Beta

×

Welcome to the Slashdot Beta site -- learn more here. Use the link in the footer or click here to return to the Classic version of Slashdot.

Thank you!

Before you choose to head back to the Classic look of the site, we'd appreciate it if you share your thoughts on the Beta; your feedback is what drives our ongoing development.

Beta is different and we value you taking the time to try it out. Please take a look at the changes we've made in Beta and  learn more about it. Thanks for reading, and for making the site better!

Tech Billionaire Boot Camp

Zonk posted more than 7 years ago | from the getting-a-leg-up dept.

Businesses 178

theodp writes "Forget the Summer of Code. If you've got a hot idea for a start-up, Newsweek says Y-Combinator, the boot camp where Silicon Valley meets 'American Idol', is the place you should be. 'Some critics scoff that Y Combinator's investment is peanuts for that amount of equity. But the opportunity is unparalleled -- total immersion into Silicon Valley start-up culture, advice from Graham and a fast track to the top angel investors and venture-capital funds. When Graham calls the winners, the founders have only five minutes to accept. "If people turn us down," he says, "as far as we're concerned they've failed an IQ test."'" We've previously discussed the program on the site, just over a year ago.

cancel ×

178 comments

Sorry! There are no comments related to the filter you selected.

First Post (-1, Redundant)

Anonymous Coward | more than 7 years ago | (#19107267)

Who cares?

Re:First Post (-1, Offtopic)

Anonymous Coward | more than 7 years ago | (#19107435)

Funny that this was modded Redundant - I guess no one really does care.

Re:First Post (-1, Offtopic)

Anonymous Coward | more than 7 years ago | (#19107825)

Funny that this was modded Offtopic - probably because it is.

Re:First Post (0)

Anonymous Coward | more than 7 years ago | (#19109209)

What is the purpose of a bunch of ACs making a thread of redundant or offtopic posts that all get modded down to -1 so no one will ever read them? Seems like a waste of time.

Graham? (0)

Anonymous Coward | more than 7 years ago | (#19107281)

Forget the Summer of Code. If you've got a hot idea for a start-up, Newsweek says Y-Combinator, the boot camp where Silicon Valley meets 'American Idol', is the place you should be. 'Some critics scoff that Y Combinator's investment is peanuts for that amount of equity. But the opportunity is unparalleled -- total immersion into Silicon Valley start-up culture, advice from Graham and a fast track...

Graham? Who the fuck is Graham? If you're going to cut-and-paste a summary, you should proofread it first to make sure it doesn't reference names, acronyms, etc. from the bits that you left out.

Re:Graham? (3, Informative)

tansey (238786) | more than 7 years ago | (#19107437)

The "Graham" is Paul Graham. From his website bio:

Paul Graham is an essayist, programmer, and programming language designer. In 1995 he developed with Robert Morris the first web-based application, Viaweb, which was acquired by Yahoo in 1998...

He has a really interesting essay-blog at his website [paulgraham.com] which is worth checking out.

Re:Graham? (0)

Anonymous Coward | more than 7 years ago | (#19108473)

He's a guy who got lucky that wannabes look up to just because he writes rants in his blog. There are plenty of people who did more interesting work and got more money who aren't blowhards like Graham.

Barely an investment (5, Insightful)

Anarchysoft (1100393) | more than 7 years ago | (#19107301)

How much do you usually invest?
Usually $5000 + $5000 per founder. So $15,000 for two founders, $20,000 for three. Occasionally we invest more. The goal is usually to give you enough money to build an impressive prototype or version 1, which you can then use to get further funding.
This is peanuts. If this is all the money you're going to get, it's probably a better use of your efforts to keep your day job and do your startup on your own spare time.

Re:Barely an investment (2, Interesting)

Zeinfeld (263942) | more than 7 years ago | (#19107399)

This is peanuts. If this is all the money you're going to get, it's probably a better use of your efforts to keep your day job and do your startup on your own spare time.

Hence the hard sell. This is not a particularly high powered bunch by Valley standards.

Graham probably hurt the spam world as much as he helped. He thought Bayesian filtering was a silver bullet, it isn't.

$20K for 6%? Thats idiotic. A VC looking at that type of deal is not going to be impressed. $20K should buy no more than a thenth that amount, and thats expensive.

Re:Barely an investment (5, Informative)

ShakaUVM (157947) | more than 7 years ago | (#19107481)

He also didn't invent Bayesian filtering. I open sourced a similar statistical spam filter a year or two before he wrote the plan for spam. And I didn't invent it either.

Re:Barely an investment (1)

Breakfast Pants (323698) | more than 7 years ago | (#19107733)

What was the name of it? Link?

Re:Barely an investment (1)

martin-boundary (547041) | more than 7 years ago | (#19107833)

Silver bullet for what? Bayesian filtering simply works. The thing is, lots of people want a single filter to work for more than one person, and then of course you'll get issues: What's interesting/spam for one person is not the same as what's interesting/spam for another person, so why should a single filter know?

But for those who use Bayesian filtering as intended (one filter per person, teaching about errors when needed) there's no spam problem to speak of, and there hasn't been for years.

Re:Barely an investment (3, Informative)

Zeinfeld (263942) | more than 7 years ago | (#19108485)

Silver bullet for what? Bayesian filtering simply works. The thing is, lots of people want a single filter to work for more than one person, and then of course you'll get issues: What's interesting/spam for one person is not the same as what's interesting/spam for another person, so why should a single filter know?

Bayesian filtering does not come close to the effectiveness of most of the commercial schemes I have used. Since I get over 3,500 spams a day (and 500 legitimate mails) I could not possibly tollerate even a 1% false positive rate. Currently I have less than 30 false negatives and essentially zero false positives. I do not check my junk mail folder, simply can't afford to.

Content analysis as pushed by Graham is much less effective than looking at other message features such as the headers, timing, etc. Bayesian learning is much less effective than other strategies.

Best paper at Graham's first spam conference was by an MIT undergrad from course 6 who completely debunked the whole notion with some rudimentary statistical analysis.

Re:Barely an investment (1)

xenocide2 (231786) | more than 7 years ago | (#19109085)

...and essentially zero false positives. I do not check my junk mail folder, simply can't afford to.

Best paper at Graham's first spam conference was by an MIT undergrad from course 6 who completely debunked the whole notion with some rudimentary statistical analysis.


I'm pretty sure the first thing to do when measuring false positives is to count them. Maybe that paper has some insight on how to do that without looking at them, but I'm still waiting for the .iso they distribute the proceedings by to finish downloading. But you're welcome to continue the faith that your software is clearly working correctly simply because you paid for it.

And, you do realize that Graham's paper specifically cited headers as a reason Bayesian techniques in the past had failed, right? I'm not sure how timing etc plays into it; I get valid emails at all times of the day -- some students are up as late as I am, some are early risers, and sometimes I get mail from my boss during the day. Really, it all depends on the person. If your use doesn't engage the public much, you could probably get away with white lists. If you're part of a large company, you'll have access to a lot of email for known good and labelled junk mail. By the amount of mail I get with no obvious purpose, I surmise that some statistical analysis tools are working.

