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Comment by arihant | Hacker News Reader

I'm not sure why it is repeated over and over that 12k is small sum of money.

12k can easily pay off 2-3 months rent, server costs, marketing stuff, even a few flights. That's mental peace for 12 weeks to build something with 100% focus. That's an extremely high value priviledge.

This should make sense for a lot of startups.

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http://www.sfchronicle.com/business/networth/article/Average...

12k is a small sum of money in SF. Assuming the founders don't want to live together in a studio, looking at >5k month in just rent. Other costs of living are also high. This leaves almost nothing for any actual start up costs.

Makes some sense if you're 22 and have no dependents, but 12k wouldn't be persuasive for a Bay Area founder with a family.

Easy solution with no drawbacks: don't move to San Francisco.

I've lived here for a while, and I wouldn't move here to do a startup today. Whatever marginal advantage there may have been to founding something here (and it was always small) has been more than consumed by the ridiculous costs. There's not even a recruiting advantage to locating here -- unemployment amongst software engineers in the SF bay area is like -150%. Every experienced engineer gets recruited on a daily basis, by startup companies that are basically indistinguishable. Startups here are increasingly hiring remote just to make it work (which seems like the worst of all worlds, really.)

Unless you're doing something where your customer base is in San Francisco (i.e. writing something for startups...or maybe tourism), you should definitely be somewhere else. Go where your customers are.

There is plenty of less expensive real estate along BART. Take a look at San Leandro, for example.

Other costs can be reduced as well.

I consider living in SF as an unnecessary luxury.

Plus the pitch doesn't even encourage people to move to SF; it encourages them to move to Silicon Valley, which is also where YC is based. It's not super-cheap either, but there is plenty of Valley housing <$3k.

> It's not super-cheap either, but there is plenty of Valley housing <$3k.

You're right. You can find studio and one bedroom apartments sub-$3K in places like Redwood City. The problem for starving founders is that landlords aren't going to lease to you when you can't show a sufficient, reliable income source (read: a real job) and sufficient credit score/history.

Yes there's Fremont, Hayward, Oakland, South SF, Daly City, and even more as well. Renting a room instead of an apartment helps a lot. It's $600-800 with utilities.

For rich people, it is a small sum. I've lived in a private room in East Palo Alto while working on startups for years for $500/month rent. If having your own private place is a must, I think you should be working at a big company anyway, since you sure aren't sacrificing any comfort for your startup.

I agree that $12K is not so small. I don't remember the exact numbers, but $12K was very close to the money in the first YC batch, IIRC $4K*(n+1), where n is the number of founders.

12k per team. Ideally founders colocate but that isn't an option for everyone.

For a team of 3, it is roughly equivalent to Australia's minimum wage for 8 weeks. It ain't much*

Best bet is to beg friends/family to look after to you (or to save up for living expenses) then chuck the $12k into the business idea where it is best used. I guess it is a test of resourcefulness, which one will definitely need to succeed in that game.

*That said it is $12k of strings-free money, and a very generous offer from a private company!

3k a month for a two-founder team. A single guy with no other obligations living in a cheap place might be able to pull it off. Married with kids -- forget it.

Eh, $3k/mo is not a great income, but it's exaggerating to say that it's an income only for a "single guy with no other obligations living in a cheap place". It's a typical middle-class American income, in fact it's almost exactly equal to the median income of a full-time worker in the United States [1]. Which, yes, is not great (the middle-class in the U.S. is not in great condition at the moment), but it's clearly neither just young single guys nor the bottom quintile living on that level of income. And, in larger households typically there's nowadays an expectation of two income earners.

Now if the goal is to entice people making 6 figures at a tech job to quit their jobs and join this program, it probably isn't enough money. But maybe that isn't the goal?

[1] http://www.bls.gov/news.release/wkyeng.t01.htm

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