Entrepreneur First Thinks It Can Grab The Talent Long Before YC

http://techcrunch.com/2014/04/14/entrepreneur-first-thinks-it-can-grab-the-talent-long-before-yc/

by jordn • 12 years ago

61 61 12 years ago

This reminds me of nothing so much as the Harvard (any selective college, really) model of recruitment: try to admit a pool of people you think stand a good chance of huge success later. (The university model's step two is "when they get it, ask them for money and hope they remember you fondly", which seems to work OK but I imagine will be replaced with "when they're admitted, make them promise to give you money later" by these guys.)

Fundamentally, you have the options of selecting for demonstrated achievement and selecting for potential. You can assess potential much earlier, so it really is a good way to scoop other people looking for the same thing.

It's also less accurate. But there's got to be a business model in there somewhere.

UK-AL5• 12 years ago

Start ups used to be for scrappy guys, the people who dropped out or had a winding career path.

Now its become a popular option its turned into selection system like a Goldman sachs graduate recruitment program. Precisely because its those type of people running these things.

Fundamentally i'm not sure they have the same character as the previous entrepreneurs. Those guys specifically chose to take the risky untrodden path. That said something about their personality. That could be the piece that makes a successful entrepreneur.

Its not like that anymore, so the people choosing to do it are a different breed. They are more like people who go to work for investment banks now.

lpsz• 12 years ago

Why do young founders participate in these accelerators? Aside from the (arguably small) amount of money, I think that participation gives them the feeling of "permission" to actually create the business they want.

I wonder how many realize that they could build the same business just as well on their own (assuming proper willpower, and all.)

salman892• 12 years ago

Are you saying that these accelerators are not increasing the founders' chance of success?

6cxs2hd6• 12 years ago

Although not a quick read, the go-to analysis of this is "Entrepreneurs Are the New Labor" [^1].

On this theory, the balance of power has shifted to investors, who prefer founders from an institution. And perhaps a certain generation of young adults welcomes this sort of structure more than others might.

Which isn't to say that incubators don't have great value for many people. They do. But they're not the only way to go about starting many businesses, you're correct.

[^1]: http://www.forbes.com/sites/venkateshrao/2012/09/03/entrepre...

petenixey2• 12 years ago

Being around other high quality founders. Having done YC I would say that that is by far the best takeaway from it and I think every other alum would say the same.

Good quality founders give you access to experience and perspective that you simply cannot find elsewhere and a value that no amount of blog reading can substitute.

An incubator is definitively only as good as the founders in it (which presents an obvious catch 22) and EF has managed to attract some incredibly high quality applicants.

The EF program is too young for a large number of those applicants to yet have become experienced founders per-se but in terms of quality of people and focus on engineering, EF is streets ahead of anything else I've seen in London.

FWIW it's also far, far harder to build a quality business solo than it is if you surround yourself with other people who are also doing well and pushing you to do better. You are as they say the average of your five closest friends.

ig14• 12 years ago

Salesforce was started by an ex-Oracle executive, Jeff Bezos worked at an investment bank looking at internet businesses, Peter Thiel also had a successful investment banking career prior to Paypal.

(for that matter Jimmy Wales of Wikipedia, Joshua Schacter of Delicious and Sal Khan of Khan academy are all ex-investment banking as well)

The scrappy drop-out risking all to start a startup narrative is cute, but only represents a small fraction of successful startups. Many startup founders had significant financial success before founding their startups.

UK-AL5• 12 years ago

Anecdotal but:

I know fair few guy running start ups, and some who got into YC. I can say they are not the type of people who aspire to working in IB's with perfect resumes from elite universities. One got fired a few times, because he could not cope with the lack autonomy, and ended up in arguments with senior management. His doing quite well now. I can say his attributes that made him fail there, made him a success in someway with his own co-founded startup.

I say this as someone who did go to an elite university.

foobarqux2• 12 years ago

Investment banking means a specific thing, not merely having worked in finance.

None of your examples were investment bankers.

Bezos and Khan worked at hedge funds. Thiel worked as a derivatives trader. Wales was a trader. Schacter was a quant trader.

Pincus was an investment banker.

neil_s3• 12 years ago

A CS student graduating from Cambridge usually has numerous job offers for GBP 45k+ or USD 100k+, promising a safe, stable lifestyle. Going down the startup route with no team, no idea, and funding of only 10-20k to live and develop a business in London for an entire year is still massively risky.

Programs like EF are simply helping manage that risk, and increase the chances of success by providing the right mentorship, peers and support environment.

