

BusinessWeek's Best Young Tech Entrepreneurs of 2011 - pg
http://images.businessweek.com/slideshows/20110516/best-young-tech-entrepreneurs-2011/

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pg
Congratulations to Tutorspree, WePay, Bump, Greplin, Hipmunk, and Disqus!

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billclerico
PG - thanks for giving two young guys from the east coast with a crappy
prototype a chance!

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dh
How sad that they only listed companies that got funding. It is not a good
culture to look at funding as success, how about growth, revenue or even
profit.

~~~
pg
It's true that funding is only a step toward success. I'm constantly reminding
founders of that. But as of now, at least, it is empirically a necessary one.
Construct a list of the most successful technology startups however you like
(by revenues, market cap, number of users), and you'll find the number that
didn't take outside funding is zero or near it.

It's an interesting phenomenon that all the biggest successes take outside
funding. Perhaps the reason is that the better you are, the better terms you
can get money on, and for any given startup, there are terms so good you'd be
stupid not to take money at them.

~~~
replicatorblog
You are right that any truly transformative tech company has raised outside
money. However, it seems like there is a shadow tech scene comprised of
substantial companies that have self funded. e.g.

CSN Stores - $300MM+ annual revenue/ bootstrapped

MailChimp - Approaching $100MM/ bootstrapped

Club Penguin - $350MM acquisition, heard they had a little angel money, but no
VC

Ganz/Webkinz - Kind of a startup within a small manufacturing biz, but they
have mid 9 figures in revenue.

SparkFun/iFixit - Both $20+MM in revenue with no outside investment.

Provocraft has $100MM+ in virtual good sales

Granted, most of these aren't household names in the tech world, but all
thrive based on web tech. I'm sure there are others beyond the ones I know,
but there seems to be a playbook that can get a company to $100MM+ without VC.

In closing, I agree with your thesis, and Sequoia's old homepage would back
you up 100%, but do you think companies like the ones above are just outliers
or are not successful enough?

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pg
A combination of both. If you constructed a list of the top technology
companies, few to zero of these would appear on it.

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robg
Do you wish you had raised VC for Viaweb and grown it to be "bigger"? How much
bigger would you have had to grow it to get a better exit personally?

Bose is at least one counterexample, it seems. However, don't the most
successful private companies have little incentive to release the information
you say is necessary for the comparison?

~~~
pg
Actually I wish I had raised less. But I wasn't trying to make Viaweb into one
of the top technology companies.

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imjk
Anyone else see this as a thinly veiled advertisement for the venture capital
syndicate. How could the two most important categories on the Best Young Tech
Entrepreneurs of 2011 be "Funding" and "Wisest Funding Decision?" Everyone's
answer seems to be, "Yeah, the best thing we ever did was take $X MM from X
venture capital."

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juiceandjuice
Wow, not one of those has any roots whatsoever in science or engineering,
except maybe Meraki.

Is this just media selection bias, or is Silicon Valley really just turning
into Marketing Valley?

~~~
pg
What do you mean by roots in science or engineering?

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juiceandjuice
I suppose the meaning of "tech" is somewhat subjective, but to me it seems
like most of the companies mentioned purely provide a platform or a service to
consumers or businesses, largely with the motivation of selling a consumer
something.

I guess I hoped there would be some cool startup working on non-linear optics
that I've never heard of, or some bioinformatics startup changing the way we
do medicine. Research spin-offs, I guess. I understand there's a lot more
intellectual overhead in some of these things, and maybe they just aren't as
glamorous or something, but I was hoping to see _something_ along those lines.

~~~
pg
Historically, few successful software startups have been research spinoffs.
That's not a recent trend. Even Google wasn't really. In biotech, yes, but
there the founders are older.

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robg
Backrub, and its creators, were clearly government funded:

"1996 - Larry and Sergey, now Stanford computer science grad students, begin
collaborating on a search engine called BackRub."

<http://www.google.com/corporate/history.html>

"BackRub is a research project of the Digital Library Project in the Computer
Science Department at Stanford University."

[http://classic-
web.archive.org/web/19971210065425/backrub.st...](http://classic-
web.archive.org/web/19971210065425/backrub.stanford.edu/backrub.html)

"The Stanford Digital Libraries project is one participant in the 4-year, $24
million Digital Library Initiative, started in 1994 and supported by the NSF,
DARPA, and NASA."

[http://classic-
web.archive.org/web/19971210113151/diglib.sta...](http://classic-
web.archive.org/web/19971210113151/diglib.stanford.edu/)

That's a huge initiative, especially in 1994, supporting many, many grad
students like Larry and Sergey. There's a strong claim that without the
research funding, we wouldn't have Google.

