Hacker News Reader

Comment by bearjaws | Hacker News Reader

My pessimism in startups is how much its been gamified. Ycombinator has essentially created a class of people who are now chasing their achievements (unicorn status, Series A, B, C etc...) and the startup is only a means to that end.

This leads to a rat race by which instead of making the best product to solve the problem they originally intended, they try to market their company as best as possible to VCs.

The idea was always build something impactful and make it as profitable as possible via fulfilling your company's mission. You can see the ramifications already in the last 2-3 rounds of startups, all of them looking for easy money "uber for X" "AI for Y"...

View on HN

This is a big part of it. I advised a founder who has gone through 9 startup accelerator programs worldwide (I told him to stop after the first one but he didn’t listen).

Each one gives him some new way to ‘level up’ in the game that is startups, without having to launch a real product or business. It’s all about grooming the startup to look good to VCs.

I joked with him that his real business should be consulting with startups that go through accelerators since he’s a veritable expert at it now.

Wouldn't that have diluted him significantly? Or were they new products each time?

Same product every time. Not every accelerator took equity. Some were government or university sponsored programs.

So how are they doing now?

As someone who has gone through y combinator twice (I recall it just starting to become cool the first time), this problems solves itself right?

They’ll run out of money in 2-3 years if it’s not working.

>> They’ll run out of money in 2-3 years if it’s not working.

No. They won't run out of money in 2-3 years, they IPO. Or at least, they did in a zero-interest rate environment.

"VCs pay the angels. PE pays the VCs. IBs pay the PEs. All for the hope of an IPO so the market will pay the IBs."

"The entire market ecology has a tough time adapting to the end of cheap (even free) money, with cash flow, rather than "valuation" being the central focus. Those who entered finance after 2008 are, basically, unskilled labor. Lehman in 2008 was a picnic compared to 2000 if you were doing tech related ventures."

I see gamified as structured. A lot of new founders, and those who've yet to succeed, don't know how to get organized. YC is helping with efforts like Startup School.

Nothing wrong with structure, everything wrong with obsessing over your startup status instead of obsessing over delivering value.

Witnessed it first hand in private equity and now startups. Usually the mission is to build a compelling product and sell it to the best of your ability. VCs are gasoline.

Making the process more gamified changed the incentives to be about getting more gasoline from VCs instead of making a real company that makes its own gas.

> everything wrong with obsessing over your startup status instead of obsessing over delivering value.

This doesn't stop, either. I've been at a company that's over 7 years old, a leader (top... 1? top 3 at least) in their space, over 500 people, and still goes on and on about being a startup. My inner cynic says this is because they can't let go of 'what got them there' and transition to big-boy pants, so they continue with the myth of the fungible tech employee, etc.

+1, it is entirely human to game a system/structure. In the case of YC, I'd bet there's always some slack in their cohorts every season. It could pay off, it could not but they're at a size where they can have it. Startup School is one of those positive ROI things that help tradeoff the gamification

To be fair, what you're talking about isn't exclusively startups but rather the ecosystem around VC-backed startups. Unfortunately there's always some slack whenever scale is adopted and/or prioritized, it's a tradeoff, depends on context regarding its necessity or not.

> The idea was always build something impactful and make it as profitable as possible via fulfilling your company's mission.

This is why it's important to really venture out with your network and environment. I used to feel this way regarding startups in general but going out of my way to meet people not in SV, SF, VC and going out of those places really help. There's a lot of cool stuff being done outside of our little bubble here in HN

> The idea was always build something impactful and make it as profitable as possible via fulfilling your company's mission.

Nah, the idea was always to make a lot of money. It was never to build something impactful or useful. Sure that may be stated goal, but without path to monetisation it aint happening, and for so many things that are either good or helpful, they can't be monetised ...

Every recruiter email I get for companies that has funding at all seems to go into 5x more text of what series and how much funding it has than what the company actually does.

Reply on news.ycombinator.com