Re:Barely an investment (1, Insightful)

martin-boundary (547041) | more than 7 years ago | (#19109121)

Content analysis as pushed by Graham is much less effective than looking at other message features such as the headers, timing, etc. Bayesian learning is much less effective than other strategies.
You don't know what you're talking about. If you knew anything about Bayesian filters, you'd know that all information in a message is/can be used: that includes headers, time stamps, etc. Even the spacing between words might be used depending on the filter.

Bayesian filtering does not come close to the effectiveness of most of the commercial schemes I have used. Since I get over 3,500 spams a day (and 500
Yadda yadda. You claim it doesn't come close, I claim it's way better than anything I've used. I get 5000 mails a day, around half is spam, there's mailing lists and messages etc, and I simply don't worry about false positives because they're so low. There, that's a competing anecdote.

Best paper at Graham's first spam conference was by an MIT undergrad from course 6 who completely debunked the whole notion with some rudimentary statistical analysis.
Great rhetorical point! You can gain geek cred by namedropping a conference and pretending you understood some rough calculation an undergrad presented, when in that same conference other _phds_ actually showed the opposite with actual test data (gasp!).

I suggest you educate yourself: start by looking at the performance of spam filters that get regularly _and scientifically_ tested by NIST (National Institute of Standards and Technology, there I'm namedropping too) instead of believing in commercial press releases.

Re:Barely an investment (2, Interesting)

dubl-u (51156) | more than 7 years ago | (#19109141)

$20K for 6%? Thats idiotic. A VC looking at that type of deal is not going to be impressed.

6% for $20K plus a seal of approval and a summer of mentoring and promotion from a guy who clearly knows how to toot horns, if mainly his own.

It's still not a deal I'd take. But it probably makes sense for some.

$20K should buy no more than a thenth that amount, and thats expensive.

Seriously? His valuation for some kids who have an idea and half-built prototype is circa $0.3m, which I agree is low. You're suggesting that it's low to put a $3m valuation on 20kloc, a neat notion, and people with no startup experience? If you think that's a good deal, I'll tell you where to send the checks, as I'm sure I can find you plenty of those.

Re:Barely an investment (1)

jackb_guppy (204733) | more than 7 years ago | (#19107453)

OH the money is for:
        This money covers lodging, food and equipment during the program.
For 3 months in SV. Where are these guys going to live?

Re:Barely an investment (1)

Anarchysoft (1100393) | more than 7 years ago | (#19107493)

OH the money is for: This money covers lodging, food and equipment during the program. For 3 months in SV. Where are these guys going to live?
What do you mean? There's plenty of housing [innvision.org] . :|

$20k , ridiculous. (4, Informative)

adam (1231) | more than 7 years ago | (#19107477)

You're completely correct. First of all, the phrase "angel investor" should never be used to accompany a five digit figure --even "venture capital" is kindof out of place. Secondly, if they're investing (up to) $20k into a startup, it is they who are failing the IQ test. [in my experience] Serious venture investors want to see startups that have already bootstrapped a significant amount of funding (at least six if not seven figures), have PhDs onboard, etc. Now, obviously some industries and ideas have a much larger barrier to entry than others. For instance, I'm in the cinema field, where a cutting edge product might cost between $50k (low end) and $1M (high end). So designing, manufacturing (etc) these products has a much larger barrier than say, the guy who has a bright idea for the next digg.com or whatever web-two-point-oh site is hot this week (where $20k might actually pay a brilliant developer to write much of the code needed). But, even using the American Idol analogy-- if you were going to invest in a singer, someone who doesn't have any sofware/hardware development needed, just needs the cash to get into a studio and get recorded, that alone would cost more than $20k.

Twenty grand really is peanuts. Hell, some venture capital groups have proposal fees that can easily run a few thousand dollars (that the startup needs to pay just to present the business plan to them), not to mention cookie-cutter research [scri.com] for business plans alone can easily run $5-10k (I won't even get into custom research).

My advice if you need $20k of investment capital? Put it on your Visa (worked for Under Armor [msn.com] ). Selling off a chunk of anything you genuinely believe to be a good idea should only be considered when you have no other available means to bring that idea to fruition.

Re:$20k , ridiculous. (4, Interesting)

Z0mb1eman (629653) | more than 7 years ago | (#19108039)

Serious venture investors want to see startups that have already bootstrapped a significant amount of funding (at least six if not seven figures), have PhDs onboard, etc.
That's exactly the point of YCombinator - to get your startup to the stage where serious investors will even look at you.

The biggest draw is not the money, it's the connections, the advice, the hype and recognition you get for being a YCombinator grad, and the investor meetings they set up for you.

Precisely because the barrier to entry is so low on the web, getting people to take your idea seriously can be very valuable. I believe one of Paul Graham's arguments in favour of YCombinator is - which would you rather do, keep the 2-10% of a company that has few chances of succeeding, or give away 2-10% of a company with higher chances of success?

Most of the YCombinator projects are run by people in their mid-20s - not exactly experienced at running a business, and this is the point in life where connections and advice can be more valuable than standard of living.

Is it worth it for everyone? If you already have capital, connections, and a rock-solid business plan, no way. If you have a great idea and lots of energy, but you're not actually sure how to make it work, then it might be.

And yes, my co-founder for "the next digg.com or whatever web-two-point-oh site is hot this week" (see my signature) flew down to San Francisco about a month ago to pitch our site to Paul Graham & co. for this year's summer YCombinator. And no, we didn't get it (we weren't expecting to :p). It was a valuable experience nonetheless, we're working on something a bit more original now :p

Re:$20k , ridiculous. (3, Interesting)

BitGeek (19506) | more than 7 years ago | (#19108791)

I guess there are people out there who are inexperienced enough to think that "connections" are actually valuable. The reality is, if you build it, they will come- if its worth funding. Hell, I know billionaires and the ones who are open to funding new ideas are interested in hearing new ideas... you don't need "connections". And anyway, if you're building a web app, you do not need funding... the barrier for entry is so low these days all you need is a job delivering Pizza for your founders to cover the rent.

Trading in "connections" is the kind of ivy league old-school, old-economy BS that we have gotten past. Sure, many VC firms are stuck in it-- but this is a blessing in disguise-- VC firms will give you absolutely bad advice, charge you too much for your equity and then make you earn your ownership back-- the idea of founder vesting is so asinine that its amazing that people fall for it-- Venture capital is a total rip off. And they can get away with it because they are investing dumb money in dumb companies and getting dumb returns-- during the boom you would have done better investing in core tech stocks than in even the best VC funds which returned 2-3X over 7 years.

And as for the value of the advice: YC insists that you move to Cambridge or Silicon Valley-- the two places Paul Graham has lived. This isn't "Advice" this is laziness. The idea that you have to be in either of those places is absurd to anyone with a lick of business sense. If you're building a new business the last thing you want to do is go where the money is expensive, the offices are expensive and there are a thousand others trying to poach your employees, whom you have to pay top dollar to on top of top equity because the living costs are so high and the competition is so high.

But they are great places for getting venture capital and participating in the trade in "connections".

YC is popular among the people who have not yet realized that these activities are bad for business, not essential to it.

