This is BS. You have a much higher chance of rasing money for the same idea if you worked in FAANG than if you worked in Accenture.
Same goes to someone who went to Harvard vs someone who went to University of Colorado.
I’d argue how your business is running is 10x as important as credentials.
(I dropped out of a non-prestigious school and had work experience at one company, have raised $120m+ in <4 yrs).
So they care a lot, but it’s not everything to them?
In other words, you had connections? I'm guessing you weren't a poor single mother who dropped out of school to raise her kid.
How do you drop out, have 1 job experience and raise $120m? Either you are extremely privilege and/or extraordinarily lucky.
Stop making it sound so easy like everyone can do what you did. Most people, who didn't even drop out, wouldn't know where to start.
> My experience: everything I own in one suitcase, here’s my sleeping situation. Would shower at YMCA and work at coworking space. $300/mo personal burn. If you could combine the two you’d fill it 100% and make SF possible again.
https://twitter.com/Austen/status/1093540469022195712
> Lambda School wouldn't exist without Gumroad.
> We bootstrapped for the first several months without salaries from the proceeds of the book I sold there. Gave us enough runway to try the crazy “pay back when you’re hired” things. Thanks Sahil!
Wanna try again?
You drop out, start a company because nobody wants you, get some seeds funding with sheer luck, grow the business progressively, hire some more people, grow some more and eventually raise 2 more rounds reaching 120M. That takes many many years.
It's a massive combination of luck and being at the right place at the right time selling an okay thing. Then persevering over numerous years and executing decently. Most people won't get there not because they are incapable but because they don't have the environment and the bit of luck.
(However, we did what we needed to do--get some Stanford people with ties to Sand Hill Road--and got it done.)
A growth chart very much who not get you funded anywhere. Numbers that would have people writing cheques in Silicon Valley or even Boston would be lucky to get a loan, personally guaranteed from the founder, for a quarter of that amount in most of Europe. People raise in the Bakery w because it’s the best place to raise. This indie hacker, growth fund, Earnest Capital, lifestyle business to selling to PE funnel thing is distributing that and building a smoother thing between VC and small business but you cannot raise anywhere else like the Valley, except perhaps China. Even the Israelis go to the US to raise.
Source: I have watched angel rounds and series A in both Silicon Valley as well as in the East Coast and India. I'm in my fourth decade now and on my 8th startup. Silicon Valley has some angels that are pretty generous about modest traction if they like the team. I haven't found such people in NYC and in India (though they may exist).
But, on the other hand, can learn that as quickly as anyone else.
>You have a much higher chance of rasing money for the same idea if you worked in FAANG than if you worked in Accenture.
You may be right, but do you have any evidence of this, anecdotal or otherwise?
> You may be right, but do you have any evidence of
> this, anecdotal or otherwise?
Sure. It's true that your background matters in general. What's not clear, and does put the burden of proof on OP, that the specific background of FAANG experience matters.
>and instead you should provide evidence this isn't the case within the YC/VC system?
As a general rule, it's not easy to prove a negative. What kind of evidence would you expect for YC/VC system that would answer this for you??
This is really accurate, at least from my experience as someone of a similar age working on my first startup at the time.
With cold outreach to VCs in NYC I had zero responses, and only two meetings with BigCos curious about us; they seemed easier to get the attention of.
When I reached out to investors on the west coast it was entirely different. I still remember getting my first reply. It was a rejection, but a super-detailed one from Topher Conway of SV Angel that stuck with me. Despite it being a cold email, he offered up a lot of points that helped me adapt my strategy and address what investors may be concerned about.
I was a kid with anxiety and never replied back to that rejection email (pains me to this day), but I have so much appreciation for people like that, who are aplenty in the Bay Area.
Ease of finance and management vision (which kinda related to the first point) seems to be the main drivers.
One of those funny situations of “ah, yes, now with my own domain Gmail can never take my email away from me!” but then my payment failing and my domain going to auction before I notice.
Regardless, it's definitely never to late to say thank you whether it's via email or some other medium.
"East Coast VCs are much more conservative, which is actually better in a longer term because it results in more stable return rates (less failure)"
Returns are power law distributed, not normally. You want to increase your variance, not minimize the chance of the fund not returning anything. VC’s investment thesis is not based on making solid returns that aren’t that risky. It’s a bunch of minimally correlated bets, most of which will return nothing, some of which return 100x their investment or more.
Stripe and AirBnB are the majority of the value of YC’s investment portfolio.
Better for whom?
I agree it could result in better average returns for the firm, but it likely isn’t better for moving society forward as a whole.
The best we can do is align incentives.
Given recent events, incentives seem to be far from aligned, even in the most basic & important aspects of our society (policing, pandemic handling).
