I applied to YC for the next batch as a response to one of your RFS. I would probably not have applied at this very early stage if you had not listed a similar idea in your RFS. If you believe in the idea but it's still pre-product, are you more likely to give a team a shot at building it at YC?
I Am Sam Altman, President of Y Combinator. AMA
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Re: I Am Sam Altman, President of Y Combinator. AMA
#502Earlier quoted context omitted.
Diversification only lowers risk. The expected value doesn't change.
Sir/Madam, that is incorrect. Diversification can easily lower expected value, or raise it. It should maximize your signal to noise ratio, if properly done.
You're using a different definition than the one I learned in school. The purpose of diversification, as opposed to simply picking the best asset, is to decrease variance.
Given a choice between two assets, or portfolios, one first maximizes expected value. Between two portfolios of equal expected value, you pick lower variance. That's the rational thing to do if you are managing a fund. The whole risk ratio thing arises only because so many investors are trying to build a well-diversified portfolio and bid up or down the price of assets accordingly. Price in turn affects expected return -- the expected value of the asset.
Re: I Am Sam Altman, President of Y Combinator. AMA
#503When you held Startup class in NYC. You brought up a few founders who were invested in... and what struck me was that each of them had previous relationships to their investors. For example I heard at least twice from an investor: "I've known john for years prior to him coming to me with [insert company name here]." So my question is, do you think there exists a "good ol boy's club" in SV that increases the chances b…
For sure it helps to get to know investors over long periods of time.
However, the investors that invested in my company knew me for 45 minutes (YC), a few weeks (Sequoia), and a few months (NEA).
It's important as a founder not to make excuses for yourself. Sure, it's easier to get money if you've known investors for a long time, but it's certainly possible to get it without knowing them for awhile.
In YC's specific case, we don't know the great majority of the people we fund at all.
Re: I Am Sam Altman, President of Y Combinator. AMA
#504Earlier quoted context omitted.
We really prefer at least two founders, but it's not a deal-breaker. We funded Drew Houston of Dropbox as a solo founder, but he got a cofounder before the batch started. A bad cofounder is far, far worse than no cofounder. I'd spend maybe 20% of your time looking for a cofounder, and the rest on your business. But don't force a cofounder if you don't have a good, organic option. The more progress you make on the bus…
>The more progress you make on the business, the easier it will be to get a great cofounder. I am not trying to be pedantic...but are they really a cofounder if you've hashed out the idea and made progress on the business prior to their involvement? It's an important question in my mind, because a cofounder typically receives far more equity than virtually anyone else that becomes involved with the business after it…
Convincing arguments have been made that it's usually a better idea that co-founders get equal equity than not, to prevent arguments about said split which are much more likely to doom your startup. It's like that point about arguments in a relationship: would you rather be right or be together?
http://avc.com/2011/04/how-to-allocate-founder-and-employee-...
Edit: I see you added that second paragraph after I wrote this out. I'm sorry for your situation, that must've been horrible. However, it sounds like in that situation the toxicity of the co-founder is more to blame than any initial attribution or equity split.
Re: I Am Sam Altman, President of Y Combinator. AMA
#505Earlier quoted context omitted.
We haven't updated our numbers in awhile. Current total is more than Uber. We'll update again at some point. It's not a perfect correlation, but the founders that build huge companies are extremely determined and smart, they have a very clear vision, they see things other people miss, etc etc. That said, there is definitely a luck multiplier for the humongous companies. You cannot have a clear plan to build a $200B c…
It may go without saying, but potential market has a lot to do with it as well. A company like Uber is entering a huge transportation market; Airbnb a huge lodging market. They can be big fish in big ponds. I think there are lots of YC companies in smaller ponds.
Only those with the very wildest imaginations (which happened to include PG and the founders) realized that Airbnb was entering a huge lodging market. Most thought it was just dumb to think many people would want to stay in other people's apartments. See http://paulgraham.com/airbnb.html
Re: I Am Sam Altman, President of Y Combinator. AMA
#506Reddit is well on it's way to becoming a dominant monopoly on the web, however there's a (subtle but important) difference between being a platform for free speech, and promoting hate speech.
If there are a billion users, but they're horrible people (eg /r/coontown), is that something you will look back on and consider as having been worthwhile?
Re: I Am Sam Altman, President of Y Combinator. AMA
#507[deleted]
Re: I Am Sam Altman, President of Y Combinator. AMA
#508Could you elaborate on what external factors and/or internal improvements are driving you and the team to again develop a larger number of companies per YC batch?
Is the scale-up going well?
Background: http://blogs.wsj.com/venturecapital/2014/05/05/y-combinator-...
Thanks!
Re: I Am Sam Altman, President of Y Combinator. AMA
#509How much do you think moving to the valley improves the odds of a startups success as opposed to another city, say Atlanta or Raleigh on the east coast?
Re: I Am Sam Altman, President of Y Combinator. AMA
#510Question re solo founders: "A startup is too much work for one person" and if you can't convince even one friend to join you, that doesn't speak well for your idea! On the other hand, a bad hire/partnership can ruin the company. YC gives signal it really prefers to look at teams than individual applications. Q: Do you have have advice or rules of thumb re how much time a solo founder should put into finding partner(s…
We really prefer at least two founders, but it's not a deal-breaker. We funded Drew Houston of Dropbox as a solo founder, but he got a cofounder before the batch started. A bad cofounder is far, far worse than no cofounder. I'd spend maybe 20% of your time looking for a cofounder, and the rest on your business. But don't force a cofounder if you don't have a good, organic option. The more progress you make on the bus…
Parker Conrad of Zenefits was also still a solo founder in his application video. If a founder intends to add a co-founder before the batch starts, how much does that impact your view on them as a solo founder during the application process?