Y Combinator Gives A Crash Course On What It’s Like To ‘Work At A Startup’

Y Combinator Gives A Crash Course On What It’s Like To ‘Work At A Startup’
Posted: 17 Jun 2010 08:31 PM PDT



Watch live video from Y Combinator on Justin.tv



Tonight at its headquarters in Mountain View, California, Y Combinator invited dozens of programmers to a new event called Work at a Startup. The event, which was announced last month, is meant to help expose programmers to what they should expect when they go about joining a startup (YC’s Paul Graham thinks that a lot of them tend to join more established companies like Microsoft simply because startup life seems so nebulous). The event is complementary to Y Combinator’s Startup School, which is meant to help entrepreneurs start a company from scratch. My notes from the event are below, and you can watch an archived video of the event here.


The event kicked off with a talk from Graham, who detailed what programmers should think about when they’re debating whether or not to join a startup.

Graham says that the two main things that prospective employees should be gauging are fun and money. You obviously want to maximize both, and the startup end of the job market is the “bargain”, because you can have fun and make a lot of money. Assuming, of course, you pick the right startup.

The second thing you need to figure out, Graham says, is whether or not the startup lifestyle is really for you. In general, he’s found that startup founders who join a large company after being acquired aren’t as happy in their new home as they were when they were running the show. The reason? Bureaucracy. There are meetings and you have to ask for permission to get things done — things that aren’t issues at most startups.

Graham says that some people (and all founders) are like that. But others aren’t. The way to tell, he says, is to ask yourself if you like the prospect of having (and implementing) many ideas at work, in which case a startup is probably the place for you. If you don’t think having ideas are a part of the job, then he says you’re probably better suited for corporate culture.

The next step is figuring out which startup you want to work at. Graham says this is actually a lot like being an investor, the difference being that investors are giving startups their time and money, while you’re giving them your work. So how do you tell which startups are promising? The secret, Graham says, is to look at the founders — even if they have an unsexy company or domain, if you have great founders, the company is more likely to go on to great things.

Alright, so you’ve found a great startup — can you expect to make a lot of money? This varies a lot, depending on how early you’re joining. Graham says that if you’ve found a startup that you want to join, you should do it quickly, because things can change fast (and the amount of equity you can expect can drop precipitously). He relayed an anecdote about a company Yahoo was thinking about acquiring for $1 billion a few years ago. After mulling it over for a few months, Yahoo agreed to pay $1 billion, at which point the company told them they’d grown and now wanted $2 billion (the unnamed company sounds a whole lot like Facebook). Moral of the story: don’t sit around thinking about things too long when startups are involved.

As for how much equity you can expect, Graham says that at the high-end, for a one-founder company with no employees, you may be able to get 50%. From there, things drop quickly — if you’re talking to a company with two founders and angel funding, you may be able to get 5-10%. Post series A, it’s hard to get more than 1%. The trade-off here is risk — most companies never get to their Series A.

Ultimately, Graham says that when you’re joining a startup, you’re looking for a company that is undervalued for the stage it is at, and that’s most likely to eventually IPO. Of course, that’s all easier said than done.

The event then switched to pitch mode, when over thirty startups gave a whirlwind series of presentations telling the audience why they should join them (it was like a speed dating job fair for startups).




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Y Combinator

The problem with game consoles

BERKELEY, Calif. (MarketWatch) -- There is a confluence of events taking place that has the potential to ruin or radically change the game console business.

This business is dominated by Microsoft Corp. (MSFT 26.40, -0.04, -0.15%) , Sony Corp. (SNE 27.83, -0.06, -0.21%) and Nintendo Ltd. (NTDOY 39.23, +1.18, +3.10%) . These companies are adjusting their models as fast as they can, but may be doomed by the rise of the tablet computer and HDMI.

The problem for the game consoles is simple, the new machine refresh rate is too slow. In other words new game consoles that are completely backward-compatible with older game consoles seems to take an eternity to be developed when compared to the constant improvement in speed, lower cost and capabilities of computers themselves.

The problem with game consoles

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When you consider the fact that a game console is just a specialized computer, you have to wonder why these companies cannot pick up the pace.

I've often thought about this and determined that it is because these companies are not computer companies and are not used to the faster pace. But Sony is a computer company and Microsoft knows the ropes.

So what's wrong? In the process they are making their entire industry obsolete.

Take, for example, the Xbox line from Microsoft. The original console was released in 2001 and the system was upgraded and re-released in 2005. In four years one generation of console was managed. This, at the time this was considered phenomenal.

And it was phenomenal by the standards of game consoles.

Look at Sony. It showed its original Playstation console in 1992 and couldn't ship it until 1994. It was six years later in 2000 that it managed to release its upgraded and new PS2 which became a runaway best seller. Another six years passed and the PS3 was released.

If Microsoft could keep up a seemingly mild pace of upgrades every four years it would be on to new generation of machines already. We'd be waiting two more years to get anything from Sony.

Microsoft is following the slow pace of Sony.

This would all be fine if nothing else in the universe was going on. Enter the iPad (AAPL 273.96, -0.11, -0.04%) .

The iPad was never designed to be a replacement for a game console, but it is already showing signs of being a replacement for the Nintendo DS-type of handheld gaming device.

Computers show generational shifts every 18 months, not every six years. Within the next two years the iPad-type device using a modern HDMI connector will be shown with game controllers and games that will easily top the capability of the game console. If they just get close, add another 18 months to the timeline and the consoles will be toast for sure.

And what you are going to see is another trend, the universality of top games. During the console wars, certain games could only be played on certain consoles. These exclusive deals are falling by the wayside because the market is so large that exclusive deals cannot make up for lost sales on competing platforms.

This marketing math will worsen when the iPad, Android Pad and others reach a critical mass of users. This will mean selling pads at a 5-million-per quarter rate, about the same sales as consoles. This sales rate could be achieved by this time next year.

It will take another year before the potential for these devices is fully realized.

This can all be thwarted by a concerted effort by Sony, Microsoft and Nintendo to up the ante and pick up the pace of new console releases.

Because the entire industry is perceived as a razor-blade business whereby you lose money on the consoles and make money on proprietary games, picking up the pace is an expensive proposition that these companies will not do.

That model will be the end of them eventually.

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Bio

Dean Baker is co-director of The Center for Economic and Policy Research (CEPR). He is the author of several books including, The United States Since 1980; Social Security: The Phony Crisis (with Mark Weisbrot); and The Benefits of Full Employment (with Jared Bernstein). He appears frequently on TV and radio programs, including CNN, CBS News, PBS NewsHour, and National Public Radio.