Perhaps I'm not giving the batch enough credit (there are some incredibly interesting companies in there) but it strikes me there is still a lot of fluff in between the gems.
I can't help but think YC would see that, so - unless they expect those companies to be acquired quickly - other than if it is an attempt to corner the incubator market (once they are in every deal, they have all the leverage over both startups and VCs) I fail to understand why they need their batches to be this large. They could have a batch half the size or smaller and pour more gasoline on fewer (better) fires.
A few of the companies seem like ones that could have bootstrapped or funded via kickstarter. They don't strike me as businesses that will make venture capitalists back their money in any considerable way.
All that being said I absolutely love the shift toward hard tech and Africa. But I can't believe there's another 60 to come...
This comment has been made about pretty much every batch of YC, right back to when it was only 8-15 companies.
The response is the same now as it has always been in the past: YC knows it can't predict in advance which companies could be home runs, so its approach is to "bet on the field" (which, thanks to power-law returns, actually works in startup investing in a way that it doesn't in horse race betting).
Remember, Airbnb and Dropbox were roundly panned when they first appeared out of YC, and in both cases were very nearly not accepted at all (Dropbox was rejected on the first application. Airbnb was accepted even though YC thought their home-sharing business was stupid and would most likely fail. YC accepted them because they were impressed that Airbnb had bootstrapped themselves by selling breakfast cereal).
Plenty of other companies that looked like winners early on have failed, and others that looked ridiculous have gone on to become very successful.
But nobody knew which would be which at demo day.
To understand more about YC's m.o., read these PG essays:
This comment has also been made pretty much every batch.
Trotting out companies that were picked before the growth strategy was implemented as evidence that the growth strategy is a good idea doesn't make sense.
Dropbox and Airbnb were massively successfully with in 2-3 years. What are the big successes from 2013 to the present?
Dropbox and Airbnb were massively successfully with in 2-3 years.
That's debatable. They both went a long time struggling to get growth and big funding in the first few years, and (particularly for Airbnb) it was more like year 4 when they became mainstream hits.
What are the big successes from 2013 to the present?
Magic, Myo & Teespring are some of the more promising ones.
And if you take it back to 2012 you have Crowdtilt, Instacart and Coinbase.
And going right back through the batches you have dozens of companies that are doing very well - servicing big markets, generating big revenues, employing many people, making good returns for investors - but you don't know them because they're not mass market brands.
And as for Zenefits; yes they deserve criticism, but they're still a formidable company with big revenues and a strong leadership team and I'd expect them to survive and do very well long term.
But the main point remains: it's the easiest thing in the world to scoff at a bunch of nascent companies presenting themselves to the world for the first time after a few months' work.
And you will always be about 95%-100% right when you judge a whole batch of startups as trivial and doomed to failure or mediocrity.
But that says precisely nothing about the effectiveness of YC's strategy.
YC has been actively seeking to grow as fast as it could since 2009-2010, and was funding over 70 companies in a batch as early as 2012, then they scaled back in 2013 after experiencing growing pains.
Plenty of well-known companies have come through in that time eg, Pebble, Stripe, Firebase, Parse, Crowdtilt, Coinbase, Instacart.
Cruise went through YC in 2014, after the time you (inaccurately) assert was the beginning of the "growth strategy".
BTW when Criuse first hit HN, commenters were generally nonplussed or critical [1], just as they had been with Justin.tv (some dude with a camera on his head??) and then Twitch (watching other people play video games??).
From the dude with a camera on his head to Twitch's $1Bn exit took 8 years, and even at year 7 people didn't think it was a winner [2].
I would love to start a multi-billion dollar startup like Zenefits and have the career that Parker Conrad has. He is LOLing all the way to the bank and his cushy consultant/VC job.
Yes, but there has to be some heuristic of value here, otherwise pg would throw $240,000 at every single person who crosses his path. How does "PetCube, the Dropcam for Pets" fufill that heuristic?
How many people are going to buy a special dropcam to point at their dog, rather than... a regular dropcam, which will be cheaper and better?
How many people are going to buy a special dropcam to point at their dog...?
