Are Y Combinator startups less Ambitious?
12 comments
Sounds like a reasonable question, with a perfectly logical explanation. A reasonable (if misguided) question.
Huge companies with huge success are very uncommon - that's why we can list them off the top of our heads. YC invests in a lot of companies, but not many in terms of the total number of startups in the world. So lets say that out of 10,000 startups, 1 gets huge (Google, Facebook, etc), 9 get big (Digg-sized). That's 1 in 1000. YC has invested in ~80 startups (call it 100 for easy math sake), which is 1% of the "market". 100 tries at 1 in 10,000 isn't great. Even if you say that YC companies are 10x more likely to succeed (not unreasonable given the training, motivation, selection bias, etc), 100 shots at 1 in 1,000 still isn't that good.
Becoming huge requires a lot of things - including luck and timing. No matter how much value YC adds, it can't add those two things. What it can do is increase 1) the odds of success and 2) the expected value of that success (0.1% chance of $1B, 99.9% chance of $0 isn't very appealing).
I think pg's goal isn't to create billionaires (although he wouldn't mind). His goal is to help smart hackers solve "the money problem" so they can have the freedom to pursue other productive pursuits they wish. Look at what he, rtm, and tlb have done since they sold Viaweb (Arc, YC, HN, Harvard prof, awesome homemade robots). None of that would have been done if they were working at Google for $110K/yr.
Trying to solve "the money problem" in a couple years shows an excess of ambition, especially since programmers earn decent coin in the corporate world.
Huge companies with huge success are very uncommon - that's why we can list them off the top of our heads. YC invests in a lot of companies, but not many in terms of the total number of startups in the world. So lets say that out of 10,000 startups, 1 gets huge (Google, Facebook, etc), 9 get big (Digg-sized). That's 1 in 1000. YC has invested in ~80 startups (call it 100 for easy math sake), which is 1% of the "market". 100 tries at 1 in 10,000 isn't great. Even if you say that YC companies are 10x more likely to succeed (not unreasonable given the training, motivation, selection bias, etc), 100 shots at 1 in 1,000 still isn't that good.
Becoming huge requires a lot of things - including luck and timing. No matter how much value YC adds, it can't add those two things. What it can do is increase 1) the odds of success and 2) the expected value of that success (0.1% chance of $1B, 99.9% chance of $0 isn't very appealing).
I think pg's goal isn't to create billionaires (although he wouldn't mind). His goal is to help smart hackers solve "the money problem" so they can have the freedom to pursue other productive pursuits they wish. Look at what he, rtm, and tlb have done since they sold Viaweb (Arc, YC, HN, Harvard prof, awesome homemade robots). None of that would have been done if they were working at Google for $110K/yr.
Trying to solve "the money problem" in a couple years shows an excess of ambition, especially since programmers earn decent coin in the corporate world.
So basically YC is in the "micro-loan" business???
If so, then I think the original premise of the comment is valid and interesting ... that "YC startups are less ambitious (perhaps by design)".
If so, then I think the original premise of the comment is valid and interesting ... that "YC startups are less ambitious (perhaps by design)".
No, more like realistic. It's like how every kid wants to be an astronaut, but there are only 100 in the world. Or how every actor wants to be the next Brad Pitt but very few actors (dozens ever?) achieve that level of success. Creating a billion dollar, public company from scratch is something very, very few people have ever done. Getting rich (single or double digit millions) has been done millions of times and so although difficult, is a reasonable goal to pursue.
And the $$ is probably the least useful thing YC provides. If I had to guess, I'd say the most useful things they provide are (in this order):
(actually turned into its own post:
http://news.ycombinator.com/item?id=147984
And the $$ is probably the least useful thing YC provides. If I had to guess, I'd say the most useful things they provide are (in this order):
(actually turned into its own post:
http://news.ycombinator.com/item?id=147984
By the way, I am very supportive of YC and I am in awe of what is being done within this community. But I can't help but to make the connection. As it turns out, money is also the least useful commodity that the Microloan Foundation provides. The following is out of their mission statement ...
"We provide ... basic business training and continuing guidance ... enables them to develop self-sustainable livelihoods ..."
http://www.microloanfoundation.org.uk/about_us.asp
"We provide ... basic business training and continuing guidance ... enables them to develop self-sustainable livelihoods ..."
http://www.microloanfoundation.org.uk/about_us.asp
Well, add connections to the right people and that's about right then. Although the goal is a little higher than sustainable livelihoods.
