Y Combinator’s Paul Graham: We’re Looking For People Like Us
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Some people are born with some of these factors, but the truth of the matter is that persistence matters most and if you are persistent most other things can fall into place or be balanced by other factors.
Lots of people are as smart as the Google founders, lots of people have similar educational background. Superstar co-founders, much as athletes, are people too. The major difference between them and you is that they continuously try to do the best they can do and do not quit when the going gets tough.
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I think this is the quote I remember...:
from http://paulgraham.com/notnot.html
"There's nothing wrong with being unsure. If you're a hacker thinking about starting a startup and hesitating before taking the leap, you're part of a grand tradition. Larry and Sergey seem to have felt the same before they started Google, and so did Jerry and Filo before they started Yahoo. In fact, I'd guess the most successful startups are the ones started by uncertain hackers rather than gung-ho business guys."
“There are some people who just get what they want in the world. If you want to start a startup you have to be one of those people. You can’t be passive and wishy-washy.”
Does wishy-washy mean something other than unsure?
However, I wonder when we begin to cross the fine-line between naughtiness, white-lies, small-rule breaking and moral flexibility to privacy-violating, scamming, propaganda spreading and even law-breaking actions.
In a world where one will do anything to win, it seems all too easy to fall by the wayside towards morally-questionable deeds.
Think about the difference between success in the military versus success in a small business. In the Army, a protocol faux pas or a single ill-considered statement can implode your career path. Understanding of and adherence to the rules is job 1.
In a startup mode, you can ignore conventions/rules, because those things are often not relevant to a tiny company. That doesn't mean that you have carte blanche to rob a liquor store -- but it does mean that you don't need approval from a VP to fill out a 4 page expense report to buy a bottle of booze for a client.
I think much of what's excepted in today's business environment can be summarized by the following statement:
"It's easier to ask for forgiveness than it is to get permission."
This logic has been used to justify all sorts of questionable actions. It's what Pincus was speaking to when he said, "we broke every rule in the book" or when Facebook unilaterally changes a once private profile to a public one. Heck, I'd even characterize Google's Buzz in this category.
Businesses do this all the time. I don't necessarily blame them. Most times it's easier and quicker to simply execute on an idea and see if there's any backlash. Much of innovation comes about this way so I do see the value in it.
But I also see the negative consequences of it.
I have to disagree. Some Armed Forces employ quite different type of organization, called Auftragstaktik.
Is it immoral to gather personal data and then share it on the internet? (Facebook personal profiles going public.)
Is it immoral to pay a PR firm to portray a competitor in a negative light if it means highlighting their questionable practices? (Facebook hiring a PR firm to highlight Google Social.)
Is it immoral to characterize a service you offer one way while leaving important details to fine print or convoluted text? (Zynga's lead gen offers, DropBox security.)
If you followed PG's record, you'd know how strong an advocate he is that startups be good.
For example - Zynga selling offers (for credits) with very fine print that signs you up for paid services. And the fine print is so convoluted/tiny most people don't read it. Helping or hurting consumers?
- Facebook hiring a PR firm to highlight questionable privacy practices by Google. Helping users or hurting Google?
- Subprime mortgages. Helping or hurting homeowners?
You're assuming your conclusion. Punctiliously following convention doesn't make you good. It just safely ensconces you near the mean. Not a promising place for startup founders to reside.
Calvin from Calvin and Hobbes is naughty. He's not evil or even "morally-flexible".
English isn't a computer program - there are many interpretations possible. I suspect that they didn't even see the other interpretation of their language around security until someone pointed it out to them.
Google walks into this minefield and says "You know, we're going to crawl and cache everything, then exploit the data in it for our own selfish commercial purposes." And it worked!
http://en.wikipedia.org/wiki/Google_Book_Search_Settlement_A...
I also think Google broke and still breaks rules, just your example is not very good. Interesting that this reply of yours is upvoted over paul, pg and tlb in this thread.
