I saw this. Chris Sacca just kept hitting PG. I do not think PG thought this, quite deeply. And many folks were just happy he erred, and sure wanted to point it out and make him know.
Yup, PG definitely screwed up this time.
Besides, those two things aren’t mutually exclusive. You can appear on shark tank and fix your product at the same time.
Paul Graham is not afraid of getting into a fight, he loves it and on many occasion sounds like the smart guy everybody loves to hate. But on this one, I tend to agree with him. Shark tank, if its a version of the UK Dragon’s den, is mostly a waste of time, and misrepresentation of what investor-entrepreneur relationship should be like.
I’ve seen Shark Tank, but I’ve seen a lot of Dragon’s Den (before I stopped watching it) to agree with Paul Graham on this. Instead of giving 50+% of your equity to a guy who looks down on you, does not see you as a partner, because he is a millionaire, and you are not, spend that energy to build what people love.
You’re probably framing it too narrow as to the benefits of appearing on the show. For participants, it’s not always about getting the cash, but also about getting that exposure (think millions of people who ordinarily wouldn’t care) from being on prime time TV.
A little example from the same Dragons den you spoke about is Chika who rightly turned down £30k (after she accepted it) from Peter Jones, for 25% of her company. Now even though I know her personally, I wouldn’t claim to know all her intentions or motives for appearing on the show. All I do know is that the exposure has allowed her to reach for even greater heights and she’s now stocked in leading supermarkets like waitrose.
In all, I think PG was wrong. A bit of smoke signal similar to Sama’s ‘don’t go to other accelerators as it affects your YC chances’ type of talk. So wrong but very deliberate words for a reason and he was rightly called out.
Yes, sometimes Shark Tank and Dragon’s Den sacrifice good investor relations for the sake of generating TV drama. Unfortunately many people like to see entrepreneurs get yelled at and embarrassed for having a “stupid” idea, so that sort of bad behavior has to be part of the show for ratings.
But here I have to side with Sacca and Cuban. Graham has made the classic geek blunder of believing wholeheartedly that if you build it, they will come. Even the best products need some marketing push, and what better than some free, organic marketing on prime time TV, with a chance of investment at the end?
People have disagreements and differences of opinion every time and it is ok. What is not ok is hanging on to every word people say because they are “successful”. There is always survivorship bias especially when people are extremely lucky. Both sides have their own reality and to a certain degree, each one is right. There are no absolutes here. Sam Altman obviously came out in support of Paul Graham with very sound points of his own but in the end, it is still all bias.
I was reading something today about startups and probability strings and realized that Kingsley Idehen @kidehen was always right when he says that Silicon Valley is the luckiest place in the world. A combination of accidental factors created the perfect environment and some very fortunate people go there to benefit from that luck. It doesn’t mean that their way is always the right way for EVERYONE.
When you read between the lines of Paul Graham’s tweet, he said nothing wrong, deriding or derogatory to Shark Tank. He just gave an innocent advice to startups who spend on all time creating the best pitch decks and reciting lines which they will pour out in front of investors. A bad product is a bad product anywhere you take it too - whether presented to YC or Shark Tank. Young Americans entrepreneurs have this mindset that once you build an MVP, no matter how bad it looks like, investor will rain their dollars on you, afterall it’s an MVP and their dollars is meant to be used to develop the product fully. Shark Tank was simply used as a reference.
That said, next time, Paul Graham should use YC as a reference by saying:
Startups: Instead of appearing on YC, spend that energy fixing whatever makes your product so unappealing you think you need to.
Personally, I think there was no need for a fight.
I’m a fan of Shark Tank. I can tell you that their act towards some entrepreneurs on their show is simply a strategy to pick the best investments. These guys have just 10 minutes to decide whether to invest in your business or not. So sometimes, they have to be very blunt. There is no time for beating about the bush. They do not look down on you except your product is crap. Once a deal is closed, the Sharks work very hard and very closely with these entrepreneurs to bring their product or services to the market.
And yes, some products are actually hard to bring to the market. The Sharks have to balance the risk by asking for very high equity on some cases. YC-like VC firms have a whole team of investment advisors and sufficient time to analyse businesses before they invest in them.
Unlike YC which only invests in highly scalabe software companies, the Sharks invest in very diversified areas: fast food, homeware, electronics, and general products. They service other important sectors of the economy which YC-like VC firms avoid because of their “greed” for 100 to 1000 times return on their investments.
Pitching it right or fixing the bug literarily, In the end, na who God bless. As a startup, you either evolve or dissolve; no fence-sitting and should go for what works for you. And honestly, I think I know or at least have an inkling as to why startupers have that arrogance and sense of entitlement; the insomnia-infested nights trying to fix a bug or the experience of having to write a whole encyclopedia of codes is not funny! So when they finally pull it off and some sociopath is trynna make them feel little about themselve is enraging.
I think you just judged YC by their visible successes rather than the reality. There are a number of non profit startups that have passed through YC. There are also a number of non-software first startups like biotech, medicine, etc in recent batches. If the highly scalable companies ramp up to high valuations faster than the others, that’s a testament to YC knowing where the world is going and has nothing to do with “greed”.
. Future genii