Y Combinator has lost its soul: A YC founder's perspective • Hacker News Board

Re: Y Combinator has lost its soul: A YC founder's perspective

#311

Post by rcoder » Wed, Jul 22, 2020, 7:18 PM UTC

haney wrote: post #210

chrisco255 wrote: post #201

Earlier quoted context omitted.

Uh, most parents would take their kids back in the event of financial disaster. That's not even rare. Many folks live with their parents until late 20s / early 30s these days.

This does make the assumption that the parents are doing well enough to be able to support their adult children. There are some situations where the parents need the support of adult children, instead of the other way around.

My personal stance towards high-risk startups changed dramatically a few years ago when I took on a big chunk of responsibility for my parents' retirement. My "nest egg" that could be absorbed in a pre-revenue startup has more or less been transformed into the house they've retired into. Having my first kid a couple of years later only compounded the effect. (They're also mutually-dependent, since my parents provide essential childcare while schools and daycare are shut down due to COVID. My parents not having to work right now is literally a matter of life and death given their age and medical histories.)

Regardless, "smart, sustainable work that will support my family" doesn't really map to the intentionally-accelerated make-or-break pace of most incubators and funds. Nor do those programs naturally align with founders who want to create a solid long-term business working from sound operating fundamentals (positive cashflow, measured and even conservative hiring, working to the team's strengths) instead of chasing the next exploding market and "faking it until you make it".

Coincidentally those safer, longer-term plays are also the ones most likely to actually build generational wealth and financial independence for people starting without either. The lack of a safety net (or the presence of one that you're thoroughly entangled in for others' sake) makes all-or-nothing, giant bets far less tenable when you aren't effectively free from having to worry about mundane details like housing or medical costs. That in turn discourages if not de facto shuts out both the least privileged and those with meaningful resources but too much to lose if it all goes wrong.

Re: Y Combinator has lost its soul: A YC founder's perspective

#312

Post by [deleted] » Wed, Jul 22, 2020, 7:20 PM UTC

sebiw wrote: post #258

hpcjoe wrote: post #245

Earlier quoted context omitted.

As one who bootstrapped, took that risk, and lost ... everything ... I've been talking passively about this for a while. I speak with startups who have a product that is poorly differentiated, me-too like, that think they are going to take over the world. The reality, the vicious Darwinian reality, is that you and your team have to bust your collective rear-ends. And get lucky. Really, I hate to deflate many many bub…

I understand what you say and I assume you have more experience than me in this field. But even if you fail, that's experience too. If you have a dream, I strongly encourage you to pursue it. It is usually more painful to look back in hindsight and one day wake up to a reality where you never even tried. To whoever is reading this: Try. Then try again. Then try another. And don't forget to look after yourself and you…

[deleted]

Re: Y Combinator has lost its soul: A YC founder's perspective

#313

Post by simonbarker87 » Wed, Jul 22, 2020, 7:21 PM UTC

awillen wrote: post #9

The idea that check sizes should be small so people should be forced into dire financial situations is a terrible one, and one that would absolutely hurt diversity. You're going to end up with a bunch of rich white dudes as founders (because very, very obviously the other way that people can afford to take smaller checks is if they have a lot of money in the bank). The smaller class size issue is probably fair, but r…

The financial purgatory expected by angels is ridiculous and one we never subscribed to and is far too much like a parent child relationship than an adult to adult relationship. Investors who want their founders in a tonne of personal debt and living on baked beans are hurting their investment and stroking their ego.

Investors are trying to sell money, companies are selling a possibly enormous return on that money, it's a win-win and founders should be treated like the professionals they would be in industry.

Start ups have basically unlimited upside risk for investors and totally limited (to the amount of money invested) downside risk for them (and in the UK very healthy tax breaks for investing), the founders on the other hand loose years building a product that may prove worthwhile, don't make them carry years of financial pain and repercussions because they tried to grow your $5-$100K.

Re: Y Combinator has lost its soul: A YC founder's perspective

#314

Post by aty268 » Wed, Jul 22, 2020, 7:22 PM UTC

felipellrocha wrote: post #310

aty268 wrote: post #183

Earlier quoted context omitted.

His argument is that B2C is underrepresented and laughed at in YC, despite it being a vital and huge market. He isn't saying one is better than the other. Ebay, AirBNB, Apple, Uber, Github, heard of any? It's too bad you were never able to enjoy B2C products, because these products are worth trying.

I'm not saying these companies provide any value. Looking how I wrote my previous comment, I might've mispoken. What I was trying to say is that early on, whenever someone pitches B2Cs to me, I tend to think they're all stupid. I don't get them. That's not to say they don't provide value. Same thing on the B2B side. They provide a ton of value, so no reason to think one is better than the other.

You don't 'get' how B2C companies work? What does this even mean? You would pass on Uber because you can't understand how a business could possibly sell directly to customers?

Why not just say you focus solely on B2B companies? That's a lot more reasonable than trying to argue that B2C is 'stupid', because the market caps of these companies would strongly disagree.

Re: Y Combinator has lost its soul: A YC founder's perspective

#315

Post by foxtr0t » Wed, Jul 22, 2020, 7:22 PM UTC

awillen wrote: post #9

The idea that check sizes should be small so people should be forced into dire financial situations is a terrible one, and one that would absolutely hurt diversity. You're going to end up with a bunch of rich white dudes as founders (because very, very obviously the other way that people can afford to take smaller checks is if they have a lot of money in the bank). The smaller class size issue is probably fair, but r…

Counterpoint: founding a startup and being financially secure isn't some inalienable right. As you point out, writing small checks will skew the population of founders, but by doing otherwise for the reasons you've brought up, you're addressing a symptom very inefficiently. It might be more effective to take an approach similar to affirmative action. I think the idea is totally valid. Pouring money into a small set of founders can have diversity implications as well, it's hard to guarantee you're distributing investment equitably if the batch size is small.

