TechStars Fills Void Left By Y Combinator With New Incubator In Boston(techcrunch.com)
techcrunch.com
TechStars Fills Void Left By Y Combinator With New Incubator In Boston
http://www.techcrunch.com/2009/02/16/techstars-fills-void-left-by-y-combinator-with-new-incubator-in-boston/
44 comments
I can't figure out why there is such a protective attitude about YC around here. Sure, the board is a service (experiment) of pg and YC, but seriously folks, they don't have a mentoring/seed investment patent on this kind of an operation. Why can't folks be happy there are more opportunities out there? Are you claiming that only YC startups can benefit from such a program or that only YC can be beneficial the young company?
I think YC and any other incubator are operating in the same space, but not necessarily in competition. That sounds like a contradiction, but the way I see it that funding startups (and I only have limited experience in this field so be gentle in your rebukes :) )is more about getting the right mix of people, ideas and money than it is about just the money.
A vc should - at that stage - bring a lot more to the table than just cash, and if the chemistry isn't working out well then that can be because of the team, but it could also very well be the vc that doesn't work well with a specific party. So, more vc's in a certain region will make it easier to find the right 'mix' without any competition taking place.
One startup I'm involved in is now in its third year, they have raised about 200K in funding from 8 different parties, mostly angel investors but also one corporate investor, the team is working out quite well after some initial shake-out.
I can fully imagine that the past would have looked different if we had not 'clicked' on a personal level with the founders, but if we had not and they would have found traction with other investors I would not have seen that as competitor running away with our business, simply a mismatch of characters.
I think most vc presentations that bomb will do so on a personal level rather than on the ideas presented, in fact I would be surprised if there were not several teams pitching roughly the same idea to a number of vcs at the same time (and sometimes even to the same vc...).
The short version of all this, first of all it is about you and the vc getting on the same page, second there is the quality of the idea and your plans for executing that idea, third there is the money.
The last two are 'fixable', the first is not.
A vc should - at that stage - bring a lot more to the table than just cash, and if the chemistry isn't working out well then that can be because of the team, but it could also very well be the vc that doesn't work well with a specific party. So, more vc's in a certain region will make it easier to find the right 'mix' without any competition taking place.
One startup I'm involved in is now in its third year, they have raised about 200K in funding from 8 different parties, mostly angel investors but also one corporate investor, the team is working out quite well after some initial shake-out.
I can fully imagine that the past would have looked different if we had not 'clicked' on a personal level with the founders, but if we had not and they would have found traction with other investors I would not have seen that as competitor running away with our business, simply a mismatch of characters.
I think most vc presentations that bomb will do so on a personal level rather than on the ideas presented, in fact I would be surprised if there were not several teams pitching roughly the same idea to a number of vcs at the same time (and sometimes even to the same vc...).
The short version of all this, first of all it is about you and the vc getting on the same page, second there is the quality of the idea and your plans for executing that idea, third there is the money.
The last two are 'fixable', the first is not.
We didn't leave a void when we left Boston, because we weren't filling one when we were there. No one seems to get this, but seed funding is not a regional business. Startups at that stage can move.
Most of the startups we funded in our Boston cycles didn't come from Boston, and practically all left Boston afterward. We could have been anywhere. Anywhere with decent coffee at least.
Honestly, they'd have done better to just fund 20 startups in Boulder rather than 10 in one place and 10 in another.
Most of the startups we funded in our Boston cycles didn't come from Boston, and practically all left Boston afterward. We could have been anywhere. Anywhere with decent coffee at least.
Honestly, they'd have done better to just fund 20 startups in Boulder rather than 10 in one place and 10 in another.
Startups at this stage can certain move, but it's expensive (in time and money) to do so. Some startups at this stage have spouses and kids, which makes this a bigger decision. If the spouse has a lucrative job, this makes it more expensive (especially in this market, where there aren't big piles of jobs sitting around in the valley).
In our case, YC was worth it. We left working wives behind and they visited us occasionally to remind us that we were married.
But if there was a similar quality program locally, we would've considered it. (For the record, I don't think TechStars is good enough that we would've punted YC for it if it were local, but it seems to be getting better).
Geography is less of a factor for YC applicants, I'd assume, because YC is far enough above the competition that it's worth it to move.
In our case, YC was worth it. We left working wives behind and they visited us occasionally to remind us that we were married.
But if there was a similar quality program locally, we would've considered it. (For the record, I don't think TechStars is good enough that we would've punted YC for it if it were local, but it seems to be getting better).
Geography is less of a factor for YC applicants, I'd assume, because YC is far enough above the competition that it's worth it to move.
"Honestly, they'd have done better to just fund 20 startups in Boulder"
I've heard they might do that as well.
