skysight-inc/HackerNews huggingface dataset:
To valuate your company after three months you have to take two things into account:

A) How much value will you have created be the end of three months?

B) How much value will you still be able to create?

If you only have enough talent and ideas to last you for three months, you don't get funded. And if you think you'll have nothing done by the end of three months (but will still have talent and ideas), you also don't get funded.

And if you're able to create something of great value after three months but you'll still have lots of value left to add, then just unask the question because the answer is irrelevant.
revealed or just compiled from existing sources?
I see the biggest risks for our little startup are "Marginal Niche" and "Too Little Funding". I don't know that I'm really convinced that we suffer from the first--in fact, I consider being vertical as a virtue and don't believe we've crossed the line (although we could), and re: not enough money--well, we're working on it. :-)

I'm not convinced that living in the Bay Area (or a similar hotbed) is essential. However, I do agree with what I believe is the underlying premise--that living in an area of concentrated geekdom will expose you to other geeks in a good way. But that can occur in college, or at a great company, and many of those exist outside of the Bay Area, albeit with much less frequency . . . but to say that you couldn't find a great hacker in Chicago or New York or Houston if you hung out at the right schools and businesses is a little strong. Then again, if it's a numbers game, then by all means go to San Fran. But in some sense it reminds me of how many people hang out in Palm Beach hoping to fall in love with someone that just happens to be a millionaire. My suspicion is that geek cliques do form, and they often form in college. That to me is the bigger point than saying 'if you want to start a startup, you should put a flower in your hair and . . .'.
Overtime and Startups
myname: You are correct. To get a "studio-quality" recording, you'll need lots of expensive equipment.

But you've obviously missed the idea: the gap between what you can make with mediocre equipment and top-notch equipment is closing fast. In the old days, you needed good mics because analog equipment needed high quality input. With digital processing and recording, you can get close with a mic that costs $200 (which, if you had a good marketplace for borrowing/sharing equipment, you might only pay $5 for the weekend).
just my opinion but i'd approach this question more from the angle, what is the $X I need to have financial freedom. do the math based on the % of the company you own to work out how much you'd need to sell the company for to make that amount. $X is going to vary for everyone.
Wow, awesome. Great lineup.
My list, categorized:

Business & Management

1. Innovator's Dilemma and Innovator's Solution by Clayton Christensen

2. Built to Last and Good to Great by Jim Collins. Built to Last is more applicable for startups.

3. Mythical Man Month by Fred Brooks. Anyone who has to manage a team of programmers and hasn't read this will fail utterly, unless they've already failed before (or been on a failing team). There's a lot that's counterintuitive about software project management.

4. Peter Drucker's work. Kinda long and repetitive, but some good insights.

Marketing

1. All Marketers are Liars by Seth Godin. I like this better than Purple Cow, Guerilla Marketer's Handbook, and The Big Red Fez. Most of those have fairly obvious stuff.

2. The Tipping Point by Malcolm Gladwell

3. Crossing the Chasm by Geoffrey Moore

Technical

1. Building Scalable Websites by Cal Henderson

2. High Performance MySQL by Jeremy Zawodny

3. Pragmatic Programmer by...well, it's mentioned elsewhere here.

There are lots of other technical books I like, but most of them aren't directly relevant to the startup I'm building
Yeah I'm with far33d. To make a "great album" doesn't take that much money. I bet only a small percentage of people could tell the difference between a good basement recording and a real nice studio.
That comment was intended to be read somewhat tongue in cheek, but for the sake of argument:

1) What's the point of having money if you aren't going to spend it and have fun? I suppose you could throw a smaller party and write a big check to the Google Philanthropy...but either way money is meant to be used.

2) If you actually had the skills and personality to turn $20K from YC into $3M in three months...you've clearly got entrepeneurism in the blood and shouldn't ever have trouble finding a lucrative job that you enjoy.
Thanks JMiao. Yeah I was thrown off with his comment too. I guess he was on my side by trying to prove that things cost a lot of money? Although that wasn't my side because if I had a home studio I would never spend 3 grand on a microphone.
All the hackers I went to college with moved to san francisco. ..
Just like huge mainframes are dwindling, the same trend can follow across other types of hardware.
Perhaps the question is meant to be read as sort of a Zen Koan.

