

Paul Graham interview on Econtalk -  Start-ups, Innovation, and Creativity - SlowOnTheUptake
http://www.econtalk.org/archives/2009/08/graham_on_start.html

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caffeine
The discussion of biotech was interesting. It made clear that Y Combinator is
_replicating the biotech model of mass production of innovation._

Paul said (more or less) that the risk investing in Biotech was in some ways
lower (because it's easier to identify the 20 leading scientists from whom the
next wonder-discovery will emerge). I think this correct, but the comparison
between that and what YC does is misguided.

Those leading scientists are like the companies who've _already been through
YC,_ presented on a platter for the big money to get at.

So what's the YC equivalent? Paul said it himself - grad school.

For Biotech, a PhD program is the way to mass-produce seed-funded innovation.
You give someone a few years, let them attack a problem and generate data. The
best PhDs coming out get labs and professorships (equivalent to venture
funding worth $1-$2 million), etc.

Hacking is not science. Therefore a seed-funding model that works for science
does not work well for software innovation. YC is the replacement - it's your
PhD in software innovation. People go in, work with mentors (I meet my PhD
supervisor once a week, and regularly hear talks from the best in the field,
just like YC founders). The best innovators come out and get funded for $1-$2
million and hopefully go on.

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pelle
EconTalk is one of my favorite podcasts. Seriously every entrepreneur would do
well subscribing to it (and listening through the back catalogue).

~~~
marvin
On the other hand, I wish I could be a fly on the wall during some of these
infamous YC dinner talks.

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ivankirigin
If there were flies on the wall, they wouldn't be nearly as interesting. Just
corner some of the speakers elsewhere and put a few drinks in them, and you
might get similar results.

~~~
mahmud
Another technique I found works great is to "be wrong on front of an expert".
Make uninformed but curious statements before knowledeable people and I will
take the time to tell you how it _really_ is.

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loganfrederick
Two of my favorite topics, entrepreneurship and economics, being discussed by
leaders in each respective field.

It's when you get crossovers such as this when you get into the field that
Joseph Schumpeter and Clayton Christensen really mainstreamed: 1\. "Creative
Destruction": The concept of new technologies destroying the older ones. 2\.
Innovation as the driver of creative destruction.

My only real critique of Y Combinator and Graham's model in general is that
it's still very tech/web-oriented. I get the cost and exit benefits, but the
noise around this sector has changed people's ideas of startups: Lemonade
stands, clothing lines, etc.

Most surprising takeaway is at the end, where once again immigration
limitations are shown to stifle economic creativity and growth.

~~~
byrneseyeview
_My only real critique of Y Combinator and Graham's model in general is that
it's still very tech/web-oriented. I get the cost and exit benefits, but the
noise around this sector has changed people's ideas of startups: Lemonade
stands, clothing lines, etc._

Ycombinator is web-oriented, but the model isn't (necessarily). You could have
a company similar to YC in any field with low initial overhead and high
scalability. Unfortuantely, I can't think of any that can match web software
(maybe finance, actually: there are already hedge fund incubators, and they
might scale down average funding to scale up the number of people they fund).

~~~
sachinag
You could probably easily do the model for consumer products _if_ you would be
able to figure out a test distribution mechanism, such as a partnership with a
grocery store chain, or some such. Yeah, it would be something akin to the
American Inventor show, but the key is to be able to do serious in-store or TV
ad (informercial or 30 second) testing.

Here's how the Crest Spin Brush came to be:
[http://www.businessweek.com/smallbiz/content/aug2002/sb20020...](http://www.businessweek.com/smallbiz/content/aug2002/sb2002081_2099.htm)

~~~
rfreytag
Isn't this something like how QVC works - take stuff and fail fast or explode
the market for that whacky items with copycats?

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nazgulnarsil
one of the things mentioned towards the end is that they "don't get" the time
sink application. that is because they are producers. the internet has made
visible the vast unproductive masses. paul doesn't like timesinks because his
time is valuable, most people's time is not valuable.

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ivankirigin
I've enjoyed Cafe Hayek, Russ Roberts' blog, for some time
<http://cafehayek.com/>

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conorgil145
I simply loved listening to this. It was more like a fascinating conversation
with Paul Graham that we got to listen in on than an interview and it was
extremely exciting.

Thanks for the fascinating insights, essays and interviews Paul.

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seertaak
Very much enjoyed listening to this. Graham's enthusiasm is palpable and
infectious, and his knowledge of the subfield is clearly second to none.

~~~
arketyp
I've read Paul Graham's essays and followed his projects ever since I stumbled
upon his essay on Java (as an ambitious teenager dreaming of hacking), but
I've never actually heard him talk. I was surprised, gathering from the
manners of expression and enthusiasm, how well he fit my image of the hacker
and nerd - although I had all the reasons to expect that. It's not the voice
I've heard in text.

Anyway, it got me thinking how much being surrounded by young (be it yet
intelligent and stimulating) hacker people affects the way you think and talk.

~~~
kirubakaran
You'll like this: <http://itc.conversationsnetwork.org/shows/detail188.html>

~~~
arketyp
I did. But this is a prepared speech, by PG the essayist, of prose.

I guess the novelty factor for me in the interview was more of a social
quality, through communication. The part of a person that does not show in
prose.

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daeken
By far, the most important statement (although it was all quite interesting)
was this: "There's nothing better than to have sophistocated users. And
conversely, it's dangerous to build a product for giant corporations or, god
help you, for the defense department, because then the stupidity of your
customer will make you stupid. You want to build a product for clever,
impoverished outsiders."

Gives me hope that they'll see that in my startup's YC application.

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bendtheblock
"worse than random" - great way to describe the likely result of big-
corp/government investment in IT projects. The YC model (and VC model to some
extent) works precisely because of the unpredictable nature of innovation - it
is hard to predict 'the next big thing', 'the next google' etc. but you can
increase your chances by investing thinly across many startups. The returns
for those that succeed will far outweigh the cost of those that don't.

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peripitea
The net result was interesting, but the interviewer's frequent interruptions
made it more grating than it had to be.

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datums
Very nice talk. Paul sounds very passionate and down to earth. One of the
things we should all work on is decreasing timesinks.

