Paul Graham's Search for the Next Facebook

http://www.businessweek.com/magazine/content/11_10/b4218038672660.htm

by rhartsock • 15 years ago

125 37 15 years ago

businessweek.com

marcamillion2• 15 years ago

I love how pg always has this kinda 'child like joy' smirk on his face for these press pictures.

Like he is thinking "this is SOO cool...Mom is gonna be soo proud."

joelrunyon• 15 years ago

We need more people doing business who are constantly thinking "this is SOO cool." Their enthusiasm shows through in their work.

tankman• 15 years ago

The pg apotheosis reminds me of an interesting Google talk by Robert Sutton where he reports that in research with monkeys, the dominant monkey receives a highly disproportionate amount of attention relative to that shared among subordinates and this phenomenon is theorized to be one of the reasons people in authority, such as management positions, tend to become less sympathetic to those below them. It's a very insightful talk for anyone with an interest in management dynamics:

http://www.youtube.com/watch?v=IN1meJ6v5Fs

alexophile• 15 years ago

I interpreted that look as "You're going to put some really lame headline above me aren't you?"

redthrowaway2• 15 years ago

His prescience knows no bounds.

DilipJ• 15 years ago

yes, he never seems to show his teeth when people take his photo. I suspect it's because he's British?

izendejas• 15 years ago

As someone who is looking to apply, even at this stage, having YCombinator as an option is tremendously invaluable. So on behalf of the dreamers out there, I say thanks Paul, Jessica and crew. Even if not accepted, just having that door there gives one more clarity moving forward by removing lots of the uncertainty.

thematt• 15 years ago

I find it surprising that Heroku was the breakeven point. There have been other (what I consider) rather high-profile exits, such as Cloudkick, Reddit, Etherpad, 280 North, etc. These were good companies and were acquired for significant amounts; it seems like YC would have realized some significant gains on them.

ry0ohki• 15 years ago

I'm wondering if "break-even" in this case means "typical VC 10X expected profit on investments"

kirubakaran• 15 years ago

No. That would be one hell of a creative definition for 'break-even'.

nopinsight• 15 years ago

The article might have meant YC recouped their past investments in all startups combined:

"YC broke even on its past investments when Salesforce.com (CRM) bought YC company Heroku"

Since the sales price is above 200 million, YC's equity would be worth 12+ million, which likely surpassed the total monetary first-seed investments in every startup they did so far.

marcamillion2• 15 years ago

That is kinda staggering given that there are still many stars that are doing pretty well...that YC is yet to exit. From Dropbox to AirBnB to WePay to Wufoo to Justin.tv to Posterous to Scribd, etc. All of those I suspect, if they have an exit (I doubt Wufoo will - mainly because I don't think the founders are interested), it will be pretty substantial.

barista2• 15 years ago

Loved this quote from the article: "This is the Harvard, so to speak, of entrepreneurship" Says something about YC.

pdaviesa• 15 years ago

Shouldn't it be the Stanford of entrepreneurship :)

barista2• 15 years ago

Or may be Stanford is YC of CS.

mindcrime2• 15 years ago

(Think MTV's Real World, but for geeks.)

Oh, boy... The idea of some TV executives out there, champing at the bit to create a reality TV show about entrepreneurs is either f!#@ng scary or LOL funny.

I can just see it now... "Survivor: YC" or "The Entrepreneur: Paul Graham Edition." Even better: "Entrepreneur Death Match: Paul Graham v. Steve Case." And the inevitable "VC Revenge Stunts, hosted by Sean Parker."

"Mark Zuckerberg Goes Back To College" might be entertaining though.

jarek• 15 years ago

It exists and is called Dragons' Den.

mlinsey• 15 years ago

American version is called Shark Tank, and based on the deals the investors offer, it's aptly named.

Mark Cuban has signed on to be part of the next season!

redthrowaway2• 15 years ago

If memory serves, the deals they offer on websites are terrible. 50% stake, $250k sort of thing. Also, they don't have any worthwhile experience to offer. I don't get why tech startups would go to them.

plainOldText• 15 years ago

I believe the title is a bit misleading. Nowhere in the article was the name Facebook mentioned except in title.

idoh• 15 years ago

The people who write the articles are different from the people who write the headlines.

MediaBehavior• 15 years ago

And the headline stringers probably think, "I've never heard of pg, so my readers haven't either. I better put 'Apple' or 'Facebook' in this headline." [/cynicism]

rhartsock• 15 years ago

lawlz...that was the reason i clicked it to begin with...but no, it was just a tease...

bfe• 15 years ago

I think it's inaccurate about the deal with SV Angel and DST, isn't it SV Angel and Yuri Milner as an individual?

As for breakeven, I wonder whether that's accurate, but considering the low percentage of shares YC takes I wouldn't be surprised if lots of successful but not blockbuster spawn could still leave them without huge returns.

dasil003• 15 years ago

What does YC take? 5% for $20,000? They're getting a return if it sells for $500,000. Granted there's going to be a lot of dilution 99 times out of 100, but if most acquisitions are in the $10m-$100m range then they can still take the dilution and do pretty damn well with their current batting average.

curiouslurker• 15 years ago

Rather short and disappointing article given the headline. I took a long sip of my coffee, reclined and looked forward to reading something much longer and better...but alas it wasn't to be!

ericxtang• 15 years ago

Anyone know what the "bottlenecks" are in YC? I assume it has to do with the number of advisors? Also, I wonder if the growth in number means decrease in quality (or experience) for the entrepreneurs.

klbarry• 15 years ago

The biggest bottle neck is quality applicants, if I remember correctly. I believe PG mentioned that Y-Combinator could triple in size and not be severely affected, though.

hollerith• 15 years ago

Although that might be the first bottleneck YC probably cannot remove, the bottlenecks PG talks of in the OP (such as office space) are the removable, short-term ones that prevent YC from immediately tripling in size.

d8niel• 15 years ago

Great article.

Paul Graham's Search for the Next Facebook

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