The godfather of Silicon Valley entrepreneurship: How to avoid the risk of starting a minefield

Intermediary transaction SEO diagnosis Taobao guest Cloud host technology Hall

Paul Graham, founder of Y Combinator, is not the usual kind of entrepreneurial mentor. Paul Greheum For 8 years he has been in charge of the YC, which has become the industry leader in business incubator, and a lightning rod for the venture in Silicon Valley.

The information recently interviewed Mr. Graham, and we talked about a wide range of topics, including "mass production" startups, Mr. Graham's controversial remarks about founder accents, his wife and YC secret weapons Jessica Livingston (Jessica Livingston), and YC pupil Airbnb some little-known stories.

The following is a textual excerpt from the interview, with slightly modified content:

When you started YC 8 years ago, what was the situation like when you interviewed a start-up company?

It's much like the present, but it's longer. It was an amazing interview, maybe 45 minutes, and now it's crazy to look back. Now we're going to spend 20 minutes interviewing them and then spending the rest of the 25 minutes breaking the time.

YC has three interview channels, and the channels are well coordinated. We will look at all the data, how many entrepreneurial teams each channel accepts, and the final results of the entrepreneurial team that each channel accepts.

How are you doing?

We are too accommodating, but this is not a mistake I am worried about. I'm more worried about missing a team that's performing well than being a bad startup. If the performance of an entrepreneurial team is good enough, the benefits will be able to compensate for the losses caused by hundreds of of inactive teams.

It would be too bad to turn down a good team. However, if you accept a poorly performing team, it's just a bit annoying. I know that we are measured by the terrible mistakes that we receive from the teams that have behaved badly.

I also think we didn't throw the baby out with the bath water. I'm worried that other interviews are more restrictive and I'm afraid they missed something. For many years, we will never know. But when we miss a company, we will eventually find out.

Is there a company that you didn't accept but it eventually became a famous company that was a big success?

All the time, we made a list. We interview the channel certainly has this is we reject and the snub person, I cannot say which team has submitted the application to YC, our interview channel certainly has missed some people.

We have not recorded enough notes on what grounds we are refusing to start a team. We videotaped the interview and the discussion that followed, and I had to go back to the video and see what we were saying. I'm afraid we may have lost some tapes.

YC has a lot of imitators, which is very convenient for us. The copycat acts like a cloth: if we drop something from the table, it doesn't just disappear. It gained the investment of other business incubators and attracted the attention of others. Then we will know something about the situation. Not all the teams we reject will be able to invest in YC imitators, but most can.

How did YC start? When did you know that the model worked?

From the outset, the situation was really: "Oh, I really should do some angel investment, let us enter the field of angel investment." ”

And then, of course, once I started thinking about it, I started thinking, "Oh, how can you reinvent angel investment?" I had a lot of ideas, and I realized in the first few weeks that it might be promising, and we were very excited about it.

What is YC's biggest innovation?

The biggest innovation is to provide the start-up company with a synchronized investment rather than an asynchronous investment;

No one has ever done this before. This pattern is better for both sides, which is more scalable for us, and they do the same thing at the same time. I can walk up to them and talk to 50 of startups at once, without having to do the same thing 50 times with 50 teams and often forget what I'm saying, right?

However, this model is also better for them. It has the same advantages as mass production. By mass production, you can produce something at a lower cost, but the product has a higher quality at the same time, unlike manual production. They have colleagues and others who encourage themselves, solicit ideas, compete with each other and exchange information about investors. It's good for them and good for us.

What is the biggest reason why startups fail?

This field is constantly fluctuating. I never know what the answer is, all my conclusions are only temporary. I never said, "These guys are going to be a big success." "I'll just say," These guys have done so far. "Because over time, we can see that there are some conflicts between startups, not just the founders, but all kinds of conflicts," he said. Startups are full of uncertainty.

Perhaps the biggest cause of failure is that startups don't create what people want. The biggest reason is that they don't give the user enough attention. For example, they have a theory in mind about what they want to build. They didn't go out and talk to the users and asked, "What do you want?" They just make it, and it turns out it's not what the user wants. These things happen again and again.

Another reason may be that they don't have enough energy. You need to have plenty of energy in place, including you have to go out and make users really happy. They did only a half-baked job. Maybe they're going the right way, but they're only halfway there. Users look at the product and say, "Ah, not bad." "If 1 million people are like that, you're dead."

What is the case of a start-up company that you prefer the founder of the company to the idea of?

Airbnb is such a classic case that we invest in our company because of people rather than ideas, because we don't really like the idea, we like the founder of the company.

Now, Airbnb has become one of the well-known brands. Like Apple, people even no longer read it as "airbed" and "breakfast" (meaning air boarding and lodging), people do not even know that the first "B" is connected with "air", Airbnb is actually "Airb and B", right?

