Actually the herd does not panic when it sees deflatin-- the period when the US was really growing, while on the gold standard and when we went from being a backwards nation to a world leader-- was a period of deflation.
Why would people get mad when their wealth gets more valuable?
No, all the anti-deflation propaganda comes from those who profit by printing money, which is literally a form of theft.
Deflation is good. Deflation is what happens when you have productivity increases reduce the cost of production, resulting in higher profits for the corporations and lower prices for the consumers.
Basically, productivity increases are real economic growth.
When the government inflates the currency to "fight deflation" what it is literally doing is printing money to devalue the earnings of everyone in the country.
It is literally stealing the results of productivity growth.
Of course, its a lot easier to steal when nobody realizes that's what you're doing, and so Keynes was a big fan of inflationary policies saying "not a man in a hundred will realize what's been done to him".
The reality is, the vast majority of people believe such falsehoods as "deflation is bad"... in fact, such a belief is so asinine that one should be embarrassed to say it-- but there is no shame in saying it because so many people have been taught to be ignorant of economic matters and uninterested in them.
As a result we have the government foisting literaly ponzi schemes on us and calling it "social security" and claiming to fight poverty while increasing it... and people fall for it.
Griffens book is a brilliant analysis of this situation-- and you really should read it. Especially if you think "deflation" is bad.
IF you consider yourself a serious programmer, you would do well to go download the free chapters of this book from the pragmatic programmers site and read up a bit.
I too had an advers reaction after 20 years of OO programming.... but I stuck with it and now I see the light.
Its surely a dumb idea for applications written in languages like C and Java... but not for erlang.
Remember, systems running this language have had uptime on the order of many years, and that's with in-place code modification.
You're rejecting what you don't understand based on assumptions that are true for other contexts.
Downtime is a sin, not a virtue!
Re:Possibly the greatest programming book I've rea
on
Programming Erlang
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· Score: 2, Insightful
Programming Erlang is the best intro-to-new-programming language book I've ever read. By far. While erlang is radically different than previous languages I've learned, this book goes a long way to making the transition smooth.
I'm still struggling, but I read the book with an application in mind, and have found its coverage is excellent... it brings you right up to the point that is needed for the other erlang documentation to be readable. (There are 60 some odd books on all the major components of erlang and OTP, including the major modules and APIs... they are downloadable from erlang.org)
So, this book accomplishes its goal and really well. ITs not a shallow marketing piece about the language (as most books written by writers rather than programmers are) its a real how-to-program in erlang book and it does a great job of showing how you solve very difficult problems in erlang. It even has as examples things like full text indexing and map reduce.
I think every programmer worth his salt should buy this and learn erlang-- the days of single core computing are over, and thus concurrency oriented programming is a critical skill to pick up, and erlang is the best language for it.
"In response to 'just keep your day job and just work on the side' - sorry, that just doesn't work. If you're dedicated enough to an idea, you'll quit your day job. If you're not living on the edge, you'll live the rest of your life dreaming of what could have been."
This smug arrogance is whats so offensive about the YC cult. You presume that anyone who doesn't go your path is just a dreamer whose not committed.
I say the reverse is true-- the guy who builds his business on the side is FAR more committed than a college student who "does a startup" for YC for his summer gig.
Generally entrepreneurs Do worry too much about peopel stealing their ideas.
But VCs are NOT trustworthy. The idea that its in their interest to be descreet is pure fantasy put out by their PR departments and apologists.
They tell each other whats going on, and when you present at one end of Sand Hill road in the morning, by the time you get to the other, you might have your meeting cancelled because they know exactly how your presentation went, what your business is, and that the VCs you met with earlier are passing... conversely if they are investing, your meeting will go much better because this VC wants in on the deal too.
They are lemmings and lemmings have ot know where the pack is going.
Go spend a few months in the bay area and you'll quickly learn what everyone is doing-- all the stealth companies and what they are up to-- if you're at all connected.
The real problem here is that VCs in the bay area are totally indiscrete.
EVERYONE there knows every other companies business and secrets, their major customers, who they are talking to what their idea is, how far along they are (Even if they are in stealth mode.)
The VCs are veritable houses of gossip and just hanging out in the bay area you quickly learn what everyone's doing.
So, if you're Tivo and you come up with a great idea, well, ReplayTV has heard about it and has enough time to implement it in *their* DVR and publicize it before you can even get a patent out.
VCs are the conduits of all this information.
So, while I think NDAs are overused and VCs would be in a tough spot if they signed them anyway... the real problem is that VCs in the valley are totally indiscreet.
They're just lemmings and they have to talk to each other to figure out where the pack is going so that they can all go in that direction.
WTF? You must have some really nice taste. The cost of living in the Bay Area, compared to Texas, is really dramatic. Its a hell of a lot more expensive.
