Why are HNers so dense when it comes to fundraising? No, the treatment doesn't come off at all sounding like profits or income. Yes, fundraising is definitely a point of success. Why do HNers have such a hard time with this? Money is an important resource for growing companies! Sheesh.
I think they're not so much dense as bitter. There's a subset of HN readers who regard startups as a whole as a sort of con game, and are angry that the participants get so much attention. There may not be that many of them, but their anger makes them disproportionately active as commenters and voters.
I probably belong to that subset. "Bitter" is an uncomfortable term, but probably accurate. Personally, it's not that I think startups are a con game (and certainly not YC); it's that YC represents a tremendous amount of support and resources and influence that aren't available to people like me who are working just as hard, and are just as skilled, but aren't a good fit for YC.
It's tough in practice to not get a little envious of that support when you don't have it.
I still think it's good manners to keep my jealousy to myself though. This is a YCombinator forum after all; bringing bile here just because we're not alums is not cool.
Definitely good manners to keep the jealousy to oneself, but more important to get rid of the jealousy altogether. Resenting others for their success/progress is a huge energy waste (been there, done that).
I'm neither dense nor bitter, I just think there's something[1] a bit wrong with a world in which SpaceX (a startup FWIW) can bootstrap a space programme from scratch for less money[2] than a photo uploader is apparently worth[3].
> bit wrong with a world in which SpaceX (a startup FWIW) can bootstrap a space programme from scratch for less money[2] than a photo uploader is apparently worth[3].
You're comparing apples and oranges:
1) what X is WORTH
2) what Y took as cash infusions
If you said "there's something wrong when a photo uploader is worth more than an orbital company", you'd be comparing apples to apples.
The mark of genius is that some people can take just a few apples and CREATE a stunning...uh...orange. OK, the analogy breaks down, but the point is: creating value is the POINT of a startup (or of any business, really), so we shouldn't be surprised that Elon Musk achieved a ton without that much cash input.
At my practice, I've worked with a bunch of YC startups. Uniformly enjoyed the experience.
I'm wary of venture capitalists. I've watched them do skeezy things firsthand.
More importantly, every time I see people cheerleading some startup for raising 50MM, all I can think is, "that poor team isn't going to be able to exit unless they can beat 150MM". It's very hard to do that, and huge investments almost guarantee that dubious companies are going to waste a lot of time trying.
True. But it's also hard to exit at $150m+ without a $50m raise. The lean startups and bootstraps simply don't have big exits like their well-funded counterparts.
While it would be nice to think that the people accepted at Harvard are the most and only qualified people to go to Harvard we all know that is not the case.
Harvard can only accept so many people and many people who could do well there, and aren't accepted, will fail to get in because the decision process isn't perfect in who gets accepted and who doesn't (and I am not even speaking of people who get in for reasons such as family or some other advantage). There are only so many slots.
Substitute Harvard for anything where the amount of qualified people greatly exceed the number of slots available and the decision process isn't a lottery and the decision is made by humans.
So it would be natural for people to be jealous and maybe bitter if they see someone of equal ability to themselves get into Harvard. Especially if it was in their face everyday. (But it's not, at least with Harvard, the jealous person is probably on another campus. With YC, if you are a HN reader and enjoy it it is in your face every day.)
I don't disagree with you about college admissions (http://paulgraham.com/colleges.html). But in my experience investors try a lot harder than undergrad admissions officers, partly because they suffer fairly immediate consequences when they make mistakes in either direction. In that respect investment is more like graduate admissions, which is done by professors instead of admissions officers, and the professors get whoever they select as grad students. (And incidentally, I went to grad school at Harvard, not to Harvard College.)
I think we need to split "startups" from "startups that people will be angry and bitter about". I guess I'm an optimist, but I don't think that sentiments like that arise out of nowhere. There's a kernel of truth to the feeling, engendered by some of the excesses of the current startup environment. That being said, the real challenge is not to paint too broad a brush and lump all startups that you don't "like" with startups that are worthy of this kind of derision.
