This deal makes things worse for non accelerated/VC'd startups because now they're competing with companies who not only have funding but also have $100K in free hosting.

exactly! In effect subsidizing the very startups who have the money to pay for hosting. Absurd.

If a one-time $100K credit is the difference between success or failure in your business model, you have a pretty weak business model.

If you're trying to validate an idea, not having to worry about hosting costs for the first year or so could be a big deal. Especially if you're planning to sell out later to a larger company who has so much infrastructure already that hosting is practically free.

Hosting costs for validating an idea run about $10-20/month, not $10-20K/month. Get a shared webhost or VPS and run things on a single box. Even if you are using every programming productivity trick in the book (dynamic languages, 3rd party libraries, RDBMSes, etc.), there is no reason whatsoever why serving 20-100 users should cost $100K. Google had indexed the whole web and was serving most of the Stanford campus before they got their first check for $100K.

Do you think you could run a service equivalent to say Google Maps on $20/month hardware under the sort of load that might come from being on the front page of HN and reddit on the same day (Heck, even HN alone)?

Also consider if you are serving HD video or doing financial number crunching over a large data set in the background.

Yes.

Remember that we're talking MVP here, not production service. If your service makes it to the front page of HN and then crashes under load, you go to YCombinator or some other accelerator, say "We built a service, it was so popular that it got to the top of Hacker News and then crashed under load. Here's the demo link, and we have a list of X thousand users who signed up to learn more before it crashed." You will be accepted, and then you will have access to the $100K in Google Cloud's program.

The one exception is if they feel that you lack the technical talent to build a scalable system even with hundreds of thousands of dollars in funding. In that case, they will tell you "Go find an ex-Googler or ex-FBer to be your technical cofounder and come back to us." In that case, $100K won't make much of a difference, you lack some critical skills to employ that $100K well. If that is your situation, well, I happen to be an ex-Googler with experience scaling Google Search who is in the market for a new project. I have my own ideas but would be happy to abandon them for something with demonstrated traction, so I would be happy to entertain e-mails (my address is in my profile) with a demo link and a spreadsheet with X thousand user signups.

If you need to run your service for longer than the few hours it takes to burn through all of the CPU/disk/bandwidth you can afford to be useful, or want to skip the incubator step it could certainly be useful to be able to apply directly.

It could also improve the value proposition for lower tier accelerators that might have a mentor network but lack the resources to support the infrastructure requirements of the most promising participants. If implemented properly, it should improve the visibility of regional players.

Nope. I would never pay $100k to Google as a startup, because there are more efficient ways to deploy that money.

I would, however, consider taking $100k in free hosting from google as a startup because making it free eliminates the cost consideration in hosting choices.

It's not keeping us out of the gate, it just that it reinforces the redefinition of startup to be "Silicon Valley VC type".

EG: 37 Signals would never have qualified, but they were a startup.

If you're actually spending $100k on hosting, one would hope you're making at least ten times as much. Otherwise, your engine of growth is fundamentally broken and you need to pivot.

Most startups need all the help they can get. Google has decided to provide help only to those who have sold their souls away. Seems rather evil to me.

Going through an accelerator mean you've "sold your soul"? That is a bit of a jump.

In a way it is. Accelerators have become two things: Pitch training camps and old-boys networks. The focus seems to be all about polishing a pitch, and faking stats for whatever part of your business needs to be faked to show traction of some kind, so that you can pitch to the old-boy network on demo day, get some money and go to work for the accelerators backers partners.

Startups long ago stopped being about building innovative business, and about VCs employing a bunch of kids to work really long hours on bad terms to make the VCs rich.

I think it is a legitimate criticism-- not ad hominem-- to say the Bay Area model has produced a bunch of soulless startups. Though of course some do follow this path and still retain their souls.

I'm uncomfortable with your generalizations (though you did account for exceptions with your last sentence).

I guess I would not be so pessimistic and give founders the benefit of the doubt that they think they are building something innovative (a word that means different things to different people).

The summer YC class had a fusion startup and a fission startup if I recall correctly. That is innovation in my book. And I think most startups are trying to change the status quo even to a small extent.

And why does a startup even need to be innovative? In this great talk by the founder of Asana (http://ecorner.stanford.edu/authorMaterialInfo.html?mid=3117) the point was made that while they're not curing diseases their software helps the people that are stay organized and save time.

Obviously I'm jumping to a point beyond the notion of a soul.

Nice branding with "accelerator". What do you think one is trading for money? Even in a simple equity trade you are giving up more than just equity... you are also putting on a leash which will alter your original being. VC's and soul trading aside, it's the exclusion part that makes the deed evil.

And yeah, I expected down voting from a group of people flocking to a VC forum like HN.