And of course, appetite for risk is not the only great quality in startup founders, so if you give the intelligent, capable people with smaller risk appetites who would have normally chosen the safer route, the opportunity to work on their own company, it isn't unfeasible to imagine they might succeed.

petenixey2• 12 years ago

Startup founding is not really an innate skill, it's about getting better at the plethora of different skills you need to found and lead a company.

What really makes a good startup founder is a prior startup founder. Ergo the more you pump into the system, the better the founders you eventually precipitate will be.

All founders are muppets at the start. The key to becoming good is doing it and then doing it again.

jcolemorr11• 12 years ago

This. Right here. This. The worst part about it is that even organizations started by the "scrappy" guys are only running after the "ib" types. And the transition seemed very quick.

This article made me wretch because the last thing I want to see is a bunch of silver spoon idiots calling themselves entrepreneurs. I was in a fraternity, which has a high chance of attracting entitled heirs, and it was the dumbest choice I'd ever made. Very very few of them had a shred of originality, ingenuity, or fire...and lacking these traits kept them out of entrepreneurship.

But now...there's an organization that would look at these type of people (high grades, family connections that would count even though no one will admit it, pizaz appearance, etc) and fund them. Yeah this is no challenge to YC. I don't agree with all of their selection processes but at least they look for traction and authenticity.

zodiac• 12 years ago

At least we have one thing going for us. If you fail a Goldman Sachs interview, you don't get to work at Goldman Sachs. If YC or some other accelerator rejects you, you can still go and start your startup and succeed anyway. In fact YC specifically says that if you make acceptance a deciding factor in deciding whether to do a startup, you'll probably fail.

In the end, startups only succeed only if enough people like their product enough to pay for it. So what if there are now accelerators targeting "non-scrappy" guys?

michaelochurch4• 12 years ago

The types of risk are dramatically different in the old Silicon Valley vs. the new one.

In 1965-80, the "risk" was working for a low salary. But there really was a talent shortage relative to what society wanted to accomplish. If your startup failed, you could resume a technical career and come out for the better because of what you'd learned.

Also, rents were low, so the only "poverty" you were worried about was having to delay your Europe vacation while working on the startup. Making rent wasn't a life-altering concern.

In 2014, the numeric financial risk is lower (most startups come close to market salary) but the career risks are huge. We have a talent surplus and a bad startup can damage your resume/reputation enough to put you out of the game.

gallamine• 12 years ago

We have a talent surplus

What makes you say that?

jes51992• 12 years ago

I don't know if I buy the resume-killer concept. Do you have some examples?

maybe it's because I'm a programmer and not a CEO, but it sure seems like at interviews people just skip the boring parts of my resume to talk about the charismatic companies I've worked at, disregarding the gaps.

I do know one company (Basho) that refuses to hire anyone who has ever had a negative experience at any job. As a result, they tend to hire young, inexperienced people.

hyp0• 12 years ago

There may be larger trends at work.

Firstly, there's supposed to be a democratization of entrepreneurship with individuals becoming more capable (due to tech) and not needing the resources of a large company.

Secondly, there may be a systemization of entrepreneurship, as we get better at it. Analogy: in the early days of manufacturing, defects rates were high and apparently random. But over time, observation and experiment, the causes were understood and controlled, resulting in extremely low defect rates (as low as you're willing to pay for, I believe). Can the same apply to startups? Of course not! But we certainly can get better at it. "Lean", imperfect though it is, is an example of this. And every time someone writes (or reads) a "lessons learned", there's an implicit assumption that there is something to learn... that it's not totally random.

sharemywin2• 12 years ago

Except I think entrepreneurs are the defects. Their the guys that make things work inspit of the system. For every rule there is an exception and an entrepreneur their to expliot it.

jsun• 12 years ago

Just make the selection process really difficult. Those who want it will get it.

Everyone shits on bankers but the reason there's so many successful ex-bankers outside of banking is because they're goal oriented people who don't take no for an answer. Very similar to startup founders.

pgt• 12 years ago

Having experienced first-hand the hiring competition of Big Co's, I started recruiting second and third year Comp. Sci. students for internships. You have to invest a lot more time and effort in training and mentorship, but it pays to build a solid working relationship before they are recruited by the corporate competition (Amazon, Facebook). I have had some good results, but it is hard to scale. Other activities that make it easier to hire is to regularly speak about interesting topics at your local university and demo interesting projects. Deliver value, and others will follow.

teemo_cute• 12 years ago

I once read a post from a company's founder who is involved in the business of hiring fresh talents for tech companies.

Basically, what he does is whine and whine about the lack of talent because most fresh graduates want to build a start-up for themselves instead of joining a company.

He tries to convince fresh graduates that they are better of joining established companies because most startups fail anyway. It seems like people distort their values when it comes to self-interest.

