
Dustin Moskovitz: Y Combinator’s “No Idea” Round Bad for Silicon Valley - dwynings
http://pandodaily.com/2012/05/03/dustin-moskvitz-y-combinators-no-idea-round-bad-for-silicon-valley/
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shantanubala
Or maybe the reason we don't have enough entrepreneurs is that we've convinced
everyone that they need to have some type of _eureka moment_ where they come
up with the _next greatest idea_.

I think YC is making a statement here: talk is cheap and ideas are cheap, but
people are really expensive. If you want a solid company, the people matter
more than the idea, because the idea will change over time anyway.

I know a lot of people who think that they have to have a "stroke of genius"
where they think of something innovative before they can be a successful
entrepreneur, when a lot of the most successful companies really _did_
reinvent the wheel (they just did it better!).

The idea for a company is an artificial barrier to becoming an entrepreneur,
because the idea isn't nearly as relevant as the execution (It's simple: what
makes Apple or Google special, or more specifically, what made them special
when they were starting out?). It almost always boils down to their _approach_
to a problem instead of _just_ the problem they were trying to solve.

~~~
guynamedloren
> _The idea for a company is an artificial barrier to becoming an
> entrepreneur_

Oh really? How many successful entrepreneurs have you heard of without ideas,
just totally empty heads and whole bunch of hustle? Do they just hack away at
nothing? Do they hustle without any purpose at all? And how many companies
have you heard of without any ideas behind them? Don't be silly.. of course
ideas matter. YC recognizes that individuals that work hard can come up with
great ideas. Of course an entrepreneur must have an idea before they start
working on something. Can that idea fail miserably? Sure, but great
entrepreneurs will keep going. The failed idea/company will be ripped into
bits, and the good parts will be funneled into a new idea. Over and over and
over again. YC is banking on their ability to identify people who can come up
with ideas and execute them.

> _It's simple: what makes Apple or Google special, or more specifically, what
> made them special when they were starting out? It almost always boils down
> to their approach to a problem instead of just the problem they were trying
> to solve._

An "approach to a problem"? Oh, you mean an... idea for a solution to a
problem? Yeah. Ideas matter.

~~~
nhebb
> _How many successful entrepreneurs have you heard of without ideas, just
> totally empty heads and whole bunch of hustle?_

We'll find out after this next YC round. Besides, I think the point is that pg
is looking for people that are the antithesis of empty heads. Startup ideas
mutate, and if you can find driven people with fertile minds and place them in
a setting where product ideas can be brainstormed and hashed out with the
guidance of the YC team, then they stand a much better chance of success then
the typical entrepreneur who might try this on their own.

~~~
guynamedloren
Don't get me wrong - I love the 'no idea' concept and hope it works out, and I
love the fact that YC is ballsy enough to experiment and innovate. They key
here, though, is that ideas still matter. YC will simply help generate and
execute those ideas.

~~~
nhebb
I agree. Ideas do matter. Being accepted into YC with no idea will place the
startups in a creative pressure cooker. Just for fun, I think I'll try an
experiment tomorrow => I'll go for a walk and not let myself come home until I
come up with 5 product ideas. (Luckily I don't mind long walks.)

Coming up with a decent product idea is hard for most people. But I have to
wonder, is it hard because they expect the ideas to come easily and have never
spent the time to really focus in on it?

~~~
jasonlotito
Coming up with product ideas is easy. Coming up with a real business model
around that idea, as well as understanding the market, not so much. Granted,
half the industry thinks the product is all that matters. Acquisition is not a
business model. It's gambling.

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paulsutter
Some people become entrepreneurs because they don't really have a choice. I'm
just not suited to general employment, so I started a search engine company
(sold to Altavista), a high performance networking company (sold to Citrix),
and Quantcast.

In each case, I sat down and said "I wonder what kind of company I should
start", and followed a methodical process.

I didnt really have a choice. I would have been miserable if I'd stayed as an
engineer at Apple.

