Facebook Should Have Stayed in Boston, and Other Quotable Moments from Y Combinator’s Startup School
For startup people, the 714 seats inside Dinkelspiel Auditorium at Stanford University were the hottest ones in the country on Saturday. That was the day of Startup School, the invitation-only event produced by Stanford’s student entrepreneur group BASES and Mountain View, CA-based venture incubator Y Combinator. For the seventh year in a row, a cast of famous entrepreneurs and investors assembled to dispense equal parts advice and inspiration to the audience of young entrepreneurs and proto-entrepreneurs.
This year’s speakers included Marc Andreessen, founder of Netscape, Opsware, and Ning, and partner at Andreessen Horowitz; James Lindenbaum, co-founder of Heroku; Jim Goetz, founder of VitalSigns and partner at Sequoia Capital; Ashton Kutcher, the TV and movie star who is increasingly ubiquitous as a Silicon Valley angel investor; Matt Mullenweg, founder of Automattic, makers of WordPress; Mark Pincus, founder of Tribe and Zynga; Mark Zuckerberg, founder of Facebook; Stephen Cohen, co-founder of Palantir; Max Levchin, co-founder of PayPal and founder of Slide; Ron Conway, leader of seed-stage investing firm SV Angel; and Drew Houston, co-founder of Dropbox.
Most speakers focused on lessons they’d learned from their own experiences building or investing in startups. The reminiscences included a few interesting bits of never-before-shared news and opinions. Zuckerberg, for example, voiced second thoughts about having moved Facebook to Palo Alto in 2004. “Honestly, if I were starting now I would just stay in Boston,” Zuckerberg told interviewer Jessica Livingston, the co-founder of Y Combinator. “There are aspects of the culture out here [in Silicon Valley] where it is still a little short-term focused in a way that bothers me…There is a culture here where people don’t commit to doing things. There is nothing wrong with experimentation; you need to do that before you dive in. But a lot of companies built outside Silicon Valley seem to be on a longer-term cadence.” (That sentiment sparked some interesting controversy on Twitter, with some commentators asserting that Boston-based investors still wouldn’t see any reason to support a social network for college students with no revenue.)
Another tidbit: Pincus revealed that after the failure of Tribe.net, the social networking site he co-founded in 2003, he “spent a year trying to buy CNET” as part of his strategy to find an audience large enough for testing new consumer services. “The problem I was frustrated with [at Tribe] was that you couldn’t fail fast. By the time you built a product and built a big enough audience to see if it’s a good idea, you are on your Series B and you have 30 people. So I thought, wouldn’t it be great if I had a large captive audience first. And if I had a big enough audience, I could come up with a good product.” Ultimately, of course, Pincus started Zynga, which found its captive audience at Facebook.
And one more shocker: Mullenweg said that in 2007, when WordPress was beginning to surpass rivals content management systems such as Six Apart/Movable Type, “We were entertaining an acquisition offer that would have personally netted me nine figures in cash.” That’s nine as in at least $100,000,000. Mullenweg said he couldn’t reveal the name of the suitor, but that he turned down the sweet offer in part because he realized he was already happy. “If I had a bajillion dollars I’d still want to be doing what I was doing, working on WordPress,” Mullenweg said. “The opportunity to change the way people interact on the Web and finally get a majority of the Web onto open-source and to stop being embarrassed about the product I was shipping was too much. So we raised a Series B.”
If you weren’t there, or you didn’t catch the live webcast on Justin.tv, here’s a rundown of some of the other insights from Startup School that I thought were the most interesting, surprising, or eye-opening.
Marc Andreessen said he regretted not having built some kind of Web-based payment system into Netscape back in the mid-1990s. “The biggest missed opportunity was payments,” he told interviewer Paul Graham of Y Combinator. “We had 800 other things we were doing, and it seemed like it would be hard. There were a few big companies that dominated the payment infrastructure. But had we done it, had there been payment right there in the browser for anything, you can argue that it would have … Next Page »