

Challenge to PG/YC - will_brown

"Founders have never had more power relative to investors than they do now." - PG<p>I think there is a very easy method to prove this and I hope PG/YC will consider this challenge to prove himself right, obviously not for the sake of proving me wrong, but proving himself and the state of the investment market right for all Founders.<p>Challenge:<p>I propose including a "mole" in the next batch of YC, someone who 1. YC did not select for an interview; 2. already has a product; 3. will not take YC funding but go through YC and will otherwise be anonymous and identified as a YC Company (I assure you endless numbers of people would go to YC without any funding, just to be identified as a YC company); and 4. will present at demo day.<p>The results can be measured through investors’ interest in the "mole".  I will propose a hypothesis, that investor interest or actual investment will at least fall within the average of the rest of the batch.  What does that mean?  Well in my opinion this would prove, Founders do not have anymore power relative to investors, there is just a different gate-keeper.  In fact, I would take this a step further and even suggest that YC has taken power away from Founders, where at least before investment was dictated by the market, i.e., if you create a product that the market adopts, then you can get funding to grow.  Contrast that with the current power struggle where if you have a product that the market has adopted, there is less investment opportunities because investment dollars are already set aside for that next YC company that doesn't even have an idea.
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itsprofitbaron
In other news, rejected YC applicant[1] calls out PG asking to be a "mole"
company[2] which could ruin YC's credibility in the long term with investors
and doesn't even make sense - for a startup the OP admits they have been told
no one wants and then goes onto try and call out Google Ventures because,
YouTube launched a version of it[3] - a completely different version which is
better executed as highlighted by the fact that it doesn't require any form of
plugin etc (this may come across as harsh but, it's useful feedback - you have
added user friction and you should remove as much of it as possible)

If you want to launch a product and succeed, YC doesn't guarantee you success
nor does being rejected mean that you are a failure. YC have invested in
numerous startups which have failed as well has having some great successes
(Heroku, Dropbox, AirBnB, Stripe, OMGPop etc) but they've also missed out on
some startups too:

\- SendGrid - <http://www.sendgrid.com/> (went through TechStars and have
raised a series B)

\- CouchOne - <http://www.couchbase.com/>

\- AfterTheDeadline - Acquired By Automattic

\- Light Sail Energy - <http://www.lightsailenergy.com/> \- Raised money from
Khosla Ventures

\- SignPost - <https://www.signpost.com/> \- Raised $1M off Google Ventures

\- MyFit - <http://www.myfit.com/> \- Raised $1M

\- Storenvy - <http://www.storenvy.com> \- although they were kicked out of
YC[4] but have recently raised $5M[5]

[1] <https://news.ycombinator.com/item?id=5420541>

[2] <https://news.ycombinator.com/item?id=5671751>

[3] <http://www.youtube.com/trendsmap>

[4] [http://joncrawford.com/post/20378314843/how-i-got-kicked-
out...](http://joncrawford.com/post/20378314843/how-i-got-kicked-out-of-y-
combinator-and-then-raised)

[5] [http://techcrunch.com/2013/02/12/storenvy-goes-from-
getting-...](http://techcrunch.com/2013/02/12/storenvy-goes-from-getting-
kicked-out-of-yc-to-raising-a-5m-round/)

~~~
will_brown
I think you missed the point, it is not about me, otherwise the "mole" would
not be very anonymous and be self-defeating...yes I put that in a prior
comment directly to PG's comment, but this is a separate post and I do not
suggest me. Separately, " OP admits no one wants" I do not know where you got
that, in fact I picked up users from HN who have posted they think geotagged
videos could be very useful in many different industries, but yes I applied to
Google Ventures and YouTube created a similar product a few months later - did
I say they ripped me off? No I just said it sucks...As to the plug-in you are
correct my product would be better if it did not require a plug-in, but I can
not just demand Google release an API for Google Earth that does not require a
plug-in.

Now...if I can smoothly transition your post about me back to my OP, I did not
require PG to take a position that Founders have more power with Investors
than any other time, I just disagree. I never said YC guarantees success, but
it does guarantee funding, and as you will note my post is about PG's take on
investment _not success_ as you seem to read into my post.

If you believe you as a Founder have more power today with investors than any
other time, that is fine, you do not need to attack me personally because you
disagree, maybe it is a fair characterization to say I called PG out, but I am
not attacking PG personally just offering a way to prove his statement. Others
have already commented my "challenge" would not prove anything, but admit my
hypothesis is correct.

I agree there is an inherent problem with YC putting someone they rejected in
front of investors, unbeknownst to investors, but "ruin YC's credibility" that
is a joke. However, I think your position proves my point as to PG's statement
that the power does not rest with Founders otherwise if a investor liked a
start-up they should not care whether they were a YC company or not, ie. if
you invest after a demo at YC only to revoke your investment upon learning
that Company was not accepted into YC, then my point is proven. So I guess a
alternative challenge could be informing investors that a YC company that
received investment is not really a YC company and see if the investors revoke
their "hand-shake deal".

