
Paul Graham: Handling Investors (talk at Stanford 11 April 07) - mattjaynes
http://blog.nanobeepers.com/2007/04/12/paul-graham-handling-investors/
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erik
Paul talks about the YC admission process. "At YCombinator we go through and
rank all of the applications, then we take the top 30 for interviews."

I bet there are a few people around here who would like to know where they
placed in the last round.

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danielha
30 was just the number they invited for the Winter batch. It's not their
standard cutoff number.

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nostrademons
It seems like it'd have to be around that just for time constraints, though.
If they give each interview an hour, 30 teams means 15 hour days all through
the weekend.

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jey
The interviews are much, much shorter than an hour. Either they're really good
at reading people, you just have to make the most of the short time you have,
or both.

Trevor said that they have about 50 interviewees for this round.

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pg
This is fairly accurate as on-the-fly notes from a talk go, but certainly
nothing like a transcription. There's a lot missing and a few things that have
been misunderstood.

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mattjaynes
Yeah, I tried to make that clear at the beginning of the post. I guess not
clear enough. I've added an update to my post including your comment. Yet
another reason I prefer to podcast - way less work for me and much more
accurate! I'll be sure to bring extra batteries with me next time, doh.

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jkush
Nice write up and great answer to that question. I can't tell you how bummed
out I am that my application was rejected. I'm debating whether it means there
was something fundamentally wrong with my app or if it's something fixable. I
know it's impossible, but I would have really liked to know what was (or
wasn't) in my application that caused it to be rejected.

~~~
nostrademons
"I'm debating whether it means there was something fundamentally wrong with my
app or if it's something fixable."

The only way to know, for real, is to build it and see if people come. No
investor, nor even an entrepreneur, can tell whether an idea will work just by
looking at an application. They can only judge which ones are _likely_ to
work.

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nurall
Although not part of his talk, Paul had something interesting to say, when
posed with the question about how anal investors are, about 'domain expertise'
of the team they would be willing to fund.

The point to take home from Paul's response to this question was that, as long
as the investors are convinced that the 'hackers' have enough domain knowledge
to realize an important need and they have a relevant and popular solution to
the problem, then the product/prototype/system should silence the
critics/cynics, if any.

Paul used Mark Zuckerberg as an example as a facilitator of 'inter-personal
networking' through facebook. The domain here being 'inter-personal
networking' ;-) and how much Mark sucks at it!

Go HACKERS!!

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danielha
Thanks for the notes. I was caught up in traffic and missed the first couple.

The best part was Paul imitating a giant cockroach riding atop an imaginary
muzzled VC like a horse, furiously cracking a whip. Definitely one of those
"had to be there" moments.

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timach
YOU WROTE: "When I did my app, I really liked the last question which was to
tell about something 'surprising' or 'amusing' that you had discovered. So I
asked if they had had many good answers to that one. Paul said that there were
some really good ones, but that inexplicably many had left that question
blank! Then he chuckled and said "Actually, there was a guy who submitted this
wonderful algorithm for wiping his ass.""

My co-founder and I answered the question as follows. "timach notes that time
is expanding between The Big Bang and The Advent of Human Consciousness. These
are the opposite poles of existence. This means that the mathematical model of
physical time using the complete ordered field of real numbers is a misleading
metaphor. What is great about mathematics is that it is a tinkertoy of
metaphor, and thus offers unlimited possibilities for new metaphors. Rigor is
the window through which intuition shines.

erdos2 discovered an enumeration formula for a class of combinatorial objects
(the "almost-injective" functions) with the following decomposition: the
formula is a sum of two terms, the first of which has a closed form
representation as fixed sum of generalized hypergeometric functions and which
is asymptotically significant; the second is provably not representable in
closed form (hence there is no closed form enumeration formula for the almost
injective functions), and asymptotically negligible. Moreover, the significant
term is asymptotically equivalent to a simpler hypergeometric function, from
which a limit probability distribution for the almost injective functions can
be derived."

I wonder if these responses are far less memorable than a high quality ass
wiping algorithm.

