As of last batch, which had 45 startups in it, we were able to give everyone the attention they needed, as measured by the results (= most observers thought w2011 was the best batch so far).
I am obviously a fan of YC. But, I would caution putting too much weight on what investors tell you or even their investment activity. At this point you are such a big deal, there is incentive to tell you whatever you want to hear.
Interestingly, much like investment portfolios (and most other things), investor opinion quality falls under some distribution. The opinions of a very small number of very no-nonsense, intelligent ones is probably the best indicator of batch quality. The rest matter very little.
On a related note, I think the distribution curve for YC batches probably shifts a minute amount to the right each batch but mostly fattens. Then, the range of investor opinions coupled with a growing positive bias creates what seems like a uniform larger shift to the right. Just speculation though.
Some of this may have to do with the quality of startups going in to the batch. As the reputation of YC rises, more and more good-quality startups want to join (rather than go on their own?). This of course doesn't take away the fact that YC has done a great job mentoring and helping early stage startups.
This makes me think (not totally seriously, though) that a YC prep-school for startups might get a lot of attention. There seems to be some room for startups at an even earlier stage than YC would accept now.
Depends what you're judging. It's true you can't judge returns till much later, because those usually depend on a single outlier, and whether they turn down the $50m offer.
The sort of test I'm talking about is a preliminary one: how promising the companies look on Demo Day. Investors who've been to a lot of past Demo Days (and there have now been 12) have a pretty good sense of what percentage of the companies they want to talk to further.
60 should be ok, because we have 3 partners advising startups about product stuff now (me, Harj, and Paul Buchheit) and I know 1 partner can easily handle 20 startups. We probably could not get up to 80 without more partners though.
I still wonder, at what point, would other variables come into play, and what those variables might be? Let's say you get a couple more partners, then would you take 100 companies?
The point is similar to this one: we often have long wait times for specialist doctor's appointments, and there are many young people wanting to become doctors, then why can't we just train more specialists?
The American Medical Association and state governments tightly restrict the market supply of physicians. This keeps physicians salaries high in the name of safety and quality. However, the market is prevented from trying different models.
That sounds reasonable, but I'm curious if you have data on satisfaction as reported by the founders? As your reputation grows, you may be getting better results partially through having higher quality startups, which would cloud the issue.
When the food served every Tuesday is the biggest complaint, I think you're running a pretty tight ship. There was no shortage of attention for those who needed it.
The last couple batches I've started asking each batch at the last dinner what we need to improve. As of last batch there were no major gripes about not getting enough attention from us.
The biggest were about Preview Day, where we introduce the startups early to a few top investors. We did it too late in the cycle, didn't give startups long enough to present, and some of the investors were lame. We're not sure if we'll even keep doing it.
There were also complaints about the food. It's getting better but it's still not that great.
It's getting crowded in the room after Demo Day. That will be partly alleviated by a 2x bigger room this summer, and we'll also probably write some software to let investors register their interest in a startup instead of assuming they'll connect afterward.
Some of the speakers were boring. There are always a few.
I'm sure you guys have enough time to dedicate to the companies, but it does lose a little of the "exclusivity" for the companies themselves. It used to be I could name every company that came out of a YCombinator class, now it's likely a bunch will go through that I've never heard of.
Yes, the applicants do get slightly better each batch. But not as fast as the batches grow. So if we were going to get hosed by growth, odds are a single batch's increase in quality would not be enough to conceal it.
Obvious retort: YC is not just about the attention of PG and Friends. The summation of prestige, money in the present and, likely, in the future, and YC network alone still put a company in a different world.
Question: Will YC pick people who need heaps of attention just to succeed?
(My) Answer: Probably not. YC people are called "relentlessly resourceful" for a reason. They will succeed somehow with or without hours of coaching and mentoring by the YC folks. This probably translates into less office time than you would expect from 60+ companies.
