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sincerely

Hiring via API

It is easy for a team of developers to start a startup right now. Indeed, many are. There are now over a hundred developers in each new Y Combinator class! These are people that could otherwise be working at your company.

Why would someone start their own company rather than joining yours?  It isn’t because they are likely to make more money.   A developer has a much higher expected return going to work for Google, Dropbox or Square than doing their own thing. I believe it is culture, not money that is driving their behavior.

“Do my own thing.”  
I speak with lots of developers every week. If they are good I try to hire them. If I fail it is rarely because they choose another startup. Usually they say “I want to do my own thing.”  This translates to “I want to decide with who, how much, and on what I work.” This is a culture decision. This may be working only 20 hours a week. This may be working from 8pm-8am wearing PJs.  This may be working while traveling in Asia.

If there is all this talent out there “doing their own thing,” how does a company capture their value?
The simple answer is to become their customer. And no, i’m not talking about contract work.

I’ve never met a talented person who said “I’d rather do contract work.”  Developers don’t like equating their time to dollars.  They don’t like working on someone else’s stuff.  Good developers want to be as close to their customer as possible.

Partnerships written in code
Luckily APIs are an innovation that allow developers to create meterable value for a company without being employed by said company.  A developer gets paid for the value they create not the hours they put in.

Instead of building a notification system for your iPhone app (requiring an additional engineer and $150k in total costs), it is easier to pay Urban Airship a fraction of a penny every time you send a notification.

I encourage developer teams to make a meterable service that many companies need but don’t want to build themselves.

As a company scales they may end these API partnerships and vertically integrate – building every piece of their service and value chain. At 2M notifications per day, it might make sense to build your own Urban Airship. But maybe you don’t ever want to get into the business of sending notifications, and you don’t have to.

It is often said the best path to success is focusing on what you are good at. Everything else you should outsource to a partner.

APIs are partnerships written in code

Case Study: Sincerely Inc.
At Sincerely, many aspects of our service and business have been written by people who don’t work for us:
Postmark – instead of running our own SMTP server.
Appirater – instead of writing our own app review notification system
Hoptoad – instead of building our own crash reporting system
Urban Airship – instead of buildling our own notification system
Geckoboard – instead of making our own dashboard
Linode – instead of owning and running our own servers
Flurry – instead of writing our own analytics
Instagram – instead of creating our own community of photo content
Github – instead of hosting our own repositories

How you can hire us
Sincerely’s focus is making it easy to send real photos in the mail from a mobile phone.  We’ve gotten good at collecting physical addresses from users. We’ve learned how to bill users for small transactions.  We’ve set up relationships with print centers around the world.  We’ve built powerful customer support systems that address the challenges of sending real things in the real world.

There seems to be a new photo app launching every week. It would be a huge undertaking for each of them to recreate what Sincerely has built.  Our Ship Library for iOS makes it easy for any app to add photo print & delivery functionality in less than 30 minutes.
 
I believe we’ll see a pattern of more companies launching APIs and launching them earlier in their life.  It is the first step of a biz dev strategy – and it is a step that developers are comfortable with.  We get to talk to each other with snippets of code.  We don’t have go through a big legal process to work together. We can even create value together without having money change hands.  Heck, you can scale to hundreds of partners without having a biz dev guy – sounds like something a lot of developers I know would really like to hear.

What services do you wish developers “doing their own thing” would build?

*There is a good discussion going on over at Hacker News – join in

YC: The new grad school

I’ve always been interested in starting companies. Ten years ago I was an undergrad at Penn State. I was told by professors, my parents & the press that the best way to start a company was to go to graduate school, become an expert in your field and start a company with a classmate.   Ten years ago grad school probably was the best place to meet potential co-founders. That’s what Larry and Sergey did.  That is how Filo and Jerry met.

So I went to grad school.

I did not love my time stuck in the dark corners of the control systems lab at the University of Maryland.  The opportunities to evaluate and work with potential co-founders were lacking. Note* I realize this concentration would have been higher at a place like Stanford or MIT. Luckily I met Adam Smith on Craigslist during a summer internship, we became roommates, did a lot of brainstorming over hot pocket dinners and eventually started Xobni together.

From the outside Y Combinator may simply look like a new disruptive venture fund. And it is. But the secondary effects may be even larger.  

I often say Paul Graham doesn’t do YC for the money, he does it to teach.  He is a professor in a new type of university. And as an entrepreneur himself, of course it is a university he founded.

The practicum is launching your first product.
The Tuesday dinners are the weekly lectures.
The coursework is Hacker News.
Your fraternity brothers are the YC alums
And unlike contributions to your university’s general fund – when you invest in Y Combinator you get a return.

As a member of the 3rd ever YC class (summer 2006) I had a sense that I was getting my chance to be an early alumni of a prestigious new community – not unlike the early graduates of Harvard.  As the years have passed, as Y Combinator has grown, this has only become more true.

Founding Sincerely 

I co-founded Sincerely with a former YC classmate, former Xobni employee, and friend, Bryan Kennedy.  Bryan’s YC-backed company Pairwise was an early hit, but never turned into the business he wanted it to be.  Bryan is the quintessential internet hacker; he has been building websites and web communities since high school. He is part developer, part designer.  I recognized his talent early during YC and when Bryan shut down Pairwise I grabbed him to run Xobni’s web team as employee #4.  Later Bryan and I worked side by side running a very analytical growth team at Xobni.  After several great years with Xobni Bryan got excited about the iPhone, left Xobni, started Swipe (a credit card processing app), and sold it within 8 months on the heels of Square‘s launch. Now Bryan and I have co-founded Sincerely together – we’re making it easy to send real printed photos from your mobile phone. We just launched our first product Postagram earlier this week

Lesson learned  

YC founders, look around you. This is the greatest concentration of company & product building talent you are likely to experience in your life.  There are potential employees and co-founders sitting around you at each dinner.  Help each other succeed. And who knows who you’ll end up starting your next company with.  

Welcome to the new grad school.