Hacker News Reader

Comment by sebmellen | Hacker News Reader

This article shows its age with the quote:

> The median startup coming out of Y Combinator wants to raise $250-500k.

I think raising comparatively small amounts stokes a kind of vigour you can't get when sitting on a few million in cash. I wonder how this dynamic has shifted the outcome of Y Combinator alumni companies. Perhaps we would have more Googles if this trend of raising less had persisted.

Money breeding laziness is also what killed ICOs. Naive teams with revolutionary ideas (which may have changed the world in startup form) raised tens of millions of dollars. This money removed the need for groundedness and scrappiness in the development process. As a result, a lot of value and time was squandered on tech that hasn't panned out.

View on HN

I think it really depends. Money in the right hands can be amazing because you can aggressively pursue an idea that takes a lot more money to get off the ground. This requires a clear idea of what matters to the business. If you don’t have that idea, money can allow you to pivot and tune your product quickly and hire the very best.

The downside is the temptation to do everything, to not make decisions. Money enables you to do that too with disastrous results.

In short, money is great. Not having a clear, disciplined strategy is the problem.

I'm not sure I agree with that.

Of course there are many moonshot projects where money is of vital importance. But for most things, the market is the best signalling mechanism available. Having little money forces you to be very attuned to the signals of the market, giving you an advantage over those who might insulate themselves from that feedback mechanism with a buffer of money.

It's hard to keep yourself attuned enough while also having money in reserve, though perhaps it is possible to have enough discipline to do so.

I think that’s totally true in cases where the market is a rapid and reliable feedback mechanism. It’s a delicate balance, and I can see how a large bank account leads to avoiding the hard choices or the rapid iteration necessary to find a good product market fit. See Quibi.

However,in some industries, the relationship isn’t quite as straightforward. I work in biotech, so in my case the market is realistically not going to be part of the story until we have a drug, which will be a long time from now. Until then our “market” is pharma partnerships or financing opportunities, both of which are only partially rational exercises in value determination. For us, lots of money is helpful to weather the storm and really build a great technology. There’s also little risk that if we treat a disease, we won’t have people want the treatment, so product market fit isn’t quite the same issue.

That said, it’s easy to lose focus by forgetting that the tech isn’t the point (finding a good drug is) and that we can’t try all options. But those are in our control.

>Money breeding laziness ... killed ICOs

ICOs were killed by Solidity and the Ethereum ecosystem more generally being insufficiently expressive to create anything of value other than pyramid schemes (insofar as those have value).

Reply on news.ycombinator.com