~~~
itsprofitbaron
To address your comment, I respectfully disagree with the majority of it.
Especially "attacking you personally" I didn't do that as highlighted by the
fact that I _clearly_ stated "this may come across as harsh but, it's useful
feedback"

Moreover, your comment came across (alongside this response) that Google
"stole" your idea after you reached out to Google Ventures. The idea has been
around for a while for instance, Virtual Video Map launched in 2006 (their
domain is a parked page) which used Google Maps + YouTube -
[http://googlesystem.blogspot.co.uk/2006/06/google-maps-
youtu...](http://googlesystem.blogspot.co.uk/2006/06/google-maps-youtube-
video-map.html) \- and that is something you should probably look at using
their maps product instead of Google Earth would remove user friction
considerably.

Similarly, the idea of a mole does ruin YC's credibility and it does not
benefit YC - they are producing 2 Demo Day's per year who they have told the
press and other investors that this batch of founders _are_ ones who they
believed are the most resourceful with potentially great ideas. Having a mole
company goes against that ideology because, YC does not believe that this
"mole" company is what they are saying _but_ more importantly, YC are a
company and they don't owe anyone anything trying to prove a point which is
true.

Founders do have more power today - the cost of starting up a company has
fallen drastically _and_ more investors have realised that whilst they can
provide help/ideas they have also realised/accepted that a founder may have
more domain knowledge into the company then they do which is why, they let
them run with their ideas. A classic example of this is with Fred Wilson /
Tumblr - Fred wanted comments on Tumblr although David (Tumblrs founder)
didn't and pushed back on the idea of not having comments on there - Fred
agrees and covers it here: [http://www.avc.com/a_vc/2013/05/great-
entrepreneurs-will-lis...](http://www.avc.com/a_vc/2013/05/great-
entrepreneurs-will-listen-to-you-but-will-follow-their-own-instincts.html)

Finally, regarding "YC guarantees you funding" they invest $11k + $3000 per
founder (as well as YC VC) but after that, you are on your own - being in YC
attracts some investor interest _but_ it does not guarantee they will hand you
a check.

~~~
will_brown
Related to your feedback on my start-up, I do not think it was harsh and think
it is spot on.

Again to transition - unless I am mistaken YC does guarantee I believe in the
form of a convertible note in the amount of $80,000 which was reduced from
$150,000 from past batches. Though any automatic funding is irrelevant to my
point.

I even agree and say in my 1st reply that there is an inherent problem with YC
permitting a company who was rejected, to present at demo day unbeknownst to
the investors. I just do not think such a move would injure YC, they could
disclose that 1 of the companies is non-YC but their identity will remain
unknown until after demo day - I even believe investors would be very
interested in learning who that 1 company was if only to justify their own
bias towards YC companies especially if it is determined that the non-YC
company attracted more investor attention than the average YC company - and in
such a case you are correct YC may lose credibility. As an investor if your
going to skip YC demo day because they are experimenting with their own
program, that is your loss as the investor. Keep in mind YC is an experiment
to begin with, they just have been very successful at what they set out to
do...disrupt the start-up industry.

------
dear
That's no challenge at all!

How about this instead: Get a bunch of investors to pitch to an audience of
founders who would then evaluate, select/reject which investors they would
take. Now that is true founders power!

I call that inverse-YC.

------
GFischer
Please edit your title to "Challenge" (there's a misspelling).

That said, I wouldn't do the experiment if I were PG. As larrys says, it
wouldn't prove anything.

------
mwerty
I seriously hope for YC's sake that PG has better things to do with his time
than an n=1 experiment.

------
orangethirty
YC does not owe anyone anything.

------
larrys
I think your hypothesis is correct in that it makes intuitive sense. [1]

The problem with the approach is that n=1 so regardless of the outcome it
wouldn't really adequately prove the point you are trying to make. You could
do the same experiment with sending 1 person to Harvard but unfortunately
that's not enough to prove anything either.

[1] TV does experiments that I've seen where they take a blond woman asking
strangers for help vs. a brunette to discover (iirc) that blonds do get more
attention (or something like that) as well as "good looking" people. Add: No
surprise there.

