How I Crashed and Burned in Y Combinator | Hacker News Reader

How I Crashed and Burned in Y Combinator

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379 pointsmparramon125 comments

Hey everyone! Author here.

First off, thanks for reading! To be honest, I really didn't expect to get this much attention. This is a story that I've wanted to share with friends and family for a long time, and was thoroughly surprised when it was picked up by Backchannel (and then posted here).

Regarding some of the points made here, I (mostly) agree. Getting into YC or raising money is not success. Changing your idea completely isn't really a "pivot" (but I don't know if the industry has as concise of a term for throwing everything out and starting over). In my mind, the real failure was squandering the opportunity of YC, an opportunity I know many people would kill to have. Clearly we should have stuck it out with our idea, but we were 21 years old, stressed out, and foolish.

I also want to note (in case anyone was wondering) that my experience hasn't diminished my opinion of YC at all. PG's advice was spot on, and YC remains an amazing program for founders. We simply didn't make the best use of our time in it.

Hopefully reading about my experience is helpful in some way. If not, sorry about that. Give it a downvote and send it on its merry way.

Thanks for putting this out there. It takes guts and self awareness to write something like this.

Thanks for posting this. As others said, it takes guts to do it. I don't think you necessarily need to stick with your idea, especially if you aren't passionate about it. Quitting early is better than spending a couple of years being miserable because you don't think your work amounts to much.

Thanks for writing about your experience, it must be difficult to do so. When we were looking at joining YC, one of the things that made us pull the trigger was the fact that we could not find anyone that had gone through the program that did not say that was worth it. No one, neither publicly nor privately and regardless of whether their startup had succeeded of failed.

Cool story, great read! I'm surprised how negative some of the comments here on HN were. They're probably just envious about how they're not getting that sweet, sweet investor money!

Most probably aren't just envious. However, those who wrote negative comments weren't afraid to announce seemingly definitive conclusions without enough data to justify their assurance. Keep in mind that the author and his cofounder were interviewed by YC partners and all of the cofounders. While their selection system has flaws, most probably agree that it's one of the best that exists right now. Perhaps they saw strengths in the author's founding team that the author himself had not perceived.

Based on the author's age, I assume he considers this the greatest failure in his life. He wrote this shortly after exiting an educational system that indoctrinates students to believe that success occurs without failures. So his perspective may have been from a point of low self-worth making it difficult to see his own strengths that will help him recover and succeed moving forward.

Thank you for writing about your experience Charlie. I hope the traveling has been beneficial, and I wish you the best of luck in your future endeavors.

For some of the negative comments, the data actively contradicts their conclusion. Many here seem to think that only an idiot would "invest in a 21 year old with a half-baked business plan." The people posting that have probably made less from whatever they're doing, than PG/YC have from their 21 year old founders.

"The people posting that have probably made less from whatever they're doing, than PG/YC have from their 21 year old founders."

So it's all about money then, right? Well if you want to take that to the logical extreme then you would take advice from, say, Larry Ellison or Carl Icahn (over PG) because they have much more money than PG does (at this point in time at least). My point is you have to be very careful about putting people up on a pedestal (which is what happens at HN so often) and thinking that their advice ranks over someone who, by the standards of this community appears to be "less successful".

Are you being serious? Valid criticism isn't the same as hating on the playa', to use your apparent vernacular. Many would consider criticism to be a considerate act and an opportunity to learn from one's mistakes. Just because you're not one of those people it doesn't mean everyone else is being mean, not to mention that many of the comments here are about YC itself rather than the article's author.

Also, YC isn't just about getting "sweet sweet" money, it's also about commitment, many times to the point of collapse due to overwork. This may be a worthwhile tradeoff for you, but it doesn't mean that whoever is critical towards the way YC works is actually broke and bitter. I'm actually quite confident that HN has a sizable population of mature, fulfilled and well-off readers who have better things to do than to pick on the unsuccessful.

Not to mention that many young people are in way over their heads when getting into this, and lack the experience necessary to come out on top. Some pull through, but in this case it was clear more or less from the start that it wasn't the case.

No one's envious nor blaming them for being too young or with half-baked ideas, it's understood that young people are naturally less adept at things. My impression is that they're rather criticizing YC for using inexperienced youngsters as fodder for investors, for just dumping responsibility on them, then leaving them to do the sweating and feel like hell for getting in without a clear plan.

Before being judgemental and assuming the worst about people, maybe you should stop and evaluate your own negativistic projections.

  > I don't know if the industry has as concise of a term
  > for throwing everything out and starting over

I recommend using the word "flush". Some examples: "we flushed that idea and started looking at something new" or "they had this idea around Uber for dogs but it was a flusher". It's what you do when your idea stinks.

Thanks for such a heart-felt post. I think you're doing exactly the right thing by analysing and understanding what went right and wrong, and moving forward towards bigger and better things with new wisdom to draw on. You've come out of this as a significantly better entrepreneur than when you started. I think the smart money would back you in the long run, because you're the personality type that learns hugely from each experience. Some failure is inevitable, but when you do, you do it fast, and never in the same way twice. This makes success inevitable, too.

Watching your career with interest Charlie!

-B & Ida ;)

As a fellow YC non-success story (with a different narrative), I really enjoyed this piece. I took different lessons out of my time in YC, but I endorse this:

  I also want to note (in case anyone was wondering) that my experience 
  hasn't diminished my opinion of YC at all. PG's advice was spot on, 
  and YC remains an amazing program for founders.