Thanks for tolerating my twisted sense of humor.
Thanks for putting this aptly, it does sound convincing to me and I do agree very much that YC puts startups at very strong position and holds the metaphor correct that it helps a kid become an astronaut. May be we will see this astronaut touch the mars, one day.
Not exactly my point, more like encouraging kids to become a pilot instead of an astronaut. You can do everything right and still not become an astronaut, but if you're smart and work hard you can probably become a pilot.
His goal is to help smart hackers solve "the money problem" so they can have the freedom to pursue other productive pursuits they wish.
Yeah, smart hackers who happen to be in US, what about us ;(
Yeah, smart hackers who happen to be in US, what about us ;(
Poor simplegeek, again a victim of angry downvoters who don't understand emoticons!
I'm sure pg would love for US immigration policies to be reformed (can you imagine him licking his chops at getting access to all the world's hackers?), but that sounds like a hard problem that makes you stupid (like programming the Win32 API).
I'm sure pg would love for US immigration policies to be reformed (can you imagine him licking his chops at getting access to all the world's hackers?), but that sounds like a hard problem that makes you stupid (like programming the Win32 API).
No problem about the downvotes ;) But I'm wondering how do they call themselves hackers if they don't understand emoticons ;)
I downvoted the comment because it contributed nothing to the discussion at hand and was a poor shot at a one-liner, akin to what reddit is filled with these days.
It's early yet. There are many YC companies building their business, and right on schedule for where they want to go. A large business takes several years to build. Some YC founders opted to go the faster path and sell early. They're not wrong for doing so. They're richer than the rest of us now, and have fat jobs at Google, Facebook, Conde Nast, etc. In a couple of years, they'll all be vested, and have a ton of cash. They can shoot for bigger success, or they can lounge around eating bon bons all day.
I'd say the level of ambition and the level of success is quite high with current YC companies. It's interesting how your assumption seems based on the notion that having YC backing makes success automatic, and all these guys need to do is be more ambitious and stick with it longer and they could all build the next Google, or even Digg. As pchristensen pointed out, the math doesn't back this idea at all. YC is a great benefit--it brings additional media, a lot of great guidance, and a lot of peers that you can lean on and ask for help from--but it's not going to make building a business magically easy, if you just have enough ambition.
I'd say the level of ambition and the level of success is quite high with current YC companies. It's interesting how your assumption seems based on the notion that having YC backing makes success automatic, and all these guys need to do is be more ambitious and stick with it longer and they could all build the next Google, or even Digg. As pchristensen pointed out, the math doesn't back this idea at all. YC is a great benefit--it brings additional media, a lot of great guidance, and a lot of peers that you can lean on and ask for help from--but it's not going to make building a business magically easy, if you just have enough ambition.
Saying that YC companies are less ambitious is like saying that an 18 yr old lacks ambition because he wants to go to college instead of trying to get a job as the CEO of IBM.
You go to YC to learn and to meet people. Generally our ideas aren't world shaking, but there is a reason for that. We're generally young and still trying to learn and gain experience. You wouldn't expect a YC startup to be a magic AI that can solve the world's problems. If you can do that...why would you need to go to YC? There is a different between a lack of ambition and a desire to learn.
You go to YC to learn and to meet people. Generally our ideas aren't world shaking, but there is a reason for that. We're generally young and still trying to learn and gain experience. You wouldn't expect a YC startup to be a magic AI that can solve the world's problems. If you can do that...why would you need to go to YC? There is a different between a lack of ambition and a desire to learn.
There's plenty of me to go around.
[Sorry!]
Today's billion-dollar markets are not tomorrow's billion-dollar markets. Building a better Digg or Facebook today won't help you kill those companies. First, it would need to be an order of magnitude better to convince anyone to switch. Second, your innovation would need to be hard to duplicate. You might stand a chance if you found some way of positioning a startup for people who don't currently use the existing services, but that's a hard problem.
Predicting tomorrow's big markets is a harder problem. The existing big companies go after the big predictable opportunities with vigour and vast resources, leaving us to chase the unpredictable opportunities. Thus, we can't consciously chase the billion-dollar opportunities because we can only guess at their nature.
[Sorry!]
Today's billion-dollar markets are not tomorrow's billion-dollar markets. Building a better Digg or Facebook today won't help you kill those companies. First, it would need to be an order of magnitude better to convince anyone to switch. Second, your innovation would need to be hard to duplicate. You might stand a chance if you found some way of positioning a startup for people who don't currently use the existing services, but that's a hard problem.
