6 ms·

Y Combinator’s “No Idea” Round Isn’t a Bad Idea, It’s Awesome

30 points by danest 14y ago

jbooth 14y ago
So let's say me and a superstar cast of Iron Man and the Incredible Hulk are accepted as a "no idea group". .... What do we do the next day? What do we work on? I can totally get behind the idea that they're funding the founders and not the idea but there has to be some idea at some point, right? Why not the day before the application instead of the day after?
- vacanti 14y ago
  I would tell them to focus on a big problem that they are passionate about and have some credibility.
remarkable 14y ago
I don't agree. As a person who has applied in the past, a developer and a sole founder, why would I submit my idea with no NDA to basically a think tank of clerical ivy league wunderkind waiting in the wings for a call from PG for a shovel ready project or a "pivot." All this in exchange for a "thanks but no thanks dude!" I was on the fence before about applying to "incubators" (I know YC is technically not a incubator), but this solved it for me. Ideas are worthless, execution is only slightly more valuable and YC is an idea execution factory. To be honest, it's an enviable position. I do appreciate the transparency.
- MrMan 14y ago
  If ideas were worth so little, wouldn't firms tend to become more monolithic? I feel that ideas are worth more than execution now. It is cheaper and cheaper to execute, but problem solving and creativity, the things that tend to break down atomically into groups of 0-3 founders, are holding their value, or becoming relatively more valuable. I think, personally, that people like to parrot this "ideas are worthless" line but I think that it is conventional wisdom at best and flat wrong at worst. I think "no idea" rounds rely on the fact that investors know that execution risk is getting lower. But finding idea people as atoms is getting harder. If the opposite were true, individual or small clusters of founders would not be so highly valued.
  - remarkable 14y ago
    Maybe YC should pivot and give founders 7% as a royalty for their idea?
    - MrMan 14y ago
      Maybe YC is just trying to catch elusive human resources in its net and deploy them to projects that have been vetted by its network of advisors and affiliates? Payments are made in the form of equity or convertible debt - no need for nasty perpetual licenses in the form of royalty payments. If many startup web businesses are not taking in much cash, but are rather meant to be sold on to larger business as interlocking pieces in the advertising money deployment machine, why commit to a stream of cash payments in the future? No-idea recruiting is a way to shake out people who may be valuable to plug into startups but for some reason are not coming up with the right ideas themselves. Or at least that is my opinion.
  - fusiongyro 14y ago
    I actually think the conventional wisdom is that ideas are valuable. After all, how often have you told someone an idea and had them tell you to patent it, with the understood implication that you'll somehow be made wealthy just from the idea. I don't think any of your points really hold water. Even a world in which ideas are worth equally as much as execution would make no sense. I can't fly to work in a picture of a flying car; the execution for new vehicles hasn't gotten any cheaper or there would be more novelty car companies. I can't network with my friends using Diaspora. If execution were so easy, there should be ten decentralized Facebook clones with proper privacy guarantees by now, and there aren't. Spend four hours walking around, wherever you are, and you can find a dozen or more people convinced they have brilliant web ideas they just don't know how to execute. Everyone who can't program is an "idea man." Separating terrible ideas from the rest isn't hard, but without time travel it's impossible to distinguish decent ideas from extraordinary ones. The Valley is becoming more and more insular and self-referencing. From outside, where I am, it looks to me like a mirror of the setup for the housing bubble, where the value of everything today is zero and the value of everything tomorrow is infinite, so nobody is doing anything today except trading the possibility of doing more and better things tomorrow. An idea or a founder might be worth a lot in this environment right now, but I don't think this situation is sustainable.
frankdenbow 14y ago
Pretty sure @kn0thing got into YC essentially with no idea (PG wasn't into the food ordering idea but liked them). Hard to argue that was a mistake.
georgespencer 14y ago
A fairly tawdry argument in this article. Dustin said, simply, that you shouldn't become an entrepreneur just for the sake of becoming one. You should have an idea that you're energised about and want to build. The fact that Zuckerberg had ideas before Facebook doesn't mean that YC's "no idea" round is a good idea. Zuckerberg was building things and tinkering before Facebook: that's the exact opposite of not having any ideas. Literally, that is the opposite. He had ideas. He worked on them.
zackzackzack 14y ago