Re: Y Combinator has lost its soul: A YC founder's perspective

#316

Post by ponker » Wed, Jul 22, 2020, 7:24 PM UTC

Alex3917 wrote: post #25

awillen wrote: post #9

The idea that check sizes should be small so people should be forced into dire financial situations is a terrible one, and one that would absolutely hurt diversity. You're going to end up with a bunch of rich white dudes as founders (because very, very obviously the other way that people can afford to take smaller checks is if they have a lot of money in the bank). The smaller class size issue is probably fair, but r…

It also doesn't make any sense from an investment perspective. Reddit would have been one of the most successful YC companies of all time, except for that they basically had to shut down because they couldn't raise money. This happened to lots of early YC companies that could have otherwise been successful. Had Reddit not sold for pennies on the dollar to Conde Nast, that alone would have probably paid for the extra…

How did the founders get so rich if they sold for pennies on the dollar to Conde Nast?

Re: Y Combinator has lost its soul: A YC founder's perspective

#317

Post by PaulDavisThe1st » Wed, Jul 22, 2020, 7:25 PM UTC

sinker wrote: post #261

PaulDavisThe1st wrote: post #254

Earlier quoted context omitted.

This is not (for me) about having kids+family vs startup. It's about number of people who can take risk of having zero income for N months. That is such a small group of people, and this narrows the pool of people who might found a startup that could change the world (or part of it). It means that all the ideas for startups are coming from people who have (at least) one thing in common. Maybe it's not the optimal thi…

I didn't state it strongly enough. Startups are for the rich and privileged , by the very nature of their mechanism of success. Lottery tickets, playing blackjack, rolling dice, are things which should only be done with what you have in excess. I don't think it's YC's responsibility to even societal odds. They are downstream from that position and simply consume and profit off those who have more than they need. YC i…

Well then I guess I didn't state it strongly enough: society does worse when the startup process is only accessible by the rich and priviledged.

YC isn't under an obligation to do the best it can for society. But if it wants to do that, or even to approximate it, the filter functions it uses implicitly and explicitly need to be considered carefully. YC has said a variety of things that indicate that it does have some desire to trend in this direction, at least in the past.

Re: Y Combinator has lost its soul: A YC founder's perspective

#318

Post by danenania » Wed, Jul 22, 2020, 7:27 PM UTC

jmwilson wrote: post #262

seizethecheese wrote: post #244

Recent YC founder here. I disagree with the premise that boring ideas are inherently bad. Stripe is a B2B company that adds an API on top of existing infrastructure. Airbnb is a basic CRUD app. I also disagree that YC is not funding interesting ideas. Our batch had quite a few. Someone was making a rapid cargo ship. Someone else was making a fully distributed cell network. The only real copycat ideas were the ones du…

The author didn't say anything about "interesting" vs. "boring" companies or ideas. He said YC should curtail funding of dev tools/SaaS startups, because the traction they appear to have is misleading. They're selling to each other, revenue moving in a circle, without demonstrating value creation outside of the sphere of similarly-situated startups. Not explicitly stated, but he's also implying it's a portfolio risk…

It's a myth imho that it's just so easy to sell your saas/devtool product to other YC companies (in your batch or otherwise), and that it somehow guarantees you early traction. It may have been true in the Stripe days when there were much smaller batches, but now being in YC means being bombarded with pitches from your batchmates (and then from each new batch as an alumni). Highly effective growth channels tend to quickly get over-saturated, and this one is no different.

Companies in YC are maniacally focused on their own goals and generally don't have the time and energy to adopt products just as a favor. They also tend to have NIH syndrome. They'll try it and give you feedback, but getting them to really use it is still very hard and requires that you're truly solving a problem.

I think a lot of companies start YC with this idea that they'll just sell to other YC companies, then quickly change their minds when they see how hard it actually is. Other early stage startups are not great customers for most b2b companies.

Re: Y Combinator has lost its soul: A YC founder's perspective

#319

Post by sealthedeal » Wed, Jul 22, 2020, 7:29 PM UTC

sangnoir wrote: post #211

awillen wrote: post #140

Earlier quoted context omitted.

Great point. People think a willingness to take extreme financial risks is somehow a useful personality trait when it comes to entrepreneurship because of selection bias. People who take that risk and make it tell that story. People who take that risk and don't make it aren't heard from. People who don't take that risk also aren't heard from. There are lots of people with great ideas and the ability to execute on the…

And often, getting credit card debt is not a material risk, but a minor embarrassment when they ask their family to bail them out and/or move in the guest house for a few months, rent-free. When poorer folk take the "same" risk, they can be ruined for decades.

True statements, fact of the matter is, this is not a fair world in which we live in. We are all created equal, but it doesn't mean that we are all given the same privilege.

Re: Y Combinator has lost its soul: A YC founder's perspective

#320

Post by redisman » Wed, Jul 22, 2020, 7:30 PM UTC

erik_landerholm wrote: post #13

As someone who did yc in s09 and w19, it was very different. But, you get out what you put in, like most things. These generalized critiques are useless. B2b is thriving at yc because it’s easier and more in the wheelhouse of developers. If there were tech climbers there I didn’t meet them. There are so many people the useless are easy to avoid. We got 6 months of work done in 3 months and the bigger check vs 09 was…

Also if you look at how the US economy works, all the money is in businesses, not consumers - compare the current stock market to the unemployment numbers for example. B2B was always going to out-compete B2C in the long run.