60 ms·

YC Annual Letter 2017

417 points by sama 10y ago

ridruejo 10y ago
"Our mission is to enable the most innovation of any company in the world in order to make the future great for everyone." I know many people will read that and roll their eyes back and believe it is just a marketing gimmick for the gullible and like most investors YC just cares about the money. The thing is that they do deeply care about founders and making things better in the world, as naive as that may sound to outsiders.
- neom 10y ago
  Interesting that you chose to post this proactively.
  - rcar 10y ago
    Even if you know the truth behind a statement like that, it's hard to read something that earnest and not have an initial eye roll in response. As someone who doesn't know the YC team's motivations, it's nice to know that at least someone thinks that some of the earnestness is real.
    - neom 10y ago
      Maybe I'm a fool then because I would read that and take it in earnest as I read and take much of the HN community in earnest. I have a great deal of respect for YC and the HN community - I guess the point of my original post was it's a little disappointing that isn't the case.
      - adamsea 10y ago
        Maybe you just haven't watched the show "Silicon Valley" ;). It's all about "making the world a better place." ;)
        deleted 10y ago
        [deleted]
  - ridruejo 10y ago
    Whenever I talk to other founders about YC, encouraging them to apply they are often asking about "what the catch is", "yeah, yeah, but how are they really?" because they don't believe it is really like that. It has become kind of a joke the phrase "making the world a better place" but YC is one of the few places where they mean it
- kukac 10y ago
  Any evidence of this ?
  - nicholasjbs 10y ago
    YC continues to support my company nearly seven years after our batch, even though we're still tiny and have no plans to exit (and thus will likely never give them any financial return).
  - ridruejo 10y ago
    Sorry for not having mentioned this explicit (it is in my profile) but this is from first-hand experience from being a founder and having going through YC with Bitnami
    - toastednz 10y ago
      love bitnami - you guys have helped me so much on AWS!
  - nathcd 10y ago
    I'm pretty sceptical that the phrase isn't a bit of marketing to some extent, but one thing (among many) that earns YC a ton of respect in my mind is YC Research. The research projects truly seem geared toward working for a better world as their first goal.
- ForrestN 10y ago
  It's funny you say this—the first thing I did, even before reading the article, was search for "Thiel." It's going to be hard for me to take this sort of thing seriously, this telegraphing of benevolence which is so central to YC's branding, until they address the fact that one of their "partners" is such an obviously destructive force within society. They don't even have to do anything but say goodbye, and they won't.
  - sverige 10y ago
    Actually, the fact that they have not bowed to the pressure to "disavow" Peter Thiel merely for his political views in one of the things that makes me think highly of YC.
    - nilved 10y ago
      You must really love Hugo Boss and IBM as well. It's so great that they were able to ignore politics when they were making uniforms and mainframes for nazis.
      - deleted 10y ago
        [deleted]
    - ForrestN 10y ago
      Yes, that sounds much more useful to the world than, you know, not partnering with people that are happy to harm it.
  - purple-again 10y ago
    While I disagree with many of Trumps beliefs and by proxy probably many of Thiels as well the fact that they refused to further the division of our country by excommunicating him for his beliefs is a huge pro in my book. The founder of Rails saying he would fire any of his employees that supported Trump was sickening and that kind of attitude will never allow us to move from bloodshed and war to one people.
    - 10y ago
icpmacdo 10y ago
"Hacker News has 3.4 million users per month and 350,000 users per day, with 4 million pageviews a day. There are just under 1 million registered accounts, with several hundred added each day. Users post around 1,000 articles and 6,000 comments to the site per day." First time I have seen those numbers, very impressive. I thought there were a lot less users.
- kevinmannix 10y ago
  I am sure there are many more lurkers than active participants
  - deleted 10y ago
    [deleted]
  - TeMPOraL 10y ago
    This is true of pretty much any Internet community, so not that surprising.
    - justinhensley 10y ago
      I think it's especially true here though due to HN's crowd sourced quality control. The rules are largely adhered to by the user base as well, and it's not just an agree/disagree button.
  - minimaxir 10y ago
    https://en.wikipedia.org/wiki/1%25_rule_(Internet_culture) https://en.wikipedia.org/wiki/1%25_rule_(Internet_culture)
  - fabrice_d 10y ago
    For sure, with 6,000 comments and 350,000 daily users.
