Plenty Still Broken In The World

Image via WikipediaPaul Graham has a new blog post out. The guy has a beautiful writing style. And he tackles the most amazing topics.

Paul Graham: Schlep Blindness

Schlep was originally a Yiddish word but has passed into general use in the US. It means a tedious, unpleasant task. ....... Most hackers who start startups wish they could do it by just writing some clever software, putting it on a server somewhere, and watching the money roll in—without ever having to talk to users, or negotiate with other companies, or deal with other people's broken code. Maybe that's possible, but I haven't seen it. ...... schleps are not merely inevitable, but pretty much what business consists of. A company is defined by the schleps it will undertake. And schleps should be dealt with the same way you'd deal with a cold swimming pool: just jump in. ....... The most dangerous thing about our dislike of schleps is that much of it is unconscious. Your unconscious won't even let you see ideas that involve painful schleps. That's schlep blindness. ....... For over a decade, every hacker who'd ever had to process payments online knew how painful the experience was. .... Because schlep blindness prevented people from even considering the idea of fixing payments. ....... Though the idea of fixing payments was right there in plain sight, they never saw it, because their unconscious mind shrank from the complications involved. You'd have to make deals with banks. How do you do that? ...... That scariness makes ambitious ideas doubly valuable. In addition to their intrinsic value, they're like undervalued stocks in the sense that there's less demand for them among founders. If you pick an ambitious idea, you'll have less competition, because everyone else will have been frightened off by the challenges involved. (This is also true of starting a startup generally.) ...... there's plenty still broken in the world, if you know how to see it.

I have said a few times being an entrepreneur is like being gay. I have a suspicion people are born or not born an entrepreneur, because there are so few of them. And by some estimates 1% of the population is born gay. I think that is also the share of entrepreneurs in the broader population.

In this blog post Paul Graham establishes the 1% within that 1%. Most entrepreneurs stay away from the big ideas, the big problems that need to be tackled.

I read the blog post twice.

Paul Graham Now Has Disqus Integration At His Blog

Image via WikipediaI took Paul Graham to task in this blog post for not having a place for people to leave comments at his blog. It is not even a proper blog, I said. I made it into a little bit of an East Coast, West Coast thing like the rappers do. Of course I like Paul Graham plenty. I was just playing along.

Top VC Bloggers: The Numbers Don't Look Right

So it was great to note Paul Graham now has Disqus integration at his blog. The next thing would be for him to start blogging daily. I would show up if he blogged daily.

Paul Graham: Y Combinator
Paul Graham: Disrupt
Greplin: The First Y Combinator Company To Get Me Excited
Paul Graham, Brad Feld, Me, BBC

I still think what Paul Graham has is a book, not a blog. It is not updated frequently enough to be called a blog.

Idiots From The Future

Here's a quote from an idiotic article in The Boston Globe. If they had called it comedy, I might have let them go. But this dude is peddling the piece as punditry.

The Boston Globe: Bubble? What bubble? Things are great. Unless ...: November 2011: Y Combinator, a “finishing school’’ for promising start-ups in Silicon Valley, announces a partnership with Wendy’s. Every Wendy’s restaurant will designate two booths near the bathrooms for tech start-ups. Y Combinator will supply $30,000 to each start-up, with Wendy’s providing unlimited baked potatoes and Frosties, in exchange for a 5 percent equity stake. ....... At the end of the program, Nigerian investor Dr. Hassan Dagogo promises (via a polite-but-urgent e-mail) to support each start-up with a follow-on investment of $500,000, wired directly to their bank accounts. Things go awry, and most entrepreneurs in the program end up living in Wendy’s parking lots.

Dave McClure's Incubator

Dave McClure is a dude to watch, sure. The guy is a major mover and shaker in the early stage game. You might not do business with him, you might not agree with him, but his insights are hard to ignore.

FoodSpotting's Dish As Starting Point

Image via CrunchBaseOkay, so I am breaking my April Fool promise of restraining from blogging about FoodSpotting.

Yesterday, or the day before, I read that both inDinero and FoodSpotting are Dave McClure companies. I kind of, sort of knew that. But it was one of those flash moments. I also have known FoodSpotting is an Angel List company.

