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Comment by mikert89 | Hacker News Reader

This is basically ensuring YC starts to get more absolute top graduates. Entrepreneurship is more and more seen as the default path for top people in the USA. All other career paths are for people that want to take the risk of ending up in a 50 year assembly line. This is probably good for society

If you want to get rich by 30, you basically have to start a startup or get into a top small hedge fund out of undergrad.

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I feel like being "the best and brightest" is quite orthogonal to having what it takes to be an entrepreneur.

I also feel like highly intelligent people might quite reasonably decide for themselves that they shouldn't have to take on that kind of risk to get what they want out of life.

This really is not true, basically every engineering job in the Bay Area will set you up with enough money to live extremely well.

YC startups are a bit above average, but still most startups fail.

If you care about building wealth, taking a stable engineering position straight out of college and working hard is a great path

This. There is a huge opportunity cost, even more so for the “best and brightest” (by whatever definition). The odds of striking it rich are really not in your favor. You may be better off working at big tech for a few years, save up, let the money work for you while you explore your entrepreneurial urge. You have a cushion and maybe that will let you take on bigger and bolder bets than what you could when you come out of college, and you maybe forced to take a “relatively safer” bet because you also have to make money soonish

No you want to take these bets when you are young, its the opposite, you go into stable careers when your appetite for risk and working around the clock has waned

There's an entire generation of FAANG millionaires that just spent a decade out of school working at one of those places and got fabulously wealthy off of it. In fact, it's probably the most likely career to get you rich instead of betting your time on startup equity that might be worth something in 6-10 years.

Yeah great they got into the fastest growing companies of all time at the perfect time

It’s not just the companies are growing. If you get an offer from BigTech with cash + RSUs and the stock stays stagnant, you will still be better off statistically than spending 5-7 years of your life at a startup.

YC is not really advocating you to become a worker at a startup. They want you to become a founder. As a founder you don't need to be a huge success for you to be well off. I'm one of 3 founders currently in a bootstrapped company that has done okay. We are approaching end of year 5. This year we will make 700k revenue, 240k profit and 50% yearly growth. Typically this kind of business is not something a VC would consider investing in, but it can still be profitable for the founders.

I'm not very liquid at the moment. My salary is a measly 60k a year. Most of 80k that is my share of the profit will stay in the company instead of go into my pocket, but the 33% ownership in the company is valuable. Very typical valuations for companies in general is 10x profit, which would mean my share of the company is worth 800k. Companies getting strategically acquired can be 20x revenue, which makes my share of the company worth 4.7million.

At FAANG I would have likely made a liquid 300k * 5 = 1.5million, which would allow me to spend more money and enjoy life right now. However, the next 5 years with my company will likely be a lot more valuable. If we manage to grow 30% a year then after 5 years profit will be 900k. That means 300k a year profit share, 3m valuation at 10x profit and 17m valuation at 20x revenue.

You realize that you’re kind of making my point? Even with your rosy projections, you’re still going to be making much less than a few returning interns I know made in their first three years working at BigTech.

Heck you’re making less than a run of the mill enterprise dev is making in a second tier major city in Atlanta

And as a founder, you still need to do well to do better off than a BigTech employee and statistically you won’t come near.

And on top of that, you’re sounding like every startup that doesn’t realize that they can’t linearly project growth based on past performance. The first cohorts are almost always easier than later cohorts unless it is a platform with network effects.

Don't forget the actual rate of return vs time spent working too. As a founder you're probably working at least 50% more time than the average faang dev, plus the added stress of being in a high impact, high consequence role.

Thought experiment: What group do you think will have the higher median total earnings over 10 years - the group that worked at BigTech or the group that worked at a YC startup?

You make your money first, let it make money for you and then do a startup.

Having done this, and acknowledging the fuzzy definition of "rich" etc - going through YC after graduating is a great career move. You have to do everything yourself so you learn a lot. About business, about a specific industry, about programming, whatever. You make connections. But unless you walk an absolute golden path (hey it happens), > 90% chance you don't get rich. > 99.9% chance you won't get rich by 30.

Not denying you can fail, but one year spent on YC and failing puts you in a position to start another business

How many YC founders end up rich before 30? Or even at all? I think it’s likely a highly valuable experience running a business experiment someone else will fund (not to mention connections you wouldn’t otherwise make), but the odds of actual, liquid wealth from the experience and time spent are very low.

