YC will accept 10k new companies into its new online Startup School(qz.com)
qz.com
YC will accept 10k new companies into its new online Startup School
https://qz.com/987043/y-combinator-will-back-10000-startups-to-prove-theres-nothing-magical-about-silicon-valley/
128 comments
IMO YC depends on its branding as the exclusive, "Harvard of incubators," and if they keep funding so many startups they are going to lose that edge and create the space for a new YC.
Each class is like 130 startups now, right? I keep seeing startups that duplicate other existing YC startups. I just imagine as an investor you have to be thinking "Ok, now there are 2 or 3 or 4 times as many startups as 3 years ago being pitched to me that are going to fail."
Each class is like 130 startups now, right? I keep seeing startups that duplicate other existing YC startups. I just imagine as an investor you have to be thinking "Ok, now there are 2 or 3 or 4 times as many startups as 3 years ago being pitched to me that are going to fail."
Or the opposite - look at all this deal flow. As these startups move through the program I am sure YC is collecting tons of data in regards to how their trending. Imagine an online portal an investor could log into and within seconds have access to thousands of startups but more importantly, visibility into their metrics and traction.
You mean Mattermark?
It seems like YC's stamp of approval often isn't enough, even without the kind of dilution you're talking about.
Patrick from Stripe said something like "Everybody still thought we were crazy, but Peter Thiel was also crazy so he invested within two hours of meeting... after that it became much easier."[1] There was also an email exchange with an investor about Airbnb that PG shared where the VCs just weren't interested and the valuation was amazingly low in retrospect. There's a deep level of conservatism in nearly all tech investors and a lot of herd-like behavior. There's a huge premium for being on their social graph and for going to the same school they did (or one many of their friends did).
Fundraising is one of the least meritocratic aspects of startups.
Perhaps the most extreme example of this I've seen is looking at Vectr vs Figma. Vectr is about a year younger but both companies have been around for a few years and are being developed at roughly the same rate. Figma is in SF, run by a Thiel Fellow and has raised nearly 18MM[2], whereas Vectr is run in Asia by a Canadian guy with few connections and has struggled to raise anything[3].
This is insane considering there's such a clear comparison between the two companies, and the one that has raised a tiny fraction of the other has somehow managed to recruit a top-notch team, keep parity on the product and even started pulling ahead in some areas. It's also completely normal. Companies run by founders out of Stanford/Harvard/YC regularly raise boatloads of money while their competitors who sometimes eventually prevail can't raise any. Fundraising often tips the balance.
There just aren't enough investors who truly believe in black swan farming.
[1] Related Stripe interview: https://www.startupgrind.com/blog/from-the-vault-patrick-col...
[2] Sigma https://www.crunchbase.com/organization/figma#/entity
[3] Vectr https://www.crunchbase.com/organization/vectr-4#/entity
Patrick from Stripe said something like "Everybody still thought we were crazy, but Peter Thiel was also crazy so he invested within two hours of meeting... after that it became much easier."[1] There was also an email exchange with an investor about Airbnb that PG shared where the VCs just weren't interested and the valuation was amazingly low in retrospect. There's a deep level of conservatism in nearly all tech investors and a lot of herd-like behavior. There's a huge premium for being on their social graph and for going to the same school they did (or one many of their friends did).
Fundraising is one of the least meritocratic aspects of startups.
Perhaps the most extreme example of this I've seen is looking at Vectr vs Figma. Vectr is about a year younger but both companies have been around for a few years and are being developed at roughly the same rate. Figma is in SF, run by a Thiel Fellow and has raised nearly 18MM[2], whereas Vectr is run in Asia by a Canadian guy with few connections and has struggled to raise anything[3].
This is insane considering there's such a clear comparison between the two companies, and the one that has raised a tiny fraction of the other has somehow managed to recruit a top-notch team, keep parity on the product and even started pulling ahead in some areas. It's also completely normal. Companies run by founders out of Stanford/Harvard/YC regularly raise boatloads of money while their competitors who sometimes eventually prevail can't raise any. Fundraising often tips the balance.
There just aren't enough investors who truly believe in black swan farming.
[1] Related Stripe interview: https://www.startupgrind.com/blog/from-the-vault-patrick-col...
[2] Sigma https://www.crunchbase.com/organization/figma#/entity
[3] Vectr https://www.crunchbase.com/organization/vectr-4#/entity
Does Vectr have vector networks, components and constraints, real-time collaboration?
The feature sets between the two apps are not identical but they are roughly at parity depending on what you're working on. I'm not a beta tester and can't do the real time collaboration but from their open road map it looks like it's in progress now. I'm most interested in seeing the asset marketplace open, though.
https://vectr.com/roadmap
Beyond the specifics of this one matchup, the trend is pretty undeniable. Pedigree is a huge advantage in fundraising and being outside of the US is a huge minus, even if the company is incorporated in the US.
https://vectr.com/roadmap
Beyond the specifics of this one matchup, the trend is pretty undeniable. Pedigree is a huge advantage in fundraising and being outside of the US is a huge minus, even if the company is incorporated in the US.
> let the startups filter themselves out by failing to keep up the progressively more challenging levels of effort.
Doesn't this happen anyway simply by exposure to the real world? :)
Doesn't this happen anyway simply by exposure to the real world? :)
Yes but it's corrupted at step one by an artificial selelection process. You want just the real world to be the filter.
Not as 'successful' as YC and other incubators/accelerators, but the idea of taking in as many and filtering out is what Founder Institute does. It is the "survivor" of Startups.
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Replying while somewhat under-slept here, but I've been taking the course and from everything seen so far Startup School is an excellent step in the right direction. The world today needs more people solving the problems they see in the world, instead of waiting to make enough money in a job that may be automated soon enough, or relying on benefits and insurance that can be ripped apart by a politician's pen. Building something from scratch is hard, and veering off-road is obviously easy (going to press to early, raising huge amounts, or not raising when you have a viral product, being scared away by a patent troll, hiring people for the sake of headcount, you name it). Compound the problems you have with additional regulatory burdens in other countries, and it can be downright impossible to make something new (vs starting another store, or restaurant).
