
Y Combinator's Graham Says Startups Must Improve Lives  - justhw
http://www.youtube.com/watch?v=2lcp0uZsY7k
======
ihodes
I'm reminded every time I watch Bloomberg I'm reminded just how high quality
they are, and how intelligent their anchors are relative to any other large
media corp.

Additionally, Paul, thanks for being frank and great. It makes me so happy to
see you as the face of not only YC, but increasingly of tech startups in
general. When I get around to implementing a good idea, I've got you to look
to not only for interesting me in programming through Lisp, startups through
YC, but also for increasingly the visibility and viability of tech startups.

Definitely worth watching all 14 minutes.

EDIT: Also, still a little bitter over "the real money's in hotel search"…
dzoblin's & my Summer '11 (I think) YC application was that. Though admittedly
not far along, and the idea was still in development. _still_ ;)

~~~
haberman
No kidding. I have to admit when I saw Emily Chang give her opening spiel,
having never heard of her or Bloomberg, my mind immediately put her in the
"vapid TV personality" bucket. But over the next minute or two I realized that
was a complete mistake, and was extremely impressed with how sharp she was.

I don't even think I was aware of how low my expectations of TV anchors are.

~~~
workhorse
I felt the EXACT same way. She really did a great job.

------
cantbecool
First time I've ever heard the word suck on Bloomberg.

I love Graham's demeanor. Emily Chang and Cory Johnson seemed lost on air,
check out 7:02 in, when Graham responded with succinct and honest answers. He
didn't over-hype Y Combinator and emphasized the human aspect of startups:
startups must make peoples lives better and hiring good, intelligent people
are the keys to success.

------
qF
'Improving lives' is ambiguous, it centralizes around solving problems that
people have. However if you scale these problems from 1st world to 3rd world
problems it seems to me that improving lives in this context is aimed more at
1st rather than 3rd world problems. Which makes sense from a business
standpoint, but the title somewhat implies that is about making the world a
'better' place.

I am not criticizing pg because I strongly believe that it is a winning
strategy when talking about startups, just take improving lives with a grain
of salt. I'd love to actually improve lives, but unless you can take the Bill
Gates route (earn billions, do charity work), it's not easy to do so from
behind a computer, writing code. Are there any startups taking the route of
actually improving quality of life?

~~~
gibybo
While making the world a better place may not be sufficient to build a
successful business, I don't think it's fair to say only organizations
focusing on the third world are improving quality of life. Companies usually
don't make money unless they are helping someone, and that help often leads to
an improved quality of life, first world or not.

~~~
qF
I specifically chose to talk about a scale, because I do agree that it is not
black and white.

There is however a difference between: earning money as a goal and improving
lives as a means (improved quality of life being a byproduct) and wanting to
improve lives (and as such quality of life) and earning money only being a
requirement to sustain those activities.

But perhaps startups are not way to go for the latter, which is why I am
curious if there are any startups taking this route (or perhaps have tried and
failed).

~~~
patio11
This is the perennial theological question about charity: do you measure
goodness based on charitable intent or on charitable results? Say getting
money to poor folks in India is a charitable result with nearly-universal
support here. It is doubtful Microsoft scores very high on the intent scale
there, but they have probably done more for poor Indians _this year_ than all
active charities and all foreign government aid _in history._ I love Mother
Teresa, but aside from the poor's spiritual needs, if moving them into the
middle class is a goal worth pursuing than economic growth has been really
freaking effective and charity not so much.

This is one of the reasons Twilio excites me so much, incidentally.
(Disclaimer: commercial relationship.) Cheap mobile phones have been a huge,
huge, huuuuuuuuuuuuuuge win for the global poor. Twilio (and companies like
it) upgrade every phone in the world to being a smart phone. I think that's
going to create wealth on the scale of the Green Revolution or the Internet
eventually.

~~~
ced
Honest question: how are phones for the poor such a huge win?

~~~
spaghetti
It depends on the existing available methods of communication. If "the poor"
have internet access, email, Twitter etc then adding phones doesn't help much.
On the other hand if the poor don't have any internet access then just having
a cell phone that lets you communicate with business partners across town
could make a substantial difference. Imagine a simple business where one guy
sells vegetables in a marketplace in an urban area and his business partner
buys vegetables from farmers 10 miles away in a rural area. If the two can
communicates via phone then they can coordinate buying, selling and
transporting the vegetables (or any physical good) easily. They could even
optimize purchases on a given day based on the "real-time" demand the one guy
sees in the marketplace. In general the local economy could be optimized in
ways that are a net win for everyone. Lack of phones and communication could
hinder this.

------
marcamillion
It's so interesting how PG answered that GroupOn question.

He dodged giving GroupOn his stamp of approval, but hedged by approving Andrew
Mason. That's definitely an interesting approach, especially for someone like
him.

Edit: Also...that TechStars response...talk about awkward. Definitely good
questions from both hosts though.

