Startup founders need to distance themselves from big tech, according to the CEO of famed startup accelerator Y Combinator

michael seibel

With the tech industry under the microscope, Silicon Valley’s
young startups are caught in the middle of contentious debates
about privacy, regulation, and accountability. 

Startup accelerator
Y Combinator runs a founder showcase, called Demo Day
, which is

something of a Silicon Valley legend
. This year, the two-day
event will run from August 19 to 20 in San Francisco where
entrepreneurs at the end of the 3-month program will pitch some of
the Valley’s biggest investors for funding for their startups.

It’s a coveted moment for techies chasing the Silicon Valley
dream, and an opportunity to shine in front of a friendly crowd.
Outside the confines of Silicon Valley however, the startups will
face a much more skeptical audience.  And Y Combinator CEO Michael
Seibel says startups need to be ready for it.

For a startup pitching an idea for a game-changing tech product,
the task is much trickier today, when tech has become a bad word
for a lot of people, Seibel told Business Insider in an
interview.

“In this age, where I think tech is getting more skepticism,
which is legit, you have to make sure you’re not letting that
splash on to your startup and get you down,” Seibel said.

Read More:
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why they rejoined Y Combinator even after launching successful
startups.

Outside of Silicon Valley, Seibel has noticed people start to
refer to startups with the same language they used to describe
larger tech companies like
Google
and
Facebook
, both of which are facing significant scrutiny from
users and lawmakers alike.

At one time, a comparison to Google would have been the ultimate
complement. Today, it’s a less-than-ideal comparison for founders
just starting out.

“Sometimes in the popular culture it’s like, it’s weird to me,
but I think it’s very normal to lump Google, Facebook, and then all
the startups you’ve ever heard of. I would hope that we could
separate them out a little,” Seibel said.

One of the biggest differences, according to Seibel, is the
standards founders are held to by the general public and investors.
Those expectations tend to remain the same whether a founder is
running a four-person team or a 50,000-person team, but Seibel
argues that shouldn’t be the case.

“It feels like Google and startups should be a closer comparison
than Exxon Mobil and startups, but in reality Google is a lot
closer to Exxon Mobile than it is to startups,” Seibel said.

Although Google and Facebook started out as four-person teams
themselves, both tech giants have come under scrutiny for a host of
privacy and anti-competitive concerns. In July, the
US Federal Trade Commission hit Facebook with a $5 billion
penalty
over its handling of user data. And Google has been
fined billions of dollars in Europe because of its business
practices, and is facing an
antitrust investigation in the US by the Department of
Justice. 

For companies like Google and Facebook, once revered as paragons
of business success and innovation, the loss of public goodwill has
come as a stunning and humbling blow. And for young startup
entrepreneurs who grew up associating Google with its erstwhile
“Don’t be evil” motto, the change in perception is one more
variable to plan for and learn from while building a company.

Many entrepreneurs may dream of achieving even a fraction of the
companies’ success, but Seibel believes that founders need to hold
themselves to a higher standard to avoid the same pitfalls.

“Honestly, maybe the standards should have been higher for those
bigger companies back then,” Seibel said. “Startups are far more of
a faith-based initiative. If you’re not in the right headspace, it
can really screw you up. You have to really be the biggest fan of
your startup to make it work.”

SEE ALSO: This
22-year-old dropped out of MIT to launch an AI startup that just
got backed by the Twitch and Instagram founders, and Peter Thiel’s
VC firm


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Startup founders need to distance themselves from big tech, according to the CEO of famed startup accelerator Y Combinator