I enjoyed this article, but I would suggest a minor correction: PG is phenomenal, but I don't believe he is responsible for shifting the balance of power from investors to founders. I think that's a function of technology and the Internet itself, as barriers to start a startup continue to be lowered. In fact, PG himself said in a TC interview there was a time (not long ago) when you almost literally had to ask permission from investors to launch a startup. That has changed, and would have been the case with or without PG, I'm fairly sure. I do, however, believe PG seriously helps to educate, encourage, and facilitate startups on the road to success within this natural function, a handful directly as YC companies, and many more through everything else he does, like his essays, Startup School, and HN.
One thing I'd add to the list of dislikes of HN is how some downvoting is applied. I think downvotes are great as a mod tool for shunning comments that are hollow, trollish, or otherwise don't contribute to the discussion. What I dislike is seeing downvotes applied carelessly because of casual disagreement with a commment which is otherwise well thought out. I'd rather people actually reply expressing their dissent, which at least gives the chance for rebuttal and further debate. Downvoting is the easy way out, and tends to look rather insulting to me, because being at zero or sub-zero relegates serious commenters to the same class as trolls. I don't think that encourages a healthy commenting community.
Back in the day (1980s, 1990s), only a closed circle of serial entrepreneurs knew the ins and outs of the business/legal side of launching and building a startup and the paucity of information available to those outside this circle was a major barrier to entry for young entrepreneurs, even within Silicon Valley. Beyond that, you basically had to be in Silicon Valley, or in one of only a very few other centers within the United States, to have a ghost of a chance of putting together a credible team for a startup. When you add to that the capital-intensive requirements for any credible startup back then (usually, a need for $2M to $4M out the gate to fund server purchases, etc. and to put together a quality team of high-priced engineers who, mainly for lack of knowledge, were not otherwise drawn to the startup world as they are today), most doors were closed to young founders, other than as they were willing to become supplicants at the VC entry point into this world.
All that has changed, and decisively so. I would say that PG, as innovator, funder, and philosophical guru for the new breed of entrepreneurs that no longer faces the old barriers, is a major symbol of that change and a major contributor to it. I agree, though, that it is inaccurate to say that he single-handedly or even primarily made it possible.
It has been fascinating to watch all this occur over the years. Founders were once little more than grist for the VC mill. All that has changed, and I don't see it ever going back. Investors remain invaluable to the process but today are required to deal with founders on terms tipping much closer to equality of bargaining power than ever before.
I agree with you and the parent, and just want to point out that I did say that PG was helping shift the balance of power. I think having someone with power and money and influence in the valley who consistently demonstrates that hungry startups can build great things with almost no money must have some kind of effect.
I did notice you said "helping". The reason I continued with the post is I still think what PG does, his money, influence, etc. has little if anything to do with the power shift, even in the context of helping it. VCs (and Angels to an extent) are primarily interested in doing things in their own best interest. It's probably true that many investors give YC companies more respect in terms of the deals they do, but, as PG points out, that's because it's in their own interest to not turn YC against them for future deals. That's not a shift of power, just a case of privileged treatment. Non-YC startups are still quite subject to getting screwed by VCs. Where the actual power shift occurs is in the leverage investors once had over founders for pushing any project forward. It used to be that for any given idea (which is accepted to be fairly valueless at that point) carrying it forward meant investors had to be involved. Why? Well, let's look at the things a startup has to have...
1. Development - this is often the biggest cost and challenge. Unless the founders themselves were developers one would have needed lots of investment capital many years ago to develop even what we consider standard applications today, like ecommerce sites. Today powerful, efficient open source platforms exist, like Magento. Publishing platforms like Wordpress have meant even hobby writers like Michael Arrington could create, publish, and build a blog reaching millions of readers, as he did with TechCrunch, by simply pointing and clicking. Development costs are much lower, and outsourced and/or collaborative development is now more viable than ever before. Nothing to do with PG here.
2. Servers/Hosting/Business Location - the further we look back, the more it cost to establish a business presence. In the old days startups were almost synonymous with brick-and-mortar buildings. Even when the products became software which could be sold virtually, rather than physically, early dot com startups were expected to have a real world base of operations, especially when adding in the need for comprehensive server capacity. This costs money. Nowadays, entrepreneurs can meet virtually, develop, blog and pretty much create value in their pajamas from anywhere in the world. Platforms like the iPod/iPad further provide reach, distribution and act as little money collection windows around the world.
3. Marketing - this is a big one, and probably the biggest reason investors played a key role early on. Reaching people costs money. In the early dot com days there were marketing budgets in the millions being thrown around at all manner of ideas. One needed significant money to even get noticed in such an environment. Today, social networks, publishing, and sharing platforms allow information to travel much more freely. Search engines have gotten better at identifying quality sites. Consider the Conan O'Brien anecdote where he explains that he sent out a single tweet directing people to a web page where they could buy tickets for his tour, which then sold out in a matter of hours. He couldn't believe he didn't have to go to a single radio show, or otherwise do any promotion.
I believe successfully traversing these three areas are crucial to any startup's success. As I've explained the further you go back in time, the more likely you were to need investment money to have any chance at playing the game seriously. All that has changed in the direction of favoring founders. PG, again, while great, really had nothing to do with this. Sorry I didn't elaborate all this the first time. ;)
>>>What I dislike is seeing downvotes applied carelessly because of casual disagreement with a commment which is otherwise well thought out. I'd rather people actually reply expressing their dissent, which at least gives the chance for rebuttal and further debate. Downvoting is the easy way out, and tends to look rather insulting to me, because being at zero or sub-zero relegates serious commenters to the same class as trolls.<<<
You know what's the sad part? In this process the lowest common denominator always rises up. Further, I've noticed that this varies from thread to thread. If you pick up a technical thread then you find insightful things on the top, but if you pick up something general that everyone thinks they can take a stab at you will usually find the simplest concept up there.
The more complex thought out ones tend to stay at the bottom, because most people don't take the time to read through them and understand what the author is saying. It's this human tendency to get attracted to the simple bright lights instead of the beautiful kaleidoscopic pattern in the sky.
Further, much of the quality of discussion is influenced by the subtlety of the matter hand. It's like the audience for each thread is difference and there is a stark contrast between these HN groups.
It's for reasons like these that I have almost quit commenting on non-technical articles. Most people don't even refute my arguments they simply down vote the hell out of me as if I am spam, especially if I say something that goes against the party line of that particular thread (certain threads invite certain kinds of people which leads to group think). That is insulting.
However, I won't quit until I find a solution to this problem. So, that I can help Mr. Graham in fixing this instead of just sending a rant to him.
Totally agree on the downvoting part. In general (as someone said earlier), the most 'careless' downvotes are self-correcting to some extent. But yes, getting downvoted on the basis of disagreement stings a bit. Other than that, HN is a fantastic community.
Maybe a karma-like system where people were only allowed to use a limited number of downvotes would make them consider doing so more closely.
One thing I'd add to the list of dislikes of HN is how some downvoting is applied. I think downvotes are great as a mod tool for shunning comments that are hollow, trollish, or otherwise don't contribute to the discussion. What I dislike is seeing downvotes applied carelessly because of casual disagreement with a commment which is otherwise well thought out. I'd rather people actually reply expressing their dissent, which at least gives the chance for rebuttal and further debate. Downvoting is the easy way out, and tends to look rather insulting to me, because being at zero or sub-zero relegates serious commenters to the same class as trolls. I don't think that encourages a healthy commenting community.