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Surely I'm missing something here. Won't giving YC equity to these researchers (who are working not-for-profit and releasing IP freely) incentivize research tha

Surely I'm missing something here. Won't giving YC equity to these researchers (who are working not-for-profit and releasing IP freely) incentivize research that benefits YC startups directly and hence increases the value of the equity held? Can someone explain why not? Honest question.

keithwhor 11y ago
Doesn't Elon Musk encouraging other people to use Tesla's battery IP help drive the electric vehicle market to maturity faster, creating more opportunity for Tesla to succeed? The market is still the market. Not sure we should look this gift horse in the mouth. George R. Price figured out altruism can be reduced a math equation decades ago, it doesn't mean we can't embrace the good that comes out of decisions like this. :)
- vickychijwani 11y ago
  Sorry if my comment came across as needlessly pessimistic. I was super-excited when Elon Musk made the Tesla "open-source" announcement, as I was yesterday when I read this. That comment was just me trying to apply my meager knowledge of startup economics here :)
DasIch 11y ago
YC startups don't grow on a tree in the YC garden and YC is what most startups want to get into. It makes much more sense to make that research widely available, chances are good for YC that the startups that do something useful with it will join YC at a later point. Even if they don't, a growing technology industry helps everyone, YC included.
brudgers 11y ago
If I were to hazard a guess. the equity is intended to make working as a researcher similarly attractive to the equity grants available when going to work for a startup. Given the diversity of YC's portfolio it's probably much more likely to create wealth than any single startup. To me, if YC is creating a research group for the long term, then long term financial stability for the researchers is probably the way to go.
coffeemug 11y ago
> Won't giving YC equity to these researchers (who are working not-for-profit and releasing IP freely) incentivize research that benefits YC startups directly and hence increases the value of the equity held? That's equivalent to saying "won't paying in U.S. dollars to these researchers (who are working not-for-profit and releasing IP freely) incentivize research that benefits the U.S. Federal Reserve directly and hence increases the value of the U.S. dollars held?" Obviously not the same scale, but you get where I'm going with this. Indirect incentives don't quite work that way.
- vickychijwani 11y ago
  The difference in scale is 4-5 orders of magnitude here, probably more. And at such different scales, I don't see how the same rules apply. For instance, trying to increase the value of USD with your work when billions of people on the planet are doing the same is basically impossible and unpredictable even if you're a great researcher / business leader / whatever, to say the least. The same is not the case with YC equity, where you can expect, with a fairly high probability, a significant increase in your equity if your research contributes hundreds of millions of dollars worth to a YC startup. I'm not trying to be poke holes in the idea or anything like that, just genuinely wondering -- and the analogy to USD doesn't seem like the right answer.

keithwhor 11y ago

Doesn't Elon Musk encouraging other people to use Tesla's battery IP help drive the electric vehicle market to maturity faster, creating more opportunity for Tesla to succeed? The market is still the market. Not sure we should look this gift horse in the mouth. George R. Price figured out altruism can be reduced a math equation decades ago, it doesn't mean we can't embrace the good that comes out of decisions like this. :)

vickychijwani 11y ago
Sorry if my comment came across as needlessly pessimistic. I was super-excited when Elon Musk made the Tesla "open-source" announcement, as I was yesterday when I read this. That comment was just me trying to apply my meager knowledge of startup economics here :)

DasIch 11y ago

YC startups don't grow on a tree in the YC garden and YC is what most startups want to get into. It makes much more sense to make that research widely available, chances are good for YC that the startups that do something useful with it will join YC at a later point. Even if they don't, a growing technology industry helps everyone, YC included.

brudgers 11y ago

If I were to hazard a guess. the equity is intended to make working as a researcher similarly attractive to the equity grants available when going to work for a startup. Given the diversity of YC's portfolio it's probably much more likely to create wealth than any single startup. To me, if YC is creating a research group for the long term, then long term financial stability for the researchers is probably the way to go.

coffeemug 11y ago

> Won't giving YC equity to these researchers (who are working not-for-profit and releasing IP freely) incentivize research that benefits YC startups directly and hence increases the value of the equity held? That's equivalent to saying "won't paying in U.S. dollars to these researchers (who are working not-for-profit and releasing IP freely) incentivize research that benefits the U.S. Federal Reserve directly and hence increases the value of the U.S. dollars held?" Obviously not the same scale, but you get where I'm going with this. Indirect incentives don't quite work that way.

vickychijwani 11y ago
The difference in scale is 4-5 orders of magnitude here, probably more. And at such different scales, I don't see how the same rules apply. For instance, trying to increase the value of USD with your work when billions of people on the planet are doing the same is basically impossible and unpredictable even if you're a great researcher / business leader / whatever, to say the least. The same is not the case with YC equity, where you can expect, with a fairly high probability, a significant increase in your equity if your research contributes hundreds of millions of dollars worth to a YC startup. I'm not trying to be poke holes in the idea or anything like that, just genuinely wondering -- and the analogy to USD doesn't seem like the right answer.