There was a thread on Hacker News yesterday that absolutely fascinated me. It shows a back and forth between John Hathorne of the MassChallenge and Paul Graham.
First off, I have a lot of respect for both John and Paul. John has done some amazing things getting the MassChallenge off the ground, funding 16 startups and giving a home to many more. I think Paul's merits need no explaining.
We were a MassChallenge finalist and a Y Combinator company, so this was equivalent to being a 13 year old girl and watching mommy and daddy fight center stage at a Justin Bieber concert.
It all started when the MassChallenge decided that it wanted to get a little press on Hacker News hoping to draw in some applications for it's upcoming deadline. The blog post was fine. It was on startupamericapartnership.org, had a glowing picture of the Relay Rides team excepting their $50k check, but it had this superficial tone that didn't make it sound authentic. Nonetheless, with their awesome post in hand they set out into the Hacker News water and things got ugly.
You can read all the comments here and the MassChallenge even asked <http://twitter.com/#!/masschallenge/status/53147207356006400> for upvotes via their Twitter account. In the end I blame this all on rhizome. The `post <http://news.ycombinator.com/item?id=2388444> was simple enough:
It's still creepy.
It however elicited a response from John Harthorne the CEO and founder of the MassChallenge. He took a snarky comment from a random HN user and turned around and punched Y Combinator in the face with it:
Is it as creepy as taking 6% equity from a company that is still young and strategically weak?
To me that is molestation.
So obviously PG had to defend his honor:
I wouldn't be surprised to see this sort of comment from a random troll on HN, but I'm surprised to see it from one of the organizers of the program.
It suggests that as well as having rather bad judgment, you don't understand the math of equity. A "free" alternative is no bargain if you end up net worse off.
John rebuts with math and economics:
But if we offer a free alternative with equivalent benefits, then 6% is way overpriced. And that's what we do.
Paul omits a discussion of opportunity cost. Sure, buying a coke for 50 cents is great ... but getting it for free is much better.
Remember that at 6.4% improvement, you end up even with ycombinator. At 6.4% improvement with MassChallenge, you end up 6.4% ahead.
and staunch ends it:
Do yourself a favor: wait until you have a track record and reputation that's at least 5% the quality of YC's before you start bragging about how much better you are.
Now it's very clear that these two have very different opinions on how a startup should be funded. Totally fine, but to the degree of using the word molestation to describe another's methods is a little much.
There is a very clear difference between these two programs, Y Combinator is a business and it's goal is to make money. The MassChallenge is a non-profit and it's goal is to 'Foster Innovation'. They both have the same mission to create more startup, but at this point you would think it's the Sea Shepherd Conservation Society vs Japanese Whalers. (Yes, that was a Whale Wars reference)
I'm not going to comment on the merits of either program. We have enjoyed the benefits of both. I'm just amazed by this whole back and forth. John's comments were down voted to the point where you can barely read them, where PG's post garnered 10 points. It just shows that if you are going to swim in someone else's pond that you need to play nice.