But they will learn-- move to Silicon Valley and pitch VCs for a few months. You'll surely get money, but if you are smart, you'll realize that the money will do more damage than good because the person giving it to you has no clue, and they will get control over your board.

The failures of the late 1990s are directly due to easy money from idiot VCs. Not bad management at startups-- bad advice from "venture capitalists" (who are generally people who went to harvard and have a sub 100 IQ.) The idea that VCs are smart or shrewedi s a carefully cultivated fallacy. The people you meet at VC firms are either 20 something fratboys who can barely operate a computer, or old guys who were funding oil companies back in teh 1970s and know even less about technology.

And you want to give these idiots control over your company, and a big chunk of the equity you built?

Re:$20k , ridiculous. (2, Interesting)

Kevin143 (672873) | more than 7 years ago | (#19109691)

I've got some brilliant ideas, billion dollar ideas, in software. Right now I'm bootstrapping a biotech startup.

Want to hook me up with some of your billionaire friends? Send me an email and I'll share my ideas.

kfischer at g mail dot com

Re:$20k , ridiculous. (2, Interesting)

Achromatic1978 (916097) | more than 7 years ago | (#19109949)

Hell, I know billionaires and the ones who are open to funding new ideas are interested in hearing new ideas

A few moments elementary Googling, you're [yahoo.com] in Bellevue, Washington, so sure, you're in proximity to at least four of America's 372 billionaires [cnn.com] .

But you post on YC's site, and comment [ycombinator.com] about how it's bad that Bay Area women are "skinnier (but more expensive)", of those that "want to date geeks". Complaining about women with expensive tastes isn't really the mark of someone has really climbed the financial walls of success.

So I'm really kinda curious, how many billionaires do you know, and how well do you know them?

Bravo (0)

Anonymous Coward | more than 7 years ago | (#19110003)

Great post there. They give enough investment to barely cover the cost of the move plus a couple months expenses in a place like SF for a couple of developers. Only goobers fall for this. You're also correct about the non-value of connections. If you have confidence and some social skills you can meet all these people without some woow-woow intermediaries to help you.

Sign in five minutes. Only naive people fall for this thing.

Re:$20k , ridiculous. (1)

aalu.paneer (872021) | more than 7 years ago | (#19109729)

When I am starting up, $20K is least of my draws. I am more interested in the advice, discipline connections and visibility!

Re:Barely an investment (1)

Breakfast Pants (323698) | more than 7 years ago | (#19107921)

Paul Graham is the same guy who said he could calculate whether the patent system was a net win if given a couple weeks. This is something I've read more than one Ph.D. thesis on, but sure, a couple weeks sounds completely reasonable, Paul.

Re:Barely an investment (1)

Anarchysoft (1100393) | more than 7 years ago | (#19108049)

Paul Graham is the same guy who said he could calculate whether the patent system was a net win if given a couple weeks. This is something I've read more than one Ph.D. thesis on, but sure, a couple weeks sounds completely reasonable, Paul.
A couple of weeks? Hmm.. if only he had 5000 dollars to pay his expenses while he worked out version 1.0.

Makes absolutely no sense (1, Offtopic)

Robert1 (513674) | more than 7 years ago | (#19107307)

'Some critics scoff that Y Combinator's investment is peanuts for that amount of equity. But the opportunity is unparalleled -- total immersion into Silicon Valley start-up culture, advice from Graham and a fast track to the top angel investors and venture-capital funds. When Graham calls the winners, the founders have only five minutes to accept. "If people turn us down," he says, "as far as we're concerned they've failed an IQ test.'

What the hell does that even mean? What utterly horrible editing.

Re:Makes absolutely no sense (0)

Anonymous Coward | more than 7 years ago | (#19107525)

That's not the ending... there are 3 more pages, bud.

Living in the past (5, Interesting)

geek (5680) | more than 7 years ago | (#19107319)

I was immersed heavily in SV startup hell back in 1995-2001. I will happily admit that I would now fail hs IQ test. I wouldn't touch that dead horse with a ten foot pole. These guys are living in the past. SV is no longer the hub it once was, nor should it be. The boom that happened there KILLED their cost of living. Firefighters and teachers were living in homeless shelters because the cost of living got so high. People are tired of that shit. Seriously, just move on. Branch out. There is no reason for every tech related startup to be cenetered in one tiny little community.

Re:Living in the past (5, Interesting)

The Vulture (248871) | more than 7 years ago | (#19107523)

I work at a Silicon Valley startup that has been in existence for four years now.

It's funny in that the engineering team that I work with (who cannot afford a house) agree with your sentiment, but of course, the management team (who do have houses) refuse to even consider relocating the company (or a part of it). My informal poll has showed that everybody in the engineering team would gladly pick up and move if given the chance. This company has no need to be in the Valley, the customers that we are going after are either outside of the United States, or have offices nationwide, which are generally not in the Valley. The company founder could easily save money by relocating us.

I would gladly take a small pay cut to live and work in a nicer area with a lower cost of living, and be able to lead a better life. After this job, I'm out of the Valley, and not looking to return. There's too much BS in the Valley, and California as a whole.

-- Joe

Re:Living in the past (4, Informative)

achacha (139424) | more than 7 years ago | (#19107783)

Then this is what you should do. There are plenty of tech friendly cities with affordable housing and relatively low cost of living. Portland, OR; Austin, TX; Vancouver, BC; Raleigh-Durham, NC; Heck even Boston, Seattle and New York City are a steal compared to SV (if you live in one of the suburbs nearby). I lived in SV for 5 years and could not reasonably afford a house and family with developer salary (pure interest loans never sounded good to me); so I moved to Austin and managed to buy a house without much trouble and enjoy it a lot and glad I moved away from the valley (not to mention all the fun life outside of work which the valley sorely lacks unless you want to drive to SF every night).

Re:Living in the past (1)

paitre (32242) | more than 7 years ago | (#19109397)

You also forget the Baltimore-Washington area which is just filled with contractors and IT services positions, primarily with the government as their customers.

CoL is kinda shitty, but it's comparable to the Boston and NYC suburbs.

Re:Living in the past (1)

markov_chain (202465) | more than 7 years ago | (#19109689)

Do you know anyone with Raleigh-Durham experience? What's the area like, how annoying is the 4-hour drive to the ocean, what kind of fields are represented..

Re:Living in the past (1)

Achromatic1978 (916097) | more than 7 years ago | (#19109975)

Agreed. My wife and I are in Tacoma, I work in Redmond (yes yes, evil empire, etc). I commute, not too horribly, thanks to carpooling and HOV loans. I can leave home at 8, be at work by 9. I also just put down a deposit on a two story four-bedroom home for $1400/month.

Re:Living in the past (1)

spads (1095039) | more than 7 years ago | (#19108629)

"I would gladly take a small pay cut to live and work in a nicer area with a lower cost of living, and be able to lead a better life. After this job, I'm out of the Valley, and not looking to return. There's too much BS in the Valley, and California as a whole." I fled that area five years ago, with no work prospects, to an area where my open source orientation web orientation was decidedly in the minority. Even though I had to work outside of my field at subsistence level for several years, it was the best thing I ever did. Though I miss the CA countryside dearly, the CAns could suck the chrome off a trailer hitch, as far as I'm concerned. That jackass talking about failing an IQ test, that's nothing but egomaniacal money-grubbing chutzpah. Anyone who falls for that line deserves to have their IT brainchild raped up the ass.

