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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

#141

Post by shahzaibmushtaq »

itsoktocry wrote: post #124
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…

> It's almost impossible to know if an idea is good at the early stages But identifying the "right" people is easy?

A good idea will not scale if the founder and founding team are bad, and a mediocre idea will scale if the founder and founding team are good.

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

#142

Post by light_triad »

itsoktocry wrote: post #124
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…

> It's almost impossible to know if an idea is good at the early stages But identifying the "right" people is easy?

Picking people is also hard, but if you narrow it down to:

1) folks who follow the directions on the application, 2) have the technical ability to build, 3) demonstrate high achievement in school/career, 4) show commitment/persistence, 5) have an idea that makes some sense, 6) are able to clearly communicate the idea, 7) have good team dynamics, 8) have some plausible strategy for growth

AND are willing to sell 7% of their startup for 125K

then the resulting pool of startups is probably smaller than you would think.

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

#143

Post by anthomtb »

Have we forgotten how venture capital (VC) is supposed to work?

A new technology comes out. The new tech has high startup costs and low marginal costs. You invest in 10 companies developing this new tech. 8 go bankrupt, one hangs on by a thread, the last one returns 1000x on what you invested.

Last I checked, Y-Combinator is still considered a VC firm. Investing in a bunch of firms doing the same or very similar things is what YC should be doing.

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

#145

Post by nonameiguess »

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.

What do you mean no similar service? You put it in your own sentence. couchsurfing.com was founded in 1999, launched the website in 2004, and still exists. It was, of course, a nonprofit founded on a principle of reciprocal generosity, not a way to make money, so it might be fair to say no similar service existed for homeowners looking to rent out spare rooms without a formal lease agreement or people looking to turn property into a hotel without it being zoned or licensed for that.

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

#146

Post by dehrmann »

anthomtb wrote: post #143

Have we forgotten how venture capital (VC) is supposed to work? A new technology comes out. The new tech has high startup costs and low marginal costs. You invest in 10 companies developing this new tech. 8 go bankrupt, one hangs on by a thread, the last one returns 1000x on what you invested. Last I checked, Y-Combinator is still considered a VC firm. Investing in a bunch of firms doing the same or very similar thin…

They're really just keeping multiple irons in the fire. If the space is a winner, another player increases YC's chance of betting on the winner. More players also means the space gets explored in different ways.

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

#147

Post by synergy20 »

osigurdson wrote: post #91
ActionHank wrote: post #83

Earlier quoted context omitted.

Steve Jobs or maybe just Apple used to pit teams against each other to develop a solution to a problem and then pick the strongest of the two. It also offers a convenient way to pull investment out early if the doppelganger startup isn't meeting targets. Just get the original startup to buy them out. It's not something that is a negative for YC, but it could be for the startups they back.

Agree. I have watched several YC videos where they state this again and again. What they are less specific about is how precisely founders are selected.

last time I read it's concentrated to a few elite school graduates

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

#148

Post by j45 »

keiferski wrote: post #106
j45 wrote: post #101

Earlier quoted context omitted.

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.

It disrupted it in the way of bringing new inventory online, and owning demand search for lodging while travelling, without owning any assets like hotels.

This pattern, of owning demand for food (instacart), transport (uber, etc), delivery (uber eats, etc) is a different model that doesn't own the assets outright and facilitates it instead.

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

#149

Post by keiferski »

nonameiguess wrote: post #145
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.

What do you mean no similar service? You put it in your own sentence. couchsurfing.com was founded in 1999, launched the website in 2004, and still exists. It was, of course, a nonprofit founded on a principle of reciprocal generosity, not a way to make money, so it might be fair to say no similar service existed for homeowners looking to rent out spare rooms without a formal lease agreement or people looking to turn…

I literally mentioned couchsurfing in the previous sentence, so yes, that is obviously what I meant: no similar business services existed.

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

#150

Post by JohnMakin »

ActionHank wrote: post #83
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…

Steve Jobs or maybe just Apple used to pit teams against each other to develop a solution to a problem and then pick the strongest of the two. It also offers a convenient way to pull investment out early if the doppelganger startup isn't meeting targets. Just get the original startup to buy them out. It's not something that is a negative for YC, but it could be for the startups they back.

Worked for a major ecommerce company that did this too - It was extremely unpleasant to work under (yet profitable if you won) and I don't like the practice but it was pretty effective. I'd guess that YC would take the "sea turtle" reproduction pattern here of hatching a bunch of mostly similar turtles and hoping a couple of them make it to sea. Stinks for the small guys that don't make it though.
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