I used to work with Bill at Seven, and this article captures his personality pretty well.
His biggest strength is he's an unbelievable salesman. He can talk pixie dust and make you want to sign on to his vision.
I believe the ability to sell your vision is the most important skill for an entrepreneur (which is too bad for me, cause I'm a coder and I suck at this skill).
First his product was the Facebook killer then he decides that he doesn't want to kill it, he wants to build on top of it. "It's the everything." ... "So we're about to make it more functional, more valuable for people than ever."
You can't flip-flop more than that. I can't wait until Facebook incorporates their new ideas into the product and puts them out of business - assuming that this new business actually exists in the first place.
> "I mean, I literally don't think there's anything to be learned from other people's stuff."
That is exactly what happened with Color, which Nguyen never even bothered to test. "I'm not here to practice. I'm here to play," says Nguyen[...]
That pull quote blew me away. This guy comes across as totally arrogant, plain and simple. Even Steve Jobs, who Nguyen apparently worships, got inspiration from other people's products. If nothing else, this article is a great warning against ever working for this guy.
I'm naive when it comes to anything related to VC's and funding, but I'm pretty sure if I had a ton of money to invest, it wouldn't be anywhere near someone like that. Even after reading the article, I don't think I fully understand why he can secure funding so easily.
VCs know that most of their investments aren't going to pan out. When they evaluate companies, they aren't worrying about whether they'll fail. Even the good companies fail. What the VCs are worried about is that they're going to say no to Facebook, and then have to explain 5 years from now how the fuck they possibly could have said no to Facebook.
What that seems to mean is that if you:
* have a persona that at least superficially seems driven, ambitious, likely to succeed, and
* you tell a convincing story about a market that might experience explosive growth, and
* you have any kind of track record of any sort to make it hard to write you off as a total bozo, and
* you have some sales skill, so you can manage the pitch process and create pressure to VC firms, then
you're probably fundable even if you think testing means "practicing instead of really playing".
These kinds of pitches seem very different from the kinds of things people write in Show-HN: postings. In particular, these pitches aren't meant to be reasonable.
This is way more of a response than you were looking for; sorry, I just had to get this out, since all I can think of when I read about Color is how good an illustration it is of VC cliches.
That is why VCs never really say no, because if you do start turning into the next Facebook in the months after you meet them, they want to be able to come back and say 'ye, remember us, sure, we would love to invest!'
I had this happen to me first hand, more than once. When raising money ~5 years ago a high profile VC stopped replying to my emails. Around 2 years later when I was associated with a high-profile project he emailed me out of the blue and asked me up to lunch. As we sat down with coffee, I said to him 'I haven't talked to you in a while, this whole time I thought you thought that I suck'. He laughed and said 'ye we decided not to invest in that'.. urgh. I found it funny and we talked about VCs not saying no for the first 10 minutes.
I continued to make light of it and at the end of that meeting after talking about a number of projects, I said 'I will take 7 days of no email as a no'.
I think what he's saying is that if you can act like this guy does, you can probably make a lot of money without ever having a decent shot at providing the value. And that VCs will continue paying you for the act.
Or he could be saying that if you can come up with a move clever way of investing that avoids projects like these you may be able to be a better VC firm than the ones that currently exist.
Let me sketch the exploit, assuming you are not that guy.
Find someone who has done more than one highly impressive thing, prefereably in approximately the same line, who seems high energy and sociable. If they have anything resembling sales experience that's a big plus. One of the best hunting grounds will be in and around universities, as they're full of people with not much money and confidence that's higher than is justified, and some of them will be much more impressive than their age mates. Find one.
Harvest startup ideas by say, looking at previous Show HN posts, or doing a Madlib generator on the Crunchbase DB for X of Y, and look for something that you can build a good story about explosive growth around, or have what you think is a good idea already.
Sell your ambitious young go-getter on your idea, or on you, somehow, and start pitching VCs with your incredible story of wild growth and fantastic riches. Meanwhile iterate on your idea. Pivot if it looks like a good idea, and hope and pray for growth while pitching VCs all the freaking time.
Basically, have an idea that could conceivably grow explosively and have a business guy with previous record of Impressiveness, capacity to Believe in your Great Idea, and the ability to Sell Stuff, including your Awesome Idea.
If you are that guy, and you can program your own mockup and iterate you might be able to get into YC as a single founder.
