
Y Combinator's Graham Discusses Start-Up Industry - zaveri
http://www.bloomberg.com/video/83135286/
======
aculver
In the later part of the interview she asks some questions about the recent
discussions regarding minorities in the startup community. I thought his
response was insightful:

"Well, I think the problem is upstream from us. I don't think it's that, like,
huge numbers of women and minorities want to start startups and that we're
filtering them out because they're not white or men or something like that. I
think that the applicant pool, the applicant pool has the same problem that
people see in our output, right? The same problem is in our input that people
see in our output. The problem is further upstream. The problem is that the
pool of startup founders is the people who are messing about with computers at
age 13. If you want to fix the problem, that's what you have to change."

~~~
jdp23
Some other incubators fund more women and minorities than YC, so this seems
like it's only part of the story. A couple questions this leaves in my mind:

\- what are they doing to broaden the applicant pool?

\- have they considered that something about the process or their reputation
might lead to women and minorities steering away from YC?

~~~
pg
Probably the biggest things we've done to broaden the applicant pool are
Hacker News, Startup School, and all the essays I've written about startups.

I don't think there's anything about our process or reputation that directly
discourages people of any gender or race. But we do prefer founders who are
hackers, which presumably thus causes fewer members of groups that are
underrepresented among hackers to apply to YC.

~~~
kevincjemison
It's definitely a complicated issue with no clear overriding cause. As a
minority who did take apart his mothers computer at 13 and compressed the
windows partition to install linux (woo hoo slackware) and has gone on to
found a startup I think some of Paul's commentary is spot on. Though I was
representative of some of the larger stats (single parent home, lower middle
income specturm) I was also one of two kids on my block with access to a
computer in the home, and my single parent was a teacher who made education a
priority. If you looked at the cohort of kids I grew up with you'd find myself
and 2 others out of 11 or so that are not either a. dead or b. in jail, or
have been in jail. Why is that? I don't know and don't claim to know, but the
road to changing it starts very young.

------
richardburton
I really enjoyed the interview but I found this exchange puzzling:

Emily Chang (quoting Max Levchin): ‘Entrepreneurs aren’t taking big enough
risks … ’

Paul Graham: ‘Well, that probably isn’t true because it’s gotten cheaper and
cheaper and cheaper to start a startup and when the cost of failing gets lower
usually people can do riskier things’

Risk is the potential for loss. If the cost of starting a startup is lower
then the potential for loss is lower which means the risk is also lower. More
people are starting startups because it is less risky, not more. That means
the number of companies being formed is going up; in turn, that means that
more people are _taking the risk_ of starting a company, whether they are
risking much or not. This might seem a subtle distinction but I think it is an
important one.

A week ago I sat down opposite an entrepreneur who built a 24-hour transaction
layer on top of the UK’s banking system which runs on nightly batch-
processing. It made the transition from 9-3 banking to 24-hour online banking
possible. He started out with a _really big_ vision and had to take _really
big_ risks and the result was a _really big_ company that created a lot of
value economically and socially. It took him two decades and nearly bankrupted
him on dozens of occasions. His vision sustained him. It kept him going
through all the terrible lows and in the end he shook up one of the slowest-
moving industries out there. That was a big risk. That was a big reward.

------
softbuilder
"it's gotten cheaper and cheaper and cheaper to start a startup"

"maybe it's just not the right time yet for a vacation on the moon"

There is a terrible amount of segment bias here. It is orders of magnitude
cheaper than it used to be to start a _software or virtual service_ startup.
Other varieties of tech startups (chip fabs, space launches, flying cars,
etc.) aren't nearly as cheap yet and represent far greater risk. It's a big
world. Lots of markets. Lots of possibilities.

~~~
corin_
Agreed, and if anything this makes it harder to aim for something like
holidays on the moon.

If it costs the same to try and build a spaceship as it does to create the new
social fad then why not reach for the stars (literally) - but when it's so
much cheaper to try and start the next Facebook, and you know that starting
the next Facebook could have just as much potential to make you far less
people will take the riskier option.

