I'm one of the Shotput Ventures partners, and I'm looking forward to a great first "class" in Atlanta. We've got an interesting group of partners, with recent business hits in software and web svcs, complementary skills and backgrounds, and good networks. Check out our partners. I think we'll be excellent mentors for our hacker teams, primarily because we love what we're doing and want to help young hackers to build stuff people want and to dare greatly. We appreciate all that YC has done to innovate and evangelize the business model. I'm an especially huge fan of pg's inspirational writing and simple writing style. There are plenty of talented and determined hackers out there who need our mentoring and connections, and it's going to be a ton of fun working with them.
A slight criticism, looking at your application: asking me to fill out a PDF resume for a founding team is irritating and time-consuming. Is there anything that a PDF form can give you that you don't get from having applicants fill out relevant information into a text box? Drafting a PDF means that now I've got to spend time making my typography look pretty, getting things organized in a nice way, and generally spending more time on presentation than I'm putting into just conveying information.
One of the things I loved about the YC application was that it didn't require external files - excepting the Posterous video, which is a supersimple email-and-receive-link system.
"The root of the problem is that people think seed funding is regional. They think they're starting the YC of St. Louis, or wherever. Then after they get started they realize that in fact the seed firms are all drawing on the same national applicant pool, and that the default fate of the nth seed firm is not to be the YC of St. Louis, as they'd expected, but to be the YC of the nth quality bucket."
Not that I know anything about this venture yet, but the regional-centric commentary immediately made me think of this comment.
In what may be heresy here on HN I am going to partially disagree with PG. Regional YCs may indeed be of the nth quality bucket, but that does not necessarily doom them to failure anymore then not attending Stanford or MIT dooms a hacker to failure.
The proof as they say is in the pudding. TechStars seems to be doing just fine so far. Let's see what Shotput's births before we call their babies ugly.
YC ignores a lot of good ideas because it's really focused on BIG ideas. YC wants to build Paypal, not 37signals. They lean toward ambitious infrastructure ideas which also have a higher failure rate. But there is a huge number of great ideas with lower risk/reward ratios that will still make stellar companies. I say bring it on... it's a great time to be in the HTML writing business. :)
But Wufoo still deals with a Big Idea: namely, something that's creating a large infrastructure on the Internet. 37signals is a private, internal service: they make things that appeal to closed niches. On the other hand, Wufoo is something that's more public, in a sense.
Maybe it's just a matter of what YC companies get named more than others, but the ones that immediately come to mind are big-problem companies. Reddit for finding news online. Disqus for comments. Scribd for document indexing. Wufoo for forms. There aren't as many niche sites (versus something like TechStars, which had a cooking site) - or am I just missing lots of niche YC sites?
Many of us Atlantans have a lot of respect for the people involved in Shotput. As some others here have said, I'll wait to judge until the first class of Shotput companies graduates.
I think Shotput is happy to draw entrepreneurs from all over the US, and this is good for our region.
In general, Shotput is important because there is almost 'no such thing' as seed funding in the southeast. A typical comment at an entrepreneur's round table here would be, "get to $1 million revenue, then someone will fund you." So this is important for the growing startup ecosystem in our region.
-$5K to $10K goes much further in many other countries than it does in the valley and most entrepreneurs there don't have the option of moving to the valley because of visa restrictions. Potential investors there should consider this. This is one advantage some locations have over the valley.
Speaking from personal experience, the challenge for doing this in developing nations is that the hard part is being connected enough to a market to know if something can be built in three months that people will pay for. If you're in a developing nation intending to sell to America, you're probably not as close to your users as you need to be because products tend to change rapidly in the early stages of a startup and you need to be interacting directly with potential users and learning from them.
But the money does go 10 times as far, so the idea could have potential. $25K can roll a startup for a year or more on the cheap in Bangalore.
Serving local customers is key, but even if you're Reddit, I think that ideally you are immersed in a community of people doing similar things. You need that feedback and energy.
reminds me of microloans. It's a growing trend in Africa. I believe there are websites that connect you to farmers in Africa and you actually make good ROI.
The difference is that I am talking about funding in amounts larger than what microloan sites like Kiva allow (Kiva's top loan amount is ~2K) but more importantly, provide mentoring like YC does. Therefore, it has to be done by experienced entrepreneurs who guide these new entrepreneurs closely.
Its not that so much as valley elitism - the idea that if you aren't there, then you're not serious and are unlikely to succeed.
But I agree with you. Also, don't investors back companies they understand? Doesn't this mean a variety of seed-stage programs will back different startups? Isn't this a good thing?
Considering the philosophy behind YCombinator, I really don't get all the hating on the clones that happens here every time one comes up.
I don't mean to say that your comment was particularly spiteful, but in every thread on a YC clone, and in the Techcrunch discussion in particular, there is much valley-hating. It gets old.
There may be truth to this, however, I think the roles of the seed funding companies remains to be seen. The Philly venture for example seems to be different in that it pairs roles to create companies. I don't think this makes sense for our team, but the Philly venture may be right for someone.
It would be hugely beneficial to have a website where people sign up and indicate when and where they've applied (after the fact), maybe even indicate their beta site if it is available. Not only would we be able to see the breadth of applicants but also the history and results.
