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So, I am looking at a bit of the transcript from the first course and it is talking about scaling companies from millions to billions and things like that.

YC started with this idea that you take a couple of college student hackers, give them like $20k and let them build something "ramen profitable." The basic idea was that tech had lowered the barriers to entry for business.

An awful lot of these big companies (Uber, Home Hero -- which is shutting down -- etc) seem to hire 1099 contractors instead of employees and they often don't pay all that well. The goal for YC seems to have become grow the next unicorn.

So, I find myself wondering (having already forwarded this stuff to various people): Is there anything of use in these lectures if you aren't looking to become a billionaire and have no desire to grow some gargantuan company that probably is making the founders rich on the backs of the 99 percent who are so often underpaid?

Is there any basic business wisdom here for people not looking for some J curve growth and then cashing out? (Serious question and I know it sounds like snark. I just don't know how to say this more diplomatically because this is not how YC started and I have trouble with the direction it seems to have taken.)




YC was always about startups and growth. Ramen profitability was an important milestone because then you weren't dependent on fundraising to survive. But it was always just a milestone, and YC's goal qua investor was to fund companies with a chance of growing big. By the time I got there in 2009 it was quite explicit, but it was clear before then too.

On the point of not growing big, though, there was one area where YC did something fundamentally new: they supported whatever the founders wanted to do. If the founders decided not to try to grow big or to take an early exit, YC was always supportive. But this wasn't because they regarded such outcomes as successful from an investment point of view (they're not). It was because they were decent people. And pg used to say that pushing founders to do something they didn't want to wouldn't work anyway.


Thank you for clarifying those points.


I think there's some value if you're more interested in creating a lifestyle business than a unicorn (as it seems like we both are), but it's certainly not perfectly matched to that goal.

It's a shame there's not a Startup School-like resource for creating a lifestyle business (YC-like in that it'd have a unified theory of lifestyle business creation, as YC has for startups, that'd been honed through assisting in the creation of hundreds of such businesses).


There is. It's called Hacker News. There's isn't a better resource to learn more about starting a small business than HN itself. From starting a consulting business to creating a passive income, everything has been extensively discussed. There are tons of inspiring stories here about creating a small business. (Incidentally, I think it would a great idea to collect all entrepreneurship related threads in a single place.)

HN's expertise falls short when it comes to adjudicating unicorns as they don't usually look promising at the beginning. But, in case of a small product, I think community's feedback and advice can be invaluable.


(Incidentally, I think it would a great idea to collect all entrepreneurship related threads in a single place.)

I forward stuff from HN that I think is pertinent to the group I run called Business Bootstrappers: https://groups.google.com/forum/#!forum/business-bootstrappe...

So far, that is the vast majority of what has been posted there. As yet, conversation has not broken out and I don't post very much else there.


I run a google group called Business Bootstrappers. I don't have a unified theory, but I did forward the links to this article, discussion and Startup School to it, which is part of why I asked this question. It has no goal of fostering what people call "lifestyle businesses" (a term I am not fond of http://micheleincalifornia.blogspot.com/2014/03/i-love-lucy-...), but it does have a goal of supporting businesses that aren't specifically looking to take VC funding.

https://groups.google.com/forum/#!forum/business-bootstrappe...


There are:

30x500 (Amy Hoy)

Founder Cafe (Rob Walling)

Dynamite Circle (community by Dan Andrews and Ian Schoen of Tropical MBA)


Great list.

That's also what we're working on at http://nugget.one and I also think https://www.indiehackers.com is a great resource for inspiration.


See "Rework" by Basecamp


"Lifestyle business" is derogatory propaganda by the investor class, who wants you to think like them and make more money for them. Every business is a lifestyle business, after all you only have one life. Investors want you to spend your time making money for them, instead of doing what you love. If you love making money too, then by all means listen to what they have to say, but take it all with a big bowlful of salt.


MicroConf.


YC in session is still about a relentless pursuit of product market fit. They're still the best accelerator for driving teams towards attaining this, and the lectures pertaining to this will be fruitful for any team.


I think this bit is going to antagonise the people you're questioning: "...probably is making the founders rich on the backs of the 99 percent who are so often underpaid". Unless I've missed something, neither Uber or Home Hero are YC companies, and countless YC companies aren't leveraging 1099 contractors in place of employees.