Predicting tomorrow's big markets is a harder problem. The existing big companies go after the big predictable opportunities with vigour and vast resources, leaving us to chase the unpredictable opportunities. Thus, we can't consciously chase the billion-dollar opportunities because we can only guess at their nature.
Why worry about predicting what the next major company will be? You are focusing on the wrong issue.
The thing you should be trying to identify is what are the major companies of today not doing quite right or not doing at all.
While there are a few examples of billion dollar companies being built upon already existing ideas, the market awards billions of dollars to those who destroy the reliance upon already existing technology.
A company that radically changes the way people do things for the better has a much higher probability of attaining billions in market cap than a company that comes along an provides perhaps a better user interface to an already existing service.
The thing you should be trying to identify is what are the major companies of today not doing quite right or not doing at all.
While there are a few examples of billion dollar companies being built upon already existing ideas, the market awards billions of dollars to those who destroy the reliance upon already existing technology.
A company that radically changes the way people do things for the better has a much higher probability of attaining billions in market cap than a company that comes along an provides perhaps a better user interface to an already existing service.
I think you might be mistaking a lack of blockbuster success (so far) for a lack of ambition. Sometimes success is what makes the company or person look ambitious after the fact.
If Google had not succeeded, it would be easy to say that they lacked ambition - they just tried a me-too search engine when Yahoo! and AltaVista were the titans. But Google caught fire and now, we all think they were audacious and ambitious to try what they did.
Ambition alone does not guarantee success: sort of a necessary-but-not-sufficient ingredient.
If Google had not succeeded, it would be easy to say that they lacked ambition - they just tried a me-too search engine when Yahoo! and AltaVista were the titans. But Google caught fire and now, we all think they were audacious and ambitious to try what they did.
Ambition alone does not guarantee success: sort of a necessary-but-not-sufficient ingredient.
So last month you had sex with your girlfriend 9 times. Where's the baby?
Same argument. No lack of ambition. Just give it time.
Same argument. No lack of ambition. Just give it time.
I guess the poster is asking if the metaphorical boyfriend is wearing a metaphorical condom.
Bravo!
Ambition can and does expand with time, so you have to give it time. Microsoft is a classic example. It started off with an interpreter for BASIC. No one could have said within 20 years later that company would reach the very top of the IT industry.
When I started out, my first objective was to put food on the table, be self-sufficient. I have grown a bit more ambitious since ... :-)
When I started out, my first objective was to put food on the table, be self-sufficient. I have grown a bit more ambitious since ... :-)
YC startups are like Moroccan restaurants. it is a four course meal and i takes 4 hours to eat diner. they start small, but by the time they serve the entree you have been prepared enough to know how to eat it right. (EDIT: plus throw in the belly dancers)
If you have been following the YC startups you will surely get that what you see at launch is not what you get 9 months later. Just take a look at justin.tv. certainly when it launched you could be like wtf is them dudes thinking. why would i want to watch his life live when i got my own to worry about. off course a few months later you when they launch the live video streaming platform, you say "oops, i did not see that one coming" then they assault you every week with new features including mobile streaming then you are like "ok these guys saw something n months ago that i am just seeing now".
yeah, I almost forgot justin.tv, they too had quite a success.
YouTube is the only company in recent memory that got huge in the lifespan of the oldest YC companies. Many companies can grow beyond what you initially see, so I would call your estimate of 3 potential huge companies a lowball.
i won't say the startup are less ambitious because i think almost all of them wants to reach the level of success of google/facebook , but then it is all about your idea/product, team, execution, timing, funding, luck, mentoring, etc.
Also YCombinator is a king-maker but not every king can have huge empire and not everyone can become Alexander, though everyone would like to become one, but then they all have some kind of limitations which is sometimes is out of your control.
Also YCombinator is a king-maker but not every king can have huge empire and not everyone can become Alexander, though everyone would like to become one, but then they all have some kind of limitations which is sometimes is out of your control.
This is a rather unfounded claim without any data. Seems like a troll post.
Yeah, certainly this is a troll post. I have been analyzing certain posts on various sites ever since I read that article by Paul. This one certainly doesn't have any base or any analytical data to question Y Combinator startups. This guy surely looks forward to pull unnecessary attention to his post.
Come on! don't get offended so easily, this is just an argument. I didn't mean to hurt any Y Combinators and would like to be very much a part of this.
