Paul Graham, Changing the World and "Built to Flip" Startups
25hoursaday.com
25hoursaday.com
We would always prefer it if founders turned down acquisition offers and kept growing the company. Any investor would. The reason some YC startups get bought early is not that it's the optimal outcome for us, but that we're willing to get less than the optimal outcome if that's what the founders want.
That's my $0.02 anyway.
I do think there are several YC-funded companies that have as good a chance as any other startup at their stage. Loopt is obviously one. There's another that's almost as old but is building something so big that they haven't launched yet. More recently than that, it gets harder to say, but there are at least 5 more I wouldn't rule out.
"In the past quarter, for the first time in 30 years, not a single tech company went public." (http://www.wired.com/techbiz/startups/news/2008/07/portfolio...)
PG's article is about working very hard and then it's over, through some kind of exit (acquisition or IPO). This is what "built to flip" means to me. If founders "kept growing the company", they would just have more of the same very hard work and stress (by my interpretation of the article).
(To me), the alternative to a built-to-flip company is one Warren Buffet would like. It has an economic moat (durable competitive advantage), putting it in such a strong position that you don't need to work so desperately hard. You can continue to deepen the moat, it's no longer life-and-death stress.
I think I'm missing something - maybe PG's [8] footnote, that a startup is choice (a): you don't love building the company. It's just a means to an end, of financial independence.
I 'd like to do work I love, within my own economic moat.
Seems like this guy doesn't understand how YC works (and judging by some of his comments, OP as well) any more than the last troll. YC doesn't hire anyone other than the occasional caterer (and to my knowledge, none of them work 80 hour weeks).
PG invests in people and says to work very hard (not as a mandate, but as advice, which he gives just as freely to people he doesn't fund) and in the troll's mind he's hiring them and forcing them to work for 2 months without sleep.
My question is, why does this sort of stuff keep climbing up the page? It's not interesting, it's not well thought. It's just senseless accusations from people who apparently didn't even take the time to read YC's FAQ.
He's arguing against something that doesn't exist. I don't know about other articles, but this one was attacked as nonsensical babble because it was.
We already have revenue and hopefully we'll have profits soon.
These blanket statements bug me - everyone else forgets about or chooses to ignore Wufoo.
Posterous, our YC-funded startup, is 100% committed to changing the world by bringing publishing online to the other 90% of people out there who know how to use email but don't know how to use complicated blog software. And we're pretty sure we'll be able to do it well enough that people will be willing to pay for the right features.
Finally, regarding the quote from Austin Wiltshire: "Who will end up really getting the spoils out of any of YCombinator’s work? Paul Graham." This quote strikes me as absurd on its face. YC takes an average of 6% but speaking from personal experience the value of the mentorship and connections far outstrip that slice of the pie. This isn't even including the access and network you get from the hundreds of other founders who have passed through YC doors now.
It's completely misguided to think that YC has some sort of strange or malicious goal of taking advantage of unassuming hard-working startup founders. Paul didn't HAVE to create YC, but he did it to serve a need he identified -- to help smart hackers like himself 'solve the money problem.' The business world rewards owners, and YC / PG is giving smart hackers a push in the right direction towards owning their creations and their destiny.
As for deciding whether to flip or not-- Google, Facebook, and every other world-changing tech firm you can think of had the chance to flip a thousand times. They said no. Making that decision is a part of a founder owning their own destiny. YC is there to help startups get to that point. What you do when you're on the threshold is your choice.
Search engines changed the world in a big way, and Google continued with that. Google makes a ton of money as a consequence.
Wireless Toll Payment changed the world in a small way, which will probably get bigger in time. But for now, toll roads are just a bit more convenient to use.
You can also change the world in a big way that doesn't generate much money at all: YouTube.
This was also true for Google for about 2-3 years after they started - perhaps more. I think we should judge Youtube after a few more years. Everyone accepts it has changed the world in a big way.
Yes, people who work for YCombinator startups tend to work a lot of hours. There is a simple reason for that: Anything worth doing is hard. It takes time and passion and constant attention. There is no free lunch.
Paul Graham isn't a damn cult leader. He just talks sense. Imagine you have only 3 months to build something so impressive that a venture capitalist will give you a million dollars to continue building it. What would you do? Work a four day week like 37Signals? Or spend every minute you have working hard to make something amazing?
People get defensive when they feel that you're implying they aren't working hard enough. Starting a company (especially a YC company) is an extraordinary situation that calls for extraordinary measures. Please stop making a big deal about the hours people work and focus more on what they build.
Note that this is DURING YC-- the most intense months of hte experience. Since then, these numbers have declined a bit.
I really love the "unconditional love from a cult leader" part of this particular string of trolls. Paul is decidedly NOT loving-- in fact, he's kinda brutal. :-)