
The little things I learned from the Valley - Cherian
http://www.gigpeppers.com/the-little-things-i-learned-from-the-valley-april-2013-edition/
======
RKoutnik
Is it just me, or are big-ticket gambles no longer viable in today's Valley
culture? The article mentions that "Ultra local services like Uber, Lyft,
Instacart, ZeroCater, Chewse, etc. are raising more cash than world domination
disruptive ideas." Add this to an underwhelming W13 Demo Day in terms of said
WORLD DOMINATION and I'm starting to wonder if investors are losing their
edge.

There's plenty of opportunity for truly revolutionary disruption in all sorts
of sectors. I just don't hear about it. As someone with disruptive ideals (but
outside the valley) am I just being paranoid or is there really a problem?

~~~
michaelochurch
I think the problem is that most of these VC-funded startups are seen as
loaded to the hilt on one kind of risk (red-ocean grow-fast-or-die gambits) so
they avoid _all other_ kinds of innovation, which is why they are such
uninspiring places if one looks at the actual work and culture. I know someone
who's trying to run open allocation and his investors said "no", because they
didn't want the added risk.

VCs are swinging for the fences more than ever, but that means they're loading
up on one kind of risk (rapid execution risk) and have no space for any
others.

At any rate, I think "world domination" is a pretty pathetic goal. Where are
the companies that want to focus on _excelling_ rather than simply
"dominating" some market?

~~~
RKoutnik
So the issue is less risk-adversity and more focus on a certain "ideal" risk.
Interesting.

As to "world domination," it's more a joking term for startups that are
creating a new product that intends to replace what the market currently has
[0]. Imagine a product designed to replace college as we know it. Incredibly
risky? Absolutely. Crazy payoff (in cash and actual change)? Just as
absolutely.

I just don't see these kinds of ideas anymore. Maybe we all forgot to remove
our schlep blinders, maybe the community has been focusing elsewhere, maybe
they exist and have been avoiding premature hype. Probably a mix of all three.

[0] Think Google/Heroku, not more mobile apps/anything social media

~~~
michaelochurch
I think that acq-hires ruined the ecosystem. The whole concept is parasitic.
Acq-hires exist because failed companies (that the market should be clearing
out) have had severe trust breakdowns and are incapable of discovering talent
within, which renders them unable to do important projects (because they don't
know how to find the people to _staff_ them) so they have to buy validated
talent at a panic price.

If a company is trust-sparse (that is, most people have the "bozo bit" on)
then I'd rather let the market kill it than keep moving around deck chairs,
leaving investors to think there's still something there. That applies both to
startups and acquiring companies. Let these trust-sparse, uninspiring husks
die already.

With acq-hires in the mix, the game is no longer about profits (so 20th-
century) or building a business. It's about getting attention-- TechCrunch
coverage, user count (which is meaningless), notoriety, and headcount (because
valuations are multipliers on number of people)-- rather than building
technology. So it's no surprise that the big winners are class-A marketers
making quixotic, red-ocean plays.

~~~
RKoutnik
As usual, those who are in it for the cash ruin it for those of us who just
want to build something cool.

Thanks for the extended explanation, I feel like I've learned more from this
thread than the rest of HN this past week.

~~~
tptacek
If you want to build something cool, push MIT licensed code to Github, or
write a kernel module for FreeBSD. The complaint that businesses are in it for
the cash doesn't make sense.

~~~
RKoutnik
You're under the impression that "something cool" is strongly typed to code.
In reality, there's much more that can be done. Building an organization to
make something happen is much more difficult than pushing to GitHub and
usually requires outside investment.

~~~
tptacek
At the end of the day, we all could have chosen med school and a life working
for Partners in Health in Haiti, so this seems like a slippery slope argument.

~~~
ankitml
I want to build something cool/useful and also enjoy the process of building.
Your argument makes it sound like do something useful just for the sake of it.
You ruined the whole argument buddy

------
josh2600
There is no series A crunch, only too many seed rounds IMHO.