And I understand if you just moved to the bay area you may like it-- I say, give it a year and you'll be ready to leave.
I lived there 3 months and I quickly learned why it sucked... now I can barely make it 3 days on a business trip before I'm pissed off and ready to fly the hell out of there.
ITs a hellhole....and california is a state that is seriously in the decline. The golden years were teh 1970s... the whole state is goign to hell. Yeah, there's a lot of VC money in the valley... but the hangover is going to be one hell of a bitch.
Anybody who build their business on nights and weekends while working a fulltime job is someone who has shown a great deal of commitment. I've done this, its damn hard... its hard not to let the startup wither away because you're too busy with your day job, and its hard not to loose interest after even 3 months of spending all your time on your job or your other job with little time for anything else.
Show me someone who built thier company that way, and I'll be interested in putting money in.
YC seems to attract and be geared for, kids in college who want a summer job with the prospect of glamorous VC money afterwards. It doesn't matter to them that they might get a raw deal-- cause they don't have much invested in it in the first place. And ther's nothing wrong with that.
The problem is that these kids are so adamant and smug that this is The One True Way To Do A Tech Startup-- that making these foolish short term choices in pursuit of a billion dollar dream is obviously right... and building a net worth of $10M by building a $3M/a year real buisiness is a "lifestyle" business-- a failure in their eyes. They are naieve and strident and there is no getting thru to them because Paul Graham has them mezmerized by the tune he's playing.
YC is a great summer camp for entreprenurial college students. But all the bashing of other ways of going about it that they do are so misguided... and the focus on only high risk, low probability business models seems misguided.
Sigh... this is what passes for intelligence in "the valley": "many investors in the valley wouldn't think very highly of your business acumen risked your house."
When you buy a house you have a mortgage on it. Right off the bat you have "risked your house" and you haven't evne started a job.
When you borrow against the equity in your house, you're borrowing money at a reasonable interest rate, probably %8 or less.
On the other hand, when you borrow money from a venture capitalsit, you have to pay it back at a rate of %350 or so-- about %50 for the "interest" on their "loan" (which they will tell you is an investment, of course) whereby after 12 months they start charging interest on the investment that has to be paid back in case of a liquidity event... and %300 "interest" in the form of all the preferences they get-- usually 2-3 times liquidation preferences, along with options, warrants and other little sweetheart deals they write into their term sheets...
And worse, when you borrow against your house, you are not giving up equity in your business. VCs expect you to not only give them equity-- the "investment equity"... but they also demand that you start vesting your equity-- they want it all. So when you take their money, you start off with zero ownership in your business and have to earn it back via vesting.
God forbid they might try to replace you now that they control the board, and then you get nothing, or a pittance.
Bottom line, you just quoted some common "intelligence" that shows just exactly how asinine and stupid the thinking in the valley is.
And you are a YC backed founder-- this goes directly to the generalization that YC is putting its businesses on a bad path.
You think paying %350 or more for your money is better than paying %8? Really?
This is why, if you ever start a startup, you really need to hire a really good salesguy. ITs clear to me that you don't know how to get your foot in the door of a mid-sized company-- even though I just told you in my original post in this thread. (Here's the secret- you call them. And I don't mean cold calling every c ompany in the book-- but identifying the businesses that are key and investing time in them.)
Really, every business that is likely a potential customer of yours is likely also never going to have heard of YC. YC helps you with awareness in VC circles... those are the connections they give. (They are totally geared towards getting people on the Silicon Valley VC treadmill.)
So, its not even sales connections that you're getting.
I don't know what country you are in. In some countries you need connections just to get permission from the governemnt to run your business. But YC would say your business is dead on arrival simply because you aren't in the USA. I think that's asinine... I think the opposite is true-- I think there are many countries where the people are keen to have economic development and a startup that's a success three would be the big fish in a small pond-- and everybody would be wanting to help in their own way because its good for the town, good for the country... in the bay area, you're just antoher of a million startups and you will lose half your employees each year unless you pay them outrageous sums.
One key lesson in business is buy low, sell high. Get your services at low cost-- including investment, but also employees-- relative to their quality. The bay area is the land if high cost, low quality.
Ok, its clear to me that you haven't met many VCs. You think I'm just talking about the "bad" VCs. Sorry, they are all bad.
Do some research and if you can get unbiased information about the "top tier" VCs, you'll find out I'm right there.
Furthermore, you really shouldn't be seeking VC money, unless you need to build a manufacturing facility. If you don't, you can bootstrap far more effecively. Truthfully, the bad advice from VCs will hurt you more than their money helps.
That "fluid highly educated workforce" is not an advantage of the valley- it means you pay a lot to keep your developers and you will lose them once they can become a founder of their own company.
You're looking at only one side of the equation and ignoring the costs. This is typical -- you've been sold a story and you believe it because you are *invested* in it being true.