YC tries to make it as simple as possible to make the life of ENTREPRENEURS survivable(Not just VC-fundable businesses). If that wasn't the case, Startup School would include an investment that gets you into the feedback loop of having to produce returns for someone. Not asking for equity is a great feature, because it encourages experimentation and provides railings to keep as many of these experiments on the lane that gives them room to validate and less risk of predictable failures. School may even be the wrong term here, I would call it an Apprenticeship, because you are practicing and mastering your craft with mentors and peers in practice.
This Apprenticeship for Entrepreneurs, crafted by YC, needs to spread with as much quality mentors and talent, as is available, and it needs to have proper funnels doubling down on people who strike gold by meeting a high-demand unmet need. Startups at advanced stages should more qualified support and more funding for equity. (Right now that step is YC Core)
Do that across any country and market segment and you won't need to worry about Jobs automation. Humanity will have an efficient method to create as many entrepreneurs out of Job bleeds as it needs and to lead them into fixing problems that actually need fixing.
YC tries to make it as simple as possible to make the life of ENTREPRENEURS survivable(Not just VC-fundable businesses). If that wasn't the case, Startup School would include an investment that gets you into the feedback loop of having to produce returns for someone. Not asking for equity is a great feature, because it encourages experimentation and provides railings to keep as many of these experiments on the lane that gives them room to validate and less risk of predictable failures. School may even be the wrong term here, I would call it an Apprenticeship, because you are practicing and mastering your craft with mentors and peers in practice.
This Apprenticeship for Entrepreneurs, crafted by YC, needs to spread with as much quality mentors and talent, as is available, and it needs to have proper funnels doubling down on people who strike gold by meeting a high-demand unmet need. Startups at advanced stages should more qualified support and more funding for equity. (Right now that step is YC Core)
Do that across any country and market segment and you won't need to worry about Jobs automation. Humanity will have an efficient method to create as many entrepreneurs out of Job bleeds as it needs and to lead them into fixing problems that actually need fixing.
At its core, YC is a VC entity, and as such is competing for promising investment possibilities. IMHO YC's move to "accept 10K new companies" is a smart attempt in attempting to extend their reach to get the first pick at the commodity. We will see if it will work out. Either way, it is great to see YC to lead the way - they have done a lot for the community already.
Disclaimer: Been once in that orange place in Palo Alto, and I am not a fan-boy. However, I do remember the dark ages around 2005, when there was nothing in Europe that was even worth to compare to this accelerator program. YC has greatly helped to change the landscape.
Disclaimer: Been once in that orange place in Palo Alto, and I am not a fan-boy. However, I do remember the dark ages around 2005, when there was nothing in Europe that was even worth to compare to this accelerator program. YC has greatly helped to change the landscape.
I am curious about your experience taking the course. How much time commitment is it? Is it something I can do while working a full time job?
At min, 2-4 hours for office hours per week ( within my group at least )
However, at the core they are pushing you to grow and build a company.
So within my group there are alot of fulltime founders.
Im a fulltime founder myself and have found the experience to be great. Its helped me to ask the correct questions and to move alot faster.
Its also great to have a solid network of other founders to chat with.
In saying this, there are members within our group whom have full-time jobs and simply work alot after hours on their products.
However, at the core they are pushing you to grow and build a company.
So within my group there are alot of fulltime founders.
Im a fulltime founder myself and have found the experience to be great. Its helped me to ask the correct questions and to move alot faster.
Its also great to have a solid network of other founders to chat with.
In saying this, there are members within our group whom have full-time jobs and simply work alot after hours on their products.
I think I can handle 2-4 hours a week. I am really interested in learning from YC how to grow
They don't financially back the 10k startups, it's just an online course where you get discounts on various online services.
Granted the online courses are supposedly very valuable, but the lack of face to face with YC's network and lack of available funding makes it hard to see how they can get away with the claim that they are "backing" 10k startups.
Edit: 200 people related to YC have volunteered to "mentor" the 10k companies. Let's assume 2 founders per company, that's 1 mentor for every 100 founders. And the course is 10 weeks long, so assuming the volunteers spend 40 hours a week for 10 weeks mentoring the founders (which they likely wont), that works out to be 4 hours per founder over the entire course.
Yeah, not the same as "backing" a company.
Granted the online courses are supposedly very valuable, but the lack of face to face with YC's network and lack of available funding makes it hard to see how they can get away with the claim that they are "backing" 10k startups.
Edit: 200 people related to YC have volunteered to "mentor" the 10k companies. Let's assume 2 founders per company, that's 1 mentor for every 100 founders. And the course is 10 weeks long, so assuming the volunteers spend 40 hours a week for 10 weeks mentoring the founders (which they likely wont), that works out to be 4 hours per founder over the entire course.
Yeah, not the same as "backing" a company.
Being in startup school, I can say it's definitely useful, and having a mentor point out when ideas are bad or ways to improve is helpful.
What's more helpful, is that you're placed in a group of say 20 other companies all trying to produce something, some are making money, some have literally nothing. You can learn from one another, share ideas, test out each others products, etc.
One thing most people trying to start a company don't have is a support network of highly motivated people doing the same thing. I know I personally do, but many of my fellow startup school colleagues do not. That's what's helpful: The startup school group office hours (or therapy sessions).
The second most valuable portion of startup school, is that they force you to be accountable. If I say I'm doing X, they want to see it. They expect results, and they push you to share.
The finally, and perhaps most valuable portion of startup school, is the fact you can network. I'd argue this is different than group office hours. There are many companies that have synergies, for example my project: https://projectpiglet.com/ can help identify trends, or "experts", which other teams could use.
There are other examples, but it's definitely been useful.
That being said, it is not YC proper. You don't get funds, many of the founders don't actually have an LLC or C-Corps. Many are in school, or (like myself) have full-time jobs working 50 hours a week.
Although not being able to work on the project full-time sucks, I've definitely made progress through startup school. We would have had less without it, the ideas from the team have bubbled up and the support pushes us to do better. I would recommend it, and definitely don't think it's "backing 10k startups", however it is helping in a significant way.
What's more helpful, is that you're placed in a group of say 20 other companies all trying to produce something, some are making money, some have literally nothing. You can learn from one another, share ideas, test out each others products, etc.
One thing most people trying to start a company don't have is a support network of highly motivated people doing the same thing. I know I personally do, but many of my fellow startup school colleagues do not. That's what's helpful: The startup school group office hours (or therapy sessions).
The second most valuable portion of startup school, is that they force you to be accountable. If I say I'm doing X, they want to see it. They expect results, and they push you to share.
