Washington DC needs to give Silicon Valley a break already. VC's are systemic risk? Oh hell no.

First, Sarbanes-Oxley mandated byzantine corporate bureaucracy to 'protect' investors. Then, the SEC damaged the Silicon Valley economy by forcing companies to count stock options twice, both as dilution and as expense. As a result, Silicon Valley, for decades the bright spot of the American economy, produced only one [initial public offering] in all of 2008. Now, Geithner wants to regulate venture capital firms to protect us some more. It's like watching children deface an economic work of art.

--TJ Rodgers, CEO of Cypress Semi via online.wsj.com

OK, lets get this straight.

Enron and Worldcom destroy trust in corporations and line their pockets along the way, and tech pays the price. Sarbanes-Oxley took cash directly out of the pockets of almost every tech entrepreneur out there, burned most of it, and gave the rest to accounting firm and auditors.

High flying masters of the universe on Wall Street use their quant models to yet again fleece the American public, and now tech is going to suffer yet more heavy handed regulation when DC puts a choke-hold on access to life-giving venture capital?

I was never a libertarian, but I'm certainly coming around.

The Lean Startup by @ericries (Web 2.0 Expo Talk + audio)

Wish I could have made it to this talk, but was too busy coding. However, thanks to the power of the Internets, we can timeshift it to... well, the weekend. ;-)

There's definitely something powerful in the approach. It feels more right than a build-it-and-they-will-come mentality. We're still learning too.

Want more on how to startup the right way? Eric Ries, Dave McClure, Andrew Chen, and Mike Speiser are some of the most prominent thought leaders of scientific / metrics-oriented startup approach.

Also, building the tech to track and make decisions like that is almost always custom rolled, which is just a development overhead that ideally could be avoided. Our friends at Mixpanel are working on that -- to help startups apply the same kind of metrics-oriented decision-making done at Slide for startups like yours and mine.

The ideal hacker paradise

Huge open spaces were created to stimulate idea sharing and creativity. A plush cafeteria was put in, complete with a gourmet chef. Couches were scattered throughout the offices so that researchers could take naps or even sleep there overnight, which many of them did. And the soft-drink machine was wired to a terminal. Researchers who wanted a drink simply typed in their choice.

In short, Thinking Machines was becoming a hacker's paradise. The thinking, says Lew Tucker, one of the company's research directors, was that "if they were fed, they'd practically live at Thinking Machines."

via inc.com

I lived it. Palantir Technologies was just like it. It's definitely a thing of beauty when it comes together. (Blatant plug: They're hiring too.)

Startup fact of life: Companies that matter evolve from companies that don't matter.

Read the stories of successful startups and, if the founders are willing to be honest, you will see this pattern over and over again. They started out as digital cash for PDAs, but evolved into online payments for eBay. They started building BASIC interpreters, but evolved into the world's largest operating systems monopoly. They were shocked to discover their online games company was actually a photo-sharing site.

It's easy for people to dismiss other people's startups. The haters love to hate on startups of all kinds. For techies, it's almost a favorite pastime.

But you gotta be in the game and be willing to change and evolve. So cut the hate, and get in the game.

Super last minute advice for startups applying for Y Combinator

Y Combinator applications are due on March 18th (EDIT, was pushed back to 25th) for the latest funding class, and I figure better late then never to post some advice. It's been an incredible journey for us at Posterous. YC gave us an incredible push, and we're always looking for ways to give back to the community.

I thought I'd pull together six specific thoughts that would be helpful to startup teams applying for this or any future round of Y Combinator. Keep in mind I'm not affiliated with YC (just an alum) and the ideas below are merely my own suggestions. Here they are.

1) You are raising money.

YC teams span the gamut. Some people are just out of college, and others have a lot of experience. If you have less experience, take some time to really realize what you're doing when you're applying to YC. You are raising money for your startup. This isn't like applying for a summer program, or getting an internship. You're commiting yourself to building a serious business.

Part of raising money is realizing you're committing your life (or at least foreseeable future) to returning investors their money, plus a healthy return. That's the entire point -- it's not a grant. We do startups because we want to create massive value, reward ourselves and reward the people who help us create that value.

2) Solve a hair on fire problem, or do it better than someone else.