The Paul Graham Business Plan (0)

Anonymous Coward | more than 7 years ago | (#19107325)

Some business are like donkeys chasing a carrot on a stick. They just keep on walking, never getting any closer to the carrot, but expending a lot of energy. They need some company to come along and give them the carrot.

This is called "The Paul Graham Business Plan".

Kittens! (-1, Troll)

Anonymous Coward | more than 7 years ago | (#19107339)

http://oralse.cx/ [oralse.cx] [goatse.ch] [oralse.cx]

Too Late for Spring...Wait for Winter (4, Informative)

Listen Up (107011) | more than 7 years ago | (#19107343)

"If you want to apply, please submit your application online by midnight PST on Monday, April 2, 2007. Groups that submit early have a slight advantage because we have more time to read their applications."

Good timing for this article...

Re:Too Late for Spring...Wait for Winter (4, Funny)

hansamurai (907719) | more than 7 years ago | (#19107427)

Unless your hot idea is time traveling.

Re:Too Late for Spring...Wait for Winter (1)

shri (17709) | more than 7 years ago | (#19108821)

In which case, you're probably not too concerned about failing an IQ test.

Wonder why they could not get a serious group of VCs to back their oh so original idea.

Seriously though, not impressed with the list of partners. One would have to be spectacularly desperate to go into this sort of scheme.
 

What a load (1)

GeorgiaCodeMonkey (1101541) | more than 7 years ago | (#19107359)

So for $5000, they get 5% of a startup that could be worth millions. Yeah--the math on that sounds fan-freaking-tastic. This sounds like IT's answer to Tony Robins, part self-help program and part scam.

Re:What a load (4, Insightful)

TodMinuit (1026042) | more than 7 years ago | (#19107423)

Agreed. Paul Graham isn't a computer nerd or a business man. He's a late night startup infomercial. "I got rich on startups and you can too! Just follow my 10 easy steps!"

BUT HE SOLD VIAWEB (0)

Anonymous Coward | more than 7 years ago | (#19108449)

You would know that if you read any article by him, he mentions it several times.

Oh and that he wrote viaweb in Lisp so he's 10x smarter than you.

Re:What a load (1)

Dunbal (464142) | more than 7 years ago | (#19107591)

So for $5000, they get 5% of a startup that could be worth millions.

      Yes it _could_ be worth millions. Probability is against that, however. Otherwise getting rich would be easy.

Re:What a load (1)

GeorgiaCodeMonkey (1101541) | more than 7 years ago | (#19107911)

Yeah, but Graham is playing the numbers. Assume he has ten "winners" who get the $5,000 investment--let's make it a grand total of $100,000 rather than $50,000 in case a few of them have two or more owners. If only one of them winds up with a net worth of $10 million (which is not all that much for a company), his investment across ten companies is now worth $500,000. And that's only if every other one completely bombs. And this isn't a blind investment--the entire "program" consists of him hearing what their business plan is and helping them tweak it to make it better. By the time they become a "winner," Graham already knows if they have something potentially profitable or a complete bomb and a great deal about the wannabe CEOs. In the end, this just winds up being a sweetheart deal for Graham.

Uncertainty (-1, Offtopic)

Anonymous Coward | more than 7 years ago | (#19107373)

There is a universal perspective. As an inside observer it is impossible to see it in its entirety. To us it exists only as an abstract idea. We can only see it in sections. We experience it constantly. Through interaction with our senses and measurements taken with our machines. The section of the universe we see grows daily. The Heisenberg uncertainty principle tells us our limits, if we don't know the starting point. We do. The starting point is everything. From proton to neutron, matter to anti-matter. Not just types of matter and energy, laws, ideas and concepts as well. The first instant of the Big Bang was violent. Many concepts canceled themselves out, others are still fighting and will continue until a stable configuration is reached. The scale on which this will occur makes our all our possible actions insignificant. The only scale that matters is local to us, thinking creatures. What we must decide is how we will react to this news. I hope that we continue on a path of peace, honesty, knowledge and freedom. However, there are many of us that are too selfish to allow this. The only thing left uncertain is everything that matters to us.

Peanuts (0, Redundant)

Opportunist (166417) | more than 7 years ago | (#19107375)

20k bucks? That's it?

Seriously, if you don't have 20k bucks yourself or could finance it somehow, drop the idea or try to pass a hat around. Handing out equity for 20k just shows that you definitly failed the IQ test and that you have no idea about business.

Hmm, a bit like "We don't do NDAs"... (2, Interesting)

DamonHD (794830) | more than 7 years ago | (#19107411)

A lot of VCs said rude/stupid/wrong/bulling/snide/nasty/thoughtless things during the dot-com boom because they could get away with it, such as one of my all-time-favourite turn-offs as a serial recipient of VC money: "We don't do NDAs", ie "Your ideas are not important so me might be careless with them"...

What was more interesting was that these jerks weren't around during after dot-bomb, but money still was, and I got some of it.

These people might be fine, but anyone whose view of me is based on "He said no to me so he MUST be dumb" is likely to be someone I don't want to work with. I hate conflict and CEO-style sociopathic posturing. So in fact it all works out.

Rgds

Damon

Re:Hmm, a bit like "We don't do NDAs"... (1)

bladesjester (774793) | more than 7 years ago | (#19107763)

I can agree with that.

I'm a very level-headed, even-handed person and I have fired clients who started down the abusive path.

I just don't do toxic relationships. They cause a lot more harm than good.

Re:Hmm, a bit like "We don't do NDAs"... (1)

dmoore (2449) | more than 7 years ago | (#19109143)

Funny you should mention NDAs. This is from the Y Combinator FAQ [ycombinator.com] :

Will you sign an NDA? How do I know you won't steal my idea?

No, we won't sign an NDA. No venture firm would at this stage. The informal commitment to secrecy on our application form is more than any VC would make.

There's a good reason for "We don't do NDAs"... (3, Interesting)

homb (82455) | more than 7 years ago | (#19109763)

A lot of VCs said rude/stupid/wrong/bulling/snide/nasty/thoughtless things during the dot-com boom because they could get away with it, such as one of my all-time-favourite turn-offs as a serial recipient of VC money: "We don't do NDAs", ie "Your ideas are not important so me might be careless with them"...
There's a very valid reason why VCs do that. I've had my share of working with VCs, and while I despise them in general, the "We don't do NDA" reasoning is sound: put yourself in a VC's shoes for a minute. Your job is to look at business plans and invest in ones that look interesting to you. So you will read hundreds of plans, speak with thousands of people who all come to tell you their idea. If you were to sign an NDA with every single one of them, you statistically are guaranteed to either infringe on it, or be perceived as infringing.