This post really misunderstands what both success and failure are.

Getting into YC or raising money isn't success. And trying an idea out for a few months before giving up on it isn't failure.

Building a success startup takes a long long time. Years. Lots of years. Maybe the idea is bad, but giving up on it after a couple of months really proves nothing. All it has proven is that the founders are the type of people that are readily willing to bail out at any moment, and that is a quality that doesn't lead to startup success. The "nightmare" described in this post is a joke compared to the depths some highly successful startups have gone through. Techcrunch wrote a bad story about me? Really? Try having to decide whether to lay off people to make payroll or having spent years on an idea only to still be not sure if it is working on not.

> The "nightmare" described in this post is a joke compared to the depths some highly successful startups have gone through. Techcrunch wrote a bad story about me? Really?

From the narrative, it sounds like there's a causal link between the TechCrunch article and the startup forcibly being summoned to office hours to ask what the hell is going on. Which says more about YC/PG's policies than it does about the startup founders.

I realize the actual nightmare is that after a few months of all-night coding the founders didn't launch the next facebook, but still:

> We had much bigger problems than the piece, to be sure, but launching with an article that roundly mocked us was one of the final nails in the coffin.

Hint to startup founders: It doesn't matter if Techcrunch writes about you or what they write about you. If you are letting that affect your perception of your company in a large way, you are doing it wrong. Though to Techcrunch's credit, in this case they really did a good job of reporting.

Having been in an accelerator before, I definitely related to their sense of dread that they might mess up this opportunity and never be successful again because of it. Watching peers strike it big must have been super hard.

I quickly realized after that most "success" is exaggerated in the media, etc. and true success takes a lot longer than we expect. Raising $1M isn't success. Hell, raising $5-30M in today's climate isn't success. "Success" is such a vague concept that it's best to just focus on being happy and building cool shit and growing it year after year. It takes time.

>>"Success" is such a vague concept

Actually its not in terms of business.

Success = Profit + Long term sustainability in doing so.

Success can also be short term growth and being bought by a larger company, in this industry.

Success is the most loosely defined, illogical concept in the startup world. When your friends are raising big rounds, you think they are successful, even though most of them won't survive beyond the runway that round gives them (esp. at that stage).

Yet the media and the community celebrates founders for all sorts of things and call it "success" when it's not. So yes, it's incredibly vague, and the existence of an accounting formula means nothing in the founder psyche.

Actually it's not that either.

Success in a business context means a positive rate of return on the resources invested. Or to refine one step further, a return that is positive and superior to the next best alternative for the deployment of said resources at a given level of risk.

So Profit.

Profitability and return on investment are related concepts but are not the same thing.

Instagram, among many others, most certainly generated ample return on its initial invested resources without ever generating profits.

ROI /= Profit.

See Amazon (or as noted below, Instagram).

However I also think that is a problem for many people who want to startup. They don't usually think about how they'll show a profit and manage to run their business within that profit. Investor money gets them started and an exit by selling an unprofitable yet growing business to a larger company is the goal.

I think it was Patrick Collison who also spoke about 'impostor syndrome' when joining YC. I imagine this is probably quite common. The whole question of what it means to succeed or fail is interesting; OP's perception of failure contradicts what I thought was the common view in SV - that to 'fail' (i.e. not get funding) is part of a greater process of learning and enhancement. I also can't understand how a 21-year-old Stanford graduate who already has experience in the market he's about to launch in could ever feel he "must have just been lucky".

>I also can't understand how a 21-year-old Stanford graduate who already has experience in the market he's about to launch in could ever feel he "must have just been lucky".

You don't seem to understand how competitive YC is. Guys like that are a dime a dozen when your acceptance rate is less than 3%[1].

[1]http://blog.ycombinator.com/yc-portfolio-stats

I completely understand how competitive YC is, I just find it hard to believe that anyone could doubt themself when they've attended one of the most prestigious universities in the world and also been accepted into the most selective startup accelerator. There's no 'luck' involved. This all takes immense talent.

Am I missing something here? You can get $$$ and top quality advice for an _idea_ and then just turn around and say "bored now - let's do something else"?

And then, so it seems, when that idea runs out you just say "uhhh... let's do this instead!"

So, what are the YC people investing in? Two guys who seem pretty smart?

I appreciate that you might need to pivot from "a social network for dogs" to "a social network for pets" or even "a dog training forum" - but this just seems like they were given investment for one idea, then immediately dropped it to do something else.

Or, like I say, have I missed something vital?

The only part you're missing is that PG has said many times in the past that they invest mostly in the team and that many teams that go through YC end up changing their idea slightly or completely. So the beginning of this situation doesn't seem very unusual, just that they never actually figured it out.

I can accept this rationale for investing in teams over ideas, but when did "pivoting" go from meaning "a modest change in direction" (e.g. switching the target market for your SASS product from consumers to enterprise, or making what was initially a secondary feature a primary one) to "start over from scratch with an entirely unrelated idea"? Seems like another term is needed--"flailing" perhaps?

A least in the YC model, that seems to be a common definition of "pivoting". A bunch of their companies end up pursuing products bearing very little resemblance to the idea they were accepted on. If anything they seem to view being too attached to your idea as the bigger negative.

Normally I use the term "leap" for the latter.

