From small seeds grow mighty oaks.
When a tree grows, at what point do you say it has achieved success? When it has reached its full height, and stopped growing? When it has dropped seeds of its own, to produce new shoots to hopefully grow into their own huge trees?
“We're hunting for awesome startups”
Run an early-stage company? We're inviting 250 to exhibit at TNW Conference and pitch on stage!
Maybe success for a tree is measured every day, when it grows a little bit further, spreads its branches a little bit wider, when it survives another day and becomes slightly, ever-so-slightly, better.
Eight little seeds
Seven long years ago, in 2005, Paul Graham had dinner with a bunch of college kids. A few hours before he had told them, during a talk at Harvard Computer Society, not to come to him for funding, but to seek it elsewhere from individual rich people who had been involved in technology startups themselves.
Over dinner, Graham realized he had been hasty in telling them not to come to him. Their drive and ambition and their ideas impressed him. If you’re going to nurture anything – especially people and ideas – then you have to do it right, so Graham decided then to put together what would become a “summer camp for startups.”
After giving the applicants just 10 days to submit, Graham received an amazing 227 applications, which just goes to show the unbelievable drive that the young would-be founders had. Without something like Y Combinator – without money, support and guidance – this creative ambition and energy can be dissipated and become unfocused.
“Paul and Jessica, with no intent to slight Robert and Trevor, are awesome,” First Batch member Chris Slowe told me. “They care, and they want us all to succeed in a way that isn’t unlike a parent.” Like a parent, Y Combinator protected and guided a group of eight applicants who were chosen to be part of the Y Combinator Summer Founders Program.
To say that Y Combinator has been a success is definitely true. But what of those eight members of the first Summer Founders Program; Y Combinator’s “First Batch”? While not every startup born in that experiment back in 2005 is still going today, their founders have arguably all found success.
It all depends on how you define that word.
The front page of the Internet
To have been responsible for funding and nuturing something that legitimately calls itself the “front page of the Internet”, the Y Combinator program has to have done something right.
Reddit is arguably the most famous of all of Y Combinator’s success stories. It was founded by friends Steve Huffman and Alexis Ohanian, and has come a long way from those early days, especially considering that, in the words of Huffman, “at its core it’s just a list of headlines.”
The fact that the idea for Reddit didn’t even come from Steve and Alexis (it was Paul’s idea) might be a glimpse into what makes the YC program so special. Having an awesome idea might get you on there, but it’s about much more than that. It’s about having that vision – knowing that you can achieve success and being able to convince others (Alexis initially had a tough time to talk Steve into leaving his job and joining him in applying for the YC program). It’s about taking the opportunity, and knowing that you want to do something amazing, whatever that might be.
ClickFacts – still going strong under its own steam
People like the First Batch founders often have a lot of ideas, but it takes something like the YC program to provide that opportunity to focus, make a decision and work towards realizing that idea. Mikhail Ledvich, along with brothers Greg and Mikhail Gurevich, couldn’t fully commit to any of the ideas they were having.
“When we found out about YC, we picked the one we thought had the most business potential and built our pitch around it. When we got accepted, we didn’t really yet understand what we were in for.”
That idea became ClickFacts, a malware solutions company for buyers and sellers of online media to identify and combat “click fraud”.
“I’m not sure if we could have pulled the trigger on doing our start up full time without YC’s backing. If we didn’t get accepted, I wouldn’t have a chance to have all the experiences that ClickFacts allowed me to have.”
Mikhail tells me that it’s undeniable he wouldn’t be where he is today without YC, not just in a business sense but also from the perspective of personal growth. “With YC I ended up as a co-founder of a startup, met amazing people, lived in California, made mistakes, learned from them, and saw what it really takes to succeed.” More so than simply guiding Mikhail and his co-founders to build ClickFacts into what it is today, the program gave him the experience and knowledge (and put him in the right place at the right time) to be able to pursue other opportunities that came along.
Mikhail is now the Associate Director of Product at Merchantry, an e-commerce merchant network, after being introduced to the co-founders by someone he met while at ClickFacts. It’s a return to the startup world for Mikhail, and a chance again to push innovation forward.
ClickFacts itself is now based in San Francisco, and continues to work hard to help advertisers and ad-networks manage their risk and security, exactly as it set out to do seven years ago. It remains the only company from the YC First Batch that is still live without having been acquired.
“I’ve never thought about that,” Mikhail told me when I asked him about it. “It was never a competition with any of the other companies since we all became friends during the YC program.”
The death of Memamp, or ‘Reddit’s first employee’
The people that you meet on a program such as Y Combinator can be as important, if not more so, than the program itself. Especially when your idea fails, as happened with memamp founder Chris Slowe.
Chris had been working on creating a better desktop search since early 2004, knowing that no existing solutions were any good. Y Combinator was the perfect chance to build it with memamp, but sometimes even a great idea, hard work, funding and an opportunity like the Summer Founders Program still aren’t enough.
