Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

On $600B of Y Combinator startup success

jaredheyman.medium.com

Post reply on HN
Print view View original

21–30 of 59 posts

Re: On $600B of Y Combinator startup success

#21

Post by sam0x17 »

ShivShankaran wrote: post #4

> data-driven approach to our investments This is as absurd as saying "data-driven approach for finding out successful humans". I am kind of aggravated to see drivel like this from VC's. This is similar to algorithm trading on stock market and not funding deserving startups. This 'data-drive' garbage is how you end up with more grocery delivery, food delivery and pet walking startups.

Don't forget about hover-board-renting!!

But yes, these days I think "data-driven" is really just a convoluted way of saying "we approximate the informed decisions of others without specifically understanding what we're doing". This is ML in a nut-shell after all. Is it possible to use ML and data science to find insights and draw conclusions that you then base your activities off of? Sure, but most are just looking for a magic black box that makes decisions for them specifically because they don't want to go to the trouble of understanding X. Once you abstract things away to that extent, you're inevitably training your algorithms to do what others do in an informed way, because where else would the training data come from?

Re: On $600B of Y Combinator startup success

#22

Post by jamesmcintyre »

I wonder if it'd be an overall boon for Rebel Fund to open up their data sets?

Pros:

- The HN/YC community would almost certainly contribute new models with new types of signal.

- It's been proven many times that we mere mortals often unknowingly either bake-in our own biases into models or act on model output unaware that the models arrived at what could be undesirable, unintentional bias. Having more eyes on the data & methodology could not only prevent unintended biases but reveal signals that turn out to be much more insightful.

- If these signals point to real, underlying fundamentals (which they likely do) perhaps YC startups could benefit by learning from them or using them as guideposts.

Cons:

- Obviously Rebel Fund may risk giving away their competitive advantage.

- YC startups and applicants may over-optimize for these signals, distracting them from their unique challenges and overall end-user value generation.

On one hand it seems obvious for Rebel Fund to protect their IP- on the other hand what if more value could be generated for YC, YC startups and Rebel Fund by finding a way to introduce a cooperative positive feedback loop? Any loss of their slice could be outweighed by growing the pie. This is likely an oversimplification and naive to the many factors being weighed but it's an interesting space for thought!

(edited for formatting)

Re: On $600B of Y Combinator startup success

#23

Post by dntrkv »

somethoughts wrote: post #20
whiplash451 wrote: post #10

Earlier quoted context omitted.

Why would this be specific to YC IPOs vs other IPOs?

I agree - It isn't specific to YC IPOs - it applies to all IPOs. I think the point is that YC perhaps is a good early stage VC in maximizing the IPO price for the benefit of LPs and founders and unloading at the right time onto the market. Perhaps its less clear given the current state of things whether their companies are good for long term earnings performance for long term ownership by retail investors.

It's not just IPOs, the whole market is experiencing a correction. We're way overdue for one anyway.

Re: On $600B of Y Combinator startup success

#24

Post by somethoughts »

dntrkv wrote: post #23
somethoughts wrote: post #20

Earlier quoted context omitted.

I agree - It isn't specific to YC IPOs - it applies to all IPOs. I think the point is that YC perhaps is a good early stage VC in maximizing the IPO price for the benefit of LPs and founders and unloading at the right time onto the market. Perhaps its less clear given the current state of things whether their companies are good for long term earnings performance for long term ownership by retail investors.

It's not just IPOs, the whole market is experiencing a correction. We're way overdue for one anyway.

Its relative - high PE, high growth multiple stocks (such as YC IPOs) have generally been reverting to mean. Most stocks that were already at the mean w.r.t. PE are still sticking to the mean with flat earnings.

What needed correcting is getting corrected. What was correct is staying correct.

The rise in interest rates means that companies that have been producing their own cash can fund growth initiatives internally. Companies who were funding growth initiatives using outside capital (debt, VC investment) are now going to be paying 10%+ to do so.

Re: On $600B of Y Combinator startup success

#25

Post by pc86 »

somethoughts wrote: post #8
1270018080 wrote: post #2

Seems like every public YC company has fallen 50%+ within the last 12 months. I'm sure the private ones are even worse off. I'm hoping the definition of success changes. I'd like to see "rational valuations", "cash flow positive", or "a sustainable business model" as metrics in the future.

Yes it's probably going to round trip back to $300B given AirBNB and DoorDash have taken their hits as of late. That said - I do think since the lock-up periods have probably expired on the big ones - the pre-IPO investors like YC/founders/VC probably made it out just fine already. It's really a message to those of us retail investors buying the IPO or post IPO shares of YC companies that need to be aware of the trac…

I search for it but can't find it, but I do recall reading an article that if you put the same amount of money into every tech stock at IPO, you actually beat the market by a hefty bit. It was probably a year ago so who knows if that's held as I think tech has been particularly hard hit by the latest correction, but who knows.

Re: On $600B of Y Combinator startup success

#26

Post by pc86 »

droopyEyelids wrote: post #18
dmitriid wrote: post #11

How come most "successful" Y Combinator startups lose hundreds of millions of dollars per year, every year. Well, they suffer no consequences, and get more money to lose, so that's success, I guess.

A "dumping" period where your business gains marketshare and undercuts competitors to drive them under is an essential part of establishing monopoly power.

Also strangely enough it's illegal if you're already a successful company and try to do it in a new vertical, but completely fine if you're a couple unknowns with a few hundred million of venture capital.

Re: On $600B of Y Combinator startup success

#27

Post by mensetmanusman »

gsibble wrote: post #14

Personally, I want to know how much Y Combinator companies have lost in Market Cap in the latest route. Many are trading below their IPO prices and have lost a huge amount of value.

At a long enough time scale everything is below value because our star collapses.

Re: On $600B of Y Combinator startup success

#29

Post by garbagetime »

mensetmanusman wrote: post #27
gsibble wrote: post #14

Personally, I want to know how much Y Combinator companies have lost in Market Cap in the latest route. Many are trading below their IPO prices and have lost a huge amount of value.

At a long enough time scale everything is below value because our star collapses.

Prove it

Re: On $600B of Y Combinator startup success

#30

Post by rkk3 »

> YC recently published an updated Top Companies list including 271 companies with a combined official valuation of over $600B (we now estimate it closer to ~$900B). Much can change in a year!

900B! Is this time travel or cognitive dissonance?

#3-5 on the list are being valued significantly above 50B and closer to 100B Meanwhile...

#3, Instacart now 24B (private valuation)

#4, Doordash now 20B

#5, Coinbase now 12B

Post reply on HN