BEST OF THE WEB: Take a look inside Silicon Valley’s hottest incubator program

This generation’s tech start-up founders share common goals – and one of them is to get noticed by Y Combinator.

This incubator program was founded by a group of investors including Paul Graham and Trevor Blackwell, and is not just one of the most coveted incubator programs in Silicon Valley – it’s often a ticket to success.

Several successful companies have been through the incubator program, including Scribd, Reddit, Airbnb and Dropbox. The average valuation of Y Combinator-backed companies reaches into the hundreds of millions of dollars.

But it’s rare that anyone actually gets a look inside the Y Combinator process. A new book by Randall Stross follows several start-ups attempting to make it big through Y Combinator, and an excerpt has been posted at Vanity Fair.

The excerpt is a fascinating look at the program and the people who apply for it.

At the time of the narrative, 170 teams of entrepreneurs had been invited to Silicon Valley to share their vision. Founders Kalvin Wang and Randy Pang are among them, hoping to win some of Y Combinator’s funds for nothing much more than an idea.

This represents a key factor in many of Y Combinator’s target programs. Several don’t have much more than an idea. Few have business plans.

At this point, the teams do not need to have a name for their proposed companies. Most do not.

Informally, YC partners will refer to the team by pluralizing whatever the applicants used as a user name when setting up an online account at the Hacker News Web site, which also receives applications for YC. Kalvin Wang is the principal contact person on the application, so the company is referred to as “the Kalvins”.

The Y Combinator team are blunt. They tell the pair, “We liked you guys more than the idea”.

What follows is a series of probing questions into what makes the business idea viable, and where it can expand in the future. Y Combinator is a seed program, and a seed always needs to grow into a viable business. Given the relatively low level of funding, Y Combinator still demands exemplary performance and ideas.

But as it turns out, maybe the personality is more important than the idea.

What Graham wants to see in the interview is that the team works well together, a prerequisite for surviving the stresses that will come in the life of a start-up. The Kalvins have acquitted themselves well, no single one dominating, each comfortably yielding to the others.

You couldn’t tell which two were hackers and which one wasn’t. The one configuration that YC partners are most vigilant about uncovering during the interviews is “hackers in a cage”, where one non-technical founder holds controlling power and treats the hackers as subordinates.

If you’ve ever wanted a good look at the Silicon Valley start-up scene, this is a good start.

Apple’s inner circle of bloggers

Apple has always had a tumultuous relationship with the blogosphere. In 2010, this came to a head when Gizmodo managed to get its hands on an iPhone 4 prototype – an incident that Steve Jobs himself became involved in.

But it also has some defenders; and no more so than John Gruber.

The blogger responsible for Daring Fireball is not only one of Apple’s staunchest defenders, but is given access to product well before anyone else as a result.

He’s part of a growing circle of bloggers Apple loves to bestow favour upon, and is yet another testament to the way Apple protects the reputation of its products.

Of course, as this BusinessWeek report shows, Gruber in return is given access to various officials and classified information too.

Gruber sometimes managed to score a few minutes with Jobs at company events. Still, he says his access into the company goes beyond the C-suite: “My contacts at Apple have always been in the rank and file.”

But he isn’t the first. Walt Mossberg at The Wall Street Journal has long been an Apple favourite, along with David Pogue at The New York Times. There are dozens of other sites given similar benefits. By targeting these defenders of the company, Apple has assured itself solid press – and a constantly churning rumour machine that feeds off its secrecy.

And no doubt Gruber is smiling – he’s made a job for himself in the process.

Gruber celebrated Daring Fireball’s 10-year anniversary last month. He quit his day job at software start-up Joyent in 2006 when revenue from T-shirt sales and ad sponsorships on the site picked up. During that time, the Philly native had to dip into his savings to support his wife and then-2-year-old son.

These days his one-man operation brings in more than $500,000 a year, according to a person familiar with his financials who is not authorized to speak on the matter. Gruber would not confirm the figure.

Apple is the most valuable tech company in the world – but who would have thought being a cheerleader would be plenty lucrative in its own right?

The video game company with no rules

You may have heard of companies that do away with managers, or adopt more of a flat management structure. But have you ever heard of a company that abandons job titles altogether?

Valve is a video game developer in the United States, founded by two ex-Microsoft employees in the late 1990s. It’s reportedly worth billions, perhaps more profitable per employee than Apple, and controls a monopoly on digital distribution of video games through its Steam service.

It also has no job titles whatsoever.

As this piece in The New York Times explains, new employees are not told what to do. They have no directives. Instead, they have a moving desk, and they’re told to contribute to wherever they feel necessary.

To spur creativity, Google management created the concept of “20 percent time,” the portion of employees’ schedules that they could commit to entirely self-directed projects. At Valve, it’s more like 100 percent time. New employees aren’t even told where to work in the company.

Instead, they are expected to decide on their own where they can contribute most. Many desks at Valve are on wheels. After figuring out what they want to do, workers simply push their desks over to the group they want to join.

One hire from Hollywood had a problem with moving his desk. The chief executive, Gabe Newell, moved it for him. The employee no longer works there.

But very few people leave, thanks to the loyalty on behalf of the company. The philosophy is that when the company gets out of the way, people can do their best work.

In one case, Valve moved an employee’s parents to the Seattle area, where one of them was also able to receive better cancer treatment.

It works. Customers wait for years for Valve to release new games, and they sell millions of copies.

But Valve has moved from making games into a range of game-like services, working with schools on an education program, and most recently working on new wearable gaming hardware.

The piece delves into Valve’s history, but its most important revelations are about its management. It hired a graffiti artist straight from the street, and even more recently brought on an economist to help analyse the virtual economies of its games.

Valve isn’t a household name. But for managers and tech companies, it may be one of the most critical examples of how to best manage employees to get their best performance.


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