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Y Combinator, Backer of Dropbox, Vaults from Experiment to Kingmaker

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Re: Y Combinator, Backer of Dropbox, Vaults from Experiment to Kingmaker

#41

YC today is becoming the same as brand-name universities have. Their hype cycle as kingmaker now attracts 7000 applications for 141 slots. If you pick the best and the brightest, your value add is debatable. Just like Ivy league schools - regardless of how good their program is, by virtue of picking the best, they have de-risked their brand dilution considerably. Mark Z didn't need Harvard or a degree to become a bil…

> If all the knowledge of YC gets democratized, anyone from anywhere can thrive at a business without going through YC

Hardly. Most of the knowledge is out there, and more.

Here is how I think YC can rocketship you:

- Access to capital. Suddenly, you are visible.

- Legal advice from top experts.

- Network of startups and guys that connect with you.

- Massive interest from media (vs. if you were a noname out there)

- Pressure to achieve. You are more pressured to give results along your peers.

- Forcing you to move to the bay area. A good idea since the startup scene is still centralized.

Re: Y Combinator, Backer of Dropbox, Vaults from Experiment to Kingmaker

#42

YC today is becoming the same as brand-name universities have. Their hype cycle as kingmaker now attracts 7000 applications for 141 slots. If you pick the best and the brightest, your value add is debatable. Just like Ivy league schools - regardless of how good their program is, by virtue of picking the best, they have de-risked their brand dilution considerably. Mark Z didn't need Harvard or a degree to become a bil…

To be fair, they do share a lot of their knowledge openly. Just check out their YouTube Channel and blog. There are no secrets or tricks.

But I guess YC is more than knowledge. It has a strong signal effect, and the regular OH sessions you get with the partners potentially can help you a lot (even though you already might know what they telling you, but like a fitness coach, it helps you stay on track). Plus the alumni network, which I guess is especially valuable for B2B businesses and future partnerships.

I didn't go through YC but know some people that have and I think that what it breaks down to.

Re: Y Combinator, Backer of Dropbox, Vaults from Experiment to Kingmaker

#43
post #39
post #32

1280 Companies[1] — 1 IPO Kingmakers... hardly. I remember going to a Commonwealth Club talk in January of 2013 titled: "Y Combinator:The Secret in this Incubator's Sauce". They talked about how YC exits are on par with or worse than any person trying to start a company. Sure there is tons of support when you're in the program and they really try to ensure soft landings through their relationships, but it's hardly a…

What makes you think business school is strictly for people who want to be entrepreneurs? Now, I agree that all these new "Entrepreneurship Master's" are a bunch of BS, but business school per se might have its merits.

I don't think business school is for people that want to be entrepreneurs. I have a lot of friends who think that business school is for people who want to become entrepreneurs. Business school is for people that want to learn how to run and optimize other peoples businesses. I'm currently enrolled in Harvard's Executive MBA program and it's a great program, but it's focused on how to optimize a company that's already moving. I've also attend a few YC Startup Schools and those are optimized for someone who wants to create something from scratch. There are a lot of overlapping concepts, but Startup School and Business School clearly have different goals.

After thinking about it, you're right — Business school probably should't be renamed, but more explicit: Run Someone Else's Business School. And YC is more like: Run Your Own Startup School.

Re: Y Combinator, Backer of Dropbox, Vaults from Experiment to Kingmaker

#44
post #32

1280 Companies[1] — 1 IPO Kingmakers... hardly. I remember going to a Commonwealth Club talk in January of 2013 titled: "Y Combinator:The Secret in this Incubator's Sauce". They talked about how YC exits are on par with or worse than any person trying to start a company. Sure there is tons of support when you're in the program and they really try to ensure soft landings through their relationships, but it's hardly a…

> 1280 Companies[1] — 1 IPO

> Kingmakers... hardly.

An IPO is not the only measure of success. Some successful YC companies are opting to remain private longer e.g. AirBnB, Coinbase and some have been acquired e.g. Heroku, Reddit.

Re: Y Combinator, Backer of Dropbox, Vaults from Experiment to Kingmaker

#45
post #32

1280 Companies[1] — 1 IPO Kingmakers... hardly. I remember going to a Commonwealth Club talk in January of 2013 titled: "Y Combinator:The Secret in this Incubator's Sauce". They talked about how YC exits are on par with or worse than any person trying to start a company. Sure there is tons of support when you're in the program and they really try to ensure soft landings through their relationships, but it's hardly a…

YC companies are collectively worth over $80 billion. They’ve invested in about 1500.

Considering they’re almost always first money in, those are not even in the same zip code as normal returns. Those numbers are absolutely astounding.

Re: Y Combinator, Backer of Dropbox, Vaults from Experiment to Kingmaker

#46

YC today is becoming the same as brand-name universities have. Their hype cycle as kingmaker now attracts 7000 applications for 141 slots. If you pick the best and the brightest, your value add is debatable. Just like Ivy league schools - regardless of how good their program is, by virtue of picking the best, they have de-risked their brand dilution considerably. Mark Z didn't need Harvard or a degree to become a bil…

On the contrary, I don't think there is much evidence at all that the Mark Zuckerberg's of the world have so much innate talent that circumstances don't matter. The more we learn about what explains individual success, it's clear that there are lots of factors pushing a given person towards being successful, and then a lot of other factors pushing that person toward being unsuccessful. There is no "best and brightest," there is a murky combination of talent, privilege, environment, education and luck.