How many people are going to want a Basic interpreter for the Altair?
A few points:
- It's $120K
- PG is no longer actively involved (at least with selections or operations)
- They've always been very open about their heuristics for accepting applicants: pick teams that show evidence of being very talented and very determined, working on ideas that may seem laughably trivial now but over 5-10 years have some chance of developing into something huge.
- "The fax machine is nothing but a waffle-iron with a phone attached." But seriously, plenty of very successful products have been generic products tailored for a particular use-case.
PetCube would have been picked because they were able to explain how their silly-looking idea has the potential to transform pet care over the coming decade (using robotics perhaps?)
Remember, everyone including YC knows that the chances of huge success for any individual company are tiny.
But as long as about 1% of the companies they back become huge, YC does very well.
Drew Houston said (in an interview) that he viewed HN's response to Dropbox as extremely positive. A few people made critical comments but thousands of people signed up and it was highly upvoted.
Yes that's true, but there was also a general feeling at the time (among investors, journalists, armchair experts) that cloud storage was a crowded space (there were like 8+ players in the space at the time [1]) and that Dropbox was either too late to the game or it was impossible for anyone to deliver a product that would appeal to the mass market.
It took them a long time to raise funding as a result.
HN has grown so much since then. That might not seem like much of a response compared to what a top story gets now, but it was a big deal at the time. It was in the top 10 on the homepage for at least a couple days.
I agree. There are a lot of great businesses in this group, but not too many potential unicorns. I really hope this signals a VC shift towards backing real businesses.
Not to knock on the group of companies, but I tend to agree. I think the larger the YC cohorts get, the more it becomes evident that the interview/selection process is heavily weighted towards the team and not the product. My take is that they are playing the odds game. With a bigger cohort they can risk more on the team instead of focusing on the product. The theory being that if they select 120 companies, the chances of having a few unicorns is increased. The smaller the cohort, the more they have to look at the product so the risk is minimized that none of the companies are unicorns.
With that said, I completely agree that I would like to see them return to smaller batch sizes. I think the larger cohorts almost give an assembly line feel to the process. Again, not diminishing the accomplishment of any of the companies, but I think the larger cohorts is almost doing a disservice to the founders.
I agree they are betting on teams. Teams that are able to do "something". I guess I would prefer to see them take on a smaller number of teams and encourage them to go after bigger visions with more seed capital behind them.
As I think about it more it seems to me that vision is really the problem, and maybe some of the teams have a vision that is limited by their experiences and surroundings.
Yep. The problem they may start running into with putting all the eggs in one basket with the team approach, is it can lead to a potential misconception about the program as a whole. Investors have favored YC companies because of the quality of the program and companies it is able to product. If the quality starts to go down with products, it hsa the potential to hurt better companies coming out of a cohort.
I've been getting the same feeling lately. There are definitely a handful of companies in this batch that are solving real problems, but I can't help but feel the majority of them are not true value-ads in a world where real problems exist.
This was exactly my take-away after reading through this list.
Industrial safety inspections done by robots and affordable, modern zero-energy homes are the kind of difficult real world problems that will make the world a better place when solved.
On the other hand, I don't know if glass-by-glass wine delivery or another college social network are solutions to real "problems" that needed to be solved.
Now of course, it's still early for a lot of these startups and I can be proven wrong. But the potential impact of a something like a smart oven with a companion subscription meal service seems really small compared to an idea like a marketplace for farmers in India to sell directly to institutional buyers
I took away the exact opposite reaction. I think there are a handful of fluff startups in there, but there seems like a bunch going after real problems. What really impresses me is how many are working on problems that Silicon Valley doesn't even know exists.
A lot of today's big tech companies looked like "fluff" in the beginning. I assume YC picked the companies based on more than what their current product offering is.
I think if you add the word "profitable" to the first sentence, the "a lot" changes to "some". But I will give you that "some" :)
Fluff was probably the wrong word.
When the perception you want to build around your incubator is about massive, life-improving, world-changing businesses (or at least that's my impression). There are some ideas I would consider leaving on the table for other investors and incubators.
- plush phones for toddlers / really loud speakers (kickstarter).