I said he does so because he is once the founder of a startup himself. Why would he discourage others from doing the same.

neverminder• 12 years ago

So this looks like a bait for fresh graduates, because more seasoned professionals know that good jobs are hard to come by. I'm a software engineer, I live 50 miles north off London and I'm looking for a job there. My spam folder receives a daily dose of "LAMP developers needed", ".NET engineers", "Fontend jQuery wizzard" and other similar offers that I'm less than excited about, but jobs with leading technologies that I work with and want to continue working with (Scala, AngularJS, etc) are nowhere to be found. What does Enterpreneur First think they can fix here?

lifeisstillgood2• 12 years ago

You are not alone, but there are two or three fixes I can think of

- Start up your own startup

- work for a startup (silicon roundabout does an email list) I get the impression (and thats about all) that there are a lot of startups who would like experienced London developers to build them their MVP - price is probably the issue.

- Why just stick to London - everyone says Remote is possible :-)

Sorry not really answering the question - I just don't think the traditional apply for a job via a recruiter thing works anymore. I just am not sure what is replacing it.

neil_s3• 12 years ago

Could you link me to the mailing list for the Roundabout? I've joined a Meetup or two, but haven't found this list.

pea• 12 years ago

I did EF in 2012 and we are hiring Angular and Scala (Play/Slick/Akka) developers actually ;). Ping me leo@kivo.com

paolomaffei• 12 years ago

work with angularJS is actually quite easy to find in London, write me an email if you want some contacts

jordn• 12 years ago

I believe that the founders of EF have not set out with the idea of it being a ‘pre-accelerator,' leeching talent before YC or banks can get their hands on it. I do think they solving a genuine problem in the supporting startup ecosystem, particularly in the UK.

I spent a year at MIT and it was hard to avoid people that were working on cool ideas and starting up. Students chose most of their classes, and each class generally had a culture of creating something in a project. As a result, a lot of students would experience working on building something cool with a variety of people. That, combined with a very supportive environment, meant that it was much more accessible to startup if you wanted to.

In the UK (or at least Cambridge) there are fewer people considering creating a startup. The UK university system also places more focus on end-of-year exams rather than project work. It's harder to come across finding the right combination of people, ideas and motivations that is needed to create a startup. Most ‘entrepreneurial’ societies tend to be full of the bullshitty types and smartest people default to jobs in finance or consulting.

So it's partly bringing together smart people, partly the legitimacy of not feeling the need to go into a corporate job ourselves, that I think make ideas like EF broadly work. That being said, the model still has its problems. Forming teams with people you've no prior experience of only works in a handful of cases. Thankfully the programme is long enough to try several combinations of teams. Even so, I believe all the people that have gone through it but haven't ended up continuing with a company (like me) still value the contacts and learning experience thoroughly.

Disclaimer: I've just finished EF as part of their 2013 cohort.

hga• 12 years ago

Demonstrating an ability to do projects is one of the things MIT looks for in undergraduate applications. Almost certainly one of the things that put mine over the top.

And, yeah, doing projects, in class or outside, is a big part of what MIT is about.

malanj• 12 years ago

His view is that there will be two accelerators left in the world – YC and the few that manage to survive on investing in startups created by the people who didn’t take it into YC.

It seems strange that he's focusing on YC if he's based in the UK? I'd imagine that YC has very limited reach in the UK. My understanding is that the startup ecosystem in the UK and Europe is still very underdeveloped (i.e. lots of opportunities for funds) so worrying about competition on a different continent seems unnecessary

neil_s3• 12 years ago

It's funny that you're commenting on HN, which is just one of the tools YC uses to capture a global mindshare. Aspiring entrepreneurs around the world now know about YC's track record, so it is kind of hard to justify choosing say Techstars UK or Techpeaks if you also get admitted to YC. The startup ecosystem is indeed not as mature in UK/Europe as it in the Valley, but not for lack of informed, aspiring entrepreneurs, but lack of accelerators and funds that are as reputed as YC.

ccallebs• 12 years ago

Jake Lodwick (Vimeo co-founder) was doing this with Elepath. I interviewed with them about 2 years ago and he was building the team before he had a product goal.

Honestly, with the amount of start-ups pivoting into new spaces when their original business plan isn't fully realized, this doesn't seem like a bad plan. Build a team that can execute on ideas -- that seems to be the hard part anyway.

roberthahn3• 12 years ago

This seems so… retarded. "YC 'zigs', so we're going to 'out-zig' them?" Seriously?

Someone should try 'zagging' and seek older people with this kind of enthusiasm to develop startups. With their real-world experience and domain knowledge, I bet the kinds of companies experienced people create would be a lot more interesting. And, in aggregate, more successful.

