Many of you already know about YCombinator and how they work. In case you don't, they are a venture capital fund that specializes in early stage startups. Basically, come up with a solid idea and we'll give you some money and a lot of advice to give it a try.

They recently posted 4 RFSes (Requests For Startups) they want to see addressed for their Winter 2010 round of financing. I believe this is just a way for YCombinator to express what markets and ideas they see have potential and want to find out what entrepreneurs can create on their own. The deadline is Oct., 28th(tomorrow)...so you have 24 hours to think about these ideas, decide which one you want to tackle and submit your application to YCombinator.

Here is a summary of each RFSes:

RFS 1: The Future of Journalism - Basically, what idea is going to save journalism from it's current state? Can you change the game in journalism? Think about content and how to make money from it.
RFS 2: New Paths Through Product Space - They seem to be looking for a new way to aggregate catalog items from manufacturers and catalog companies. This is a huge space with an fairly straight forward business model. You just have to figure out a way to drive traffic, sell product better than the companies can and get your piece of the profit pie.
RFS 3: Things Built on Twitter - This is fairly straigtforward. There are plenty of apps built off the twitter concept. Build a new website using the power of twitter and the twitter community. Think 140 characters with a new twist on twitter.
RFS 4: New Ways to Use Live Video - Everyone knows TV is so last millenium and the way people are entertained is changing rapidly. YCombinator wants some ideas on how to use the Justin.tv API to change the way LIVE video is distributed and watched on a massive scale. We're not talking YouTube here. We're talking broadcasting live events like sports, concerts, interviews, debates, etc.

I have some ideas on these topics. Some I've already thought about at length...but I want to hear your ideas. What would you pitch to answer their RFSes? If you aren't going to apply or build it yourself, I want to hear your thoughts. You never know, it may inspire someone else to build it. 

There were some great posts this week. Plenty of food for thought. If you have any others that you'd like to share, feel free to do so in the comments section. I will update the post accordingly.

Post of the week:
What Startups are really like: Paul Graham writes a great "essay" on what startups are really like using some feedback of what surprised his ycombinator alum with their startup. ***HIGHLY RECOMENDED***

Things that Aren't Worth It for Entrepreneurs: A list of things entrepreneurs should simply skip. Like raising capital and one night stands. By Kate Walling.

How Being Scrappy Made Grasshopper Profitable Within 2 Months – with Siamak Taghaddos: Great interview on how Grasshopper was able to take their voicemail service and make it profitable quickly.

Should Web Entrepreneurs Hang on to their Companies?: William Carleton asks the question "Should a startup sell out or hold on to the asset they built?"

Ten unconventional wisdoms for funding startups:10 great tidbits on investing from an experienced entrepreneur.

Never Say “VC”: Dave Troy throwing it down on the term "VC". Think Investors...not VC.

Rich vs. King in the Real World: Why I sold my company: Jason Cohen gives a great explanation on why he sold his company. (Flippin' sellout!) Some food for thought while you're building yours.

Startup School Coverage: On Saturday, YCombinator held "Startup School 2009" for hackers who are thinking about starting their own business or already have. Lots of coverage of the weekend and some good stuff went on there


The Best Quotes From Startup School: A breakdown of some quotes from Startup school from Gabor.


Startup School: An Interview With Mark Zuckerberg: TechCrunch rehashes the startup school interview with Mark Zuckerberg.



Here is the re-broadcast of Startup School on Justin.tv

As an entrepreneur who's never lived in Silicon Valley, Seattle, Boston or anywhere else like that, I've often wondered if it really matters where you're located. After all, it's the Internet right? You can do anything from anywhere. Why does it matter if you live in Topeka or Palo Alto?

This is a question I've often struggled with. I've had friends pick up and move to San Francisco and find success raising capital and finding the right team. I also say I haven't done too bad by myself without VC, so why move? My thoughts on this are evolving somewhat though.

While doing some surfing, I stumbled upon this article from Paul Graham of YCombinator explaining why people should move to Silicon Valley. He makes some good points and essentially says Silicon Valley is the best place because they understand startups the best. Here's a quote from the article that stood out to me.

West coast investors aren't bolder because they're irresponsible cowboys, or because the good weather makes them optimistic. They're bolder because they know what they're doing. They're the skiers who ski on the diamond slopes. Boldness is the essence of venture investing. The way you get big returns is not by trying to avoid losses, but by trying to ensure you get some of the big hits. And the big hits often look risky at first.