- Slack or Zapier acquisition targets.
- Chatroulette for phonecalls.
- The next Whisper / Secret / YikYak / Gossup / Babbly / Cloaq
- Yet another live streaming service.
- A meal subscription service which makes me buy an oven to join?
No offense intended to any founders or investors. If I'm wrong that's great!
I wonder if there are sector quotas, or at least sector tick boxes:
Social
Developing World
Middle Class US Consumer
B2B
...and so on.
Of the set, I think the Developing World group is the most interesting. The markets there are huge and largely untapped, and a hit really does have the potential to change the world.
The Middle Class US Consumer group seems the least interesting. Some of the hardware projects wouldn't be out of place in a Sharper Image catalogue.
I think "fluff" is the wrong word. However I find it extremely difficult to imagine some of these companies earning > $1bn, which is what VCs are looking for. If you're not gunning for > $1bn in valuation you're essentially killing your company by giving away equity to VCs.
UI is really coming in everywhere isn't it? Beautiful.
https://www.truebill.com/ I REALLY need something like this, it helps you manage your subscription payments and I always get charged an extra time or two. Gosh I hate it -_-. I've lost so much money this way.
>Shypmate does not process requested items until it has been paid for. Once payment is confirmed, Shypmate will purchase item(s) within 24 hours and have it mailed directly to a Shypmate Traveler.
So it looks like the products come from established online retailers and not from "my buddy is going to drop off a package to your house, don't open it, just deliver it".
As a former Track & Field athlete I thought Trac (https://www.tracchicago.com/) was really interesting. To have the ability to get automatic timing / splits in practice would have been amazing. I can remember the distance coach always having to run around and yell splits to everyone; I'm sure he wouldn't have minded focusing on other parts of the workout besides time. I wonder how well it would handle people running distance and sprinters running on the track at the same time?
Also the fact that they have disposable chips used for races at $1 each would have given my HS (this was rural Oregon in a HS of ~250 kids) the ability to have automatic timing at our hosted meet(s).
Really cool stuff for a sport that doesn't get a lot of attention.
Potentially silly idea, but could this be (cheaply) replicated by a phone with a slow motion camera pointed across the finish line and an armband with a QR code on it facing towards the camera?
I think RFID chips guarantee higher precision and much more reliable. If a leaf falls in front of the camera, or something suddenly changes in the background, that could easily distort the image.
I had the opportunity to be a judge at a "shark tank" style event Trac pitched at last summer. Their presentation and product were outstanding and it sounded like they were already getting some good traction. I'm happy to see they've made it into YC.
I'm curious as to how safe Nurx is. Some birth control can cause serious health issues if your background and / or current health are not taken into account. Is an app that asks questions "good enough" to remove the liability of a doctor prescribing something that could hurt / kill someone? Or am I just way off base? If anyone can elaborate it would be helpful :)
I think it's definitely an interesting concept. Maybe the market isn't ready for it yet (regulations), but hopefully this startup can spur a congressional discussion about online prescriptions in 3-5 years.
It's essentially one-step beyond telemedicine. Nothing wrong with that. And as it expands to include other drugs such as ED drugs and maybe (maybe) drugs such as adderall.
What I really don't like is them calling themselves the "Uber of birth control", do you expect women to share their birth control with each other!?!?!? This is not a sharing economy business and should not be referred to as such. This is a form of digital medicine, one step beyond telemedicine and should be referred to as such. Stop being lazy and figure out how to describe your company.
> One of our doctors will review your request right away. If she needs more information or has relevant advice, she may call you before writing your prescription. [1]
I read that. The part that concerned me was not being there and looking at the patient. Birth control can cause some serious side affects. Granted it's a small portion of the population if I recall correctly but even so the patients are not doctors and may not understand the seriousness of answering a question incorrectly (or may not realize they are or their health could have changed since the last time they, say, had their blood pressure checked).
Hence I'm curious what type of liability this opens them up to. Like I said maybe it's nothing / not a big deal but I was hoping if someone knew they could comment.
Presumably a doctor would know all this, and would take appropriate precautions prior to prescribing any medication.