~~~
vincentchan
Just curious, what methodical process did you follow? Did you first test the
market using tactics similar to the lean startup approach? Thanks for your
advice.

~~~
paulsutter
Basically, make a list of known problems that you're well suited to solving,
rank them by criteria, fail a lot, bang your head against the wall, and
eventually things start to stick.

For example, Quantcast. Konrad had done an applied stats company and I had a
big data background. So we think about insurance fraud (sales cycle too long,
concentrated customers), starting a quant fund (which is more fickle, the
market or investors?), etc, or ad targeting.

Ad targeting. Big, fast growing market, and it's all script kiddies except for
google (this was 2006). But where do you get the data? I knew that publishers
hated comscore and Nielsen with a passion. So, free measurement service and
provide targeting along with. Then, how to promote it? Using SEO. Create a web
page for every site so that it shows up when a webmaster searches for his site
name. Once you have have petabytes of data, hire PhDs and give them powerful
tools. And voila, powerful as targeting with a unique data advantage and
publisher relationships.

You want big market, fast sales cycles (aka easy customer decisions), fast
growth, slow witted competitors, and most of all don't even start unless you
know how you will promote and sell it. I'm partial to b2b because consumer is
so random, it's a tipping point thing and there's almost never any technology
involved.

Cool problems are cool problems. Find them, choose the one you can solve.

~~~
vincentchan
Thanks for your advice, Paul.

------
steve8918
Even PG said that they have no idea whether or not this is going to work, or
if it's a good idea. But they were willing to give it a shot, which is the
most interesting part of this whole thing, since they have the guts to try.

If it doesn't work out, then no harm, no foul.

~~~
sixQuarks
I agree. They're just testing an idea out, let's see what the results will be.

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capred
This is a classic case of someone who doesn't realize that their own situation
is not everyone's situation. Not everyone comes to the valley as a cofounder
of a company that becomes a $100B+ phenomena. Here's a clue: they didn't
invest in Asan because of you - but because of Facebook.

I wonder what Dustin would have to say in an alternate universe where he was
just another Harvard CS grad.

What YC is doing is opening up entrepreneurship to a whole new group of people
- who might be just as competent as you - but don't want to work for you.

Also, I think what type of 'impact' I make is something I'll decide for
myself. Working for your companies is not what I think is the best thing to do
with my 1 and only life.

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evoxed
I think "no idea" is a poor choice of language for the YCombinator application
in my opinion. The first bit of the introduction was much better: > We're
going to have a separate application track for groups that don't have _AN_
idea yet.

If this was all they said it wouldn't take much clarification to show another
(more likely) meaning... you [your team] does in fact have _ideas_ , but none
of them are the one. You have a demonstrated ability to see problems and
invent creative solutions, but in this case you're looking to find the problem
that can best use your talents– YC being one of the best places to do that.

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rdl
I think the question is how many people actually got in from no-idea.

If a bunch of people submitted apps, thought about entrepreneurship, and 5-10
groups or individuals got interviews, thought more about entrepreneurship, and
some (or none) got into YC, I don't see how this really changes things.

In fact, I think we'd all win from 10-18 year olds learning more about
entrepreneurship (at least as an option), so they could steer their careers
toward it -- by working on independent projects, by working for great
companies (like facebook) where they can learn and meet cofounders, etc.

I agree that working for a company like Facebook is probably a better purely-
financial decision than starting a startup, for a lot of of people, but I'd
rather do a startup anyway.

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gfodor
To me, the "no idea" idea is easy to laugh at. That means it's either absurd,
or brilliant. Anyone who tells you they know which of the two is guessing. In
fact, I'd say anyone who makes bold claims about the result of YC's experiment
is being very "un-entrepreneur"-like since an entrepreneur knows better than
to write off ideas that seem ridiculous.

Ironically enough, this meta-idea might be so revolutionary that the ideas
that come out of it from the entrepreneurs (since they will be forming in a
different environment) could turn out to be dramatically more impactful than
if left to come up with their idea on their own.

~~~
coopdog
Agree

At it's best there's a brilliance to it. What's your idea?

"Does it really matter? Throw me something horrible and I'll still execute
flawlessly"

At it's worst: I can't think of anything... tell me what to do. Obviously
these people get filtered out

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tlb
The world needs both kinds of companies: ones that express an original idea of
the founders, and ones that respond to a discovered customer need.

