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If you go through the most recent YC batches, it's insane how much of their "customer list" is just other companies in the same or recent batches
Small companies buying and selling each other's services is probably the #1 thing that other ecosystems should emulate.
Getting your first 3 customer is hard, you need an open and empathetic system for that - a 'cohort' is exactly that.
They're not moving money around with 'no services rendered'.
It does however mean that the situation is 'highly leveraged' - and therefor risk is more concentrated, and, they do disclose.
Nominally there's nothing wrong with investing in one's own supply chain.
It makes a lot of sense for a value chain player with huge cash position and therefore a lot of power to take a % ownership of a buyer.
Consider for a moment - what if Nvida acquired OpenAI? They would be two divisions in the same company. Would anyone consider it wrong for surpluses from one to be invested in the other? No. The moment it's 'managerial accounting' instead of 'balance sheet accounting' - nobody would care.
Imagine Google or AWS acquired Nvidia - maybe in 2017 so it would seem more realistic in terms of price - would any of this seem financially dubious? No.
Of course - those mega mergers would be bad for competition, but that's a separate question.
There's nothing inherently wrong going on here, as long as it's on the books and people understand the inherent structural risk of coupling etc..
you’re literally scamming VCs lol
What is this style/design called? I keep seeing it pop up more and more (and have to assume it's a side effect of vibe coding).
If you go through the most recent YC batches, it's insane how much of their "customer list" is just other companies in the same or recent batches
Yeah, they raise a massive round on traction from other YC companies then need to find the real Product Market Fit (enterprise and others) after that round. It's actually very inefficient
Cohorts are not 'raising massive rounds' on selling to a couple of poor YC startups that 'don't want they product but pay for it anyhow' They're selling to people who are using their product, but probably have bit of an open mind about things, and are willing to overlook hiccups. A bit like how buyers often have a 'national preference' in some cases.
Every startup ecosystem should do this, it's probably one of the top things any system could do to try to get things going.
A sent 10K to B, B sent 10K to A, where is 10K coming from? and if it's a circle then how would you report higher revenue..
If you go through the most recent YC batches, it's insane how much of their "customer list" is just other companies in the same or recent batches
Having been in a YC company that wasn't in the SaaS space, this never made sense to me/us. So many YC products were just way out of a reasonable price bracket, there's only so many $30/m subscriptions you can buy per employee. Talking with their sales teams was funny because they grossly over estimated our budgets.
Yeah but like, most of us work in tech and sure a lot of this money is getting “wasted,” but on what and who? Often on people who spend it elsewhere, a little bit gets siphoned off every time for living costs, luxuries, and side projects of individual employees, or other benefactors thereof. I wouldn’t call this excess a “bad” thing, the excess is what allows us any reprieve in the rat race, time to spend with loved…
Excess isn't a problem, it's the distribution of the excess. Right now (in America) pretty much all of it goes to the top couple percent. The bottom ~40% of Americans have, by all practical measures, experienced a reduction in standard of living compared to 1980. Like, yes, they can afford more trivialities. TVs are cheap, particle-board furniture is cheap, and so on. But the actually important things like healthcare, education, and housing have moved further out of reach.
So yes, it's nice that my Anthropic friends can retire to work on, in one case, their fantasy novels. I'm very happy they can focus on something they love (and I look forward to reading their books). However, that much capital concentration leads to a hefty chunk of our (really rather rich) country struggling to service basic needs (like having a roof).
Earlier quoted context omitted.
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