But then I expect FoodSpotting's next round of funding to come from one of the major VC firms in the range of 10 to 20 million dollars, whenever that might be. In a year or less perhaps?

This reinforces my point that it is not either or. Old school VCs still matter, actually they matter big. But The Angel List, Y Combinator, TechStars, 500 Startups, they have changed the early stage game fundamentally, irrevocably. In short, they have innovated.

And FoodSpotting is proof. (Twitter ---> Instagram ---> FoodSpotting)

48 Hours

It was two days before Demo Day at Y Combinator and Daniel Gross had moved from product to product like I had changed majors at college. The guy had nothing for Demo Day. The textbook thing to do for Paul Graham was to say, you know what, you had your 12 weeks, tough, you are out. But Paul Graham took the road not taken, and that made all the difference.

Greplin: The First Y Combinator Company To Get Me Excited

Greplin happened during the final 48 hours.

Jessica Mah: The Most Promising 19 Year Old Tech Entrepreneur In America

Or maybe she is 20 now. But still. Daniel Gross and Jessica Mah you have you to watch out for. Jessica's InDinero, the Mint.com for businesses, is headed for a hundred million plus kind of exit in a few years. Daniel will be swimming in the billion dollar range, if only because his product, Greplin, is just more fundamental. But Jessica has started by monetizing from day one. Three years from now they will not be by the roadside, a has been. They will be bigger than anything we can imagine right now.

Idea to Initial Execution

Image via Wikipedia"If you're investing in a startup at a $10 million valuation, you're not saying it's actually worth $10 million … You're saying it has a 1% chance of being worth a billion."
- Paul Graham

March 25: Stern: Entrepreneurs Exchange Summit

TechCrunch: If Execution Is What Matters, Where Does That Leave Ideas?: the process of getting a great product out there is a vital part of what constitutes innovation in the first place.

The saying that it is not the idea, it is the execution is cliche in the industry. I am going to argue to the contrary. Ideas matter. Big, unsexy companies execute all the time. When a Marco leave a Tumblr to launch an Instapaper, that is not to say he got dissatisfied with Tumblr's execution, and decided he could do a better job at it, and so he left. It was not about the execution. Tumblr's execution is the most sophisticated it has ever been. He left for the idea.

Dave McClure: Fighting Words For The Angel List

If you follow tech in the blogosphere, it is hard to miss out on Dave McClure. I read this blog post of his the day it came out, but only today found out he was one of the people behind something called the Silicon Valley Microfinance Network. This guy is of interest. I have been meaning to comment on his post about The Angle List.

The Angel List Controversy, Fred's Marketing Controversy

EatUps Don't Seem To Have A Monthly Rhythm

Image via CrunchBaseToday has been my day for New York City, for Microfinance, for Greplin.

Chris Dixon Just Impressed Me Like Never Before
Screw Twitter, Screw Facebook
Greplin: The First Y Combinator Company To Get Me Excited
Very Much Would Like To Go Into Bihar
Some Serious Biking
TED Talks: Wael Ghonim, Bill Gates
Passion For Microfinance, Passion For Social Media
Walking/Running: Putting One Foot After The Other
Love Is A Symbol
Going High Tech: Selfish Reasons
Microfinance Alone Can't Cure Poverty
Focus, Focus, Focus
I Love This City

But last night I was at the First FoodSpotting First Friday. I was surprised by how many people showed up. At one point I counted 31 people.

Chris Dixon Just Impressed Me Like Never Before

Image by Zach Klein via FlickrFor Chris Dixon to have been an early investor in Greplin, I mean I am mighty impressed. You have to have been party of some kind of an inner circle, you have to have earned your way to being part of that inner circle. Being part of that inner circle was not enough. I mean, the Y Combinator companies present in front of lots and lots of angels and investors. To be able to spot Greplin for the winner that it is, early on, I mean, I am impressed.

Take this for a compliment Dixon. You are even more impressive than I already thought you were. You just earned your Super Angel title in my world. Super Angels pay super attention to the really, really early stage companies. They go straight to the source. They put their ears to the ground. And then listen. For the horse hooves.

