Several groups said our weekly dinners saved them from a common problem afflicting startups: working so hard that one has no social life. (I remember that part all too well.) This way, they were guaranteed a social event at least once a week.

I've heard Y Combinator described as an "incubator." Actually we're the opposite: incubators exert more control than ordinary VCs, and we make a point of exerting less. Among other things, incubators usually make you work in their office-- that's where the word "incubator" comes from. That seems the wrong model. If investors get too involved, they smother one of the most powerful forces in a startup: the feeling that it's your own company.

Incubators were conspicuous failures during the Bubble. There's still debate about whether this was because of the Bubble, or because they're a bad idea. My vote is they're a bad idea. I think they fail because they select for the wrong people. When we were starting a startup, we would never have taken funding from an "incubator." We can find office space, thanks; just give us the money. And people with that attitude are the ones likely to succeed in startups.

Indeed, one quality all the founders shared this summer was a spirit of independence. I've been wondering about that. Are some people just a lot more independent than others, or would everyone be this way if they were allowed to?

As with most nature/nurture questions, the answer is probably: some of each. But my main conclusion from the summer is that there's more environment in the mix than most people realize. I could see that from how the founders' attitudes changed during the summer. Most were emerging from twenty or so years of being told what to do. They seemed a little surprised at having total freedom. But they grew into it really quickly; some of these guys now seem about four inches taller (metaphorically) than they did at the beginning of the summer.

When we asked the summer founders what surprised them most about starting a company, one said "the most shocking thing is that it worked."

It will take more experience to know for sure, but my guess is that a lot of hackers could do this-- that if you put people in a position of independence, they develop the qualities they need. Throw them off a cliff, and most will find on the way down that they have wings.

The reason this is news to anyone is that the same forces work in the other direction too. Most hackers are employees, and this molds you into someone to whom starting a startup seems impossible as surely as starting a startup molds you into someone who can handle it.

If I'm right, "hacker" will mean something different in twenty years than it does now. Increasingly it will mean the people who run the company. Y Combinator is just accelerating a process that would have happened anyway. Power is shifting from the people who deal with money to the people who create technology, and if our experience this summer is any guide, this will be a good thing.

[1] By heavy-duty security I mean efforts to protect against truly determined attackers.

The image shows us, the 2005 summer founders, and Smartleaf co-founders Mark Nitzberg and Olin Shivers at the 30-foot table Kate Courteau designed for us. Photo by Alex Lewin.

Thanks to Sarah Harlin, Steve Huffman, Jessica Livingston, Zak Stone, and Aaron Swartz for reading drafts of this.

Ideas for Startups

(This essay is derived from a talk at the 2005 Startup School.)

How do you get good ideas for startups? That's probably the number one question people ask me.

I'd like to reply with another question: why do people think it's hard to come up with ideas for startups?

That might seem a stupid thing to ask. Why do they think it's hard? If people can't do it, then it is hard, at least for them. Right?

Well, maybe not. What people usually say is not that they can't think of ideas, but that they don't have any. That's not quite the same thing. It could be the reason they don't have any is that they haven't tried to generate them.

I think this is often the case. I think people believe that coming up with ideas for startups is very hard-- that it must be very hard-- and so they don't try do to it. They assume ideas are like miracles: they either pop into your head or they don't.

I also have a theory about why people think this. They overvalue ideas. They think creating a startup is just a matter of implementing some fabulous initial idea. And since a successful startup is worth millions of dollars, a good idea is therefore a million dollar idea.

If coming up with an idea for a startup equals coming up with a million dollar idea, then of course it's going to seem hard. Too hard to bother trying. Our instincts tell us something so valuable would not be just lying around for anyone to discover.

Actually, startup ideas are not million dollar ideas, and here's an experiment you can try to prove it: just try to sell one. Nothing evolves faster than markets. The fact that there's no market for startup ideas suggests there's no demand. Which means, in the narrow sense of the word, that startup ideas are worthless.

The fact is, most startups end up nothing like the initial idea. It would be closer to the truth to say the main value of your initial idea is that, in the process of discovering it's broken, you'll come up with your real idea.

The initial idea is just a starting point-- not a blueprint, but a question. It might help if they were expressed that way. Instead of saying that your idea is to make a collaborative, web-based spreadsheet, say: could one make a collaborative, web-based spreadsheet? A few grammatical tweaks, and a woefully incomplete idea becomes a promising question to explore.

There's a real difference, because an assertion provokes objections in a way a question doesn't. If you say: I'm going to build a web-based spreadsheet, then critics-- the most dangerous of which are in your own head-- will immediately reply that you'd be competing with Microsoft, that you couldn't give people the kind of UI they expect, that users wouldn't want to have their data on your servers, and so on.

A question doesn't seem so challenging. It becomes: let's try making a web-based spreadsheet and see how far we get. And everyone knows that if you tried this you'd be able to make something useful. Maybe what you'd end up with wouldn't even be a spreadsheet. Maybe it would be some kind of new spreasheet-like collaboration tool that doesn't even have a name yet. You wouldn't have thought of something like that except by implementing your way toward it.

Treating a startup idea as a question changes what you're looking for. If an idea is a blueprint, it has to be right. But if it's a question, it can be wrong, so long as it's wrong in a way that leads to more ideas.

One valuable way for an idea to be wrong is to be only a partial solution. When someone's working on a problem that seems too big, I always ask: is there some way to bite off some subset of the problem, then gradually expand from there? That will generally work unless you get trapped on a local maximum, like 1980s-style AI, or C.

So far, we've reduced the problem from thinking of a million dollar idea to thinking of a mistaken question. That doesn't seem so hard, does it?

To generate such questions you need two things: to be familiar with promising new technologies, and to have the right kind of friends. New technologies are the ingredients startup ideas are made of, and conversations with friends are the kitchen they're cooked in.