Of his reasons, 1 and 2 are mistaken. If a startup with a single founder looks especially promising, we don't simply reject them; we get them to find one.
And we have no bias toward consumer apps. Two of the most successful startups we've funded (neither is launched yet) are doing stuff for businesses. The reason we fund more consumer apps is simply that more apply.
BTW, we're soon going to announce a third plan B, which we hope will be a better alternative to this or Techstars: to work for a YC "alumni" company. While some (e.g. Loopt) are quite established, others are so new that you could be the first hire, which is very much like being a founder.
I tried to be careful on point #1 and stated it as "leans heavily towards startups with 2 or more co-founders". I think this was a reasonably fair characterization, as I don't think you reject applicants purely on the fact that they are a sole founder.
Point taken on #2 (since I don't know what the applicant pool looks like, it was easy to guess that you have a bias towards consumer internet based on past selections).
I think it rocks that you're going to make another path available for folks to join existing YC alumni. This is a great idea. Yet one more reason for folks to consider applying to YC in the first place (i.e. it can be a channel to find more great people for the company).
If you really need to be told a plan B you shouldn't start a startup.
Plan B is just start building something and stop worrying about getting other people's approval! If you make something cool, then you will be able to find other founders, money ... etc.
Suggestion: list all options before assigning a "Plan A/Plan B" ranking:
( )Pursue your own business plan and forget about YC
( )Get accepted by Y-C and start your business that way
( )Work for a YC Founder.
Each have pros and cons, and everyone's goals and cabilities are a little different. Assign Plan "A/B/C" in whatever way works for you. For some, working for a startup company will probably be the best experience they can get if the goal is to start their own eventually.
Not all ideas, no matter how world-changing, can be turned into a full company with just one founder and roughly zero cash. For young founders, 15k, partners and a basic support system can make a world of a difference.
edit: The real deciding factor for me though will be his equity equation.
Right, but it's usually possible to find another, simpler idea - even if it's just consulting - that will generate $15k and bring you in contact with potential cofounders or customers.
Thats a cool proposition, something to consider for those of us who dont get accepted YC. However, I think 99% of the experience founding a startup is from the fact that it is based on YOUR idea, not someone elses. From that comes the insane relentless drive to push the limits. I would have a hard time programming 20 hours a day for weeks on end for an idea I was not involved in creating.
I do think its cool he would be willing to fund your personal idea after the work period. But then you lack the mentoring/community/networking aspect of YC which I think is more important than the actual funding (at least in the very early stages). Best of luck to him though on recruiting some quality hackers.
I would disagree with your thesis that 99% of the experience is based on pursuing your idea. Many entrepreneurs start companies for reasons other than pursuing their own idea. Some simply like the control, autonomy and culture of a startup.
I'd also posit that when finding co-founders, you are in a sense finding someone that will help you execute your idea (and that makes them no less of an entrepreneur).
"Some simply like the control, autonomy and culture of a startup."
Will people really get the opportunity for that, though? If the idea isn't "theirs" in the sense that it was (more or less) handed to them as something to work on for you, will they feel the same freedom to change or modify it as they would with their own startup? And isn't that flexibility a necessary component for a startup's success?
It's a delicate psychological issue... as students, we've been very much conditioned to respond to an authority figure (teacher, boss), and if you don't want to fall into that role, you should be consciously careful not to.
"Some simply like the control, autonomy and culture of a startup."
But those are the people that work for startups, as early employees. And they can frequently make more than $15K from it.
The folks applying to yCombinator are typically those that either don't want to be employees or have already been employees and decide they want to move on. They wouldn't even have a yCombinator app if they didn't have their own ideas. If you want someone to work on your idea, you have to compete with the hundreds of other Boston-area startups that are now hiring.
Good idea. The most important thing YC provides is an effective social network. You're connected to piers going through the same process, so you have people that understand what you're going through. In addition, YC provides advise/access to people who have been where you're attempting to go and facilitates interactions with investors that would be difficult to arrange on your own. You probably couldn't offer the same networking opportunities, but if someone is having a hard time finding a cofounder, being Cambridge at MIT would probably help.
I agree with all your points. That's why my offer doesn't really compete with YC. In fact, you have to have applied to YC and been turned down in order to be considered for this option.
I can't provide the peer-group support and advice that PG does. But, I can hopefully start you down the process (I'm involved with half a dozen local startups, not including my own, and have decent contacts on both the entrepreneurial side and the investment side of the community).
I'm excited by what seems to be a boom in micro-seed startup financing...what could less charitably be referred to as the YC-app knockoffs.
This guys seems to have a good approach, though, in defining a slightly different niche for what he wants to do. While I would be willing to concede that nobody can implement the YC model as well as YC, I hope there is room for more micro-seed startups^2 with different focuses and different approaches.
I would liken this more to Google's summer of code or Joel Spolsky's paid summer internship program.
I think it's really hard to compete with Paul and what he's built with YC. Strong following, great set of people and a very difficult set of benefits to match. If you fit the YC profile, I think that's a great path for lots of hackepreneur types.
But, I think there are still "gaps" in the market between YC and other early-stage investment vehicles (angel groups, VCs, etc.)
Wow this summer will be very interesting. I'd like to see the outcome of the Techstars.org, YC and onstartups. I'm sure we should get a good crop of startups.