You are asked to present a rational analysis of a situation that, if you think rationally about it, cannot occur!
In Nov 2006, Seth Godin addressed the concept behind this issue quite elegantly (I am paraphrasing the relevant points below; the direct link is at the end of this post):

--Don't do a deal where each side gets a fixed percentage. A 50/50 split of a company invented in a bar is always a bad idea. Even paying someone 5% for some sort of contribution can come back to haunt you. INSTEAD, BUILD THE DEAL AROUND A SHIFTING PERCENTAGE BASED ON CONTRIBUTIONS OVER TIME.

--Don't assume that the money you start with is going to be enough. Let's say you and a buddy each put in $5k and each take half the business. Then what? What happens when the money runs out and only one of you is willing to put in the next block of capital?

--Do a deal with someone you trust, but don't do a deal with a friend. You'll likely end up with neither a partner nor a friend in the end.

http://sethgodin.typepad.com/seths_blog/2006/11/dont_make_a_bad.html
Alex3917 threw his shoe at sethjohn, and sethjohn was then enlightened.
Those poor veterans. They're going to have to open 1239812398 credit card and home loan applications.
Now I think I need this book. Your right about stats, I would move them to number 6 or perhaps even to prelaunch.
For PG: Paul, if you absolutely have to have this question in the application, it might help to add the word "cash", e.g. "What's the lowest cash offer you'd take".
YouTube Case Study: Widget marketing comes of age - Startup Review Blog
See, I wish there was a service like Y Combinator just for meeting co-founders. It is hard for people who are in non-tech areas (or at least, non-startup-friendly areas) or middle-tier public universities to meet people to start companies with.

Personally, I have been trying to get picked up by a startup so I have an excuse and a means to move to a better area. How would others here recommend meeting people?
This is a horrible website.
Five pounds of AJAX!
Ever wonder why a big co like Microsoft would have a "VC summit?" Traditionally the point was to explain where Microsoft planned to expand, in order to frighten VCs out of investing in companies in that area. VCs being what they are, that kind of thing works surprisingly well.
Anyone have any idea what the author's agenda is here? Why am I reading a hit piece on Shockley written 17 years after his death?
Bummer; I thought this was going to be an announcement about a new program where they closed deals quickly. The startup funding business needs something like that. Current funding procedures are a huge time suck for founders, who need to be working on their software, not spending weeks negotiating with investors. Most founders would trade valuation to get deals to close faster. At least, I'd advise them to.
That's funny. Steve's probably a good guy to do it, too. I met with him at a small roundtable when I was leading a consulting firm (Microsoft gold partner). He was great--spoke 200 words/minute about all of the products they had right around the corner. I wrote them all down and then checked about six months later. They delivered on the Office Live stuff (about 50% of what he'd said), but then everything else was pretty flat.

He was fun to be around though. :)
Enough, obviously, because we've had several startups that got acquisition offers after three months.
"Approaching the question?" How about just answering truthfully? What would someone have to offer, assuming nothing else about the deal?

If you put some high number no one would offer, you're not really answering the question, are you? If you say you'd need 20 million, I'm going to ask: so if someone offered 19, you'd say no?
Honestly, this is not a hard question. We're not asking you what you think we want as a return. We're asking what you'd take.

So if you think 3 million is a fantastic deal, then you haven't answered the question correctly. We're not asking what you think would be a fantastic deal, but what would be the worst deal you'd still accept. Would you really turn down 2 million for three months' work?

Incidentally, we don't even think about what we want as a return. Some VCs may, but we don't. We just fund anyone who seems good, and assume the returns will take care of themselves.
The figure you give depends on your feelings which are created from your internal and external circumstances. I immidiately asked myself the question, "What do I want?"