- nsgoetz 10y ago
  Those numbers surprised me to, but I don't think they should have. I rarely meet anyone in software that doesn't know at least know about HN, if not actively read it. In fact, my sister's boyfriend is in tech even though she isn't. When I met him for the first time, my sister felt a little left out because we immediately got into a deep discussion about an article we read on here. We live across the country from each other, but reading hacker news is almost expected for both of us.
mbrock 10y ago
I think it's a mistake to conceive of Reddit as a place to "waste time." It's also the new platform for lots of important online communities to discuss and disseminate information.
- dongslol 10y ago
  It was tongue in cheek.
- matt4077 10y ago
  Or, alternatively, a place for mediocre minds to meet and become truly terrible, together.
- shostack 10y ago
  While I think it was a joke, I'll just say that Reddit has become an important professional resource for me. I have found a couple high signal-to-noise subs with senior professionals from my industry. If I have a gnarly problem, there's a good chance someone there can help me out. This is huge because there isn't really a Stack Overflow type option for these sorts of problems generally.
gregoire 10y ago
Is there a reason why this is published on Sam's blog and not on YC's blog? Oh and a remark on the letter's typography: the double spaces after periods should be single spaces.
- adambmedia 10y ago
  Lol. I once worked with a guy who, when asked for his input on critical emails, would meticulously comb through and delete second spaces after periods. "What did you think? Did you make any changes?" "I removed all of the double spaces after periods." :)
- sama 10y ago
  I had emailed this out to the YC community over the weekend. I got word from a journalist it was about to leak, and I couldn't get in touch with the person that runs the YC blog (I don't yet know how to post on the new one, but I'm sure going to figure it out now). I didn't want to wait, so I just posted it where I could. Also I happen to think documents are easier to read with double spaces after sentences. Surely there is something more important to complain about than that.
  - pen2l 10y ago
    > Surely there is something more important to complain about than that. https://plus.google.com/+VicGundotra/posts/gcSStkKxXTw https://plus.google.com/+VicGundotra/posts/gcSStkKxXTw Sam, it's meant with the love of the art. I was going to make the same complaint. For those of us who work in a particular field, certain things just stick out and it feels very natural to point that out and make the world perfect in a way we are confident it can be perfect if some things are changed (I review grants, I convert double-spaces to single-spaces so much that I can spot one from a mile away and change it right away... sadly, I don't have access to change your writings :)).
    - gregoire 10y ago
      Exactly, typography is a subject that is very dear to my heart. And while I agree that it may be a personal preference, there is a side effect to using double spaces: layout engines consider single spaces the default for their line breaking algorithm, and sometimes, when using double spacing, new sentences start at a new line with a space before the first letter which, in this very case, looks weird and therefore hinders readability.
jtmarmon 10y ago
"The percentage of women who apply to YC is roughly the same as the percentage of women who get funded. The same is true for Black and Latino founders." I'm guessing what he means to say here is that if x% of the applicant pool is woman/black/latino, then x% of the accepted pool is woman/black/latino, right? The way it's phrased it sounds like every woman/black/latino who applies is accepted
- mildbow 10y ago
  Not to me. percentage of women who apply ~= percentage of women who get funded.
  - jtmarmon 10y ago
    you're right - after rereading I realize that it's totally equivalent
  - deleted 10y ago
    [deleted]
- purple-again 10y ago
  I'm curious if that's by design or coicidence. Generally when taking s small sample size (funded) you expect the majority to be over represented and any minorities to be under represented until the sample grows to a large enough size to eliminate the variance.