You're completely correct that the original meaning of the term was specific. Eric Ries originally wrote, "I want to introduce the concept of the pivot, the idea that successful startups change directions but stay grounded in what they've learned. They keep one foot in the past and place one foot in a new possible future. Over time, this pivoting may lead them far afield from their original vision, but if you look carefully, you'll be able to detect common threads that link each iteration. By contrast, many unsuccessful startups simply jump outright from one vision to something completely different. These jumps are extremely risky, because they don't leverage the validated learning about customers that came before." [1]

Sadly, the term is getting killed by Semantic Diffusion [2]. Precisely because people want to dignify their flailing with a fancy-sounding word.

[1] http://www.startuplessonslearned.com/2009/06/pivot-dont-jump...

[2] http://martinfowler.com/bliki/SemanticDiffusion.html

It doesn't seem that rare. The creators of Reddit joined YC with a pitch for ordering delivery food through your phone.

Yeah, that almost seems like a bait and switch scam.

pg called Soylent "the biggest pivot in YC history"

"Affordable wireless networks" somehow became a food company.

http://blog.soylent.me/post/51007573199/the-biggest-pivot-in...

That's an odd one, but still something with an empirical basis for the decision.

If I remember correctly, the creator of soylent invented it for his own needs, blogged about it, then was stunned by the amount of interest.

In this case, it seemed like the idea kept changing before they had even figured out much about it, or had any evidence to justify a different direction.

"So, what are the YC people investing in? Two guys who seem pretty smart?"

Yes, actually. Under the assumption that smart people can adapt and change as situations demand.

Someone with "a good idea" who is not smart is tied to that good idea. If it turns out not to be a good idea, or the environment changes and they need to adapt... I'd rather bet on the smart people.

I had similar questions based on this: "In college I had started an ed-tech company, ClassOwl, that raised nearly a million in seed funding. My two cofounders and I attended StartX, an incubator affiliated with Stanford, but ultimately decided to finish our degrees instead of pursuing the startup dream."

Am I understanding that right? Twice in two years this guy took other people's money for something and then quit?

I know we are in another bubble, but this really worries me. What, as an industry, are we doing if recent graduates see their basket of choices as "a) go to grad school, b) work at a big tech company, or c) attend a prestigious startup accelerator"?

On the one hand, I love entrepreneurs, and think that anybody who feels the calling should be supported in doing it. But on the other, I really feel like it is a calling, like being an artist or a religious missionary. People who are the kind of people who will be happy taking one of life's default choices should probably just go do that. If people are becoming entrepreneurs because they see it as another convenient, high-status, high-reward option, then I think we're doing something pretty wrong.

And kudos to Charlie Guo for being honest like this. It's sure not easy, but it's very valuable to the rest of us.

Unless there's some kind of actual contract (leave before X years and you have to return Y% of the funding), I don't think that should be very surprising. People start on something (even a funded something) and then change to other things all the time, if their interests change or another opportunity arises.

For example, a portion of the people who win $30k/year National Science Foundation graduate research fellowships take a year or two of the funding, and then decide a PhD isn't for them. Some of those people, after taking $30k or $60k in PhD fellowship funding, leave grad school to start a company instead. I don't think it should be that surprising that people might go the other direction as well, taking $30k in Y Combinator funding, trying a startup for a bit, and then deciding to leave the startup and go to grad school instead.

A research fellowship is not seed funding, though. YC doesn't "give" people $30k, it invests $30k in their business.

It's not identical, but it's not like the NSF "gives" people $30k of the taxpayer's money just as a gift ether. The goal is to invest public money in future researchers. In both cases there's a clear intent that you will use this as seed money to jump-start a project that will achieve the funder's goals (monetary return and positive PR for Y Combinator, production of research & PhDs for the NSF GFRP). But there's no requirement that you continue to do it indefinitely, and no ban on bailing out if you decide it's not for you after spending $30k of the funder's money. I don't see this as any more morally binding in the Y Combinator case than the NSF case.

In addition, it's not like leaving a PhD funded by an NSF GRFP leaves zero net positive impact. Funding research leads to papers (hopefully with valuable insights) and to knowledge and training passed down to other researchers. I don't think it's a very good analogy to startup funding in that sense. (Although I suppose one could make the argument that alums of failed companies have hard-earned experience so some of the value is still there, diffused out to wherever they go next.)

In the best case I think that's possible, but in the usual case someone who leaves a PhD program after a year does very little research. US-style PhDs don't typically require a master's degree first, so first-year PhD students are doing mainly course work and "figure out what I want to do for my PhD" project-shopping. If you do that for a year and bail, it's pretty common that you wrote zero papers and did very little research. If you leave after two or three years, it's more likely you will leave some kind of research contribution, although it's also pretty common for people who realize they are going to leave to just "pivot" to full-time MSc coursework, so they can leave the program with a master's degree. In that case, the NSF basically funded someone to take MSc courses, which is arguably not useless, but isn't what the NSF intends to fund.

I think with this amount of money it's just a risk of funding people. Putting in strings requiring repayment if the person changes areas, when you're giving someone <$100k, is pretty heavyweight for either the NSF or Y Combinator, so they just try to pre-screen for people they think are going to use the money as intended and stick with it, and accept that some percentage of people will instead use the money to flail around for a year or two and leave. If the percentage gets too high, then I guess reconsider the screening process.

Yes, that's true. For full disclosure, I left a PhD after 4 years to work in industry (I was frustrated by some aspects of academia), having spent three years on an NSF fellowship, so I may be biased here :-) I absolutely didn't go into it thinking I would do that, and I try to bring a researchy perspective everywhere I go now. I also think it depends on the school and the field. Where I was, it was common for first-years to get on a project right away and help churn out results. Probably guided closely by older students or advisors, but still doing productive work.

