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YC Graveyard: 821 inactive Y Combinator startups

ycgraveyard.iamwillwang.com

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Re: YC Graveyard: 821 inactive Y Combinator startups

#221

Post by withinboredom »

CPLX wrote: post #129
withinboredom wrote: post #108

Earlier quoted context omitted.

So ... is a restaurant considered a small business? Where do you draw the line on initial investment?

Depends on what kind of restaurant. But the point is that a business model that is "profitable" but actually took millions in initial capital and has no provision for debt service isn't an actually profitable business model.

That’s what I’m asking. Most businesses take startup capital, but where do you draw the line?

If it takes 10mil of funding to get off the ground and it would also take any competitor that to catch up… then you have a moat and can basically make money forever.

Even if you wanted to get into money transfers, the licensing alone is around 1million, and you haven’t even written any software yet or gotten any infrastructure. You can also “rent” someone else’s license but then your margins go out the window.

So, I’m not sure what the point is here. Some types of businesses require capital to start, even if they never scale.

Re: YC Graveyard: 821 inactive Y Combinator startups

#222

Post by julianeon »

jbverschoor wrote: post #52
jll29 wrote: post #51

There are not just startups that become unicorns and startups that fold. Investors' worst nightmare is if you just make enough money to keep going, but you don't grow ("lifestyle business" as they use it is a derogatory term). That's because they prefer a sudden death where they can write down the investment and deduct their loss from taxes than an investment where they never see any money again. And then there are "…

That’s not what a lifestyle business is. Unless your lifestyle is eating ramen

The thing I don't like about the term "lifestyle business" is that it imprecisely mixes 2 very different things. It's like grouping students who were accepted at Harvard and chose not to go, with students who flunked out of school, as "not Harvard." Imagine if you were presented with a group that was 50/50 for example and had to draw conclusions about it. Really those are just two dissimilar groups that were lumped together, that shouldn't be bucketed together.

In the case of "lifestyle business," it includes businesses that tried their best to expand but hit a ceiling. They failed, basically, to return their investment in any meaningful way. Or to put it even more simply, they failed. At the same time, "lifestyle business" includes businesses that are tremendously strong and could be 10 or even 100x bigger, but aren't due to owner's choice. It mixes together businesses that are capable of being Fortune 500 with those that are almost the inverse. In that sense it's confusing and unhelpful.

Re: YC Graveyard: 821 inactive Y Combinator startups

#223

Post by CPLX »

withinboredom wrote: post #221
CPLX wrote: post #129

Earlier quoted context omitted.

Depends on what kind of restaurant. But the point is that a business model that is "profitable" but actually took millions in initial capital and has no provision for debt service isn't an actually profitable business model.

That’s what I’m asking. Most businesses take startup capital, but where do you draw the line? If it takes 10mil of funding to get off the ground and it would also take any competitor that to catch up… then you have a moat and can basically make money forever. Even if you wanted to get into money transfers, the licensing alone is around 1million, and you haven’t even written any software yet or gotten any infrastructu…

The point is that capital has a cost.

If you’re not carrying the cost of that capital on the books you’re not “making money” at all.

Re: YC Graveyard: 821 inactive Y Combinator startups

#224

Post by soared »

someone7x wrote: post #180
soared wrote: post #173

Earlier quoted context omitted.

Having worked at those, they are shoestring to the core. Guests see beauty, behind it is paper mache and $8/hr college students whose wages are garnished for rent and class fees.

At Disneyland? Where there’s a union for food and beverage workers? > We perform everything from preparing and creating treats like turkey legs and churros to serving grant and exquisite meals at the famous and exclusive Club 33. If you are eating in the parks, our members are making that happen. https://workersunited.org/joint-boards/local-50

Disney college program makes up a good portion of workers, and they are not a part of the union.

