Comment by tyohn | Hacker News Reader

Comment by tyohn | Hacker News Reader

According to Techstars and Ycombinator; they pick startups because they like the founders not necessarily the business model but; I've looked at some of the startups that have received funding and I know I'm not a zillionare but they seem to have very questionable income models. If you take advertising out of the equation, I'd guess many of them don't have an income model.

Here's my guess at the business model; get the mentors at Techstars or Ycombinator to help you develop your company. (i.e. get as many people using your site as possible, probably for free) Then since there really isn't a real revenue source, after you get a lot of eyeballs you sell the company to some larger company. Wah La ~ Web 2.0

I don't want to sound like I am indorsing or rejecting anything I would just like to see more creative income models.

I know it seems like poor business, but I think it's well-suited to young entrepreneurs:

- It lets them focus on their presumed competency of making something people want. They don't know much about running a business, selling on a day-to-day basis, managing employees or even doing business development.

- It proves the product's worth quickly. A good business with a lousy product is not worth much, so focus on getting a great product first. You can criticize PG's "internet companies don't die from overpopularity" as a business model, but it's correct in practice.

- It tends to maximize the advantages of young founders: motivation, risk-taking ability and fresh analytical approaches.

- It fits with the life investment strategy that says that you take risks for large gains early in life as you build up your earning potential. Sure, young founders are undervalued, but even if they were properly valued they should still go for it.

That said, YC still does some stuff that isn't in that exact mold.

"I don't want to sound like I am indorsing or rejecting anything I would just like to see more creative income models."

I don't know how many more creative models there can be. The list by sharpshoot above gives a pretty good picture of a wide array of business models. I'm sure there are other ways to make money...but most of the obvious ones (and a few non-obvious ones) are covered by the past YC companies. I don't know anything about the TechStars companies, so I can't speak to that.

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