But I've never been through it, so I don't really know the answer. There are some brilliant people I've met who couldn't do the simplest of things. What little attention a group needs in one area might be made up for in another.
But they don't have to compete - each startup can all have all the face time they want.
"There's no limit to the number of office hours they can book; startups talk to us as often as they want... The office hour software is designed not just to book slots, but to show us if startups are getting enough time with us. We set aside blocks of time for office hours, and if not all the slots get taken, we know demand is satisfied. (If all the slots get taken, we set aside more time.)" http://ycombinator.com/atyc.html
Actually we've improved the system since then. Now startups that want to talk can also request office hours, and people who are in the queue get slots first whenever we create a new block. I should add something about that.
I think its just a mark of the times. Top talent is focusing on creating new ventures. I think if the quality of businesses is on par with the last batches – and I am sure it is, if not higher – it's not a problem. I assume the talent level is equal to previous years so if the teams submitted their ideas two years ago they would have been accepted. I would focus less on the number and more on the increasing success of Y Combinator.
None of Y Combinators competitors have anything like that to offer new entrepreneurs.
Y Combinator competitors would be foolish to try to compete on the money axis anyway - the cash has always been minimally important. They would do much better by identifying and focusing on YC's actual weaknesses.
The biggest is probably the meta-weakness of not focusing on any specific market. How much that matters depends on how unusual the market is. Education, for example, is a very unusual market, and Imagine K12 has a unique advantage in the network of schools they have access to.
In my opinion, some of your biggest strengths are also what leaves room for competitors.
For example, you focus on Silicon Valley where you are extremely well connected. Competitors could do very well by simply focusing on less glamorous, but emerging startup hubs.
You require people to relocate to Silicon Valley for a few months. This shows commitment from both parties and is a smart choice for you, but it also makes the program inflexible and unsuitable for a great deal of talented, perhaps more experienced people who cannot easily relocate. Your typical candidate is a student who is fresh out of college. Your competitors may capture the value in other demographics which have less flexibility when it comes to relocation, ability to quit their job, and so on.
Imagine an Untyped Lambda which offers similar terms to yours, but is also very flexible. You don't have to relocate (you can work remotely). Oh, and you can also apply if you are going to do this part-time, if at the moment you are employed and want to see where the startup goes before quitting your job.
You may think that this idea is grounds for a complete disaster, that such candidates might not committed, and so on - but perhaps, just maybe, such a degree of flexibility would lead to all sorts of new talent giving entrepreneurship a honest shot.
I'm not advocating that you do all that, but rather that a smart competitor may use it to their advantage.
Oh, and you can also apply if you are going to do this part-time, if at the moment you are employed and want to see where the startup goes before quitting your job.
To be honest, that doesn't sound like a very promising investment opportunity.
YCombinator isn't a charity - they need things to succeed.
That may be an edge case, but it wouldn't be the first time that someone built a great company out of a side project or an idea developed after work either. My point is that such an investor wouldn't exclude people a priori because they can't relocate to Silicon Valley. Instead it would evaluate each case and select only the most promising investments, including the outliers who happens to have little flexibility at the time of the investment.
Why would they even consider it? When you have many already willing founders to move down and give 110 percent. Also, face to face contact is a bonus especially at the start.
I would be interested in knowing the reasons why that startup was so far behind.
Is it the constant feedback about the startup/idea from mentors and other YC members that make the startups better Or the ability to solve technical issues quickly because of help from others?
Almost everything YC supplies, they missed, from specific things like face to face conversations with us and the insights of the speakers to more general ones like the contagious spirit of rushing toward Demo Day and the startup-friendly atmosphere in the Valley.
* Barriers to entry not commonly seen in the web/mobile space (complex bureaucracy + entrenched players with opposing interests able to grease that bureaucracy, etc.).
* Lots of disparate stakeholders that all have to be coordinated and managed (healthcare: govt, taxpayers, patients, doctors/staff, insurance companies. Education: Parents & taxpayers, teachers unions, students, local+state+federal govt.)