That summer Google released their own Desktop Search solution. Not only that, but Apple announced their intention to build and add Spotlight to their next OS X release. Memamp pressed on, but it was too much, especially with the difficulties of trying to write a multi-platform desktop app.
Something like Y Combinator throws up opportunities in mysterious ways. Following the Summer Founders Program and the early death of memamp, Chris’ co-founder and roommate Zak Stone moved up the street to Harvard grad school. This left Chris with two spare rooms, just as the reddit co-founders were in need of a new apartment.
“I was reddit’s first employee about 2 months later,” Chris tells me. Memamp may have been dead, but things were looking up.
Academic life and startup life are like two sides of a coin. When Chris was accepted into the Y Combinator program, he was ending his 5th year of Harvard grad school studying experimental physics, and his intention was to continue on that academic road.
“I can’t think of another decision that has affected me more,” Chris says of applying for Y Combinator. While finishing his final two years of his PhD, helping take reddit to acquisition in late 2006 and moving to San Francisco to start a family, Chris had realised that academia was not the road for him.
“I got into physics because I liked hard problems, and I enjoyed the process of discovery in solving them. Though the types of problems are drastically different, startup life is structured much the same way.”
Chris is currently working to solve the problems of online flight search with travel startup Hipmunk, co-founded by Huffman (along with Adam Goldstein) and with Ohanian on board as an advisor.
Infogami and activism, or ‘Reddit’s next employee’
Things can change quickly in the Y Combinator program. Aaron Swartz made it into the Summer Founders Program with his flexible blogging/wiki software Infogami, which he had already been working on for some time. Soon afterwards though, Infogami was to become part of Reddit under the name Not A Bug, and Aaron would help to build Reddit into what it is today.
After leaving Reddit in 2007, Swartz has been involved in a huge number of different ventures, from founding Watchdog.net to being an advisor for Avaaz.org and a consultant for Change.org. He is perhaps best know as Executive Director of Demand Progress, an activism organization that was at the forefront of the fight against SOPA/PIPA. His activist lifestyle has lead to controversy, most pertinently when Swartz was indicted on fraud charges after downloading around 4 million law journals from JSTOR.
A lot of the media noise surrounding Aaron is often about controversial aspects of his life, such as his arrest or his disagreement with Ohanian and Huffman over whether he was a co-founder of Reddit or not. It’s a shame that these are the things most talked about in regard to Swartz, but is perhaps indicative of the type of person that he is, and the type of person that a program like YC attracts and breathes life into. Swartz is someone who is working with tireless ambition to make a difference. He is, indeed, demanding progress. When I asked fellow First Batch alumni Phil Yuen what his definition of success is, he said “to change the world.” Swartz is certainly someone who is trying to do that.
The wild ride of TextPayMe
If you never start something, then you will never know whether it is possible or not. So you should just grab the opportunity to start when it comes along, and figure out whether what you want to do is actually possible as you go.
When something keeps you up at night and causes you to quit your job at Microsoft, it must be a little bit special. For Yuen, co-founder of TextPayMe, that thing was an essay that Graham (who Phil describes as “a rockstar”) had written on starting a startup company.
“I flew out from Seattle, where I lived, to Boston to Paul’s lecture on the back of his essay,” Phil tells me. He talks about the power of Graham’s reputation, and describes that time as “a moment” – one of those opportunities that come out of nowhere and you just have to take.
Along with brother Gerald Yuen and friend CJ Huang, that opportunity was taken with them pitching online security startup Firecrawl to the Y Combinator board, which scored them a place on the program. At the end of the 3 months however, Phil had an epiphany and spoke to Paul. Easy as that, Firecrawl was no more, and TextPayMe was born.
Phil describes this flexible, open nature of Founders Program as central to the whole ethos of Y Combinator. That it was about giving power and nurturing guidance to people and ideas – recognizing that sometimes things don’t work and ideas shift and change and die and are born – not following some rigid road of rules.
Obviously the real work of building a startup happens after a program, and for TextPayMe (a mobile payment system) this was where the wild ride really began. “We were overly-naive engineers trying to solve a problem,” Phil says with a laugh, looking back on a time when the crazy set in. TextPayMe attracted attention and fierce competition, the most fierce of which being emails from one company’s lawyers informing them of licenses that they needed and did not have. More worryingly, the lawyers had contacted the relevant authorities. That’s when the flood of letters from various state Attorney-Generals came, and the TextPayMe team really started to see the unexpected (and costly) obstacles that can beset any startup.
The team left Amazon after a few years to found CupidsPlay, a social gaming site that launched early 2011 which has since been acquired by Zynga. The founders still work there, all except Phil who has only recently left. Why? So he can explore the next idea that comes along, of course.