I'm guessing the difference between techstars and YC is less about going regional to source applicants than it is about spreading around the mentor pool, sort of like franchising the "learn from elders" experience rather than concentrating it. YC's a bet in the other direction, sure, but I'm also interested to see how this plays out because I just can't imagine the bay area has a complete lock on all of the previously successful entrepreneurs willing to advise the next generation of hackers. At the very least, there's a certain amount of mentors and potential investors that like being away from the echo chamber and prefer to talk in Boston about Derrida rather than in SF/SV about virality, or in the case of Techstars and Brad Feld, about Lance Armstrong, beer and whatever else people like in Boulder.
I've heard they might do that as well.
I'm guessing the difference between techstars and YC is less about going regional to source applicants than it is about spreading around the mentor pool, sort of like franchising the "learn from elders" experience rather than concentrating it. YC's a bet in the other direction, sure, but I'm also interested to see how this plays out because I just can't imagine the bay area has a complete lock on all of the previously successful entrepreneurs willing to advise the next generation of hackers. At the very least, there's a certain amount of mentors and potential investors that like being away from the echo chamber and prefer to talk in Boston about Derrida rather than in SF/SV about virality, or in the case of Techstars and Brad Feld, about Lance Armstrong, beer and whatever else people like in Boulder.
The difference isn't in that dimension. The mentor pool in Silicon Valley is massive; probably several times the rest of the country combined.
I see, you're not just talking about network effects of aggregating all of the startups together, it's about having a common pool of investors as well. I wonder if angelconf is a first step towards a ycombinator-like structured approach towards the investing side of the equation?
http://www.angelconf.com/
http://www.angelconf.com/
Not just investors. There is a collection of people associated to varying degrees with YC who advise the startups. (They're the old-looking people in the slides on our frontpage.) Sometimes they invest, but they don't only talk to startups they invest in.
One of the hardest parts of being in Boston for us was that this pool of advisors was so much smaller there. It was just a handful of people. Whereas in the Valley there are on the order of 50 different people we might introduce one or more YC startups to each cycle.
One of the hardest parts of being in Boston for us was that this pool of advisors was so much smaller there. It was just a handful of people. Whereas in the Valley there are on the order of 50 different people we might introduce one or more YC startups to each cycle.
Yeah, that's probably the case, I was just entertaining a thought experiment because I really like the people I've met through techstars and want them to do well.
The bay area's network effects really do create different kinds of opportunity rather than just more of the same - it's the reason I moved to the bay area in the first place three years ago and it's been a great career decision. Living here means being able to do things like apply to yc, whereas I'd probably never consider moving to Boulder or Boston if it just came down to 5 digits of seed investment. I'd rather stay here and force my projects to happen during nights and weekends instead. Here, you'd be crazy to turn down admission to yc and access to the advisors involved, no matter what your day job pays.
The bay area's network effects really do create different kinds of opportunity rather than just more of the same - it's the reason I moved to the bay area in the first place three years ago and it's been a great career decision. Living here means being able to do things like apply to yc, whereas I'd probably never consider moving to Boulder or Boston if it just came down to 5 digits of seed investment. I'd rather stay here and force my projects to happen during nights and weekends instead. Here, you'd be crazy to turn down admission to yc and access to the advisors involved, no matter what your day job pays.
| Startups at that stage can move.
Not all can, or are willing, whatever their reasons. While it might be smart business in your case to have picked your location and make the startups come to you, I think it's disingenuous to say that seed funding is not a regional business [because] startups at that stage can move.
I won't bore you with the specifics of my location or what's possible here, but I do think there's a good business opportunity for anybody that's willing to come up with a VC/incubator model similar to yours, but that can be deployed in lots of different locations.
Oh well. Bootstrapping isn't as much fun, but it'll get me there. :-)
Not all can, or are willing, whatever their reasons. While it might be smart business in your case to have picked your location and make the startups come to you, I think it's disingenuous to say that seed funding is not a regional business [because] startups at that stage can move.
I won't bore you with the specifics of my location or what's possible here, but I do think there's a good business opportunity for anybody that's willing to come up with a VC/incubator model similar to yours, but that can be deployed in lots of different locations.
Oh well. Bootstrapping isn't as much fun, but it'll get me there. :-)
So Jealous,
Why not come down to Sunny Florida. The Space Coast is an amazing place and their is a lot of innovation down here. Its also extremely warm.
Why not come down to Sunny Florida. The Space Coast is an amazing place and their is a lot of innovation down here. Its also extremely warm.
I think teams would apply to YC no matter the location, but not likewise for TechStars.
"Startups at that stage can move."
What if they don't want to? What if they don't want to be in California. This gives them options.
What if they don't want to? What if they don't want to be in California. This gives them options.