* The market is not traditionally tech-savy and/or early-adopting. Users have to be actively convinced. Getting traction is even more of an uphill battle.
* Anywhere the risks to loss of investment are not transparent or clearly understood.
Maybe all markets are like this to an extent, but some moreso than others?
I think yc generally does best with consumer products where the founder could put himself int he place of the user. Industry products (good example is health care) has such a high barrier to understanding that someone who hasn't been in the field would have a very difficult time designing a useful tool.
Based on his single example I suspect any market which requires intimate familiarity with and the ability to minimize what bureaucratic ritual dances must be taken before, after and in-between any action.
At the end of the decision making, do you feel many other great startups are being left out, due to the amount of startups you can only choose? Or you feel the others just don't have something going on.
One way we know is by seeing how they do afterward. A company that would have been great if we funded them is probably going to do at least ok if we don't.
I assumed that was your line of reasoning but probably is a big word here. I don't think it's something you can really know in that it's finding proof in a negative, such as when a doctor says to a patient, "The tests didn't find cancer -- you're cancer free!"
If Larry and Sergey had done their post-graduate work in Moldova, the world wouldn't have Google. (Remember they shopped Page Rank to places like Yahoo, who didn't want it. As an idea, no one believed in it.) The connections at Stanford gave them access to capital which they otherwise would not have had, which allowed them to prove the concept. Without that funding, Page Rank would be just another dissertation.
If recognition from YC is the only piece that is missing from a startup's puzzle, I would be disappointed if they cannot make it on their own.
Many of us are at different levels of competence at being a successful entrepreneur. Many drop off from the startup world altogether, some drop off from applying to YC and endup with a small business, a tiny few will show up as groupons of the world.
Agreed, this is why I am more encouraged by others such as RockHealth where they have a very specific vertical they focus on.
The market, needs, barriers etc are wildly different in the consumer internet and mobile space than in health care -- and something like RockHealth is greatly needed so that vertical can mature.
I must admit. I cant wait to hear the types of startups that made the cut this time. It would be incredible to know (or scary as hell) to find out if any of them are in essence, similar to what we want to do (or are in the process of doing).
YC has made it possible for some really cool technologies come to the marketplace. And YC has inspired many like me to get off our collective asses to chase our dreams. Even if what I am currently building does not amount to a whole lot, the essays of PG has sure inspired me and will in turn inspire a lot many more who I will be sure to recommend it to.
I can promise you they barely remember the interview. After so many days with hours of 10 minute interviews, the chances they will even remember any useful insight you had is close to nil.
Moreover, YC would never take an idea you told them in an interview and tell it to another start-up.
The problem arises when you put these two statements together. Sometimes we hear a key insight or have an interesting thought and seem to forget it instantly. In reality, it's often filed away somewhere in our heads, only to be refreshed later when something similar jogs our memory.
The true danger for a non-accepted startup is for their ideas to be absorbed into the subconscious memory of the YC advisers, only to bubble up later as a seemingly-original idea or interesting angle for another startup to pursue. This kind of accidental "idea theft" is practically guaranteed.
Honestly, your idea probably isn't that great. Even if it truly is, these things tend to have pretty short half lives. By the time it accidentally made its way to another startup through a YC partner you'll probably have had a lot of opportunity to already act on it. Or someone else will probably already have come up with it.
I'm not talking about "my idea" (I didn't even apply) or the value of ideas in general. I merely dispute the notion that a YC partner would hear an idea, forget it, and never make use of it again. I've seen it said several times over the last few years by defenders of YC and I don't buy it.
The reality is that some people will have genuinely good, novel ideas but not be accepted (perhaps the applicant didn't seem motivated enough). Not using that idea takes conscious effort; "forgetting" the idea is exactly the recipe for inadvertently passing it on to someone else.