I think you're right re: clawbacks, though. I can't imagine the mental pressure were the scenario to be "you MUST stay in academia or you owe the government $XXXk". I actually know a PhD student on a (non-US) government scholarship who has a clause like that. He calls it his "slave contract".

Getting back to the original topic, I think that for any venture with a high rate of failure (startups or grad school or...), there has to be some room to allow the funded person/people to say "this isn't working" in good faith and pivot or leave. That's totally different from someone taking funding without the intention to use it properly, or just deciding they're bored or whatnot.

Contracts are to business what skeletons are to people. They explain something of the raw structure, but little more. (Also, if you find yourself looking at it, something has gone wrong.)

Every time I have taken investment, I have seen it as a commitment to see a venture through. Maybe it works, maybe it doesn't, but I am going to give it all I have. So no, I don't think, "gosh, I found something more fun to do," is a legitimate reason for walking away from a startup. If that's how somebody thinks, then they are not cut out for starting a company, because there are always points where almost anything else will be interesting or appealing.

Fellowships are different. I'm advising a new fellowship program right now and, like all education, it's seen as an opportunity to help someone learn. We expect a certain percentage of people to go on to do the thing we want people to do, but if not they'll be taking the knowledge and doing something else, which is also fine.

My concern here is really with the system. If we are pressing money upon people who aren't suited for it, then something's pretty wrong. Nobody should be "trying a startup for a bit".

How about the "I had countless friends who were nearly finished with their computer science (CS) degrees and had an idea for a company, but they struggled to move from concept to finished product. I wanted to help them bridge that gap", says they 21 year old that never launched anything.

Something is fucked up here. I don't blame Charlie Guo, he's just a product of the environment, but why would anyone invest in him doing this idea? There's no knowledge or experience. It's like investing in my idea for in home brain surgery. It doesn't make any sense, and the article thing raised multiple red flags to me.

The app still exists, so it hasn't vanished off the face of the earth.

I'm concerned that graduates have the expectation that you an sit in a room, brainstorm and come up with a killer idea which will get millions in seed funding. That doesn't show that you're interested or knowledgeable in the field/problem area you're trying to solve. It sounds like the gold rush.

That's not to say that you shouldn't sit in a room and brainstorm, but sitting down and listing currently-hip ideas is a quick way to crash. Sit in a room and list current big problems that you have a lot of knowledge about!

> So, what are the YC people investing in? Two guys who seem pretty smart?

The fully loaded market rate for "two guys who seem pretty smart" in Silicon Valley is somewhere between $200,000 to $300,000 per year -- at regular day jobs. Even boring regular employers invest a ton of money in people just based on an interview.

Remember this, when thinking about all of the investors who are always demanding tons of up-front proof and traction from founders. Regular day jobs generally require you to do nothing up front, except showing up to an interview. Firing within the first year is relatively rare. In many ways, regular day job employers are a lot less risk averse than investors!

> The fully loaded market rate for "two guys who seem pretty smart" in Silicon Valley is somewhere between $200,000 to $300,000 per year

Each

Bullshit.

Recruiting costs, signing bonus, salary, health care, insurance, taxes, equipment, office space, software subscriptions, expenses. I've been at 5 startups, and we always budgeted 200-250k per hire per year

Well of course! The hiring managers at "Regular day job employers" aren't dispensing their own money, and the company they work for is already established and likely doesn't have any shortage of money with which to "take risks."

Recruitment is quite a different to investing. First of all, the upside-risk is pretty much eliminated from the employee, usually. And the employees can be fired. Yep, I guess that it is somewhat rare, but at least there is that possibility.

But the employer has to follow the manager's directions.

CS degree from Stanford == clout in the startup community

Stanford is really a great school, but I hope that isn't generally the determining factor here. Many other universities have great CS departments with strong entrepreneurial programs on the side. (MIT, Berkeley, Harvard, Columbia, etc).

edit: I guess Stanford grads apply in much higher numbers than most other colleges.

It is a calculated risk, some end up like this and others make Reddit (who also pivoted), Dropbox or Twitch. Since you only need a few really big winners the net can only catch but a few and it can still be a successful process.

It is really timing as well, even if you have the right people at the time it might not work out. Personally it seems you would want more of a track record for investment, but it is a risk YC is willing to take for the big fish as they have a much bigger net + filter with smaller investments.

YC essentially pans for gold way upstream right in the blue stream before the blue ocean way before the red ocean.

> So, what are the YC people investing in? Two guys who seem pretty smart?

Standford CS grads.

> So, what are the YC people investing in? Two guys who seem pretty smart?

In a lot of talks by VCs, Seed funds and incubators posted on YT, they have said that they invest in people. It's been said that people with entrepreneurial spirit will keep coming with ideas & executions and the said VCs/Seed Funds/Incubators want to build relationships that span across these ventures.

What a great story. Charlie is very brave for telling this, and it's something that more people need to hear.

Getting into YC is not an achievement. Even if you get in, you're not special. You still have to bust your ass like everyone else trying to build a company. Not getting into YC isn't a big deal either, because you're still not special.

Stories like Charlie's should help others highlight this fact. He said that he felt impostor syndrome. I've felt that too. I don't have a great solution for that, but what it should tell you is that even people who you feel are smarter/better than you really are not. We are all the same, and we all face the same struggles, albeit in different circumstances.