Getting sufficient money is trivially easy outside the valley. In my experience, not even being in the state of california has not been a problem for raising money in the valley. But if you're smart, you're not raising VC money anyway.
Hell, the advice to put your company in the valley is just one of the really stupid bits of advice you get from VCs which will cost you far more than any supposed advantage at raising money by being htere--- doubling or tripling your costs mean you need twice or three times as much money for the same amount of value addition to your valuation or customers.
If VCs were recommending tech companies relocate to sacramento-- close enough for conveneint board meetings but with a much lower cost basis-- then they would go up a bit in my estimation.
But the reality is-- VCs really DON'T give a shit about your company... they don't need you to be a success... they just need one of 20 investments to be a huge success... they are gambling and playing the odds.
Thus they will maike you take long shot positions-- go after very highly risky low probability super high payoff choices-- evne when low risk, high payoff choices are present.
This is the real lesson of the 90s that nobody seems to have learned.
And, as a founder you're much better off owning %33 of a $30 million dollar company than %3 of a $300,000 VC backed company sold at a garage sale. In one case, your net worth is around $10M, and in the other its $0. You won't evne get %3 of the sales price.
Hell, if a VC backed company sells for $30M, you won't even get 3% then because the VCs have double dipped so many times that there's nothing left to split up after they are paid off.
People really are not looking at these VC deals with the terms that are totally asinine-- like making founders earn back their equity.
Actually, I think its only those without money who find the prospect of gold diggers to be exciting.
the reality is, the higher your net worth, the more shallow (skinny) vapid women and men there are... the more you have to deal with idiots who have dollar signs in their eyes.
I know, your fantasy that as a millionaire you'll be able to keep a trophy wife is probably a key motivating factor in your life.
But if you ever achieve it you'll realize that, after taking half your net worth, the money you lost was the least expensive damage they did. (And before you jump to another idiotic conclusion- no, I've never been married nor fell for a gold digger.)
By the way, your googling-fu is so manly powerful! I be very intimidated! Jesus, man, who do you think you're impressing?
I do know billionaires, more than one. Some of them are open to funding companies, but not all. (One is really just retired and winding down his commitments.) One, for instance, who is open to funding new ideas is actively looking for them and talking to people about them.
So, if someone had a good idea and had moved it along to the point where it was worth funding, it would not be hard to talk to this guy.
No, I'm not interested in making connections or introducing anybody... my point is that this isn't necessary.
The money is readily available if you want it.... its only a position of ignorance or belief in the myth of connections that lets people think that in order to suceed you have to be introduced to the right people.
Ah, yes, one of the members of the cult comes here and tells us that we're all stupid and of course, the only reason we would disagree with the preaching of the cult is because we were turned down for membership.
Well, sorry to burst your bubble, but there is no way I would have applied to YC, so there's no way I could be jealous of having been turned down. (Plus, $15,000 is less than I have in cash on hand, not a meaninful equity investment.)
"It's about ten grand worth of legal work from a top valley firm."
This, and virtually everything else you say, along wiht the monotanous repetition of the same things from other YC koolaid drinkers convinces me that you really are so inexperienced that maybe the hand holding you guys get is worth it to you. That's fine-- if you're that clueless, get your hand held.
But please, stop with the "Paul Graham is the second coming of Steve Jobs" BS. Stop with the patronizing arrogant BS you guys constantly spout, based on your abject ignorance of the business world and the tech industry.
Jesus, you value "contacts" and you seek venture capital-- its obvious you don't know what your'e doing.
We're telling you that you're going the wrong way-- but you've drunk the koolaide and you are so young that you know everything so there's no point in wasting time with you.
I guarantee you in 5 years your perspective will be different. (And my business's valuation will be an order of magnitude bigger... as will my percentage ownerhsip.)
I guess there are people out there who are inexperienced enough to think that "connections" are actually valuable. The reality is, if you build it, they will come- if its worth funding. Hell, I know billionaires and the ones who are open to funding new ideas are interested in hearing new ideas... you don't need "connections". And anyway, if you're building a web app, you do not need funding... the barrier for entry is so low these days all you need is a job delivering Pizza for your founders to cover the rent.
Trading in "connections" is the kind of ivy league old-school, old-economy BS that we have gotten past. Sure, many VC firms are stuck in it-- but this is a blessing in disguise-- VC firms will give you absolutely bad advice, charge you too much for your equity and then make you earn your ownership back-- the idea of founder vesting is so asinine that its amazing that people fall for it-- Venture capital is a total rip off. And they can get away with it because they are investing dumb money in dumb companies and getting dumb returns-- during the boom you would have done better investing in core tech stocks than in even the best VC funds which returned 2-3X over 7 years.