Oh! I think I get it now! I know why people write about YC when they aren't in YC, aren't affiliated with YC, and run businesses that are orthogonal to YC. They want to get to the top of hacker news and maybe get their job advert read by the selective crowd of hacker news: "We're currently looking for a lead interaction designer. If you think you're up for it, email jobs@yipit.com" -sidebar of author's website
- rcavezza 14y ago
  1.) This strategy that has a high likelihood of working. 2.) I don't see anything wrong with it. Is there an unwritten rule that one must be affiliated with YC to have an opinion about the program?
  - zackzackzack 14y ago
    No! If I was in his position I would do the same thing. I wasn't writing with a sarcastic intent. It's hard to be genuinely surprised about realizing something on the internet without coming across that way it seems. I honestly just figured out why he might have considering writing about YC at all given his background.
wheels 14y ago
Am I the only one that's tired of the absolutist arguments without any substantive evidence that seem to plague social news sites? We have no idea if Y Combinator's "No Idea" thing is good or bad. I suspect YC doesn't know either and once they do, unless they let us know how it worked out, we still won't know. No amount of prognostication will answer the question. It's a real pet peeve of mine when people who don't know what they're talking about not only answer questions, but go above and beyond that to answer them definitively.
- gravitronic 14y ago
  The only mistake you've made is submitting this as a comment instead of a blog post as it is clear that you can play these types of arguments out piece by piece on blog posts that will make it to the HN front page.
- rcavezza 14y ago
  I suspect YC has a good idea the "No Idea" thing will work. Why test ideas you think are bad? From what I've heard, ad hoc teams already happen in the YC program for various reasons. This is not a completely untested hypothesis.
aespinoza 14y ago
In my opinion this is just like the way record labels started creating bands out of thin air without any substance. They gathered potential talented people, form the band write songs for them, decide their image, their sound, etc. This doesn't mean that this model won't work, it just means that they are not really artists. The same thing is happening here. How can you be called an entrepreneur if you can't even come up with an idea? Entrepreneurship is not for everybody. But if you don't have an idea, then you really should not be looking to be an entrepreneur. Entrepreneurs undertake something; "The French infinitive 'entreprendre' translates as 'to undertake' " (from Wikipedia). If you have no ideas to undertake, then undertake other people's ideas by joining an existing company.
- ChuckMcM 14y ago
  Although if you called your startup "The Monkees" they might have a basis for a lawsuit :-) More seriously though, my experience is that smart, motivated people get stuff done. And putting them in a situation with a deadline is one way to entice them to get something done (its the way college works after all :-)) As with many things, starting can be quite hard and I see the experiment YC is running as a way of seeing if incenting these folks to start will produce good results. Regardless of the outcome its a good experiment to run as it can inform future estimates on the available folks for creating new companies.
  - aespinoza 14y ago
    I agree. But we have seen from experience, that people that have trouble finding something to undertake are better off working on other people's ideas. If they have what it takes to be an entrepreneur, they will find their idea while working on another. This is why people working for Google, Facebook, and startups become really great entrepreneurs. They live the life, they learn the trade and then when they get an idea they have everything in the world to succeed. But in turn, if you just came out of college, being an Entrepreneur sounds good, let's try it without any clue on what you are doing, then it is going to be a waste of your time. But I have to agree. YC trying it does not mean is wrong or bad. It might work, but they have to understand these engineers will not be entrepreneurs, at least not in their first instance.
bksenior 14y ago
YC views the idea as proof of experimentation and in turn a bias for doing and not only thinking. It would be like NFL scouts watching tape of prospects doing home improvements around campus instead of placing football to decide what they physical school sets were. The idea is a lense in which to judge talents they consider statistically more likely to produce a successful entrepreneur. The other good point already made was that YCs investment best leveraged if you ready almost right away. No matter how you smart you are, identifying a problem, creating a solution and assembling a team takes time, valuable time. In most cases this process would put you a bit further out from some of the expertise that YC has to offer.
pedalpete 14y ago
I think what the 'No Idea' misses is that if there is a team which is absolutely amazing and can theoretically come into YC and amaze everybody with their capabilities, don't you think they'd be able to come up with an idea? PG even gives a list of things he'd like to see built, take one of those if you don't have your own, but not having anything to me seems like a bit of a cop-out.