The finally, and perhaps most valuable portion of startup school, is the fact you can network. I'd argue this is different than group office hours. There are many companies that have synergies, for example my project: https://projectpiglet.com/ can help identify trends, or "experts", which other teams could use.
There are other examples, but it's definitely been useful.
That being said, it is not YC proper. You don't get funds, many of the founders don't actually have an LLC or C-Corps. Many are in school, or (like myself) have full-time jobs working 50 hours a week.
Although not being able to work on the project full-time sucks, I've definitely made progress through startup school. We would have had less without it, the ideas from the team have bubbled up and the support pushes us to do better. I would recommend it, and definitely don't think it's "backing 10k startups", however it is helping in a significant way.
Networking only works if you're with a relevant audience. It's probably not useful to participate in a fashion industry networking event if you're a startup selling EDA software.
In any case, as long as it's not asking for an ownership stake, I don't see the problem with it.
In any case, as long as it's not asking for an ownership stake, I don't see the problem with it.
In such large groups, engagement drops off really fast.
If half the companies drop out each week, that's 200 mentors towards 625 companies, which isn't that great, but not too bad.
If half the companies drop out each week, that's 200 mentors towards 625 companies, which isn't that great, but not too bad.
Plus, this is all happening online
They might not back the whole 10000 startups but would probably invest in 5-10% of the ones they feel are really good.
Where can I apply? The site says it's already started: https://www.startupschool.org/
> The course will begin on April 5th, 2017
But the title implies they're going to add 10,000 new applicants.
> The course will begin on April 5th, 2017
But the title implies they're going to add 10,000 new applicants.
The article answers your question:
> Now, Startup School will accept about 10,000 companies in early 2018, says Altman, and potentially more after that.
> Now, Startup School will accept about 10,000 companies in early 2018, says Altman, and potentially more after that.
I am super excited about this. The thought of applying for YC was never on the table because I'm reluctant to move to the US. Startup School is great, but sometimes I feel that it's a little too condensed and, well, at the end of the day it's still passive consumption. Mentoring personalises things a little, so this news is welcoming.
My question is, can this mentoring be as effective as having a 'real' mentor? I have no doubt that YC mentors are highly qualified individuals, but with 10k startups, I can't help but feel that these sessions would be as rapid-fire as one of the live office hour videos in Startup School. Nothing wrong with that, but for me, I look for relationships the most from mentors.
This also makes me think that this may just be a Round One to perhaps a lengthier process to sift for startups with the best potential..
My question is, can this mentoring be as effective as having a 'real' mentor? I have no doubt that YC mentors are highly qualified individuals, but with 10k startups, I can't help but feel that these sessions would be as rapid-fire as one of the live office hour videos in Startup School. Nothing wrong with that, but for me, I look for relationships the most from mentors.
This also makes me think that this may just be a Round One to perhaps a lengthier process to sift for startups with the best potential..
As a side note, the data in the graph "Number of applicants and startups accepted into Y Combinator", evidences two things:
1) the number of applicants is increasing (which is what the graph was evidently made for)
2) the percentage of successful applicants is declining steadily actually halving from (roughly) around 3-4% until 2012 to (still roughly) 1,50-2,00 later
This may be IMHO due to two factors (or a combination of both):
1) Too many startups lately apply without having a sound enough project or not original enough ideas
2) Y Combinator has become more picky when choosing who to accept
Surely it is not as easy to be accepted (in the actual YC financing program) as it may sound, I thought that the success rate was higher than that.
1) the number of applicants is increasing (which is what the graph was evidently made for)
2) the percentage of successful applicants is declining steadily actually halving from (roughly) around 3-4% until 2012 to (still roughly) 1,50-2,00 later
This may be IMHO due to two factors (or a combination of both):
1) Too many startups lately apply without having a sound enough project or not original enough ideas
2) Y Combinator has become more picky when choosing who to accept
Surely it is not as easy to be accepted (in the actual YC financing program) as it may sound, I thought that the success rate was higher than that.
This should be good for a large number of startups who are not in the valley. Structure with an incentive program is a great way to get teams in markets lacking a SV-style approach to entrepreneurship. I think English speaking countries have had a big advantage here because there's so much content and expertise out there. One thing they should do is simulcast the lectures with professional translators in another langauage or at least crowdsourcing subtitles. This would be really helpful for entrepreneurs in places like Japan.
I've been saying for long time that YC is just a new kind of university and now it starts appearing more and more like that. The goal of a traditional university is to enable financial security for students through high-quality employment enabled by a skill set provided by the university. YC effectively does the same -- it provides students with a necessary skill set to enable financial security through self-employment. The main difference is that education in YC is paid with shares, not cash.
> high-quality employment enabled by a skill set provided by the university
Neither YC nor a university are in the business of particularly providing such a thing. They provide a stamp of approval, aka vetting, which is what gets you the job. That you survive it, learn very minimalist skills, graduate and get that piece of paper in theory increases the odds that you possess such and such personal qualities. From there, the overwhelming majority of what you will need for your career, will be learned post-university. The university isn't doing much more than vouching that you represent at least a baseline, ideally according to / in-line with the university reputation.
In the case of YC, their stamp of approval is what gets you the big money. They vet you. They do not make you a great hacker or leader, or give you those skills, you have to do almost all of that yourself. The best they can do is sometimes point you in the right direction and offer occasional help.
Neither YC nor a university are in the business of particularly providing such a thing. They provide a stamp of approval, aka vetting, which is what gets you the job. That you survive it, learn very minimalist skills, graduate and get that piece of paper in theory increases the odds that you possess such and such personal qualities. From there, the overwhelming majority of what you will need for your career, will be learned post-university. The university isn't doing much more than vouching that you represent at least a baseline, ideally according to / in-line with the university reputation.
In the case of YC, their stamp of approval is what gets you the big money. They vet you. They do not make you a great hacker or leader, or give you those skills, you have to do almost all of that yourself. The best they can do is sometimes point you in the right direction and offer occasional help.
> The goal of a traditional university is to enable financial security for students through high-quality employment enabled by a skill set provided by the university.
I believe universities traditionally aspired to loftier goals. See:
https://en.wikipedia.org/wiki/Liberal_education
I believe universities traditionally aspired to loftier goals. See:
https://en.wikipedia.org/wiki/Liberal_education
I just LOVE the photo used in the article. Is that the very first cohort? so many familiar faces.. Sam standing next to Paul.. even Aaron!
great piece of yc history! What a great photo.
great piece of yc history! What a great photo.