And as for the value of the advice: YC insists that you move to Cambridge or Silicon Valley-- the two places Paul Graham has lived. This isn't "Advice" this is laziness. The idea that you have to be in either of those places is absurd to anyone with a lick of business sense. If you're building a new business the last thing you want to do is go where the money is expensive, the offices are expensive and there are a thousand others trying to poach your employees, whom you have to pay top dollar to on top of top equity because the living costs are so high and the competition is so high.
But they are great places for getting venture capital and participating in the trade in "connections".
YC is popular among the people who have not yet realized that these activities are bad for business, not essential to it.
But they will learn-- move to Silicon Valley and pitch VCs for a few months. You'll surely get money, but if you are smart, you'll realize that the money will do more damage than good because the person giving it to you has no clue, and they will get control over your board.
The failures of the late 1990s are directly due to easy money from idiot VCs. Not bad management at startups-- bad advice from "venture capitalists" (who are generally people who went to harvard and have a sub 100 IQ.) The idea that VCs are smart or shrewedi s a carefully cultivated fallacy. The people you meet at VC firms are either 20 something fratboys who can barely operate a computer, or old guys who were funding oil companies back in teh 1970s and know even less about technology.
And you want to give these idiots control over your company, and a big chunk of the equity you built?
If I was a manager and an employee just up and quit one day, I certainly would mention that if someone called me to check a reference.
If the employee found out, this would likely result in you being sued and found liable for the value of the job you caused them not to get. Even if whatever you say is true.
Every time anyone gives a reference, they take the risk of being found liable. Really, there is no reason to give references and companies with any sense (EG large companies) forbid their employees from giving references.
Companies that ask for references before hiring you are ones that should do a better job in the interview process.
Oh what a load of crap. You have your story backwards-- a bunch of dig windows fanboys have been attacking RD and managed to get it banned from dig.... bu that tells us about the level of integrity of Dig users, not about RD.
I am continually dismayed at the legions of poser-geeks-- what you call fanboys, and you are one, by the way-- who have zero engineering skill or knowledge, but spout pre-written bullshit to bash politically correct targets all day long. Your ranks have swelled to the point that real geeks-- people with engineering knowlesge-- no longer participate in the forums you have taken over, like slashdot, and to a greater extent, digg.
People like you have ruined dig because you bury true stories that cover companies you hate (like RD Apple stories) and dig stories that are FUD in support of your chosen platform (Windows or Linux.)
That article you linked to--- the type of illogical "reasoning" that I've come to expect from the ignorant. Correlation is not causation, and of course, the reality is there was an active consipiracy to bash RD and get it banned from Dig-- the article you link to being an example-- for the sole reason that it talks about Apple in a favorable light.
Bottom line is, you have no intelligence, you just want to bash apple, and anyone who supports them.
Notice that your comment here is not about the topic, but about the writer.
Also known as an adhominem attack-- attackin the person rather than the point.
Plus a large factor in quality is the choice of materials and parts. (I'm not trying to bash Dell here, just giving examples, I can't say for sure anything about their overall quality.)
Dell Laptops (I'm typing on one now) are made from cheap ABS plastic. MacBooks, for instance, are polycarbonate, aka "bullet proof glass" (though when polycarbonate is sold to be bullet resistant it has extra fibers...) ABS is really cheap to injection mold, but polycarbonate is (or was until recently) difficult to manufacture into a computer case. But its much tougher-- its great stuff. Its just not cheap.
And then there's the gotcha type stuff- when you are cutting corners there are lots of components you can go cheap on, or go without-- anti-static protection, etc. Apple tends to take a lot more care in tehir designs, in my opinion, than dell, and this results in significantly greater longetivity and lower problems.
I've gone through 4 dell laptops in 2 years, fortunately they are the companies and not mine. I believe these problems were all due to poor design choices on mundane components that wore out or came loose from their moorings due to thermal cycling or were simply not put there in the first place to save costs. My ancient Titanium Powerbook, however, is still going strong.
It may be the same robots that put the parts on the PCBs and the same plastic factory that manufactures the cases-- but the choice of materials and components and design have a big impact on the quality of a machine.
which you got to admit is pretty asinine. You can use open source apps on OS X, and if you don't want DRM, don't buy itunes.
They make it sound like itunes won't play plain old MP3 files....or that when you rip your DVD itunes adds DRM.
This just some bloggers trying to get attention, and putting themselves out as "geeks" but they are not geeks, they are certainly not alpha geeks. Its pure FUD.
The really truely technically skilled have been using macintoshes for a long time, and will continue to do so.
I mean, seriously, Cory Doctow? He's not even technically literate, is he? He's just a media whore.
Slashdot Mirror
Actually the herd does not panic when it sees deflatin-- the period when the US was really growing, while on the gold standard and when we went from being a backwards nation to a world leader-- was a period of deflation.
Why would people get mad when their wealth gets more valuable?