It's a "con game" to these folks because all of the strategies for getting VC investment is described as such. And when someone succeeds in winning the "game", these people take it personally. I would call it "resentment" instead.
For me, the dream of entrepreneurship isn't about selling my company to a BigCo (TM), or even getting VC funding. It's about building a business that will sustain my family for years to come. Exactly like businesses in my Chicago neighborhood who start restaurants, or retail shops, etc. I want to build something that I can call my own and not be dependent on an employer's paycheck. And the fear of being pink-slipped because I'm not a "young rock star ninja." I just happen to know software and GIS, etc rather than widgets. And I know it really well.
DHH has talked at length about this trend, and although it's not quite as strong in Chicago as S.V., it's still present. Many people in GenX/Y/etc aren't willing to work their asses off to build a business. Popular media and SV successes only build on this fantasy. This adds to peoples' resentment. It's like the American Dream has morphed from bootstrapping your own small business into something larger, to building something that someone else will pay you F.U. money to take off your hands. Then you can sip Mai-Tais on the beach with half-naked women wandering around. If that's your vision, then Godspeed. But don't assume everyone has that same vision.
I don't mean to sound trite, but that's not the America I grew up with. This entire forum has the undercurrent of the very idea/goal you're complaining about. Building start-ups, but let's glamorize the VC-funded ones that got lucky in the lottery. If this forum was about "bootstrapping companies" into successful small businesses, I think the tone would be very different.
Regardless, I'll keep reading HN, and taking pleasure in those diamonds in the rough that inspire my vision of America.
>"Yes, fundraising is definitely a point of success."
Really? When your bank gives you a mortgage, do you deem that a "success"?
The fact that there are people who see raising funds as a sort of "end game" is a problem, at least in my opinion. Pets.com, Kozmo.com and Webvan all raised lots of money. So did Enron and Worldcom, in a different way.
Success occurss when you produce net economic gains to society.
Actually, for most people, the bank giving them a mortgage is deemed a success. It means that the bank believes that you, as a person, are responsible enough to pay back a massive loan. It is a huge personal validation for a lot of people.
In the same way, obtaining VC means that a fund believes that your team and your idea are strong enough to return on their investment, and anyone who isn't pissing their pants with joy about receiving an offer, even if they're not going to accept it, has a seriously deficiency in their Oh Shit Is This Really Happening receptors.
>"and anyone who isn't pissing their pants with joy about receiving an offer, even if they're not going to accept it, has a seriously deficiency in their Oh Shit Is This Really Happening receptors."
Of course you piss your pants with joy. But its more of a, "no matter what happens we're going to be okay" thing. There are many examples of that investment vaporizing, either in the startup stage or when they unleash the business on the public. It's happening with Zynga as we speak.
So, I can understand being happy about it, but calling it a business "success" is a stretch.
> When your bank gives you a mortgage, do you deem that a "success"?
Whithout a doubt! No one is saying it's an end game! It's a milestone on the road to large scale success.
Enron and Worldcom were wildly profitable. Is that your point?
Your sentiment is exactly what I'm talking about. If you're going to follow startups or have an interest in business-building, at least learn the basics that funding is necessary and raising it is an accomplishment.
If anyone is dense, it's you. It is certainly odd that the number of HN postings that follow the pattern "Company X raised $Y" far exceeds that of postings about revenue or profits, which are undeniably more important metrics for success. To some degree that can be explained by the fact that many incubated startups are legitimately in a phase where raising capital is important and revenue/profits not yet achievable. But why do we hear so little about later phases? IMO it's just as much a symptom of the dysfunctional aspects of the current startup scene that aims primarily towards acquisitions, where revenue, let alone profits, are ctively avoided because they're seen as an impediment to ridiculous acquisition valuations.
If you think that the goal of a startup is to get the highest possible hype-based acquisition valuation, sure. Call me naive, but I still believe that building an actual profitable business is a much better goal. It may not lead to crazy payouts, but it is also more honest and does not depend as much on timing a boom phase. I gather that this kind of thing is derisively called a "lifestyle business" in startup circles. I submit that at least it is actually a business, rather than a hand of hype poker.