It happens that I have a lot of data about the number of startups that need to be in Boston to participate in something like YC, because they were the ones who waited for summer cycles to apply when we had the summer cycles in Boston. Of those we accepted I don't think the number was ever more than 3 a year.
What about network effects? I'm aware that SV is the best, but perhaps there are some benefits to diversifying their presence? Additional exposure to local mentors, raising startup buzz in the area with media/event coverage, even interacting with other local businesses? Since YC decided to leave I imagine these probably weren't very big effects, but I'm curious.
In my experience, concentration produces the most powerful network effects. E.g. the closer the startups are brought together, the more they help one another. This is true both within and between cycles, and between startups and the greater community.
Though this isn't the reason we decided to be in CA year round, such interactions are much increased here. I was sitting in a cafe in Palo Alto recently having lunch, and in the course of one hour I ran into 3 YC founders and 2 angel investors I knew, all 5 of whom were there independently.
The thing we used to like about going back to Cambridge in the summer was the lack of this, actually. If you had to overhear the conversation at the next table, at least it was about Derrida and not virality.
Though this isn't the reason we decided to be in CA year round, such interactions are much increased here. I was sitting in a cafe in Palo Alto recently having lunch, and in the course of one hour I ran into 3 YC founders and 2 angel investors I knew, all 5 of whom were there independently.
The thing we used to like about going back to Cambridge in the summer was the lack of this, actually. If you had to overhear the conversation at the next table, at least it was about Derrida and not virality.
Im in non-silicon valley - and not leaving anytime soon - I have a family, putting down some roots, etc. My hope though was that the online world would provide this network effect, though I guess there is just not enough bandwidth in online interactions for people to size each other up, make friendships, relationships, etc.
I understand the Silicon Valley advantage exists b/c of the physical proximity of so many important ingredients, and the overwhelming number of the ingredients, but surely the number of non-SV people outnumbers even that.
I would love to hear those kinds of conversations in diners around here - but it doesn't happen. The only place I hear those kinds of conversations are here, on the web. I have a fairly limited dialog with people on these subjects, really the market and my partner are the major sources of input for ideas and where to go in the future.
I'd love to be in SV, to be a part of it, but I'm not willing to trade what I and my family have for the benefits to found there. How can anyone afford to live there also, is beyond me.
Anyway - i'm rambling. I guess I should start to take my online identity more seriously. I should post in my profile what my company is and does. I should try and connect with people I meet on here. But finally, something is holding me back - a certain innate caution retreats from that type of display. Because for all of the wonderful people that are on here, there are probably some bad apples. I guess its the same as in the physical world, but there you have cues, and police, and safety.
pg - any way to add some kind of reputational system to hacker news? Or maybe thats a good startup idea.
You could put in anyone's username, and any site, and rate them on a series of categories - whatever. It can be as simple as 'friend' like facebook. But it would be a kind of metadata for these relationships. I could see if someone who is a friend of mine on here likes them, trusts them, etc. Though making all of that explicit might be too much. Human social interaction allows for alot of subtlety - you can say alot without saying anything. Thats another place online communication suffers, its very hard to detect sarcasm,etc. Oh well, I guess I'm really rambling now.
I understand the Silicon Valley advantage exists b/c of the physical proximity of so many important ingredients, and the overwhelming number of the ingredients, but surely the number of non-SV people outnumbers even that.
I would love to hear those kinds of conversations in diners around here - but it doesn't happen. The only place I hear those kinds of conversations are here, on the web. I have a fairly limited dialog with people on these subjects, really the market and my partner are the major sources of input for ideas and where to go in the future.
I'd love to be in SV, to be a part of it, but I'm not willing to trade what I and my family have for the benefits to found there. How can anyone afford to live there also, is beyond me.
Anyway - i'm rambling. I guess I should start to take my online identity more seriously. I should post in my profile what my company is and does. I should try and connect with people I meet on here. But finally, something is holding me back - a certain innate caution retreats from that type of display. Because for all of the wonderful people that are on here, there are probably some bad apples. I guess its the same as in the physical world, but there you have cues, and police, and safety.
pg - any way to add some kind of reputational system to hacker news? Or maybe thats a good startup idea.
You could put in anyone's username, and any site, and rate them on a series of categories - whatever. It can be as simple as 'friend' like facebook. But it would be a kind of metadata for these relationships. I could see if someone who is a friend of mine on here likes them, trusts them, etc. Though making all of that explicit might be too much. Human social interaction allows for alot of subtlety - you can say alot without saying anything. Thats another place online communication suffers, its very hard to detect sarcasm,etc. Oh well, I guess I'm really rambling now.
any way to add some kind of reputational system to hacker news?
I've often thought of doing something like that, as an aid to people trying to find hackers to hire. Would other people want such a thing? (Assuming it could be implemented in a way that wasn't obnoxious.)