PG's advice to Charlie about focusing on an idea they're passionate about, and an idea that they could see themselves working on for the next 5 years is sound. Don't chase trends. Don't chase money. Chase your passion. When you're really passionate about something, it's infectious to others around you. They want to help you. The success and money will usually follow.

I'm glad that people like Charlie tell these stories, since we seem to focus on the success stories. Those are few and far between. Charlie's story is likely more prevalent than we perceive.

> Getting into YC is not an achievement. Even if you get in, you're not special. You still have to bust your ass like everyone else trying to build a company. Not getting into YC isn't a big deal either, because you're still not special.

Unfortunately, the marketing of YC (and many other accelerators) disagrees with this, with emphasis that joining a startup accelerator validates you and makes you part of the elite and gives you the authority to make a I'm-a-thought-leader Medium blog post. (Case in point, the "A YC alumni’s tactic to hack some early investors interest through a prolific Angel" incident: https://www.dropbox.com/s/go9lfnxwt9fnax2/My%20Investment%20...)

The disconnect between <X>-group-likes-my-startup and the reality of operating the startup is one of the reasons why there is a rise in stupid startups which eventually crash and burn. (This is also one of the reasons I hate sites like Product Hunt)

From a strict biz point of view, the flaw is in the accelerator/startup model.

If you have a viable business idea, you can make money from it almost from day one. There are plenty of people who run side businesses and do a day job too.

You only need a huge sum of investment cash if you need to pay yourself and/or a dev team a ton of money to build a massive working prototype and do some marketing.

So what is YC actually for? How much of the chumminess and support offered by getting into YC is mission critical?

If you can't answer that question, don't apply. And I'd suggest that you don't know enough to answer that question until you've built a prototype small business that runs successfully - not just a GitHub account with shiny code happening that might somehow be business related, perhaps, but a business with paying customers that makes more than it costs to run.

If you need to spend five weeks writing code, you may as well expand that to half a year of less intense and more considered part-time work, bypass the drama, and see how well your business idea does on objective terms in the real world.

You won't get feted as one of the elite entrepreneur class, but you'll learn a hell of lot more about business, customers, and yourself than you will by spending a fortune on moving to SF and hanging out with the cool kids.

Bottom line is that if you don't have the stamina to go it alone, you probably won't do so well with funding anyway.

"PG's advice to Charlie about focusing on an idea they're passionate about, and an idea that they could see themselves working on for the next 5 years is sound."

Except for one thing. Passion about something is not something that you wake up in the morning, think about a bit, and then go pursue it.

You won't find a single story in legacy business history of someone who started a wildly successful business because they woke up one morning and thought "I want to start a business". It happened the other way they were going about their business and noticed a need or had an inspiration or idea and then decided to pursue making it a business. Only exception is now in the current day and age we have so many people doing so many things with ease of entry some people are able to pull this off it seems.

In the case of YC or other incubators we now have people who are attempting to just "come up with an idea and fill a need" and while some are succeeding it's not the way businesses have started ever before. Generally. And the process of finding something takes time as well and there is much serendipity involved (and that doesn't operate according to a schedule either).

Now it is possible to "think up" a business but that process can take years. In the case of my first business I had the inspiration one day while in college, pursued it out of college and then thought of a better idea which is the one I actually did. The process took time and there was no particular deadline. That idea worked and I sold the company (9 years later).

The 2nd business on the other hand took me 4 years or 5 years to come up with an appropriate "inspiration" as I investigated various possibilities (flying around to trade shows). There was no deadline that I was working under ("demo day"). Just whenever I found something I would do it. And I finally did and it worked out as well.

My point is, I don't think you can say to someone "focus on an idea you are passionate about" and they go off and "think" and come back with "yeah we want to do X we are passionate about it".

> You won't find a single story in legacy business history of someone who started a wildly successful business because they woke up one morning and thought "I want to start a business".

Eh, maybe. Motorola and HP were both started this way. The founders of both companies hated the idea of working for other people. (I know this because waaaaay back in the mid 90s I read an article about humble beginnings in Inc Magazine, and these are the examples I remember.)

>You won't find a single story in legacy business history of someone who started a wildly successful business because they woke up one morning and thought "I want to start a business".

I don't know that it's woke up one morning, but the narrative I'd read on Amazon suggests that Bezos did something along those lines. As I recall it, he didn't care what he sold, he just wanted to sell something on the internet and searched for something that made sense to sell that way, settling on books.

Obviously, it's morphed and expanded since then, and I doubt he literally woke up one morning and decided to move to Seattle and start Amazon, but it's not like he was already running a web company and decided to add commerce, nor already selling books and deciding to add an online channel.

This is what happens when people want to "do a startup" more than they want to build a business doing X. The passion for the idea/product should come first, with incubators (if deemed necessary) being used as a tool towards achieving that goal.

This is something I've been struggling to understand with some of the startups I read about on here. My lack of understanding is probably to do with the fact that I'm not an entrepreneur, nor do I desire to be. What I'm missing, though, is why these people want to simply start a company.

I get wanting to start a company around your idea. In that case, the company isn't the goal but rather the medium for pursuing the goal, which is to push your idea/product. I don't understand wanting to start a company for the sake of having a company.

HBO's "Silicon Valley", Arron Sorkin's "Social Network", TechCrunch, The Verge, Hacker News and tweetstorms brought to you by Marc Andreessen glorify the tech-startup entrepreneur. People within our industry have been taught that the best of the best start tech companies. And the best of the best are 20-somethings! It seems so reachable. So everyone thinks this is what they're supposed to do. Anybody who's anybody has launched a startup in San Francisco, right?