If I buy $10 worth of paints (and equipment) then use that to create and sell you a painting for $10, that is society signalling that I really should find something better to do with my time. The raw materials are about as hard to produce as the care anyone has for my work. The value created by me doing the work was $0.
On the other hand, an artist who turns $10 worth of paint into a $100 painting has created enormous value - that artist should be the one who gets all the paint, and that is what the market will sort out. That artist is not wasting time, their art is high value add over the raw materials. The time they spent on art added $90 in value.
If firms tend to have solid profit margins, almost by magic society at large will get more actual value out of the same amount of resources. Nothing is good in excess, and there is plenty of intellectual room to quibble about where the threshold and preconditions need to be for the outcome to be 'good', but investors making a solid return is very healthy. It can move society as a whole forward.
which startups in your opinion did that? you know, an actual innovation not another competitive service as a service
Yep, it's maybe better for random strangers if both commit to a lot of work that may not pay out. (Or maybe not, isn't there something better for them to do?) But that's a really entitled point of view, isn't it? It's better for everybody that is actually on the line.
Sorry, this assumption is just a pipe dream.
1. Privilege opens doors not available to others.
2. Those with privilege are often oblivious to the advantages they have.
Now, he obviously had talent to even get into a top engineering school at that age, so there is some correlation as well as causation here. Still, unless he wasn’t admitted yet or actively hid the fact from YC, it seems highly unlikely it didn’t carry some weight - especially at that age, with so much less track record to look at.
I saw another comment saying that I went to MIT around the same time as YC. It was actually after — going through YC enabled me to apply to MIT and get in without a high school diploma. Privilege didn’t help me get into YC (persistence + timing + luck did) but afterwards the privilege of getting into YC helped me with my college applications.
If so, were they unpaid?
How were you able to support yourself so young and inexperienced in the Valley?
- No one cares about your background ... if you're a white man. - You don't need a lot of experience ... if you're a white man.
> I was able to get a job in SF with a single cold email and zero connections
This seems like sheer dumb luck. For every one of him (or you, if you're reading this) there's a lot of people who thrash and struggle. I went through 80+ job applications before I got one offer last search, and that's less than I thought I would need
> You don't need experience to get started
This one seems situational. Best example I saw recently (and I can't find the twitter thread, I'm sorry) was weirdly shaped food startups. The large point was that there are stores for oddly shaped food, they're just ones rich people don't normally shop at (WinCo anybody?). And there are uses for damaged food, like juice. Sometimes you think you've found a niche, but you should still research it a bit
> Silicon Valley doesn't care about your background
Sure it cares less than other places. It still cares a lot. It's not everywhere people would support you that way. My silicon valley high school wouldn't have allowed folks to try and make scheduling software for them, not a chance.
> Failure is acceptable
This one, I somewhat like. Avoiding failure is definitely prioritized. I think maybe we should emphasize fallback plans maybe? Some people just can't afford to fail completely unless they have people who will support them through it
I sent two emails, one to the CEO of Teespring and one to the CEO of Y Combinator at the time (Sam Altman). Both replied (though sama politely declined my request to be his summer intern haha) so getting a response from high profile entrepreneurs is definitely possible without much luck.
It's very interesting looking at how you - a successful newcomer - view silicon valley compared to the way I see it - as somebody who grew up there and left.
The other interesting bit is how you got here. It looks like you've been coding and elbows deep in computers forever. I'd hazard a guess that also helped you over folks like me who are quite a bit less certain of where we want to go
I started coding when I was 13 and started wanting to build companies around the same time so I think that focus of desire definitely benefited me. I strongly believe finding what you want to focus on is more valuable than how early you start. Greg Brockman (founder of OpenAI) didn’t start coding until he went to college, and there are numerous examples of people in tech, art, and other fields discovering their focus later in life and succeeding.
If it was full of “Silicon Valley” culture, for example.
This is both true and false at the same time. We were able to go through YC without much background (Bottomless.com YC W19), however the post-YC fundraise was a bit more of a slog. It turns out analysts for major VCs will look up the founders on LinkedIn before bringing you in for a conversation.
Regardless, it's only been a minor headwind. We still raised post YC based on results.
There are many tech-y people who move there because it's more open, and it almost feels self-perpetuating. But the rest of the people aren't always that way. My dad grew up around there, he remembers highway 85 as the orchards behind his backyard. I remember the Netflix HQ as a gardening nursery. There are still little farms dotted around, hidden in places people don't normally notice as they zoom by.
It feels like tech transplants sometimes forget that or aren't even aware of it. Tech permeates the whole area, you can't escape it. But there's a lot more to be experienced around if you're willing to search it out. It might be helpful to tone the shop talk down a bit too
- Got into a top university. Good grades are popular, unsurprisingly. A proxy for intelligence and hard work.