And, there is also such a thing as acceptable risk. Incorrectly used, even over the counter medicine such as aspirin can result in fatalities (Reye's syndrome)
I call out Aspirin specifically, because you have to be very careful with children/teenagers who have flu-like symptoms or are recovering from chickenpox. This is a drug that can kill in fairly well known situations, but is available over the counter. Just because a drug is dangerous to certain people, doesn't mean that it can't, or shouldn't be prescribed by a doctor electronically.
Aspirin can kill in a pretty random fashion too - it is just much harder to show an association in these random cases. The risk is low, but there is always some risk with any drug.
Oral contraceptives are one of those interesting drugs where not taking it is more dangerous than taking it (pregnancy is much more dangerous than the pill). If any drug should be available over the counter and heavily subsidised it is oral contraceptives.
Childcare is a very heavy female industry. It's a role that's highly feminized and the bias still carries very strongly today so yeah I'm not surprised at all. In fact I'd be willing to bet the amount of men they actually have in the network is less than a percentage point.
Due to the perceived biases I too would probably only use graphics with women in it. I'm not saying it's right by any means but ultimately they're here to build a company and while they can certainly, very slowly, help the situation being overt may not be the best idea today.
If Function of Beauty's product is even 1/4th as good as their customer service was - I can see them doing very well.
I saw their thread a while back and was looking to buy new hair product anyway - so went with them since what they're selling is about the same cost as what I was buying anyways.
First things first, I purposefully broke their form when it asked me for my name (entered some Japanese). It was a small matter, but that's what made it stand out to me. They could have just left it blank or went with the name they had on file for me but instead they emailed me asking what the name should be.
Then they messaged me on a Saturday to clarify one of my "goals" since it was contradicting my "hair profile". Slightly bigger matter to have my catered formula you know... actually catered to my hair and goals. Again, they could have just took my submission at its word rather than clarify with me but they chose to reach out.
If the product itself is good, they've already won me over.
I didn't look at the site but the idea does seem pretty cool (this coming from a guy with short hair and a no name shampoo bottle that last 4 months).
Are they teaming up with hair salon's at all? Those are where customers that want to spend $30 on a bottle of shampoo are located. Partner with the salons and give them a cut. They could even provide a "training session" with stylists that can then work through the profile with their customer. The stylist becomes a brand ambassador.
What is YC's policy (or ethical guideline) about accepting multiple companies in the same domain? I know (some) VCs enforce an ethics guideline where they only back one player per domain (A16Z does). Obviously it isn't always easy because you can't know in advance what startups morph into.
Seems like Prompt and Chatfuel are fairly similar right now though. Any comments on this from YC and/or the Prompt/Chatfuel founders would be welcome :)
Was this discussed at all when the decision to accept these two into the batch was made? Really curious how these situations are handled because it seems like it could be an even bigger issue for an accelerator like YC that takes more companies into the funnel than a typical later stage investor. A16Z mentions the limit to one player/domain as one of the more interesting constraints on their overall business model. I believe it's roughly on the same level as partner bandwidth.
This is not true at the seed stage. The back one player per domain rule is something usually only followed at series A and beyond. a16z, for example, does not have a policy of only backing one player at the seed stage. In fact, they scaled back seed investing years ago because despite this stated policy people still had this misconception.
"""Will you fund multiple startups working on the same idea?
Yes. If you fund as many companies as we do it's unavoidable you'll end up with some overlap. Even if you tried not to accept competing companies, you'd still get overlap because startups' ideas morph so much. The way we deal with it is that when two startups are working on related stuff, we don't talk to one about what the other's doing.
In practice it has not turned out to be a problem, because most big markets have room for several slightly different solutions, and it's unlikely that two startups would do precisely the same thing.
"
UnnyWorld – A mobile League Of Legends clone:
[...]
While cloning popular games might not be prestigious, bringing the League Of Legends experience to mobile could be quite lucrative.
"
Coming from India, I really wish Kisan Network becomes a success. Farmers rarely get the market price for the harvest and sometimes they are forced to sell their crop for pennies because there is no other way. I think the biggest hurdle in selling is lack of infrastructure for storing and transportation, both of which this startup seems to be trying to solve.