Screw Twitter, Screw Facebook
Greplin: The First Y Combinator Company To Get Me Excited

Screw Twitter, Screw Facebook

My number one gripe with both Twitter and Facebook - services I love - has been that - fuck it - I can't even search through all of my own tweets, I can't even search through my own Facebook wall.

Looks like they both needed an outside party to come along and take care of the problem. Daniel Gross, you are a billionaire for doing this.

Greplin



Greplin: The First Y Combinator Company To Get Me Excited

Greplin: The First Y Combinator Company To Get Me Excited

Image via CrunchBaseDon't get me wrong. I am and have been huge on Paul Graham and Y Combinator. Recently I read the name of a friend - 19 years old - in a magazine article. She apparently had graduated from Y Combinator and had just raised a million dollars in funding. I emailed her. Hey, is that you? Yes, it is me, she said. You should also raise money, right now is a great time to do so.

Paul Graham, Brad Feld, Me, BBC

But I have said at this blog a few times that I don't see any iconic company emerging out of Y Combinator. Y Combinator has had a propensity to produce middling companies. A $200 million exist is not impressive.

Greplin

And let me make it very clear I have not been reading up on Y Combinator companies. There must be gems being spewed out every few months. But I only read about companies that show up in the news.

The Angel List Controversy, Fred's Marketing Controversy

Image by Lachlan Hardy via FlickrThere are two major controversies raging in the blogosphere right now. One is to do with The Angel List. The other is to do with our own Fred Wilson's blog post about marketing. Fred has started a s_itstorm by suggesting the best tech startups don't need marketing budgets. In fact, that is how he spots a great tech startup when he sees one.

The Angel List controversy I am sanguine about. I don't see two sides to the argument. There are many ways to invest. The Angel List is just one of them. Efforts like The Angel List have surely democratized the investment climate for the early stage startups. But there are old school holdouts with proven track records who think the process at The Angel List is too diluted. You can't really find nuggets of gold there.

I have said before that I don't expect an iconic company like Google, Facebook to emerge out of Y Combinator. But Y Combinator has been a great entrance to the scene. The majority of startups are not going to go IPO. And Y Combinator works great for such middling efforts.

Yuri Milner's Smart Y Combinator Move

Image by davidcrow via Flickr

Wall Street Journal: Y Combinator’s Paul Graham On The $150K Per Start-Up Offer: “It’s probably one of the most surprising things that has happened so far,” Graham said. ..... Milner teamed up with SV Angel–the seed fund run by prominent angel investor Ron Conway–to offer $150,000 each in convertible debt in each company. .... Of the more than 250 companies that Y Combinator has produced since 2005, more than 20 have been acquired, but mostly for small amounts. The biggest success, by acquisition price, is Heroku Inc., which Salesforce Inc. bought in December for $212 million. ..... convertible debt–which converts to equity once the company raises venture capital at a set price–with no valuation cap and no discount, an extremely rare set of terms for entrepreneurs. ..... Y Combinator companies received $11,000 plus $3,000 per founder in exchange for 2% to 10% of equity ..... the average Y Combinator company raises $700,000 after the program. .... “The biggest change and huge change for better is now none of them are desperate,” Graham said. Fund-raising “takes a lot of time away from the company. Now they’re already there. They have that foundation.”

I don't think a Google or Facebook can come out of Y Combinator. The big iconic companies tend to have this streak of independence. But I think Y Combinator is great for middling companies. I'd be very surprised if any Y Combinator company goes IPO some day. But many have been and will be bought for a decent chunk of change. Many will stay mid size and profitable.

Not Going Into Any Accelerator Program

Image via WikipediaThere is no accelerator program anywhere that will help me tackle the last mile in microfinance, the most important mile in my line of work. I have a FinTech startup, but it does not revolve around coding, it revolves around the last mile of microfinance.

Also, I can't think of one iconic tech company that came out of some accelerator program. You could argue accelerator programs are a new phenomenon, they have not had the time to spit out iconic companies yet, but accelerator programs are more for purely web tech companies. Mine is not one.

