YC is going all-in on a technology with no proven business value, driven mostly by ideological desire. It might prove to be their downfall.
didn't YC research fund OpenAI itself?
What's working for YC companies since the AI boom
21–30 of 121 posts
Re: What's working for YC companies since the AI boom
#22Do "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 integ…
Its a good point and it comes back to why Google can't take up projects that other startups are working on.
Google has all the technical infrastructure, talent and everything to make something like AirBnB, Docusign and hell even intellij. Why not?
Re: What's working for YC companies since the AI boom
#230 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.
Levels. I think we are somewhere between 2 and 3?
1. YC startups target consumers. (B2C)
2. YC startups target businesses. (B2B)
3. YC network becomes large enough that startups can exist purely to serve other YC startups. (B2YC)
4. A new accelerator is launched which aims to fund YC companies that serve other YC companies. (YC4YC)
5. ?
Mostly joking, but I do sometimes look at the social media accounts of people in YC / Silicon Valley and wonder if they are living in an increasingly insular world. I think they would benefit from stepping outside of that into the greater world economy more deliberately.
Re: What's working for YC companies since the AI boom
#24Do "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 integ…
Its a good point and it comes back to why Google can't take up projects that other startups are working on. Google has all the technical infrastructure, talent and everything to make something like AirBnB, Docusign and hell even intellij. Why not?
Thing is, OpenAI/Anthropic/etc. are demonstrably taking up those ideas. There actually were (are?) AI PDF reader startups and AI research assistant startups. (And AI coding startups, AI video startups, image analysis startups, etc.)
"AI startups," if they make sense, seem to have a very short shelf-life. They're either overtaken by the continuing improvement in LLM context windows, or, if there's a real and general unmet need for what they offer, the giants will tend to integrate it.
Re: What's working for YC companies since the AI boom
#25Do "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 integ…
Yes, they do, because ultimately software UI is what gets regular people to use things.
To a technical user there may be little/no difference to you between prompt engineering into a chat box vs. clicking a button with premade text slots.
But to the average non-programmer, a chat app like ChatGPT is somewhat pigeonholed into the chat format, and so use cases that don’t lend themselves to this interface will be outcompeted by specific apps that do.
Re: What's working for YC companies since the AI boom
#26Do "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 integ…
Its a good point and it comes back to why Google can't take up projects that other startups are working on. Google has all the technical infrastructure, talent and everything to make something like AirBnB, Docusign and hell even intellij. Why not?
Google actually did make their own Docusign, it's called eSignature [1] and it was built into Google Workplace
Re: What's working for YC companies since the AI boom
#27a) 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…
You are being downvoted but I think you are correct: I'm not sure I could name a single company that came out from YC in the past 10 years, which makes think that YC was essentially pg, and I'm not a fan of him but he was obviously a very talented business person and had a really good eye for startups.
YC's leadership nowadays seem to lack of any kind of vision and just follows whatever shiny tech is currently in vogue, which is a huge red flag for accelerators.
Re: What's working for YC companies since the AI boom
#28> Zero LLM evaluation, observability, or tooling companies in the Series-A data.
This makes sense. The entire engineering/tooling field is so gonna change. Picking a winner makes isn't really possible. Most people are just starting to solve real problems with it and starting to build patterns that are not complete nonesense. But it will still change a lot
> “AI for X” verticals are surprisingly narrow.
I think that makes sense too. Those were a significant part of the initial hype. A lot of people promising that they'll take a "generic" LLM (which you all have seen how already smart that is) but now train it specifically on parenting, or trivia, or your emails, or your help center. It's a service type that will continue to exist. Perhaps it needs to tailor to a specific enterprise scenarios to gain traction as a startup. Though the need for these companies to manage the privacy concerns of the customers with their ability to inspect and look at the data and clean it might not be fully solved yet.
> Reducto - Reducto is an AI-driven API that specializes in converting unstructured documents like PDFs and images into structured data.
This is an example of the type of companies where "extracting LLM relevant context from X" and are relevant for any company doing the "AI for X" schtick or enterprise doing AI development on their own. This company is specifically about PDF and images, but we probably gonna see others that are for videos, archives, isos, msoffice docs, and even the ultimate holy grail of "universal binary => very rich structured data" API.
> Developer Tools & Infrastructure
The picks in this category are the most perplexing to me.
Re: What's working for YC companies since the AI boom
#29Earlier quoted context omitted.
Its a good point and it comes back to why Google can't take up projects that other startups are working on. Google has all the technical infrastructure, talent and everything to make something like AirBnB, Docusign and hell even intellij. Why not?
Google actually did make their own Docusign, it's called eSignature [1] and it was built into Google Workplace [1] https://workspace.google.com/resources/esignature/
And in true google fashion, it only works with Google accounts; if you send a signature request to a non-google account, it says it's sent but does not work...
Re: What's working for YC companies since the AI boom
#30Earlier quoted context omitted.
Its a good point and it comes back to why Google can't take up projects that other startups are working on. Google has all the technical infrastructure, talent and everything to make something like AirBnB, Docusign and hell even intellij. Why not?
Google actually did make their own Docusign, it's called eSignature [1] and it was built into Google Workplace [1] https://workspace.google.com/resources/esignature/
There’s a specific reason why google doesnt promote a Docusign like product even when they have superior technical abilities.
It probably comes down to the fact that code is not that crucial but all the other non technical aspects like distribution, supplier relations and marketing that makes a product.
Maybe LLM wrappers turn out to be that way. The model may not matter but the distribution and customer relation etc would matter more.