I've often thought of doing something like that, as an aid to people trying to find hackers to hire. Would other people want such a thing? (Assuming it could be implemented in a way that wasn't obnoxious.)
Great. The more funding opportunities out there the better it is for all of us.
I think that most people's interest (including mine) in doing YCombinator or TechStars is not really the funding. It seems that you'd be much better off in this case just saving the 6 or 8k yourself. Rather, the network and guidance in getting your idea off the ground seems to be the real value.
Exactly. The value of each of these programs is directly related to the guidance, advice, and networking involved. Having a good selection process is also a good validation of teams/ideas.
I'm in Chicago. Here the politicians sell the voids.
I don't really believe that this is just a coincidence. If they were planning a second location they wouldn't have gone to Boston where there was YC. They would have tried to go some place w/o much competition, like New York.
And if they were indeed planning to take YC on, why Boston and not Silicon Valley?
And if they were indeed planning to take YC on, why Boston and not Silicon Valley?
Strong ties to Boston with the founders of TC. Brad Feld went to MIT and still has a strong and love for the area. David Cohen sold one of his startups there.
Because YC is supply-constrained. If you believe there are more fundable opportunities than YC can handle then it makes perfect sense to "compete" in Boston.
I wouldn't be surprised if it were all just a story, though.
I wouldn't be surprised if it were all just a story, though.
pg commented above, so that can't be their reason. Maybe they just like Boston?
Because there's a gap in Boston that needs filling? A lot of start-ups want to go to Boston, or can't make it to California.
As someone else mentioned, both David Cohen and Brad Feld have a history in Boston, it's where they got their start (as it has been for many others thanks to MIT and Harvard). There was also a strong push for quite a while from the Boston and Cambridge entrepreneurial community.
Is there any competition at all in NYC?
What I like about techstars - they don't pretend to be unique. Instead of going to some bizzare place like NY or whatever (they seem don't like SF) just to generate buzz they go to Boston, the most logical place for them to go to to attract more healthy attention. But people still generate buzz :)
These people set a new record for me-too-ness every month.
Call it me-too if you like, Matt, but there's some great stuff coming out of Techstars. I don't care where innovative companies come from - just that they get off the ground.
Sorry to hear you're not into that.
Sorry to hear you're not into that.
That's just silly. I didn't say a word about any of the startups. Just the organization itself.
Personally, having been in TechStars (founder of SocialThing), I think the programs are very different. Both have their merits, one is not necessarily better than the other, just different.
Why the TS vs. YC animosity? We're (startup founders) all in this game together. Of course there will be competition and such, but we're all at the same stage at one time or another, so why not help? Why not be happy that there are 10 more companies that will get funded than last year?
Why the TS vs. YC animosity? We're (startup founders) all in this game together. Of course there will be competition and such, but we're all at the same stage at one time or another, so why not help? Why not be happy that there are 10 more companies that will get funded than last year?
I don't think there is any animosity between founders for TS vs YC. I've intro'ed TS startups to our investors before, and if/when we need to go back and raise another round, they'll do the same.
I wouldn't say it's animosity. I just think they're sort of lame copycats. For fuck's sake man, they stole YC's application word for word. I think that gives lifetime exemptions to those of us calling them a me-too act.
Finance (funding IS finance, right?) in itself is rather uninventive. Would you prefer to learn different rules each time you get new CC?
Well, there's uninventive, and then there's directly copying every move, sometimes literally by cutting and pasting. Though I suppose they say good artists copy, great artists steal. Maybe TechStars are great and just seem lame to me.
TechStars requested videos this year, before YC's latest application opened, which also requested videos - are we to now start saying YC copied TS? Get over it.
If TechStars made a video or a paragraph explaining it, and YC actually cut and pasted that into their site, then yes, I would claim that.
I'm not knocking TechStars for doing a similar thing. I'm knocking them for copying it line by line (often by cutting and pasting) and not innovating at all. Good businesses often borrow ideas from successful competitors, but they never copy them entirely. They always seek to improve.
I'm not knocking TechStars for doing a similar thing. I'm knocking them for copying it line by line (often by cutting and pasting) and not innovating at all. Good businesses often borrow ideas from successful competitors, but they never copy them entirely. They always seek to improve.
Nothing matters less to me than mee-too-ness about startup programs. I'm desperate for 100 absolutely same programs to be available to me in absolutely same time in absolutely same places.
Be serious man, copying a application form cann't be seen as a brutal act of uncreative vandalism.
Be serious man, copying a application form cann't be seen as a brutal act of uncreative vandalism.
The problem is that it's not the funding or the batch concept that makes Y Combinator. It's something that can't be replicated once, let alone 100 times.