Applying for YC funding doesn't make sense for several reasons:
1. I want to be king, not rich; everything I hear tells me that YC pushes companies to grow fast and increase their valuations, and that's something I fundamentally don't care about. I know that I'm stubborn enough that this would just result in a lot of frustration on both sides.
2. Tarsnap doesn't need the money. It's solidly profitable, and I honestly have no idea what I would do with investment money.
3. I don't want to live in the bay area -- not even for 3 months. Granted, this seems like it may be less of an issue now that it's possible for people with pre-existing conditions to get medical insurance; but the bay area is fundamentally not somewhere I can ever imagine myself wanting to live.
4. Converting Tarsnap into a US corporation would eat a lot of time and money. I completely understand why it's necessary for companies YC is going to invest in; but it's another reason why having YC invest in Tarsnap doesn't make sense.
I think YC and its portfolio companies are doing great and interesting things, and I'd like to be part of the community... but as explained above, taking funding doesn't make sense; when I applied for the YC fellowship (I know it was a stretch) you told me to apply for funding instead; and you haven't asked me to be part of YCR.
None of our current programs sound like a good fit.
We're considering doing something for later-stage companies that might be a good fit, though we haven't sorted out details about the bay area for example. If it does end up as a 'go', we'd probably do it next year.
It's also possible in future iterations of the fellowship we'll be open to companies that are further along.
Have you thought about going the Private Equity route? I perform software/IT diligence for PE firm's targets and it sounds like you would fit that typical mold.
Why would I want to do that? It would give me what I don't want -- money -- and not give me what I do want -- to be part of a community of smart people doing interesting things.
I think YC is the wrong place for this, for all the reasons you say. I don't see any reason that Tarsnap fits in YC besides "community", and even then it would be more of an outlier than a peer. It seems like it would fit in a community of people that are interested in lower risk, slower growing, but more personally lucrative businesses.
YC companies do technically interesting things for sure, but a lot of the community is probably more about hiring, office space, fund raising, financials, and that sort of thing. These are all different for high risk startups.
I heard about this "Micropreneur" thing several years ago. This is something that interests me, and I've been working part time on projects in this vein. It seems to me that people who want slower growth and less personal risk are inherently a little less "collaborative". That describes me and there's nothing wrong with it. Still, I understand the need to bounce ideas off of others, quickly fill in gaps in your knowledge, etc.
I don't see any reason that Tarsnap fits in YC besides "community"
Yes, that's exactly it.
and even then it would be more of an outlier than a peer.
I'm not so sure about that. OK, in a financial sense sure; but I know there are lots of YC companies doing technically cool things. It's not all rapidly-growing social networks for cats. ;-)
> It seems to me that people who want slower growth and less personal risk are inherently a little less "collaborative".
Could you please expand on this? I am in the same vein as cperciva but it doesn't have any relationship with collaboration. Sometimes you have a relatively successful company where more capital and fast growth would cause more harm than good BUT because right now you can't see a path for growth.
It wasn't a very important comment, but I would say that there are some people who get a "high" from collaborating with many people on problems (working really hard with a small team), and some people who get a "high" from learning things on their own and applying them, with the help of experts.
One person you could take as an example is the Pinboard founder. If you read all his blog posts, I wouldn't call him a "collaborative" person. Is he a highly intelligent, productive, and respected member of society? Yes. Collaborative? No.
My impression is that cperciva is like this, but I could be wrong. I'm more like this too, as mentioned. But you still need community if you're in this camp.
I think there is potential for higher overall growth when you have the right team, simply because there are too many things for one person to do, requiring many different types of expertise. Though there is not necessarily higher "per capita" return.
But growth compounds, so that explains why YC prefers co-founders over solo founders. But YC also acknowledges that there is a big downside to working with teams: co-founder disputes are one of the biggest, if not the biggest, reason for startups failing!
I will reply anyway! I don't know the details about Tarsnap but in my case I work with a co-founder and several employees. We work collaboratively.
In this context we don't have the potential for higher overall growth because the specific niches where we do business are not growing enough. In the past we tried some new areas with great expectations but they never took off. This doesn't mean that we would not prefer a more favorable market sector if we "discover" it in the future.
Colin, given that you don't want to live in the Bay Area, how do you envision yourself being a part of the YC community? These propositions seem fundamentally at odds with one another. Given that restriction, however, here are some ideas:
Could you arrange to go down to YC periodically and hold "office hours" to begin relationships with founders that are doing interesting things in your areas of expertise?
Could these relationships lead to you becoming a technical advisor for some of them?
Colin, given that you don't want to live in the Bay Area, how do you envision yourself being a part of the YC community?
Well, you see, there's this thing called the "Internet" which allows people to communicate over large distances...
Could you arrange to go down to YC periodically and hold "office hours" to begin relationships with founders that are doing interesting things in your areas of expertise?
That's something I'd absolutely be happy to do.
Could these relationships lead to you becoming a technical advisor for some of them?
If someone's interested in my advice, sure.
Could you angel invest in some of them? Could you attend YC investor day?
I don't think the amount I would be able to invest would be very meaningful. Also, I'm guessing the tax issues involved with cross-border angel investing would be painful. (Just a guess, but I find that assuming that tax issues are painful is a good default position.)
May not be a helpful comment, but investing in the US as a non-citizen is surprisingly easy. I have several investors from outside the US and they mock my US based investors who have more hoops to jump through.