I think this is the money line right here:
The heart of YC’s philosophy is that world has too few people solving fixable problems, a “bottleneck in society,” says Garg. “If you fundamentally believe that, then [Startup School] is exactly the right thing to do. You are empowering a bunch of people to just try and it’ll turn out it’s going to be way easier than they thought it was going to be. And there’ll be more progress.”
The heart of YC’s philosophy is that world has too few people solving fixable problems, a “bottleneck in society,” says Garg. “If you fundamentally believe that, then [Startup School] is exactly the right thing to do. You are empowering a bunch of people to just try and it’ll turn out it’s going to be way easier than they thought it was going to be. And there’ll be more progress.”
> They chose inexperienced college students over startup veterans.
Is this still true of YC today?
Is this still true of YC today?
As of June 2016 the average age was around 29.
https://www.ycombinator.com/faq/
https://www.ycombinator.com/faq/
I would imagine the startup life skews young in general because older age tends to mean more responsibilities, and at some point if you haven't been successful with a startup you'll tend towards a more traditional position for those reasons? "Startup Veteran" is kind of an amusing phrase.
I disagree. I'd say older people have more networks, more experience and more resources, hence will find less comparative benefit in giving away precious equity to YC (etc) than young people who need all the above.
It could be said that YC and other startup incubators have done a stellar marketing job in taking ~6% equity off organisations by turning the tables on funding and making companies "apply" to give their equity away. From YC's perspective they have nothing to lose and everything to gain from this arrangement, versus the founders who are in pretty much the opposite position.
It could be said that YC and other startup incubators have done a stellar marketing job in taking ~6% equity off organisations by turning the tables on funding and making companies "apply" to give their equity away. From YC's perspective they have nothing to lose and everything to gain from this arrangement, versus the founders who are in pretty much the opposite position.
I know of several well connected, 'Older' founders who applied, were accepted and are doing well.
There is even cases of YC alums going through again. The reason is likely quality, structured mentoring and not just marketing.
There is even cases of YC alums going through again. The reason is likely quality, structured mentoring and not just marketing.
That's probably true. I was sort of envisioning bootstrapped, self-funded businesses as a different category than the YC-startup style business.
Youre confusing concepts. You can skip an incubator like YC while still intending to not bootstrap. There is also no such thing as a 'YC-style' startup, YC was set up to target startups, so can't have invented them.
YC used to only give a tiny amount of equity that any vaguely successful person could match ($16k?). It filled the gap between starting and series A.
Bootstrapping means avoiding getting a series A.
Basically, YC didn't invent startups, it invented a new, more accessible route to starting one.
YC used to only give a tiny amount of equity that any vaguely successful person could match ($16k?). It filled the gap between starting and series A.
Bootstrapping means avoiding getting a series A.
Basically, YC didn't invent startups, it invented a new, more accessible route to starting one.
When I picture a "Startup Veteran", I picture someone who's worked with one or more companies to a large and successful exit. Someone like that is likely fairly wealthy, and so doing a startup doesn't have the same amount of risk as someone doing it for the first time has.
If we could know the median it would be way more telling than the average age.
I would expect that with a fairly even distribution such as ages, the median and mean would be similar. Medians are primarily useful for data sets with large outliers and I doubt there are many 400 year old YC alumni :)
Not sure, but if there are a bunch of 40s years old, this would already start shifting the average upwards compared to the mean even if the data is rather centered in the mid 20s.
This would be somewhere in the Vingean Scholastics portion of the Venn diagram I proposed a few years ago:
https://www.exratione.com/2012/01/the-future-of-the-venture-...
The future is wandering towards Fast Times at Fairmont High, it seems.
https://www.exratione.com/2012/01/the-future-of-the-venture-...
The future is wandering towards Fast Times at Fairmont High, it seems.
So, I am looking at a bit of the transcript from the first course and it is talking about scaling companies from millions to billions and things like that.
YC started with this idea that you take a couple of college student hackers, give them like $20k and let them build something "ramen profitable." The basic idea was that tech had lowered the barriers to entry for business.
An awful lot of these big companies (Uber, Home Hero -- which is shutting down -- etc) seem to hire 1099 contractors instead of employees and they often don't pay all that well. The goal for YC seems to have become grow the next unicorn.
So, I find myself wondering (having already forwarded this stuff to various people): Is there anything of use in these lectures if you aren't looking to become a billionaire and have no desire to grow some gargantuan company that probably is making the founders rich on the backs of the 99 percent who are so often underpaid?
Is there any basic business wisdom here for people not looking for some J curve growth and then cashing out? (Serious question and I know it sounds like snark. I just don't know how to say this more diplomatically because this is not how YC started and I have trouble with the direction it seems to have taken.)
YC started with this idea that you take a couple of college student hackers, give them like $20k and let them build something "ramen profitable." The basic idea was that tech had lowered the barriers to entry for business.
An awful lot of these big companies (Uber, Home Hero -- which is shutting down -- etc) seem to hire 1099 contractors instead of employees and they often don't pay all that well. The goal for YC seems to have become grow the next unicorn.
So, I find myself wondering (having already forwarded this stuff to various people): Is there anything of use in these lectures if you aren't looking to become a billionaire and have no desire to grow some gargantuan company that probably is making the founders rich on the backs of the 99 percent who are so often underpaid?
Is there any basic business wisdom here for people not looking for some J curve growth and then cashing out? (Serious question and I know it sounds like snark. I just don't know how to say this more diplomatically because this is not how YC started and I have trouble with the direction it seems to have taken.)
YC was always about startups and growth. Ramen profitability was an important milestone because then you weren't dependent on fundraising to survive. But it was always just a milestone, and YC's goal qua investor was to fund companies with a chance of growing big. By the time I got there in 2009 it was quite explicit, but it was clear before then too.
On the point of not growing big, though, there was one area where YC did something fundamentally new: they supported whatever the founders wanted to do. If the founders decided not to try to grow big or to take an early exit, YC was always supportive. But this wasn't because they regarded such outcomes as successful from an investment point of view (they're not). It was because they were decent people. And pg used to say that pushing founders to do something they didn't want to wouldn't work anyway.
