Update on this post in 2022…
I wrote some posts around this time that were explicitly predicting things. This post wasn’t that. It was more what we’d call a ‘vibe shift’ take. But I think I actually called this pretty well!
Original post…
Like many tech minded people I viscerally hate prestige. We tend to want to view the world as a harsh meritocracy where only the best achieve success. It’s partly why we revere people who have the guts to drop out of school. They took the risk of losing the prestigious paper to hang on the wall. However, whether or not we choose to ignore it, prestige does matter.
Even I, who eschewed a “top-tier” school think differently about people who go to Stanford, MIT, or Harvard. The natural reaction to hearing this is to think people there are smarter and better. The same is true of those who go to work at McKinsey, Goldman, or Google. This causes a large disruption in talent- people tend to underestimate those without the right pedigree and possibly overrate others.
This is why I was unhappy to hear about Yuri Milner deciding to invest 150k in every YCombinator startup. Yuri’s investment obviously seems good for YCombinator and all of the current startups there. It takes away a huge amount of risk and pain associated with starting a startup. As Michael Arrington says, it is a game changer. It is the next act in making Entrepreneur a truly prestigious profession.
This has two main effects. First, this makes entrepreneurs aware of their status and prestige. Already, YCombinator and more broadly startups had geek cachet amongst the HackerNews and TechCrunch crowd. This has now moved mainstream, with articles in the Wall Street Journal, New York Times, and others. It is frustrating to hear of the multitude of business people “just looking for someone who can code” to make their startup. This reeks of a bubble. Encouraging startups and innovation are incredible things that I care deeply about. But, I worry beefing up the prestige of this profession leads people to underestimate the difficulty of doing a startup.
Second, the infusion of money allows entrepreneurs to be able to get office space, and buy the latest tech, and greatly lesson their risk. I am not sure this is necessarily worse for startups. But, there is something about the idea of kids in a house coding the night away on the “Next Big Thing” that warms my heart. I want them taking on the world, and hoping to make it huge. Prestige changes YCombinator from the hacker-underdog bringing down the Man to the Harvard of startups. Until now, startups were seen as the gritty off-the-beaten-path choice, not the prestigious option.
I am not sure that this is necessarily a bad thing. But, it sure feels different.