Hawaiʻi's Technology Community
Perhaps it's time for a seed fund incubator in Hawaii?
This latest TechCrunch post, "LaunchBox Unleashes Its First Nine Startups" really got me thinking of whether we could do something like this in Hawaii.
Ever since I met Paul Graham back in 2004 when I presented at MIT's Spam Conference (fast forward 21 minutes to see me make a presentation in record cold temperatures wearing so much clothing I looked as chunky as Santa Claus) I followed his Y-Combinator project very closely with great interest, always pondering its applicability to Hawaii.
A seed fund incubator basically is designed to give a couple of geeks a summer's worth of room & board money to belt out a beta version of a web company. In exchange, the incubator gets a small percentage of the company and the right to invest in future rounds.
This is something that just might work here. We could style the incubation process after the business plan competition (which also gives a sizable prize for the winner) and then perhaps as a community, agree to provide some of our expertise to help the startup succeed.
Is this something worth pursuing? I haven't spoken to Paul since '04 but I'm certain he'd at least return my email and perhaps give us some pointers of how to do something like that here in Hawaii (I thought about asking him to perhaps partner with us but he told me he really hates flying).
What do you all think?
Ever since I met Paul Graham back in 2004 when I presented at MIT's Spam Conference (fast forward 21 minutes to see me make a presentation in record cold temperatures wearing so much clothing I looked as chunky as Santa Claus) I followed his Y-Combinator project very closely with great interest, always pondering its applicability to Hawaii.
A seed fund incubator basically is designed to give a couple of geeks a summer's worth of room & board money to belt out a beta version of a web company. In exchange, the incubator gets a small percentage of the company and the right to invest in future rounds.
This is something that just might work here. We could style the incubation process after the business plan competition (which also gives a sizable prize for the winner) and then perhaps as a community, agree to provide some of our expertise to help the startup succeed.
Is this something worth pursuing? I haven't spoken to Paul since '04 but I'm certain he'd at least return my email and perhaps give us some pointers of how to do something like that here in Hawaii (I thought about asking him to perhaps partner with us but he told me he really hates flying).
What do you all think?
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Comment by John on August 6, 2008 at 3:05pm
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YC takes a 6% investment. Because of their connections and ability to legitimate you, that 6% is very valuable (and for most startups well worth it).
This would be one of the challenges of a Hawaii version (as I alluded to previously). Whoever ran it would need to offer serious value beyond simply offering 20k or 30k.
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Comment by Daniel Leuck on August 6, 2008 at 2:26pm
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We had an interesting chat about this thread at the Jelly coworking group today. Gabe raised an interesting question about the type of person that would benefit from a 20K or 30K investment. I definitely wouldn't give up any equity in ooi for this amount. Are YC companies usually started by recent college grads?
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Comment by Shawn Drost on August 6, 2008 at 11:03am
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Dan points out that my link is broken. Correct link. (Note: Hawaii has two, not three, 'i's.)
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Comment by Peter Kay on August 6, 2008 at 9:41am
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I'd be happy to work with anyone to facilitate some kind of joint event to see if we can bring all the entrepreneurs out of the closet. If there's enough traction, we can make this happen.
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Hey all,
As Sid said, this is a topic we've been interested in. I'm also a longtime lurker on news.ycombinator.com, and I've seen people ask Paul Graham how to start a Y Combinator in their town. He's not very helpful, these days he just refers people to the faq entry:
Will you help us set up something like Y Combinator in our town?
There already is a Y Combinator in your town: Y Combinator. The seed funding business is national, not regional.
As for attendees, Sid and I are compiling a list of the most entrepreneurial hackers we know for an event we're planning (a startup weekend). When we email them, I'll add a link to this thread and ask any interested parties to speak up. I'd probably be interested, although it would depend on how involved I am with the business I've already started, NewView.
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Comment by Truman Leung on August 6, 2008 at 8:23am
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I've been running the weekly Jelly/Coworking meetings for the last couple of months in hopes of providing just such a real world forum for tech entrepreneurs to connect. During the course of these informal weekly gatherings one person was offered a job, at least four local web 2.0 companies/startups were represented, promising startup ideas were discussed and technical and design tips were exchanged.
As a continuing experiment, I hope to see the group attract more talent, more cross-pollination ... hopefully fostering an environment that can see people connecting and starting new companies. Some may want seed funding while others may prefer to bootstrap. It might be interesting if a company or Manoa Innovation Center or some organization like it were to provide permanent office space for such coworking:
http://coworking.pbwiki.com/
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I think a seed fund incubator would be a good idea. Moreover, I think fostering many smaller start-ups matches well with Hawaii's strengths and weaknesses. Because of Hawaii's remoteness and less developed technology sector, smaller start-ups have a better chance of succeeding. They can take on narrower problems and they can exit at more modest and attainable valuations.
A couple of key challenges for a seed fund incubator:
- The incubator would need to be run by an entrepreneur with strong technological skills and relationships. I think this is key reason of YCombinator's success. Graham and his team are first rate developers (enabling them to help their startups with key technical problems) with great relationships in big tech companies (making acquisitions easier).
- As Peter alluded to, how many engineers would be interested in taking this type of risk. In the Bay Area it's gotten to a point where even if you fail with a incubator startup, it's a badge of honor and you know it will minimally get you a better paying, more challenging job at another company. But in Hawaii, how many people will ditch their government or corporate job for this?
- In terms of real world forums, Manoa Geeks is certainly the biggest though most are tech enthusiasts/bloggers/etc. To my knowledge, Hawaii does not really have a physical forum/meeting for tech entrepreneurs /aspiring entrepreneurs. It would be valuable if we did have that.
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Good question. Hopefully we can get some idea from responses to this blog post. TechHui was created in part to answer this sort of question.
In terms of real world forums, maybe Manoa Geeks? It seems to have grown quite a bit this year.
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Where do you think would be a good place/venue to give this some more visibility? I'm on the HVCA board & a part-time Angel executive board member so that side of the coin won't be a problem.
It's the other side, frankly, that I'm more concerned over: the raw talent of people that would want to go for this.
What's a good way to get a reading if we've got these kinds of people here?
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There is definitely interest in a Hawaii based YC type Web 2.0 company launchpad. This has come up in a few other forums. I remember Bill Spencer commenting on something along these lines.
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