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Y Combinator Traded Prestige for Growth

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Re: Y Combinator Traded Prestige for Growth

#141

Post by hobofan »

nordsieck wrote: post #75
hobofan wrote: post #26

Earlier quoted context omitted.

> You don't want to attract founders who figure YC is a low-risk alternative to grad school Of course YC would want that (in the short- to mid-term). The only thing YC has to do is produce a portfolio of companies that looks good enough that other VCs invest into that. This is completely disconnected to building viable businesses, as they just don't have to be the ones that are left holding the bag, and as an acceler…

> The only thing YC has to do is produce a portfolio of companies that looks good enough that other VCs invest into that. This is completely disconnected to building viable businesses, as they just don't have to be the ones that are left holding the bag, and as an accelerator they are in the best position to do that. That's really short term thinking. It might work for a class or two, but eventually VCs will realize…

> but eventually VCs will realize that they're getting bad returns from their investments

I'm not saying that they are necessarily bad returns. It's just that for many reasons there is a strong opportunity for a disconnect between viable business models and seed-investments. E.g. exit event horizons are currently so long[0] that it becomes hard to correlate exit success to seed-funding (for better or worse).

> If you think that's the path to good long-term ROI, I have a startup to sell you.

Oh, I don't disagree with you. But from the actions of YCombinator it seem like either:

- They don't see this as a risk to their long-term ROI (due to some factors we are not seeing here)

- They don't have proper means of self-assessing their selection quality and think they are scaling well while they don't

- The situation is not as bad as the article and some of the comments here make it look like, and everything is fine with YC

[0]: https://www.ycombinator.com/topcompanies/ <- There are many 10+ year old companies on that list without an exit and YCombinator isn't even 20 years old yet

Re: Y Combinator Traded Prestige for Growth

#142

Post by [deleted] »

dgreensp wrote: post #106

Full disclosure, I'm a YC alum whose last start-up was acquired by Google, who applied to this batch and didn't get an interview. YC is not the stamp of quality it once was, to be sure, though it still works as social proof, because investors (especially VCs) want to invest in companies other investors like (or failing that, companies they imagine other investors would like). YC would say that they aren't trying to b…

[deleted]

Re: Y Combinator Traded Prestige for Growth

#143

Post by jhanschoo »

dgreensp wrote: post #106

Full disclosure, I'm a YC alum whose last start-up was acquired by Google, who applied to this batch and didn't get an interview. YC is not the stamp of quality it once was, to be sure, though it still works as social proof, because investors (especially VCs) want to invest in companies other investors like (or failing that, companies they imagine other investors would like). YC would say that they aren't trying to b…

> It's just hard to convey the sense from the early days of YC that they really didn't care about the return, or the progress so far, or VCs, or fads, or anything. That said, I really was at the right place at the right time and got very lucky.

It seems to me that there was an early '10s milieu that enabled YC to behave like it did. Web apps and mobile fundamentally transformed everyday life and communication in very visible ways and there seemed to be a lot of low hanging fruit. I observe, similar to your 2), that YC seemed to have a bias toward products for tech people by tech people, and that wasn't a bad strategy, because there was still a lot of plumbing to do; there still is, but I feel that there are established solutions for the mass market to a degree that there wasn't.

Re: Y Combinator Traded Prestige for Growth

#144

Post by octopod12 »

pj_mukh wrote: post #130
noobermin wrote: post #102

Earlier quoted context omitted.

I think something people might be missing is the context around this post, which is that the founders are being dragged on twitter, essentially. Since a lot of you hate the site, I'll summarise briefly: one of the founders did a thread starting with the following post: " I just quit my 270 000$ job at Coinbase to join the first YCombinator fall batch with my cofounder @not_nang We're building PearAI, an open source A…

This is an indictment of Twitter tbh. Not YC. A lot (most?) YC founders aren't even on Twitter.

the founders were status-signaling on twitter.

it is clear they are in it for the "status" of being YC. and they dont care a whit about solving anybody's problem.

they do this for a while, get it on the resume and go back to their 270K jobs after a few months.

this in and of itself is a hustle, lol. they hustled YC.

Re: Y Combinator Traded Prestige for Growth

#145

Post by tempusalaria »

buggeryorkshire wrote: post #19

Surprised this doesn't mention meticulous.ai, who seem to spam HN with "we're hiring!" each month but i've never heard of anybody using them, nor do LI show any new employees. Hey Gabriel, what's going on?

What about Imbue which has raised like 300mln, spams fake hiring ads all the time, and doesn’t have a product…

Re: Y Combinator Traded Prestige for Growth

#147

Post by ToucanLoucan »

dylan604 wrote: post #27
ToucanLoucan wrote: post #5

Earlier quoted context omitted.