Like Facebook. Facebook was started in Boston. Boston VCs had the first shot at them. But they said no, so Facebook moved to Silicon Valley and raised money there. The partner who turned them down now says that "may turn out to have been a mistake." 

He's obviously right that Facebook could have easily started in Boston, but the investment market and the VC's were not as bold as those in Silicon Valley. Is it possible your location really matters so much that you can go from being unfunded to one of the hottest websites in the world? I find that unbelievable, but Facebook is a great example to highlight the difference.

What do you think? Is your location helping or hurting you?

I've been doing a lot of reading lately and wanted to share some great posts with everyone on BigStartups.com. Lots of good stuff in here from last week. 

The role of Product Managers in Startups: A good post regarding the important role of a Product Manager in startups. Written by Ben Yoskovitz

Watch out Google and Adobe, Small Business is warming to social networks: A fair warning to the larger companies out there about how small businesses are starting to use social media sites like Twitter and Facebook to promote their business. Written by Alex Salkever

Most Startups should be deer hunters: Great analogy post on why Startups should not try to hunt elephants or rabbits, rather they should try to hunt Deer. Written by Mark Suster.

Don't let the bastards grind you down: Post from a VC telling entrepreneurs to not take the "No's" so seriously. Written by Mark Solon.

6 steps to the perfect pitch: A few heads up tips on pitching your product to the investors. Written by Scott Gerber.

Top ten lies of startups: VC's seem to hear the same stories from entrepreneurs all the time. This post seems to sum them up. Written by Marty Zwilling.

How not to suck at blogging: A general blog post on how to blog and how not to blog. Written by Adam Baker.

So you want to start a startup? 5 places to start: 5 great tips on where to look when thinking about starting your new business. Written by Collis Ta'eed.

The amazing response to my war against sleazebas who charge startups to pitch angels: Jason Calacanis goes ape on Keiretsu Forum and PrivateEquityForums for charging startups to pitch angel investors. Written by Jason Calacanis

Startup founders should flip burgers: This post goes over the important concept of knowing the finer details of your business and not simply leaving to the staff. Written by Mark Suster

Why entrepreneurs find web strategy tough: A good article explaining the difficulties entrepreneurs have when ironing their strategy out. Written by Barry Welford

In Startup land the old could strike gold: Discussion on why Older entreprenuers(aka over 30) are more likely to succeed than younger ones. Written by Susan Campbell

The future of venture capital: A VC's thoughts on the future of Venture Capitol and why it's headed that way. Written by Mitch Kapor.

The best programming language for a lean startup: People are always fighting over what programming language you should build your product in. The answer is "It Depends". Written by Kevin Dewalt.

10 huge successes born from early failures: Great article talking about huge successes that are an evolution from their original idea. Written by Nicholas Carlson and Nick Saint.

The Pmarca Guide to Startups, part 8: Hiring, managing, promoting, and firing executives: Discussion regarding how to manage an executive team within a startup. Written by Marc Andreessen.

Ten rules for web startups: Ten(okay...11) great tips and advice for your startup. Written by Evan Williams from Twitter.

One of my favorite people in the startup space is Jason Calacanis. Every week he does a video/call in show(ThisWeekInStartups.com) on uStream.tv. There's great stuff in there and I recommend it to everyone.

Here's the live version of this weeks show. Streaming live video by Ustream
Update: This was a great show. Plenty of controversy (as too be expected by Jason). He rails on Keiretsu for trying to charge startups to pitch to Angel investors.

Thinking BIG means thinking without limits. I've personally struggled with this on my previous startup ventures. It's a matter of self esteem and something we should all be aware of when thinking about our ideas. We see it all the time in business, people choose to start a business selling a product to their circle of influence instead of selling a product to the world. They choose to be the Sales Manager of someone elses business instead of being CEO of their own.

It's important to remember this kind of thinking as an entrepreneur. You've made the decision to be a CEO of your business, now are you going to be the CEO of a small business or a BIG business? The answer is based on how you think. Once you realize this, you are free to make the decisions you need to not simply be successful, but VERY successful.

I've seen a lot of entrepreneurs dip their toe in the waters of success...but they need to take the plunge and do it right. You can choose to sneak slowly through the doors of entrepreneurship or you can bust through them with all your might and confidence. It's the realization that you DESERVE great success and not moderate middle of the road success. Don't settle and don't let anything hold you back. If you start with that attitude, you are the path to being rewarded for thinking BIG.

