Are you sure you want to start a company? (A Letter to Y Combinator Applicants)

Most of that sounds pretty good, but I have to disagree with this bit:<p><i>Ask yourself: would you sell your company? Would you sell it for $20 million? If you answered yes, at this stage, find a new idea. You don’t love it enough.</i><p>That strikes me as an over-generalized view. Different people have different circumstances that are going to affect that decision. Somebody who has already had a successful exit and is already set financially, or someone who is very young, might have a different threshold for when they would or wouldn't sell, versus someone who's older and who has never had an exit.<p>In my own case, as a 37 year old who's never had the "big exit" I can say that there are few - if any - ideas that I <i>wouldn't</i> sell for $20 million (assuming I owned a significant chunk of equity at exit and was going to be walking away with multiple millions of dollars personally.)<p>Sorry, but the chance to assure myself of financial independence now and for the foreseeable future, and to buy myself the ability to work on whatever I want in the future, could conceivably trump my allegiance to pretty much any idea I might be working on at the moment. I'm not saying it would necessarily be a slam dunk decision, or a decision I'd make on the spur of the moment... but it would be awfully tough to say no to an exit like that, knowing that I'm not getting any younger, and that another chance might not come along.<p>That said, if I were running a company, and owned enough equity to maintain control, and had to face that decision, I would say "no" if I believed the $20 million exit was far less than what we would eventually achieve, and/or if staying the course were the right thing to help more of the founders / early employees ultimately realize their own degree of financial freedom.

I don't think I want to change the world right now. I really don't. Does that make me a bad person or unfit to be an entrepreneur?<p>All I want to do is solve a real problem for some segment of a large market and make their lives a little easier. I want to build as much value as possible for my customers, so that they are willing to pay good money for my software. And yes, I want to get rich.<p>I agree that optimizing solely for a quick flip is not the best way to build a successful business. I would rather optimize for growth and creating value for customers and investors.<p>But questions like "Why is there so much materialism? Why is it so competitive?" strike me as absurd. If you accept the premise that a startup is a business and a fundamentally Capitalistic(rather than Marxist) endeavor, why wouldn't there be materialism and competition? Isn't that the point?

&#62;Would you sell it for $20 million? If you answered yes, at this stage, find a new idea.<p>Selling a business for $20M would make it a lot easier to get traction for your next idea.

I can relate to a lot of what Jon is saying in the article, but quite honestly the impression I've gotten is that investors are only interested in the "quick flip" and don't want to hear the grandiose plans.<p>It seems like if I were to talk to a potential investor and tell them the ideas I have to change consumer behavior for the better and connect an industry in a way that hasn't been done before, they'd tell me to stop dreaming and to forecast their 10x.<p>If every company sells to Google when they get a chance, who becomes the next Google?

I agree with most of the other comments here regarding the over-generalization of the $20 million offer.<p>"Would you sell it for $20 million?" There are so many variables for consideration in answering this question that can result in anything from a symbiotic relationship with a bigger player to augmenting the market using the buyer party's core competencies to just forfeiting the rights to the other party (which is the only viewpoint factored into the author's answer- "find a new idea"). Don't need to necessarily find a new idea as much as be a master of the idea's fate.<p>Nonetheless, I heartily agree with the last section- mastery of a domain of knowledge. Advice needs to be slapped as a layer on top of hardcore expertise. I've made this mistake in the past of letting the allure of a tech lead me to an area where I didn't have the necessary expertise and idea dissipated quickly. Now I'm focused on an area that my partner and I have deep-seated expertise in and the advice is very easy to cut through to take only the nuggets that apply.

Your article made my heart race; all the way through I was thinking "That's US"! Especially the "touch of insanity" part because we are selling our house and taking some pretty big leaps to make this thing happen.<p>We only learned about YCombinator about 2 weeks ago, within days of having decided to go "all in" but it's too great of an opportunity to pass up so we're scrambling to hit the app. deadline while getting the house on the market, planning next steps etc. But we are so energized everyday by the possibility of bringing our idea to life.<p>The Ron Conway quote was right on time for me -“real entrepreneurs aren’t thinking about exits; they’re thinking about changing the world”... I always feel a little nuts for being sad when people say things like "you'll probably sell to...for millions"... but from now on, I'll think about you, Ron Conway and changing the world and smile because clearly, I'm not the only one! Thanks a bunch for this post.

Jonathan, thanks for the great post. I agree with you (unlike a handful of HN commenters) on feeling uneasy about the materialism, doing a startup for the money, etc. I saw (and experienced) a lot of that first hand and never really understood it. Doing a startup to get rich off a startup in my opinion is like playing in a rock band for the fame and money, not for the music.

I would totally be open to the possibility of selling my company someday, it's just that they would have to be just as crazy as me to take me up on my terms. Not everything revolves around $$$.

A better question than the $20m question would be: Would you sell knowing the aquirer would shut down the product, like many that sold to Facebook have for example.

Ok, it's time to pour some cold water here: there's no such thing as the "true spirit of the entrepreneur". This phrase is reminiscent of the "you cannot grasp the true form of [X]" meme. Cool it, Giygas.<p>An entrepreneur needs confidence, freedom, and opportunity. There needs to be a problem for him or her to solve, he or she must believe that it can be solved, and he or she needs the resources and freedom to do it. Then, he or she needs to be <i>right</i> on the solubility of the problem given available resources, and able to capture the value created (if he or she cares about being wealthy). That's all. It's not wizardry. It is something that few people have the freedom to do.<p>I think 20-year-olds' garage startups are very cool but overrated. People write about it because it's rare. The best time to start a business, for most people, I would put around age 35-50, when one is still young but has the experience to judge whether it will work, enough years to one's name that one can hire experienced people (no one wants a younger boss) and the connections to pull it off. (I'm 27, by the way; not an older person trying to justify himself.) Y Combinator gives the people in their 20s a bump by providing connections they'd otherwise never have, and that's an awesome service, but that's atypical for people of that age, and the prestige and contacts of YC, if not singular, are something most of its brethren don't have.<p>Also, I think it's very naive to believe anyone wouldn't "sell out" for $20 million personally. At $20 million, that lie school tells smart people about the world being their oyster becomes true. Ideas come and go, but being rich means you actually own your life instead of renting it from a series of employers (or, if you're lucky enough to be in a startup, VCs). The second-best thing about being rich is having the freedom not to work, but that (from what I've heard) is like a toy that gets boring after a few years. The <i>actual</i> best thing about being rich is having the freedom <i>to</i> work. (The shuffling around and taking orders from others, in an artificially stressful office environment, that most people do? Not really work. Real work improves the world and <i>matters</i>.) I can think of very few legal and ethical things (and some ethically acceptable but illegal ones) I would not do for $20 million; I'd have the confidence of knowing that I can do real work for the rest of my life. Seriously, I'd <i>love</i> to kill all of life's stupid anxieties and dedicate (most of) my existence to useful work.

I wonder how the case of Kevin Rose and Digg gels with all of this.

yes.<p>The way I see it, the only way to have sustained positive impact on the world is to allow humans to be more human and entangle it in the worlds economic system so it remains in place. That construction can only be achieved by a business.