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byoung2
_People who decide first that they want to be an entrepreneur and then go
looking for an idea are getting it the wrong way around_

I disagree. These kinds of "hey, let's start a business" conversations happen
all the time among would-be entrepreneurs long before they've come up with an
idea. YC's "no idea" round is simply taking what would have been a discussion
over drinks with friends, or in a dorm room full of CS majors before applying
and moving it later, so it happens under supervision.

~~~
skrish
Absolutely. My friend and I wanted to quit & run a business. We kept
discussing about different ideas over a period of time and then just decided
to quit & get started.

Looking back, it was so naive to have written a few business plans, waiting
for that 'unique' idea to come up.

I would say, talk to 50 folks (potential customers) about a problem. See if
they acknowledge the pain and if they would pay for it to be solved. Try to
put a number to solve that problem - how much would it cost (direct or
indirect) them without that solution and just build it.

Does not matter whether competitors out there are already building it. Every
business would take its own course based on customer feedback and no two
businesses' vision will be the same over the years.

------
pinchyfingers
When speaking at Y Combinator's Startup School, Mark Zuckerberg made it clear
that some people can do a great service for the world, even if their only
motive is to "be an entrepreneur".

Zuckerberg said that he created Facebook because he felt like it needed to
exist, but that he had immense respect for Jeff Bezos, even though Bezos'
motivation for being in business was of a different nature than his own.

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giftedbygod
A company without an idea sounds as bad as mortgage without a downpayment.

I think that this will be quoted in the future to indicate when bubble became
obvious. I mean, come on, how much money must be flying around there for free,
if they are willing to fund a band of 18 year olds who don't even know what
they want.

------
ajju
The original idea is probably the least important thing about most startups.
There are cases where the founders have been working in a domain for many
years and start a company with a very specific pain point in mind. Those are
the exceptions.

Most successful founders have an initial idea, talk to potential customers,
and find a related and sometimes completely unrelated thing that people want
more and/or that excites them more.

It may yet turn out that having _an_ idea is an indicator of something that is
currently unknown but important, and that cannot be filtered for otherwise. If
this happens, it will be apparent to YC soon. Meanwhile they are innovating,
taking risks, and trying new things - which is exactly what I would expect
from a group of people teaching others how to build better startups.

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collegeportalme
I think it really depends. If YC makes it a point to select only ex-
entrepreneurs who have proven themselves, it could be a good thing. But if
they start letting anyone who has good background into this, Dustin is
absolutely right.

~~~
fredsters_s
Why? Because Moskovitz's aims would have been better served if they had gone
to work for Facebook instead? Seems like a pretty shaky argument to me.

------
dkrich
I think there are two competing schools of thought and neither is completely
right or wrong.

One believes that an entrepreneur needs to serve a cause and do something to
better the world and success will come proportionally to how much they have
enriched others' lives.

The other believes that an entrepreneur just needs to make a boatload of cash.

There are countless examples of successful entrepreneurs that pursued both
routes, but I do believe that those in one camp probably wouldn't do well if
they tried the other. Some people are just very smart, and sometimes smarts,
hard work, and some luck is all you need.

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prostoalex
It doesn't seem that a "no idea" entrepreneur at YCombinator is that much
different than "entrepreneur-in-residence" position at other venture funds.

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brainless
A largely unsuccessful entrepreneur's 2 cents: The idea is what you fight for.
Even if you run out of money, you still believe in the idea to keep moving and
eventually (maybe) succeed. The idea is your child, she may grow and become a
musician instead of doctor that you wanted, but she is still your child. I am
not sure how that applies when "no idea" teams just take duty of someone
else's child.

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netmau5
Well we just started up without an idea. So my life is literally 100% about
proving this guy wrong - or I starve.

There are more paths than your path Mr. Moskovitz.

------
zbruhnke
I think DM kind of missed the point of what YC is doing here.

Their argument is not that smart people can just make anything work, but that
smart people who have the desire to change things in the world for the better
almost always have an idea lingering in their head.

They just need help finding out what that idea is and YC finds they are good
at helping people do that.

Think about how many people left good companies for bad ideas and pivoted to
something else.

With Dustin's point of view they would have been stupid for leaving said big
company in the first place, but alot of times the struggles after leaving the
security blanket are what make the greatest ideas come to life.

I hope YC continues to be transparent with the results of this experiment, I
think it could prove to be even better for the valley as it gives people who
are truly qualified the confidence to do something without feeling like they
are going at it alone.