On the point of not growing big, though, there was one area where YC did something fundamentally new: they supported whatever the founders wanted to do. If the founders decided not to try to grow big or to take an early exit, YC was always supportive. But this wasn't because they regarded such outcomes as successful from an investment point of view (they're not). It was because they were decent people. And pg used to say that pushing founders to do something they didn't want to wouldn't work anyway.
Thank you for clarifying those points.
I think there's some value if you're more interested in creating a lifestyle business than a unicorn (as it seems like we both are), but it's certainly not perfectly matched to that goal.
It's a shame there's not a Startup School-like resource for creating a lifestyle business (YC-like in that it'd have a unified theory of lifestyle business creation, as YC has for startups, that'd been honed through assisting in the creation of hundreds of such businesses).
It's a shame there's not a Startup School-like resource for creating a lifestyle business (YC-like in that it'd have a unified theory of lifestyle business creation, as YC has for startups, that'd been honed through assisting in the creation of hundreds of such businesses).
I run a google group called Business Bootstrappers. I don't have a unified theory, but I did forward the links to this article, discussion and Startup School to it, which is part of why I asked this question. It has no goal of fostering what people call "lifestyle businesses" (a term I am not fond of http://micheleincalifornia.blogspot.com/2014/03/i-love-lucy-...), but it does have a goal of supporting businesses that aren't specifically looking to take VC funding.
https://groups.google.com/forum/#!forum/business-bootstrappe...
https://groups.google.com/forum/#!forum/business-bootstrappe...
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MicroConf.
There are:
30x500 (Amy Hoy)
Founder Cafe (Rob Walling)
Dynamite Circle (community by Dan Andrews and Ian Schoen of Tropical MBA)
30x500 (Amy Hoy)
Founder Cafe (Rob Walling)
Dynamite Circle (community by Dan Andrews and Ian Schoen of Tropical MBA)
Great list.
That's also what we're working on at http://nugget.one and I also think https://www.indiehackers.com is a great resource for inspiration.
That's also what we're working on at http://nugget.one and I also think https://www.indiehackers.com is a great resource for inspiration.
See "Rework" by Basecamp
"Lifestyle business" is derogatory propaganda by the investor class, who wants you to think like them and make more money for them. Every business is a lifestyle business, after all you only have one life. Investors want you to spend your time making money for them, instead of doing what you love. If you love making money too, then by all means listen to what they have to say, but take it all with a big bowlful of salt.
There is. It's called Hacker News. There's isn't a better resource to learn more about starting a small business than HN itself. From starting a consulting business to creating a passive income, everything has been extensively discussed. There are tons of inspiring stories here about creating a small business. (Incidentally, I think it would a great idea to collect all entrepreneurship related threads in a single place.)
HN's expertise falls short when it comes to adjudicating unicorns as they don't usually look promising at the beginning. But, in case of a small product, I think community's feedback and advice can be invaluable.
HN's expertise falls short when it comes to adjudicating unicorns as they don't usually look promising at the beginning. But, in case of a small product, I think community's feedback and advice can be invaluable.
(Incidentally, I think it would a great idea to collect all entrepreneurship related threads in a single place.)
I forward stuff from HN that I think is pertinent to the group I run called Business Bootstrappers: https://groups.google.com/forum/#!forum/business-bootstrappe...
So far, that is the vast majority of what has been posted there. As yet, conversation has not broken out and I don't post very much else there.
I forward stuff from HN that I think is pertinent to the group I run called Business Bootstrappers: https://groups.google.com/forum/#!forum/business-bootstrappe...
So far, that is the vast majority of what has been posted there. As yet, conversation has not broken out and I don't post very much else there.
YC in session is still about a relentless pursuit of product market fit. They're still the best accelerator for driving teams towards attaining this, and the lectures pertaining to this will be fruitful for any team.
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I think this bit is going to antagonise the people you're questioning: "...probably is making the founders rich on the backs of the 99 percent who are so often underpaid". Unless I've missed something, neither Uber or Home Hero are YC companies, and countless YC companies aren't leveraging 1099 contractors in place of employees.
Your question might be better rephrased to something like:
Is there value in Startup School for those aiming for modest growth or to create a lifestyle business?
Your question might be better rephrased to something like:
Is there value in Startup School for those aiming for modest growth or to create a lifestyle business?
Is there nothing in between?
lifestyle business
modest growth business
<-- one or two more company sizes in here?
multi billion dollar company
You don't want to say the word "lifestyle business" in any sentence or the VC's will ignore everything else you asked and focus on that. When they hear that word it triggers some sort of "fight or flight" response in the primitive amygdala of the VC, leading them to run away. Pretend you've never even heard of the concept of "lifestyle business", it keeps them happy.
lifestyle business
modest growth business
<-- one or two more company sizes in here?
multi billion dollar company
You don't want to say the word "lifestyle business" in any sentence or the VC's will ignore everything else you asked and focus on that. When they hear that word it triggers some sort of "fight or flight" response in the primitive amygdala of the VC, leading them to run away. Pretend you've never even heard of the concept of "lifestyle business", it keeps them happy.
We're not talking about VCs but freely available courseware. The mentors are apparently YC alumni rather than VCs.
> Is there value in Startup School for those aiming for modest growth or to create a lifestyle business?
Product/market fit is important even in a lifestyle business. The issue you will have is making your business work at a minimum scale.
Product/market fit is important even in a lifestyle business. The issue you will have is making your business work at a minimum scale.
If you watch the lectures you will find a more realistic view of startups. They start saying that the odds are against you and it is a better bet to work at a startup instead of founding one.
Which is bullshit because founders get paid more and have an ownership stake. This is a laughably bad attempt to provision their companies with junior developers who have a slave mentality.
Junior developers don't often skip payroll (they can move on if asked to do so) founders do. Junior developers don't often mortgage their houses or max out credit cards, founders do.
I can go on and on.
I think getting into debt is dumb, but statistics show that founders risk a lot more than employees. And many people do not want to be founders. Please don't call them slaves.
I can go on and on.
I think getting into debt is dumb, but statistics show that founders risk a lot more than employees. And many people do not want to be founders. Please don't call them slaves.
Going into debt is entirely optional. At the start non-founders have the same or lower salary with less long term benifits. Obviously not everybody can be the founder because they didn't come up with or act on the idea.