Think of it this way. As children we all needed to compete for the attention and resources of our parents, otherwise we would have starved. So typically the oldest child uses the strategy of being charismatic, in order to manipulate the parents into paying attention to it. The the second child comes along, but by this point there is no way it's ever going to out compete the oldest child on the axis of charisma, because the oldest child just has too much of a head start. So the second child often acts kind of sickly and pathetic, again as a different strategy for manipulating the parents into providing attention and resources.
The point is that in order to succeed in a startup, you need to be well versed in a variety of these strategies in order to get other people to help you. Otherwise you're not going to get any of the resources you need, because you're way too small and pathetic to be worth caring about based on any intrinsic measure of worth.
naughty --> mischievous
entitled --> relentless and determinedThey want these types of people because they have the highest chance at success when failure is the norm.
http://www.schneier.com/essay-306.html
http://money.cnn.com/2005/08/05/technology/google_cnet/
https://www.recordedfuture.com/ ( Google and In-Q-Tel both major investors )
http://thestockmarketwatch.com/stock-market-news/recent-even...
http://xsreviews.co.uk/2011/05/google-to-lose-500m-to-antitr...
Could keep going for a while. My point is simple: It is easy to forget the "bad" when everyone focuses on the "good"
The closest the is the anti-trust settlement, but the reporting around that is kind of murky. I've never seen a proper report of exactly what it related to.
The others are arguably good. For example, the Schneier article is about how Google has a interface to Gmail to allow it to retrieve data when it receives a warrant. That was what got hacked, but I think saying that makes it evil is a pretty long stretch.
Tech is so hopeless ingrained with the speculative investment market, they've adopted the worst biproducts of it.
Twit is Leo's tech shows..which are still tech focused. Twist is Jason Calacanis' shows which have a VC/Angel 50% focus.
So you would think that there would be dozens of papers that analyzed the trolley problem from the point of view of what makes an algorithm ethical or unethical, but this doesn't seem to be the case. (E.g. why not imagine a universe where the people on each track had to somehow bid via differing auction mechanisms as to which direction the train went, why even imagine a person at the switch at all?)
I am somewhat interested in questions like whether or not it's morally acceptable to lie to a system or a (non-conscious) robot. At least on the surface this doesn't violate any of Kant's moral objections to deception. That is, Kant said (more or less) that the reason why lying is unethical is that it deprives the other person of their ability to make a rational decision, and our rationality is part of what makes us human, so lying is unethical because it deprives others of their humanity. So e.g. is it unethical to lie to about your age on a porn site? It might be, but if it is then we'd an entirely new framework to justify that sort of thing.
It almost seems like based on the power imbalances between people and algorithms, and the traditional justification against lying, it would almost be morally virtuous to teach your children to lie, as long as they're lying to a machine and not a person. (Of course a machine could be composed of people who are following an algorithm when interacting with you, but they still aren't making any sort of autonomous decisions for themselves.)
Anyway this type of problem is a little different than the problem of what makes the systemic design of a social system ethical or unethical, but they're both just different sides of the same coin.
I'm sure there were otherwise nice people that were Nazi soldiers. And there are probably a few nasty people who work for Google to create products millions of people love.
As social systems, as you call them, grow larger and more connected it may make the ethical positions of systems more important. The problem is that most corporations are inherently amoral, and governments almost always think they are the good guys.
Nb. I think that recent discussions have put a moderate damper on this, and perhaps the newer ranking algo (in which flagging has greater weight I think?) has played a part, but the problem remains.
More likely, what's actually needed is a balance. And, interestingly, the kind of person that makes a good entrepreneur is probably on the psycopathic side of normal. A very nice article in the Guardian made this point at the weekend - http://www.guardian.co.uk/books/2011/may/21/jon-ronson-how-t...
If you limit your statement to "all the rules of the society in which you live", I'm not sure your statement is true. What do you think of Oskar Schindler? Womanizer, cheat, Nazi, fraud, and traitor. Yet he saved the lives of hundreds of Jews during the holocaust, and ended up as the hero of a movie.