This was my answer:
$2,000,000 for property,
$1,000,000 for the house (I live in Silicon Valley),
$2,000,000 for traditional reinvestment,
$1,000,000 to start the next company,
$6,000,000 total for each partner,

After three months, it depends on where the software is. However, the purchasing company will be the one evaluating that aspect. For me, it is a question of what I want versus what they are willing to give in return.
Netflix: Take as much vacation as you want.
Ignorable.
take home point, for startups and big slow companies: "The worst thing is for a manager to come in and tell me: `Let's give Susie a huge raise because she's always in the office.' What do I care? I want managers to come to me and say: `Let's give a really big raise to Sally because she's getting a lot done' - not because she's chained to her desk."
You can't count Netscape; most of their traffic comes from people clicking on the wrong thing by mistake.
YC physically creates that sort of group of peers. For those of us that choose not to make it out, YC News is fostering something similar on the web. It's not a replacement, but it's a good conversation starter. We might even see some startups from founders meeting online through YC News. Have there been any examples of this so far?

Speaking of which: extantproject at gmail dot com if anyone out there would like to throw some ideas around.
"Taking a $1M lump-sum means never having to work again."

Sorry, no.
I think talking to people in YC News comments works:

extantproject at gmail dot com if you want to throw some ideas around
Definitely. It was great to read this when I had the beginning stages of a company idea in my head. Made me think of it in a completely different way.
This will be an interesting data point about whether two giant companies (and not even technology companies) can produce something to compete with a startup. I think the odds are heavily against them. In fact, it might be worth starting the startup they'll have to buy when their own in-house development efforts fail.
More Javascript. CSS for a lot of things we did with images. Pages could look a lot better. Otherwise it would probably be pretty similar.

I think Weebly may be planning to add shopping stuff, in which case they'll become it.
Is Good Design a liability when you're trying to appeal to the Masses? (MySpace vs. Virb)
The _real_ rules are:

1) Don't fail

2) Win

3) Don't not win

Also, see: http://thetravisty.com/Saturday_Night_Live/mov/Sexual_Harassment_and_You.htm
A senior VP at NBC recently asked me for my advice regarding digital media strategy, and YouTube obviously came up in the course of our conversation.

I'm still waiting to actually see what the service delivers, but I'm a bit worried for YouTube concerning how News Corp/NBC will use exclusive content to grab eyeballs.

On the other hand, especially execution-wise, those old media guys at NBC have absolutely no idea what they're doing.
The lowest, R4,000,000 (ZAR), it's about $540,000.

Invested month-to-month at a fixed interest rate of 8% gives you more than R26,000 ($3,500). After taxes it's roughly R19,000.

I don't know about the USA but in South Africa this is a fairly decent amount of money to receive each month.

I would use the money to purchase a home and a car (required in RSA) and focus on my next startup.

Aaagh. No stress. Just fun.
Hmm, I don't know. How could they get into funding and have any pretense of journalistic objectivity? And if they stopped being a good source of startup info, readers would go elsewhere, and they'd lose the original source of their power.

O'Reilly can go into venture funding without compromsing the original source of their cred, which is technical books. It would be much harder for a journalist covering startups.
What a relief! Thank you for sharing that. After watching everyone talk in millions here, I was concerned my "absolute worst" deal that stretched below $100k might hurt our chances of being accepted to YC. I am going to go ahead and put in an honest estimate :) thanks,
If an organization even uses the word "overtime," they're not a startup. In a startup you just take it for granted you're working all the time. You don't have a special word for it.
Virb does look real good. My only worry is that it doesn't offer many features that matter to normal people. The best addition is the button to stop customization. For the majority of myspace users they're not going to care for most of the techie features. They could have some tricks up their sleeves though.

When Purevolume updated their site a while back I was real dissapointed at the lack of additional functions. They just added the social network part into the site. I'd hope that they are taking a more innovative approach to this project and not just trying to compete directly with everything Myspace offers.
I've personally used virtualization to reduce costs in a datacenter. We had two physical servers running VMWare with three virtual servers each. Worked great.
Is this article saying that if you think that biological inheritable traits exist, then you will be a sociopath and a failure like Shockley ---despite the best science?
From the link: "What's in store for TechCrunch? Perhaps a new branch - TechCrunch Ventures?"