Very few companies need to raise more than $1M to reach profitability any
more, so traction should be required before raising money, but if investors
wait for traction, they'll miss the really big deals. This sets up a dynamic,
particularly influenced by the JOBS act, where unsophisticated investors can
flood the market with cheap capital.

When it comes time for a startup to raise money from serious investors, they
won't touch it unless it looks like Midas. I'd argue that the Series A levels
haven't really changed from year to year, but that we perceive it as a Crunch
because of the ridiculously large number of seed rounds.

~~~
jaredsohn
>I'd argue that the Series A levels haven't really changed from year to year

It doesn't take away from your point, but I believe there are actually an
increasing number of Series A level investments happening.

We call the current situation a crunch because we're measuring the
competitiveness of going from seed to Series A.

------
ChuckMcM
Palo Alto has always been a 'university town' with respect to Stanford's
presence there. It benefitted from professors who were both teaching and
entrepreneurs, or nurturing ideas that came out of their labs into full grown
companies. Berkeley has a similar vibe for similar reasons.

Traditionally San Francisco has been an artistic and design hub but not an
engineering focused environment. However, that is a great environment to
create products which are distinguished primarily by their design.

It's surprising however how dysfunctional the whole San Francisco political
scene remains. One would hope that the influx of young workers and the tax
base they represent would encourage improvements in the management processes
in order to capture long term economic growth. Its not clear that will happen
though. It makes me wonder how durable a decision to base your company in SF
will be.

------
dasil003
> _Palo Alto/University Ave is no more the place to be. You have to be in San
> Franciso. Caltrain/BART rides are perceived too long._

Is this true? If so why is PA real estate still so sky high? I understand if
your startup culture is based on youthful hipness, but that is orthogonal to
the viability of a startup.

~~~
ethikal
Shouldn't high costs be a deterrent to startups? How can a startup be "lean"
if its employees need to pay most of their salary in rent?

~~~
ttrreeww
In a gold rush, the miner (employee) don't make the big bucks. It's the miner
support (landlord, investor, founders) that make the huge bucks.

~~~
dasil003
Depends on if there is any actual gold. Whoever strikes the mother lode makes
many orders of magnitude more than the suppliers (eg. Facebook).

------
lowglow
> Palo Alto/University Ave is no more the place to be. You have to be in San
> Franciso.

I agree. The culture, inspiration, community, and experience here is a bit
unparalleled. I can just as easily lock myself away to build product as I can
go out and get away from marinating in self induced frustrations.

There is also money out here. People are willing to travel and visit, there
are a ton of venues for meetups, etc. I couldn't imagine a better place to be
(at the moment) for both tech and life.

~~~
ucee054
How can it be "a bit" _unparalleled_? Is that like being "a little bit"
pregnant?

~~~
lowglow
Is there a word/phrase for when you want to use a word, but it sounds cliche,
so you try to underplay the use of that word by prepending some diminutive
modifier?

~~~
ucee054
Well it's very amusing if you do that to a superlative, it might be better to
just go with the cliche.

I sought a synonym for unparalleled for you here:

<http://thesaurus.com/browse/unparalleled>

But these seem to be even worse. Sorry, I tried.

------
zalew
> Startup employees don’t make as much cash as I thought it would be. And that
> shouldn’t be the persp­ective.

what should be the perspective then?

~~~
Cherian
Learning, wearing 10 hats, broad range of knowledge from tech, design, hiring,
firing, hyper productiveness, fun all the way up to optimized way of buying
coffee.

A startup experience will definetly accelerator your career. You are likely to
be more valuable than you were x months/years before the startup.

~~~
zalew
for me it sounds like it's what you do when you start your own company, not
when you get hired by one.

does it take applying the name 'startup' to any company to embrace all that
awesomeness in contrast to being hired by a company that doesn't meet this
definition? I'm asking seriously. taking into account that 90% of startups
fail in one way or the other, how is exactly working in an unknown
unsuccessful young company such a strong career booster?

~~~
michaelochurch
_how is exactly working in an unknown unsuccessful young company such a strong
career booster?_

It's not. There are plenty of people out there with no-name companies on their
resumes.