It's impossible to know if Mark Zuckerberg would be a billionaire if not for Harvard, for both easy reasons (maybe if he went to Yale, he would have slipped on a banana peel and then gotten hit by a bus) and deeper ones (how much did luck play a role in Zuckerberg's success, and did the network and prestige of Harvard help him capitalize on his good luck?)

Zuckerberg had many more factors in his favor than just Harvard, that's for sure. Anyone who tries to explain his success by saying "oh, that's because he went to Harvard," is wrong. But it's also impossible and silly to claim that we can know that he is just so talented and intelligent that all contingency removed he still would have become a billionaire.

This applies to the broader argument about Y Combinator. YC has a competitive advantage in that it attracts companies that have many positive factors behind them to apply. But that doesn't mitigate the possibility that YC itself is another positive factor, or that the only benefit to participating in YC is knowledge. From the outside, it seems like the applied knowledge expressed as case-specific advice and mentorship would be hard to "democratize," and that the intense amount of mutual support (start ups patronizing each other and becoming an instant, deep professional network for each other) are also not really expressible as knowledge.

Access is an incredibly powerful resource that YC can provide its companies, and one that has absolutely no correlation to being "the best or the brightest." The reason there are so many successful white male founders is not because they are the "best and the brightest," but rather because they are culturally and ethnically connected to networks that provide them with access to business opportunities and conversations and platforms and education that aren't nearly as available to non-white non-men yet. There are countless "best and brightest" women of color who do not have all of the favorable circumstantial factors that made success easier for Mark Zuckerberg (and obviously made it easier for him to get into Harvard in the first place in various ways) and yet are equally brilliant and talented.

Re: Y Combinator, Backer of Dropbox, Vaults from Experiment to Kingmaker

#48
post #44
post #32

1280 Companies[1] — 1 IPO Kingmakers... hardly. I remember going to a Commonwealth Club talk in January of 2013 titled: "Y Combinator:The Secret in this Incubator's Sauce". They talked about how YC exits are on par with or worse than any person trying to start a company. Sure there is tons of support when you're in the program and they really try to ensure soft landings through their relationships, but it's hardly a…

> 1280 Companies[1] — 1 IPO > Kingmakers... hardly. An IPO is not the only measure of success. Some successful YC companies are opting to remain private longer e.g. AirBnB, Coinbase and some have been acquired e.g. Heroku, Reddit.

Being acquired or acqui-hired(soft landing) means the company (and probably the culture) is gone. I worked at BBN Technologies back in the mid 2000's. This is the company that co-founded the internet, they have the second domain name ever registered (bbn.com)[1], their engineers co-invented foundational technologies that make the internet work today. In 2009, they were acquired by Raytheon[2]. As a stand alone company, BBN was not able to generate sustainable value, but Raytheon as the prime contractor is able to.

Also, being private longer but losing money is not sustainable. If companies are private and profitable, then that's a different story. AirBnB is still raising money[3] and their valuation is almost too big for them to get acquired. Their only successful exit is an IPO or becoming so profitable that they can buy out their investors. Coinbase is making a killing so they might be sustainable especially with the growth of the cryptocurrency market over the past 2-3 years (And the fees they keep charging me). SalesForce & Condé Nast have generated more value out of Heorku and Reddit than YC.

Don't get me wrong — I love YC products. I stayed at an AirBnB in March in Vancouver, I bought some Ethereum today on Coinbase, I updated a site I maintain[4] which has been running on a free Heroku Dyno for 5 years+ and my Reddit birthday is January 19, 2010.

YC companies have the same challenges that everyone else has even with their power and influence. There needs to be more of a track record of YC companies succeeding disproportionally to other companies before I could classify them as kingmakers.

[1] - https://en.wikipedia.org/wiki/List_of_the_oldest_currently_r...

[2] - https://www.raytheon.com/ourcompany/bbn/

[3] - https://www.crunchbase.com/organization/airbnb/funding_round...

[4] - https://gitignore.io

Re: Y Combinator, Backer of Dropbox, Vaults from Experiment to Kingmaker

#49
post #32

1280 Companies[1] — 1 IPO Kingmakers... hardly. I remember going to a Commonwealth Club talk in January of 2013 titled: "Y Combinator:The Secret in this Incubator's Sauce". They talked about how YC exits are on par with or worse than any person trying to start a company. Sure there is tons of support when you're in the program and they really try to ensure soft landings through their relationships, but it's hardly a…

YC companies are collectively worth over $80 billion. They’ve invested in about 1500. Considering they’re almost always first money in, those are not even in the same zip code as normal returns. Those numbers are absolutely astounding.

The 'worth' of a private investor's portfolio is a vanity metric. A more precise measure of YC's success would be money invested VS realized returns. Are those figures available?

Re: Y Combinator, Backer of Dropbox, Vaults from Experiment to Kingmaker

#50
post #49

Earlier quoted context omitted.

YC companies are collectively worth over $80 billion. They’ve invested in about 1500. Considering they’re almost always first money in, those are not even in the same zip code as normal returns. Those numbers are absolutely astounding.

The 'worth' of a private investor's portfolio is a vanity metric. A more precise measure of YC's success would be money invested VS realized returns. Are those figures available?

It’s not really a vanity metric in this day and age. A lot of the best companies aren’t going public... ever. The measure that determines whether it’s a vanity metric or not is liquidity. If there are a dozen investors willing to buy stock at $x it’s worth $x.
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