30 points by danest 14y ago

So let's say me and a superstar cast of Iron Man and the Incredible Hulk are accepted as a "no idea group". .... What do we do the next day? What do we work on? I can totally get behind the idea that they're funding the founders and not the idea but there has to be some idea at some point, right? Why not the day before the application instead of the day after?

vacanti 14y ago
I would tell them to focus on a big problem that they are passionate about and have some credibility.

remarkable 14y ago

I don't agree. As a person who has applied in the past, a developer and a sole founder, why would I submit my idea with no NDA to basically a think tank of clerical ivy league wunderkind waiting in the wings for a call from PG for a shovel ready project or a "pivot." All this in exchange for a "thanks but no thanks dude!" I was on the fence before about applying to "incubators" (I know YC is technically not a incubator), but this solved it for me. Ideas are worthless, execution is only slightly more valuable and YC is an idea execution factory. To be honest, it's an enviable position. I do appreciate the transparency.

MrMan 14y ago
If ideas were worth so little, wouldn't firms tend to become more monolithic? I feel that ideas are worth more than execution now. It is cheaper and cheaper to execute, but problem solving and creativity, the things that tend to break down atomically into groups of 0-3 founders, are holding their value, or becoming relatively more valuable. I think, personally, that people like to parrot this "ideas are worthless" line but I think that it is conventional wisdom at best and flat wrong at worst. I think "no idea" rounds rely on the fact that investors know that execution risk is getting lower. But finding idea people as atoms is getting harder. If the opposite were true, individual or small clusters of founders would not be so highly valued.
- remarkable 14y ago
  Maybe YC should pivot and give founders 7% as a royalty for their idea?
  - MrMan 14y ago
    Maybe YC is just trying to catch elusive human resources in its net and deploy them to projects that have been vetted by its network of advisors and affiliates? Payments are made in the form of equity or convertible debt - no need for nasty perpetual licenses in the form of royalty payments. If many startup web businesses are not taking in much cash, but are rather meant to be sold on to larger business as interlocking pieces in the advertising money deployment machine, why commit to a stream of cash payments in the future? No-idea recruiting is a way to shake out people who may be valuable to plug into startups but for some reason are not coming up with the right ideas themselves. Or at least that is my opinion.
- fusiongyro 14y ago
  I actually think the conventional wisdom is that ideas are valuable. After all, how often have you told someone an idea and had them tell you to patent it, with the understood implication that you'll somehow be made wealthy just from the idea. I don't think any of your points really hold water. Even a world in which ideas are worth equally as much as execution would make no sense. I can't fly to work in a picture of a flying car; the execution for new vehicles hasn't gotten any cheaper or there would be more novelty car companies. I can't network with my friends using Diaspora. If execution were so easy, there should be ten decentralized Facebook clones with proper privacy guarantees by now, and there aren't. Spend four hours walking around, wherever you are, and you can find a dozen or more people convinced they have brilliant web ideas they just don't know how to execute. Everyone who can't program is an "idea man." Separating terrible ideas from the rest isn't hard, but without time travel it's impossible to distinguish decent ideas from extraordinary ones. The Valley is becoming more and more insular and self-referencing. From outside, where I am, it looks to me like a mirror of the setup for the housing bubble, where the value of everything today is zero and the value of everything tomorrow is infinite, so nobody is doing anything today except trading the possibility of doing more and better things tomorrow. An idea or a founder might be worth a lot in this environment right now, but I don't think this situation is sustainable.

frankdenbow 14y ago

Pretty sure @kn0thing got into YC essentially with no idea (PG wasn't into the food ordering idea but liked them). Hard to argue that was a mistake.

georgespencer 14y ago

A fairly tawdry argument in this article. Dustin said, simply, that you shouldn't become an entrepreneur just for the sake of becoming one. You should have an idea that you're energised about and want to build. The fact that Zuckerberg had ideas before Facebook doesn't mean that YC's "no idea" round is a good idea. Zuckerberg was building things and tinkering before Facebook: that's the exact opposite of not having any ideas. Literally, that is the opposite. He had ideas. He worked on them.