People want to do a startup to get rich. Solving interesting problems keeps you motivated, but it's the profit motive that pushes people to actually do a startup. It's the profit motive that drives capitalism, not the "solve interesting problems" motive.

I don't get it, I have been working with web development for the past 10 years, I never had problems finding a job but I wouldn't know how to do remote consulting while I travel around the work to "take a break", nevertheless the tone set from OP is confusing you don't know if he is humble, spoiled or bragging. It's all mixed up, and like other people noted pivoting is not changing your idea completely, this is starting over.

I share your impression of the tone. It's probably due to the text being written by a 21-year old. At that age hardly anyone has a fixed personality, but displays kind of fluctuating character traits. At least I think that's what leads to the impression you so accurately described.

I'm also interested in how he's travelling the world while doing consulting work. Travelling (for leisure) and working don't go well together in my experience, curious how he's pulling it off (so I can try too).

I have seen pretty many doing that. However, don't except a work like in a stable, salary-based job, with a little risk. More like shorter freelancer gigs, maybe some small software products/apps/websites which generate some passive income along the side, etc.

Also I wouldn't say that you can travel just to have fun, you also have to get the work done. That means settling for some place longer than you would recreationally. I have met these guys in coworking places, for example.

It's a euphemism for not working at all, though likely with one or two experiences that keep it from being a total lie (the majority of the money lived off of being either already saved or coming from family).

The guy just failed hard in a pretty limp way. The options are either to try to "grow personally" and then to try something similar again, or to buckle down with a normal job and develop your skills and knowledge into something that really has value. When you've been drinking the start-up kool-aid the second is a hard pill to swallow - having to actually compete with everyone else - but I think it's worth it.

I find this paragraph interesting:

"From the outside, it might have looked like I was crazy to feel this way. I had graduated from Stanford, I had a CS degree, and I knew how to play the startup game. In college I had started an ed-tech company, ClassOwl, that raised nearly a million in seed funding."

Pardon my ignorance, but if a startup is a game, wouldn't knowing how to play be knowing how to win, i.e. an exit? I feel like getting venture capital would be the equivalent of prolonging the game, which is a +0 type of action. Is raising money really "playing?" From what I've read raising money just results in needing to raise more money.

I was going to make a similar comment. There is an undercurrent of "raising money = success" in this posting. The whole concept of throwing money at 21-year olds and hoping they find an idea still seems bizarre to me, but obviously it has paid off for the YC guys.

"For the first time in my life, I had impostor syndrome: I convinced myself that I did not deserve the success I had achieved."

This particularly struck me as ironic. Maybe he felt like an imposter because the other people had an actual plan and he didn't.

The article makes it clear that the YC interview selection process is deeply flawed. Leaving out the idea that they were selected because they told a story about the sound of biting a bottle, surely at the interview stage, if the entrepreneurs do not know what the company is making, or the business looks weak the interviewer should just say no. It's not enough to say "here are two bright people that can pivot". Bright people are everywhere, good business ideas are rare. All this does is cause the stress that the author has gone through as he and his partner have to desperately search for a business idea that may not come. This kind of stress, based on unrealistic expectations, can lead people to kill themselves, and seems to me to be borderline unethical.

Meanwhile there are literally hundreds of other companies and thousands of smart people with great ideas that would gladly take their place and succeed, including many of the readers here.

It's probably true that the YC interview process is deeply flawed, but OTOH there is no known better way to select worthy investments yet. Good startup business ideas are not only rare but also impossible to identify a priori. The only way to tell whether a business idea is good or not is to actually try it out in the market and see what happens. (This doesn't mean that any crazy idea is good, but it does mean that some good ideas seem crazy before they are tried.)

If there were any methodology that could identify worthy investments with anything close to high accuracy, there would not be stock markets and there certainly wouldn't be a VC industry.

VC investment works differently from other forms of investment due to the outsize gains on the rare successes. This market requires many comparatively small bets with limited losses and a few low-probability but huge payoffs. Compare this to a Warren Buffet style investment methodology of a few large bets in well-established companies and industries with high probability of moderate payoff. Neither is "right" in an absolute sense; it depends on the investor's risk tolerance and the nature of the opportunities.

The VC business model is to apply some coarse-grained filters to screen out obvious scammers and gross incompetents, then give the remainder of the cohort some money, knowing in advance that 99% will fail completely. The remaining 1% will pay for the losses on the 99% many times over.

Moreover, in YC's case, the amount of money they invest is so small compared to the massive returns on their few successes that they can now afford to take many of these small risks on "two guys who seem smart." Most of them will fail, and they know that going in. It doesn't matter. They're betting that sooner or later, they'll wind up with another AirBnB or Reddit that will pay for many thousands of these small bets.

Honestly I think that YC is opting to make fewer risks these days, not more. The days where you can get funding without traction are numbered, and with it go the real crazy idea startups like AirBnb, Stripe, and Twitch.tv.

I agree with it being arguably unethical, but mostly because it's a business model that tries to appease two sides (the techies with ideas, and the investors), which, in my opinion, easily leads to one side being product for the other side.

Some such businesses may work, like job recruitment, but I think it's mostly because the weaker side (the unemployed) doesn't have much to lose.

I don't think you should call it a pivot when you are effectively starting over. Pivot literally means one foot planted and moving the other to a new spot.