I would appreciate a much expanded version of what you just said. I am aware that Poe's Law states more or less that no parody is so extreme that it cannot be taken seriously by at least one person in the faction the author is atempting to parody.
I always felt that extremeness (extremity?) is not necessary in the statement of Poe's Law but I could never find a good example. What you said sounded like a mockery of the YC process, but I'm not sure. The 2 have something in common... attention to detail? (Poe's Law: the parody and the parodied are both outrageous in their own ways.) In light of your discovery, I might restate Poe's Law thusly: no parody can be so ardent that it cannot be mistaken for what it parodies. What do you think about punctuation to indicate the state of being serious?
I think that punctuation to indicate seriousness/sarcasm would never catch on because it would interfere with deniability, deliberate obscurity, signalling and (im)plausible deniability.
I wasn't really joking at all with my description. I mean there are almost certainly groups that fit that description perfectly among YC alumni.
The halo created around some of the people that exhibit the qualities you mention is a really powerful motivator.
The only thing I would add is the fact that you have to know all the players and all the buzz and buzz words.
You don't want to say "no I don't know who Fred Wilson is or who Mike Arrington or PG is etc. Or you're not up on what's going on in the startup community. (Which could happen with someone who has a killer track record from a different industry.) In other words you know the lay of the land.
I might suggest cough having the players know you. There's a famous line in Chicago politics: "Don't be sent by nobody" (An apocryphal applicant, on asking for a job at a local politician's office, was asked "Who sent you?" "Nobody." "Kid, one piece of advice: don't be sent by nobody.")
This is my exact sentiment. I stopped reading after midway. It's great this man has so much passion, but I am pretty shocked how he can just continue to throw paint at a wall hoping he picks the right color that people will love. Maybe he should slow down a little and think through what he wants to do and what problem he is out to solve.
Facebook started with $17,000 investment from a friend and was a dorm room project, not a company. When trying to beat someone it is probably a good idea to see how they got to where they are at. Steady growth over time works. Dumping a shit ton of money into something and saying its going to the the "X" killer doesn't.
The laughing stock is not Bill Nguyen, its the VC's that gave him the money. If you walk in a room and say Color and they laugh, they should really be embarrassed. How many of these same people wanted to get in on this deal before it launched? The really funny thing is that there will be someone else that comes in with a great deck and grand illusions of how they will be the next Facebook, the VC's will pump this person with money too.
Why is it that political journalists are critical, trying to turn every stone, and business/financial journalists treat their subjects with softer gloves than a teen mag does Rihanna?
If there's one person in the Valley who you can ask difficult questions, it's Bill Nguyen. Instead, the author asks him about whether his wife likes the house on Maui.
Politicians live in the public eye, in a way different from celebrities (be they pop stars or CEOs). They are, in a sense, obligated to grant interviews and be open to the hard questions, because a politician is selling him or her SELF.
A pop artists sells music, a company sells a product or a service. I'm not predicating my use of facebook based on whether or not Mark Zuckerberg did pot in college or got blowjobs from his secretaries.
So when you interview someone who isn't selling themselves, you don't have the freedom to ask those kinds of questions. Unless maybe you don't that person to ever grant you or your magazine an interview ever again.
This explanation doesn't really get to the heart of it.
Fast Company has always been breathless and brainless. They always present "business" in such a way to make it seem like all you need to be a rich, successful, famous, sexy entrepreneur is "a great idea" and maybe some fun personality traits.
They aren't in the business of reporting, they're in the business of titillating, teasing, and making their reader think "that could be me!" - exactly, in other words, the stuff I've dubbed entreporn:
that's true, but that's also why I love Fast Company. If you want harder-hitting business journalism, it's better to stick with Fortune or Businessweek. There you can read about the underbelly of business,the Madoffs/Goldmans/oligarchs etc.
Fast Company and Inc. are both owned by the same firm, and they try to portray a more humanistic view of business, ie. social capitalism, the belief that entrepreneurs can one day solve all of the ills in the world. Its a very uplifting philosophy, and I for one find it encouraging.
I've never heard of the term entreporn though, if you coined it then congrats! I like the term, and maybe it is apt. Maybe that's precisely what someone is curious but hesitant about entrepreneurialism needs.
Which is fine! I'm not ANTI-Fast Company. I'm also not anti-porn. Assuming it doesn't hurt anyone, people have a right to enjoy whatever they care to enjoy. Some people even enjoy TechCrunch.
