Y Combinator When No One Cared • Hacker News Board

Re: Y Combinator When No One Cared

#101

Post by strangeloops85 » Tue, May 02, 2017, 6:47 AM UTC

After lurking for many years, I finally decided to create an account to comment on this. We were one of the companies in that first group -- alas, for various reasons, we ended up leaving after a couple of weeks (sigh). But I do remember the interview process, the first meal or two, and meeting the rest of the founders. Looking back, it's pretty cool to have (very briefly and inconsequentially) been part of that formative time in YC's history.

A bit of background: We were a group of Harvard CS-ish undergrads, had been readers of PG's essays, and also noticed a fellow classmate's startup taking off (The Facebook!). The Summer Founders Program, as it was called, was actually pretty well advertised in our community. And, from our vantage point, it seemed to be both a great opportunity and prestigious (which of course tickled our over-achieving prestige-seeking 20-year-old selves). In fact, I turned down an internship after I'd accepted the offer, to do YC (and, amusingly, after we left YC a couple of weeks in, somehow got the internship again). I remember PG asking a lot of very good questions, and poking some pretty big holes in our pitch. I'm guessing they picked us because they figured we'd pivot into something more reasonable than the idea we started on. This being the pre-smartphone era, our idea of doing something cell-phone-specific (and algorithmically focused no less) probably seemed a bit dubious.

While no one (or relatively few) may have cared in the broader investment world at the time, we -- the young hacker / startup wannabes -- definitely noticed. PG, Jessica and the rest of the team did a great job attracting our attention and interest. And that, I'd venture to say, was a key element of YC's future success that was there from the very beginning.

Re: Y Combinator When No One Cared

#102

Post by ljw1001 » Tue, May 02, 2017, 12:08 PM UTC

danielpatrick wrote: post #69

rexreed wrote: post #11

What's also telling is that the program started in Boston and moved to Silicon Valley pretty quickly. In my own experience, it seems that the Boston startup scene is dying. Unless you're in life sciences. The ecosystem there seems to have given up on supporting early stage non-life sciences companies.

To counter your arbitrary experience with my own, the Boston startup scene seems to be thriving.

Yeah, it does seem fairly healthy, but one has to admit that Boston would be a very different place today if Microsoft and Facebook (and YC) had stayed. At this point Kendall Square really is all about the biotech (aside from the research offices of big west coast firms like MS, Amazon, and Google.

Also troubling about Boston startups is the frequency with which the best get bought by SV companies. Seems to me that this also tends to limit local growth. So not bad at all, but not what might have been either.

Re: Y Combinator When No One Cared

#103

Post by vonnik » Tue, May 02, 2017, 12:58 PM UTC

mbesto wrote: post #90

vonnik wrote: post #58

It's useful to think about Jessica's comment under the original message, that YC is "mass production of startups." What it really means, I think, is that YC is comfortable with more failure than other investors. They are spreading their bets wide by making many small investments, and as they have said many times, only a small percentage of those bets need to be right. That's quite different from how most VCs invest a…

> That's quite different from how most VCs invest at any level. Most VCs are trying very hard to be right while making very few bets that are fairly large relative to their fund. And as the Kaufman report shows, that doesn't work. Most of those VCs are failing to show ROI to their LPs. Sequioa, Accel, Kleiner, and NEA for example have all made a similar amount of (or more) investments in startups than YC. I think it'…

Maybe so, but not in the same amount of time. Sequoia and Kleiner have been around since 1972. 45 years. YC has been around since 2005. The larger a startup gets, the more likely we are to hear of its failure, and the firms you mention are all making much bigger bets. YC comes in earlier and spreads its bets wider. It takes it more than 100 startups per batch. I doubt Sequoia makes 100 investments in a year.

Re: Y Combinator When No One Cared

#104

Post by vonnik » Tue, May 02, 2017, 1:01 PM UTC

zeckalpha wrote: post #89

vonnik wrote: post #58

It's useful to think about Jessica's comment under the original message, that YC is "mass production of startups." What it really means, I think, is that YC is comfortable with more failure than other investors. They are spreading their bets wide by making many small investments, and as they have said many times, only a small percentage of those bets need to be right. That's quite different from how most VCs invest a…

Investing in stocks : Vanguard :: Investing in companies : YC

In a sense, and there's no shame in that. Index funds recognize that retail investors are bad at choosing where to place their money. I think it's equally plausible that venture investors are just as bad, and that spreading your bets within a certain range (in stocks, publicly traded companies) reduces risk and increases the likelihood of gain.