Alot of them do, not only that, they build skills that help them start their next company. Many of which are bootstrapped and profitable. This whole idea that startups are a complete lottery ticket is not only false, its increasingly less false, more money is being made now in startups than ever

Based on public exit and liquidity event information, startups still remain a lottery ticket for most. 90% of startups fail entirely, for example (CB Insights). YC startups have more longevity, and more get to a Series A then non YC startups, but the best batches based on performance have been between 2009 and 2013. 10% achieve an exit, 4.5% became unicorns. Only 17 companies backed by YC (out of almost 5k) have gone public, and all except Airbnb, Instacart, and Reddit have underperformed post IPO.

Have fun, learn, develop and grow your skills and network, take the investment, but it’s important to be honest with one’s self about odds of success and outcome. If you win, respect and appreciate the lottery ticket for what it was. Hard work and years of grinding is table stakes, but you can still fail (and most do).

https://www.lennysnewsletter.com/p/pulling-back-the-curtain-...

https://www.marketsentiment.co/p/the-yc-report

10% chance at millions fresh out school sounds great!

If you think "exit" automatically means millions, you've probably never seen an exit before. Of those that exit, the majority of startups get almost $0 for the common shareholders. I continue to believe that a lot of YC's alpha comes from the fact that they are very good at angling people toward small exits where they basically make no money but YC recovers their investment.

10% of 0.01% of people is probably closer. 0.01% is probably way to high even.

> More than 50% of companies are still alive after 10 years

I’d rather have a 50% chance at my own startup being alive after 10 years than go work some big corp job.

To each their own. If you must do a startup, do so. My comments should be treated as informing prior to an informed decision.

If you work for 10 years in big tech and save your money, you’d have enough for a lifetime of chasing startup ideas.

This is the part I think young people don't understand. My husband and I worked around 16 years combined in tech. We started pretty late, since we both have PhDs, and we're not engineers so we aren't making top of the market. We still had enough money after that time to buy a house, have 2 kids and go on a multi-year sabbatical. And most of this working period was not at FAANGs.

If you're young, talented, single and bringing home $200k a year including RSUs, you are on track to basically do whatever you want in a decade. Make it to senior manager / Staff level and you should be clearing $400k a year at least. And if you do it smartly you're working 9-5, not some 996 bullshit. That's a ridiculous amount of money.

It's not as sexy as building a startup. But at least for me the ROI has been incredible. And I'm not super smart- my whole college career I looked down at people who spent their lives in front of a computer. I completely missed the trend of tech and Silicon Valley, and I definitely don't work any harder than the next guy. But if you do good work I've found that it tends to pay off.

People really underestimate how much FAANG pays, all things considered.

If you spent the last 10-15 years as an engineer/manager in FAANG (and these past 5-10 years have been very far from what’s called the “golden age”), and were financially responsible, you’re a multi millionaire, most likely still in your 30s.

If you’re a couple that worked there, well damn you’re not just rich you are wealthy.

I can’t think of a better starting point for founding a startup. Or retiring.

Sacrificing 10 years seems a lot when you’re fresh out of college. But 1. it’s not really a sacrifice since your life is much more comfy than most 2. in the grand scheme of things 10 years is not a lot. You will most likely spend way more time on a failed startup while having the worst time.

I have a problem with the analogy “lottery ticket”. I think analogies are helpful as long as we are talking perhaps a singe order of magnitude difference between the two things.

The chance of winning most popular US lotteries is approximately 1 in 300,000,000. In comparison, the chance of IPO-ing a YC company is approximately 1 in 300. You can count how many orders of magnitude of difference that is.

I buy a lottery ticket for $1, in a moment, with no further effort. A YC startup founder grinds for years, if not a decade, to reach IPO with unknown opportunity costs. They are not the same. How many lottery tickets over how many lottery draws to equalize the odds is a fun thought experiment to quantify a dollar value for the option premium.

17 YC IPOs over how many total YC founder years (Lifetime YC companies * # of founders * years YC company active, roughly)?

(I’ve put a lot of thought into being a founder, from an aggressively data driven perspective about how to spend time, which is non renewable)

It's all about the opportunity cost. There are always assumptions that need to be made, but it will be hard to argue that lottery tickets are better than startups. I don't think they are.

A more useful comparison would be a serious statistical analysis between startups and other occupations.

I am not spending years of my life trading money for lottery tickets, startups are worse than lottery tickets

I said "serious".