Totally agree, see also: http://techcrunch.com/2015/01/07/before-you-make-that-pivot/

> I would have to talk to my cohort and confirm that no, we hadn’t found an idea yet and yes, we were still super excited about our “company.” I did little else but eat, code and sleep.

If you don't have an idea what you're doing what are you doing coding?

a prototype is a conversation with yourself

[1] http://www.paulgraham.com/head.html

Please tell me that this Ryan Lawler from TechCrunch is writing in that style to insinuate his utter disdain not only for the FanHero business model, but for the whole "free money for 21-year olds with a half-baked idea" industry. He can't possibly write that way for real, could he?

I think he's writing that way on purpose and I share his disdain for "free money for 21-year olds with a half-baked idea"...

Full article:

http://techcrunch.com/2013/07/18/y-combinator-backed-fanhero...

He may be writing in the style of the YouTube celebrities the product targeted.

You cannot satirise illiteracy or ignorance online without people assuming you are actually illiterate or ignorant.

This post seems to neatly encapsulate a lot of what I feel is wrong with the entire start-up / accelerator scene. I've always felt that capable people with a good idea will succeed 99% of the time anyway - and if that team in particular doesn't succeed, then another group will, and hence no net loss to humanity of the 'idea'.

OTOH, this kind of process seems to rescue half-baked ideas, or throw money at people that can perhaps program but can't actually run a business, or glorifies killing yourself working for hope of a huge payday. Perhaps I'm in the minority, and perhaps it's because I'm old (44) and 'get-off-my-lawny' ... but I am so not down with this kind of approach to making money.

Not sure why the author didn't consider a fourth option when graduating from college:

    4) Join the ground floor of a startup *as an early employee*

It would've yielded invaluable experience and a whole lot of personal growth, leaving him in a much better place to run a company years down the road.

At this point, I don't really think he's learned anything at all, and he won't learn much about running a company while he's galavanting around southeast asia humblebragging.

I agree with this, but I don't think it even has to be a startup. Big enterprises may also provide good learning environments, possibly even with experienced developers/marketers/whatevers as mentors, as opposed to a startup's possibly few young, inexperienced recent grads, hellbent on revolutionizing The Way You Think About Shoe Storage with their product called Shoely™ or whatever. Big companies also pay consistently.

I don't know though, the guy seems quite dishonest to me, more interested in means rather than ends, yet still claiming that he "never wanted to start a company simply for the sake of starting a company". To me, he never seemed to question whether he even had anything to give in the first place and address this issue first, if needed, but simply expected to run a successful startup fresh out of college.

Not sure I'd call his closing statements to be humblebragging though, it seems to be just a passing thing for him.

..."professional hoop-jumper" ...He means being a kid?

There's a self-importance and arrogance to all of this that really comes through from this type of rhetor. I think the imposter syndrome might not be that much of a syndrome in the case of far too many startup teams sadly.

When I read that line - "nearly two decades as a professional hoop-jumper" - I pictured in my head a guy in his early 40s. Professional means you get paid for your work. Hoop-jumper is a strange way to describe your education.

The "impostor syndrome" meme would have us believe that if you feel like an impostor, don't worry -- it's a positive sign that you're actually a modest, shy kind of genius.

But sometimes it just means that you really are out of your depth.

Impostor syndrome is also frequently abused by successful people who want a socially acceptable way of denying that much of their success actually was due to luck and timing.

When I read about FanHero on techcrunch, I thought it was a good idea despite the article's tone.

Mainly because I watch a lot of alternative content and listen to podcasts, and I want a way to support what I like. It wasn't an original idea but with awesome execution I think it could had worked.

I agree! And if you read the comments on the TechCrunch article, many of them agree about the article being badly written.

I get that it's sarcasm, but what was the TechCrunch writer's message supposed to be? That nobody needed this product? That it was badly built? That the author just doesn't like YC kids? Whatever the author was trying to say, there was probably a better way to say it.

"I don’t want to start another company until I find a problem that I care about. A problem that I eat, sleep and breathe. A problem worth solving."

i agree with you but you shouldn't wait for these ideas to come by out the blue moon, you should be constantly searching, trying/testing, and keep living/experiencing a lot of different things...because there are a lot of problems out there that you DO NOT know they exist, and how would you know you care about these problems if you don't know they exist.

good luck.

The author sounds spoiled and entitled to everything in their life up until YC.

This seems like a parody of entrepeneurship. Like instead of defying the odds to be an entrepeneur he's defying the odds to avoid getting startup funding as a recent CS grad from Stanford.

The world it full of things that sound appealing. But you may find when you get a chance to do them it isn't your thing. You may enjoy art, admire artists, but not really enjoy or be suited to the work of an artist.

Through some very strange twists of fate it seems to me that bot programming and starting a business ended up being "fashionable" things to do. And obviously as all fashionable things there's quite a lot of people that want to ride the hype train.

Statistics tell us that there will always be a certain percentage that are on the train just for the hype.

My 2 cents: getting on the train just for the hype is a clear indicator that you do not have a very good knowledge of yourself. Internal, time-tested, hard-earned kind of knowledge.

Does YC ever accept business / growth people or just "tech"? I ask that in seriousness, as my take - in my very limited time as a startup founder & employee - has consistently been that many startups fail due in part to an obvious lack of business sense and skills. I'm regularly surprised by the sheer amount of startups out there, many of which are funded, with coders and designers who have no damn clue how to sell.

"We were a solid team, a designer/developer combo." Is that a solid "build a business" team or just a solid "engineer the product" team?

