Would Steve Jobs have applied to Y Combinator?

http://slidetocode.com/2012/05/18/ycombinator-ambition/

by yanis • 14 years ago

73 70 14 years ago

jorleif• 14 years ago

An important factor between Web 2.0 startups and "change the world" startups is the size of investment required. Web 2.0 startups are very cheap. Starting Tesla Motors on Y Combinator funding would be impossible. Apple was also started on a very small budget at a time when electronics was in a similar position cost-wise as the web is now.

What is different between most web 2.0 startups and Apple, though, is that Apple expanded an existing enterprise market to the general public. Cloud computing is having similar effects, but otherwise I don't see many similarities.

saddino• 14 years ago

While Apple as Jobs and Woz hocking Apple I kits was started on almost no budget is true, Apple as an actual company was started with a $250K loan from Mike Markkula. Hardly a small budget when you consider those were 1976 dollars. Steve wanted to do big things, and he understood it took big dollars to do so.

I think the point of the OP boils down to: Steve (like Zuck now) wanted to build a company that changed the world, not build a company that he could flip.

architgupta• 14 years ago

Empirically, the way to do really big things seems to be to start with deceptively small things. Want to dominate microcomputer software? Start by writing a Basic interpreter for a machine with a few thousand users. Want to make the universal web site? Start by building a site for Harvard undergrads to stalk one another.

http://paulgraham.com/ambitious.html

davidw3• 14 years ago

> Empirically, the way to do really big things seems to be to start with deceptively small things.

Well, to really pursue that argument, you'd also want to look at how many "deceptively small things" stayed small and never amounted to much of anything.

facorreia• 14 years ago

Apparently the key is in being a "deceptively" small thing, not plain small...

cdeonier• 14 years ago

The article states: "I think the problem is rooted in the business model that seems to be preached by Y Combinator: build a great product, choose investment over income, and exit as quickly as possible."

I'm pretty sure I've heard the first point mentioned before by the partners of YC, but I'm not sure I've seen evidence of the others. Is there actually evidence of YC telling its classes to exit as quickly as possible? My guess is any quick exits are more likely as a result of founders being offered a chance at a payout rather than YC pushing them to exit.

amirmc2• 14 years ago

To add to your last point pg stated more than once that the best outcomes for YC will occur if companies can make it to IPO. That's not a short-term play.

edit: here's a link where he says as much http://news.ycombinator.com/item?id=265623

onlyup2• 14 years ago

Out of curiosity, is there a list of the fastest companies to IPO? (Non-YC companies included)

JVIDEL• 14 years ago

Both Apple and Microsoft started at a time when personal computers barely existed and thus a couple of guys with very little capital could build a computer kit or code a blackjack game in a day.

One key difference its revenue: Allen often mentions how any piece of code brought money to the company, simple apps that are 100% free today would have been sold for tens of millions back then. Same with hardware, which is why Apple could get roughly 1 million (in today's dollars) to leave the garage.

Basically both companies were in the right place at the right time: right before the PC revolution began. A YC-equivalent at that time would've appeared around 1982, after IBM launched the "official" PC with DOS and the ball was already rolling.

That was the time when a lot of other startups appeared, like Amiga, Adobe, Lotus, Silicon Graphics, etc...

Note that none of those companies were as successful as Apple and Microsoft were, in fact some went chapter 11 and disappeared.

onlyup2• 14 years ago

> both companies were in the right place at the right time

When looking back on a very successful company, it seems they were all in the right place at the right time. Adding to Microsoft and Apple, Google, Facebook, Twitter

shrikant• 14 years ago

microtonal• 14 years ago

Were in they right place at the right time, or did they mold the future to such an extreme, that in hindsight it seems as if they were in the right place at the right time?

larrys4• 14 years ago

Timing matters. Later example - many things had to come together for the ipod to be a success as well as the iphone and for that matter the ipad. While there is no question that Jobs did much to mold this, there were many other factors such as the price of components and technology the products relied on. So you can't "mold" anything without the proper materials.

Much of what we have today wouldn't be possible w/o broadband. Instagram wouldn't exist unless digital camera technology was developed to the point it had. Facebook became immensely popular because of digital photos. Wouldn't happen if people had to scan photos to get them on Facebook.

nkassis• 14 years ago

I don't think so because you have to remember that there was a lot of other companies at the time working in the same space. Just an example would be Commodore that was actually much more successful in the 80s than Apple. There were many others with similar ideas.

