google but they might come close.
You're basically setting yourself up to have a 'gmail' pulled on your 'hotmail'.
PS: Nobody things the best way to beat gmail is to offer 1 TB email accounts. Email fell behind the HW curve but as long as Dropbox stays reasonably close to actual costs nobody is going to dramatically undercut them.
Last week I had to send a PDF to one of my students (an undergrad philosophy major) and suggested dropbox, and she already had a public folder set up.
I haven't converted to a pay using yet, but I'm at 50% of my 3.5GB. When I hit my space limit, I will likely switch.
Archangel Ron Conway, who said he’s put money into 500 companies over the last 12 years, kicked off the day with an optimistic and generous recruiting speech: He said he believes every “entrepreneur who has the guts to start a company” should get funding, and added “I believe the more angels we have in Silicon Valley the better.”
If there was no acquisition of LaLa, we'd all be listening to music for 10 cents a track on our iPhones and Androids. Hopefully they come up with something awesome at Apple.
This concept is unfamiliar to me? What does it mean? What compromises a "rolling" financing deal?
A rolling deal is when angels keep showing up over time and send you more money, rather than you setting a fixed date saying "on August 1st, I need 10 angels with $100,000 each, or my company is bankrupt".
If YCombinator culture is too strong, it may damage the necessary diversity in people conception of a startup.
A good group of people need a lot of small differents groups in order to explore the landscape of startup opportunities. So let's hope that YHacker influence doesn't grow to excessive influence.