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What's working for YC companies since the AI boom

jamesin.substack.com

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Re: What's working for YC companies since the AI boom

#11

Post by shivbhatia »

lubujackson wrote: post #4

0 consumer products is wild. I know SaaS has taken over from a bang for buck perspective, but this seens like a too-narrow approach by YC.

Hard to beat the chat interface when it comes to consumer products if you ask me. Pre-AI I often wished I could just talk to an application rather than try to figure out how the buttons the developers had chosen to wire up mapped onto what I was trying to achieve.

Re: What's working for YC companies since the AI boom

#12

Post by throwanem »

lubujackson wrote: post #4

0 consumer products is wild. I know SaaS has taken over from a bang for buck perspective, but this seens like a too-narrow approach by YC.

A too-narrow approach after Apple beefed it? Nobody knows how to bring AI to market yet but OpenAI, Anthropic, and Google. Long shots are one thing, but all the ideas I've heard for b2c AI so far are mostly more like pipe dreams. Look for a Zynga play once the field starts opening up for that in maybe a year or so, would be what I'd try to do.

Re: What's working for YC companies since the AI boom

#13

Post by ljf »

biccsdev wrote: post #7
lubujackson wrote: post #4

0 consumer products is wild. I know SaaS has taken over from a bang for buck perspective, but this seens like a too-narrow approach by YC.

0 consumer products is just a symptom of the current state of the global economy

It is also a sign of where something is in its cycle - when engines were first invented they laboured in mines originally, then moving traction engines/tractors, then trains - it was a long time before the average person owned an engine for their own use.

Re: What's working for YC companies since the AI boom

#14

Post by threeseed »

a) The next two years are the reckoning for a lot of these AI startups. In the enterprise space everyone was being pushed to trial AI products to see whether they can deliver the ROI that was being marketed. Newsflash: it hasn't. And many of these startups will see serious churn.

b) Everyone needs to stop perpetuating the YC lie that they invest in the best founders and they just happen to want to do AI. It's rubbish and insulting because it implies that only young, male, SF-based founders can be the best. Instead it's clear that YC has been aggressively pushing AI which makes sense given they are a significant investor in OpenAI.

Re: What's working for YC companies since the AI boom

#15

Post by tzury »

To measure what's working for B2B YC companies, especially over the course of two years period you need to answer the following questions:

    a) what are the growth rate when measuring customers which are *not* YC companies?
    b) what is the churn rate for that same group.
Measuring by Series A (Assuming investors are the compass not the users - aka the market), is completely anti-YC the way I perceive the YC philosophy from afar.

Re: What's working for YC companies since the AI boom

#18

Post by gizmo »

threeseed wrote: post #14

a) The next two years are the reckoning for a lot of these AI startups. In the enterprise space everyone was being pushed to trial AI products to see whether they can deliver the ROI that was being marketed. Newsflash: it hasn't. And many of these startups will see serious churn. b) Everyone needs to stop perpetuating the YC lie that they invest in the best founders and they just happen to want to do AI. It's rubbish…

Other than the "request for startups" YC publishes YC doesn't push founders to start a specific type of business. AI is simply where the opportunity is (or is perceived to be). YC (and everybody else) understands that most AI enterprise startups will fail, as you point out. The gamble, as always, is that a few startups in the current batch will get huge.

Re: What's working for YC companies since the AI boom

#20

Post by A_D_E_P_T »

Do "AI Startups" even make sense?

There appears to be a pattern. Unmet need is identified: "I want ChatGPT -- but able to read PDFs" or "I want ChatGPT -- but able to do research and produce lengthy reports." Startup gets funding for this and, if they're lucky, releases a rough beta that leans heavily on the OpenAI API. Two months later OpenAI launches a better, much more polished and seamless version, which is integrated into ChatGPT itself.

I had briefly considered forming a Legal AI startup (going so far as to download the fulltext of every legal ruling ever made in the US -- something like 400GB) but then o3/DeepResearch got so good that it became apparent that there'd be little point.

Steve Hsu claims to have solved hallucinations in a customer service context, which might be the only "startup-type" idea that has a head-start over the giants.

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