Obviously these companies lasted while others disappeared due to bad management, competition etc... It's hard to say that without Apple and Microsoft, the micro-computer revolution would not still have occurred.

sparknlaunch• 14 years ago

Difficult hypothetical but Jobs was a control freak. Hard to see him going though the motions of an incubator or accelerator.

yesimahuman• 14 years ago

I don't want to be nit picky, but YC is not an incubator or accelerator. In fact, I think this is the #1 thing that copy cats get dead wrong.

To me it's a practical replacement for college, with a similar atmosphere. Steve dropped out, so maybe this would have appealed to him more.

wissler3• 14 years ago

"Ferociously independent" might be a more accurate characterization than "control freak." And you're right, I don't see Jobs submitting himself to being led around by mentors.

On the other hand, he didn't have to deal with the much more complicated legal environment that we have now, which includes patent suits left and right whenever there's big stakes involved. But on the other other hand, perhaps there's no good way to navigate these new problems anyway.

MehdiEG• 14 years ago

I admit that I'm not intimately familiar with YC's and pg's preaching but my impression of what I've read and seen from pg is that he is very insistent on startups having a solid business model and on them focusing on customer acquisition. And I don't remember having ever heard pg advocate quick exits. This is at odds with the assumptions you've based your post on. I might be wrong though - happy to get corrected by YC alumni.

As for "changing the world", this is an expression that's as meaningless as it gets. Of course everybody wants to change the world, why wouldn't you? And since everybody lives in their own world anyway, in a way, everybody changes the world. For example, I personally find Facebook to be one of the most useless product I've ever used. I genuinely wouldn't notice if Facebook disappeared tomorrow. On the other side, for my deaf teenage cousin, Facebook literally changed his world. He went from being the weirdo disabled boy in the corner of the room that nobody would talk to to being a perfectly normal teenager communicating on Facebook like any other teenager.

So the YC startups you're talking about might not have changed your world but you can be sure that they've changed quite a few other people's world. Arguably, Steve Jobs, who you cite in example, has hardly changed the world for most people. Had he not be there, computers and smartphone would have been there anyway and would have more or less done what they do today (and I'm saying this as a big admirer of Apple who has discovered computing on a Mac SE and is typing this post on a MacBook Pro).

When it comes to bigger goals like ending wars or poverty, fixing the global warming problem or space exploration, it would be incredibly naive to believe that you can tackle the problem as a nobody (i.e. as a young, first time entrepreneur with no cash and no network).

Elon Musk didn't start with a crazy-big-truly-change-the-world project. He, you know, did Paypal first. Just like what the Stripe guys (a YC startup) are doing. Bill Gates didn't start by tackling the issue of poverty, illnesses and illiteracy in Africa. He started by writing an interpreter. You have to start somewhere and this somewhere is generally relatively small but gives you what yo need (knowledge, experience, network, cash) to follow up with something bigger afterwards. That's my understanding of what YC is all about.

imd23• 14 years ago

This topic is so difficult to analize that I just follow one rule: do what you love and fuck the rest.

If you're doing what you love, you'd feel right. Passions take play here, but there is a catch here: everyone have passion, or have discovered them. So, if you are from the part who have, just follow them.

brudgers3• 14 years ago

"Is the next Steve Jobs or Bill Gates filling in Y Combinator's application form right now, or are they taking the independent route?"

YC can reproduce the career arc of Steve Jobs, but not Bill Gates. Until the IPO Microsoft didn't sell stock to outside investors in significant quantities. By essentially bootstrapping, Gates and Allen were able to bring Ballmer on board with 8% equity at a point when outside investors would be eyeing exit in a VC backed company.

This is in contrast with Jobs, who lost control of Apple by accepting outside money. On the other hand, having grown up in Silicon Valley, Jobs would not have needed the sort of guidance through the startup landscape that YC provides relative to a hacker from Topeka - i.e. Jobs was sophisticated enough to raise money for Apple based upon his social connections within Silicon Valley.

wissler3• 14 years ago

But Jobs had to be lucky enough for Apple to nearly go bankrupt so they would entertain having him return and turn them around. This cosmically lucky event is not very reproducible.

kalininalex• 14 years ago

After Apple, Jobs didn't sit on his hands, but went on to found two companies - Pixar and NEXT. Pixar alone would have made him famous, again. And, NEXT assured his return to Apple, because of Apple's failure to innovate in early 90s and the need of something, anything to restart its OS line. NEXT and Jobs were their best bets.