Loss prevention using this tech is tough, especially since it's trivial to defeat UHF RFID tags' detectability -- on purpose or by accident, by placing the tags against your body (fundamentally different from EAS). Plus, the things you're most-keen to track (high-value items) are also the most likely to contain metal; metal mucks w/ RF propagation and energy harvesting, and therefore requires special (more-expensive) tags.
This idea dates back to the early days of UHF RFID... it didn't work back then, and not much has changed in the technical fundamentals that would make me think it has suddenly become possible. There are some new uses cases in retail... but they revolve around new (non-checkout) business plans.
I would LOVE nothing more than to be proven wrong... so I hope they find a way to make it work!
(I happen to be an expert in this field... happy to talk more, as it's still a major interest area.)
I'm not sure if it will save stores money or not. A lot of stores don't want it to be too easy to check out and leave. Getting to the cashier and waiting in line increases the chances that you'll make another purchase. Stores focused more on high volume convenience-driven purchasesprobably think about things differently though, and maybe they'd be more interested in something like this.
Maybe the bigger possibility is that it allows stores to present and sell their goods in afar more decentralized way that gets them closer to where consumers are. If on-demand workers, or drones, could restock inventory, and shoppers just needed an app to make purchases, then shopping malls could disolve into the surrounding cityscape.
Just like how google's predecessors were not keen on search relevance so that users didn't find what they were searching for quickly - leading to them spending more time on the website and increasing ad revenue. We know where that logic led those companies to ;-)
IKEA, on the other hand, designed their stores specifically to keep customers inside as long as possible. If you don't know the shortcuts (or don't notice them), you have to wander through the whole showroom & marketplace. And just about everyone leaves with more than what they initially planned.
I think you might be right. When I picture a clothing store, the queue in front of the cash registers are lined with small, impulse purchase items (belts, underwear, socks, necklaces) that are easy to grab while waiting.
The thing I found most interesting about this batch is they are all pretty advanced. Although YC has not said otherwise it looks like "build a business from an idea in 3 months is dead".
Another way of looking at it is that maybe the tools available to entrapreneurs have advanced to the point where a lot more is possible in 3 months. Therefore a 3 month old company today looks like a 12 month company of 3 years ago.
What I was saying is a bit ambiguous. I wasn't suggesting that you can't build a business from an idea in 3 months, just that it appears that YC is not accepting teams with basically just an idea anymore. All the companies presenting looked to be pretty advanced going into YC. I don't blame YC for this as it is just a reflection of the great pool of candidates they get to choose from.
Oooh, some are pretty cool. Here's a silly question: I'm just some random dude with zero experience or history of investing. When and how might I be able to invest in any of the startups listed in this page?
You may need to be an accredited investor, in which case you either need at least a million in assets or an income of more than 200k. I believe this restriction is in the process of being removed eventually though.
A small clarification, that's a million in assets not including your primary residence. Something about that being a reasonable proxy for the sophistication to understand the risks involved and the business (or maybe just wealthy enough to hire a reasonable lawyer to review the docs?)
The short answer is you'll need lots of money (typically minimum investment per company of $25K), and/or connections + be able to add value in other ways (as an advisor, etc).
Alternatively, you may be able to find some of these companies on AngelList Syndicates, FundersClub, etc, though I think you'll still need to be an accredited investor.
I like Deako but if they would add an electric outlet to the list of products that can be remotely controlled, it would be nice (maybe even with a kill-a-watt meter feature).
I can't help but think YC would see that, so - unless they expect those companies to be acquired quickly - other than if it is an attempt to corner the incubator market (once they are in every deal, they have all the leverage over both startups and VCs) I fail to understand why they need their batches to be this large. They could have a batch half the size or smaller and pour more gasoline on fewer (better) fires.
A few of the companies seem like ones that could have bootstrapped or funded via kickstarter. They don't strike me as businesses that will make venture capitalists back their money in any considerable way.
All that being said I absolutely love the shift toward hard tech and Africa. But I can't believe there's another 60 to come...