The Aha Moments That Made Paul Graham's Y Combinator Possible(fastcompany.com) |
The Aha Moments That Made Paul Graham's Y Combinator Possible(fastcompany.com) |
I was 30, not 31.
My degree is in CS, not computer engineering, which is a hybrid of CS and EE.
We were already working on another company when we decided to work on ecommerce. We were making software to generate web sites for commercial art galleries (who didn't want web sites). So we didn't suddenly decide to write software to make stores. It was more a question of switching to a market that wanted what we could make.
Robert's apartment was not in NYC. I was the one who lived in NYC, and I was visiting him in Cambridge.
I didn't wake up with a specific sentence in my head. I just woke up with the idea that we might be able to control the software on the server by clicking on links.
It's an overstatement to say that the idea of Viaweb was too strong to fail. We came close to failing several times. It is true though that the best thing we had going for us was the quality of the software (rather than, say, marketing, or connections).
We weren't the only ones "insane enough" to make web-based software. At least one of our competitors did. It was a big help though that our most dangerous competitor took a long time to grasp the idea.
The story about the origins of YC omits Jessica. We decided to start it one night while we were walking back from dinner in Harvard Square (http://ycombinator.com/start.html).
Robert never devoted his time exclusively to YC. Jessica and I did, but he and Trevor have always done it part time.
As far as I know, no one has ever tried to put a valuation on YC. You could value our current assets fairly precisely, but that would come to less than 500m.
On the last few weeks/months before starting Viaweb, did you consider yourself a failure for being almost 30, well-educated but out of the formal career track, "poor" and unmarried? If so, was that the fuel behind your many amazing achievements later on?
Also, the story started a little too late for me. I would have loved to have heard about pg's earlier inspiration...I often wonder if he drew it from the same places as me: the classrooms of Doc Shultz, John Drumm, Adrienne Kapisak, Laura Mikesell, and Linda Sproull, and of course the computer lab and chess club at Gateway High School. I wonder how he ended up in computers instead of history, art, or literature. Funny how time flies. We've both come a long way since Monroeville, Pa.
Perhaps a future blog post?
Do you think this is where your affinity for people who might be pitching a bad idea but seem smart / have good work ethic comes from?
Once you're on the other side of the news, even a little bit, you begin to understand just how broken it really is.
ps. "You could value our current assets fairly precisely, but that would come to less than 500m." <--- elegantly understated; this is what success at the seed investing game looks like :)
That could have been pg's motivation. I could also be reading to much into it.
From what I remember there were quite a few making web based software, Hayden's Critical Path for example springs to mind, and of course Yahoo and Nutscrape (as it was fondly called by those unfortunate enough to have to work on it)
Were you generating the sites in sort of a 3rd-party, no-connection way, or did they just want someone to create their sites for them?
YC could probably sell their stake in Dropbox alone for more than that.
Dropbox is worth maybe $5b. I think YC's stake comes out to 1-2% after the rounds. So, off by an order of magnitude or so. Just based on published info about the distribution of YC companies and their value, it's probably more like $200mm total fund value. Given that money-in was say 300 x $20k, and maybe triple that to account for salaries and other overhead, say $20mm, it's a 10x return so far.
Which is pretty baller for a VC fund.
On the other hand, I suspect PG etc. could have created a single startup of their own worth >$300m x 2 (to account for dilution) and probably exited it, in the same amount of time.
Of course, this is just a guess-I have no idea how much Dropbox was diluted in their early funding rounds. Even so, Ycombinator's stake probably couldn't be worth more than $600MM if we assume Dropbox is worth $6bn.
After all, if you like the standard way, and practice it, what you are going to get is standard results - which are mostly average. Yes, there exist crazy creative innovations, but the vast majority of successful business are not new inventions - but rather, a better way to do something everyone is already doing. It's evolution -- sometimes a big step, but still, way more often evolution than revolution.
"I hate writing Windows software." Builds the first web app.
Wow, Darwin, Mozart, Graham and Ford. PG's head must be spinning. ;-)
What a huge load of bull (in the last paragraph) on an otherwise good story (albeit some inaccuracies) of how pg started YC.
Usually there are very mediocre people who works at assembly line. The trick is that YC filters out the best people possible, like Google does.
This is why the odds of successful exit (one way or another) are much greater than on average. They don't need each project to turn out into Airbnb. More than one is enough.)
Everything else is second. It is a pipeline of people who motivate, control themselves and push themselves to the limits. This is the cheapest (but hardest) way to get work done.
Sometimes sticking it out is what is needed. These days it is fashionable to "pivot" -- I believe that in most cases you've gotta to stick it out enough with the original idea to see where it takes you. The data only tells you what you want to measure. The best insights/pivot you'll get by following your @gut (or as PG did with his "aha" dream of converting into a web-based store)
"Robert: Well, the other person that I’ve interviewed . . . I’ve interviewed five so far. I’ve got about three or four more to go. It was a gentlemen named Paul Graham. I don’t know if you’re familiar with him.
Andrew: Y Combinator.
Robert: Yes, and Hacker News, yes. He’s really brilliant. So, one of the things I’m talking about in the book is the power of being a non-conformist, and it comes to what we were talking about earlier about your life’s task that you’re unique. There’s something different about you. When you find it, there’s power in that uniqueness. It’s almost like Harry Potter or something. When you find what makes that what it is about you, you’ve got this little diamond that’s going to give you power.
So, Paul Graham, what I liked about him was he’s always been a complete non-conformist and has gotten away with it, not because his parents had money or he was privileged, but because he didn’t care and he took risks and he just followed what he wanted to do. And that’s sort of the end of this book. That’s like the ultimate thing.
So, when he first started out, he didn’t really want to get into business, but he needed to make money because he was living in a really crappy apartment in New York. He came up with this other friend who was a great hacker. His name eludes me right now. You might know his name, and they came up with Viaweb, basically, because he was so good at this one code which name also eludes me that he writes in.
So, he kind of backs into being a successful businessman, and he doesn’t really care. Then, when Yahoo buys out Viaweb, he doesn’t suddenly try and morph into a conventional businessman working for Yahoo. He quits after a year. He becomes a writer. He writes articles that create a great following, and then he kind of backs into Y Combinator, which is a brilliant business model, I think, for the future for entrepreneurs, for tech startups.
But he doesn’t give a damn about what other people think. He doesn’t follow what other people do. He does what he thinks is right for himself, and I just think it’s a brilliant formula. I’ll be more explicit in the book and make it more, something you can understand. But that’s sort of the gist of it."
(Both audio/video and full text transcript can be found here: http://mixergy.com/robert-greene-power-interview/)
Y Combinator's first batch was in Boston, this essay explain why being in Silicon Valley in important and why it's very difficult to replicate.
For instance, YC rather explicitly doesn't provide shared office spaces. The shared office space of a TechStars location is a large startup community galvanizer in the cities where TechStars has set up shop - and partially offsets the need to be in the Valley for those companies.
There's no question that TechStars is tweaking the YC model subtilely in its attempts to get global outreach. (This is a good thing, the world could use more experimentation.)
Think your story, along with many others in the Valley (e.g. Jim Clark), goes to show that this is a long-term game, and it only gets better with age and experience.
For example, while it was very obvious that your team had high skill (given your academic credentials), you didn't have domain expertise in online commerce.
Would you have picked you? :)
We did have domain expertise of a sort: we were experts in generating web sites, which back then was a comparatively rare type of knowledge.
I'm pretty sure we would have invested in us, because we had a very clear thesis about what needed to be made, and ecommerce would have seemed a promising market.