I think it's time we recognize Christopher Columbus as the ultimate entrepreneur. If it weren't for him and his balls of steel we all would not be here today. This guy empitomizes the entrepreneurial spirit to the Nth degree.

The risks we all take are all pretty much the same as Christopher Columbus. He had an idea and believed in it enough to take the risk of possibly falling off the "edge of the earth". We all do the same thing as entreprenuers. To face the rest of the world and say "you're wrong and I'll prove it" is no different than what any entrepreneur has ever done. To face the rough sea's and all the naysayers wanting to return home and stick to his guns to ultimately succeed. Is that not what we have to do everyday as entrepreneurs? To know you're right and not to simply feel it. That is a man we can all look up to as an entrepreneur.

Of course my biggest complaint about the Christopher Columbus story is that he had to get approval from the Queen of Spain to take his voyage. What a crock! I would have preferred that he bootstrap the adventure instead. It would have been a better testiment to finding the America's, home of the free.

Happy Columbus Day should also be Happy Entrepreneur Day too!

One of the major sticking points of starting your own business is the envitable question... "Where do I get the money to do it?" I ask this question on any project I work on and so does every entrepreneur. It's actually the biggest wall to hurdle for most new startup companies. Of course the answer is different for every business...but the pro's and con's are all pretty much the same.

My answer has always been to bootstrap your startup at first. It's not easy, but it forces you to do several things.

Be Creative: When you don't have several months or years of backup cash in the bank, you're forced to claw and scratch to find money to keep building your product. Yes it can be distracting when you're starving, however it helps you in the long run fine tune and adjust your business model.

Build basic business priciples: We see so many startups in the online world trying to defy basic business principles. It's as though the founders think their business doesn't need to follow the basics because it's so much better than the rest. I've been there. Trust me, it doesn't work. Focus on the basics and the rest will follow. The likelihood that your startup is going to eventually succeed without the basics is worse than winning the lottery.

Eliminate waste: This is pretty straight forward, but I feel it needs to be said. When you don't have a ton of money, you don't spend it. When you do have the money, you do. Many times you can get by without spending that money. It's the old adage..."A penny saved is a penny earned." That cannot be more important than when starting a business.

Focus on profits: I can hear Jim Mora right now..."Profits? Don't talk about...Profits? You kiddin' me? Profits?" (See video reference below) It seems so many startups forget about profits when they have plenty of money in the bank from a loan or investors. However, it's the whole reason they're in business. If you can bootstrap your business and find a way to be profitable at the same time, congrats! You've just found the holy grail of starting a business. Pop a cork or tap a keg, it's time to celebrate.

Stop Daydreaming: This is something I have a hard time controlling myself. I like to day dream just like everyone else. The rewards of having a successful business are great, however it gets you no where to dream about your 100 foot yacht when you have a sales call coming up.

It seems everyone is always looking for the easiest way to do something. I can't blame them. That's just basic human nature. However, taking venture capital or getting a business loan is not always that simple or easy. It takes a long time, distracts you from the core of your business and decreases your profitability in the end.

Bootstrapping is what I call the "tiny door". It's the one that is the most difficult to get through, but when you do make it through the rewards are always greater. The choice is up to you, but now you know where I stand.

Enjoy the Jim Mora Reference:

After 10 years of building web businesses, I've learned one thing... Business Plans are ALWAYS wrong! I defy anyone who says they have executed their business plan perfectly from the start. The truth is that there as so many factors you cannot predict when building a business, so why try? Is it an excercise of the mind? A personal challenge? Why do so many entrepreneurs spend so much time writing business plans when they're always wrong?

Obviously the core of what you're planning on doing should be outlined, but a business plan is only needed if you're going to go off and raise capital or get a loan. Typically they only want to see you've thought your business through and it makes sense to them. They'll also be judging you based on your experience as to whether you can actually execute on your business plan as well. 

Here's a quick video of Marc Andreessen giving his viewpoint of what a business plan means to a Venture Capitalist.

 
So in other words: Your business plan does nothing other than force you to think and prove that you've thought about the full details of your business.
 
It's definitely not a bad thing to think about your business in depth. Just don't expect to be right and definitely don't be so rigid that you can't change it at a moments notice.

This is a serious subject that I see many entrepreneurs spending a lot of time on. It's up to the entrepreneur to decide how far they want to take their business plan.