AndrewKemendo 10y ago
Companies like Amazon, Facebook, Google, Apple, and Microsoft have powerful advantages that are still not fully understood by most founders and investors....This trend is unlikely to reverse without antitrust action, and I suggest people carefully consider its implications for startups. I think the "startup community" needs to have a serious conversation about this [2]. If we agree that machine learning is going to be a major underlying technology moving forward and that as a result, data is the new Oil [1], then the top 5 technology companies serve as the new Oil Barons. It goes further than that actually in my mind, as these firms are disrupting themselves and innovating as fast if not faster in many areas than small startups can. They are in every industry and if they can't move as fast, then they buy the talent or the whole team. Granted, a small team will always move faster, but I think that these mega corps know enough now to know that they can pivot on trends if needed. I do worry about the likelihood of a startup that could beat google, facebook, microsoft etc... with humble roots. Maybe if a "startup" came in with 100M+ in funding, but more than likely at this point those companies would be funding that startup, if only for the intelligence value. So while "we've seen this before - someone always comes out of nowhere" which gave rise to the current crop of major companies, it would have to be pretty left field at this point for a company to compete with the major players without investment from an arm of theirs. Considering Snapchat is the biggest IPO in the coming year, I don't have a lot of hope that there will be something coming through. [1]http://fortune.com/2016/07/11/data-oil-brainstorm-tech/ http://fortune.com/2016/07/11/data-oil-brainstorm-tech/ [2] https://medium.com/@andrewkemendo/the-ai-revolution-will-be-different-from-the-microprocessor-revolution-cb417d324203 https://medium.com/@andrewkemendo/the-ai-revolution-will-be-...
- pyb 10y ago
  Reading between the lines, wasn't Sam complaining about a trend whereby many promising startups get acquired way too early ?
  - AndrewKemendo 10y ago
    I can't speak for sam but in my mind that is a big piece of it. If you don't sell, then the big companies don't get bigger. Unfortunately in that case if you do get big enough despite that, they will just target you and take a chunk of your market (Instagram Stories vs Snapchat) so that you can't dominate. Look, it's brilliant and exactly what every firm should do. The question is really, if it's a net positive to have 5 companies run everything* in consumer technology. I don't know but history seems to not like that.
derrickc 10y ago
I'd love to know the 50 companies with >$100mm valuations. Anyone know of a list or can start one? I saw this was 32 companies last year and really curious which were added.
- bluekite2000 10y ago
  where is the list of 32 companies?
blacksmythe 10y ago
>> funded over ... 1,470 companies >> more than 50 of our companies are worth more than $100 million each. 3.4% is a remarkable ratio.
- _sentient 10y ago
  Especially given that those numbers are back-loaded, with somewhere around a third of all YC companies having been funded within the last two years.
- bluekite2000 10y ago
  Is there a list of those 50 companies?
danvoell 10y ago
Hi sama, great letter. The only thing I would suggest for the next round is to identify some misses. What are some RFPs that you tried to solve and didn't and what are your insights on this? The two annual letters I like the most are Bill Gates and Warren Buffet. From Bill Gates, I don't mind the endless optimism since it is a foundation. From Warren Buffet, I expect the ole hoe hum, we'd be trillionaires if we had seen this trend or we were totally wrong about this ...
- sama 10y ago
  Thanks! Will add this in next time. Plenty of misses to write about!
  - moflome 10y ago
    I you're still reading, I was glad to see you mention the international funding successes and would like to learn more about the internationalization of the YC program. Thanks!
yawgmoth 10y ago
On the HN front - I would like to see a discussion and then the implementation of measures to encourage meaningful discussion, discourage low-effort comments, but also to discourage "negative lurking". Like other users noticed, there are a lot of lurkers -- some of which downvote and move along. Because frequently I do not understand why a post has been downvoted (my own or otherwise), I am discouraged from contributing. A byproduct of both negative lurking and the fact that HN has concluded itself to be an intelligent community is that some readers, including myself, feel judged by the score next to our comments. There is someone out there reasonably asking "why do you care?" but it is also important to acknowledge that this phenomenon exists. Part of the longevity of a user's participation is the willingness of the community to accept it.
- asperous 10y ago
  You're not given the ability to downvote without reaching a certain karma threshold, so there are already some thoughts in place there.
  - yawgmoth 10y ago
    It actually seems worse to me that people who have been around to achieve that threshold (it's 500, right?) don't have exhibit the etiquette I'm asking for. They should know better, right?
    - Schwolop 10y ago
      I'm going to respectfully disagree. Part of why I like HN is that meta-discussion of the "why did you downvote me?" and "downvoting because ..." are actively discouraged. Better to silently downvote and move on, which I do frequently for all many of reasons. This has next to no impact unless multiple readers do the same thing, at which point greying out comments serves the intended purpose of conveying that the community as a whole doesn't think the comment is valuable.