Thought experiment: who do you think would be better off as a group? 10 college grads working at any of the FAANG+ companies or the same 10 being YC founders?

Let me make this simple for you: you will not get rich by 30.

I know, I know...there are examples! And yes, there are, but statistically, they won't be you. You're playing the lottery, only it's a lottery that steals your youth and gives you psychological problems.

If your only goal is to get rich, then don't do a startup. You have to have some more fundamental reason, or the agony will beat you.

I live in NYC, I have met alot of very rich startup founders. But not only that, lots of people making 50k a month from a startup they built post YC, raised no VC, and have no boss.

Its an outdated take to think people arent doing this

Sure. Google "selection bias". You aren't meeting the 10,000 who failed.

I also live in NYC. I lived in SF, during possibly the all-time greatest period of wealth creation in the last 50 years. I knew billionaires when they couldn't afford bar tabs. I ate leftover boxes of Obama-Os (again, Google it) that nobody wanted.

I'm still telling you the truth. Every one of those people who succeeded went through hell and back, and even then there was no guarantee that there was a reward at the end of the hell. Doing a startup is like getting punched in the face repeatedly for many, many years, with only your faith -- in something -- to carry you forward. You have to have more than just a desire to be rich.

You dont have to create a billion dollar company. Especially after raising VC and failing, its much clearer how to build a business. Very reasonable to think a smart hard working person can build a company making 1M a year. Life owning a company that makes even a moderate amount is 1000x better than a career. I think your analysis is outdated

If it's 1000x better than a career and you believe it's achievable, why haven't you done it yet?

why do you think i havent

It seems like you would've mentioned your own success rather than those around you when talking about how feasible it is. It's a lot easier to say something is achievable when you've done it yourself.

And again, I think you would've simply responded "I have" rather than ask me what I think. Obviously I could be wrong.

Wait, are you saying the Obama O’s story - that the 500 boxes sold out, saving AirBnb - is not totally true?

Well, they definitely had a lot of Cap’n McCains left over, and we also had more than a few boxes of Obama O’s inside JTV. We would eat them as office snacks.

I was told that we were given them, but maybe they were surplus? Either way, real boxes.

You live in NYC.... there are a lot of "startup founders" who already come from generational family wealth

Are you trying to tell me those who take the most risk already have a safety net?!

> If you want to get rich by 30, you basically have to start a startup or get into a top small hedge fund out of undergrad.

I am 30, I am rich by most measures of wealth and probably in the minds of most college grads. I worked in various big tech companies (incl stints in FAANG) after graduating with my BS in CS. A lot of my peers did do startups, and they had varying degrees of success. But almost everyone who went to big tech has set up their next generation for success at this point

By rich I mean like 25 million +, not 3 million

Goalpost shift. $3M net worth individual is rich by every measure in the USA

Why is everyone equating "best and brightest" with "rich by 30"? Were Kernighan and Ritchie rich by 30?

> If you want to get rich by 30, you basically have to start a startup or get into a top small hedge fund out of undergrad.

Many will enter, few will win lmao

or you buy bitcoin

Entrepreneurship isn’t getting showered with millions for doing nothing other than being accepted as a part of the blessed elite and access to an infinite spigot of free money when all other sources have been dammed off and diverted to the ever shrinking minority of ever increasing ultra-wealth.

its still better than these people fighting over promotions in finance

This would be a better comment if it asserted what the poster believed entrepreneurship IS rather than what it is not.

FWIW, to me entrepreneurship is an amazing path, but starting a company right out of college?? There’s a LOT of skills to develop. Have someone to copy. Make sure you draw enough salary. Keep an identity outside of your company (networking!) so you can pick yourself up if (when) it crashes.

For people who took a second to get this (like me), @fijiaarone means it is.

And I concur - in this AI hypecycle more than ever it seems to be about how can peacock the best. Its neck and neck with the crypto hypecycle a few years ago for the incidence rate of vaporware and snake oil. Sure there are some legit founders building meaningful product but they seem to be a small minority.

dude we just invented computers you can talk to

Whose "we"?

there are open weight models which are SOTA.

not sure how you plan to monetize it.

Tell me how you can make a profit or if you even have a plan to make a profit..

or your plan is to sell it to a higher fool who believes that they can sell it to an even higher fool....

Oh. Sounds similar?

yeah and its amazing, that doesnt mean you dont have charlatans, hucksters, hustlers, opportunists etc. come for the gold rush. In fact, you should expect them to

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