~~~
pg
That's why I put the "really" in there. It was government funded in the sense
that any side project people work on in grad school is government funded,
since the government is paying their living expenses. If that makes the
startup a spinoff, Apple was a spinoff of HP, because Woz was still working at
HP when he started designing the Apple I.

~~~
robg
A $24M project, over 4 years, at six universities is exactly supposed to
encourage creative innovation among the next generation and surrounded by
domain experts. That initiative was _designed_ to produce projects like
Backrub.

Was Woz's job description at HP written to specify novel hardware? Was he
surrounded by mentors and other employees hired to support that initiative?
Across six departments?

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pclark
6 out of 20 of the entrepreneurs were funded by YC. How incredible is that?

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il
And many listed doing YC as the best funding decision they ever made.

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run4yourlives
As an "outsider", the only thing I really take from this - besides seeing the
prominence of YC startups - is that there certainly is a shit ton of money
chasing unproven ideas.

I mean, all of these products seem on the surface to be viable entities. I
suppose that alone is better than what was happening ten years ago. However
the issue I have is that the degree they need to succeed _just to be a
positive return_ is sometimes bordering on the outlandish.

Groupon - a BILLION dollars? Seriously? It's news if an entire industry is
worth this much, let alone a single company.

Maybe I'm just not getting it, but a lot of this stuff seems to be overvalued
in the extreme.

~~~
pg
Whether Groupon is overvalued depends on its price to earnings ratio. What is
its current P/E ratio?

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southpolesteve
I disagree. P/E is just one way of valuing a company.

Regardless of their current valuation, my personal opinion is that Groupon
faces serious issues regarding the long term sustainability of their business
model. They have dominated an ecosystem that will eventually balance itself. I
am skeptical that they can maintain their current valuation through that
process.

~~~
pg
I agree that there are other methods you can use. I thought it would be a
start to bring the level of the discussion up to specifics at all.

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LostInTheWoods2
I don't understand the age discrimination. Is there a "Best Old Tech
Entrepreneurs of 2011"?

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spydertennis
The younger you are the less time you've had to achieve something. Therefore
it's more impressive when you do.

~~~
robertk
First statement is true. Second statement is false.

~~~
spydertennis
Explanation?

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rishi
Solid list and congrats to everyone on it.

I'm not a fan of how much emphasis BusinessWeek puts on the funding amount. It
really is the only data point they write about. Would like to see revenue or
users... or something else.

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tlb
Funding events are usually announced publicly, while revenue isn't. Revenue is
also hard to compare between product, service, and advertising-supported
companies.

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iamelgringo
Just realizing how small the startup community really is. I've had drinks with
a quarter of the people on that list at Hackers & Founders over the last 3
years.

Cheers, mates. Next round's on you. :)

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spencerfry
I've got so many friends that shoulda made this list, but fly under the radar.

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kongqiu
I'm probably not the only one who'd be interested in an alternative list...

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bugsy
Got halfway through the list and gave up. So no one builds products anymore.

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edw519
Congratulations, Jason Baptiste!

I made a point of meeting Jason when we lived in Miami at the same time. I had
to meet this guy who made so many great comments here at Hacker News.

Glad to see you've moved on to bigger and better things. It was only a matter
of time. Looking forward to hearing great things about Onswipe.

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jasonlbaptiste
Ed, thank you, it means a lot :). Hope to see you again before my next time in
Miami.

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stevenj
Really cool to see several YC companies listed.

I really wish I could invest in YC.

I bet YC will (still) be a notable player in the industry 20 years from now.

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delinka
I really wish the mainstream media (oh, and US automobile manufacturers) would
use the same calendar that we mere mortals use.

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RealGeek
Wonder how many of them are dropouts?

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truthseeker
I installed Bump on my iPhone but used it just once. Any one knows how Bump is
doing in terms of traction and usage?

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lurker19
It's not.

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sahillavingia
Where's Mark Zuckerberg?

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rms
He's transcended lists like this.

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pitdesi
For those who commented on the age discrimination, Businessweek has this list
of overall most promising startups:

[http://images.businessweek.com/ss/08/06/0627_fresh_entrepren...](http://images.businessweek.com/ss/08/06/0627_fresh_entrepreneurs/)

