Below are my raw notes from the Y Combinator startup school
Andy Bechtolsheim
>> number of transmitters per chip will double every two years (predicted in 1969)... Moores Law has produced 1 million times the number of transmitters per chip than we had 40yrs ago... most amazing thing is this is projected to keep going for another 20yrs (Another factor of a thousand). There has never been anything in mankind where we have had a billion fold improvement for the same price. What do you do with a trillion transmitters per chip? >> browser history:
- 1990 Tim Berners-Lee at CERN
- 1991 First browser on UNIX and DOS
- 1992 First browser than can display graphics
- 1994 Marc Andreessen releases Mosiac
- 1994 Marc Andreessen founds Netscape
- 1995 Netscape goes public (Most peoples first experience with the web was Netscape)
>> historical browsers: Active Works, MacWb, Air Mosiac, AMiga, NetCaptor, NETCOMplete, NetCruiser, NetPositive, PlanetWeb, HotJava, IBM WebExplorer, internetMCI, WWWC..........Netscape!>> how do you find things?
- 1993: W3Catalog, Airweb, Jumpstation
- 1994 Webcrawler, Infoseek, Lycos
- 1995 AltaVista, Open Text, Web Index, Magellan, Excite
- 1996 Dogpile, Inktomi, HotBot, Ask Jeeves
- 1997 Northern Light, Yandex
- 1998 Google
>> lessons from web innovation: time from innovation to adoption is short; what matters most is to sole the right problem>> which large high-tech co spends the least % of revenue on R&D?
- Apple** = $1.6B on 62.8B... 2.5% of their revenue & 6.5% of their margin
- IBM = $5.8B on $95.13B... 6.08% of rev, 13.24% of margin
- Intel = $5.7B on 35.1B... 16.2% of rev, 29.14% of margin
- Microsoft = 8.3B on 76B... 11% of rev, 13.5% of margin
>> "The hardest thing to do is say no" - Steve Jobs (context of...there are always more ideas than time or money)>> Development Spending Pattern: big company = Discover (little) Design (medium) Deliver (a lot)... Value & innovation is built into the Discover stage (oppty for startups) >> The Horizon Effect (comes from Artificial Intelligence)... If a computer is playing chess and can only see 5 steps ahead it lacks the 6th option which may be the winning combination and you make the wrong move. Best example is Christopher Columbus (if you dont believe there is land on the other side of the Ocean, you will never set sail). Believe in yourself despite not being able to see the outcome clearly. Paul Graham>> Spent majority of time hypothesizing on what is going to happen in the venture capital industry. Nothing novel --> traditional venture class is being squeezed, rise of angels, shift of power to entrepreneurs, convertible notes, etc. >> Disappointed that he spends so little time on what are the factors he sees as being common in successful startups. What are the outliers? Talk more about importance of location? Makeup and dynamic of founding team? When to focus on revenue? BIG questions! Andrew Mason>> Walk us thorough his pitch for The Point. He described it as being "very bad" ... but didnt make it clear why he felt that way>> I deduced that he felt it was bad because it was too broad. Lofty, ill-defined, poorly focused goals wont work. Weirdly, I liked the broad aspiration and felt it was very similar to GOOD. >> What he was smart enough to identify was the need to focus on a very particular segment where he could get critical mass and then pile on. And so goes Groupon...>> Would rather 1 email than 10 twitter followers or or facebook fans. Email works! >> Left me thinking...what is GOOD's version of Groupon (ie. its focused effort that will drive mass, rapid adoption)?>> Lobby of Groupon has magazines with covers of Myspace, Friendster, Napster Execs Reid Hoffman>> Biggest challenge is how do you drive adoption?>> Beachhead (Marines) -> Invading the Market (Army) -> Nation Building (Police). Can CEO adapt?>> Average person has 7 +/- 2 websites in their head... Very had to break into that. >> How do you get big? Search. Virality. Symbiotic partnership (Paypal/eBay, YouTube/Myspace, Zynga/Facebook)>> People usually use what they encounter. So better product alone doesnt necessarily mean a win. Look at MSN traffic market share...large userbase that just use it because its embedded when you launch IE. Classic "encounter" versus proactive better product (NY Times) People in Washington read The Washington Post because it is on their doorstep in the morning.. Encounter! >> LinkedIn Viral Gold = being able to see who is in the mirror!! Upload your address book and see "who else is here" made them feel the community...Instant adoption driver! Ironic because it started as upload your address book and get better features...have a larger network, etc, etc...Talked about broader interest. Wasnt until they satisfied the self interest (mirror) for it to work. >> Good entrepreneurs are about good judgment. More than anything else. Some people say stay true to your vision...no matter what (run through the brick wall). Other say, listen to feedback and pivot! What do you do? When? How? >> First question to startups is: How do you get to a million? Second question is how do you get to 10 million? Ron Conway>> Invested in Google at a pre-money of $75M and was thrilled to just get into the round (didnt care what valuation was...just was happy to be in); all the investors in that round made $400 for every $1 put in. >> Companies are binary. Either big wins or no win. Top early stage investors understand, its much much much more about picking winners than negotiating valuations. Unless you are a short term investor. >> Accel and The Washington Post were competing to be the lead investor in Facebook. Accel outbid The Washington Post. >> Biggest regret: passing on investing in Salesforce.comAdam D'Angelo>> Views the Q&A space much like the search space... A lot of disparate players (Yahoo Answers, forums, billboards) but none of them doing it well (sees similar opportunity to what Google did with search. Make results more relevant / rapid innovation, rapid adoption) >> Facebook Questions versus Quora -- doesnt see Q&A as being an embedded feature... Much like how search was stifled inside of Yahoo - Google gave it the singular importance that it deserves>> Quora isnt about one new killer feature. Its about a large number of small (incremental) improvements that add up to a materially better experience. Mark Zuckerberg
>> "Building a company is one of the most efficient ways in the world to align the interests of a lot of smart people towards making a change."
----
RANDOM THOUGHTS:>> Facebook should buy Microsoft & Zuckerberg should be CEO (I might blog about this idea later)>> Sometimes I forget that Yahoo invested in Google ($10M); In exchange for giving Yahoo 2.7 million shares, Google got a perpetual license to Yahoo's patent on matching online advertisements to web-search results. Yahoo was also given warrants to purchase shares that Google granted it under a partnership signed in 2000.>> What is the statistical chance that you will a) one of your cofounders will adversely effect the business b) you will have a falling out with your cofounder? b) you will never speak to your cofounder again?