Take the following example: X comes to you with an idea. You reject X because the management team is weak (another perfectly valid reason). A few months later, Y comes to you with a very very similar idea. You like Y's management team and invest in it. As Y grows and becomes publicized, X reads about it, sees that you invested in it, and gets pissed off that "you stole X's idea!" Lawsuit.
Another example: You've been focusing on a certain field, say the Web 2.0 crap. You've by now gotten so much info, you've discussed it with so many companies, that when you're talking to X that came to pitch its idea, when you tell them why it'll fail you're probably going to say something that was covered under one of the dozens of NDAs you signed in the past year, but how are you going to know?

Signing NDAs would completely obliterate a VC's ability to operate. The problem is that most entrepreneurs are so obsessed about their idea being the one-and-only greatest thing ever that they aren't able to see the issue from a VC's perspective.

Failed an IQ test - depends on perspective (5, Insightful)

Anonymous Coward | more than 7 years ago | (#19107441)

"If people turn us down," he says, "as far as we're concerned they've failed an IQ test."

In other words, if you say no, or demand to "think about it for 24 hours", you probably might have an IQ that is too high to allow them to take advantage of you, and thus makes you ineligible to be one of their patsies.

The smart people are the ones that after receiving the call, say no, realizing that the idea has been vetted as having potential, and should run with it on their own.

Everything that is wrong with Venture Capital (5, Insightful)

Sanity (1431) | more than 7 years ago | (#19107451)

"[if founders turn us down] as far as we're concerned they've failed an IQ test."
Yeah, they scored too high and thus know better than to sell their equity for peanuts. I mean, wealthy or not, what an arrogant twat.

total immersion into Silicon Valley start-up culture
I can imagine few worse things for starting a technology business than to be immersed in the incestuous and insular world of Silicon Valley. Most Internet users don't live in Silicon Valley, why would it be an advantage to be isolated from them?

When Graham calls the winners, the founders have only five minutes to accept.
And they are willing to admit such underhanded pressure tactics? Sounds like these guys are everything that is wrong with venture capital.

Re:Everything that is wrong with Venture Capital (1)

Dunbal (464142) | more than 7 years ago | (#19107567)

what an arrogant twat.

      Yet there are always plenty of people with money prepared to hand it over to, or on the say so of, an arrogant twat. "Oooohh isn't he aggressive Mildred? I like THAT, excuse me sir, how many millions did you say you needed?"

Words of code? (4, Interesting)

Anarchysoft (1100393) | more than 7 years ago | (#19107467)

Graham loves it when his little chicks take on the big birds. "These guys have written 40,000 words of code in three months!" he crows. "You never see that in a big company!"
Who counts by 'words' of code? Working for big companies, I've written several thousand lines of code in a day many times. It's not typical, but it's not quite rare either. Of course, after a writing flurry I'd usually spend the rest of the week pulling my hair out because of the bugs I had added. ;)

Re:Words of code? (1)

Dunbal (464142) | more than 7 years ago | (#19107547)

Heck when I get inspired I can easily write 40,000 WORDS of code in a weekend...

Re:Words of code? (1)

Breakfast Pants (323698) | more than 7 years ago | (#19107851)

If you've written several thousand lines of code in a day, it is safe to say you have seriously neglected something.

Re:Words of code? (1)

Anarchysoft (1100393) | more than 7 years ago | (#19108021)

If you've written several thousand lines of code in a day, it is safe to say you have seriously neglected something.
What do you mean? My copy/paste keys are working perfectly? :)
Seriously, the busiest days are when I simply don't sleep but have worked through the entire night into the next day and then sometimes through the next night as well. Does that still count for SLOC in a day? :)

Re:Words of code? (1)

setagllib (753300) | more than 7 years ago | (#19108499)

The math for that is pretty reasonable. It's pretty easy to type that fast. However, most code time is spent thinking, testing, editing, refactoring, etc. and any code which doesn't have a good application of these habits is not worth writing. You're seriously better off doing things in smaller increments, especially with how human memory works. That's not always possible of course, but preferrable. I'd rather spend two days writing code than one day writing and the next three days fixing. It's especially discouraging to have unworking code for days at a time, and this is known to kill many otherwise promising projects, even open source ones.

Re:Words of code? (1)

Anarchysoft (1100393) | more than 7 years ago | (#19109295)

The math for that is pretty reasonable. It's pretty easy to type that fast. However, most code time is spent thinking, testing, editing, refactoring, etc. and any code which doesn't have a good application of these habits is not worth writing. You're seriously better off doing things in smaller increments, especially with how human memory works. That's not always possible of course, but preferrable. I'd rather spend two days writing code than one day writing and the next three days fixing. It's especially discouraging to have unworking code for days at a time, and this is known to kill many otherwise promising projects, even open source ones.
As general advice, I think that's solid. There are times when the moon is just right and the focus is 100% that you can code in a sustained, brilliant way for many, many hours and actually produce better code than the usual 8-hour shift (with 2-3 hours of actual coding for most people.) I don't think I've ever experienced that hacker mind while physically at a traditional business office, but I've lucked into it many times at home. It really is a great experience.

Re:Words of code? (2, Funny)

innocent_white_lamb (151825) | more than 7 years ago | (#19109917)

Back in the mid-80's I was working on a truly fascinating program (a survey instrument data massaging thing). I started working on it on Friday evening. After working on it for a while, I realized that I felt sick. I wondered why; what's wrong with me... I ultimately realized that it was late Sunday evening and I had worked on this for the whole weekend, never leaving my basement and not eating or sleeping (or anything) for the whole time. I went out to the restaurant down the street and had something to eat and immediately felt much better.

Taking VC is almost guaranteed to screw you (5, Interesting)

kcbrown (7426) | more than 7 years ago | (#19107489)

But the opportunity is unparalleled -- total immersion into Silicon Valley start-up culture, advice from Graham and a fast track to the top angel investors and venture-capital funds.

Make no mistake: if you take VC funds, they, not you, get into the driver's seat. And it means that their priorities, not yours, are what will drive the company.

Back in the dotcom days, before the crash, it generally meant the VCs would attempt to groom the company for a quick IPO. That meant growing the company quickly and sacrificing the long-term viability of the company in order to do it.

It was common for the original founders of the company to be booted from the company or otherwise sidelined. The VCs would bring in their own executive management teams, all the way up to the CEO, which would answer only to the VCs, of course.

The end result is that the startups were unable to maintain their focus on their original mission and were vastly over-committed compared with their needs. And predictably, most of them tanked shortly after their IPO. The VCs usually made a nice profit when the companies IPO'd, but once stock investors finally realized what was going on, IPOs suddenly became worthless. And thus the dot-bomb ensued.

If I were the founder of a startup, the last thing I would do is take the money of a VC. That money is heavily tainted. Taking it would be akin to committing suicide. The only way I would take it is if it came with a contract that clearly stated that I would remain in complete control of the company as if I had not taken the funds at all. And I doubt any VC would ever sign such an agreement.

i mostly agree with you. (0)

Anonymous Coward | more than 7 years ago | (#19107559)

for the most part, what you say I believe to be true. Bringing on any investor means that person now has a commitment to your project, and will feel an emotional and financial bond, one that will lead them to want to 'steer the ship' so to speak-- so one should be smart about entering into these relationships, especially with investors who may have desires and styles very divergent from your own.