~~~
jey
Sorry to threadjack, but what does this mean:

"timach notes that time is expanding between The Big Bang and The Advent of
Human Consciousness. These are the opposite poles of existence."

I don't understand what you're trying to say by "time is expanding". It also
seems to me like a rather anthropocentric view of the universe to put human
consciousness at one "pole of existence". We've only observed a thin slice of
existence thus far. If you could explain this, maybe I'd understand your
following assertion that "the mathematical model of physical time using the
complete ordered field of real numbers is a misleading metaphor".

I don't understand erdos2's discovery either, but I'll chalk that up to my
complete ignorance when it comes to math.

~~~
timach
He's my cofounder and I don't understand what he is talking about either. As
for what I am saying, the basic point is that only two interesting things have
happened. One is The Big Bang, and the other is that we know it. All else is
imaginary. The idea that "we've only observed a thin slice of existence" is
falling prey to the metaphor to which I am objecting. There is no "existence"
to slice up.

~~~
juwo
"He's my cofounder and I don't understand what he is talking about either"

That is so funny!

When I initially read your post two days ago, I was indignant at PG a la
"throwing pearls (you) before swine (YC)".

Now I realize - and I dont know if PG would have had this insight - an
entrepreneur needs to communicate ideas. I could not even read through your
answers, much less understand them!!!

~~~
erdos2
I still don't know what he was getting at, and neither does he. :)

~~~
juwo
So, are you his cofounder?!

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Tichy
So what is the ass-wipe algorithm mentioned in the article? It is not
patented, or is it?

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mattjaynes
He he, nope - it's under GPL ;)

I created a new thread so others could add their answers. My answer is here:

<http://news.ycombinator.com/comments?id=12495>

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brett
Did anyone mention when someone's cell phone started to ring in the middle of
Paul's talk? After 3 or 4 rings he realized that it was his own, in a bag,
across the room.

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mattculbreth
Man that looked like an awesome talk. I love Atlanta but missing out on this
kind of stuff really sucks. That couple of days for Startup School was
refreshing.

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elialfordj
"This is what VC's care about: A) traffic B) what other VC's think of you C)
the quality of your team"

I had to stop reading. What about uuhmm...revenue?

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brett
The point he was making there was that while VC's claim team quality is the
highest priority, it's not (and most VC's are unable to accurately evaluate
team quality anyways).

Regardless: Are you claiming that all VC funded companies have revenue at the
time of funding? To my knowledge VCs fund many pre-revenue companies. That
would indicate that at least for those deals revenue was not an important
factor. A lot of laundromats have more revenue than many early stage startups
and VCs aren't knocking on their doors.

~~~
elialfordj
Do all VC funded startups have traffic? Do all VC funded Startups have a
reputation among VCs? I was obviously not making a statement about "all" VC
funded companies. If we're talking about what is important to venture
capitalists when evaluating startups seeking early stage financing, I think
revenue should have been a good candidate for that short list of qualities. If
you can show in a small test market that your model is capable of generating
revenue, and your model is scalable, this is going to look pretty appealing to
your prospective financier. Not every startup involves some abstract technical
concept, it is possible to build a company with revenues from the start.

~~~
brett
That's a pretty good point. Some VC funded startups (namely ones that have not
launched) probably have less traffic than some laundromats and that clearly
does not mean traffic is not important. My guess is that buzz amongst VC firms
is more of a uniform prerequisite, but point well taken.

Ultimately this list is entirely empirical. Paul's list seems to jive with
other sources I've read/heard but, admittedly, I know relatively little about
VC deals. If you've got examples where revenue was a big factor early on I
would be curious to hear about them.

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mattculbreth
Did Paul use Zenter again?

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comatose_kid
No, not this time.