Your question might be better rephrased to something like:

Is there value in Startup School for those aiming for modest growth or to create a lifestyle business?


Is there nothing in between?

lifestyle business

modest growth business

<-- one or two more company sizes in here?

multi billion dollar company

You don't want to say the word "lifestyle business" in any sentence or the VC's will ignore everything else you asked and focus on that. When they hear that word it triggers some sort of "fight or flight" response in the primitive amygdala of the VC, leading them to run away. Pretend you've never even heard of the concept of "lifestyle business", it keeps them happy.


Yes. This area has quite a few private equity-owned companies. It's actually a fascinating space for buying a company, building it up, and then selling it to another company at a healthy markup.


100% true - personally worked with ~40 software companies that fit this criteria.


We're not talking about VCs but freely available courseware. The mentors are apparently YC alumni rather than VCs.


> Is there value in Startup School for those aiming for modest growth or to create a lifestyle business?

Product/market fit is important even in a lifestyle business. The issue you will have is making your business work at a minimum scale.


If you watch the lectures you will find a more realistic view of startups. They start saying that the odds are against you and it is a better bet to work at a startup instead of founding one.


Which is bullshit because founders get paid more and have an ownership stake. This is a laughably bad attempt to provision their companies with junior developers who have a slave mentality.


Junior developers don't often skip payroll (they can move on if asked to do so) founders do. Junior developers don't often mortgage their houses or max out credit cards, founders do.

I can go on and on.

I think getting into debt is dumb, but statistics show that founders risk a lot more than employees. And many people do not want to be founders. Please don't call them slaves.


Going into debt is entirely optional. At the start non-founders have the same or lower salary with less long term benifits. Obviously not everybody can be the founder because they didn't come up with or act on the idea.


"risk" is a relative term here. Most of the founders come from fairly privileged backgrounds, and most of the time "I started a company let me tell you how it failed" works pretty well when interviewing in later ventures.

Additionally, early engineers and biz folks are usually brought on specifically because the founders don't know what the fuck they're doing in either technology or business.

There's this big myth that being a founder is some magical hardship and a massive fucking gamble, but the realities don't make that so--instead, it's used to justify fleecing employees out of market rates.


I don't think it is accurate to say most founders come from a privileged background without actually knowing the numbers. I am a founder (not YC) and both parents were public school teachers.



I think you've misunderstood the reality of being a founder. It is truly a privilege, but not in the way you think -- if you successfully label yourself as one and get enough attention, you are more likely to be able to 'fail upwards' as investors will overvalue your experience and personal network.


Most start ups will fail, and the founders' equity will be worth nothing. They are putting all of their eggs in one basket and taking responsibility for investors' money, employee salary and customer needs. Compare that to early employees at companies that have found product market fit and are early in the life cycle of rapid growth, their smaller equity grant will be worth more, especially after considering the significantly lower risk they are taking at a well funded company with product market fit. The point is, if you want to maximize for your own personal wealth, join a great company with traction as early as you can. If you are obsessed with creating something or solving a specific problem, or are a little be crazy, then start a company to pursue the vision. Just do so knowing the risk reward points to a lower wealth outcome compared the the alternative. And by the way, many founders take below market salary for a long time and may even go without salary or put money in when times are lean.


In a proper startup, the founders typically make the least amount of money to start and plow back all available resources into growing the company. Only when the company is on more stable financial footing, either through profits or investments, does the founder start to make a salary closer to market. Of course this can go wrong and since the founders set the salaries they can suck money out of the business, but IMO the founder should be making the least amount of money in the early stages.

In regards to the Startup School lecture, one of the points Dustin Moskovitz makes in his talk is that you have a better shot at doing well financially if you join a startup at Series B+ than you do trying to start your own startup. You'll have less stress and if you join the next mega-successful company, you'll most likely make more money. There's also a huge amount of learning that takes place working at a rocket ship for a few years and the brand creditability is worth something too. The hard part is picking a startup that is actually the next Google, Facebook, Uber, etc and sticking around until it goes public to exercise your options (especially since companies are taking longer to go public and lock up early employees with golden handcuffs - https://en.wikipedia.org/wiki/Golden_handcuffs).