Angel Bubbles: No Bubbles

Image via CrunchBase

Naval Ravikant: There is No Angel Bubble. There are Many Angel Bubbles.: The total amount of additional capital flowing through the Silicon Valley early-stage ecosystem, thanks to Super-Angels and newly minted millionaires, is on the order of half-a-billion dollars or so. It’s no more than a middling-sized VC fund. Would the emergence of a new VC fund be considered a bubble? Would the collapse of one signal disaster? ..... Most of the small companies being funded will fail, but the ones that hit will generate fantastic returns. And because of their small size and operating costs, a greater percentage will be able to get “ramen profitable” than was traditionally possible. ..... we’re all going to have to become even more comfortable with failures, re-starts, and the kind of team re-combination that one sees from one Y Combinator Demo Day to the next. ..... Angel investment valuations have been climbing very quickly ..... a small number of high-profile Angel investments, moving small amounts of capital but at very high valuations, can make the entire market look overvalued. ..... Seed is the new Series A .... an incredible renaissance in technology, with smart phones taking computing to local arenas and social networks taking it into the mainstream populace ..... we’re going to see the equity gap narrow between the founders of raw startups and early key team members.

I think this is new, uncharted territory, rather than bubble territory. Bubble would be if we were a year or two from imminent collapse. I don't think we are.

TechStars' Geographical Advantage Over Y Combinator

Image via CrunchBase

TechCrunch: TechStars Launches Ten New Startups In Seattle: six of the first twenty companies to go through the program have been acquired by larger companies, and about 70% of its companies have been funded and/or are now profitable.

Y Combinator is in the Valley. Y Combinator has done something remarkable. I think Y Combinator is the reason we have a new species in town: the super angel. But Y Combinator is in the Valley. Being in the Valley, in the Valley alone is a disadvantage. People don't buy servers anymore. They have Amazon web services. Times have changed. Some of the best programmers I know are self taught people. All the material you need to teach yourself programming is available online for free. And so the idea that you have to be in the Valley to be part of the action, well, that is passe.

Paul Graham: Disrupt

Me @ BBC

Image by Getty Images via Daylife

This BBC article is the biggest media mention of me to date. The last time I had anything even remotely close was when a German newspaper wrote an article calling me Robin Hood On The Internet, ("Robin Hood Im Internet") and that was in 2006 for my fierce work into Nepal's democracy movement. That article also resulted in me getting interviewed by German radio right here in Manhattan. They said that newspaper article created a demand among many local radio stations. And that of course they will translate, and the voice over will be in German. I showed up at their state of the art studio, did my interview, and left. No snacks, nothing. Around that same time I was also lined up to appear over the phone for a BBC program. This was going to be live. But I overslept. And felt so bad about having overslept. It was like winning a marathon and missing out the awards ceremony. But I blogged saying I got invited on to the program. (BBC Calls) That was like giving myself a consolation prize.

It is also a good feeling to get followed by Ann Curry on Twitter. (Direct Messages From Ann Curry, Steve Case, Robert Scoble) I am strong on social media, on new media, but I have always been big on old media. You have to grow up listening to BBC radio as your only reliable news source in a non democratic country to truly appreciate what that brand name means. And I was a guy who could even listen to the BBC in English. That impressed a lot of people back in the days.

You can speak English? Okay, so speak. I want to hear what it sounds like.

United States To Woo Entrepreneurs With New Visa Law BBC News

Paramendra Bhagat, a budding entrepreneur, wanders around the cream of New York's tech scene, shaking hands and making contacts.

This is the NY Tech Meet-Up, a well-known monthly gathering of more than 700 people, including venture capitalists (VCs) looking to fund the next Facebook.

Sitting in a large auditorium in Chelsea, there is a crowd of hip, skinny people and the earliest of early adopters. One man ignores all the presentations to watch live baseball on his iPad - four days after it launched.

"I'm here because this is where all the opportunities are, in New York," Mr Bhagat says.
After the presentations finish and the mingling begins, he goes around talking to the investors, telling anyone prepared to listen about his start-up, which aims to bring poor people in the Indian sub-continent online.

But Mr Bhagat is from Nepal, and despite having been in New York since 2005, US visa regulations mean there is no easy way for him to stay in the US as an entrepreneur.

Even though, he says, "there are immigrants who want to come, and VCs who need them".

The news article mentions Paul Graham, it mentions Brad Feld. That is august company.

A Soft Spot For Mike Arrington
Paul Graham: Y Combinator
An Immigrant Story For Brad Feld

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