People call it "Airbnb" as if it were an airline, and when we interviewed the company, Jessica said: "We have to invest in these guys." ”

They are very energetic and imaginative, especially in the story they told us-their experience of financing themselves by selling the Obama and McCain brand breakfast cereal.

Like the familiar stories, their money is spent, the company stops, and they will have to give up. At the time, they were saddled with huge credit card debt, and they survived by selling the 30,000-dollar Obama and John McCain brand breakfast cereal, two of the company's three founders and designers. They designed the wonderful and cool box, the box of the captain McCains of Obama Os and captain John McCain's brand cereal. You can check on the Internet, you can find those boxes.

Doing these things shows that they have great energy and imagination. You're going to go bankrupt. Most people will despair and give up.

To move on, and to move forward in such an imaginative way, is the quality that makes the founders of startups succeed. We thought, "These guys are great, maybe they have other ideas, or the idea is not going to be as bad as we thought, but anyway, we have to subsidize these guys, how can you exclude Airbnb from the company you're investing in?"

How much money does the YC incubator start-up need at the beginning?

You will want to get enough money, and if the company has two founders, it may be enough for them to keep the money for a year. If the company is doing well, they will be able to make more money on this basis, so who cares? This is a good deal for investors.

You care too much about the money when you are not doing well in a start-up company. The more money you have, the more time we spend. As for the problem, like breaking up, you can imagine the difference between two different types of breakup, one is that neither side has any assets, the other is that one side has millions of dollars.

When a party has a lot of money or both sides have a lot of money, let the breakup process is a lot more motivation. This is what has happened, and we have learned from experience that the thorny breakup is often the result of money.

We think that if we cut down on the amount of money, we might be able to weaken the forces that drive these bad things and still provide enough money to the entrepreneurial team to keep them out of business-if they can't get the money out of demo day. I think that's a good thing and I think it's cool. You can never be sure, but I think we're right now (YC and its partner investors will invest 94,000 to 100,000 dollars per start-up).

Does YC discriminate against female founders?

I am almost certain that we do not discriminate against female founders. Because by examining the teams that YC misses, I will know. You can say, we should do more, we should encourage women to start a business.

I think the problem is that, at least for technology companies, the founders of really good technology companies have a very strong interest in technology. In fact, I've heard that entrepreneurial teams say they don't like to hire people who start programming after studying computer science.

If someone is really good at programming, they should find out for themselves. Then, if you look at the successful founder's resume, you will find that almost invariably, they started their own hacking career from the age of 13. This means that the problem is that we have to go back ten years. If we really want to solve this problem, what we have to do is not to encourage women to start a business now.

Because it's too late now. What we should do is try to change the computer curriculum or something like that in the middle school system. God knows how to make a 13-year-old girl interested in computers and I have to stop and think.

How do you determine if you discriminate against female founders?

You can see what a group of potential founders are, and there are many ways you can do that. For example, you can search Google for Pycon (a large conference on Python).

This is a group of people who choose to be themselves. Anyone who wants to apply can attend such a meeting and they will not discriminate against anyone. If you want to see the composition of a programmer's group, look at that or other meeting venue, not necessarily pycon.

Or you can look at the author of the Open Source project, which is also a "self-selecting" group, who won't even meet directly. Everything is emailed, and no one is scared or feeling abandoned by something like that.

Well, yes, as founders of startups, women are inherently incapable of reaching the level we expect. But if YC can be more proactive, what's the damage?

No, the problem is that when these women reach the age of 23, they don't have to be like Mark Zuckerberg, and Zuckerberg started to tinker with computers when he was about 10 years old. By the time he created Facebook, he was a hacker, so he looked at the world in a hacker's eyes, which made him create Facebook. We cannot allow these women to look at the world with a hacker's eye and create Facebook because they have not been hackers for the past ten years.

This has changed since being a hacker is no longer so important. The nature of startups is changing. In the past, most startups were technology companies. Now we have companies like Gilt groupe, who are actually retailers, and they need to be good at selling, because technology is more commercialized.

This may be why women are now more founders than in the past, because the nature of the startups they are trying to build is different. To start a startup, you don't have to be a hardcore hacker like you did 20 years ago. This is partly because software is gobbling up the world, partly because infrastructure is more pervasive.

Now that you have a heroku cloud application platform, you don't need to be hands-on, you just have to write some Ruby apps and put it on the Heroku platform, and then it pops up. or Amazon Network Service (AWS), you no longer need a system administrator, Amazon will do the work of your server. Startups are extending to different areas.

When we started our company in the late 90, our servers were in our offices. At that point, you couldn't even share the server, not to mention Amazon Web services.

What makes you an indispensable part of YC?