That being said, if your goal is to get rich, your best bet is probably to start an actual business, raise as little money as possible, and "sell early" - e.g. acquired for < $30M. If you look at most acquisitions, most of them are under the $30M mark (https://www.cbinsights.com/blog/tech-companies-exit-early-st...).

The reality with taking venture capital is even if you take a "small" amount of from seed investors of lets say $2M in exchange for a 20% stake, you're looking at a $50M exit to make back 5x the VC's money (simplifying the math and not accounting for additional liquidation preferences), which in a VCs perspective isn't that great. They're more so looking for a 10x return, so $100M is the minimum for a seed investment.

Probably the ideal scenario for the founder trying to become wealthy is to just be as lean a possible, keep as much equity as possible and ultimately sell to become financially secure. Once you have enough money to keep you set for your life, then maybe it makes more sense to swing for the fences.


It is not bullshit statistically speaking. Ownership doesn't imply you have something valuable.


yeah it's a gambit. When you win you win big. But many times you don't win at all.

In a statistics sense I'd be curious what the expected (average) return on being a founder is


Watch the first lecture!


The easiest way to See how this applies to your particular situation is to actually watch the lectures and see what resonates with you. A lot of it is common sense that should apply to startups of all sizes that all building something new (vs say, opening a regular business like a restaurant): talk to users, iterate rapidly, work hard, focus...


I would like to know before I invest that kind of time whether or not it is likely to simply be a waste of my time. If I just wanted to watch all of them and decide for myself, I wouldn't need to stick my neck out trying to ask a question that I know is going to be interpreted as rude by many people.


It's free, you can take the time to sample it on YouTube otherwise you just look ungracious. Plus to say that you are going to be so enlightened by the first video that the rest must be just as great rules out the possibly in video 3 you make an association that is important to what you are doing.


And telling me my time is worth so little that I should not even be allowed to ask if the content has any hope of being relevant to me is monstrously disrespectful of me and my time. The people at YC don't have to answer this if they find me to be too excessively rude. I would be happy to hear from people who have already watched some of the videos or whatever.


I'm not a VC chasing founder and the content is/was very helpful to me. I just cut out the hockey stick and spending huge to acquire and apply it to my little unsexy niche.

So yes I believe it will be valuable. Ignore the parts that you disagree with.


Thank you.


Because it is rude. Your examples aren't YC companies and many YC companies are successful that don't produce billionaires.


It's only rude to the people who believe that unpleasant things shouldn't be talked about.


I think the rudeness isn't about unpleasant things here. But using examples out of context.


I imagine if I had used AirBnB (a YC company) and their legal troubles as an example, it would be considered even ruder.

The reality is that an awful lot of companies today seem to be all about the benjamins in a way that isn't healthy for anyone. There is no nice way to say that and say "I would like to not pursue such a business model."


It's not unpleasant, it's just an incorrect premise.


You know, I am homeless. This introduces substantial obstacles to me accomplishing anything. I cannot watch videos with sound in a library. I end up having to jump through a lot of hoops to do anything like watch a video in order to try to further my goals.

I am a little burned out on the message I consistently get from people online that I am not allowed to solve my very serious financial problems because I am too poor to afford manners. Meanwhile, everyone seems okay with rich people not caring one whit about my suffering. Me misphrasing something is apparently an offense punishable by potential starvation.

So, yeah, I'm kind of bitter about how rich people treat poor people these days. It is generally pretty monstrous.


Well, if sound is the problem, every video has a text transcript under it.

https://www.startupschool.org

The video I enjoyed most is "How to Find Product Market Fit" by Peter Reinhardt.

https://jotengine.com/transcriptions/WIUL8HBabqxffIDOkUA9Dg


>too poor to afford manners

I'm not aware they actually cost anything.


You are not aware that it is difficult to remain on your best behavior when you are facing potential starvation, trying your damnedest to find a way to make an earned income and facing this kind of bullshit where asking a question wrong gets you dog piled for "being rude"? There are damn few comments here that answer my actual question. There is enormously more sturm and drang over my supposed rudeness.

This problem started before I was homeless when I was being dog piled on HN for being a woman opening my mouth here. There seems to be NO good path forward for me. Trying to figure out how to solve my problems at all appears to be frowned upon. My very existence appears to be frowned upon.


Just want to chime in that your comment makes total sense and hope to see it answered!




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