Copying Y Combinator - If there's a right way, what is it?
oldgregg: A bunch of these group have popped up but everyone I know will only apply to YC and TS... The other groups just don't have the credibility yet. I think techstars has done alright because it slid in as #2 and it has really gotten out front on the community side of things -- great job differentiating themselves from YC.I don't think it will work to copy anything, I'm always going to give 6% to Paul Graham in the valley before I give 6% to Opie Taylor in Mayberry.I think there might be an opening on the lower end of the market. Right now these groups are making total investments in companies around 50k (after program costs). That still requires a serious potential return to make a profit. So while they will tell you otherwise, they will rarely invest in an idea unless it has a very large potential market size. They will take 1% chance at a billion dollar return over a 50% chance at a million dollar return. Which leaves a decent number of smaller ideas on the table. The truth is that a company providing great software to dentist's offices will probably be ramen profitable before an idea like tipjoy -- but obviously the potential returns are a lot lower.Intellectual capital is also a big problem. If you are ambitious and talented you have probably already moved to a tech hub. That said...I would buy a giant house and go Heaven's Gate style. Recruit local talent that hates their demeaning code-monkey job and sell people on the vision. They get free rent and a very small stipend. Dig up 10 people like this in a secondary town and now you've got a little community going... Hackers in these small towns are usually really hungry for people who "get it" so it's not about the money. Snag really sharp kids right out of high school or college and spend some time building into them in a really intense way. It's really talent development in a lot of ways, but it could potentially be a great funnel for getting people connected.And just to soapbox for a second, post-industrial age-graded education is dehumanizing and bureaucratic -- although it's been great for making mindless factory workers. But it's not working anymore, so sooner or later we'll move back toward an apprenticeship model where people learn in a holistic relationship-driven context. That's what these seed stage funds are doing right now -- and it seems to be working.