Re: Y Combinator When No One Cared

#105

Post by vonnik » Tue, May 02, 2017, 1:03 PM UTC

tedsanders wrote: post #80

vonnik wrote: post #58

It's useful to think about Jessica's comment under the original message, that YC is "mass production of startups." What it really means, I think, is that YC is comfortable with more failure than other investors. They are spreading their bets wide by making many small investments, and as they have said many times, only a small percentage of those bets need to be right. That's quite different from how most VCs invest a…

I don't see the subtext that connects mass production and comfort with failure. In fact, I see mass production as a way to reduce failure rates. The idea behind mass production is to take a process that's done in a low-volume, idiosyncratic way and replace it with a process that can be reliably repeated at scale. With Y Combinator, that means replacing the rocky solo founder journey with a community full of of adviso…

The subtext may not be in Jessica's piece, but YC's strategy implies that only a few of their investments need to go big for them to win. While certain aspects of YC do standardize startup growth, a lot of parts of the process can't be standardized. What you have left is a numbers game. If all YC startups succeeded, that would be a sign of failure, because it would indicate that YC itself was not taking sufficient risk.

Re: Y Combinator When No One Cared

#106

Post by elmar » Tue, May 02, 2017, 1:18 PM UTC

freehunter wrote: post #48

rexreed wrote: post #11

What's also telling is that the program started in Boston and moved to Silicon Valley pretty quickly. In my own experience, it seems that the Boston startup scene is dying. Unless you're in life sciences. The ecosystem there seems to have given up on supporting early stage non-life sciences companies.

>the startup scene I feel like this is one of those SV bubble things, that a place has to have a "scene" in order to have startups (and only SV has a "scene"). There are thousands of successful businesses everywhere, even ones that would be considered "startups". The only difference between SV and any other city is people are willing to throw money at ideas with no chance of ever turning a profit which isn't really a…

"The only difference between SV and any other city is people are willing to throw money at ideas with no chance of ever turning a profit which isn't really a sign of a healthy ecosystem."

And some off then even work? like Snapchat, Facebook, Twitter, AirBnB, Uber etc.

Looking back to the time they where funded all these ideas look like sure lossers.

Re: Y Combinator When No One Cared

#107

Post by elmar » Tue, May 02, 2017, 1:31 PM UTC

Nition wrote: post #78

Love the page width on that Summer Founders Program[1] link. I also appreciate the fact that the URL still works! Well done making sure Cool Urls Don't Change. [1] http://old.ycombinator.com/sfp.html

"We know India and China are full of smart people who'd like to come and contribute to the growth of the US economy, but our government won't let us bring you here to do it."

Re: Y Combinator When No One Cared

#108

Post by taneq » Tue, May 02, 2017, 1:35 PM UTC

vonnik wrote: post #58

It's useful to think about Jessica's comment under the original message, that YC is "mass production of startups." What it really means, I think, is that YC is comfortable with more failure than other investors. They are spreading their bets wide by making many small investments, and as they have said many times, only a small percentage of those bets need to be right. That's quite different from how most VCs invest a…

I was attending an event at a local incubator last week when it hit me - and maybe this is obvious to everyone else - that 'startup incubators' are just taking the music industry business model and applying it to entrepreneurs.

Re: Y Combinator When No One Cared

#109

Post by tedmiston » Tue, May 02, 2017, 1:55 PM UTC

taneq wrote: post #108

vonnik wrote: post #58

It's useful to think about Jessica's comment under the original message, that YC is "mass production of startups." What it really means, I think, is that YC is comfortable with more failure than other investors. They are spreading their bets wide by making many small investments, and as they have said many times, only a small percentage of those bets need to be right. That's quite different from how most VCs invest a…

I was attending an event at a local incubator last week when it hit me - and maybe this is obvious to everyone else - that 'startup incubators' are just taking the music industry business model and applying it to entrepreneurs.

It might be helpful to explain more what parts of the analogy you have in mind with that.

Re: Y Combinator When No One Cared

#110

Post by tedmiston » Tue, May 02, 2017, 2:21 PM UTC

cookiecaper wrote: post #72

mseebach wrote: post #42

Earlier quoted context omitted.

"People" may pay lip service to remote work, but YC as far as I can tell were never ambiguous in their belief that being physically in SV is important for success.

YC has YC Fellowship, which doesn't require startups to be located in SV. YC also used to maintain an official program in Cambridge, but they shut it down after a few years IIRC. Everything YC does should be viewed through the reality that YC is an investor. Their interests are not necessarily aligned with the interests of founders, and as the party with the leverage, they can mandate that people move to SV solely ba…

They folded YC Fellowship last year. In some sense they replaced it with the MOOC but the programs look pretty different.

Also, there are plenty of investors that realize this, you just have to look for them. For example, Drive Capital in Columbus, OH was founded by ex-Sequoia in 2013 and has raised over $500M since.