"risk" is a relative term here. Most of the founders come from fairly privileged backgrounds, and most of the time "I started a company let me tell you how it failed" works pretty well when interviewing in later ventures.
Additionally, early engineers and biz folks are usually brought on specifically because the founders don't know what the fuck they're doing in either technology or business.
There's this big myth that being a founder is some magical hardship and a massive fucking gamble, but the realities don't make that so--instead, it's used to justify fleecing employees out of market rates.
Additionally, early engineers and biz folks are usually brought on specifically because the founders don't know what the fuck they're doing in either technology or business.
There's this big myth that being a founder is some magical hardship and a massive fucking gamble, but the realities don't make that so--instead, it's used to justify fleecing employees out of market rates.
I don't think it is accurate to say most founders come from a privileged background without actually knowing the numbers. I am a founder (not YC) and both parents were public school teachers.
https://www.inc.com/minda-zetlin/do-you-need-a-wealthy-backg...
https://qz.com/455109/entrepreneurs-dont-have-a-special-gene...
CB Insights also concurred with the principle in their May 8th email.
https://qz.com/455109/entrepreneurs-dont-have-a-special-gene...
CB Insights also concurred with the principle in their May 8th email.
I think you've misunderstood the reality of being a founder. It is truly a privilege, but not in the way you think -- if you successfully label yourself as one and get enough attention, you are more likely to be able to 'fail upwards' as investors will overvalue your experience and personal network.
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Most start ups will fail, and the founders' equity will be worth nothing. They are putting all of their eggs in one basket and taking responsibility for investors' money, employee salary and customer needs. Compare that to early employees at companies that have found product market fit and are early in the life cycle of rapid growth, their smaller equity grant will be worth more, especially after considering the significantly lower risk they are taking at a well funded company with product market fit. The point is, if you want to maximize for your own personal wealth, join a great company with traction as early as you can. If you are obsessed with creating something or solving a specific problem, or are a little be crazy, then start a company to pursue the vision. Just do so knowing the risk reward points to a lower wealth outcome compared the the alternative. And by the way, many founders take below market salary for a long time and may even go without salary or put money in when times are lean.
In a proper startup, the founders typically make the least amount of money to start and plow back all available resources into growing the company. Only when the company is on more stable financial footing, either through profits or investments, does the founder start to make a salary closer to market. Of course this can go wrong and since the founders set the salaries they can suck money out of the business, but IMO the founder should be making the least amount of money in the early stages.
In regards to the Startup School lecture, one of the points Dustin Moskovitz makes in his talk is that you have a better shot at doing well financially if you join a startup at Series B+ than you do trying to start your own startup. You'll have less stress and if you join the next mega-successful company, you'll most likely make more money. There's also a huge amount of learning that takes place working at a rocket ship for a few years and the brand creditability is worth something too. The hard part is picking a startup that is actually the next Google, Facebook, Uber, etc and sticking around until it goes public to exercise your options (especially since companies are taking longer to go public and lock up early employees with golden handcuffs - https://en.wikipedia.org/wiki/Golden_handcuffs).
That being said, if your goal is to get rich, your best bet is probably to start an actual business, raise as little money as possible, and "sell early" - e.g. acquired for < $30M. If you look at most acquisitions, most of them are under the $30M mark (https://www.cbinsights.com/blog/tech-companies-exit-early-st...).
The reality with taking venture capital is even if you take a "small" amount of from seed investors of lets say $2M in exchange for a 20% stake, you're looking at a $50M exit to make back 5x the VC's money (simplifying the math and not accounting for additional liquidation preferences), which in a VCs perspective isn't that great. They're more so looking for a 10x return, so $100M is the minimum for a seed investment.
Probably the ideal scenario for the founder trying to become wealthy is to just be as lean a possible, keep as much equity as possible and ultimately sell to become financially secure. Once you have enough money to keep you set for your life, then maybe it makes more sense to swing for the fences.
In regards to the Startup School lecture, one of the points Dustin Moskovitz makes in his talk is that you have a better shot at doing well financially if you join a startup at Series B+ than you do trying to start your own startup. You'll have less stress and if you join the next mega-successful company, you'll most likely make more money. There's also a huge amount of learning that takes place working at a rocket ship for a few years and the brand creditability is worth something too. The hard part is picking a startup that is actually the next Google, Facebook, Uber, etc and sticking around until it goes public to exercise your options (especially since companies are taking longer to go public and lock up early employees with golden handcuffs - https://en.wikipedia.org/wiki/Golden_handcuffs).
That being said, if your goal is to get rich, your best bet is probably to start an actual business, raise as little money as possible, and "sell early" - e.g. acquired for < $30M. If you look at most acquisitions, most of them are under the $30M mark (https://www.cbinsights.com/blog/tech-companies-exit-early-st...).
The reality with taking venture capital is even if you take a "small" amount of from seed investors of lets say $2M in exchange for a 20% stake, you're looking at a $50M exit to make back 5x the VC's money (simplifying the math and not accounting for additional liquidation preferences), which in a VCs perspective isn't that great. They're more so looking for a 10x return, so $100M is the minimum for a seed investment.
Probably the ideal scenario for the founder trying to become wealthy is to just be as lean a possible, keep as much equity as possible and ultimately sell to become financially secure. Once you have enough money to keep you set for your life, then maybe it makes more sense to swing for the fences.
It is not bullshit statistically speaking. Ownership doesn't imply you have something valuable.
yeah it's a gambit. When you win you win big. But many times you don't win at all.
In a statistics sense I'd be curious what the expected (average) return on being a founder is
In a statistics sense I'd be curious what the expected (average) return on being a founder is
Watch the first lecture!
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The easiest way to See how this applies to your particular situation is to actually watch the lectures and see what resonates with you. A lot of it is common sense that should apply to startups of all sizes that all building something new (vs say, opening a regular business like a restaurant): talk to users, iterate rapidly, work hard, focus...
I would like to know before I invest that kind of time whether or not it is likely to simply be a waste of my time. If I just wanted to watch all of them and decide for myself, I wouldn't need to stick my neck out trying to ask a question that I know is going to be interpreted as rude by many people.
Because it is rude. Your examples aren't YC companies and many YC companies are successful that don't produce billionaires.
It's only rude to the people who believe that unpleasant things shouldn't be talked about.
I think the rudeness isn't about unpleasant things here. But using examples out of context.