You learn a lot, but then go into a subordinate position where everyone thinks
you're an idiot. Either you push back and end up in lots of conflict (possibly
fired) or you accept it and gradually become what they think of you.

~~~
zalew
kind of my point. I guess it's prestige when you have 'I wrote the youtube
player' on your resume when youtube was a startup. if you have 'I wrote the
nextvidflixr.io player but we closed down after 3months because the founder
was a moron' it's cool story bro, now go home and get your fking shinebox,
isn't it? there are startups and startups.

//edit: and in my hypothetical example I don't mean the skillset required to
write a player, but the position where you worked with successful people that
did everything right, rather than the same experience at a wannabe company
doomed to fail.

~~~
michaelochurch
The "career booster" argument is something that the bad startups use to sway
clueless young talent. It's not true in general, and a good startup will show
you the kind of work you'll be doing and let you decide for yourself.

Yes, _good_ startups are good for peoples' careers, but there are only a few
of those in existence (that are still startups; I wouldn't count Facebook) at
a given time. Oh, and most of the good startups are slow-growth companies
you've never heard of, but that are doing genuinely interesting work (machine
learning, robotics, etc.) rather than social media. They're very selective and
hard to find, but those are much better options than these VC darlings.

Social Media is the Reality TV of startups. It's not common because it's good,
but because it's cheap. Here, "cheap" pertains to talent (hard to find,
especially for non-technical people) more than anything else.

It's easier to get a title at a startup, and if you can convince the next
employer to take that title seriously, you can swing it to a permanent
improvement.

I think, though, that unless a startup has distinguished itself as a real
engineering shop (and very few have, because very few deserve that accolade)
that being a startup engineer is a career negative. Most of these startups
have MBA-type management and the Design Paradox implies, so the engineers
aren't very good. With a few startups excepted, most startups see engineers as
cost centers and give them laughably low equity and if you work at a company
like that, you're a chump.

~~~
tptacek
This is a comment that says there are only a few good startups in existence.
There is no possible way the author fo the comment can back that argument up.
It's a sentiment that stretches past commendable skepticism, past cynicism,
and lands with a flatulent thud right in the soft belly of parody. It's like a
mirror image of the "sharing economy will render property ownership obsolete".

That's too bad, because when it isn't making ludicrous generalizations about
the CS/engineering demographics of the whole tech startup sector, it makes a
good point about not accepting below-market wages from tech companies.

~~~
consz
>This is a comment that says there are only a few good startups in existence.
There is no possible way the author fo the comment can back that argument up.

Why does he have to back it up? Null hypothesis, "There are no good startups",
right?

~~~
tptacek
Uncharitably: what he's saying is that there only a few startups he considers
good that he can name off the top of his head.

~~~
michaelochurch
Why is that uncharitable? It's fairly true. I am sure there are a lot of great
companies out there that I've never heard of.

~~~
tptacek
Wow, what a dishonest response. Your attempt to repurpose the premise of my
comment as if had been yours to begin with ignores your actual assertion,
which is "but there are only a few of those [good startups] in existence".

I apologize in advance if you are like that guy in that movie who lost his
long-term memory and therefore could only remember the last hour of his life
and therefore only had my comment to go on in composing that response.

~~~
michaelochurch
Are you John G?

------
GuiA
> South Bay is getting more expensive. Rentals at $2500 for 2 bedrooms in
> Mountain View and Palo Alto. East PA and Fremont continue to be cheap.

Meanwhile, those of us living in the East Bay are somewhat happy with the
price they're paying and the short length of their commute :)

~~~
ahmadss
any recs on family friendly cities/towns in the east bay for those looking to
move out to bay area soon? my wife and i plan on working in SF proper. her
firms SF office is located near embarcadero BART, and i'm still looking for a
gig.

~~~
malyk
All of them?

I guess the big question is schools, which I know nothing about. But if you
stay away from the worst parts of oakland than I think almost any east bay
city would be pretty good.

