4 ms·

It's amazing how much YC is doing these days. It seems like there's a major announcement nearly once a week. Sam might turn out to be the most effective VC in

It's amazing how much YC is doing these days. It seems like there's a major announcement nearly once a week. Sam might turn out to be the most effective VC in the world.

ChicagoBoy11 11y ago
I don't think this is the right measuring stick. The only thing growing the incubator does is add to their expenditures, in a small way dilute the 'YC' bump for admitted companies (just think what Harvard would be like if they accepted 20k instead of 1k), spreads the partners a little bit thinner, etc. The counterargument would be that, if they could expand like this and still keep roughly the same batting avg., all of this would just mean even more returns for YC. The problem is we haven't observed THAT part of the equation yet. When it comes to these startups, swinging and missing is not nearly as costly as not being part of the ones who do succeed, so at first glance there is an argument to be made that growth in it of itself is a good thing 'cause it allows you to make more bets. But, clearly there is a sweetspot, or else the right VC strategy would be to hardly spend any time with companies at all and just make small bets in anything that's even remotely viable, thereby getting a "market rate" return for startups. For all I know, that number is negative, so you unfortunately do have to find value by doing better than market basket -- either by selecting companies well or contributing positively to their chance of success. And that, sadly, gets harder to do the bigger you get. Jury is still out on his effectiveness as VC, but looking from the outside, one thing you can say for sure is that they are working really hard and pushing initiatives which you can't help but be very excited about.
- morgante 11y ago
  I agree that it's not guaranteed to be a slam duck investment strategy. Maybe it turns out that YC cannot scale and trying to expand it ruins it. But at least he's trying to innovate. Remember that people were quite skeptical of YC when it first started, and their strategy turned out to be genius. Sam could have easily sat on that strategy, but is instead trying a whole new thing. As you point out, there's no guarantee that this strategy works. (That's why I said "might.") Trying something awesome puts you in the running, but it doesn't guarantee a win. For that we need to see returns (including returns to the broader ecosystem and society).
  - MaysonL 11y ago
    If YC has a similar success rate with strategy innovations as it does with companies, it will be succeeding enormously.
    - JonFish85 11y ago
      How do you figure? In other words, how do you define "success rate"?
sama 11y ago
Thanks but doing a lot of things is at best neutral; at worst it distracts you and you miss the next Airbnb (though on the inside at least, it feels like we say no to a LOT of thing we could do).
- samstave 11y ago
  Do you regret saying no to anything in particular?
- simonebrunozzi 11y ago
  I disagree, Sam. By doing many things, you are naturally exploring new trends and topics that will bring the next AirBnB. It's a necessary cost.
- thaumasiotes 11y ago
  > doing a lot of things is at best neutral (emphasis added) If you really believe this, you should stop doing things immediately. Why go to effort where the best case is "it's just as if we hadn't bothered"?

It's amazing how much YC is doing these days. It seems like there's a major announcement nearly once a week. Sam might turn out to be the most effective VC in the world.

ChicagoBoy11 11y ago

I don't think this is the right measuring stick. The only thing growing the incubator does is add to their expenditures, in a small way dilute the 'YC' bump for admitted companies (just think what Harvard would be like if they accepted 20k instead of 1k), spreads the partners a little bit thinner, etc. The counterargument would be that, if they could expand like this and still keep roughly the same batting avg., all of this would just mean even more returns for YC. The problem is we haven't observed THAT part of the equation yet. When it comes to these startups, swinging and missing is not nearly as costly as not being part of the ones who do succeed, so at first glance there is an argument to be made that growth in it of itself is a good thing 'cause it allows you to make more bets. But, clearly there is a sweetspot, or else the right VC strategy would be to hardly spend any time with companies at all and just make small bets in anything that's even remotely viable, thereby getting a "market rate" return for startups. For all I know, that number is negative, so you unfortunately do have to find value by doing better than market basket -- either by selecting companies well or contributing positively to their chance of success. And that, sadly, gets harder to do the bigger you get. Jury is still out on his effectiveness as VC, but looking from the outside, one thing you can say for sure is that they are working really hard and pushing initiatives which you can't help but be very excited about.

morgante 11y ago
I agree that it's not guaranteed to be a slam duck investment strategy. Maybe it turns out that YC cannot scale and trying to expand it ruins it. But at least he's trying to innovate. Remember that people were quite skeptical of YC when it first started, and their strategy turned out to be genius. Sam could have easily sat on that strategy, but is instead trying a whole new thing. As you point out, there's no guarantee that this strategy works. (That's why I said "might.") Trying something awesome puts you in the running, but it doesn't guarantee a win. For that we need to see returns (including returns to the broader ecosystem and society).
- MaysonL 11y ago
  If YC has a similar success rate with strategy innovations as it does with companies, it will be succeeding enormously.
  - JonFish85 11y ago
    How do you figure? In other words, how do you define "success rate"?

sama 11y ago

Thanks but doing a lot of things is at best neutral; at worst it distracts you and you miss the next Airbnb (though on the inside at least, it feels like we say no to a LOT of thing we could do).

samstave 11y ago
Do you regret saying no to anything in particular?
simonebrunozzi 11y ago
I disagree, Sam. By doing many things, you are naturally exploring new trends and topics that will bring the next AirBnB. It's a necessary cost.
thaumasiotes 11y ago
> doing a lot of things is at best neutral (emphasis added) If you really believe this, you should stop doing things immediately. Why go to effort where the best case is "it's just as if we hadn't bothered"?