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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

#101

Post by j45 »

keiferski wrote: post #89
Cthulhu_ wrote: post #76

Earlier quoted context omitted.

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.

Airbnb was basically a monetized form of Couchsurfing, not a hotel alternative. It only later turned into a direct hotel competitor. To my knowledge there was no similar service at the time.

The first resonating problem you solve is rarely the bigger problem you end up completely solving.

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

#102

Post by jedberg »

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 has only been investing in deep tech for about a decade, I'm not sure that's long enough for them to have had a home run yet.

For example, Boom Supersonic was founded 10 years ago, and just this summer completed their second test flight. They are scheduled to launch commercial operations in 2029.

Lucid bots was founded in 2018, and just did their Series A to fund their growth of their autonomous drone fleet.

I wouldn't count YC out of the deep tech game just yet.

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

#104

Post by joshdavham »

pilingual wrote: post #99

"Y Combinator seems to be the perfect place for mergers. Every winter for the past three winters, Y Combinator has funded a podcasting company. In winter 2017, Breaker. In winter 2018, The Podcast App. And in winter 2019, Brew." https://dan.bulwinkle.net/blog/there-should-be-more-mergers/

Any idea why mergers aren’t more common? The article doesn’t really seem to have an answer to that.

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

#106

Post by keiferski »

j45 wrote: post #101
keiferski wrote: post #89

Earlier quoted context omitted.

Airbnb was basically a monetized form of Couchsurfing, not a hotel alternative. It only later turned into a direct hotel competitor. To my knowledge there was no similar service at the time.

The first resonating problem you solve is rarely the bigger problem you end up completely solving.

But AirBnb didn't "completely solve" the hotel industry, and hotels still exist. If anything, they seem to still basically be operating in the same space as they started: owner-based rentals, for both individual rooms and entire properties.

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

#108

Post by frigidnonce »

Diversification is a hedge against ignorance. Investors are always more ignorant than founders to begin with (breadth vs depth), and at the stage YC backs most companies at, even the founders don’t have much of a clue how successful they will be.

This is the “correct” investment behavior.

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

#109

Post by spacebanana7 »

fidotron wrote: post #44
meiraleal wrote: post #13

Earlier quoted context omitted.

That's not the case for most dev tools YC startup, they are targeting the same HN users/ other YC startups (trying to sell shovels)

The great suspicion with YC is what proportion of YC companies have all their customers being a mix of other YC companies and those with shared investors? There is a real danger with current era Bay Area tech that it is just a game of musical chairs played with money, with remarkably little external value being generated.

This can be a good thing. One of the hardest things about building new software products is getting initial customers to discover your bugs, missed requirements etc and also add credibility.

As an enterprises SaaS buyer, I'd much rather use a code documentation tool that'd been circle jerked around a YC batch a few times compared to one with no prior customers.

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

#110

Post by ericjmorey »

mrcwinn wrote: post #84
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…

They say that, but what if the opposite was the actual truth? Look every VC is "founder friendly" because without founders there's no deal flow. At the end of the day though every VC is optimizing for exit value. So it makes sense to bet on the same idea twice. If Founder A screws the pooch, you've still got Founder B.

This matches typical VC investment patterns.
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