The USG doesn't feel like it has to protect you, so if you want to put money here, they are more than welcome to take it. :)
(Of course, don't trust me, get a real advisor / tax advice)
I'd say there's probably not a place for Tarsnap at YC (though I'm not sama), there's simply not enough ambition, but I'd be surprised if there isn't a place for Colin Percival. There obviously already is at HN and I bet there's dozens of startups that could use your help or advice in some way.
You mentioned a lot of reasons why Tarsnap can't be in the YC community. Perhaps you could come up with some reasons why you would have a place? It's marketing man ;)
Well, it's hard to separate "Colin Percival" from "Tarsnap". I mean, yes, what I really mean is a way for me to be involved; but I have every intention of continuing to run Tarsnap for the foreseeable future, so they can't really have me without also having Tarsnap.
5. You find a co-founder CEO to run Tarsnap, Inc. from Silicon Valley. The CTO remains in Canada. Lawyers handle the messy details.
This is kind of what Oculus does. John Carmack is in Texas with a small team, while most others are in California.
You retain absolute control over the core technology, but help your co-founder turn it into something more marketable and user friendly. Some of the Tarsnap GUIs authors might be interested in helping.
YC deals with lots of foreign founders but maybe it wouldn't work in this case. I still think it would be great if you had a team helping you like John Carmack does.
you could probably get an audience with whoever you want if you asked for it.
Maybe, but I'd need to know who to ask. Being not part of the YC community, I don't know who is doing interesting things; nor do I know who to ask if I have a question about something.
If you don't know what you'd do with seed capital, then I'm not convinced you know where your company is going.
You don't want a top-notch dev team? You don't have dreams to reach more enterprise customers? You don't want a world-class marketing campaign? You don't want a research team dedicated to the "next big thing"? There are tons of ways you can improve your offering.
Stubbornness is a desire to remain the same, persistence is the willingness to constantly change.
You don't have dreams to reach more enterprise customers? You don't want a world-class marketing campaign?
Hell no. Those sound like a lot of work.
You don't want a research team dedicated to the "next big thing"?
Not really. I mean, research is great, but Tarsnap is a backup service. It shouldn't be a backup service which also dabbles in self-driving cars, or a backup service which also hosts minecraft servers. If I decide I want to do something new, it will be something new, not part of Tarsnap.
I think - based on his posting history, which dates back all the way to the beginning of HN - that Colin knows exactly where his company is going. He has very specific opinions about how security should be done, the expertise to back that up, and a customer base that's (mostly) on board with those choices. Tarsnap's used by a number of prominent companies and individuals here, notably Stripe [1], patio11, and steveklabnik [2].
It may not be what the rest of us want, but remember that there are some companies that simply know what they're good at and want to own that particular niche.
You're talking about where his company is. I'm not saying he's not already doing great - he says it himself above.
My point is, if you're creative, directions to grow your company are not scarce. Resources to do-so are. If he is actually flush with cash, and doesn't know what to do with it, that's a fundamental problem.
It's not always a good idea to grow your company outwards - if you're good at what you do, it's better to do it even better than to start doing other stuff you're not good at. Oftentimes, bigger teams and more resources don't help with that.
History is full of companies (eg. Lotus, Evernote, Clinkle) that lost focus and floundered because they had too many resources available, and also of ones (eg. Apple after Steve Jobs's return) that took off after they cut their product lines and laid off people.
Let's say I have a fantastic sushi bar. I'm the main sushi chef and after a multi-year on and off frustrating search I finally found an assistant / apprentice. We have also have a waiter and a cleaner / busser.
I have lines out the door for the limited hours I'm open, even after raising prices three times. All my employees are well paid, including profit sharing and benefits.
Sushi Combinator wants to give me big multiples of annual earnings to take a minority stake in the business, but in exchange he wants me to try to increase revenue dramatically. Any of the ways I can think of doing so I believe, even if successful, will leave me less happy than running the business I have now.
First, I don't believe YC's only goal is to dramatically increase revenue.
Though, to entertain your analogy: Why not develop the next-level sushi fish? One that not only dazzles your exclusive audience in texture and taste, but is a delight to work with and more satisfying to cut.
> Should I take the money?
If you want to do big things, then yes.
If your happiness relies on staying a sushi chef, you are a sushi chef, not an entrepreneur.
Applying for YC funding doesn't make sense for several reasons:
1. I want to be king, not rich; everything I hear tells me that YC pushes companies to grow fast and increase their valuations, and that's something I fundamentally don't care about. I know that I'm stubborn enough that this would just result in a lot of frustration on both sides.
2. Tarsnap doesn't need the money. It's solidly profitable, and I honestly have no idea what I would do with investment money.
3. I don't want to live in the bay area -- not even for 3 months. Granted, this seems like it may be less of an issue now that it's possible for people with pre-existing conditions to get medical insurance; but the bay area is fundamentally not somewhere I can ever imagine myself wanting to live.
4. Converting Tarsnap into a US corporation would eat a lot of time and money. I completely understand why it's necessary for companies YC is going to invest in; but it's another reason why having YC invest in Tarsnap doesn't make sense.
I think YC and its portfolio companies are doing great and interesting things, and I'd like to be part of the community... but as explained above, taking funding doesn't make sense; when I applied for the YC fellowship (I know it was a stretch) you told me to apply for funding instead; and you haven't asked me to be part of YCR.
Is there some other option here?