-old(er) and cranky entrepreneur.

fecak2• 12 years ago

I know of at least a few companies that fall into this category. A few years old, products with serious traction, laser focused on one problem, engineering teams that all have 5+ years experience, and almost all working remotely (which is likely tied to the experience level). The concept of funding people instead of an idea is one I hope will grow.

mathattack• 12 years ago

The value in these companies comes from the talent. Is it really feasible to give blind offers to large groups of college grads based purely on their potential? Large consulting firms seem to think so, and their market cap per employee is much lower than software firms, so perhaps this can work.

neuromancer2701• 12 years ago

yeah, as some one "older"(mid-30s), married and with children, YC or HAXLR8R( I am interested in open hardware) are just not options financially partly because of where they are bay area cost of living seems like it is a massive tax on a startup. It would be definitely be interesting to see a wider range of ages and not having to move to the SF area. Kima15 is a little more interesting it would be neat to see if they have different demographics and if the outcomes are different.

pitt19803• 12 years ago

I see this reply all the time

I feel like there is undue offense being taken here

I'm not sure that older entrepreneurs are fertile ground for accelerators

not because older enterpreneurs are worse than young enterprenuers (the opposite is probably almost obviously true), but more because the types of funding that most accelerators are giving out can't really complete with what most 30+ year old can self fund

someone who's been making a programmer's salary for 10+ years, probably doesn't need the relative pittances that accelerators throw out,

they've also probably built a personal network such that what what accelerators provide isn't all that valuable

virmundi• 12 years ago

I think that really depends on where you're from. I've got a small network in Indianapolis. It's not really good for anything but consulting work, largely in Indianapolis. So I'm bootstrapping a consulting/product company right now. It would be nice to get some accelerator cash for the project, but I'm not the target market.

Others will probably have this issue too. If you're not, in/near the valley, your network might not count for too much when it comes to a start up.

roberthahn3• 12 years ago

I disagree on all counts. You're making generalities that can be falsified. And no one has done the homework to figure out what's really going on.

It is possible for an older entrepreneur to not have the kind of funding you're suggesting. I'm one.

It is possible that an older entrepreneur had the kind of career that didn't encourage the development of a network of connections useful for building a business. This is (mostly) also true for me.

I count myself lucky - I'm part of an incredible program that provides me with a basic living expense (my wife makes up the rest), and access to advisors, lawyers, bookkeepers, marketers, sales people and negotiators to teach me the knowledge and skills that I lack. I could not have gotten this far on my own.

But the point I was making is that there seems to be such a focus on getting young people (what's next? high school grads?) that there's a much richer, more experienced field of opportunity being ignored.

Or at least underreported on HN :-)

michaelochurch4• 12 years ago

YC isn't just about getting the best talent. Some YC founders are clearly very good, others are unimpressive. I've seen the whole spectrum.

YC could pick its crowd at random (not to imply that it does; it doesn't) and it would still work. A few bozos would get in and be likely to fail, but it wouldn't be remarkable considering the statistical noise already in the startup game.

Venture capital is a feudalistic reputation economy, and YC is a case of Paul Graham monetizing his reputation. Just being YC establishes that a startup has real potential and puts it ahead of the teeming masses. Paul Graham wouldn't have to do anything to make YC a winning trade for him and the startups.

Before anyone says I'm being unduly cynical, let me fill out a few of my points. First, Paul Graham earned much of that reputation. He's a good writer, he understands Lisp at a deep level, and his technical chops are strong even by engineer standards and put him ahead of 99% of financiers. Second, I'm sure that YC's picks are better than its rejects. Third, I'm sure he worked really hard on the YC program. My point is only that he doesn't have to. He could pick startups at random, do absolutely nothing, and it'd still work, financially speaking.

Can anyone replicate this? Probably not. Paul Graham deserves credit for carrying the banner. In 2002-4, the mainstream business world had written startups off and people believed there'd never be another 1990s-style tech boom (which was mostly froth, but had a lot of genuine substance). Paul Graham pointed people back to the truths that the dot-bomb-shocked business mainstream was prepared to discard, like (a) that technology really matters, (b) small businesses can be extremely efficient, and (c) smart people require a different management style that most corporations don't get. He deserves a lot of credit for keeping the banner in the air in the gloomy early and mid-2000s. That right move, on his part, is a major reason why he has a monetizeable reputation. Is that feat replicable? Probably not.

BrownBuffalo• 12 years ago

Basically the Minor Leagues of YC -> which is fine, but call it what it is.

Entrepreneur First Thinks It Can Grab The Talent Long Before YC

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