~~~
ryannielsen
Actually, that's fairly consistent for pg. As he notes later in the interview,
he believes that a startup's founders matter more than the idea as good
founders will improve upon or drop a bad idea.

I think that was exactly the heuristic pg used in this case. He may not think
GroupOn is best company in its current form, but he believes that Andrew
Mason's smart and driven and is thus capable of evolving GroupOn into a solid
and profitable business.

~~~
staunch
I think betting on the founder breaks down as a company grows to a certain
point.

Steering a small startup is one thing. Steering a 10k person public company is
entirely different.

I doubt Steve Jobs at age 26 could have saved Apple from impending doom in
1996. Even at age 41, with all his additional skill/experience, it was far
from easy for him.

~~~
ryannielsen
Maybe, maybe not. I honestly don't have enough info to feel I can make an
assertion either way. My gut does say, however, that many of the same traits
are required of both startup CEOs and 10k employee public company CEOs. The
challenges are indisputably different, but a CEO who's tenacious, intelligent,
creative and driven will find ways to surmount any challenge whether it's
hiring the first employee or executing a billion dollar take-over.

Fair questions: would Apple be facing impending doom in 1996 if Jobs hadn't
been ousted and instead been allowed to lead his company? Would that Apple be
as successful today?

~~~
anamax
> Fair questions: would Apple be facing impending doom in 1996 if Jobs hadn't
> been ousted and instead been allowed to lead his company?

Jobs didn't want to run Apple - that's why he brought in Scully. Then he got
confused.

It was arguably better for Apple and Jobs that they were separate while Jobs
re-found his clue.

> Would that Apple be as successful today?

I'd argue that it would have crashed and burned if Jobs had ousted Scully and
would have faded if he hadn't brought Scully in.

------
ntoshev
PG says the first iteration doesn't matter much as long as the founders are
good and iterate quickly. Empirically, is this the case? Airbnb and Dropbox
certainly didn't iterate on their _concepts_ that much. Google's first shot
was excellent. Facebook captured 90%+ from Harvard students before moving on
to conquer the world. Are there real counterexamples, or even better, hard
data?

(If only YC recorded and aggregated key metrics from their startups, it would
be so much easier to answer such questions)

~~~
ig1
Airbnb was iterating prior to being part of YC, they've given several
interviews where they talked about how they'd gone through several launches
and failed to take off and had to iterate on their model. For example they
started out by only being an introduction service, but they found handling the
payment in person was actually a major issue (socially awkward, no record of
transaction, etc.) so the end up incorporating payment handling into their
service. That was likely a critical iteration.

Google's primary business is Ads which wasn't what they started with.

~~~
spaghetti
Handling all payments is absolutely critical because it leads to a
review/rating system that is credible (which is critical for a service like
Airbnb where strangers are offering and renting space to/from each other). As
soon as the payment processing is gone you end with a review/rating system
like Yelp. Namely one this is easy to game (for example business owners
offering free things to people who give them a good Yelp review) and therefore
carries little to no weight. I've used Airbnb three times now. The credible
rating system was crucial for me to feel comfortable staying with a total
stranger.

------
jmitcheson
I loved this quote (I'm paraphrasing)

Reporter: What kills young startups?

PG: The back button

Brilliant

------
yuvadam
I'd really like to hear about pg's gripes with TechStars.

~~~
staunch
Backstory as I understand it:

David Cohen asked PG's permission to start a YC franchise of some sort in
Boulder. He said no. David Cohen cloned YC in virtually every respect (down to
copying the application form).

Basically what Wimdu is doing to AirBnb.

Still, it has been 5 years and YC has certainly not suffered. I'm surprised PG
isn't a bit more magnanimous towards them.

~~~
ig1
Not really. TechStars is a franchise model, Cohen built a replicable model for
seed accelerators while YC is largely driven by Paul Graham personally. You
could remove Cohen from TechStars and TechStars would be the same, you
couldn't remove PG from YC without changing it's nature substantially.

TechStars was obviously derived from YC, but it's no more a clone than
McDonalds was a clone of existing Burger bars.

~~~
staunch
They copied everything about YC as it originally existed down to the
application form. If that doesn't count as a clone nothing does.

TechStars has only recently started trying to replicate their model on a wide
scale. They're very far from proving that they can.

The fact that TS would be just as good without the founder isn't necessarily a
positive sign.

~~~
davidw
> The fact that TS would be just as good without the founder isn't necessarily
> a positive sign.

If they have 'productized' the process so that they get, rather than one
charismatic, super smart guy like PG, a series of founder types who go in and
talk and mentor their startups, perhaps it can be made to "scale" to some
degree, rather than be a program based exclusively on the brilliance of one
individual.

Although, to be fair, YC seems to be taking on new people as well.

------
teej
The question I wanted them to ask is "How do you identify great founders?".
Every question they asked led to "YC picks founders, not the business". If
it's all about the people, I want to hear more about how he evaluates them.