This is just speculative news. Though, it isn't inconceivable for Mike to take this path. He has, in the past, funded several startups (often unsuccessfully). Moreover, he is a well connected and recognizable individual in this industry; so his background in technology as well as law will certaninly assist him in this respective.

Michael's strength in the online world, however, is also his weakness; TC might risk losing credibility as an unbiased startup blog. It will be like expecting Fox television to provide "fair and unbiased" news :D
[dr evil]One miiiiiiiiiiiiiiillion dollars[/dr evil]
Well, he was an advocate of eugenics. He looked at the data available to him and came to a reasonable conclusion. But "reason", you may have noticed, can really, really piss people off when it goes up against conclusions they've drawn from other sources. As an experiment, write down the 10-15 best arguments you have against the practice of tattooing. Then, go up to someone who has tattoos and say, "Here are the reasons why tattoos are bad." Prepare for some incredible, but mute, rage staring you down after that.

Now, try the same thing with human biology: "Here are the top 10 reasons why low-IQ people should undergo voluntary sterilization". The reaction is quite a bit worse.
I am not sure what it would look like, but I am guessing it would be Google that buys it out this time :D
Is 'script' licensing (a la vBulletin) still an option for a web application?
Okay, I missed the humour.

Regarding (2), though. I think making $3M in 3 months has a lot more to do with luck and hype than any inherent skill. So, obviously those numbers were pulled out of thin air. The likelihood of that happening is extremely low.

Also, having a job you enjoy is no panacea. Whenever you're working for someone else (even the customer), there are things you won't enjoy. The discipline that allows you to do these things is the same discipline that makes it possible to work at a job you don't really enjoy.

Having said that, I agree with the approach of sacrificing quality-of-life for, say 5 years in order to never have to work again. Doing this for something you mostly enjoy will allow you to put in the effort without killing yourself. Unfortunately, this can become self-perpetuating. There's no inherent good in working.
Paul Buchheit: How to be right 90% of the time, and why I'd rather be wrong.
I think I've stated our question poorly. It's not that we don't want to answer truthfully, it's that we're having a hard time converting what we want into a dollar figure.

Here's what we want: We want to work on cool problems. We want to make software that solves problems. We want to make enough money to live comfortably. We want to love our work.

Hopefully, in three months, we'll have some of what we want, and be on track to get the others. Someone buying the company from us may change those things in lots of different ways, depending on the situation.

Our question is, how do we quantify those wants? It's not clear to me how to do so. One approach may be to quantify other factors that would lead to us getting what we want - such as the amount of money we'd want to start another startup.

I could just give something in the ballpark, but it wouldn't be particularly accurate. For instance, I could say that giving away the site we love to work on is worth x, but if someone asks me why not x-1 or x+1, I won't have a good answer.
Well, obviously, this is for some reasonable definition of have.

The numbers work for me. I'm married, and have a mortgage.

I guess I was blurring the line between being retired and semi-retired. Were I to earn such a lump sum, my daily activities would probably look the same. I just wouldn't be working for anyone else, and wouldn't have that mental burn-rate / countdown timer going.

Controlling expenses is a very powerful tool. For every after-tax dollar you save, you're saving like 2 pre-tax dollars. So, it's much more effective to save $1 than to earn an extra $1.

Here's my mental hierarchy of wealth. Each one represents a drastic change in quality of life, and options. It's somewhat logarithmic.

1) Stop living month-to-month. I.e. at the end of the month, you have enough to pay another month's expenses in the bank.

2) Pay of all debt, except mortgage.

3) Stop living year-to-year. I.e. at the end of the year, you have enough money to not work next year, possibly having to reduce your quality of life, but not to poverty.

4) Semi-retirement. If you didn't work for the next five years, you'd still have enough money to start a business at the end of the period.