I imagine if I had used AirBnB (a YC company) and their legal troubles as an example, it would be considered even ruder.
The reality is that an awful lot of companies today seem to be all about the benjamins in a way that isn't healthy for anyone. There is no nice way to say that and say "I would like to not pursue such a business model."
The reality is that an awful lot of companies today seem to be all about the benjamins in a way that isn't healthy for anyone. There is no nice way to say that and say "I would like to not pursue such a business model."
It's not unpleasant, it's just an incorrect premise.
You know, I am homeless. This introduces substantial obstacles to me accomplishing anything. I cannot watch videos with sound in a library. I end up having to jump through a lot of hoops to do anything like watch a video in order to try to further my goals.
I am a little burned out on the message I consistently get from people online that I am not allowed to solve my very serious financial problems because I am too poor to afford manners. Meanwhile, everyone seems okay with rich people not caring one whit about my suffering. Me misphrasing something is apparently an offense punishable by potential starvation.
So, yeah, I'm kind of bitter about how rich people treat poor people these days. It is generally pretty monstrous.
I am a little burned out on the message I consistently get from people online that I am not allowed to solve my very serious financial problems because I am too poor to afford manners. Meanwhile, everyone seems okay with rich people not caring one whit about my suffering. Me misphrasing something is apparently an offense punishable by potential starvation.
So, yeah, I'm kind of bitter about how rich people treat poor people these days. It is generally pretty monstrous.
Well, if sound is the problem, every video has a text transcript under it.
https://www.startupschool.org
The video I enjoyed most is "How to Find Product Market Fit" by Peter Reinhardt.
https://jotengine.com/transcriptions/WIUL8HBabqxffIDOkUA9Dg
https://www.startupschool.org
The video I enjoyed most is "How to Find Product Market Fit" by Peter Reinhardt.
https://jotengine.com/transcriptions/WIUL8HBabqxffIDOkUA9Dg
>too poor to afford manners
I'm not aware they actually cost anything.
I'm not aware they actually cost anything.
You are not aware that it is difficult to remain on your best behavior when you are facing potential starvation, trying your damnedest to find a way to make an earned income and facing this kind of bullshit where asking a question wrong gets you dog piled for "being rude"? There are damn few comments here that answer my actual question. There is enormously more sturm and drang over my supposed rudeness.
This problem started before I was homeless when I was being dog piled on HN for being a woman opening my mouth here. There seems to be NO good path forward for me. Trying to figure out how to solve my problems at all appears to be frowned upon. My very existence appears to be frowned upon.
This problem started before I was homeless when I was being dog piled on HN for being a woman opening my mouth here. There seems to be NO good path forward for me. Trying to figure out how to solve my problems at all appears to be frowned upon. My very existence appears to be frowned upon.
It's free, you can take the time to sample it on YouTube otherwise you just look ungracious. Plus to say that you are going to be so enlightened by the first video that the rest must be just as great rules out the possibly in video 3 you make an association that is important to what you are doing.
And telling me my time is worth so little that I should not even be allowed to ask if the content has any hope of being relevant to me is monstrously disrespectful of me and my time. The people at YC don't have to answer this if they find me to be too excessively rude. I would be happy to hear from people who have already watched some of the videos or whatever.
Just want to chime in that your comment makes total sense and hope to see it answered!
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My co-founders and I really enjoyed the 10 week startup school. We're full time founders and have been working for the last three years on building MyAppConverter. The course gave us time to really get some actionable advice on how to grow our business. The greatest thing is that our time committment for the OH call and weekly reporting on our business metrics made us really focus on what matters i.e. making and selling as part of daily work. Wether or not one applies to YC programme, I would highly recommend any founders to join the MOOC course.
So, YC branches out into the MOOC business.
[deleted]
I was excited until:
> Now, Startup School will accept about 10,000 companies in early 2018, says Altman, and potentially more after that.
2018 seems like an eternity away. I hope my new company is profitable by then.
> Now, Startup School will accept about 10,000 companies in early 2018, says Altman, and potentially more after that.
2018 seems like an eternity away. I hope my new company is profitable by then.
whats your new company?
Hi a1exyz,
Sorry for the delayed reply. I wasn't checking in on this thread.
Unfortunately since this is an anonymous account I can't say :)
Sorry for the delayed reply. I wasn't checking in on this thread.
Unfortunately since this is an anonymous account I can't say :)
With immigration to the US being as hard as it is (Nigh on impossible for say, Europeans, to work in the US), and , on top of that, the US government going full protectionist, this is amazing.
Complete aside: am I the only one who imagined Naval flipping through a physics book to double check his assertion?
I'm trying to work out what bothers me about this.
I wonder if it's actually bad advice for all those thousands of entrepreneurs to be advising them to go for being mega gigantic.
It's bad advice because those thousands of new entrepreneurs have a much greater chance of long term success by NOT following the "go super big" path.
Indeed it appears that taking a "quite successful" company down the "go super big" path might lead to a variety of adverse outcomes (as I have gleaned from reading the stories of many failed venture backed companies).
I suspect that what is niggling me is that perhaps YC and all the other venture capitalists maybe are really now acting and advising what is in their interests, which is really not in the interests of all these bright eyed new entrepreneurs.
I suppose YC's history and origin make it feel like they are on the side of the entrepreneur, but is that still true?
I wonder if it's actually bad advice for all those thousands of entrepreneurs to be advising them to go for being mega gigantic.
It's bad advice because those thousands of new entrepreneurs have a much greater chance of long term success by NOT following the "go super big" path.
Indeed it appears that taking a "quite successful" company down the "go super big" path might lead to a variety of adverse outcomes (as I have gleaned from reading the stories of many failed venture backed companies).
I suspect that what is niggling me is that perhaps YC and all the other venture capitalists maybe are really now acting and advising what is in their interests, which is really not in the interests of all these bright eyed new entrepreneurs.
I suppose YC's history and origin make it feel like they are on the side of the entrepreneur, but is that still true?
I dunno. I got accepted into office hours, and yc didn't provide me with Amazon credits that they said were part of the program, and I didn't feel like the advice the person gave me was anything I didn't already know, besides "do what you're doing, but harder". Perhaps it's jumped the shark. I distinctly got the feeling that yc is now peddling a narrative of the hacker that is either untrue or no longer true, and is dispensing platitudes instead of actually getting people help with "the hard parts", as in connecting people with a real process that helps them get money (or conversely, critical responses to "stop wasting your time", if that's what's deserved)
Perhaps they have refined their business down to the essential core which is to back large numbers of entrepreneurs in the hope they don't miss one that gets big. Like 500 startups. Hard to believe that backing large numbers of companies can be much more than betting on lots of horses.
