Growth as a false signal in Y Combinator startups

One has to appreciate how Paul Graham built Y Combinator into the world’s flagship accelerator and handed it off to others to continue its impressive run at the top of the heap. In fact, I have yet to meet a founder who regrets joining the program. But after stepping away from the YC scene for five years and then returning to observe the last two demo days, I now wonder if some of the views Paul shared in his original, widely read Essays are being taken to absurd extremes. The evolution of his take on startup growth serves as an excellent example. Keep reading over at TechCrunch to learn more. Highlights include: – Why early revenue growth should not be..

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35 Million Fans and Counting: Shoe Lovers’ CEO Bets Big on Social Commerce

It’s no secret that social networking platforms are penetrating the $1.6 trillion e-commerce space.  Chatter about Facebook, Twitter, Pinterest and even Google and YouTube launching ‘buy buttons’ has persisted for over a year.  Tandem has been evaluating this evolution, mulling over what the turn to commerce means for social media stakeholders.  As part of our inquiry, we sat down with one of our portfolio company founders, Felipe Servin of Shoe Lovers, in order to hear his take on the social commerce opportunity straight from the frontlines.  Shoe Lovers currently lays claim to the most engaged page on Facebook in the world with over 35 million very active fans. Please take a moment to introduce Shoe Lovers to our readers who..
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Why Uber Is Doing (Mostly) Right by its Workers

The war of words (not to mention lawsuits) surrounding the debate over worker classification in the on-demand economy has reached a fever pitch over the past six months, with a California judge recently granting a class action suit against Uber.  Until now the debate has overwhelming supported the implication that employee/W-2 status is unquestionably better than contractor/1099 status for any number of reasons, the main one being the benefits received by W-2 employees but not by 1099 workers. It is widely understood that 1099 status is employer-friendly, saving on a number of employee- and back office-related costs, such as the above-mentioned benefits and the oversight needed to manage them.  Less well understood is that 1099 contract work actually serves the needs..

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Satellite Startups: Tapping into the Global Talent Pool

Silicon Valley is a lot of things: saturated, expensive, a possible echo chamber, and a hit HBO Original comedy. But, it’s also the birthplace of Uber, WhatsApp, Slack, and Instagram. It’s home to 40% of all “unicorns” and 49% of all VC funding so far this year. Sramana Mitra, founder of 1M/1M, ably summarizes why entrepreneurs come to the Valley: access to funding, advisors, and early adopters being key reasons. But despite these benefits, building a company in the Valley is daunting. Competition for talent is cutthroat and the costs are exorbitant. Many founders now reasonably ask the question: should I start my company in the Bay Area or elsewhere? However, this either-or approach can be flawed. The best course..

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Loaded Gloves: How Early-Stage Startups Can Punch Above Their Weight

When we at Tandem think of the term “disruption” in the startup world, we have a particular picture in mind: a small team of hungry entrepreneurs beating out larger incumbents for market dominance. If it were a fight movie, we’d be looking at Rocky, The Karate Kid or Million Dollar Baby. You know the story: an up and comer with limited resources figures out how to punch above his or her weight and defeat the champion. So how do tech startups write their own scripts with the same winning results? There are certainly a number of possible approaches, but one powerful pattern we’ve observed is new market entrants building their brands quickly and cost-effectively from the time of launch. Think..

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The True Hardware Pre-Sales Platform Is… Facebook?!

When Tandem began investing in hardware startups in 2013, the sector was only just beginning to shake off its reputation as “the ugly step-child of venture capital.” As our first-ever hardware investment, Tile, a device company building “the world’s largest lost and found,” provided a crash course in the opportunities and challenges associated with hardware investing. While the company’s co-founders, Nick Evans and Mike Farley, managed to quickly build a business selling millions of dollars of product only weeks after launch, no one at the outset could have predicted what the principal driver of this hyper-growth would turn out to be. One major factor in our decision to invest in Tile was the new ability to test product-market fit through..

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