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Y Combinator often backs startups that duplicate other YC companies, data shows

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Re: Y Combinator often backs startups that duplicate other YC companies, data shows

#61

Post by petesergeant »

I don’t mean this in a bad way, but like, at this point YC’s business model is spray and pray right? They weed out obvious losers, and then use vibes to pick a section of the rest, push them through a standard accelerator program, and demo day at the end, and this works because having been accepted into YC is like being able to say you went to a fancy university: no guarantees on future performance, but you’re probably not an idiot.

They should be (and are — YC Fall Batch!) trying to maximise the number of companies they take on while not diminishing returns below their cost of capital and brand dilution.

This is not a boutique investment shop.

Re: Y Combinator often backs startups that duplicate other YC companies, data shows

#62

Post by bhouston »

evoke4908 wrote: post #58
bhouston wrote: post #54

I think this is actually okay. Execution matters, not the idea. Also if YC was trying to do coordination between its portfolio companies, it would be against the interests of the founders themselves because the founders do not care if another company in the YC batch succeeds or fails - they don't have a stake in that other company.

> Execution matters, not the idea. This is the core ethos driving Chinese manufacturers to rip off anything and everything they can

> This is the core ethos driving Chinese manufacturers to rip off anything and everything they can

I think everyone does this. We just like to focus only on Chinese companies when they do it, because many times when Chinese companies do it, they do it so well that it is a threat.

Re: Y Combinator often backs startups that duplicate other YC companies, data shows

#63

Post by bhouston »

typeofhuman wrote: post #55
bhouston wrote: post #54

I think this is actually okay. Execution matters, not the idea. Also if YC was trying to do coordination between its portfolio companies, it would be against the interests of the founders themselves because the founders do not care if another company in the YC batch succeeds or fails - they don't have a stake in that other company.

> Execution matters, not the idea. Execution matters _as much as_ the idea. A good idea executed poorly produces bad results. A bad idea executed well produces bad results. This is what YC is hedging (was it the execution or idea) by investing in duplicative startups.

I guess I am saying that ideas are a dime a dozen. Every idea will likely get executed by multiple teams - it is incredibly rare for an idea to only get explored by a single team. Those teams that succeed did so because of execution.

Re: Y Combinator often backs startups that duplicate other YC companies, data shows

#64

Post by CuriouslyC »

bingemaker wrote: post #26
Ballas wrote: post #18

It makes sense. If you are an investor and have a strong belief that a specific product or idea is a good one - you might want to decouple your odds of success from the people/team/company executing that idea.

YC also says that they don't believe in the idea, but the founders ¯\_(ツ)_/¯

If that were true, there'd be no point in ever applying a second time to YC.

Anecdotally, people do get accepted after 2-4 failures. Maybe YC was on the fence about those founders and their willingness to slam themselves against a wall repeatedly tipped the scales, or maybe they invest in a certain kind of founder and when they run out of those they invest in "promising" ideas.

Re: Y Combinator often backs startups that duplicate other YC companies, data shows

#65

Post by light_triad »

JumpCrisscross wrote: post #52
light_triad wrote: post #49

> YC startups don’t have to be unique. Far from it. Slow news day. YC has made it clear over the years it's almost all about the founders not the idea. It's almost impossible to know if an idea is good at the early stages, and ideas change, startups pivot, often the timing is wrong, and the market unproven etc. More often than not most of what startups do is not unique, otherwise there's no market for it. A new take…

> More often than not most of what startups do is not unique The message is also that if your start-up is based on deep tech moats choose another seed. (Think of YC's home runs. None had an industry secret/IP secret sauce.)

YC's roots are definitely the software hacker/painter/kill FAANG from a coffee shop type founders, although they've shown that deep tech teams can make interesting progress without years of R&D. Finding investors that get your idea and can help with their network is paramount. YC might not be the best fit in all cases.

Re: Y Combinator often backs startups that duplicate other YC companies, data shows

#66

Post by _fizz_buzz_ »

typeofhuman wrote: post #55
bhouston wrote: post #54

I think this is actually okay. Execution matters, not the idea. Also if YC was trying to do coordination between its portfolio companies, it would be against the interests of the founders themselves because the founders do not care if another company in the YC batch succeeds or fails - they don't have a stake in that other company.