Even without Apple Jobs would have accomplished many things. That's just the kind of person he was. So, luck has nothing to do with this.

brudgers3• 14 years ago

Because at the time, Jobs was still hanging around in Silicon Valley, he was the ideal candidate - i.e. cheap, and available.

hi• 14 years ago

You mean would Steve Wozniak & Steve Jobs have applied to Y Combinator? (Oh yeah, that other Steve...)

No! They were too busy hacking phones and building things people wanted to waste time to go through the application process of YC. Money was chasing them.

This is true for most runaway successes, they were all true hackers that broke things: Facebook, Apple, Microsoft, etc. Not the "hackers" who are asking for $125k salary...

They didn't care about the money, they didn't care about the allure, they didn't care about the status. They just wanted to break things and make them work better, legality aside.

But the landscape has changed, and Steve & Steve are not just starting Apple and YC would not be around if Apple wasn't started when it was, so it's a silly question be it a fun thought experiment.

I think YC supports the companies that shoot for the moon, but people aren't willing to take the risk and say no to acquisitions of $20-$100m because that is the short term business model of today and people just want to take their $5m and show off.

"The approach of remaining independent, and investing profits back into to the company followed by technology zealots such as Jeff Bezos and Steve Jobs is unattractive to an investor."

They only way to counter this is to build a great product with little to no money and have it grow like a weed, then negotiate like a mob boss to keep the majority of the voting rights of the company.

That's enough for now, time for focus...

lgieron• 14 years ago

> They didn't care about the money, they didn't care about the allure, they didn't care about the status

Isn't that a romantization? How do we know they didn't love tech AND wanted to become rich at the same time?

damoncali• 14 years ago

I saw Wozniak on a CNBC stating explicitly that Jobs cared very much about the allure and status of being in big business, for what it's worth. I see little evidence he cared much about the money.

startupfounder3• 14 years ago

You are making the point for me, thank you. They do love the tech, first and foremost, and don't want to sell out for a quick buck because they know money is not the thing that makes you happy! Wealth is different then money, building wealth is valuable for them, not money. Big difference.

dpritchett2• 14 years ago

> I think YC supports the companies that shoot for the moon, but people aren't willing to take the risk and say no to acquisitions of $20-$100m because that is the short term business model of today and people just want to take their $5m and show off.

A more charitable take: A founder with a few grand in the bank is doing a high wire act without a safety net. A respected repeat founder who's already banked a few million can let go of most concerns for safety and family and focus on changing the world or self-actualization or whatever you want to call it.

startupfounder3• 14 years ago

This is the mindset I am talking about, "I just need a few million as a pillow and then I can create something great!"

A founder with a few grand in the bank who can create something great is the founder who doesn't depend on money to make them great! They don't need to look for investors to support them and give them an allowance.

Look at Richard Branson, Steve Jobs, etc... Money is not the dependent factor, they hack the system for the simple fact that they want to hack the system! Free phone calls, driving a van records across boarders, etc.

ezequiel-garzon• 14 years ago

"YC would not be around if Apple wasn't started when it was"

How did you draw that conclusion?

jiggy2011• 14 years ago

I'm guessing they are making an assumption that without Apple personal computers would never have take off and we would still be stuck in mainframe hell.

larrys4• 14 years ago

"They didn't care about the money"

While your statement is true about Wozniak from what I know it's not true about Jobs. He was a business person and he knew how to make a buck in addition to wanting to "change the world". Same with Gates for that matter.

startupfounder3• 14 years ago

“Being the richest man in the cemetery doesn’t matter to me” - Jobs “Going to bed at night saying we’ve done something wonderful . . . that’s what matters to me.” - Jobs

raverbashing• 14 years ago

I believe, and of course I may be wrong, that SJ did care about money, but as a means of something.

I'm sure he would be very bothered if he didn't have money to take Apple to a fair, or to get the needed parts.

(of course, if you're starving you care about money)

webwright• 14 years ago

I think your response and the OP are quite wrong on a few fronts.

First off, YC is NOT looking for companies that take $20M exits. They certainly happen, but it's not great for YC. 95% of the money made in the valley from liquidity events in the valley are from 10 companies-- YC is trying to be part of those 10. The smaller exits just keep the lights on (don't believe me? Do the math on what YC gets from a $20M exit after being diluted thru a funding round or two).