I dont know if there are more than 2 plans. Its either YC or go alone. Reason for sticking with YC is free access to paul graham :D and his suggestions. I think this is something priceless and if at all we are out of YC, I hope i have a face to face meet up with PG and convince/beg to be our mentor :) Just like George Bush quoted "You are either with us or against us", i would go ahead and quote, its either YC or alone :)
Don't forget the other YC founders. PG gets all the fame, but IMHO RTM has accomplished more. And I wouldn't mind working with Trevor or Jessica either...
Summary: If you don't get to be a YC founder this time, come work for his startup on his ideas. Same location, same time period, same money, very different role IMO.
This is a reasonably fair characterization (though candidly, I have not worked out all the details yet).
I considered simply making an equity investment (like YC does), but don't have the bandwidth to do something like that at this time.
One of the reasons I didn't post this article until after the YC deadline is that I wanted to make sure people didn't confuse this as an alternative to YC. As you noted, the role is very different.
Howdy Dharmesh. I think it's a cool idea--good luck with it. I like the http://www.websitegrader.com/ app. I ran it on a couple sites I'm involved with and got some good suggestions.
Thanks. This is a pet project of mine (amongst others). Response so far has been pretty good. We haven't officially "launched" it yet, but about 9,500 URLs have been processed by the tool so far. It's a fun little tool to work on.
I hadn't seen the site before, very cool. My only suggestion would be to offer the necessary syntax when relevant, e.g. for adding meta keywords. Granted, it only takes thirty seconds to lookup, but people are more likely to make the changes immediately before they forget if it's right there.
I wonder if he'll get the type of people he wants or expects: there's a significant difference between people who want to start their own company versus going to work for someone else (i.e. this does sound more like a summer internship than a funding opportunity).
Very interesting proposal. If someone isn't already working on a startup, this would be a great way to get some experience (working for a startup is the next best thing to starting one). Who knows, it might serve as preparation for the winter round of YC.
Though I'm a big PG fan, I'm no PG. My thinking is that my experiment can extract a few more people into the startup mindset (and clearly, there's some upside for me too). In my experience, simply resisting the temptation to jump into big company land is a huge step. If possible, I'd like to make it really hard for great hackepreneurs to revert to a big company job simply because they didn't make it in to YC.
Its not good to put it this way, Now a days no one gives a damn, let alone offering you something in return for some money, i would rather appreciate the helping hand offered by this guy.
Will you be paying the employer share of Federal and State taxes from their paycheck? No
Is there any obligation or gurantee that you will help them in return for the work they have done for you? No.
If, after working for 3 months on your project; if you dont like them, will you still be obligated to finance them to work on their idea? No
That's the definition of someone looking for a temp or contract programmer. (and frankly, the market rate for a 3 month contract programmer of YC caliber would be at least double that).
So, was I mistaken? :) :)
Note the big difference. YC lends a helping hand by letting the startups work on their own projects and investing money, effort, experience and time to help them succeed with their companies.
My sincere suggestion is: be generous and offer the exact same terms that YC does.
"cast your bread upon the waters for after many days they shall return to you"
NERD: READS EMAIL, looks dejected, tears streaming from eyes. Starts blowing on sleeve. Honking
sound.
'... We're sorry to say that we can't accept your proposal for funding. Please don't take it personally, because most of the proposals we rejected, we rejected for reasons having nothing to do with the quality of the applicants ...' [0]
GEEK #2: "So did we get in?"
NERD : "No, we didn't get in."
GEEK #2: "Why, do you think it had something to do with me saying, 'I wanted to give it a try for 3 months then go back home and continue my PhD.?'" [1]
GEEK #1: "You what?"
NERD : "I told you, first we do the startup, make a good product, then the PhD., then we party, not before."
GEEK #1: "What about this?" ... interesting offer, "show off hackenpreneur skills?"
GEEK #2: "Isn't 'hakenpreneur' one of the Thunderbirds?"
NERD: "Thats Hacken - backer" [2]
ALL: Read article, mouths words, absorb information [3]
GEEK #2: "You do almost the same thing, same place, similar money, coding! LOOK! They even give you a idea to start working on."
GEEK #1: "Sun Tzu says: 'a wise general makes a point of foraging on the enemy. One cartload of the enemy's provisions is equivalent to twenty of one's own, and likewise a single picul of his provender is equivalent to twenty from one's own store.'" [4]
NERD : "Hmmm. What about our idea?"
NERD : You know. Our idea to revolutionise the storage and retrieval of unstructured data across the Internet. We have a demo, we've launched, got great feedback, users. We have what it takes. It will probably change. We can adapt.
GEEK #2: "Goggle stopper!"
NERD : "No, Google stopper."
GEEK #2: "Thats the code name, 'Goggle Stopper'."
GEEK #1: "Sun Tzu also said 'when your weapons are dulled, your ardor damped, your strength exhausted and your treasure spent, other chieftains will spring up to take advantage of your extremity' [5]
GEEK #2: Ancient Art of War, I love that game. If you get enough knights, take the bridge you can ...
NERD : But if we work for something else, we miss out on working on our own stuff, the people stuff, the business stuff. We could always go home, scrape some money together, polish our idea, skills and pitch again?
GEEK #1: "Sun Tzu also reminds me that, 'our men must be roused to anger; that there may be advantage from defeating the enemy, they must have their rewards'". [6]
NERD : Every day we aren't working on our own product, is a day wasted. Nothing will stop us!
GEEK #2: You're right. Why would we want to work on other peoples ideas? We're street wise. We do things on our own terms.
BTW, we're soon going to announce a third plan B, which we hope will be a better alternative to this or Techstars: to work for a YC "alumni" company. While some (e.g. Loopt) are quite established, others are so new that you could be the first hire, which is very much like being a founder.