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0 pointsAndrewKemendo11y ago0 comments

All great points, but you are also missing the context. Altman and PG and Andreesen aren't talking about starting businesses that are generally sustainable or considered "lifestyle." They are specifically and narrowly focused on trying to build $1BN+ dollar companies that have insane growth rates in competitive markets.

You can't "miss things" in that context - especially strategic investments - because they will be picked up by competitors who will "out hustle" you.

I feel like the YC folks either haven't done a good enough job clarifying that they don't speak for "all businesses generally" or the community is assuming that they are.

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grey-area11y ago· 3 in thread

All great points, but you are also missing the context.

I don't think he's missing the context, he's explicitly rejecting the assumptions behind this position.

They are specifically and narrowly focused on trying to build $1BN+ dollar companies that have insane growth rates in competitive markets.

Altman and PG and Andreesen are not building anything, they're focussed on investing in companies which have insane growth rates. That is not a fatuous cavil - that's a very different thing and sometimes puts their motivations at odds with those of company founders. An investor does not have the same incentives as someone building a company, and it's little wonder they want as many people as possible to grow fast or burn out trying.

You can't "miss things" in that context - especially strategic investments - because they will be picked up by competitors who will "out hustle" you.

Is hard work always rewarded? Is giving your life over to your company going to make it succeed? I'd argue there is a far more complex interplay of forces in the success or failure of companies - often it'll come down far more to who they know, or who their investors know, and whether they can come to the attention of the right people in order to have an exit (which just happens to be a great outcome for investors).

Founding a company is extremely hard work, often underestimated, and often all-consuming, but it doesn't have to take over your life completely, and I'm not sure it's healthy if it does. Success has many different definitions, and there are many routes to it.

trcollinson11y ago

I entirely see AndrewKemendo's point. But yes, you see my position correctly. In fact, I would argue that Altman, Andreesen, PG, et al. are not even "trying to build $1BN+ companies". They are investing their money in High Yield High Risk markets. And their track records and returns show this. They have funded 716 companies. 3 are worth north of $1BN. 20 are greater than $100M. [1] Their track record is amazing, but ~97% of the business's they have invested in have not "made it big", so to speak.

A good friend of mine owns a very successful real estate software company. At last estimate he is worth ~$300M. He started the company without traditional investors (his father did put in $10,000 to be fair), he owns the entire business himself. He has many "things"; cars, vacation homes, an island. He also has a wife and has very successfully raised 4 kids while building up his business.

The point I hope a few people can take away from all of this is that investors like YC and the like have one way of starting a business. It is successful for some, life changing for others, and entirely the wrong approach to business for yet a different group. There are many other ways to start a business, technical or not. grey-area, I am with you. It is not healthy to have a company consume you completely, and it is not necessary for a business to succeed. Work hard, understand your market and most importantly your customers, build a product your customers enjoy and need, and you will find success, possibly the variety that makes you $100M+.

[1] http://blog.ycombinator.com/yc-portfolio-stats

Permit11y ago

>In fact, I would argue that Altman, Andreesen, PG, et al. are not even "trying to build $1BN+ companies".

> Their track record is amazing, but ~97% of the business's they have invested in have not "made it big", so to speak.

That's entirely beside the point. They are specifically looking for those rare, billion dollar companies.

See: http://paulgraham.com/swan.html

The fact that most of the companies don't hit $1 billion is not at all relevant. That's to be expected when hunting for companies that are rare by definition (black swans). It speaks nothing to the intent of the investors.

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AndrewKemendoOP11y ago

I don't think he's rejecting them because he isn't saying "I'm building a slower business" or "I'm not looking for explosive growth" - things I have seen people say that indicate they know the distinction and are rejecting it.

Agreed on the building vs investing - however my point stands, they are pushing forward the mantra of MASSIVE disruptive companies.

To the rest of your points, in my opinion those factors are held ceteris paribus compared to how hard you hustle - largely because they are generally out of your control, that is unless you are hustling.

As an example, I had NO (as in zero) network in the Angel/VC startup world in D.C. 2 years ago. Now I have quite a robust network and it wasn't because I knew someone, it was because we were building something great and I went out found who was who and talked to them. It didn't take over my life, and still doesn't but it does take up as much as possible. I am after all typing on here.

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