Second, to say "The approach of remaining independent, and investing profits back into to the company followed by technology zealots such as Jeff Bezos and Steve Jobs is unattractive to an investor," is just flat out wrong. There are certainly long-game consumer plays (like Facebook) where revenue is eschewed. But Heroku? Parse? Dropbox? AirBnB? Monster cash flow businesses.

As to whether Jobs would do YC-- he might not have when Apple was already growing. What about when he was selling blue box hardware? What about when he came back from India and got a job at Atari?

JumpCrisscross• 14 years ago

Do we have empirical data that YC doesn't get most of its returns from incremental exits? I thought that the hallmark of the YC model was its diversification along the long tail of founders, freeing it from the 10-bagger trap of traditional VC.

kunle• 14 years ago

> I think the problem is rooted in the business model that seems to be preached by Y Combinator: build a great product, choose investment over income, and exit as quickly as possible.

This isn't the model preached by YCombinator at all. It actually literally runs counter to the model preached by YCombinator. YC is 7 years old, and has approached building companies with pragmatism; it's definitely the case that many startups will fail, a some will exit quickly, and a select few will last long enough and be strong enough to be IPOs, and then even fewer will last long enough as public, independent companies (Google is 13, Microsoft and Apple are both older than 20 years) to try doing things in house like building autonomous, self driving cars, or space rockets.YC is well aware of this dynamic, but the key thing this post misses is: creating a company that lasts, or being a founder well resourced enough to fight again, is a crucial part of being able to build space rockets. You have to be there. So with that in mind the model YC ACTUALLY preaches is more like:

"Talk to users, write code, build a great product, that makes money, and you wont need investors. If you do this, you just might last long enough and be strong enough to build space rockets."

asparagui• 14 years ago

The more dangerous question...would he have gotten in?

After all, you're dealing with a college dropout who didn't study anything related to computer science and had personality issues. I suspect that the HR guys at Apple would drop Steve's resume in the waste bin if he applied today.

mattmaroon• 14 years ago

"none of the copycat incubators have an alumni list or investment portfolio containing names such as Dropbox, Reddit, Clickpass, Posterous or Codecademy. I can't think of a better list."

Clickpass? Really? I could think of a better list containing just YC companies.

And how do Dropbox, AirBnB, Heroku, Weebly, Justin.tv, etc. lack vision?

smoyer• 14 years ago

I don't spend all day reading HN but I'm here quite a bit ... can someone explain the "and deluded database CEOs" reference?

ezl• 14 years ago

> I think the problem is rooted in the business model that seems to be preached by Y Combinator: build a great product, choose investment over income, and exit as quickly as possible.

This seems like a misinterpretation of what YCs investment/mentorship philosophy.

kenjackson• 14 years ago

With all due respect this article seems naive. Sure Google is building self-driving cars now (not exactly innovative, since virtually every 3rd grader lists that as one of the things they imagine in the future), but they did that after acquiring a hugely profitable core business which was "just another search engine".

Everything is "just another xyz" until its not.

What YC gets is that it asks it's founders to solve a problem. Maybe a real pain point, or a problem you don't know even exists until someone points it out to you, but whatever it is -- solve it well. At that points your minor pivots are leveraged until, before you know it, you're moving a mountain, when you started just intending to move a pebble.

And BTW, didn't Dropbox pass on an acquisition from Apple near $1B?

brandonb2• 14 years ago

>I think the problem is rooted in the business model that seems to be preached by Y Combinator: build a great product, choose investment over income, and exit as quickly as possible.

YCombinator never tells founders to "exit as quickly as possible". In fact, they and most other technology investors get 90+% of their returns from the home runs and encourage founders to go big if things are working. You can do the math yourself: how many talent acquisitions would it take to add up to one Dropbox ($4B valuation)?

While a lot of companies coming out of YCombinator (and Silicon Valley in general) are focused on the internet, there are exceptions. For example, there was a 3D scanning company in the most recent batch: http://venturebeat.com/2012/03/27/matterport-3d-scanner/

bobsil1• 14 years ago

Their application used to ask the lowest price you'd be willing to sell for. Seemed really focused on quick flips.

  If one wanted to buy you three months in (August 2007), what's the lowest offer you'd take?

http://dl.dropbox.com/u/27532820/app.html

brandonb2• 14 years ago

What makes you think that a low answer is what they're looking for?

craigyk• 14 years ago

Is there a chance that YC might one day think of funding more capital intensive ventures, like biotech?

stewie2• 14 years ago

I think he would get rejected.

Would Steve Jobs have applied to Y Combinator?

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