Edit - looks like 5% but they can only work the unskilled food service etc

Re: YC Graveyard: 821 inactive Y Combinator startups

#225

Post by jbverschoor »

amyjess wrote: post #149
idlewords wrote: post #72

Earlier quoted context omitted.

In other sectors that's just called a "small business" and celebrated as the fullest expression of the American dream. I've always found it funny that tech treats the idea of a going concern with such distaste.

My favorite video game company is a little Japanese outfit called Nihon Falcom. They've been around since 1981, have about 65 employees, release exactly one new game a year, and if you've played any of their games, you can tell they're all made on absolutely shoestring budgets. They have also never posted a loss and have an absolutely bonkers amount of cash on hand (enough to keep the company going for several years…

Ahh good old dragon slayer iv in the MSX

Re: YC Graveyard: 821 inactive Y Combinator startups

#226

Post by jbverschoor »

smallerfish wrote: post #58
jbverschoor wrote: post #52

Earlier quoted context omitted.

That’s not what a lifestyle business is. Unless your lifestyle is eating ramen

Sure it is. If your business nets 3 million a year, it takes 5 people to run it, and your customer base is steady, that's lifestyle. Sucks for investors, pretty nice for you if you can keep it running.

Just enough to keep going is different from a lifestyle business. Ramen/support low margins != a good lifestyle

Re: YC Graveyard: 821 inactive Y Combinator startups

#227

Post by nkotov »

My company is on the list (S20). Several founders from my batch did really amazing stuff (Supabase, ZIP), others got acqu-hired. It's pretty interesting how the paths have developed over the years.

I am still very bullish on YC. If you have a startup and have an opportunity with an interview / ability to attend the batch, you should definitely do it.

Re: YC Graveyard: 821 inactive Y Combinator startups

#228

Post by jordanb »

AbstractH24 wrote: post #116
jll29 wrote: post #51

There are not just startups that become unicorns and startups that fold. Investors' worst nightmare is if you just make enough money to keep going, but you don't grow ("lifestyle business" as they use it is a derogatory term). That's because they prefer a sudden death where they can write down the investment and deduct their loss from taxes than an investment where they never see any money again. And then there are "…

Worse than becoming lifestyle company is becoming a zombie startup. Zombie is when founders get rid of almost everyone except what they need to give the impression of effort, do little work, but draw an income and slowly spend down the money they raised until it’s gone. I was one of the very few survivors at a startup that turned into a zombie in 2020 (went from 100+ employees to 10 in a matter of weeks). In some way…

I question your read on what happens here. At most startups the investors control the board (there are a few where a charismatic founder manages to retain control, but that's rare).

If the board thought the founder was just transferring the remaining investment to himself slowly they'd fire him and replace him with someone to wind operations down.

Re: YC Graveyard: 821 inactive Y Combinator startups

#229

Post by bobxmax »

threeseed wrote: post #199
bobxmax wrote: post #192

Earlier quoted context omitted.

How is that worse, as a VC firm? If I was betting on technology right now, I would bet on SF-in person teams with young founders and a focus on AI. Sounds like the perfect target.

I have zero issue with YC's investment thesis. I have an issue with the way they continue to market themselves as being altruistic and a defender of startup founders everywhere rather than your run of the mill predatory, self-interested SF VC.

But again, what exactly is it about their approach/thesis that's "predatory"?

Re: YC Graveyard: 821 inactive Y Combinator startups

#230

Post by KingMob »

aaronblohowiak wrote: post #117
adastra22 wrote: post #24

Earlier quoted context omitted.

There were plenty of ways to get paid on the internet before stripe. On paper it didn’t look like they were doing anything new. They just did it better. Airbnb… idk. Who wants to rent their house out to total strangers? I wouldn’t. I wouldn’t have thought it would take off like it did.

It was commercial version of couch surfing and/or web2.0 version of vrbo. I was highly skeptical of it taking off because it was “a copycat”! How wrong I was…

Man, I used to use couchsurfing.org to get free places to crash in grad school.
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