YC is supposed to help with things like that. They teach techies the business side of things and I would imagine they'd say "you need to hire someone to do sales" if that's what they needed. In this case they said from the start something like "we're concerned about your product idea" which was their primary problem. I suppose having someone with sales smarts may have helped them figure it out, since their idea was to help you-tubers sell stuff apparently.

I suppose teaching techies business is easier than teaching business folks tech (or maybe quicker?). Still, I continue to be perplexed at the absence of "business" in startups. I'm not convinced that injecting "business" into a startup is an option for a later date.

If you have to hire someone to sell to your first customers then you might have a problem

Hey, I have ideas too!

http://zonas.free.fr/?p=pages&pg=ideas

Those seem like things that you'd like to make. Some might even be interesting to look at, but What problems do they solve? Why would OTHER people want them? Go to each one and write what it does for people rather than what it is.

thanks for the suggestion :)

Aside from some other great comments here (some of it which really nail it) I'd like to point out that the greatest difficulty of the author seems to be being in charge of things.

Throughout the entire story he is denying control.

Being accepted into Y Combinator? Pure luck. Most critical interview factor? Sound of biting a plastic bottle. It doesn't surprise me a tiny bit that he thought he had impostor syndrome since he probably felt he is getting rewarded for something that is seemingly totally out of his control.

Then all the "pivots". Again feeling that startup success is something that will magically come just by "waiting a bit longer" or "having a slightly better idea" (i.e. being largely out of one's control), of course you re-set the course right away if the odds seem against you. Even if it's just some objections by interviewers who know you for about 10 minutes. Because they surely know better, right? No way to to prove these guys wrong, right? Probably much better to try something different...

The author ends by saying he wants to get back into startups once he's found a suitable problem to work on. That's cool. Even better would be to find a problem he knows he can solve, by being in charge.

Did anyone at YC talk with these founders after investing in them? It sounds like they never understood why they were accepted. Getting accepted into YC should be a confirmation signal, not a signal that you should pivot (yes, YC invests in people, but if that was the case in this case then I would've expected a partner to have helped them find a new idea).

Am I the only one who thinks it's insane that someone can go from an undergrad CS degree to a failed startup and then directly into (presumably well paid) consulting gigs? I'd be pretty wary of a consultant who's only work experience was starting their own company and failing.

I think this is both an indictment of "squirrel" syndrome (the dog from Up), and YC not choosing well in the first place. maybe that's the environment there, but I would guess if you brought in a new team with an idea, gave them money for that idea and then they went and dumped the idea right off and went to something new and shinier, they shouldn't have been funded in the first place?

And with two previously abandoned businesses in his past, someone should have asked about commitment to the idea. Sure you can work on something you don't love, but then its a job not a career or a self focused business, not something worth others investing in without a really clear business plan and exit strategy.

Thanks for writing the article. One thing have bothered me for a long time is why tech startups think TechCrunch or any other high-speed news website writing about them is an indication of early success. It may help you get early customers via the write up if your customers are actually those clicking through these clickbaity links. But this probably doesn't apply in all cases. A lot of the times those reading such viral stories more often than not are on the lookout for the next big big idea to copy. So why bother? May be I don't get as it is some sort of a Valley thing.

> We researched Bitcoins, smart devices, 3D printing, biometrics, and a host of other industries.

Is this common? As in people first decide they want to do a "startup thing". Then they fish for idea. Just curious, is this how most startup idea begin?

I kind of thought it was always someone first having a burning and interesting idea that eventually they want to develop and it gets developed as a startup or patent or something like that.

Probably more common than you'd think. Brainstorming for new ideas or looking for something that doesn't work as well as you think it should or seems to be "missing" is a valid way of trying to start a business. You may not be passionate about it, but if it can make money, you can be passionate about that.

Thanks for sharing this story. I know it was a tough decision to leave the company. If you were in a situation that causes you a lot of stress and unhappiness, there's no shame in leaving.

There are a lot of people being critical here. It's easy to look at the situation from the outside and feel entitled to make comments. I bet if some of the commenters here were in you're situation they'd feel differently.

An idea may be worth less than the potential of the founders, but a well thought-out idea reveals a lot about the founders themselves, in my opinion.

Developing an idea that you feel comfortable genuinely committing yourself to is hard.

Usually it takes six months from coming up with an idea to researching it and getting to the point where I believe in it.

Most of the time, you start with only a vague notion and have to further develop that into something concrete.

No wonder that it didn't turn out well for them doing it under pressure in just a few days time.

Now YC gives startups less money, so they can't try to "pivot" after the first failure. Win big or die fast.

Comment below: "Building a success startup takes a long long time. Years. Lots of years." Not in the YC world. That's not the model.

So what was FanHero? The website is now redirecting to imhomeapp.com (their latest pivot, I suppose), and the article doesn't explain at all.

They seemed like good guys who had no sense of wherewithal. I liked the FanHero idea, it seemed pretty good.

Having youtubers hawk goods seems not so different from advertising/endorsements/affiliate links. I think something that might be more useful for people would be low friction engagement of consultation/services/speaking/musical performances etc.

I wrote a lengthy blog post in response to this post in hopes that it will help aspiring founders avoid a similar fate if their startup gets accepted into Y Combinator.

http://mortdeus.blogspot.com/2015/01/y-combinator.html

Wow. Aspiring Founder here. What a read. Loved this:

"I don’t want to start another company until I find a problem that I care about. A problem that I eat, sleep and breathe. A problem worth solving."

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