I do think reddit have strong business model and generates more quality contents than Digg, for this I have backing from zdnet (http://blogs.zdnet.com/web2explorer/?p=99). And Ofcourse reddit is a very much success and my favorite. Look at this data going head-to-head with StumpleUpon (http://siteanalytics.compete.com/stumbleupon.com+reddit.com/...)
In terms of backing my argument, if you think reddit have gone far than the Digg I think you should look at the compete data (http://siteanalytics.compete.com/digg.com+reddit.com/?metric...) and this argument backing that, reddit isnt that viral(http://socialnewswatch.com/digg-versus-reddit/). My point is it could have been more viral with little more effort and more to it that no other startup came close to Reddit and Scribd (http://siteanalytics.compete.com/scribd.com+reddit.com+loopt...)
And I could very well turn this post off, if everybody favors with this.
I do think reddit have strong business model and generates more quality contents than Digg, for this I have backing from zdnet (http://blogs.zdnet.com/web2explorer/?p=99). And Ofcourse reddit is a very much success and my favorite. Look at this data going head-to-head with StumpleUpon (http://siteanalytics.compete.com/stumbleupon.com+reddit.com/...)
In terms of backing my argument, if you think reddit have gone far than the Digg I think you should look at the compete data (http://siteanalytics.compete.com/digg.com+reddit.com/?metric...) and this argument backing that, reddit isnt that viral(http://socialnewswatch.com/digg-versus-reddit/). My point is it could have been more viral with little more effort and more to it that no other startup came close to Reddit and Scribd (http://siteanalytics.compete.com/scribd.com+reddit.com+loopt...)
And I could very well turn this post off, if everybody favors with this.
Lots of positive stuff without evidence gets praised without being accused of being Fanboy material. This could be a troll or a decent contrarian question, and I think the comments and responses show it was the latter.
I certainly wouldn't go so far as to label it a troll post at all- Keep in mind, PG et all encourage apps that are intentionally small in scope, such that they have a reasonable change of being finished in a 3 month cruch-and-run marathon.
There are a lot of great apps which fit this model, but they DO tend to be smaller in scope- The constraints of the model force uses to focus on their core feature offering, rather than adding everything under the sun, to appeal to as many users as humanly possible.
There are a lot of great apps which fit this model, but they DO tend to be smaller in scope- The constraints of the model force uses to focus on their core feature offering, rather than adding everything under the sun, to appeal to as many users as humanly possible.
The examples, facebook and digg, had a much smaller scope when they started than many YC startups have...
Yes, I think initial scope is less of a concern, the way it evolves with time and adapt to user need is very much important for the success.
How do posts get NEGATIVE points when we only have "up" buttons for voting?
Because you have to have 25 karma to downvote.
Thank you.
Why are people down-voting for asking a simple question? Is THAT what "25 karma" gives them?
This community seems to be getting a little too overcrowded with self-important downvoters. Sad, really. I used to like it here.
There is so incredibly much I could contribute here, but now I ask "why bother" if the community begins its inevitable slide (thanks, Tech Crunch!) into Diggland and Reddithood?
Why are people down-voting for asking a simple question? Is THAT what "25 karma" gives them?
This community seems to be getting a little too overcrowded with self-important downvoters. Sad, really. I used to like it here.
There is so incredibly much I could contribute here, but now I ask "why bother" if the community begins its inevitable slide (thanks, Tech Crunch!) into Diggland and Reddithood?
Comments get downvoted if they don't add to the discussion, and particularly if they're off topic from the thread they're on. Asking how posts get negative value is a fine thing to do. Create a Ask YC post and someone will gladly answer. Asking this otherwise reasonable question in the wrong place however can lead to downvoting.
Everyone makes mistakes occasionally and gets downvoted (sometimes it's unfortunate but you can just get downvoted for expressing an unpopular opinion). But hopefully in the long run you bring positive value to the site and your comments are voted up more often than down.
Everyone makes mistakes occasionally and gets downvoted (sometimes it's unfortunate but you can just get downvoted for expressing an unpopular opinion). But hopefully in the long run you bring positive value to the site and your comments are voted up more often than down.
Why we didn't see next facebook or Digg beaters(in terms of size)? I think only Scribd, Loopt and Reddit have gone so far and they had much more potential to go further considering their business models ... or I am being a jerk? Of course I don't know the complete picture and it's too early to tell this, but I would like you to give a different dimension to this argument and tell us your opinion.