davemc500hats

you guys feel free to mock 9GAG, 500, & YC.

9GAG has grown to tens of millions of users and billions of page views per month in less than 2 years. the company was generating single-digit millions with a team of less than 10 people.

in short, it's a great business that has tremendous scale, and you haters can all go put a sock in it.

while there are recent examples of large-scale adoption of enterprise solutions (Yammer, Box), most enterprise sw requires well-trained expensive people to do direct sales. this is certainly doable with the right people, but they are not in limitless supply. scaling enterprise sales is usually people-bound, and hard. this is often the limiting factor in scaling enterprise business, and requires experienced and well-financed teams.

"some" in this case was Groupon & Zynga, not Pinterest or Instagram. while perhaps not the best cases of getting to sustainable profitability, nevertheless both Groupon & Zynga did phenomenally well in customer acquisition and revenue... what they have failed at is long-term retention.

regardless, the argument Fred seemed to be making was that distribution and customer acquisition is getting "harder"... this is not the case.

sure that's fine. altho we'd like to learn more about you too :)

we prefer teams, but we do accept solo founders occasionally... if yer friggin' awesome.

we usually prefer you have: 1) a functional prototype 1.1) or you've built products w/ previous traction 2) a team which includes one engineer at a minimum 2.1) ideally + designer + cust acquisition), and 3) some # of users (not your mom or your friends) 3.1) ideally some revenue too 4) have a business model / revenue model 4.1) or, shitloads of traction if not 5) some moxie.

yeah, sorry about that... we'll let the folks at AngelList know. agreed it's kind of non-obvious.

of course i realize YC appreciates hustlers as well as hackers, however don't you think there's some truth to YC being exemplified by the "hacker" way? i certainly meant that in a complimentary way.

in any case, didn't mean to mis-characterize your post... just thought it would be useful to identify some of the differences in YC & 500 re: style, philosophy, practice.

(regardless, happy hunting / farming :)

>>analogy to sports players is confusing and unnecessary >>though it probably attracts more views.

umm... you aren't in marketing, are you?

"probably attracts more views" -> not confusing, necessary

also: yeah, of course Ichiro was big in Japan, and Bonds was one of the greatest at getting walks. doesn't detract from a good story.

the baseball / moneyball metaphor was important.

i know that some folks who don't know baseball won't get it, but the references because of the book & movie were somewhat essential.

AI might not have a traditional view of "PRACTICE" but i bet he put in a helluva lotta time shooting hoops, one way or another.

besides, not all metaphors have to work perfectly... it's the story that counts.

there's no misfortune if we have black swans. and we probably already did find one with 9GAG last summer.

the point i was making was about whether that's the focus, or simply a result.

no, that wasn't it at all.

really hope our branding is more "intuitive artists" than "the hippies"... but yeah, that's probably directionally correct.

i prefer band geeks vs. chess nerds, as stated in the piece.

the Avis "we try harder" thing has always been a favorite of mine... i guess i always do feel like being the underdog makes me work harder.

anyway, i'm sure most folks at YC feel like they try harder too. probably we're more similar there than different.

but yeah, i don't mind being the underdog.

yes, did know that & included it in the original draft.

ivan: i don't think i was creating or enjoying controversy.

there's no controversy in clarifying differences between 500 & YC, that's just simple transparency.

my goal was to clarify and differentiate 500 in the eyes of potential future founders, and perhaps some press and/or influencers who would carry that story to them as well.

don't really care whether i ruffle feathers from some folks as long as the message was loud & clear.

pretty sure i did that.

Paul, re: your comment "all other things being equal" -- wouldn't you agree that some investors are not at all equal to others? (YC itself included)

seems that GV resources are worth something more than other investors checks by themselves. while i agree there are many investors who are "just a check", there are at least some who bring a lot more to the table than just capital.

anyway, i understand the timing issue of subsequent / lower cap deals, but i wonder if this isn't just a result of a sequencing problem for diff "hi-res" financing negotiations within a period of 30-90 days around the same raise.

perhaps, but also useful information... much better that the person said it, rather than think it and not let her know.

at least now she has information to process about that pattern of interaction behavior.

perhaps true, but the ability to deliver that statement forcefully & confidently is much easier for most people if it's actually TRUE. while some can pull it off whether or not the reality matches the statement, most of us are more likely to display confidence knowing the facts match the body language.

plus, you'll get reamed if you later get caught telling a lie, and ethics matter (at least for some of us).

agreed, difficult for new entrants to come in at this point... that's also what people told me 2 years ago, and we carved out our niche ok. so not impossible, just challenging.

we are still allocated 50-25-25 valley-restofUS-RestOfWorld, so at the moment 1/2 our deals are in California. but due to prices being somewhat overvalued here, as well as comparatively inexpensive in other places, along with potential for growth in emerging markets, yes we are planting seeds for the future we think will reap benefits 3-5+ years out. we think it's a pretty decent strategy, but only time will tell.

ilya, it's great to have folks like you in 500 and YC :)

btw, the link to that discussion between me & eric is here: http://www.udemy.com/lean-startup-sxsw-2012-videos-and-prese...

if you listen to the conversation between me & eric in the first talk of the conf, i think you'll find we discuss the issues mentioned below like: - is lean startup really a "proven" discipline? - are there "wantrepreneurs" getting cultish around lean? - does this shit really work?

the answers to which are probably: - no, not just yet, but we hope it's useful - definitely - maybe, and we'd love your help figuring it out :)

in other words, it's a work in progress with some very likely positive benefits, but by no means a perfect science (yet, anyway).

ok, so I lied... we did have to kill a few chihuahuas to get this deal done. but it was quick and merciful. #RIP

nope that was me, not svbtle. just occasional change of pace, maybe give the trolls less to blather on about (altho seems like i got plenty of shit for using too much pink).

personally, i think proper grammar is mostly a waste of time... as has happened previously, its use will be eroded by pop culture and mainstream behaviors rather quickly.

also, for some reason i think capitalizing the word 'I' is somehow king of arrogant. don't know why that is, but just seems that way to me.

1) we are quite clear with our companies that we are aligned in the goal that they need to perform to receive future funding from 500 (as well as others)

2) 500 is usually a minority investor in following rounds, so decisions still likely made primarily be lead investor

3) if companies and follow-on investors are more worried about our decisions & subjective assessments rather than the company fundamental business metrics, then there is already a problem.

we are in this business to be successful and make money. much as aim to help all of our founders, we sincerely hope they are too.

due diligence is much better in the rear-view mirror, IMHO.

our 2nd check is a great confirmation of whether we were right or not... happens ~20-30% of time after 1st check.

"500 due diligence = mentor filters + quick 1st check, followed by thoughtful 2nd check based on metrics"

LOL.

500 Bazillion Startups, yo.