Congrats. GaTech is a great school with really smart students. But what's most important is what YOU do at GT. I hope you will take full advantage of this great opportunity, enjoy learning, and keep an open mind and an open heart. Don't worry about whether or not others think you are "cool." Have the confidence to love yourself and to be a beacon of loving-kindness toward others. Congrats!
I attended their open house, and I didn't get the impression they are just early stage angels, although if thats all they are that would still be great, because there are very few of those here. Many in the investment community in the southeast have been openly hostile towards the need for more early stage capital, let alone willing to fund seed stage companies.
Anyway, my impression from talking with the Shotput guys was that there was a lot of value add they were providing. I would suggest actually contacting them if you are interested, as I think you'll be surprised and impressed. Most of these guys are active advocates for our region's startups and do everything they can to mentor and open doors.
Allow me to explain. I either live in the valley or want to live in the valley. I idolize you and love this site. You are the smartest guy on planet earth, and anyone that copies you is pathetic because they could never be as cool as you. Who do they think they are!?
Now that I've impressed you with flattery and have defeated your enemies on your behalf, I'd like to tell you about Project Tomacco. With your help, we can caffeinate tomatoes and hook every college kid on a healthy alternative to coffee. Did you know tomatoes have antioxidants that fight cancer? Thats right, we're helping to prevent cancer. We're going to change the world, Paul, one tomato at a time.
Is there a way to attach a spreadsheet to a comment on hacker news? Because my projections are going to blow you away. If we get one percent of the tomato market you're going to be a very rich(er) man, Paul.
For those who may not be able to pierce @rjurney's smoky satire, this is indeed satire.
I have to agree with the spirit of what he's trying to convey in this comment: news.yc would be a more interesting community if a majority of the people didn't default to PG's opinion on everything in general (this is my anecdotal observation and might be incorrect) and YC clones outside the valley being of nth quality bracket in particular (this is a pet peeve since I live outside the valleY) without giving it some thought for themselves.
In fact PG himself seems to spend quite a bit of time thinking about how the valley can be recreated elsewhere seeing how he has written about it in more than one article and says:
"How hard would it be to jumpstart a silicon valley? It's fascinating to think this prize might be within the reach of so many cities."
Surely trying to recreate YC outside the valley can only help?
It's the stage after YC that makes the Valley what it is-- the angel stage. YC could be anywhere. We contributed as much to Silicon Valley when we were in Boston.
Here's my train of thought about why Shotput, if successful, would help Atlanta:
- There is really very little seed stage funding in Atlanta (unlike the valley)
- The people who choose to startup in Atlanta AND need seed funding usually do so because they want to live in Atlanta for the foreseeable future (or have to, for some reason). If they didn't, they would just move to the valley since getting seed funding is so much easier there.
- Therefore, after seed funding, they are likely to stay in Atlanta (The round 1 funding scene in Atlanta is better than the seed funding scene..although not optimal)
- Hence, Atlanta will be one startup ahead because of Shotput Ventures
The gist is that if first time entrepreneurs were going to leave Atlanta after seed stage, they would likely have done so at seed stage since seed stage funding is so much harder here.
Unless they restrict applications to people from Atlanta, they'll get them from all over the country. Meanwhile, most groups from the Atlanta region won't apply only to Shotput, but also to the other seed firms.
So unless they restrict applications, there will end up being little local component, just as with every previous seed firm. Techstars intended to be the YC of Boulder. But IIRC only 4 of the 20 startups they've funded so far have been from Colorado. As far as I know, the same thing has happened to everyone after them as well.
The seed funding business isn't regional. People would like to believe it is, because it's 20x cheaper to run a YC than to do what you'd actually have to do to make startups stick to a particular city. But it isn't.
OK You've got a point. But let us say only 20% of the applicants stay in Atlanta. That's 4 more than otherwise would. Also, as I said before, once you pass the seed stage, it's easier (but not valley easy) to get the $1M you mention in "Can you Buy a Silicon Valley". It will help long term.
Basically, if we could at least get the ease of raising seed funding in Atlanta at parity with the ease of raising 1st round for a startup with revenues, it would be a significant win for us.
I do agree with you that if there were more VCs funding at the $1M level in Atlanta, we could keep all the Shotput applicants here and maybe a bunch of startups would move from across the country to Atlanta. But since politicians are unlikely to be as enlightened as making the $1B investment you mention in your essay would require, we'll have to attract private investors. If 1 of those 4 startups has a big successful exit, we'll probably get 1 more large fund to come to Atlanta.
But let us say only 20% of the applicants stay in Atlanta.
This assumption is off by an order of magnitude. YC funded 61 startups in Boston. Only 3 are still there, and 1 of those is talking about moving to SV. So the assumption should be more like 2-3%.
Here's an anecdote about skepticism towards YC that may be somewhat instructive: In 2005 after I attended Startup School and I learnt about YCombinator, I mentioned it to a well known and successful entrepreneur (who I know knows pg). The first thing he said: "Taking 5% for 5-10 grand is rape". He went on to clarify he didn't think pg is a bad guy but...
Since then, startup after startup has shown how much value the YC program has provided in exchange for that 5% stake to the point where I bet a majority of young first time entrepreneurs today consider applying to YC.
My point is the same as @lanceweatherby 's. Let's wait for the these new funds to get some results before we judge them.