I'm not contending that it does not make sense to share an idea with YC as part of the application process. Weighing the financial impact of giving away the idea (most would contend this is relatively small) against the potential benefit of getting into YC, submitting an application to YC will often be the rational decision.
I couldn't agree with you more, Brandon. It happened to me!
In college I TA-ed a technology commercialization class (I had never taken it myself). I got to look at all their papers, assignments etc. The next term I took a similar class (entrepreneurship), and was charged with plagiarism by the college!! I was shocked, I never plagiarized! They said there was a lot of work turned in the other class that shared similar ideas. They told me what part of my work was in question. I dug around my old files, and found that I had subconsciously pieced together my entire proposal based on three or four submissions! I didn’t even remember them! However each unique aspect of my proposal was ripped off. The profs liked me, I got off the hook, had to re-do the work. But since then I have known that what we know and what’s in our arsenal are not the same thing always.
You know how they say you forget a huge percentage of what you learn every day, I say forget? Maybe. Unable to "come up with it ourselves in the future", unlikely.
Just for argument's sake, let's assume your right - that subconscious idea leakage is unavoidable. Now ask the question, "how did the entrepreneur come up with the idea?". The thoughts any any individual has are a function of their environment (that's the abstracted version of your theory :). There are lots of people having lots of ideas all the time, many with in similar environments as the entrepreneur. The net result is that if the entrepreneur did not allow their idea to 'leak' into YC's consciousness, some other person in YC's environment would do so within a short period of time. So there is no loss to the entrepreneur of exposing the idea to YC, aside from a small chance of a small time shifting of the 'leak' (only if they really are the first person to expose that idea to YC, which is statistically unlikely).
Simple version: even if subconscious-idea-leakage exists, the likely cost is vanishingly small, as your idea is unlikely to be new to YC. If it would have been new, then withholding it only buys you time until the next bright person exposes the same idea to YC.
If you believed in conscious/active idea leakage the numbers would look different. I feel confident that no such leakage exists - it over estimates the caching capabilities of those involved ;)
Newton was not the first person to detect gravity, but he took notice. Guess what we did? We wrote a paper about "discovering gravity" and instead of publishing it we passed it on to an assembly line that produces paper-publishing scientists.
I forget who said this (and I may be mangling the quote too), but you know success is 10% inspiration and 90% perspiration.
Your ideas aren't really worth anything (I'm generalizing here - if you dream up the cure for cancer, hooray!). It's your ability to execute on and realize those ideas that are worth something.
Don't worry about good ideas and telling others. Desire is above implementation. If someone else doesn't desire the idea as much as you do it will never be implemented and even if implemented, not the same way you would.
It makes sense though - more people probably stumble across HN while searching for programming answers than through hearing about Y Combinator.
Even those that realise that the top left top left 'Y' image is actually a link to ycombinator.com would be hard pressed to find a link from there to PG's essays.
> I'm actually pretty surprised that there are HN users that don't know about his essays...
Actually a long time ago, I remember reading one of PG's essays on High School and was struck by the sheer number of active comments (vibing with the thoughts) on it from kids who were in high school and most likely had no idea what HN was.
The more popular and powerful YC becomes, the more it becomes evident that there's an emerging niche in the market for facilitator-type enterprises doing what YC does. Something akin to mentorprising; PG et al are mentorprisers of
I guess this is to be expected as geek culture becomes more mainstream.
Most everyone trying to get accepted by YC is familiar with PG, his writings, and the YC partners experience regarding startups. It's a primary reason many apply.
Respect that PG and the other founders know how to scale the program and handle the workload. They have all the experience of running YC, while each of us has none.
They would be the first to limit their startup count if that needed to happen.
The interesting bit is that $9 million is a normal amount for one company's series B round. In this case, that money is going to (in theory) benefit 60 companies. That is a big change that could have a significant impact.
is this going to suffer from the same problems as increased class sizes? less personal mentoring, for example?
i guess you can argue that it increases the pool of connections, but that's a lower quality (unproved) pool than contacts with established players, no?
is this going to suffer from the same problems as increased class sizes? less personal mentoring, for example?