The one place I disagree with your characterization is the presumption that anyone can sell a stake in their company and easily lose control. The investor has as much control as you give them. If you sell a 10% stake for $X, they are going to have 10% voting rights at board meetings. You might even create a second class of stock (without voting rights), although I don't expect any savvy investor would agree to this. Then again, most VC types want a majority stake, so perhaps that was implied (51%+ ownership) in your last statement. Either way, I wanted to point out for everyone else, that just because someone invests in your comapny, they don't have default control of it.. you just have to be careful about how much you sell off, and what control that stake gives to the buyer.

Re:Taking VC is almost guaranteed to screw you (1)

smallpaul (65919) | more than 7 years ago | (#19109697)

If I were the founder of a startup, the last thing I would do is take the money of a VC. That money is heavily tainted. Taking it would be akin to committing suicide. The only way I would take it is if it came with a contract that clearly stated that I would remain in complete control of the company as if I had not taken the funds at all. And I doubt any VC would ever sign such an agreement.

VCs sign such agreements all of the time. By definition if outside investors have less than 50% of the voting stock of the company then they do not have control. If you read the article you'll see that Graham gets 5-6% of the company. This means that he is very far away from having control of the company. I don't believe that Y Combinator has ever replaced the management of a company that they ran and I don't see how they could with such little equity.

Even in a more normal situation where a VC might want control of the company, there are many, many circumstances where their interests and those of the founders align. They do not always align, but they often do. People accepting VC money are not necessarily stupid. They take a risk to get money that they might not be able to succeed without. If your competitors are using VC money to grow much more quickly than you are then it makes more sense to shop around for VCs you can work with than to let them crush you through better capitalized marketing or a larger sales force. Google is a perfect example of one of these "VC-suicides" you talk about.

Bad idea. (2, Funny)

TheSlashaway (1032228) | more than 7 years ago | (#19107539)

As many others point out, $10k-$25k for 5% in your company is ridiculous. It doesn't fund the company at all and they take a good percent of it. It's for suckers. A better deal would be something like $250,000 for 1-2 percent of the company plus resources. Then you could at least try.

Re:Bad idea. (2, Interesting)

rossifer (581396) | more than 7 years ago | (#19108801)

$250,000 for 1-2 percent of the company plus resources.
$250k for 2% means a $12.5 million pre-money valuation. 1% is a $25 million pre-money valuation. For two no-name kids before the prototype? You're smoking crack. One thing that I think you've overlooked is that ideas aren't worth much by themselves. An idea along with the will and ability to build a company is what's worth something.

Now, I'm completely aware that early stage valuation is largely speculation and hand-waving, but I have yet to see a pre-prototype, non good-old-boy management team valuation of over $2 million. The one valuation close to $2 million that I know of was back when VC's were throwing money at anything (and these were some very stupid VC's).

You've got to come up with one hell of a story to explain why this bright idea (and only the bright idea) is worth $12.5 million. That is one hell of a good story. Somehow, I don't think you're going to figure out a story quite that good.

Ross

Re:Bad idea. (1)

ez76 (322080) | more than 7 years ago | (#19109799)

That would be a better deal, and with capital like that, you'd be able to both live and work in Fantasyland.

a word of advice (5, Insightful)

Anonymous Coward | more than 7 years ago | (#19107553)

If you're ever placed in a position where you're offered a deal that doesn't sound so hot, but

1) the surroundings are hyped up, for example a "boot camp for Web 2.0 entrepreneurs" that is a "combination of Silicon Valley and American Idol";

2) you are given a ridiculously short time limit to make up your mind, let's say five minutes

and

3) if you don't accept, you "fail the IQ test" in the eyes of the people making the offer

then grab your shit and head out the door as fast as possible. Don't forget your cell phone.

(following Harvey Mackay).

IQ Test (4, Interesting)

ShakaUVM (157947) | more than 7 years ago | (#19107557)

As far as I can tell, Paul Graham is a hustler.

Taking 5% of a company for TWENTY THOUSAND DOLLARS? Anyone who accepts that deal should be shot. Saying that "they failed an IQ test" just makes Graham out to be a fraud.

Also, and this is a personal pet peeve for me, he wrote "The Plan for Spam" in August 2002. Bob Boyer and I (Bill Kerney) while grad students at UC San Diego wrote a very similar statistical spam filter, which we open sourced and released in December 2000 (and which some people took and continued working on it). And we didn't invent the idea either -- we based our work on the UC Irvine Machine Learning Database.

And yet somehow he never corrects the notion that he invented the idea.

Re:IQ Test (1)

Dunbal (464142) | more than 7 years ago | (#19107671)

Taking 5% of a company for TWENTY THOUSAND DOLLARS? Anyone who accepts that deal should be shot

      Oh but I'm sure this type of hustler will be quick to point out that if he takes 5% of your company for 20k, that means he thinks you are really worth FOUR HUNDRED THOUSAND DOLLARS! Isn't that amazing!? And that's without doing anything at all! Imagine what you will be worth in just a few years... etc, ad nauseam

Re:IQ Test (1)

Breakfast Pants (323698) | more than 7 years ago | (#19107823)

Considering all the risks he takes on you, that means he potentially thinks you are worth millions. Not a terrible valuation for a bunch of kids just out of college.

Re:IQ Test (0)

Anonymous Coward | more than 7 years ago | (#19108391)

Considering all the risks he takes on you

All the risks? What? He takes $20k risk. As someone else who did the math pointed out, he breaks even when you hit $400k, nowhere near your "millions".

Re:IQ Test (4, Insightful)

homer_s (799572) | more than 7 years ago | (#19108173)

Here is a passage from one of his essays (which I think are very insightful):

A while ago an eminent VC firm offered a series A round to a startup we'd seed funded. Then they heard a rival VC firm was also interested. They were so afraid that they'd be rejected in favor of this other firm that they gave the startup what's known as an "exploding termsheet." They had, I think, 24 hours to say yes or no, or the deal was off. Exploding termsheets are a somewhat dubious device, but not uncommon. What surprised me was their reaction when I called to talk about it. I asked if they'd still be interested in the startup if the rival VC didn't end up making an offer, and they said no. What rational basis could they have had for saying that? If they thought the startup was worth investing in, what difference should it make what some other VC thought? Surely it was their duty to their limited partners simply to invest in the best opportunities they found; they should be delighted if the other VC said no, because it would mean they'd overlooked a good opportunity. But of course there was no rational basis for their decision. They just couldn't stand the idea of taking this rival firm's rejects.


Re:IQ Test (1)

ShakaUVM (157947) | more than 7 years ago | (#19109815)

>>that means he thinks you are really worth FOUR HUNDRED THOUSAND DOLLARS! Isn't that amazing!?

Note this is after you've already (from what I can tell from TFA) put together a business idea and they picked the top whatever percent of ideas. He's buying a chunk of your company for a couple pennies and a slap on the back, and then insulting people that don't think that's a great idea. It's not the offer that's necessarily insulting -- perhaps you really might only be worth a half million or so -- but calling people stupid for rejecting his offer, when they might have done the math and realized he's offering them a crap deal.

