.Silicon Valley´s Start-Up Machine
The New york Times. Friday, May 3, 2013. Michelle Crosby, an energetic 37-year-old lawyer in Boise, Idaho, applied for a loan last November from a local bank, Western Capital. She proposed to use the money, ,000, to help start a new business, Wevorce, which could be described most reductively as an H&R Block for divorces. The bankers liked the idea, and Crosby was a strong candidate. They had even given her an earlier loan to open Wevorce’s first office. But after four weeks, the bank was stalling and Crosby had yet to receive a cent. At the height of her frustration, she received an e-mail from a small group of private investors in Mountain View, Calif. They invited her to an interview and, after listening to her story, promised her 0,000 in exchange for a 7 percent stake in Wevorce. Crosby accepted on the spot. The next day, she found a condo for rent, at ,500 a month, in Mountain View, and left Boise, and her boyfriend, behind.
Ian Allen for The New York Times
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Haisha Chen is a 23-year-old Chinese-born University of Chicago graduate who goes by David so that Americans remember his name. With two friends, Teng Bao and Dafeng Guo, Chen created software that allows Internet users to build simple, elegant Web sites, designed with mobile devices in mind, in 15 minutes. They called their product Strikingly. Last July, to their parents’ alarm, the men bought one-way tickets to San Francisco — Chen from Shanghai, Guo from Hong Kong, Bao from Chicago. They rented a single bedroom in a cramped apartment in San Francisco’s Outer Richmond neighborhood, sleeping on two futons, one of which prevented the door from opening more than a few inches. They spent ,000. Soon other virtual communities — like the Twitter account for fans of the 1990s TV show “Boy Meets World,” and a Facebook page called “I Big Trucks, Mudding, Bon Fires . . . Country BOYS! :)”— began selling shirts, with staggering success. In November, Teespring earned 3,336; in January, 9,029. But the founders felt they could do better. “We don’t want this to be a -, -, million business,” Williams told me. “We’re looking at the big picture here.” I asked Williams and Stites-Clayton to define “big picture.” They responded in unison: “A billion dollars.” When the investors called with their offer of 0,000, Williams and Stites-Clayton also moved to Mountain View.
The Mountain View investors are the partners of Y Combinator, an organization that can be likened to a sleep-away camp for start-up companies. Y.C. holds two three-month sessions every year. During that time, campers, or founders, have regular meetings with each of Y.C.’s counselors, or partners, at which they receive technical advice, emotional support and, most critical, lessons on the art of the sale. There is no campus, only a nondescript office building in Mountain View — on Pioneer Way, around the corner from Easy Street. Founders are advised to rent apartments nearby, so that they can run to the office in minutes should an important investor pay a visit.