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Comment by pg | Hacker News Reader

It's rather low to say that I tell people this because it's "optimized for the success of Y Combinator." I was saying it before we started Y Combinator. For example, in "How to Start a Startup" (http://paulgraham.com/start.html):

  Ideally you want between two and four founders. It would
  be hard to start with just one. One person would find the 
  moral weight of starting a company hard to bear. Even Bill
  Gates, who seems to be able to bear a good deal of moral 
  weight, had to have a co-founder.

I already knew then, both from my own experience and from watching other startups, how necessary cofounders were. Since then I've observed the trajectories of over 450 startups YC has funded. I'm even more convinced now that cofounders are necessary. And that you dismiss as "rhetoric" and offer instead one piece of anecdotal evidence that is not even conclusive yet? You do not make a very convincing case.

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It's also rather low to hate on the OP's startup because it doesn't fit your definition of great success. You do that a lot and it's not nice. In the realm of startups -- single-founder or not -- Treehouse may very well be well above average.

There are thousands of single founder companies out there. Your system is biased and your predilection toward group founded companies may self-fulfill your prophecy.

In a way, you're like the coach or owner of an NFL team telling kids to stay in school and do well in sports because they may be a pro-baller some day, when really, they need to hit the books if they want a positive outcome in the average end.

Noam Wasserman wrote about plenty of reasons to be a solo-founder in his book, "The Founder's Dilemma." Some people would rather be king and your proposed path of group founded companies going on to VC fueled greatness is not the map for kings.

http://hbr.org/2008/02/the-founders-dilemma/ar/1

You do that a lot and it's not nice.

For example?

There have been several threads like this pop up from time to time arguing that there are successful paths outside group founded vc backed avenues. I've seen people list a number of great startups that didn't take your proposed path and you knock them because they don't meet your criteria for successful company. I'll look for a thread, I can't think of any search terms that would lead me to one at the moment.

I'm not saying that your data doesn't support your hypothesis, but I think you need to recognize the plethora of examples of single founded companies that achieve great success and know better than to apply to ycombinator because you don't like single founder applicants.

As someone else said above, success is relative and people deserve their success even if it isn't a billion dollar IPO or 10x cash out that may, in the end, have left them with less money than they'd make over the life of a smaller achievement through some other path, be it group founded, bootstrapped, or whatever.

My point is, there is a lot of greatness to be had that doesn't meet your standard and it'd be nicer to recognize greatness that doesn't follow your rules than to knock it because it is a counterpoint.

I don't think you should make this sort of accusation without backing it up. Not so much because it's unfair as because it's probably mistaken: you're probably arguing against opinions you attribute to me rather than anything I've actually said.

Here's a thread where you knock "mundane, income-producing businesses..."

http://news.ycombinator.com/item?id=175469

As it turns out, it's a carsonified post. Strange.

I also remember a post where someone listed a whole bunch of awesome bootstrapped companies and you said, basically, that none of them was at the level you consider successful.

EDIT -- here's the one I remembered! Awesome, the thread from 549 days ago no less: http://news.ycombinator.com/item?id=2556959

Where someone mentioned a list of successful bootstrapped companies with million $$ exits or revenues and you say: "If you constructed a list of the top technology companies, few to zero of these would appear on it." http://news.ycombinator.com/item?id=2558576

Okay, so those companies are (edit: NOT) "Top Technology Companies" but neither are thousands, perhaps millions of group founded, vc funded companies that follow your path either.

Your attitude toward bootstrapped and single-founder companies is one of extreme negativity and I don't think it's warranted.

Also edit and bit tongue in cheek: Wal-Mart was a single founder company, so the top two retail giants in the entire world were founded by individuals rather than groups, so that data tells me that to be the BIGGEST in the entire world, maybe you should consider being a single founder.

Presumably it's the "mundane" you think is disparaging. But it was in reply to this:

  More of us should be focusing on building simple, focused,
  small-team web apps that meet everyday needs. Am I saying 
  we should kill our dreams of changing the world? No. But 
  we all need to admit that YouTube, Facebook, Bebo, Google 
  and Twitter just aren’t the norm.

  Instead of desperately trying to create the next 
  phenomenon, which is highly unlikely, why not aim for 
  something that’s definitely achievable?

I.e. The word "mundane" was simply a reference to the concept he introduces of something that is not a phenomenon, but instead meets everyday needs.