Looping ahead of the curve
Perhaps the most straightforward road to success to arise from the Y Combinator First Batch is that of Loopt, the location-based mobile service founded by Sam Altman and Nick Sivo.
Many of the First Batch companies, such as Infogami, Firecrawl and memamp, have been ideas that didn’t work out. Loopt is a prime example of an idea that was ahead of the curve. Location-based services are currently all the rage as the mobile web becomes more and more important, and many of them are being acquired as big companies see the financial potentials in the mobile market.
In fact, Loopt was itself acquired earlier this year, by banking company Green Dot for $43.4 million. But even with this acquisition, Loopt remains ahead of the curve. In an interview with AllThingsD, Altman described the advantages of working closely with a banking company. “Many of the companies in the mobile location space are trying to figure out different ways to tie what they’re doing to commerce. We’ve all realized the critical piece is how you tie in commerce and payments.”
Altman is currently staying with Green Dot for the foreseeable future, and will be working with his team in Silicon Valley to push forward the newest applications to make mobile payments a mainstream reality. Again, an example of the “world-changing” success mentioned by Yuen.
YC makes the man, not the business
“I always say that without YC I would have taken the job offer I had and become a consultant, and I’d probably be chained to a desk somewhere in an office park” Justin Kan tells me, when I ask him how Y Combinator affected his life.
This was one of the most interesting answers I got from the discussions I had while writing this piece. It’s hard to imagine Justin, the man who live-streamed his entire life for about 8 months, stuck behind a desk all day. It got me thinking about how YC nurtures not just ideas and businesses, but people too. Perhaps it’s about people more than anything.
“They told us that we were one of the teams that seemed promising but had a bad idea,” Kan told me of their YC application with Kiko, an online calender. “I think Paul, Trevor (Blackwell) and Robert (Morris) were impressed by our conviction and eventually they caved and let us in.”
That conviction is partly how Justin and his co-founder Emmett Shear came to realize when it was time to move on. After the release of Google Calendar, they decided to sell. In unconventional fashion they turned to eBay, to “figure out if there were any interested parties out there on the Internet”, as Kan puts it. Turns out there were, and Kiko was sold to Tucows in 2006 for $258,100.
But now Kan was on the road that starts with Y Combinator, and he jumped on his next idea of live-streaming his life. Justin.tv was born and generated a lot of media interest. The site is now the world’s largest live-streaming community, with a reported number of over 40 million registered users, and is still ran by original co-founder Shear.
From the simple beginnings of a man with a camera permanently taped to his baseball cap, a massive network and several spinoff companies have been born, including Socialcam (which has recently been sold to Autodesk for $60 million), and TwitchTV (a dedicated video game broadcasting community that Kan described to me as “ESPN for gaming”). Kan also started Saboteur, a clothing line for men.
Kan’s latest venture is Exec, an outsourcing service for people to get their jobs and errands done for a flat rate of $25/hour, and he is a part-time partner at Y Combinator.
He has come full circle to be in the position to be able to mentor and guide ambitious youngsters with the same drive and passion that Justin and his fellow First Batch cohorts had back in 2005. I asked Justin how he would define success, to which he replied, “being able to do the things you are passionate about.” Justin has been able to do that time and time again on the road that started from Y Combinator.
Of the founders that I got to speak to for this article, I asked them all what success meant to them.
But really, success isn’t a fixed destination that can be aimed at. There isn’t a map, and you can’t tell how long it is going to take to get there, or what you will have to do along the way. The only thing you can do, if you want to find success, is to take the opportunities that present themselves and run with them.
A lot of the First Batch exhibit that “world changing” success that Yuen spoke of, but it hasn’t gone that way for all of them. The least obviously financially successful member of YC First Batch has been Jesse Tov, whose startup Simmery Axe closed down immediately after the Summer Founders Program. After a short stint with the U.S. Navy Fleet Numerical Meteorology and Oceanography Center, Jesse returned to academia and is now a postgraduate fellow at Harvard.
Success doesn’t have to mean changing the world. Success can be something a little bit more modest. When I asked Chris Slowe to define success, he answered with this:
“My definition has definitely drifted over the years, but, speaking as a married 33 year old with a 14 month old daughter, success is being able to feed your family and live comfortably working on interesting problems at a job you enjoy and with people you genuinely like and admire.”
Or as Mikhail more succinctly put it to me, “Success is waking up happy in the morning and doing something you are passionate about every day.”
Where Are They Now?
So, where are they now? The 8 companies and 15 founders that made up the Summer Founders Program of 2005. Some of them have been acquired and made a hell of a lot of money. Some of them haven’t. Some of them have seen through their initial ideas and are still going strong, while some abandoned their ideas before even finishing the program.
But no matter where they are, what is really important is that they took that opportunity, way back in 2005, and continue to take each opportunity presented to them now.
Enjoyed this? Read: 10 Y Combinator startups that didn’t make it, but should’ve
Image Credit: Evan Leeson