5) Retirement. You can maintain your current lifestyle, or a slightly scaled-back one indefinitely. Mortgage is paid off.

6) Rich. Your kids could do (5), if you decided to fund the lazy brats.

7) FU money.
Justin.TV Co-Founder Talks Up Live, Mobile Internet Video
Interesting policy. It sounds great, in theory, but would be hard to implement.

A recent employer gave me 3 weeks of vacation. Great! Never mind that they kept asking me to delay it, for a year because each artificial deadline they created ended up slipping. There's never a good time to take vacation.

EDIT Therefore, it's always a good time to take vacation (given sufficient notice).
I recently started thinking similarly about the "right 90% of the time" logic, so I'm glad I read this.

Thanks for another interesting entry, Paul.
Where do I sign-up?
Again, it depends on how exactly you imagine the situation. If the choice was acquisition by Google for $2 million, or probable destruction by Google in a year...certainly I would take the former.

On the other hand, if I was passionate about the product and thought there was great potential for growth over the next few months and years, I wouldn't want to walk away for anything less than a fantastic deal.

I appreciate your focus on excellent people rather than returns and dealmaking. The profitability of YC strikes me as an interesting question simply because it's an important aspect of a model that is unique and interesting in many ways.
A whole bunch of them have moved to San Francisco in the last 6 months.
Exciting Times To Be An Entrepreneur In America
Heh. I would like to see the author's home page circa 1998. I will bet cash it had a textured background, MIDI file, cat picture, stock art animation, link to Lycos, etc.

Everyone's first web page looks ugly. Most will stay ugly.

But there's something to the idea that ugly works, that worse is better. Direct Marketers have known for decades that a 'downmarket' look improves response, at least in the US. Junk mail looks trashy because that's what thousands of generations in a viciously competitive ecosystem has produced. Ugly works.
In a sense, by definition not, since good design is design that achieves its purpose.

Sometimes ultraclean design can send a message of fanciness or snobbishness that turns off "ordinary" people. But I think a good designer can temper that fairly easily.
It probably means never having to work again on something you don't like. Esp. if you're young when you get it.
"Direct Marketers have known for decades that a 'downmarket' look improves response"

Interesting. Source?
3 years doing ads for the Yellow Pages and DM. This guy has the same conclusion with good examples:

http://alistapart.com/articles/whitespace
What struck me was how slick the platform was. I don't particularly care to watch Justin for more than just a few minutes, but if it was someone I did want to watch I'd probably load it up every night.
I tend to think of the people who were made uncomfortable by my antics instead, but I feel a similar sense of relief to be free of them. I've often found comfort in the H.G.Wells short story "The Country of the Blind".
I don't believe that most users will put up with poor design.

It's just that some sites like myspace have so much momentum that users will go to them despite their poor design because all their friends are there already.

The problem in terms of design is just the opposite. I would say that users' high expectations with respect to presentation have hurt web startups in a big way since many founders can't afford a professional web designer. Flash over substance is always a bad thing.
eh, wayback machine only goes back to 2004 for mikeindustries:

http://web.archive.org/web/20040617123234/http://www.mikeindustries.com/
a starter list can be found at yrumours ~ http://yrumors.blogspot.com/
I'd want to walk away and be able to look someone in the eye and say "I'm a dot com millionaire." So with the share structure, capital gains tax (guessing), and exchange rate the number I'd pull out of my ass would be four million for the whole shot assuming no dilution.

Three months is long enough to know if I really believe in something or not. I wouldn't sell out on anything I believe in for less than this. If that money isn't on the table after three months, I can wait and put in the sweat and time to make it worth that much.
Quick quiz: To make the most profit, sell by:

- reason, to solve needs

- fashion, because they can be made to want it
http://jobs.netflix.com/cojobsFlix.asp
Amazing! A Baby Went To Sleep Brown And Woke Up Redhead!
Good advice! The biggest mistake I've made in past businesses is to try to do it all alone. That's a recipe for having it fizzle out into an undead hobby project.
Why Popular Sites Are "Ugly"