No, all the anti-deflation propaganda comes from those who profit by printing money, which is literally a form of theft.
This is simply not true.
Deflation is good. Deflation is what happens when you have productivity increases reduce the cost of production, resulting in higher profits for the corporations and lower prices for the consumers.
Basically, productivity increases are real economic growth.
When the government inflates the currency to "fight deflation" what it is literally doing is printing money to devalue the earnings of everyone in the country.
It is literally stealing the results of productivity growth.
Of course, its a lot easier to steal when nobody realizes that's what you're doing, and so Keynes was a big fan of inflationary policies saying "not a man in a hundred will realize what's been done to him".
The reality is, the vast majority of people believe such falsehoods as "deflation is bad"... in fact, such a belief is so asinine that one should be embarrassed to say it-- but there is no shame in saying it because so many people have been taught to be ignorant of economic matters and uninterested in them.
As a result we have the government foisting literaly ponzi schemes on us and calling it "social security" and claiming to fight poverty while increasing it... and people fall for it.
Griffens book is a brilliant analysis of this situation-- and you really should read it. Especially if you think "deflation" is bad.
IF you consider yourself a serious programmer, you would do well to go download the free chapters of this book from the pragmatic programmers site and read up a bit.
I too had an advers reaction after 20 years of OO programming.... but I stuck with it and now I see the light.
Its worth the effort.
Its surely a dumb idea for applications written in languages like C and Java... but not for erlang.
Remember, systems running this language have had uptime on the order of many years, and that's with in-place code modification.
You're rejecting what you don't understand based on assumptions that are true for other contexts.
Downtime is a sin, not a virtue!
Programming Erlang is the best intro-to-new-programming language book I've ever read. By far. While erlang is radically different than previous languages I've learned, this book goes a long way to making the transition smooth.
I'm still struggling, but I read the book with an application in mind, and have found its coverage is excellent... it brings you right up to the point that is needed for the other erlang documentation to be readable. (There are 60 some odd books on all the major components of erlang and OTP, including the major modules and APIs... they are downloadable from erlang.org)
So, this book accomplishes its goal and really well. ITs not a shallow marketing piece about the language (as most books written by writers rather than programmers are) its a real how-to-program in erlang book and it does a great job of showing how you solve very difficult problems in erlang. It even has as examples things like full text indexing and map reduce.
I think every programmer worth his salt should buy this and learn erlang-- the days of single core computing are over, and thus concurrency oriented programming is a critical skill to pick up, and erlang is the best language for it.
"In response to 'just keep your day job and just work on the side' - sorry, that just doesn't work. If you're dedicated enough to an idea, you'll quit your day job. If you're not living on the edge, you'll live the rest of your life dreaming of what could have been."
This smug arrogance is whats so offensive about the YC cult. You presume that anyone who doesn't go your path is just a dreamer whose not committed.
I say the reverse is true-- the guy who builds his business on the side is FAR more committed than a college student who "does a startup" for YC for his summer gig.
LOL, clearly you've never taken VC funds. Go get yourself a term sheet and then read the contract that comes with it when they get really serious.
Also, your citcation of google is asinine.
Its not the size of the sales force that determines the success of a Web business.
Hell, Google spent nothing on marketing and had no sales force. QED.
Generally entrepreneurs Do worry too much about peopel stealing their ideas.
But VCs are NOT trustworthy. The idea that its in their interest to be descreet is pure fantasy put out by their PR departments and apologists.
They tell each other whats going on, and when you present at one end of Sand Hill road in the morning, by the time you get to the other, you might have your meeting cancelled because they know exactly how your presentation went, what your business is, and that the VCs you met with earlier are passing... conversely if they are investing, your meeting will go much better because this VC wants in on the deal too.
They are lemmings and lemmings have ot know where the pack is going.
Go spend a few months in the bay area and you'll quickly learn what everyone is doing-- all the stealth companies and what they are up to-- if you're at all connected.
Another reason not to relocate there.
The real problem here is that VCs in the bay area are totally indiscrete.
EVERYONE there knows every other companies business and secrets, their major customers, who they are talking to what their idea is, how far along they are (Even if they are in stealth mode.)
The VCs are veritable houses of gossip and just hanging out in the bay area you quickly learn what everyone's doing.
So, if you're Tivo and you come up with a great idea, well, ReplayTV has heard about it and has enough time to implement it in *their* DVR and publicize it before you can even get a patent out.
VCs are the conduits of all this information.
So, while I think NDAs are overused and VCs would be in a tough spot if they signed them anyway... the real problem is that VCs in the valley are totally indiscreet.
They're just lemmings and they have to talk to each other to figure out where the pack is going so that they can all go in that direction.
Yeah, TO has an active startup scene-- I can see that and I've never even visited.
YC would say you're foolish.
But the reality is Paul Graham has only ever lived in Massachussetts and California-- the two places that YC advocates people relocate.