------
jholman
You know, it's always a visceral pleasure to hear/watch pg talk; at least for
the way my brain is (soft-)wired, he's so charming and listenable.

But every time I see him interviewed, my "he's got an axe to grind" detector
is going off so loudly that it's starting to drown out the charisma. It's
understandable, in that high-tension soundbyte-oriented environment, that pg
wants to ensure he stays on-message, but it's also disappointing from someone
who we know is capable of being so much more informative.

He says, in response to several questions, "oh, that's not how a perfectly
rational market would work, so it's probably not what's happening". I mean, I
agree with the argument as far as it goes, generally reality roughly
approximates an ideal market, but the approximation is always rough, and pg
repeating this is sort of wasted air, isn't it? Examples:

at 2:08 in response to "big enough risks",

starting at 2:38 in response to valuations like Dropbox's,

at 5:25 in response to Aston Motes's very plausible theory about bias in
"pattern-recognition"

Everyone's entitled to try to manipulate the media as best they can, and I'm
not even doubting the sincerity of pg's claims about the market's effect on
all those issues. But it sure would be nice to hear you dig a little deeper,
pg.

------
vasco
I don't understand the women+minority problem. Different people have different
interests, and I believe this is a good thing and not a problem. If more
diversity were to come to the startup world that would be awesome, but I don't
see this as a problem that needs fixing.

Startup people just have to keep doing what they do and if more people get
interested in startups then things will all fall into place. What about the
percentages of women and minorities in such places as politics? Is this a
problem too? What about other industries that are dominated by women, is there
a problem there?

People like what they like and that's that!

------
pwim
Eric Ries claims to have had "shocking" results when having recruiters remove
all demographics from resumes. His suggestion for YC:

 _I suggest the following experiment: for your next batch of admissions, have
half of your reviewers use a blind screening technique and the other half use
your standard technique, on your first screen (before you’ve met any
applicants). Compare the outputs of both selection processes. I predict they
will show different demographics._

<http://techcrunch.com/2011/11/19/racism-and-meritocracy/>

Obviously YC needs to interview applicants, but as it already cuts people
before the first interview, it might be an interesting experiment.

~~~
pg
We see them at the application stage too, because the application includes a
video. The video tells us a lot more than their race and sex. So if half the
people reading applications didn't see the video, we'd do a lot worse at
reading applications.

------
the_cat_kittles
Why is the "not enough women and minorities" question even on the radar? Did I
miss something?

~~~
schwabacher
Because it is an ongoing and serious issue that hurts startups as well as
women and minorities.

~~~
the_cat_kittles
care to be more specific?

~~~
schwabacher
They spent a long time talking about this, at the expense of more interesting
questions she could have asked PG. Especially more interesting to people
interested in startups.

It is a serious issue though, 96/4 men to women is a really bad ratio. And my
guess is that the ratio of white and asian to hispanic and black is even
worse. So startups miss out on a huge potential talent pool and the
perspective of people who might approach problems in a different way. And at
the same time women and minorities are largely failing to take advantage of a
really exciting opportunity.

PG is probably right, the bulk of the problem is that thirteen year old girls
/ black kids are not playing with computers. So maybe this is a question that
would be better directed at parents or teachers, but it definitely should be
on the radar. It is a problem that can be solved, that we should solve, and is
a good thing for people watching Bloomberg / people doing startups to think
about.

------
localhost3000
Thought she handled the, "well, this is news to me! i don't know anything
about the recent IPOs!" response pretty well.

~~~
latchkey
She's also very smart (Harvard grad) and has an impressive resume.
<http://en.wikipedia.org/wiki/Emily_Chang_(journalist)>

~~~
gbog
So she is of Chinese ascent. How weird, I couldn't tell. And her strong
American accent, so strange. Sorry.

------
gbog
A bit OT but would be nice to have a [video] tag for these autostarting
videos.

~~~
rdl
I particularly hate autostarting videos with loud preroll ads :(

------
dontbelame
I love Emily Chang's facial expression :)))))

~~~
steveheady
Listened to the audio while browsing web, the condescending tone of overvalued
tech for privileged white people was all I could hear from her.

Paul, on the other hand, is a class act as always.

