He calls me out on it in the video below so I might as well admit it: I’ve been a bit hard on Paul Graham and Y Combinator in the past. It’s not that I think he hasn’t been a great mentor to young entrepreneurs– he has. But that’s a lot of equity to give up and to date no Y Combinator company has really hit it huge. Graham says that’s going to change.
“Four or five of our companies could go public,” he says in the interview after the jump and names some names. (He also does the cutest face ever at minute marker 3:28. Jim Carrey meets one of Jason’s puppies?)
This is a longer video, but it’s one of my favorites I shot all day. Stay until the end where he tells start-ups how to market themselves to customers and investors in a downturn.
TC50 and Paul Graham from sarah lacy on Vimeo.
Hahahaha….that face…I was waiting for it. Didn’t think it would live up to your description..but.it.did. Awesome.
“The problem is you read your own columns.”
Oh snap!
Stay away from this loser. He once ate my baby and blamed it on a dingo.
Chickenhawk.
Stranger Danger!
Very true! It doesn’t matter if the first version looks like crap as long as you can get user feedback and iterate a newer version
But, if you launch something with only 1 or 2 features and those features aren’t that great to begin with, why would someone come back later down the road to see if you launched anything good?
Because most likely there will be others seeing it for the first time as well as those returning. If great improvement is made, it will get noticed.
If it isn’t that good, very few people will see it to be turned off anyway so that’s hardly an issue. The feedback you get from those who do use it will prove far more useful.
Agreed, we have these arguments all the time. I think you have to just keep working to get better. Don’t be scared that you’re product isn’t all that great. There will always be eyeballs out there. Everything is a cycle, early adopters are the people you’re looking for initially and their feedback is important.
Seriously: I heard he ate the commentor above’s baby and blamed it on a dingo.
Stay away!
Stranger Danger!
Paul Graham seems comfortable in his role as the Simon Cowell of TechCrunch50.
I’m torn, Nick might be more of a Simon…
I like this guy.
We’ll have to invite Paul to do the Carey face @CMSExpo next May in Chicago during our Angel Talks.
why is camera so unstable, c’mon! its not a blair witch project after all!!
Please use Youtube for embedding videos.
Vimeo is very slow.
Vimeo is not only slow but seems to freeze with annoying frequency. Doesn’t handle net connections that come and go.
Is it just me or does Paul Graham look a little like Paul McCartney?
>Is it just me or does Paul Graham look a little like Paul McCartney?
+1
All startup founders should study everything Paul says…always droppin nuggets of startup wisdom.
Founding a company to go public is not the real goal.
If it happens it is a possible additional benefit.
Apparently some people see going public as the ultimate goal.
Great interview…
Paul Graham made some good points…like the way his mind works…
Still feel unable to agree with launching “as soon as you’ve got something”…
The idea makes sense, it just feels uncomfortable to knowingly foist a product/service on potential customer…
“How does it all work, what’s the insides like. And so you have to ask a lot of questions.
People never seem to answer all the questions pre-emptivey in the presentation so you gotta ask a lot of questions.”
It would be nice to know what are the questions that get asked. Which need to be answered?
Paul was the best panellist. He asked some questions that made the startups think, and in one case – the secondary ticket sales price predictor thang – made it seem like they should change their whole business model. I’d love to see more judges ask tougher questions and be blunt – like Cuban last year – aslong as its constructive, of course (:
Doesn’t Reddit being bought by Conde Nast count as “hitting it huge”? Facebook-style world dominance isn’t the only route to a successful company.
Sarah you got it right! The fact that he has no real exits says it all. The market doesn’t lie.
Paul Graham is my new Hero.
“That’s a lot of equity to give up…”
As one who has given it up, it’s really not.
In the earliest stages you want to optimize for you CHANCE at success, not your magnitude of personal windfall should you actually achieve it. It’s a no-brainer to me. It accelerates fundraising, makes fundraising more competitive (which probably raises your valuation by 6% right there), gets you a great network, gets you some great advice, and (the smallest part) gets you some free PR.
Overall, your shot at sucess and/or an exit is vanishingly small. Startups are very fragile things. If you can increase your chances for success by giving up 6% at a time where you have built virtually NO value (pre product), then it’s a ridiculously good buy.
I think Paul was a little unclear when he talked about launching your start-up early with only a few pieces of functionality before it is “100%.” You only get one chance with customers, it’s all about first impressions. The chance that I see a new company and don’t like it but then come back because my friend likes it a week later will almost never happen.
Now when it comes to investors and money and all that jazz, it is always the same questions! How do you make money? How will you reach your customers? How will you make MY money back?
The last question is the worst because it forces the entrepreneur to think about things that don’t help the business. As much as you want to make a great ROI you need to let them do their work and focuses on what matters.
it’s not a lot of equity to give up considering what he does for the YC companies. in fact, i think its the best deal in startup land
I like this quote at the end:
“Investors ask your plan for making money if they’re not smitten with you. If they’re smitten with you, they don’t ask.”
Now I feel like I really missed out. Tony Hsieh and Paul Graham reviewing your pitch, that feedback does have some incredible value.