~~~
hzay
I felt he deliberately did not go into this topic. He was asked "How do you
pick ~60 out of ~2000 applications?", and his entire response could be
paraphrased as "We have practice". It made me wonder if it was because he
thought it was too complex a topic for a quick TV show.

~~~
pg
I wrote about how I read applications here:

<http://ycombinator.com/howtoapply.html>

<http://news.ycombinator.com/item?id=801739>

~~~
someperson
Semi-related: The YC application for Dropbox from the link above seems to have
been taken down.

Does anyone have a mirror?

~~~
pg
<http://bit.ly/dropbox-yc-app>

~~~
someperson
Thanks Paul.

------
delinquentme
PG: ballsy enough to wear two popped collars?

i hope he won some money on that bet.

------
aymeric
Loved the questions Emily Chang asked, she seems sharp.

------
6ren
Iteration (aka _trial-and-error_ ) occurs on three levels, with feedback from
users; to pivoting; and he's elsewhere said YC was initially a way to learn
about angel investing, by having many investments, turning over quickly. Like
geneticists studying fruit-flies - or Christensen studying the disk-drive
market.

One of the disappointing things he's elsewhere said they've learnt through
this is that _smartness_ is less important than they'd thought. I wonder why
he's fallen back to "smart people" in this interview - maybe it's code for
"good people". #5: <http://www.paulgraham.com/really.html>
<http://www.paulgraham.com/founders.html>

------
Geekette
PG, your enthusiasm is crazy infectious. Loved the clip.

------
dkrich
I liked this interview, but I found myself siding with the dude at the
computer more than anybody.

I mean I fully agree that startups must and should improve lives to be viable.
But then how are you in the same interview going to plug a website called
"Hipmunk" that basically just displays flight info in a different way that to
me doesn't really seem any more intuitive than Kayak?

Flight search has been done. A billion times. Unless you are coming with some
interesting new business model, you are just shuffling around existing
information and wasting a lot of time and money. You aren't really improving
anybody's lives or solving a real problem. Why not try to build something that
really helps people do something they can't do now?

~~~
kn0thing
You've deftly avoided commenting on our mascot. This is just one year into
hipmunk - there's more to come. But even a year in, think of all the hours
we've liberated for flight/hotel searchers to do other more productive things
(like read Hacker News -- OK, bad example).

------
natural219
This interview defines me. Paul Graham exemplifies software entrepreneurship:
"Make something people want." Cory Johnson, herald of the old guard: "Make
users wade through bullshit; make ad revenue." You are dead, bullshit business
man. Welcome to my century.

~~~
Goladus
I am pretty sure Cory was not advocating click-throughs to generate ad
revenue, in fact he seemed to be specifically trying to frame that particular
approach as being vulnerable to competition.

The key question of course being, how can hipmunk actually make money doing
this?

~~~
natural219
I did not get the same impression other HN'ers did, I noticed. To me Cory
sounded smug and know-better, but maybe that's what I expected out of him.
I'll watch it again.

~~~
Goladus
Oh he definitely he sounded smug and know-better, he's a professional TV
personality and his audience is not typically hackers. But I think that's more
a reflection of him not actually caring deeply about topic more than true
conviction. That comment was just a set-up for the truly interesting question.

------
int3rnaut
What I like best about what Graham says is the idea that good people will
persevere and do good things to make peoples lives better and that he's
willing to bet on these good people. That's something universal, not just in
the startup world that I wish more people believed in.

------
wensing
I like how PG surprises the male interviewer with his non-traditional filters
for good investments.

------
known
I agree with PG. We need to do <http://www.netmba.com/strategy/swot/> and
<http://www.netmba.com/strategy/pest/> analysis before doing a startup.

------
jasontan
ironically, we ran into PG & JL downtown right after he did the interview.
while we were lugging cinema displays...

------
lhnn
tag

~~~
seancron
If you want to bookmark an article on HN, you don't have to leave a comment
for the purpose of tagging it. Just upvote the story. Then goto your profile
and click on "Saved Stories." Every article that you've upvoted on HN will be
there.

Or you can bookmark the page using your browser/bookmarking service of your
choice.

Either way it's better than leaving a "tag" comment.

~~~
lhnn
Thank you. That's not quite an intuitive association, but my era of tagging is
over.

------
Mizza
Never seen PG talk before, figured he'd be another west-coast asshole, but he
seems super down to earth!! Think I might apply to YC now..

~~~
justin
FYI: If you think everyone on the west coast is an asshole you'll probably not
be very productive living here and doing YC.

~~~
Mizza
Totally valid point, and everybody should be given a fair shake, it's just
that a lot of the people I've met from the west coast startup scene seem very
pretentious (and I'm quite sure I'm not the only person out east who feels
that way.)

Paul doesn't seem that way at all in this video, however, in fact he seems
incredibly down to earth. I found this surprising and refreshing, and it makes
me think that I have a misconception about the scene out there, and that I
would like to experience it now to decide for myself.