> Execution matters, not the idea. Execution matters _as much as_ the idea. A good idea executed poorly produces bad results. A bad idea executed well produces bad results. This is what YC is hedging (was it the execution or idea) by investing in duplicative startups.

It's more like 90/10. 90% execution and 10% idea. And actually almost all successful startups didn't have "original" ideas:

- google wasn't the first search engine

- facebook wasn't the first social network

- tesla wasn't the first electric car

- ChatGPT wasn't the first chat bot

Re: Y Combinator often backs startups that duplicate other YC companies, data shows

#67

Post by snarf21 »

mst wrote: post #35

If nothing else, having competition helps validate the market. Which is often an advantage to all companies involved - a lot of the time, you're only notionally competing with each other, your main enemy is "people not using a product in that space at all." e.g. for a lot of business SaaS the only enemy worth caring about is Excel. (I've more than once been involved with companies where the "competitors" were all on…

I see it more as more of a hedge. If you believe in the opportunity, placing extra bets makes sense. Uber and Lyft weren't the only ride share companies but sometimes luck wins out and sometimes execution does.

Additionally, if one seems to be winning, you just acqui-hire the "loser" in the winner, use that problem space expertise to scale faster AND you still get to claim a higher exit rate even if it was just to yourself.

Re: Y Combinator often backs startups that duplicate other YC companies, data shows

#68

Post by mst »

xpe wrote: post #43
mst wrote: post #35

If nothing else, having competition helps validate the market. Which is often an advantage to all companies involved - a lot of the time, you're only notionally competing with each other, your main enemy is "people not using a product in that space at all." e.g. for a lot of business SaaS the only enemy worth caring about is Excel. (I've more than once been involved with companies where the "competitors" were all on…

Yes, this can happen. How often and under what conditions I’m not sure. I’ll give some other lenses: 1. From the point of view of an individual person, growth in the overall market is often an advantage. If one company doesn’t survive, there will be probably be others. Your skills and connections can help in a similar organization with a slightly different angle on the problem. 2. From the point of view of memetics,…

Yes, and as a variant on (1) from the point of view of potential *customers* it makes adoption (at least feel) less risky because if your original chosen supplier goos *poof* there'll be another one to switch to rather than you having to re-adjust your internal processes to go without.

(I'm not sure under what conditions either, I mostly know this from having lived it and I wasn't on the business side in any such cases so)

Re: Y Combinator often backs startups that duplicate other YC companies, data shows

#69

Post by RecycledEle »

YC should back duplicate startups because each startup's chance of success is low. If it makes sense to back a startup with a 10% chance of being a big company later, then a second such startup also makes sense, even if there is a 1% chance that they both make it and one of them is not needed.

The problem is when someone says the quiet part out loud, and the duplicate startups start talking to each other. The people at one startup refuse to do useful work because they incorrectly believe the other startup have a better idea. You want to leave those decisions to senior management, who can move technologies to make one company successful.

Have you ever suddenly received an influx of employees because someone jast realized that there was a duplicate company doing the same thing (fake gasp) and that it was time to combine the best parts of both the get a product? Somehow, despite nobody knowing there were duplicate startups, a proof of concepts has been working for a few months combining the best bits from each of 3 (fake gasp) startups, and the third one had very little to contribute so you will not see their people around.

I'm sorry if my post hurts anyone's plans. Fell free to delete it.

Re: Y Combinator often backs startups that duplicate other YC companies, data shows

#70

Post by snarf21 »

typeofhuman wrote: post #55
bhouston wrote: post #54

I think this is actually okay. Execution matters, not the idea. Also if YC was trying to do coordination between its portfolio companies, it would be against the interests of the founders themselves because the founders do not care if another company in the YC batch succeeds or fails - they don't have a stake in that other company.

> Execution matters, not the idea. Execution matters _as much as_ the idea. A good idea executed poorly produces bad results. A bad idea executed well produces bad results. This is what YC is hedging (was it the execution or idea) by investing in duplicative startups.

I disagree. True "good execution" will not produce bad results over the medium and long term but that is what good execution is actually solving for. Good execution should recognize when/how pivots should be made to produce value.
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