zackzackzack 14y ago

Oh! I think I get it now! I know why people write about YC when they aren't in YC, aren't affiliated with YC, and run businesses that are orthogonal to YC. They want to get to the top of hacker news and maybe get their job advert read by the selective crowd of hacker news: "We're currently looking for a lead interaction designer. If you think you're up for it, email jobs@yipit.com" -sidebar of author's website

rcavezza 14y ago
1.) This strategy that has a high likelihood of working. 2.) I don't see anything wrong with it. Is there an unwritten rule that one must be affiliated with YC to have an opinion about the program?
- zackzackzack 14y ago
  No! If I was in his position I would do the same thing. I wasn't writing with a sarcastic intent. It's hard to be genuinely surprised about realizing something on the internet without coming across that way it seems. I honestly just figured out why he might have considering writing about YC at all given his background.

wheels 14y ago

Am I the only one that's tired of the absolutist arguments without any substantive evidence that seem to plague social news sites? We have no idea if Y Combinator's "No Idea" thing is good or bad. I suspect YC doesn't know either and once they do, unless they let us know how it worked out, we still won't know. No amount of prognostication will answer the question. It's a real pet peeve of mine when people who don't know what they're talking about not only answer questions, but go above and beyond that to answer them definitively.

gravitronic 14y ago
The only mistake you've made is submitting this as a comment instead of a blog post as it is clear that you can play these types of arguments out piece by piece on blog posts that will make it to the HN front page.
rcavezza 14y ago
I suspect YC has a good idea the "No Idea" thing will work. Why test ideas you think are bad? From what I've heard, ad hoc teams already happen in the YC program for various reasons. This is not a completely untested hypothesis.

aespinoza 14y ago

In my opinion this is just like the way record labels started creating bands out of thin air without any substance. They gathered potential talented people, form the band write songs for them, decide their image, their sound, etc. This doesn't mean that this model won't work, it just means that they are not really artists. The same thing is happening here. How can you be called an entrepreneur if you can't even come up with an idea? Entrepreneurship is not for everybody. But if you don't have an idea, then you really should not be looking to be an entrepreneur. Entrepreneurs undertake something; "The French infinitive 'entreprendre' translates as 'to undertake' " (from Wikipedia). If you have no ideas to undertake, then undertake other people's ideas by joining an existing company.

ChuckMcM 14y ago
Although if you called your startup "The Monkees" they might have a basis for a lawsuit :-) More seriously though, my experience is that smart, motivated people get stuff done. And putting them in a situation with a deadline is one way to entice them to get something done (its the way college works after all :-)) As with many things, starting can be quite hard and I see the experiment YC is running as a way of seeing if incenting these folks to start will produce good results. Regardless of the outcome its a good experiment to run as it can inform future estimates on the available folks for creating new companies.
- aespinoza 14y ago
  I agree. But we have seen from experience, that people that have trouble finding something to undertake are better off working on other people's ideas. If they have what it takes to be an entrepreneur, they will find their idea while working on another. This is why people working for Google, Facebook, and startups become really great entrepreneurs. They live the life, they learn the trade and then when they get an idea they have everything in the world to succeed. But in turn, if you just came out of college, being an Entrepreneur sounds good, let's try it without any clue on what you are doing, then it is going to be a waste of your time. But I have to agree. YC trying it does not mean is wrong or bad. It might work, but they have to understand these engineers will not be entrepreneurs, at least not in their first instance.

bksenior 14y ago

YC views the idea as proof of experimentation and in turn a bias for doing and not only thinking. It would be like NFL scouts watching tape of prospects doing home improvements around campus instead of placing football to decide what they physical school sets were. The idea is a lense in which to judge talents they consider statistically more likely to produce a successful entrepreneur. The other good point already made was that YCs investment best leveraged if you ready almost right away. No matter how you smart you are, identifying a problem, creating a solution and assembling a team takes time, valuable time. In most cases this process would put you a bit further out from some of the expertise that YC has to offer.

pedalpete 14y ago

I think what the 'No Idea' misses is that if there is a team which is absolutely amazing and can theoretically come into YC and amaze everybody with their capabilities, don't you think they'd be able to come up with an idea? PG even gives a list of things he'd like to see built, take one of those if you don't have your own, but not having anything to me seems like a bit of a cop-out.