People just need to understand what they're reading, and why they shouldn't place their trust in its realism. What I see here on HN all the time is a refusal to question the motives or background of the speaker/writer/what-have-you. It's considered ad hominem, a fallacy. But it's not. It's just good thinking.
Journalists fear that being too critical will cost them the access to be able to write profiles like this. For a magazine mostly about doing puff pieces, that would be a killer.
Political journalists encounter the same thing, but their success is less dependent on this availability - and people are buying their content for that criticism, not puff pieces.
Also there is the question of talent - don't you think a more diligent reporter would rather be working for a publication/in a subject area with more prestige?
This is essentially why everyone enjoyed reading that Techcrunch guys articles. He asked the difficult questions everyone wanted answered and wasn't afraid to take some flak, unfortunately, it got him booted too.
"The premise was to create a mobile social network of people you didn't know, rather than ones you already did. Nguyen believed Color would be the Facebook killer."
I have a theory that conflicts with his thinking. If an app connects people it will trump an app that requires people to physically connect themselves. My test for this is "does this app work for users coming from a rural setting?". Facebook works amazingly well because it connects people. Color works horribly. Your app can be profitable and cool not working in a rural area, but it won't be a Facebook.
There's no big secret why Bill Nguyen can raise money. Once you have sold one company for $850 mil, you aren't going to have trouble raising money in the future.
Which is one of the problems with the Valley. These incubators operate on the same premise. Take Techstars, where they openly said, "It's about the people, not the idea." We're literally throwing money at people to think of ideas, and it stems from our obsession with "stars". Is it that hard to wait for a tangible product?
There is so much money sloshing around, and people are so scared to miss a deal that they're willing to take all the risk up front. It's crazy, and doesn't work like that in any other industry I can think off..
And many other industries work this way. Biotech and oil & gas come to mind. In fact, the tax laws around carried interest were enacted to encourage oil & gas exploration.
I honestly believe YC is different. It's not just about "People" or their ideas, but in their execution.
Throwing money blindly and seeing what sticks doesn't seem to be the YC modus operandi. It is interesting to see the number of YC alumni who join other YC startups, or do a second start-up, with similar teams and a new idea.
I would hope to measure up to the YC standard, and get myself and my ideas accepted, when the timing is right.
I don't really know how venture funding works, so pardon my stupid question: Why did he need/want to raise $41m from outside when he sold his company for $850m a few years ago?
I asked this of an old boss of mine who cashed out perfectly fine and then raised money for his next business. It's not just about money - having people like Sequoia Capital on your team is more valuable than the money.
Not just raising money, but attracting smart people and getting takeover offers from APPL, AMZN, GOOG, MSFT, etc., apparently. The bubble in this market already convinced the investors that trading start-ups can work without users. The other delusional money is waiting to take their shares at x5 price anyway.
You know something interesting? I went around linking friends to this article due to Bill possessing a lot of the traits typically lionized in entrepreneurs.
My psych major friend reads it and goes "yup that's a checklist for psychopathic behavior. Don't believe me?" then he links me the wiki:
VERY interesting if you read the wiki on psychopathy and re-read the Bill Nguyen article.
I'll also be careful to state I'm not trying to say anything here - behavior is highly contextual after all. Take for example a professional fighter who can be a really nice guy, loving family man and friend yet flip a switch when the bell rings. You just can't say whether this man is violent or not - his behavior is contextual.
There's a lot of criticism about raising money, having a high profile team and starting a company without actually having a product. This may turn out to be short sighted. I think Cisco started the same way.
For all his negative qualities pointed out, at least this man is thinking something freaking different than a freaking share button with a varied alias. Color didn't go hit, but its far better than 90% of photo sharing apps out there. It at least does something different.
What these guys are selling is a photo app, what these guys are doing is that they are toying around with possibilities in sensing, VR and localization on mobile. Could very well be huge.
No, I meant that 'hypo' means a lack, and 'hyper' means an excess, so I would expect a 'hypo'-manic CEO to be some sort of depressive and not look like a great candidate for funding and a 'hyper'-manic CEO to be extremely energetic and convincing and voluble and so at an advantage with VCs.
>' "When you're binary, you just pick a side; whether it's right or wrong doesn't really matter. You're all in. So you find out all the good and bad things about it instantly. When you find that it's not right, you just move on," he says.'
I'm reading the Isaacson book, and he reminds me of Steve Jobs. Everything is black and white, everyone is either a genius or a shithead.