They aren't backing any of these companies financially. It is hard to tell what is in it for them yet. The only way this makes sense is if it is a pre-filter for their application funnel to increase the quality of their selections. Contrary to this, they originally claimed that startup school would not give you any leg up in the application process.
Yes, I'm a little concerned about this too; we've all presumably watched most of the startup talks and I know more information about this stuff than I think I really need to. It's easy to follow the checklist of things not to do but proving out new ideas is always going to throw up specific challenges.
I'm more concerned about the detail focused questions like which features I should build first, how should I test (with a proper statistical probability) and a low number of users? What leads us astray most as startup founders (apart from investors and running out of money)? How can I simplify this feature so it takes me a day to try rather than 4-5 days? Should I remove it if no-one liked it or persevere with improvements?
I mean even stupid questions like what size should I make my DB server if I'm posting my startup to Show HN on a Friday afternoon? What logging/dashboard/analytics should I set up to start?
The problem is I'm not sure someone who talks to me once per week would be anything other than a sounding board for my own thoughts as I should know my business so much better than they ever could.
The real reason to do YC of course is their unmatched network of people and the brand recognition you get when talking to investors...
I'm more concerned about the detail focused questions like which features I should build first, how should I test (with a proper statistical probability) and a low number of users? What leads us astray most as startup founders (apart from investors and running out of money)? How can I simplify this feature so it takes me a day to try rather than 4-5 days? Should I remove it if no-one liked it or persevere with improvements?
I mean even stupid questions like what size should I make my DB server if I'm posting my startup to Show HN on a Friday afternoon? What logging/dashboard/analytics should I set up to start?
The problem is I'm not sure someone who talks to me once per week would be anything other than a sounding board for my own thoughts as I should know my business so much better than they ever could.
The real reason to do YC of course is their unmatched network of people and the brand recognition you get when talking to investors...
I'd actually be more worried that none of that matters and other things like "who you know" matter more.
A lot of the technical things you mention could be just a wierd inverse cargo cult. Those are things that actually would be effective for running a real company, but you're going through the motions because that's what everyone else "did to get money" even though that's not what they did to get money.
Look at indie.bio -- almost every single one of their companies is a joke chasing some hot topic in biotech with often little or no real market or effective business strategy. The folks running the company make big noise about, open source science and breaking free of the postdocapalypse/community science, and the ruination brought to a generation of academic PhDs. Yet not a single one of their companies licenses operates with free ip licensing and about half of the companies are spinoffs with full time academic professors on the founding team or advisory board.
In general there is a disconnect between the narrative that's sold and what actually happens.
A lot of the technical things you mention could be just a wierd inverse cargo cult. Those are things that actually would be effective for running a real company, but you're going through the motions because that's what everyone else "did to get money" even though that's not what they did to get money.
Look at indie.bio -- almost every single one of their companies is a joke chasing some hot topic in biotech with often little or no real market or effective business strategy. The folks running the company make big noise about, open source science and breaking free of the postdocapalypse/community science, and the ruination brought to a generation of academic PhDs. Yet not a single one of their companies licenses operates with free ip licensing and about half of the companies are spinoffs with full time academic professors on the founding team or advisory board.
In general there is a disconnect between the narrative that's sold and what actually happens.
> I suspect that what is niggling me is that perhaps YC and all the other venture capitalists maybe are really now acting and advising what is in their interests, which is really not in the interests of all these bright eyed new entrepreneurs.
Do you really doubt this, on any level? YC exists in order for the investors to secure a large stake in the next Facebook, no matter who that ends up being. They're not philanthropic, that's just the sales pitch.
Do you really doubt this, on any level? YC exists in order for the investors to secure a large stake in the next Facebook, no matter who that ends up being. They're not philanthropic, that's just the sales pitch.
Bullshit, I've attended a startup school event in london and they were very clear that they want people to relocate to SV.
Is YC backing 10k international startups with funding, or is this just a MOOC?
Is YC backing 10k international startups with funding, or is this just a MOOC?
Frightenly ambitious.
If I'm making a tech product (not SaaS) as a solo founder, no employees, no funding, not in the Bay Area, but making a product that people love, would I be considered a success?
I personally love the Startup School lectures and they have been a great help to me.
I personally love the Startup School lectures and they have been a great help to me.
If you're growing and profitable, you might consider ignoring all the startup culture nonsense.
Growing yes, and profitable yes! I may not have a million or billion dollar market, but I've totally replaced my desk job income with this :)
I don't see the niche drying up anytime soon, so I appreciate this advice. I feel like I am on the right track!
I don't see the niche drying up anytime soon, so I appreciate this advice. I feel like I am on the right track!
Why would "growing" be a prerequisite to success? Isn't profitable enough, especially if already decently profitable?
I assume you are asking a serious question, but yes, you need to at least grow to match the rate of inflation/cost of living. Aside from that, it's up to you to decide how much you want to grow.
Really depends upon the goal. If you're a venture funded startup then the find is aiming for a 10x truth from you over 7-10 years. This will translate to 2-3x Y/Y growth for the first years of the startup. Ofcourse, if you're self funded, these rules don't apply.
What matters is if it's a success to you. Which I'm worried sounds like it might be flip or dismissive, but I think is the core truth of it.
No, thank you so much for this advice! It was helpful and much needed.
I may not be building a million or billion dollar market, but I figure that if money is the same, I'm glad to be working by my own rules rather than someone else's!
I may not be building a million or billion dollar market, but I figure that if money is the same, I'm glad to be working by my own rules rather than someone else's!
Are you making money? Then yes.
Fortunately yes!! Of course it is not millions of dollars a year, but it is enough to replace a desk job income and seems stable.
Here's to hoping!!
Here's to hoping!!
VCs didn't want Dropbox or Airbnb or Stripe without YCs stamp of approval.
YC could very plausible fund as many startups as there are ambitious and determined founders.
Let anyone participate in the programs and then let the startups filter themselves out by failing to keep up the progressively more challenging levels of effort.