In my experience some of the most risk-averse people who think the least of
themselves are some of the smartest people I know.

I'd be willing to bet I'm not the only one who sees that pattern.

------
areyoukiddingme
Is this guy for real? "More impact"? Did he really say that?

Facebook has to be the creepiest company in the history of business. It really
shouldn't even be a company.

It's just a website that an enormous number of people have decided to
simultaneous use, thereby creating connections. (Which is a great thing, but I
would not give Mark Zuckerberg or this guy any more credit than any other web
developer. They were lucky, not brilliant.) People could choose any website to
make such connections. And there are hundreds of thousands of kids who could
create such a site. Zuckerberg himself had to take the FB idea from someone
else- his HotOrNOt clone (FaceMash) or filesharing application (WireHog) would
never have made it- he did not even have a solid idea. If this kid had his
way, he'd ensure they were all his under his employ. And all their ideas would
be property of FB. Nice try.

------
jeffpersonified
To say that the "No Idea" round is bad for Silicon Valley is to give an overly
simplistic view of the "entrepreneur."

However, the interesting thing here may not be one of whether an idea is
necessary to initially catalyze a great company... or not. That seems like a
chicken or the egg kind of question. (Do great companies breed great ideas or
do great ideas breed great companies?)

Instead, I think the focus on the individual may be the most pertinent from
this article. For some, those who are great at building within a company,
being engineer #100 at Facebook is perhaps the greatest place of impact that
person could have. Of course the converse can be true as well, which is the
story we're all too used to. The underlying assumption is that a person's
greatest placement is proportional to her natural inclination and disposition,
and I'm inclined to agree.

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EricDeb
I think it's a fine idea. In my experience the start up mindset is something
some people have and is not necessarily tied to a particular idea. Also,
programmers aren't usually the best at networking. So why not let YC do it for
them and tack them on as a founder to a company with massive potential?

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tomwalsham
The representation of this move as a gateway for 'glory hunters' or
wantrepreneurs is surely at odds with the intentions or the likely
implementation (not that many of the applications no doubt fit this).

I don't imagine the interviews to be along the lines of "Do you really want
this? Do you reckon you can make something awesome? Great, you're in", rather
that this is more for successful teams 'in between ideas' or great
combinations of proven individuals. Otherwise I find it hard to see what the
selection criteria could be.

Different people have different aspirations, and not all them involve Sr.
Moskovitz' opinions of 'success' or 'impact'.

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DodgyEggplant
"no idea" means "no idea at the time we apply"

------
ericflo
A good chunk of the companies in YC have "pivoted" to the point of working on
completely new ideas. Some of those pivots are very successful. So, it didn't
really matter which idea they applied with, did it?

------
RyanMcGreal
Do you decide to become an entrepreneur and then set about finding a business
idea to exploit, or do you find a business idea to exploit and then set about
becoming an entrepreneur?

This question assumes only one of these is a viable path to a successful
business, when it's clear that the path into entrepreneurship, like the path
into a good idea itself, is anything but linear. It's easy to insist on _a
priori_ grounds that someone is doing it wrong, but the only proof that
matters is whether a viable business emerges from the end of the process.

------
deepGem
If I understand properly, pg is looking for great people who may not have the
'greatest billion dollar idea'. This individual he is looking for, has
creativity, has built products and is a passionate technologist, not an empty-
head. I think what he's doing is great. This proces brings a new breed of
people into the YC engine. People who couldn't find co-founders, who couldn't
launch startups in their college, who don't have access to a great
technological community.

------
forgottenpaswrd
I am totally shocked!

One cofounder of a big company believes that if the good workers try to
compete with his company instead of working for the big company is outright
bad.

------
drsim
Isn't Dustin contradicting himself?

“The only reason you should be an entrepreneur is because that’s the only way
the idea will come into the world,”

Vs

"A lot of great people are wasting their time and talent by pursuing
'something that doesn’t exist yet,' instead of joining bigger projects that
already have proven ideas."

So, isn't YC trying to achieve precisely the latter: getting talented people
into a proven entrepreneur's business?

------
neya
Makes perfect sense. IMO, a true entrepreneur devotes himself to an Idea he
loves, an Idea he will want to spend the rest of his life with, working on.
Thats the case with Bill Gates, Steve jobs and other successful entrepreneurs.
Now if they say you don't need an idea to become an entrepreneur, then wtf
will that guy work on? Come on, this is irony at its best.