The new Color app, judging by its website, actually looks really cool. Nguyen has taken something that already exists -- social broadcasting from your phone's video camera -- and made it seem space-age (turn a photo into real life.. the "transporter" comparison). Same technology, but now I can see why he's a master salesman.
i couldn't agree less. I think the thing looks exactly like what it is. A hurried, "let's ship something before my reputation is entirely ruined" product from someone who sold a vision without so much as the scaffolding in place. The original product was a mess and facebook could easily eat the lunch of "color" as it stands now. Hoping for better for whatever is next from this team.
This article summarises what makes the valley both awesome and absurd. I got mixed emotions reading it. It manages to be both appalling and inspirational.
And Bill Nguyen makes the manic Zuck portrayal in The Social Network appear shy and retiring by comparison. I'd love to meet him.
fascinating article. It looks like Color raised a lot of money, then launched and found out why customers didn't want it, and now they are trying to pivot. Basically the opposite of what YC and 37signals recommends.
For the record, YC doesn't push any particular ideology as hard as 37signals does. And if you were to ask PG, I think he'd say that different things work for different companies and founders. Running out of money before capitalizing on a profitable business model is the most common way that startups die. So launching quickly, raising money, and pivoting are all good things.
It's been two years since we entered the 'post-PC' world. If you had to choose which one to give up - your ipad apps or the web, which would you choose?
IBM didn't survive the PC, none of the PC guys survived the web, and I don't think any of the web guys will survive the post-PC world
So he didn't say post-PC devices won't access the web (and actually, neither did I) but that web apps today will not survive. That was the point of my question.
I agree with you, and disagree with all of the quoted statement. IBM did survive the PC even if they got out of the PC business. It's not clear if the "PC guys" are PC makers or those who make software for PCs, but either way they have indeed survived. Especially if you include the Mac ecosystem. And "web guys" will certainly survive the post-PC world. There will be adjustments and adaptations to new environments but great folks at Mozilla and other forward thinkers are ensuring that the web will survive and become a good platform for apps.
As is always the case few things ever kill the old technology, they simply provide another way to do things. Native apps are not going away on any platform, and web apps will only get better in the future as the web becomes a better platform for making them. The browser will continue to be one of the most important native apps.
I think a better one would be, if you could only choose one device primarily for consumption (and stuff like commenting/ basic writing/ taking notes). Would it be the ipad/ iphone or a laptop?
I'm not commenting on the usefulness of tablets (they certainly have their place). Just the idea in the article that these devices are going to make web apps obsolete.
It was an interesting read. But by the end I have no idea what Nguyen is really good at other than selling a startup. He's a wheeler and a dealer, but I sure don't have the impression that he knows how to build something as truly disruptive as he says he can.
But there was nothing in the article that gives me the feeling he is anything like Steve Jobs. He's just phenomenal at the flip, and that says a lot about what the Silicon Valley VC's that invested in Color are after.
"Parasite" is unfair. You still need guys like him to agitate, to unsettle and disrupt the marketplace. Color was a pretty innovative idea, it was just terribly executed both in technology and marketing.
Yeah, that's unfair...I retract that. But I wouldn't suggest for a second that you don't need "guys like him" i.e. great salespeople who can sell ice to eskimos. That's why I find his arrogance so over the top insofar as he compares himself to Jobs and other innovators.
This is still a valuable skill. Not the only one but a valuable one. Who wants to tie their money or career to someone who can't get you paid on the other side?
Absolutely true. However the article leans toward framing him as a visionary capable of superhuman feats:
"IBM didn't survive the PC, none of the PC guys survived
the web, and I don't think any of the web guys will
survive the post-PC world,"
Bill Nguyen is implying that Color.com will do what IBM, Microsoft, and Facebook can't, and survive the post-pc world. And there is no evidence he is capable of this since he flipped every company he started.
No, he is implying some startup will do what IBM, Microsoft and Facebook can't. Historically speaking, this is a decent analogy. After all, Facebook did what Microsoft and Google couldn't. Apple did what IBM couldn't.
Why even mention it if he doesn't think that Color could be the disruptive company that can make that leap?
I doubt he's saying "Yeah a bunch of companies are going to fail at this, including Color, but hey throw cash at us anyway". That doesn't make for a good sell at all.
His biggest strength is he's an unbelievable salesman. He can talk pixie dust and make you want to sign on to his vision.
I believe the ability to sell your vision is the most important skill for an entrepreneur (which is too bad for me, cause I'm a coder and I suck at this skill).