Probably NOT. The bar has been higher in recent batches and as a result, relatively more established companies make it to the batch, as compared to, say, in 2005 - 2007. This benefits both the companies and YC -- the companies benefit by the excellent environment and networking opportunities, and YC ends up making somewhat (again, relatively speaking) safer investments.
YC is certainly getting and accepting applications from more established companies now, but they're also still funding very, very early stage companies (i.e., two founders and an idea).
My cofounder and I were in the Summer 2010 batch and fit that description, and I know of founders in this summer's batch who do as well.
from 2008, so my starting assumption is that some other people here on HN like to discuss education policy.)
What evidence is there that there are problems from increased class sizes? Several of the countries that best the United States in educational achievement
have long had larger class sizes than the United States. For example, my wife grew up in Taiwan when the typical class size was 60 pupils in each classroom, and an unusually small class might have 50 pupils. But she had better primary and secondary education in mathematics and science and world history than I had (I supplemented my schooling with much independent reading of library books, which is the main reason I can keep up with her knowledge base) and she was going to school in a second language (her native language and home language was Taiwanese, but all her school instruction was in Mandarin) and attained strong proficiency in English by the end of high school besides. Small class sizes aren't so good if they match up many learners with less proficient teachers and curricula that are not well thought out. Better to have a larger class size, if that means being with a better teacher, and that's what the research shows about education policy. On the specific point of mentoring for start-up businesses, if the YC people know their craft, and it appears that they do, shared face time with them is better than much more undivided face time with at least some other investors. Choose your trade-offs if you are launching a start-up.
I think YC would cut it off if they knew they had reached their limit. After all, they're investing in these companies and want them all to succeed. Overbooking would cost them a lot of money in the short- and long-term.
that depends on the maths, doesn't it? for example, although they no doubt want them all to succeed, they probably make a lot of money on very few, and those few pay for the rest. since no-one can predict exactly which those few are, it's not clear the investors lose by increasing the pool (as long as they don't lower their standards).
that's not the same arguments as a participant might use. it could be that you're going to start several companies in your lifetime; the probability of any one succeeding is not that great, but hopefully one will. from that point of view, what you want from YC is high quality contacts that carry across into future companies, even if those are not YC supported.
there's nothing to say, on the face of it, that those to mechanisms must pull in the same direction; the timescales are different, for example.
I don't know if this data is available, but I'd be interested to see what percentage of this class was incorporated before applying, and what percentage got incorporated as part of the process.
Also interesting would be what percentage of this class include repeat YC founders.
When you want to start another startup. You could do that either because the old startup didn't succeed, or because you got acquired and are now finished working for the acquirer, or because although the old startup is doing fine, you decided to leave to do something new. We've had all 3 cases.
It’s unbelievable how candid and forthcoming you are as a business owner (YC being your business).
Is it wrong to assume that the value of YC diminishes with each additional serving? And as a follow-up, do you have any third (or even fourth) time founders?
I don't know. Obviously some of general stuff we talk about, you'd already know, if you'd done it before. But on the other hand maybe there are other advantages you'd be better equipped to extract the second time through. E.g. if I went back to college now I'd be able to learn a lot more than I did at the time.
I think I inderstand. I can now imagine it being sort of like watching a really fast paced and complex movie for the second time. A second viewing may enable you to peel off deeper layers of complexity (that you might have missed the first time around). Also, it can never hurt getting the YC stamp on your venture - again! :-) Thanks for the answer.
Anyone know what the chances of them taking someone who applied late might be? We just heard about Y Combinator and applied a couple days ago. Their information is vague on this only saying that chances are very slim. Probably more slim now that they are taking 60 off the top.
Yuri Milner (as an individual and not via DST-Global), along with SV Angel's Start Fund, invested in the individual companies that participated in YC -- not in YC directly.