If I break a rule, I still can stare at myself in the mirror, and I will even be able to tell this to my children when they will be grown-ups. If I happen to break one of my moral principles, it will be another story.
This is nothing new, Confucius taught this long time ago already.
http://www.paulgraham.com/founders.html
and also this:
http://www.paulgraham.com/good.html
Combined, the message is: focus on the high bits of good. If someone establishes a clinic in a poor country and saves people's lives, I'm not going to hold it against them if they do it with supplies that fell off a truck.
I actually have read those. I admit, part of my reaction was purely personal. I want to found a company so much it hurts. I'm smart, resourceful, creative, and determined. But I wouldn't say I'm used to getting my way, and breaking rules -- even in service of a higher goal -- makes me very nervous. (Think Hermione Granger.) So reading this was like getting hit in the gut. Not that it will stop me, but it highlighted how important the emotional aspects to founderhood are and how far I still have to go.
I've seen this trap with a lot of people who did well in school. For 12 formative years you're rewarded for performing tasks to spec and following rules, and you grow up and find that the things you really want to do involve transcending all the traits that got you where you are. That's the element of Google I'm referring to, I suppose. They make almost a cult of academic success, and for some people that was a kind of shining hope. And you, frankly, fit right into that. So to hear you say that guts might matter more in the end than brains hurts, even though I know you're right.
Andy Rubin (Android): "That's the way Google works, don't ask for permission for an idea, just go and do it. And then, when you are way beyond the point of no return, you're like, 'I need $200 million'"
Wesley Chan (Google Toolbar, Google Analytics): After Larry Page told him the Toolbar/Popup blocker was the "dumbest thing I've ever heard", Chan, a 'lowly' Associate Product Manager at the time, surreptitiously installed it on Page's computer and waited for him to mention how much faster his browser was running.
Paul Buchheit (Gmail, Later Friendfeed, Facebook, YC): IIRC he was the one who pushed for putting ads in Gmail based on the content of emails. When Google deployed this, it generated significant controversy and almost everyone considered it 'naughty' to say the least. Today, Gmail is the only place other than a search engine where I (and likely many others) click on any ads. The ads were important because providing Gigabytes of storage to millions of users for free is not scalable without generating revenue.
Google even tried to formalize naughtiness by making 20% projects, usually done as naughty skunkworks projects, part of the rules.
Now it seems that YC has learned empirically that determination is the more important predictor of success (see intro to The Anatomy of Determination).
A concern for YC might be: with this new emphasis on determination, it might become the next thing applicants try to "fake" to get accepted?
"All of the violinists had started playing at around age five, and they all played about two or three hours a week during the first few years. However, around the age of eight, an important difference began to emerge in the amount of hours they each practiced. By age 20, the stars in the group had all totaled 10,000 hours of practice over the course of their lives; the “good” students had totaled 8,000 hours; and the future music teachers just over 4,000 hours.
What the research suggested was that once you have enough talent to get into a top music school, the thing that distinguishes one performer from another is how hard he or she works."
Being in Silicon Valley, I meet smart entrepreneurs all the time. Many of them come from places like Stanford. I think many pass the basic threshold of intelligence. In fact, this is more than passing considering that it doesn't take an elite education to create a good company IMO.
Obviously, not all these people succeed and so the other factor behind success is likely to be what you said: determination.
And although I tend to agree, let me play devil's advocoate for a moment. "We learned quickly that the most important predictor of success is determination."
A more important predictor of success could be, ambition. It's different from determination because with ambition you need to make it big, but with determination you just have to have it.
Determination is the wrong thing because to make a startup succeed you have to want it, but you also have to want to make it big.
In fairness, pg touches on this when he says, "I don't know if it's exactly right to say that ambition is a component of determination, but they're not entirely orthogonal. "
They simply don't have enough data yet for an accurate model of recruiting.
It's incredible to think of the value that has been added to so many companies for the price of a single large series A.