Re:IQ Test (1)

HiddenBek (1101673) | more than 7 years ago | (#19109005)

Taking 5% of a company for TWENTY THOUSAND DOLLARS?

This is misleading. Y Combinator is not proposing to buy 5% of your company for $20,000, as that company doesn't even exist when the agreement is made. Rather, they provide the means to bootstrap an idea with no risk to yourself, then let you keep 95% of the result.

Anyone who accepts that deal should be shot.

Ok, so what's the alternative? How should a smart person with big ideas but no money go about starting a company?

Reddit [reddit.com] was formed in 2005 by two 22 year old students during the first YC founders program. In 2006 they were acquired by Wired, almost certainly making them millionaires. YC, with their percentage, must have done well too. Sounds like a good deal for everyone.

Getting a company off the ground has traditionally been difficult, which is probably why so few people attempt it. For most folks it either means a tremendous leap of faith (quit job, mortgage house, cross fingers), or limiting yourself to evenings and weekends while you do something else to pay the bills. Y Combinator was designed to make forming a startup more accessible, and shouldn't be viewed as an alternative to traditional VC funding. It's an alternative to a regular job.

Re:IQ Test (1)

xenocide2 (231786) | more than 7 years ago | (#19109317)

I'm sure there are plenty of dorm room nerds who could make something valuable for 20 thousand but can't convince the local bank to make a business loan for what amounts to a website. And a few might even take the deal. But you're right. This is the kind of cash I could come up with as a grad student. There's no point in taking the money if I believe the idea has wheels. If that's the kind of bad businesmen they're after, well then maybe Morris hasn't quite fully recovered from prison.

Graham selling tactic in the past was that it was closer in nature to an internship in entrepreneurship. It'd have to be, if the net value is four hundred thousand. But the idea of using it as an IQ test has some (perhaps unintentional) merit: don't turn away a guy with money interested in funding your ideas, negiotiate.

Y Stealer (2, Informative)

Anonymous Coward | more than 7 years ago | (#19107573)

I was once turned down by Y Combinator, I met Paul Graham, he is arrogant and thinks he's the smartest guy in the world. I applied them because I was living outside USA, so it could be a good opportunity for me. But after coming to Silicon Valley, I saw that things are not so hard, you can easily access people you want here, so you don't need to give 10% of your company to this asshole (I respect his articles though). I'm very happy now that I was turned down, it allowed me to protect my shares.

For a guy who lives in USA, Y Combinator is purely stupid. I talked with many VCs and that's what they think too. Look at Y's current investments, which ones succeed? Loopt, Scribd got the investment in a few months, do you think it's Y Combinator who gave them this mojo, they could do it by themselves too. With Y Combinator, you fail without learning anything. If you are without him, at least you fail by learning something.

Don't jump the gun now... (2, Insightful)

Anonymous Coward | more than 7 years ago | (#19107607)

As a Y-Combinator funded company, I can tell you that it's not about the money. The money is sufficient to get a prototype for real investments from Angels/VC's. The justification for the low valuation (~400k) is that it isn't a valuation. The 5% of equity is in exchange for a community of incredibly intelligent, passionate peers who are similarly coding for their lives and guidance from someone who knows the startup industry inside and out. PG is also incredibly well-connected; he'll get you in a room with Sequoia on a dime and instant publicity.

In response to 'just keep your day job and just work on the side' - sorry, that just doesn't work. If you're dedicated enough to an idea, you'll quit your day job. If you're not living on the edge, you'll live the rest of your life dreaming of what could have been.

Re:Don't jump the gun now... (1)

ez76 (322080) | more than 7 years ago | (#19109831)

If you're dedicated enough to an idea, you'll quit your day job. If you're not living on the edge, you'll live the rest of your life dreaming of what could have been.

That would be inspiring if your next sentence wasn't "... and that's why I spent my life savings to found FerretTube."

boot camp? (1)

Urza9814 (883915) | more than 7 years ago | (#19107611)

Didn't apple already do this?

Re:boot camp? (1)

Joe The Dragon (967727) | more than 7 years ago | (#19107655)

The us army did long before apple was even around.

I attended their event at Stanford... (1)

leather_helmet (887398) | more than 7 years ago | (#19107651)

a couple of months back - A lot of great speakers in additional to the panel of startups that were funded (reddit, justintv, scribd..) - Anyhow, from my perspective a majority of the crowd was/is gay for Paul Graham - A lot of interesting conversations regarding the nominal amount of cash they inject - To a guy from Ohio or Minnesota, etc., they would jump at the chance to move out to SV for the $5k carrots dangled in front of each founders (For example reddit is a bunch of guys from V-tech - whom, as many of you know, were purchased by Conde Nast) - Anyhow, I see Y-Combinator as more of an incubation program for geeks that have no clue regarding business and provides them a great incentive to move out to California - in addition, the halo effect of Paul Graham may not hurt - Pros and cons both ways

As for myself, my startup is further along than most as we are self-sustaining with a handful of clients - It was great to learn from the speakers and meet some other like minded and entrepreneurial folks

Re:I attended their event at Stanford... (0)

Anonymous Coward | more than 7 years ago | (#19108941)

Hey, I've lived in Minnesota, and I now live in Ohio, and I'll tell you this much:

I don't know anyone who wants to live in Silicon Valley, much less California, and I know none of my friends or co-workers would even raise an eyebrow for $5,000.

What a load of arrogance. Just remember, the country as a whole doesn't give a rat's ass about the happenings in California. We're putting our $5,000 towards North Carolina.

An old scam for a new generation (3, Insightful)

cstec (521534) | more than 7 years ago | (#19108237)

"When Graham calls the winners, the founders have only five minutes to accept. "If people turn us down," he says, "as far as we're concerned they've failed an IQ test."

If you accept in 5 minutes, you've failed an IQ test. These people are not that important, regardless of what they tell you, and neither is the amount of money they have on the table. This is an attempt at simple manipulation on the part of older investors looking for wage slaves that will ask how high when told to jump. Unfortunately, if you're a 20-something, they're targeting you.

Understand the strength of your signature and the committment it represents. Never, EVER, be afraid to walk away from a deal. It's a big planet and there are plenty of legitimate people to do business with.

Re:An old scam for a new generation (0)

Anonymous Coward | more than 7 years ago | (#19108529)

The only variables on the deal are amount invested and valuation. It's pretty clear that you'd certainly be an idiot to have not decided on your bounds before getting the call. After having made that decision, who cares if you're allowed 5 minutes or 3 seconds?

Re:An old scam for a new generation (1)

cstec (521534) | more than 7 years ago | (#19108705)

Contracts are as variable as human beings and as random as a floating point value. Every term means something, and has some price. You will never know the specifics until they are finally laid out in front of you, cast in eternal, damming words and signed by both parties. You can't know the bounds on an N-dimensional equation in advance. You can work out where you stand, but that doesn't eliminate variables. The only way to decide in 3 seconds is to ignore aspects of the proposition laid before you. Either you understand the folly of skipping the fine print, or you will.