I mean I can't speak for that commenter, but I hold any VC backed startup in suspicion for a good amount of time because if they can't reach the size demanded by their investors, which runs the gamut from ambitious-but-achievable all the way to not-in-my-or-your-lifetime, a perfectly profitable modestly sized business is almost bound to be shut down and it's services terminated with little drama, leaving behind poten…

> if they can't reach the size demanded by their investors In this sense, how is YC any different from any other VC firm?

It's not, which is probably why I said VC not YC.

Re: Y Combinator Traded Prestige for Growth

#148

Post by chronic9304 »

throw14082020 wrote: post #9

How many times did the author apply and get rejected from YC? I have heard this sentiment before, from a less successful VC. After comparing them based on track record, it was clear YC is in a league of its own. I want to get advice from people who have built startups before. Looks at YC advisors on YouTube and you'll find they're all very successful. Look at the partners and advisors at most VCs or accelerator progr…

> How many times did the author apply and get rejected from YC?

Author is not wrong.

This “YC is actually a negative signal” sentiment started back in 2018-2019.

The “actual” good entrepreneurs (e.g., the folks you expect from Harvard, MIT, Stanford, Berkeley) stopped applying to YC a while back.

There are different signaling mechanisms in 2024, which I won’t reveal here, because the “plebs” will turn it into shit, just like they did to YC, leetcode interviews, and FANG ML jobs.

Re: Y Combinator Traded Prestige for Growth

#149

Post by ninetyninenine »

KerryJones wrote: post #126
ninetyninenine wrote: post #72

It’s true. With 40k applications and roughly only 100s accepted… they likely only chose pearai because of nepotism. It would be self sabotage if they regularly do this so likely only a few companies are selected this way with pearai being one. The above is a very educated guess on pearai, but whether or not YC engages in nepotism or not is unmistakable to me. They do and there is real corruption in the selection proc…

"Yes pg fired Sam Altman from YC." How can you be so certain? https://techcrunch.com/2024/05/30/paul-graham-claims-altman-...

I saw that too.

Pg is lying according to my source. I mean my whole post is about corruption. It fits the story that pg is capable of lying.

Keep in mind. I’m a random guy on the internet and my source isn’t 100 percent solid from my pov either. So keep that in mind when judging this whole thing.

Overall this is what happened: some person at the family retreat listened to Geoff tell the story about how pg made the decision to fire Altman and that person relayed the story to me.

Overall from the fuzzy evidence I’m thinking he was actually fired but I’m not 100 percent on that either.

You’ll have to be your own judge for this. This is one of those things that people will never know for sure.

Same with the nepotism. Nothing will ever be proven here. The best info an average layman can get is rumors from someone willing to relay this gossip anonymously on a forum and you can’t even be sure if this guy (me) is making all this stuff up. You’ll have to form your own opinion and take a leap of faith in either direction or leave it as an unknown.

Re: Y Combinator Traded Prestige for Growth

#150

Post by solumos »

Something that I think is a bit misguided about this is that YC, at founding, was pretty unfashionable itself. The "accelerator" model wasn't particularly proven, and the thesis was that there was an untapped talent pool of "hackers" who just needed to figure out how to run a business and get connected to the right people/resources in order to be successful founders. Compared to other accelerator-type opportunities at the time (and some that still exist), YC was extremely founder friendly.

YC 1.0 made good on that vision — the success rate in the early batches is indicative of that. Once PG stepped back and handed the reigns over to Sam Altman, YC focused more on scaling up, while the startup ecosystem grew significantly as well, specifically around "Web 2.0". At the time, it wasn't particularly difficult to create a venture-backable web business if you had the technical skills and the right resources to achieve distribution. Along the same lines, being a startup founder became a viable alternative to becoming a banker or management consultant for high-achieving individuals. So naturally YC, as a backer of hyper-successful startups that generally have an easier time fundraising, became a magnet for the status-seeking subset of high-achieving individuals, leading to it becoming more of a stamp of prestige.

Since Sam Altman's tenure, it seems like a lot of the initial edge that YC had at founding is significantly diluted. There are a lot of aspiring founders seeking funding, but the Web 2.0 opportunity doesn't really exist anymore (at least not at the same scale). So today, YC looks much more like a large seed fund that funds more specialized businesses rather than the types of founders of the initial cohorts (i.e. hackers that want to build Web 2.0 businesses), and I think people are overly critical of that scale up. 2005 was a very specific point in time for the startup industry, and the YC thesis was not only well-timed, but extremely effective through ~2014 — but it's been difficult for them to figure out how to continue the momentum given changes in the ecosystem.

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