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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

#71

Post by BeefWellington »

xpe wrote: post #46
pavlov wrote: post #36

Earlier quoted context omitted.

The conflict of interest is simply dead and forgotten in an era where the president-elect has his own cryptocoin, his own social media company, and appoints his billionaire supporters to improve efficiency in the parts of government that directly oversee those billionaires’ own businesses.

Yes, political corruption is a drag/loss on everyone except the corrupt ones. Worse, it can shift a system out of its viable operating zone. Corrupt individuals in a market can destroy the market. But what is the connection to the parent comment? No matter how corrupt one part of government or a market becomes, it doesn’t excuse further corruption. If anything, more corruption makes additional corruption more likely…

I think it's reasonably straightforward they were making the point that conflict of interests are no longer taken seriously, along with many other related things. Politics tends to be a trailer of social views, not a leader.

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

#72

Post by zachthewf »

snarf21 wrote: post #67
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 yo…

Exactly right. Traditional VCs come up with a thesis and then buy 20% of the company they think will be the winner who fits that thesis when they're at like $1M to 10M revenue (series A)

YC can instead get ~10% of every plausible winner they come across when they're at $0 revenue

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

#73

Post by BeefWellington »

gwbas1c wrote: post #45

> YC commonly accepts startups that are building similar or nearly identical products to previous YC grads. Some of them are direct competitors; others differ slightly by targeting a new geography (Asia or Latin America), or are a subset of a larger market (point-of-sale software for bars versus coffee shops). If you're going "by the book" with Crossing The Chasm, ( https://en.wikipedia.org/wiki/Crossing_the_Chasm ),…

It seems pretty obvious to me that in modern times successful companies pick a segment of business to build expertise in and then expand outward from there.

Your ability to understand a specific client's business is usually gonna be your key differentiator against large incumbents.

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

#74

Post by svnt »

xpe wrote: post #46
pavlov wrote: post #36

Earlier quoted context omitted.

The conflict of interest is simply dead and forgotten in an era where the president-elect has his own cryptocoin, his own social media company, and appoints his billionaire supporters to improve efficiency in the parts of government that directly oversee those billionaires’ own businesses.

Yes, political corruption is a drag/loss on everyone except the corrupt ones. Worse, it can shift a system out of its viable operating zone. Corrupt individuals in a market can destroy the market. But what is the connection to the parent comment? No matter how corrupt one part of government or a market becomes, it doesn’t excuse further corruption. If anything, more corruption makes additional corruption more likely…

The connection is that the conflict of interest being discussed was only ever a social/ethical contract.

That social contract is in the bin right now, so the question is moot.

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

#75

Post by whoknowsidont »

I think a different, perhaps weird, way of looking at this is that YC looks at the founders first and then market opportunity ("idea") secondly as justification.

YC doesn't need a single version of an idea to "win", and it's often stated plainly it doesn't even necessarily value the "idea" behind a lot of these investments but the founders themselves.

If you look at it that way, it's no surprise that multiple startups are working at the same market opportunity ("idea"), and that YC actually just wanted the founders themselves regardless of whose execution of the "idea" ends up winning (if any).

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

#76

Post by Cthulhu_ »

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…

The article lists a few, none of which were unique - coinbase? Cryptocurrency exchanges already existed. AirBnB? Booking.com and other hotel or bed-and-breakfast booking websites already existed. Stripe? Yet another payment provider. Reddit? A Digg clone. Dropbox? rsync. etc.

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

#77

Post by [deleted] »

_fizz_buzz_ wrote: post #66
typeofhuman wrote: post #55

Earlier quoted context omitted.

> 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

[deleted]

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

#78

Post by svnt »

addcn wrote: post #41

Useful here-say from some investors at the last few demo days: not all of the companies that are "copiers" apply + are accepted with the "copying" idea. Many founding teams end up pivoting during the batch and scramble to get proof points on the board before demo day. They're most likely to end up pivoting to well-known problems, therefore the clustering around a few common themes. It doesn't explain all of the data,…

Not to be pedantic but maybe it will help in the future: it is spelled hearsay. You heard someone say it.

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

#79

Post by smt88 »

empath75 wrote: post #51
smt88 wrote: post #31

Earlier quoted context omitted.

There's an enormous amount of evidence that almost no VC knows what they're doing (almost none beat index funds in the long run). YC seems to have a spray-and-pray approach, and it used to be run by Sam Altman who has repeatedly failed upward, so I think it's very reasonable to assume this is either not a conscious strategy or it's just a bad strategy. Either way, the VC's value is to be able to predict whether Dropb…

> Either way, the VC's value is to be able to predict whether Dropbox or Zumodrive deserves their bet, and they clearly couldn't. This is an extremely wrong-headed view of what VCs do, and one thing investors do _in general_ is to have a strong idea of what they know and don't know, and in particular, what _nobody_ knows is which companies or products in particular will succeed or fail. If they knew that, they'd put…

Your description of a VC's value is describing them as an index fund of startups, and I suppose you could say YC has moved in that direction.

But most VCs are paid to make bets on which companies are most likely to succeed. I never said they're supposed to know with certainty. That's a silly straw man that no one who understands basic finance would suggest.

But they spend much of their time supposedly screening deals to find good ones, and there is a preponderance of evidence that they're worse at it than a dumb index fund.

There have even been experiments to automate picking deals, and even a fairly naive algorithm is better than most VCs.

Only people on the VC side of the table think they have any added value other than lucking into being trusted to invest other people's money.

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

#80

Post by svnt »

empath75 wrote: post #51
smt88 wrote: post #31

Earlier quoted context omitted.

There's an enormous amount of evidence that almost no VC knows what they're doing (almost none beat index funds in the long run). YC seems to have a spray-and-pray approach, and it used to be run by Sam Altman who has repeatedly failed upward, so I think it's very reasonable to assume this is either not a conscious strategy or it's just a bad strategy. Either way, the VC's value is to be able to predict whether Dropb…

> Either way, the VC's value is to be able to predict whether Dropbox or Zumodrive deserves their bet, and they clearly couldn't. This is an extremely wrong-headed view of what VCs do, and one thing investors do _in general_ is to have a strong idea of what they know and don't know, and in particular, what _nobody_ knows is which companies or products in particular will succeed or fail. If they knew that, they'd put…

> VCs and early hires are taking a massive amount of personal risk.

I think you meant “Founders and early hires” here?

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