[derefr]

But for someone whose whole job is to find, and invest in, "the next Google", you'd think there could be some sort of recognizable features that a Bayesian classifier could learn as positive weights (as, if there weren't, that person would guess correctly at no greater a rate than chance, and would therefore be replaced by a small shell-script/die roll.) Those recognizable features should then be able to be decomposed into discrete features—which could be written down as a checklist.

To put it another way—there are only two ways to do a job whose output is boolean (invest/don't invest): either algorithmically, or randomly. Any judging algorithm can be approximated by a checklist.

[dustrider]

GP's point is that the truly breakout success redefine what it means to be successful. e.g. Google wasn't taken seriously because there was no money on the internet, MS wasn't taken seriously cos there was no money in software, etc. etc. You don't see the revolution coming, you're in it or you're not.

With FUD and spin making such big motions on startups (see diaspora 2 months ago) you're as well off making random bets, bets on personality or some other arbitrary factor that works for you.

There isn't a winning strategy, or all invested startups would succeed, so it's pretty much a die roll. People like PG pick a few criteria that work for them and to some measure stack the deck in their favour, but it is and will always be a gamble.

[apsurd]

  has_traction? 
  has_ability_to_get_traction?

Sure these are jobs in and of themselves but I'd think those would be the primary things everyone should be gunning for.

It's pretty clear that the "checklist" boils down to sizing up the founders (clear leader?) and sizing up the founders persistence. Persistent leaders usually end up getting traction some way with some product. So that would be my 2 classifiers.

[chegra]

I think PG is on the right track with his investing strategy.

Lets say his probability of finding the next Google with this rule was a arbitary value of 0.001. I wouldn't know its exact value but I'm assuming it's non-zero.

He would have to invest in 693 companies before he has a 50% chance of hitting a google. I don't think they have gone that far as yet. It's just a matter of time.

[jacquesm]

There are hundreds of thousands (millions?) of web companies, there is one google, and maybe 50 or so (extremely successful) companies where investors from a seed fund had a chance to get in on the bottom rung they way YC wants to have it.

The chances of finding 'the next google' are a lot smaller than what you think they are, but the chances of scoring a really big hit (on the order of 10's of millions in terms of ROI for YC) are pretty good.