Considering that the example Merriam-Webster gives of the use of mundane is

  the mundane concerns of day-to-day life

it seems to me I got about as close as one can to choosing the perfect adjective for things that "meet everyday needs."

This is why I hate arguing on the Internet. All this work for nothing.

No, the mundane was not disparaging. It was the previous sentence where you suggested that anyone defining success differently from you was "behind", which is exactly the point. Consider the alternative, where you simply argue for why a certain threshold is the correct one for success, without casting a judgement on people who think differently than you. It doesn't even matter if the statement is objectively accurate; it's irrelevant and disparaging.

As for your other example (which is about bootstrapped companies, which is not even the topic of this thread), I'm not gratuitously introducing the concept of top technology companies as a way of disparaging the companies he lists. That concept was introduced in the grandparent:

http://news.ycombinator.com/item?id=2557078

What sentence in that comment is false?

You said funding was necessary, he gave a list of 6 companies without funding that were hugely successful by any measuring stick that doesn't include Apple, certainly life changing FU money for the founders. You called them both outliers (maybe true, but it's not like it was just 1 company) and "not successful enough."

The benefits of being a solo founder are pretty obvious (eg I can start now, I don't have to deal with another person or worry about equity etc) but the disadvantages are not very clear if you are just starting out. This is why balanced advice from experienced people is useful.

You seem to be suggesting that PG's advice is at the very least creating bad vibes or perhaps even that he is trying to reshape reality for mercenary purposes. This is frankly a bit nuts considering how much carefully considered free help and advice PG gives out in his essays alone.

PG's original point is sound. The OP's blog post could have said what it wanted to say without falsely attributing PG's or Techstars' motives to greed.

You wrote a recent blog claiming the entire word of startup for high growth companies suitable for venture funding. While I seem to remember there being asides that other models were valid businesses and valid choices the overall impression given was that any company not swinging for the big win didn't deserve to use the word.

Your blog post was completely right that they don't make financial sense for Y-Combinator or VC generally but it didn't need to claim the word. Just calling the VC suitable companies 'high growth startups' or 'venture companies' rather than denying any other new business the use of the term would not have lost anything from the meaning without appearing so dismissive of other models.

This comes up time and time again...a win for Paul Graham is not a company that makes 3.4M in revenue anaually. He is searching for and betting on billion dollar enterprises like Dropbox and AirBnB.

Success for PG is very different than success for many others.

Like a lot of things that come up time and time again, not because it's true.

A lot of people assume that because we've funded some companies valued in the billions, this is the only thing that counts as success to us. But that isn't true:

http://www.paulgraham.com/swan.html#f1n

It's funny you should link to that essay because, IIRC, the HN discussion had a whole lot of people missing that exact point. Despite the footnote.

Perhaps I wasn't clear. By I "success" I meant financial success for you.

I can't believe it still needs pointed out to someone who's been on HN for a while:

YC was never about the money.

For an insight into PG's motivations, you might want to re-read his essay on cities (it's more likely to be "power", as in your influence on the world). The footnote in the Black Swan essay linked above seems to corroborate that.

I'll check it out, thanks.

Fair point on the timing of your essay. I didn't realize it was written before you started YC.

Can you guys please release your empirical data about the success rates of YC companies, broken down by various things like market, year founded, location, number of founders, etc?

It would be hard to disclose the raw data without also disclosing the secrets of individual startups, but we might publish some trendlines one day.

In a sense, I already do disclose such data in a general way, because whenever I write or say anything about startups, I wouldn't contradict trends I know about.

You could anonymize the data and release a pretty monumental study. I would imagine the PR bump would be great too.

My post is not an attack on you or TechStars. It's just a counter-point to your data, based on my own personal experience.

It's hard to anonymize a data set that's both small and has a lot of variation.

I'm sure you would find a way to anonymize the data if it would result in a compelling story for YC.

But as we all know so well the "startup outcomes" follow a power law. Dropbox and AirBnB make for a great YC PR, but are certainly nothing like a statistical mean outcome (aka "expected value").

I'd say it is a pretty reasonable thing to postulate that "doing things YC way" would result in a worse expected outcome for an individual founder vs. retaining control of a profitable business. If this statement is wrong please refute it with data.

