
A Boot Camp for the Next Tech Billionaires - drusenko
http://www.msnbc.msn.com/id/18628572/site/newsweek/
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ced
"If people turn us down," PG says, "as far as we're concerned they've failed
an IQ test."

Has anyone read Axelrod's _The Emergence of Cooperation_? Looking at the above
quote with that book in mind, I'd say that PG is trying his best to establish
his reputation as a bully. Yes, probably all founders would be stupid to pass
up on his offer, no matter how low. However, given that, at the offer stage,
he has already spent some time (and money) for the interview, he's partially
invested in the startup. Thus, he would _also_ be "stupid" to reject a
counteroffer that was somewhat more favorable to the founders. But then he
would ruin his reputation as a bully, and open the door for more negociations.
So he won't negociate at all. It's his best strategy.

It's not necessarily a bad thing for us, as long as he still makes a fair
offer, but the way he says it makes me cringe. He's using the applicant's ego.
Who here would like to _fail_ PG's IQ test?

~~~
pg
The reason we don't negotiate is that the most significant thing we offer, our
advice and connections, we offer a constant amount of to everyone.

For the thousandth time, it's not about the money...

Here's why it's an IQ test. One should give up n% of one's co for something
that will make the remaining 100-n% worth more than 100. So you should give YC
6% if you think we can improve your prospects by 7%. Do we? Easily. And
someone who doesn't get that even after talking to us in person is not very
perceptive.

~~~
ralph
_So you should give YC 6% if you think we can improve your prospects by 7%_

Not if you think someone else will improve your prospects by a bigger ratio
compared to the cut they're taking though.

Don't know of anyone like that, just being pedantic.

~~~
pg
Yes, true. What I actually said was that if anyone turns us down simply due to
the implicit valuation, they've failed an IQ test, but these things get
compressed when reduced to one sentence quotes.

~~~
budu3
What was your exact quote? Where does the 5 mins come in?

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jey
By the time you're at your YC interview, you already know all of the terms of
the deal except for one variable: the percentage of the company taken by YC.
So if you're accepted, PG calls and gives you this one piece of missing info,
and you and your cofounders get 5 minutes to decide whether it's acceptable.

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abstractbill
I'm quite impressed that Steven Levy wrote about YC. I know him from "Hackers:
Heroes of the Computer Revolution", and "Artificial Life" - two of my favorite
books.

~~~
omouse
And there's a book about crypto that he wrote too.

 _Hackers: Heroes of the Computer Revolution_ was well written and
enlightening. If only the rest of the mass media could figure out what the
word hacker actually means.

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willarson
Reading that article, I can't help but feel like the reporter had decided what
he would find before he actually looked for it. The wording is very strong,
and the imagery is picturesque, it just doesn't really seem to square with
what I've read here and in pg's articles (that the input and advice they give
is important, but not controlling some how doesn't conjure the image of a
bootcamp in my mind...).

~~~
vlad
I personally thought it was the best article about Y Combinator that covered
everything from start to finish of the ones posted here before. I think the
bootcamp analogy refers to how fast everything happens over a period of a
couple of months when you first join the military, after which it is usually
less hectic. That's a good way of explaining Y Combinator to MSN readers, even
if startups continue to have hectic lives for a longer time than that, while
somebody could go to an officer school for 13 weeks and then go straight to
being responsible for 20-200 adults much older than they are, while startups
are still trying to get going. Other than that, I think the article explained
very well that most people came up with their own ideas.

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schoudha
Surprised that Zenter turned down a Google offer. I wonder how low it was?

~~~
ecuzzillo
Low millions probably means low ones-of-millions, which is non-fuck-you money
in return for a situation which you'd probably want to say fuck-you to, at
least if you believe the general sense around here that Google's status as the
ultimate hacker's mecca has begun to fade.

~~~
nostrademons
Low ones-of-millions - say $2M - is still enough to last 20 years at
$100K/year (not counting taxes, but also not counting interest). Most decent
entrepreneurs ought to be able to come up with another viable startup within
20 years, so for most practical purposes, it basically is fuck-you money. You
won't be able to never work again, but you have enough of a financial cushion
that you never have to work for another person again.

~~~
ecuzzillo
Yeah, but startups, for most founders, are a HUGE schlep. And, the return on
the schlep is nonlinear in the size of the schlep; it's more like exponential,
assuming you keep winning your rolls of the dice. And, the n+1th roll of the
dice has a much higher expectation than the nth. In other words, they've come
all this way, and they're ALMOST at fuck-you money-- they wouldn't want to
come back 20 years later and go through the whole process again.

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rokhayakebe
I got rejected by the YC and it still annoys me ever now and then, but the
article is good and right. Ok maybe sayuing billionaires is a bit too much,
maybe most of them will sell for a few millions but if you think about it when
they start they second with the money form the first, they will have better
chances at making billions. GO YC. And next time invite me to San Fran

~~~
rms
We're so young that we all have a very long time to make billions of dollars.
We have a lifetime to get there. It also gets easier as the dollar becomes
more and more worthless.

~~~
ralph
The dollar recently hit a 26-year low against sterling and an all-time low
against the euro. Just about everything is pointing to a lower dollar. US
growth is disappointing (YC excepted ;-) and is set to underperform Europe
[IMF]. US rates are expected to be cut later in the year whilst the UK and
Eurozone are set to rise. The UK rate is already higher than the US, normally
a predictor of bad things to come. US inflation is a bit high which lessens
the dollar's appeal as a holding asset.

The US deficit, still 6%, is depending on the sale of US Gov. bonds. Oil
producing nations are buying, and so are Asian central banks because they want
to see their exports look cheap in USD. (Doesn't China hold USD1.2 trillion?)

The dollar looks set to drift lower. If holders get concerned they have too
many and dump some of their wedge it'll plummet.

Interesting times. You could all be millionaires real easily. ;-)

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budu3
When the Weeblies show up for the meeting, they pull up Maples's Web site and,
using their software, clone it almost instantly. Then they show him how he can
use Weebly to tweak it easily and even redesign it. Maples's eyes open wide.
Later he will explain that at that moment, he was determined to help fund the
Weebly team.

How's that for a killer pitch!

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zaidf
billionaires? LMAO!

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startupper
What is old is new again. From the article:

"The Valley's new wisdom: don't fund anyone over 30."

Eerily reminiscent of Bubble 1.0.

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wschroter
what was the case for suggesting these companies would make the founders
billionaires?

~~~
someremains
i just think that is an assumption by the reader that these companies in (even
these companies in their present form) will make the founders billionaires. I
think it is safer to assume that the experience gained is more likely to lead
them to be come billionaires in future endeavors rather than in these
companies or even their next.

~~~
wschroter
I hope they all become billionaires. I just missed the correlation.