I specialize in figuring out when people need to adjust or replace their ideas, or when they need to figure out what the first priority of their current ideas is. Because in many cases, people will do it again, just intuitively knowing that it has a future, but not knowing what it means.

However, it is a good idea to think about the full meaning, because it may affect which direction you go. Are you going this way or that way?

Because at first it looks almost the same here and there, but after a while it makes a difference.

Why do YC-hatching startups seem to be looking for a way to explain how their business can solve a billions of dollar problem?

When investors invest in a start-up, they are looking for the possibility of a bigger company. It may be small, but not zero, and they are not interested in investing in a company that meets the top at some point. If you're an earlier Bill Gates, when you explain your startup to investors, if you just say, "We're going to continue to develop programming languages for microcomputers," that doesn't sound promising.

You'll want to say, "We're starting with programming languages, because all microcomputers can run, and microcomputers are becoming more powerful and pervasive." As they become more powerful, we will follow up all the way until we develop all the software that runs on all microcomputers. ”

If you encourage startups to express themselves in how they can commit to a 1 billion dollar market, will you lose credibility?

We don't invest in all the applicants, we only invest in people we think are good enough. I've never lied to these people before. In fact, I really believe that we and these startups plan to conquer the world. If they are fully and aggressively implemented, almost all startups can make the plan a reality. One of the secrets of persuading others is surprisingly simple, you just tell them the truth.

Some people talk on presentation day without consulting me, where they will tell a few stories about how their business can develop into a 1 billion dollar market. "We are developing software, software is a trillions of dollar market." All we have to do is grab 1% of it and then we can do billions of dollars. ”

Why do people attack YC?

It's strange. In fact, just last night, Jessica said to me in bed, "Why does everyone hate us so much? Why does everyone try to attack us?" I explained that fame is a potential energy.

For example, some clothing brands you've never heard of will produce their own stuff in sweatshops, right? Someone wrote a news report about it, and people would say, "Yes, so what?" isn't clothing all produced in sweatshops? "

Nike will also produce clothing in sweatshops, and suddenly it becomes "Nike using sweatshops"! It's an exciting big story, and newspapers will report such news because it attracts eyeballs, and labor rights advocates flock in, even though they don't pay attention to small companies that use sweatshops, right? ?

This is because the reputation of those companies is a potential energy.

Jessica talked about the investors who tried to stab us in the back and there was something like that. This is a lot of things.

If you are the founder of a start-up company, you ask the investor, "should I apply to YC?" Investors will say no, right? They hate us! Investors hate us, and many investors hate us.

And why?

Well, it depends. You can say that if you think we're really good, then it's out of jealousy, and if you think we're not good, then they think we don't deserve all of these project flows. That's what investors want, and they want to get the project flowing.

We have a wealth of project flows, and they are scarce. It's like the rich and the poor, they look at us angrily, and when they see another startup that's going to be part of the flow of our projects, they shout: "Another, no, no!"

A recent news report quotes you as saying that "a heavy foreign accent" would prevent startups from successfully applying for YC, what is the story behind this statement?

There is no cause for such a big controversy, depending on who is applying. The interview was an enrichment of a two-hour long talk, which is why it sounded like a bunch of aphorisms and consonant, and they erased the middle words.

The controversial remarks are from that long conversation, and I talk about how we sit down and try to consciously identify factors that can predict failure. We have a list of 30 and 40 factors to examine during the interview. It includes people sitting, their body language, who they look at when they talk, and so on.

The interviewer asked me, "Can you tell me some of these factors?" I said, "It's not going to be public, because if I tell you a lot of things, people can pretend, then it won't work." ”

The reason I'm willing to tell her the accent is because if you can disguise a good accent, your accent will be good, and so is the accent!

I have no opinion about people pretending to be an accent. But people's reaction seems to be that if they have a very strong accent, we will automatically shut them out. The accent is just one of 40 factors, and if they have 8 problems in 40 factors, we may refuse, but not just a heavy accent.

Some of these startups are hard to understand, but we also invest in them because they perform well in other areas. The question depends on who is making the application.

How strong do you need to be to create a start-up company?

In startups, you have to get up in the end and cowards can't succeed.

People do get stronger. In the process of working as a start-up, people become much stronger. But if you are weak now, you will have to stop being weak, and no one can help you unless you are, or you will be doomed to failure and then leave your job elsewhere. This is the only two options. You can't always be weak, because your weakness will eventually lead to failure in the company, and then you will have to do something else.

In fact, this is one of the most surprising things that a start-up team must be stronger than a full-time job, and it turns out they can do it. Things that people are good at are very different. Just as some people can grow faster than others, and people don't really know where they can grow up. In fact, even we are not good at evaluating this, even though that is our main job.

No one can predict such a thing well. We may be able to make better predictions than others because we have a lot of data and that's what we've been thinking about for the last 8 years.