Somehow I missed a whole summer of Paul Graham essays. Anyways I’m on top of things again — and after reading one of his latest I browsed over to see what’s new at Y Combinator.
If you don’t know (I might not nail all the details but here’s the gist), Y Combinator provides seed-stage funding and support for web startups. They do funding in batches — which means twice per year they bring a whole bunch (20 – 30 startup companies, each with 2 or 3 partners) to Silicon Valley and run a camp for 3 months. Y Combinator gives each $17,000 – $20,000 in exchange for about a 1-digit percent of ownership.
Small but beautiful.
Reddit and Loopt both started there. So did Disqus and BackType, Posterous (which I use almost daily for my “asides“), as well as Scribd (which I use for publishing my longer stuff), and Dropbox for syncing/sharing/backing up files online…
That’s only a handful of the most successful ones — and YC only got up and running in 2005.
It’s funny — almost ridiculous — to think about all this generative stuff that’s created by a bunch of college-age people (mostly) working with less money than they’d earn at a restaurant for the summer. And obviously the YC companies aren’t the only ones turning out very cheap, or free, but very useful apps and platforms like this…
Until now I’ve been a vocal enthusiast for this kind of thing, but I’m starting to have pangs of doubt. Maybe it’s because — let’s not forget — I’m doing this for free and I’m in the process of trying to transition towards something more, um, “cashflow positive.”
I had one of those “duh” moments, asking myself, “How sustainable is an economy in which so many people aren’t generating any income from their work?”
Maybe my skepticism was triggered by Jason Fried’s hilarious satire, writing that 37signals is suddenly worth $100 billion:
“Once you have profits, it’s impossible to just make stuff up. That’s why we’re switching to a ‘freeconomics’ model. We’ll give away everything for free and let the market speculate about how much money we could make if we wanted to make money.”
And then Chris Brogan had a great post, The Audacity of Free:
Free can be a wonderful thing, and there are some really great things that are (and should be) free. But free is a choice, and it’s not your buyers who decide this, no matter what we like to think in social media kumbaya-ville… costs are part of life.
What I’m struggling with is how to charge someone for something I’m willing to do anyways — whether for fun, or for the learning experience, or the challenge, whatever. Not just that, but how do I charge for things I wouldn’t want to pay for… i.e. I’m satisfied with my own second-rate (or third- or fourth-rate) web design because I simply can’t afford to hire anyone — but more generally, when it comes to anything creative, I’ve always been inclined to assume I can do it myself.
Or rather, I want to do it myself because I enjoy the challenge and the opportunity to learn.
But through my uncertainty I’m coming to appreciate the benefits of for-pay professional models and how unsustainable this willingness to work for free might be — both for myself and for our economy and society as a whole.
But then again the question becomes, why can’t I find a career in an existing organization? Obviously there are a lot of highly motivated people out there; why are existing organizations and institutions failing to accommodate us? Why do they let us disrupt their industries from underneath and eat away at their business from the outside?
Why weren’t Twitter or FriendFeed developed at Google? Why did those founders leave? How have news and magazine publishers allowed a bunch of bloggers and entrepreneurs undermine their business models? Why haven’t more of the innovations occurred within previously existing organizations?
I have a few answers I’m tempted to speculate on but I’ll hold on to those, for now…