Great hackers get caught up in technology, but technology doesn't create value in and of itself. Technology is only useful for solving people's problems.

This is the basis for why Paul Buchheit's oft-quoted line is true: Startups can often just add "done right" to any other business and have it work out fine. "Done right" means you're making something better/cheaper/faster than something else out there that already creates value.

The best startups don't just make something right -- they solve a hair-on-fire problem. Avid Technologies, founded by Bill Warner (one of our investors), is an example of a hair-on-fire problem. Prior to nonlinear editing software, editing videos was such an error prone and difficult process that when Avid was released, a billion dollar industry was born.

If your startup doesn't quite fall under the "hair on fire" or "done right" categories, then you're going to have that much harder a time explaining to investors and customers why you're important, or even surviving. Yes, the idea matters.

3) Have a capable team
The ideal startup team (regardless of YC) requires the following trinity of skills:
  • Great Coders. You just need to be able to create it on your own.
  • Great Designers. You have to be able to make it solve user problems, and make it look damn good too.
  • Great Hustlers. You have to be able to get the product out there and in front of people.

Throughout your team, you should have each of these important aspects locked up. Be realistic with yourself about what you and your teammates are good at. You are getting married to your cofounders -- you're literally getting out onto a life raft in the ocean with them, and you're going to need to work with them (and well) to survive.

Doing a startup without a kickass team who can really clean up on each of the three skills is going to war without guns, ammo, training, or all of the above. 

4) Write well.

This should be obvious, but PG's essays are an indication of what you should be striving to do in your application. It should be crisp and articulate, and to the point.

One way to do this is to actually write every last idea down -- write copiously. Then edit. Edit mercilessly until there is not a single word you could remove without losing significant meaning.

5) A little help from friends.
You've got mentors, right? Get as many trustworthy and intelligent eyeballs on your written application as you can. This goes for any application for anything, really. More eyeballs will always help you flesh out your concepts, spot weak links and strengthen your case.

Email founders of YC companies, or founders of any company, to get feedback. We're here to help -- someone helped us.

6) What are you going to do if you don't get in?
You've got to keep working on the startup no matter what. Realize that you don't need anyone to give you a permission slip to create your own startup.

Good luck to all the applicants, and I can't wait to see/hear about your future successes.

AirBed & Breakfast (airbnb.com) lets me jump directly into the previous lodging search I was in. They rock.

I met Brian, Joe, and Nathan, the founders behind airbnb.com recently through the YC grapevine. They are total user experience/design badasses. And they also help people find cheap places to crash with locals all over the world. Hosts get to rent out a spare bedroom or a couch and get spare cash, and travelers get a great deal, safe place to stay, and often times an awesome local to show them around town.

Check this out. This afternoon, I was looking for a place to crash in Austin for SXSW and actually almost booked this place near downtown. Great deal, and a great location. But I got distracted and didn't book it, even though I did make it to the booking screen.

Just now, I received an email from them...

I can click on "continue the booking process" to jump right into the same flow I was in before. Brilliant! Why doesn't Orbitz or Travelocity or even Kayak.com hook me up with a) history, and b) email reminders, and c) total extreme convenience of jumping back to where I was? Because they don't hustle. AirBed & Breakfast hustles.

They're the guys behind Obama O's and Cap'n McCains, which incidentally helped them bootstrap and self-fund their venture... which by the way, actually makes money, and has made money from Day One.

Hustle + great design + great business model makes airbnb.com destined for some incredible success. I know I probably won't be booking a hotel again anytime soon, especially when traveling for fun.

ConnectU guys made out like bandits -- a cool $65 million settlement with Facebook and Mark Zuckerberg. Also, are ideas worth 3.25%?

Either someone just got paid off for being a real litigious nuisance with otherwise baseless claims (unlikely) or Zuckerberg really kind of was over a barrel with respect to his previous business partners (likely).

Perhaps this also settles the age old question of how much an idea is worth vs. execution. At $65 million, and assuming Facebook has a valuation of at least $2 billion (very conservative estimate), that would put the idea at around 3.25%.

EDIT: My roommate Alex reports "Actually the gloating is worth 65 MM... there was literal IM text from Zuckerberg to others bragging about how he ripped the idea and did the execution better and how stupid these twins were, etc."