Re:An old scam for a new generation (0)

Anonymous Coward | more than 7 years ago | (#19109261)

The only variables on the deal are amount invested and valuation. It's pretty clear that you'd certainly be an idiot to have not decided on your bounds before getting the call. After having made that decision, who cares if you're allowed 5 minutes or 3 seconds?
It's an excellent sign that they're trying to scam you in some way. Someone offering you a good deal doesn't have to use sleazy high-pressure sales tactics.

Re:An old scam for a new generation (1)

gad_zuki! (70830) | more than 7 years ago | (#19109901)

Yeah, in 5 minutes you cant really consult with a lawyer/business savvy friend. Sounds like hustling to me.

universal channel? (1)

Ep0xi (1093943) | more than 7 years ago | (#19108239)

does anyone remember who invented the "universal channel"? it was a model and an electronic design which were intended to be used for trasmitting up to six audio channels within the same phisical medium which in that time were copper telephone lines. the system used the sideband to trasmit the channels "encoded" in different frequencies and two modems by each ending were connected to amplifiers which were designed by the same guy and connected to speakers to choose and hear the channel of standard music you wanted. In those times there were not the "idea" of a copyrighted "model" of system but now we use it often in patents. Tere were two kind of patents one kind "legal" and the other kind "moral" think what would have been of the world if Einsteins E=MC2 were patented first by other guy in other country?... The invention i named earlier was the first and previous approach to the actual internet. When this guy "the inventor" actually saw the "Internet" he died almost instantly of cancer, because he never patented his invention and left his family in povery because the country in which he was born used to gift patents to the US. This is just a part of my lifestory to you actually meet what could be a real patenting system which could be internationally accepted as law for every country.

Guy Kawasaki tried this (1)

Animats (122034) | more than 7 years ago | (#19108389)

Guy Kawasaki has been doing something like this for years, with Garage.com [garage.com] . Their biggest success was Claria, which distributed adware. Not a great track record there.

IQ tests (0)

Anonymous Coward | more than 7 years ago | (#19108769)

Anyone who signs stuff under pressure, or who agrees to even deal with someone who requires a decision within five minutes, has failed an IQ test.

Correct: "Take your time to look this over. Discuss it with your advisors. We need to make a decision quickly, so this expires in three days, but that should be enough time for you to fully understand it and come to an informed decision."

Incorrect: "Sign here in five minutes! Sign! Sign it now you idiot!"

Anyone who is putting that much pressure is doing a scam, in my experience. Maybe these guys are the one exception to that rule, but agreeing to things under pressure is generally a bad habit.

yeah it's an IQ test (0)

Anonymous Coward | more than 7 years ago | (#19108839)

"If people turn us down," he says, "as far as we're concerned they've failed an IQ test."'"

If anyone falls for their arrogant short bus riding bullshit, THEY HAVE failed an IQ test.

CambrianHouse works too (1)

amyrmidon (861719) | more than 7 years ago | (#19109001)

Cambrian House [cambrianhouse.com] is another way to throw start up ideas around. At least at Cambrian House you can get some feedback and people to collaborate on your idea - not just five minutes :P. But Having a chance to just experience a startup with some guidance would be great.

Wow, I think every single person here misses the.. (2, Insightful)

dumbfounder (770681) | more than 7 years ago | (#19109139)

point. Most of these companies are just at the idea stage. Most companies at the idea stage would give out 5% just for Paul Graham to be on their board of directors, which opens up Paul Graham's rolodex for making contacts in the industry. For kids coming out of college to get funded in this way is a huge springboard for their careers. It is a HUGE opportunity for these (mostly) kids that I thought the slashdot crowd would have some amount of respect for. Yes, it isn't a lot of money, and it is meant to put a lot of pressure on these guys to get a product together ASAP. Which is a GOOD thing for a tiny startup.

A different way to go from nothing to something (1)

ScottV (694828) | more than 7 years ago | (#19109969)

If you've got an established business and you need funding to go to the next level YC isn't right for you. That's when you need VC investment. If you've got nothing and you want some cash to build that very first version then YC probably makes good sense. Starting up in your spare time has a fairly low probability of success and maxing out your credit card is fairly high risk. Additionally a more thoroughly developed product after YC funding is likely to give away less equity if further VC investments are required. The real benefit isn't 'contacts' as everyone here has dismissed, but the involvement and personal investment of experienced people. Another benefit of a low valuation is that your company doesn't have to become the next google for the investors to get a return on their money. This means they won't be pushing you to take the ridiculous long shot options if you don't want to. I think its far too easy to see equity as a precious resource to horde, sometimes you have to realize owning a smaller piece of a bigger pie is preferable.

VC 101 For the /. Developer (2, Interesting)

mpapet (761907) | more than 7 years ago | (#19109977)

Here's a quick and dirty run down of what one SHOULD do if they want to start a business.

There's a fork at the beginning of the road: Quit your job or keep your job and commit to your startup as best you can.

For the Quitting My Job crowd:
1. Make an actual living at it ASAP. If you can't, then forget it. If others around you are, and you can't for some reason, there simply isn't the time to learn the hard knocks. Either way, you have about 12 months. You should, after 12 or so months, have a good idea if it's gonna work. If you can't make that decision on your own, then you are in dire need of some Management. You don't need to go to Paul Graham to get it.

2. AFTER you are making some money with a workable widget 2.0. reassess. From here, you work with a great clarity that is not available to a Paul Graham graduate. If you want the big VC $$ it will take a great deal of time, effort and money to get. In fact, it's probably a full-time job on its own.

For the Moonlighting crowd:
You will need to work MUCH more smartly than the Quitting My Job starter because the pace of "ground breaking innovative Widget 2.0" is limited. If you are good at whatever you want to start, then there should be success despite the Job Quitter that is competing against you.

Your success STILL needs to be measured in dollars. Forget Youtube style VC burn for now, but concentrate on generating revenue. Despite working less at it, it MUST make money with a pretty clear path to replacing your salary and benefits.

________Tips for either group_________
You must know what you need and how much you are willing to give away to get it. Hint: 5% is a whole heck of a lot of equity to put on the table.

Grow on your own revenue. Don't be tempted by the other ways to do it. If you have a good business, it will grow on its own.

There are too many barriers to youtube-like startups in the U.S. Seriously consider starting it someplace you'd like to emigrate. VC capital is wasted largely on lawyers in some way, shape or form in the U.S. If you are tempted by the conventional public offering, the amount of money the banks sucks up is absolutely shocking. This is one reason why Google cut some of the bankers out in their IPO.

Stay flexible. Chances are excellent what you started out doing for money will be somewhat different than what actually brings the money in.
Load More Comments
Slashdot Login

Need an Account?

Forgot your password?
or Connect with...

Don't worry, we never post anything without your permission.

Submission Text Formatting Tips

We support a small subset of HTML, namely these tags:

  • b
  • i
  • p
  • br
  • a
  • ol
  • ul
  • li
  • dl
  • dt
  • dd
  • em
  • strong
  • tt
  • blockquote
  • div
  • quote
  • ecode

"ecode" can be used for code snippets, for example:

<ecode>    while(1) { do_something(); } </ecode>