I don't think that in california they have discovered that there are investors outside of the bay area.
WTF? You must have some really nice taste. The cost of living in the Bay Area, compared to Texas, is really dramatic. Its a hell of a lot more expensive.
And I understand if you just moved to the bay area you may like it-- I say, give it a year and you'll be ready to leave.
I lived there 3 months and I quickly learned why it sucked... now I can barely make it 3 days on a business trip before I'm pissed off and ready to fly the hell out of there.
ITs a hellhole...
Anybody who build their business on nights and weekends while working a fulltime job is someone who has shown a great deal of commitment. I've done this, its damn hard... its hard not to let the startup wither away because you're too busy with your day job, and its hard not to loose interest after even 3 months of spending all your time on your job or your other job with little time for anything else.
Show me someone who built thier company that way, and I'll be interested in putting money in.
YC seems to attract and be geared for, kids in college who want a summer job with the prospect of glamorous VC money afterwards. It doesn't matter to them that they might get a raw deal-- cause they don't have much invested in it in the first place. And ther's nothing wrong with that.
The problem is that these kids are so adamant and smug that this is The One True Way To Do A Tech Startup-- that making these foolish short term choices in pursuit of a billion dollar dream is obviously right... and building a net worth of $10M by building a $3M/a year real buisiness is a "lifestyle" business-- a failure in their eyes. They are naieve and strident and there is no getting thru to them because Paul Graham has them mezmerized by the tune he's playing.
YC is a great summer camp for entreprenurial college students. But all the bashing of other ways of going about it that they do are so misguided... and the focus on only high risk, low probability business models seems misguided.
Sigh... this is what passes for intelligence in "the valley":
"many investors in the valley wouldn't think very highly of your business acumen risked your house."
When you buy a house you have a mortgage on it. Right off the bat you have "risked your house" and you haven't evne started a job.
When you borrow against the equity in your house, you're borrowing money at a reasonable interest rate, probably %8 or less.
On the other hand, when you borrow money from a venture capitalsit, you have to pay it back at a rate of %350 or so-- about %50 for the "interest" on their "loan" (which they will tell you is an investment, of course) whereby after 12 months they start charging interest on the investment that has to be paid back in case of a liquidity event... and %300 "interest" in the form of all the preferences they get-- usually 2-3 times liquidation preferences, along with options, warrants and other little sweetheart deals they write into their term sheets...
And worse, when you borrow against your house, you are not giving up equity in your business. VCs expect you to not only give them equity-- the "investment equity"... but they also demand that you start vesting your equity-- they want it all. So when you take their money, you start off with zero ownership in your business and have to earn it back via vesting.
God forbid they might try to replace you now that they control the board, and then you get nothing, or a pittance.
Bottom line, you just quoted some common "intelligence" that shows just exactly how asinine and stupid the thinking in the valley is.
And you are a YC backed founder-- this goes directly to the generalization that YC is putting its businesses on a bad path.
You think paying %350 or more for your money is better than paying %8? Really?
This is not valuable advice!
This is why, if you ever start a startup, you really need to hire a really good salesguy. ITs clear to me that you don't know how to get your foot in the door of a mid-sized company-- even though I just told you in my original post in this thread. (Here's the secret- you call them. And I don't mean cold calling every c ompany in the book-- but identifying the businesses that are key and investing time in them.)
Really, every business that is likely a potential customer of yours is likely also never going to have heard of YC. YC helps you with awareness in VC circles... those are the connections they give. (They are totally geared towards getting people on the Silicon Valley VC treadmill.)
So, its not even sales connections that you're getting.
I don't know what country you are in. In some countries you need connections just to get permission from the governemnt to run your business. But YC would say your business is dead on arrival simply because you aren't in the USA. I think that's asinine... I think the opposite is true-- I think there are many countries where the people are keen to have economic development and a startup that's a success three would be the big fish in a small pond-- and everybody would be wanting to help in their own way because its good for the town, good for the country... in the bay area, you're just antoher of a million startups and you will lose half your employees each year unless you pay them outrageous sums.
One key lesson in business is buy low, sell high. Get your services at low cost-- including investment, but also employees-- relative to their quality. The bay area is the land if high cost, low quality.
Ad hominem. Argue againt my points if you wish, but since I wasn't making argument from authority, my status as authority is irrelevant.
Ok, its clear to me that you haven't met many VCs. You think I'm just talking about the "bad" VCs. Sorry, they are all bad.
Do some research and if you can get unbiased information about the "top tier" VCs, you'll find out I'm right there.
Furthermore, you really shouldn't be seeking VC money, unless you need to build a manufacturing facility. If you don't, you can bootstrap far more effecively. Truthfully, the bad advice from VCs will hurt you more than their money helps.