The way things are right now, YC is selling the "possibility" of becoming an outlier, while downplaying what "typical results" usually look like. If you were in a consumer product market it could likely break FTC rules on truth in advertising: http://www.ftc.gov/speeches/starek/nima96d4.shtm

EDIT / RESPONSE 1: This is not an "accusation". I am simply stating as fact that YC's model is focused on promoting its largest outlier successes (which form the bulk of YC portfolio value) while releasing no real data on the "mean outcome". Take it for what it is worth. As far as my statement about comparing "mean outcomes" it is obviously just a subjective judgement based on anecdotal evidence because there is no publicly released data from YC.

EDIT / RESPONSE 2: Let's be realistic. Any VC firm can release % of IPOs, M&A and failures as well as IRR figures and exit bands. There is no reason to include any company-specific proprietary data. The only reason for YC to not give such estimates is because it would highlight the fact that most startups are nothing like Dropbox.

That's a stark accusation. Do you have data to back this up, or is this your suspicion?

No, actually he can't anonymize that data. High variation might as well be a signature for a short list (under 1000) of companies.

Also, his company has spent time and money to gain access to data that should help him pick emerging companies. I'm not sure why you would feel entitled to that. I'm sure they are working on some data project to help automate decisions on applicants, if not they will be eventually.

That data will give them an edge when making offers. When you are in a position where asymmetrical information is working to your advantage why would anyone give that up?

You just made another case against incubators / accelerators in general.

If they have to rely on "asymmetrical information" to get access to deal flow and make competitive offers and if releasing the data would hurt their attractiveness to prospective investees, why exactly are they a good deal for entrepreneurs (who can actually build a business)?

There is an old saying if you do not know who is the fool at the poker table, that's you.

The association is not same as causation. I think It would be more useful to derive or at least inference the causation of success/failure from your data.

For example: if someone can't convince other people to join, how could he be able to convince customers/investors later on. This implies causation. I would love to hear more causation like this for the single founder startup.

There are relationships and associations everywhere. If people look at the data between skin color and success, they will find relationship. but it doesn't mean people succeed because of their skin color. The causation is more useful information than the mere association.

> In a sense, I already do disclose such data in a general way, because whenever I write or say anything about startups, I wouldn't contradict trends I know about.

That's a bit circular, if people would question the things you write or say about startups, you'd tell them they are backed by empirical data, then when someone asks for this data you tell them its implied by the things you write or say about startups.

I can totally understand why most of that data is hard or impossible to disclose, that's obvious. But you can't cite secrets as evidence, all you can do is say "trust me, I know what I'm talking about". You can't have your cake and eat it too.

Obviously no one is questioning the existence of that data, nobody's suggesting you're cooking it up, they're just wondering if they'd spot the same patterns in it as the ones you perceived to be there.

To sum it up, whenever you write or say anything about startups, the only thing you disclose about such data in a general way, is the conclusions that you drew from it, what you perceived (not "know") to be a trend, which is probably useful and very valuable, but is something entirely different than the data itself.

> Since then I've observed the trajectories of over 450 startups YC has funded.

... many of which may be a result of your inherit selection bias. Starting a company "that gets really big" is hardly a success criteria that an average first-time entrepreneur has in mind. You might not like how Ryan expressed it, but he's right - do not let the lack of a co-founder stop you from starting a company. It's a non-issue. If you have this option - great, if not - fine, and there are several upsides to it.

I think there are (at least) two parameters needing concrete definition: 1) What is success? 2) What's the ratio of solo startups that achieve the level defined in 1).

As has been mentioned, either an exit of a few million or a stream of a million of profit a year for a couple of years are more than enough to many potential founders.

That's the parameter I'm missing when you say cofounders are necessary. Necessary to achieve what, exactly?

I agree. It'd be awesome if PG would release the data they have on the outcomes of YC companies. There would be a lot we could all learn from it.

This would also allow everyone to come to their own conclusions.

The #1 piece of data I wish pg would release is a comprehensive (if anonymous) survey of every YC founder "would you do YC again?" and the related "would you recommend YC to a friend doing a startup?". (although as a control, "If you were doing another startup, and couldn't get into YC again for that business, would you still go ahead with it?")

PG, I always wanted to ask you. What do you mean by "moral weight" exactly? Thanks.

It is a word play on "moral support". e.g. a cofounder provides moral support when external pressures are high. Bill doesn't seem like the type to need "moral support" because he can alone handle a high "moral weight".

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