My wife and I live in North Oakland and we think it's very nice. It's
certainly not white yuppie suburbia, but it's also not dirty run down violent
west oakland. If you want something more towards the former then you probably
want to look in places like the berkeley or oakland hills, rockridge,
peidmont, walnut creek, etc. Basically things along Rt 24.

~~~
Domenic_S
> _All of them?_

Hmm, don't agree here. East Bay cities I don't find particularly family-
friendly: Berkeley (except for the hills $$$), Oakland (except for the hills
$$$), Emeryville, Richmond, Concord, Antioch, Pittsburg, Brentwood, basically
the whole north 4 corridor.

~~~
malyk
I guess I don't really know what family friendly means. This whole area is
muti bedroom houses with yards. There are parks scattered around. The one
question, which I acknowledge knowing nothing about, is schools.

What does "family friendly" mean?

I shudder to think that it has to be your typical suburbia. There's so much
more to offer than a sheltered back yard where your shuttled from strip mall
to strip mall to practice field in a car.

~~~
ahmadss
family friendly can be parsed many ways, but in general, it's some weighted
combination of outdoor/parks/community programs, crime rate, public school
quality, the ratio of kids to adults and seniors in the area, median house
size, etc.

------
moystard
My apologies if the answer is obvious, but why does he mention Mailbox?

~~~
rgbrenner
The sentence is "HYPE is now a subject of discussion. MailBox as an example."

What is Mailbox (from wikipedia):

    
    
      Weeks before its launch, pre-registration prompted a wait 
      list of over 380,000. Mailbox was added to the iOS App Store 
      on Thursday, February 7, 2013; it became the second most 
      downloaded free app in the App Store that day
    
      In March 2013, Mailbox was acquired by Dropbox Inc.
    

So: they hyped up their app, and were able to exit less than a month after
launch.

~~~
whiteshadow
So, when he says that HYPE is subject of discussion, that means that other
companies are looking at this factor as a winning factor? What is your reading
on that?

------
coin
Funky horizontal scrolling on an iPad, pretty much unreadable.

------
ttrreeww
I hope more startups move to Texas... housing cost are way too high in SV.

~~~
coolsunglasses
I, (and my next startup), are possibly moving to Austin soon.

So there's one for you.

~~~
michaelochurch
What's your next startup?

~~~
coolsunglasses
I'm not sure if you're curious or about to make an example of me.

~~~
michaelochurch
Curious. You can tell me offline, or not at all.

I'm pretty excited to see the growth of a strong startup scene outside of NYC
+ SF. I feel like VC-istan is played out and I'm trying to get a coherent feel
for what's next.

~~~
coolsunglasses
Normally I'd prefer a B2B/B2D type thing for practical reasons, but it's a
consumer fashion thing.

Discovery and recommendation oriented, designed to get the rather large
percentage of the young population that isn't dressing as well as they could
on board. Especially young professional-age men.

It's an itch-scratching problem that is dear to me. Even if it doesn't develop
into a sustainable business it's worth it to me to attack.

I'm in Mountain View right now, consulting after my stint as a non-founder
CTO. Not going non-founder route again.

I'm bootstrapping at least initially so I get more utility from cheap land and
nice people than I do accessibility of seed money.

~~~
michaelochurch
_Normally I'd prefer a B2B/B2D type thing for practical reasons, but it's a
consumer fashion thing._

Interesting. That seems more like a New York startup, but COL would _really_
be out of your favor out here, and you'd be competing with finance on
salaries.

 _Discovery and recommendation oriented, designed to get the rather large
percentage of the young population that isn't dressing as well as they could
on board. Especially young professional-age men._

That's a great concept. I think a lot of us are late to realize that how you
dress (especially for work) matters. I didn't know how to dress until I met my
wife. I hope that it works out.

 _I'm in Mountain View right now, consulting after my stint as a non-founder
CTO. Not going non-founder route again._

I hear you on that. I feel like startup founders overestimate the degree to
which they've "de-risked" the business, mainly as an excuse to take 10x the
equity. In truth, a company with 18 months to live, no free-standing
reputation, and that fires without severance is _not_ de-risked at all.