------
revorad
It's funny to see when people seem to get personally offended any time someone
tries a crazy new idea.

To anyone having even a fleeting interest in "entrepreneurship": you don't
need any special reason to do it. You don't need to justify it to anyone.

Leave the Grand Unified Theory of Startups to VCs and tech pundits. Do it just
because you want to.

You don't ask permission to write code, do you?

------
kul
Max Levchin and Evan Williams are good counterexamples. Both decided to be
entrepreneurs first. Ideas followed.

------
bootload
_"The 100th engineer at Facebook did way better than the vast majority of
entrepreneurs in the Valley, had more impact"._

...building on an existing idea. This reads like a pitch to hire talent in a
tight technical market from a platform company. All those little startups
wasting their time again.

------
chmike
What is unclear to me is what YC will do with these "no idea people" ? Does YC
intend to throw ideas at them and see what happens ? Will these people be
invited to join YC funded startups ?

Without this information it is difficult to check if Dustin's critic make any
sense.

------
dgregd
"No idea" is just an idea how to create successful company. Actually a new
one. Time will tell if this is good or bad.

Anyway having more engineers with that kind of experience, creating a business
from scratch, is great for the ecosystem.

------
rythie
No idea, should really mean, lots of ideas but not tied to a particular one
yet. It would be bit worrying if someone couldn't think of a single idea
before applying.

------
moubarak
Guys, they mention its an experiment and will continue only if it works. It's
always good to experiment.

"We're not sure this will work, but if it does we'll do it from now on"

------
clarebear
It is amusing that some people have so much trouble differentiating between
"not firmly committed to one idea" and not able to generate ideas."

------
areyoukiddingme
Bad for SV? Or just bad for FB? And Asan.

What he's really saying is he knows others can do what FB does and do it
better. But he'd like them to just concede the social networking space to FB.
"Don't bother trying to compete. You won't have an impact."

------
jsprinkles
If you Google that misspelling ("Dustin Moskvitz"), it's a repetitive mistake
that only pandodaily seems to make. How on earth can a publication spell his
name incorrectly that many times, in multiple stories?

Edit: They fixed it. It lives on in the URL, and a comment below.

~~~
DanBC
People put misspellings into their dictionaries. They don't know how to remove
the misspelling. Thus, there's no red[1] squiggly line telling them there's an
error.

[1] Who chose red / green? I'm not colour blind, but I think these are not a
good choice. Especially since the squiggles are the same - at least make the
shapes different.

~~~
raldi
What are the green ones used for?

------
michaelochurch
The "no idea" round is an interesting experiment, but I think the crop of
startups it generates is going to be weaker than those that emerge in other
seasons.

The danger's not that the ideas will be mediocre, because ideas change so
frequently at the seed stage as to be dispensable. I think the real problem is
more subtle, and it's the fact that this kind of presentation will attract the
wrong sorts of people: narcissists who are attracted to the "we don't invest
in ideas, we invest in _people_ " rhetoric that VCs often use. That line is
practically designed to appeal to narcissists, because a pathological,
arrogant narcissist is going to hear those words and think, "well, I'm already
a shoe-in then, because I'm better than all those other idiots who are
applying". People will apply just for the personal validation of getting in,
and in a "no idea" round, there's no way to filter them out.

There's a flip side of this as well: if you're rejecting or accepting a
business strategy or technology concept, people who get rejected will be able
to walk away with their dignity intact, because you're turning down a strategy
or a plan rather than that individual as a person. So it's entirely
impersonal, and they'll apply again in a year or two with a better idea. The
"no idea" round is going to leave a sour taste in the mouth of everyone who
gets rejected, even though simple mathematics tells us that the vast majority
of applicants will be.

By the way, although I don't think PG's motives are such, here's what most
venture capitalists _actually_ mean when they say, "oh, we invest in people,
not ideas". It means that they invest in _stories_ , and that their decisions
are going to be swung by unusual personal stories and heroic narratives, so
you can expect a lot of Aleksey Vayner types to get in.

~~~
neutronicus
It's interesting that you presume that narcissists motivated by personal
validation are a bad bet.