Edit: That was excessively brief. So many parts about the whole investment cycle were broken. Some are marginally less broken now. Having a negotiation between a fresh engineering graduate who does not know what "pre-money valuation" means and the principal of a firm with 9 figures under management, and expecting that negotiation to produce an equitable or efficient outcome, is broken. Contacting angels serially is broken. Using who has attended a dinner party with your buddies as the most efficient screening method available for predicting skill with conversion rate optimization is broken. Investment outcomes where the company succeeds and founders do not end up rich is broken. The work culture in Silicon Valley is insanely broken. etc, etc
YC has unbroken some of these. It turns out that an application process and a few weeks with a team scalably works as a decently efficient proxy for success. It turns out founders can be taught what pre-money valuation means and when they know this they get screwed less often. It turns out that spending half of one's time raising money is, as expected, just a deadweight loss.
Of course YC is overall a mix of interview and internship and summer camp and summer classes and more. The above is an attempt to think through one of the threads.
It used to be implicit that some angels were saying "If you're good enough to be in YC, you're good enough to get investment from me." That is now 100% explicit for at least one deal. The vetting is getting outsourced, streamlined, and productized.
>> turns evil and sells out the brand
I imagine that his applicant pool is becoming more and more qualified over time, giving him a graduating 'class' that is constantly improving.
Thus it is a little scary that every Y-combinator class is bigger than the previous one.
However he is also figuring out how to scale the model and provide more assistance. For example current graduates benefit from finer tuned screening, have more kinds of assistance available, better assistance (pg knows more than he did when he started), a bigger network to draw on, and save more otherwise wasted fundraising time.
On balance the result is that classes seem to be getting better, not worse.
However I guarantee that a point will be reached where the Y-combinator model can't keep improving and growing at the same time. At that point his personal financial interest will still be to keep growing the program. It will be interesting to see what happens then.
Damn, that's a good return, if you assume all positions were held and an 8% stake taken then that should yield $240 million, or an ROI (CAGR) of 116% since 2005. (This assumes the 5 million was all invested in 2005).
Anyone have a good metric to factor dilution from future rounds?
I know other YC-a-like organisations have started up elsewhere: have any of them been running long enough to get any idea of long term success yet?
It's crucial to look at the founders, because that's what does the work. Just as Catmull says of movies, a successful startup is made of many creative ideas; also, many implementation challenges, flexible adaptations and tests of determination that is very hard for one person to handle.
A startup is an on-going process, not a one-off event.
Then again the companies will probably be worth even more by the time they reach liquidity.
The total value of YC companies is $3 billion. While, the total amount invested by YC is $5 million.
Very impressive results when you consider that YC takes about a 6% stake for its initial investment. Congratulations to all involved.
http://www.forbes.com/forbes/2010/1108/best-small-companies-...
As YC funds more companies, the value of the "We're a YC company" branding diminishes faster. Whatsmore, there's some curious economics in how YC companies do business with other YC companies. If the bulk of customers of YC companies are other YC companies, then you what you have is basically just a pyramid scheme. It's also kinda lame to hear Paul Graham play favorites and talk about how great Sam Altman is all the time.
The YC brand has improved over time drastically despite the increase in companies. When I started in the first YC batch, there were only 8 companies but the only angels that could bother to show up to demo day were just some of PG's friends. Now, demo day is a who's who of SV investors, even though they have to sit through 5x as many presentations!
With the value of YCs portfolio companies over $3 Billion, it's ridiculous to make the allegation that YC is some kind of pyramid scheme.
Aside from the visual violation, nobody should hide their digits under socks in spring/summertime. All feet look good; nothing a good pedicure can't fix.
Birkenstocks are a kind of footwear. Lots of people like them. What's the point of getting affronted by this? Does it make the world anything other than worse?
Understanding that people judge you by how you dress isn't snobbery, it's accepting reality.
I think it has more to do with maintaining a kind of legitimacy/authenticity within the hacker community than anything else. It's just good business sense to be the opposite of what geeks don't like/understand: VCs in suits. When you're in the business of funding businesses, you want to be approachable.