- Speaks English. How many YC folks don't? I'm sure there are a lot of smart people in the world who just didn't grow up with English and so are somewhat cut off from SV. Not insurmountable though.
- High EQ. Helps smooth interactions with just about everyone, including investors and employees.
But of course, the two don't have to be generally mutually exclusive.
It creates practical difficulties. Similar to when founders have accents so strong that people can't understand what they're saying: http://www.paulgraham.com/accents.html
all of whom are bordering on the spectrum
First - don't assume that the 'big thing entrepreneurs are building' is in any way 'important'.
9 times out of 10 the 'big thing' is just neat idea, a project, and may have nothing to do with profiability.
Most 'grand visions' are that.
MS, Amazon, Snap, FB, Insta, Google - they all started pretty small, and worked at a fairly small scale. Surely they had visions, but they were fulfilling needs from the get-go.
I think what you are confusing is probably 'risk profile' of smaller VC funds, who in fact, don't have the patience to worry about building large marketplaces for example. It has to do with mentality, but also the size of the funds, and their experience with bigger bets.
And of course, nothing compares to SoftBank in terms of a 'massive fund looking to support global penetration'.
Hmmmm. Be careful about this. Lots of people do know the right answer.
Youth energy and enthusiasm count for a lot, especially backin the earliest days of computing like when bill gates got started. That was because adults knew very little.
> Experience is only loosely correlated with age
These days age and experience count for a lot. Lots of older people have incredibly valuable answers to common challenges in competing and business.
So many problems we have in society seem to be caused by this mass weaponized Dunning-Kruger effect.
[1]https://en.wikipedia.org/wiki/Wikipedia:Chesterton%27s_fence
Now I'm wondering what school they went to where they went to, since all the ones I have attended this hasn't been even close to being true…
2014 - Moved from Boston to San Francisco to work as a
fulltime engineer at Teespring instead of doing my
junior year of high school.>> went to MIT
Care to share anything more about this, purely out of intrigue? My own experiences have shown me that folks aren't as quick to respond, especially when you have limited value (experience) to show, even if you're just looking for mentorship.
To everyone else, the mid-west front-end developer making 55k who thinks he's a failure because he hasn't had the same success as a 17 year old MIT student and YC alum... happiness is an internal force that comes from inside you and not from external luxuries. Its OK that you didn't go to MIT, its OK that your company didn't go through YC. Its OK that you don't post a 200k+ salary on levels.fyi. Many people who have had those accolades are currently MISERABLE or have faced many hard failures since. Those hard failures are rarely publicized. We all will face great hardships in life... its the human condition. Instead of worrying about these things focus on finding your own internal happiness and pride.
Have you read The Courage to be Disliked or A Guide to the Good Life? These books resonated with me and it seems like you may enjoy them too :)
If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and sticking to the rules when posting here, we'd be grateful. Note that they include:
"Be kind. Don't be snarky."
"Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something."
Need to determine if it fits under the "Race Baiting" or the "Educating Adolescents on Privilege" category.
Welcome to one of the cold, hard realities of forming a company and selling something. If you don't make something that someone wants to buy, you won't succeed. And that something needs to be more than just a shiny or useful object. (Those are commodities and can be replaced -- it's your service which'll set you apart and make you worth paying.)
Even if tech is your primary focus, that needs to be bundled up in some sort of package that makes it worth paying for.
Doubly (or more) so if you are going to have actual customers and aren't going through the startup process in the hopes that some other company buys you out.
To an extent yes, but generally it still matters a lot. Look at any big tech company, and you'll find a significant number of Ivy League grads and Forbes top 25 grads.
Or look at YC itself. Anecdotally I'd say at least 50% of the YC founders have a degree from a Forbes top 25 school (it would be great if someone had the real stats).
I mean, when Bill Gates was in High School computers weren't really in general use, so they probably were still doing it on paper. Why say no? They wouldn't have to use it if he failed. Also, did he build it first, or ask for the business first?
Whereas it sounds like this person asked his school if they would convert to his scheduling tool before he had built it to try out? I can imagine a school administrator saying "we'll probably stick with our enterprise contract, thanks" in the 2010s, and it would be a reasonable answer.
I wouldn't personally recommend that one experience be the basis for your East Coast / West Coast judgments.
50% of VC's are Harvard/Stanford.
FB, Insta, MS, Snapchat, Amazon, Google etc. - Ivy League or Stanford.
(Ok, Amazon and MS are not 'Valley' but ...)
So the industry is more open to 'outsiders' of the cliques than say, banking - definitely, but it's still a clique, don't kid yourself.
It’s very important to remember that just as youth is not necessarily a disadvantage, so too is being older than the average anything to worry about.
Wouldn't surprise me if this applies to majority of applicants.