That "fluid highly educated workforce" is not an advantage of the valley- it means you pay a lot to keep your developers and you will lose them once they can become a founder of their own company.
You're looking at only one side of the equation and ignoring the costs. This is typical -- you've been sold a story and you believe it because you are *invested* in it being true.
Getting sufficient money is trivially easy outside the valley. In my experience, not even being in the state of california has not been a problem for raising money in the valley. But if you're smart, you're not raising VC money anyway.
Hell, the advice to put your company in the valley is just one of the really stupid bits of advice you get from VCs which will cost you far more than any supposed advantage at raising money by being htere--- doubling or tripling your costs mean you need twice or three times as much money for the same amount of value addition to your valuation or customers.
If VCs were recommending tech companies relocate to sacramento-- close enough for conveneint board meetings but with a much lower cost basis-- then they would go up a bit in my estimation.
But the reality is-- VCs really DON'T give a shit about your company... they don't need you to be a success... they just need one of 20 investments to be a huge success... they are gambling and playing the odds.
Thus they will maike you take long shot positions-- go after very highly risky low probability super high payoff choices-- evne when low risk, high payoff choices are present.
This is the real lesson of the 90s that nobody seems to have learned.
And, as a founder you're much better off owning %33 of a $30 million dollar company than %3 of a $300,000 VC backed company sold at a garage sale. In one case, your net worth is around $10M, and in the other its $0. You won't evne get %3 of the sales price.
Hell, if a VC backed company sells for $30M, you won't even get 3% then because the VCs have double dipped so many times that there's nothing left to split up after they are paid off.
People really are not looking at these VC deals with the terms that are totally asinine-- like making founders earn back their equity.
Actually, I think its only those without money who find the prospect of gold diggers to be exciting.
the reality is, the higher your net worth, the more shallow (skinny) vapid women and men there are... the more you have to deal with idiots who have dollar signs in their eyes.
I know, your fantasy that as a millionaire you'll be able to keep a trophy wife is probably a key motivating factor in your life.
But if you ever achieve it you'll realize that, after taking half your net worth, the money you lost was the least expensive damage they did. (And before you jump to another idiotic conclusion- no, I've never been married nor fell for a gold digger.)
By the way, your googling-fu is so manly powerful! I be very intimidated! Jesus, man, who do you think you're impressing?
I do know billionaires, more than one. Some of them are open to funding companies, but not all. (One is really just retired and winding down his commitments.) One, for instance, who is open to funding new ideas is actively looking for them and talking to people about them.
So, if someone had a good idea and had moved it along to the point where it was worth funding, it would not be hard to talk to this guy.
No, I'm not interested in making connections or introducing anybody... my point is that this isn't necessary.
The money is readily available if you want it.... its only a position of ignorance or belief in the myth of connections that lets people think that in order to suceed you have to be introduced to the right people.
Ah, yes, one of the members of the cult comes here and tells us that we're all stupid and of course, the only reason we would disagree with the preaching of the cult is because we were turned down for membership.
Well, sorry to burst your bubble, but there is no way I would have applied to YC, so there's no way I could be jealous of having been turned down. (Plus, $15,000 is less than I have in cash on hand, not a meaninful equity investment.)
"It's about ten grand worth of legal work from a top valley firm."
This, and virtually everything else you say, along wiht the monotanous repetition of the same things from other YC koolaid drinkers convinces me that you really are so inexperienced that maybe the hand holding you guys get is worth it to you. That's fine-- if you're that clueless, get your hand held.
But please, stop with the "Paul Graham is the second coming of Steve Jobs" BS. Stop with the patronizing arrogant BS you guys constantly spout, based on your abject ignorance of the business world and the tech industry.
Jesus, you value "contacts" and you seek venture capital-- its obvious you don't know what your'e doing.
We're telling you that you're going the wrong way-- but you've drunk the koolaide and you are so young that you know everything so there's no point in wasting time with you.
I guarantee you in 5 years your perspective will be different. (And my business's valuation will be an order of magnitude bigger... as will my percentage ownerhsip.)
I guess there are people out there who are inexperienced enough to think that "connections" are actually valuable. The reality is, if you build it, they will come- if its worth funding. Hell, I know billionaires and the ones who are open to funding new ideas are interested in hearing new ideas... you don't need "connections". And anyway, if you're building a web app, you do not need funding... the barrier for entry is so low these days all you need is a job delivering Pizza for your founders to cover the rent.
Trading in "connections" is the kind of ivy league old-school, old-economy BS that we have gotten past. Sure, many VC firms are stuck in it-- but this is a blessing in disguise-- VC firms will give you absolutely bad advice, charge you too much for your equity and then make you earn your ownership back-- the idea of founder vesting is so asinine that its amazing that people fall for it-- Venture capital is a total rip off. And they can get away with it because they are investing dumb money in dumb companies and getting dumb returns-- during the boom you would have done better investing in core tech stocks than in even the best VC funds which returned 2-3X over 7 years.
And as for the value of the advice: YC insists that you move to Cambridge or Silicon Valley-- the two places Paul Graham has lived. This isn't "Advice" this is laziness. The idea that you have to be in either of those places is absurd to anyone with a lick of business sense. If you're building a new business the last thing you want to do is go where the money is expensive, the offices are expensive and there are a thousand others trying to poach your employees, whom you have to pay top dollar to on top of top equity because the living costs are so high and the competition is so high.
But they are great places for getting venture capital and participating in the trade in "connections".
YC is popular among the people who have not yet realized that these activities are bad for business, not essential to it.
But they will learn-- move to Silicon Valley and pitch VCs for a few months. You'll surely get money, but if you are smart, you'll realize that the money will do more damage than good because the person giving it to you has no clue, and they will get control over your board.
The failures of the late 1990s are directly due to easy money from idiot VCs. Not bad management at startups-- bad advice from "venture capitalists" (who are generally people who went to harvard and have a sub 100 IQ.) The idea that VCs are smart or shrewedi s a carefully cultivated fallacy. The people you meet at VC firms are either 20 something fratboys who can barely operate a computer, or old guys who were funding oil companies back in teh 1970s and know even less about technology.
And you want to give these idiots control over your company, and a big chunk of the equity you built?
If I was a manager and an employee just up and quit one day, I certainly would mention that if someone called me to check a reference.
If the employee found out, this would likely result in you being sued and found liable for the value of the job you caused them not to get. Even if whatever you say is true.
Every time anyone gives a reference, they take the risk of being found liable. Really, there is no reason to give references and companies with any sense (EG large companies) forbid their employees from giving references.
Companies that ask for references before hiring you are ones that should do a better job in the interview process.
Oh what a load of crap. You have your story backwards-- a bunch of dig windows fanboys have been attacking RD and managed to get it banned from dig.... bu that tells us about the level of integrity of Dig users, not about RD.
I am continually dismayed at the legions of poser-geeks-- what you call fanboys, and you are one, by the way-- who have zero engineering skill or knowledge, but spout pre-written bullshit to bash politically correct targets all day long. Your ranks have swelled to the point that real geeks-- people with engineering knowlesge-- no longer participate in the forums you have taken over, like slashdot, and to a greater extent, digg.
People like you have ruined dig because you bury true stories that cover companies you hate (like RD Apple stories) and dig stories that are FUD in support of your chosen platform (Windows or Linux.)
That article you linked to--- the type of illogical "reasoning" that I've come to expect from the ignorant. Correlation is not causation, and of course, the reality is there was an active consipiracy to bash RD and get it banned from Dig-- the article you link to being an example-- for the sole reason that it talks about Apple in a favorable light.
Bottom line is, you have no intelligence, you just want to bash apple, and anyone who supports them.
Notice that your comment here is not about the topic, but about the writer.
Also known as an adhominem attack-- attackin the person rather than the point.
Plus a large factor in quality is the choice of materials and parts. (I'm not trying to bash Dell here, just giving examples, I can't say for sure anything about their overall quality.)
Dell Laptops (I'm typing on one now) are made from cheap ABS plastic. MacBooks, for instance, are polycarbonate, aka "bullet proof glass" (though when polycarbonate is sold to be bullet resistant it has extra fibers...) ABS is really cheap to injection mold, but polycarbonate is (or was until recently) difficult to manufacture into a computer case. But its much tougher-- its great stuff. Its just not cheap.
And then there's the gotcha type stuff- when you are cutting corners there are lots of components you can go cheap on, or go without-- anti-static protection, etc. Apple tends to take a lot more care in tehir designs, in my opinion, than dell, and this results in significantly greater longetivity and lower problems.
I've gone through 4 dell laptops in 2 years, fortunately they are the companies and not mine. I believe these problems were all due to poor design choices on mundane components that wore out or came loose from their moorings due to thermal cycling or were simply not put there in the first place to save costs. My ancient Titanium Powerbook, however, is still going strong.
It may be the same robots that put the parts on the PCBs and the same plastic factory that manufactures the cases-- but the choice of materials and components and design have a big impact on the quality of a machine.
That comment is so... 1994, and hell, in 1994 it was wrong too.
which you got to admit is pretty asinine. You can use open source apps on OS X, and if you don't want DRM, don't buy itunes.
They make it sound like itunes won't play plain old MP3 files....or that when you rip your DVD itunes adds DRM.
This just some bloggers trying to get attention, and putting themselves out as "geeks" but they are not geeks, they are certainly not alpha geeks. Its pure FUD.
The really truely technically skilled have been using macintoshes for a long time, and will continue to do so.
I mean, seriously, Cory Doctow? He's not even technically literate, is he? He's just a media whore.