      - nickpsecurity 10y ago
deleted 10y ago
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notatoad 10y ago
>I expect that people will talk about software as one of our secret weapons. can you give a broad overview of what software YC creates? What does it do? is it internal tracking and stats, or exclusive libraries that YC-funded companies get to use to build their products?
- burkaman 10y ago
  Bookface is one thing I know of: https://bookface.ycombinator.com/ https://bookface.ycombinator.com/ I think they developed it in-house.
  - garry 10y ago
    I wrote it. It was needed because YC had funded larger batches and the hardest part of a community is knowing who is in it and who you can trust and ask for help.
- snowmaker 10y ago
  All of the above. YC's software lets us evaluate thousands of applications per year and use the data we generate to continually get better at that. We also run bookface, a private site just for YC founders. Sometimes overlooked is the importance of the software that we make accessible to everyone: Hacker News, of course, and our soon-to-launch MOOC Startup School.
Keverw 10y ago
> In future years, we also hope to explore how something like ‘financial aid’ might work for people that need a small amount of capital to help get their startup going. Sounds interesting. I always kinda hated how people fresh out of high school with zero credit can have so much money handed to them for going to school. While if they wanted to get a business loan or buy a house they would be much more scrutinized. I wonder with that money instead and right mentorship if they could come out ahead of their peers who used that money for college instead. I know some people who just go to college because they feel like they have to, and get degrees they don't even use. Imagine one spending 4 years going into debt, the other coming out a head with a real world profitable startup. One thing I always hate about school work is I feel like I'm just doing stuff for the sake of being graded or being busy. I rather spend my time creating stuff that's more real instead, learn as I go. There's a bunch of free and even paid training on-demand on the internet to fill in your skill gap.
- mljoe 10y ago
  Thiel's Fellowship is somewhat based on that idea, a scholarship for NOT going to college. I still think college has value, but the costs have been increasing much faster then inflation, while the value has been declining due to the systemic efficiencies of acquiring knowledge in the information age. Together these are making the value proposition worse and worse. I can't judge anyone for wanting to skip college. There is a lot more we can be doing as a society to encourage entrepreneurship. It would be nice if in the future we could let our children use 429 college savings plans for angel/seed funding instead of educational expenses. Especially if tuition becomes free in the next 10-20 years anyway.
- whorleater 10y ago
  > I always kinda hated how people fresh out of high school with zero credit can have so much money handed to them for going to school. While if they wanted to get a business loan or buy a house they would be much more scrutinized. That's only because you can't default out of student loans and are government backed. Which if you could default and didn't have government backing, students would never be able to get loans.
- rokhayakebe 10y ago
applecore 10y ago
Minor nitpick: n^2 isn't the correct factor to describe hyperscale networks. It's much slower, probably n x log n.
optimusclimb 10y ago
> 4) Does this company have a clear and important mission? > Without this, I usually get bored. More importantly, companies that don’t have this usually have a hard time recruiting enough great people to work with them, and thus struggle to become very large. I find this one interesting. When Google started, there were many incumbent search engines. Their mission was to provide better results than what existed, i.e. improve on an existing product. Uber's "mission" was to get privileged people with smart phones and disposable income a sexy/cool ride home from the bar. Facebook was a social networking site targeted at college students...what was it's mission? To allow people to see what that cute person in their Psych class was up to this weekend? Snapchat...the clear and important mission to allow for safely sending risqué pictures? While I believe Sam's belief that they WANT to work with companies with clear important missions, that doesn't seem to be a/the deciding factor in becoming "very large", or attracting great people. If anything, it seems like the "spaghetti at the wall" approach is what happens - some startups gain momentum, and then it's the high growth trajectory that attracts a ton of talent.
- dharmon 10y ago
  In fairness, he does state that this is just about his boredom. At the end of the day, its up to him and the YC stakeholders to decide how much his personal boredom is worth in terms of returns and missing The Next Big Thing. The danger is in forgetting that all the big companies with lofty mission statements ("Make the world more open and connected", "Organize the world's data") did not start out that way at all. They didn't develop them until well after the point that some place like YC would be investing. In fact, there might be an inverse correlation: companies that start out with huge, inspirational missions before they even have a user / customer are more likely to end up failures. I could think of many reasons why.
- shoyer 10y ago
  Google's mission has been "to organize the world's information and make it universally accessible and useful" since day one [1]. You're confusing mission with strategy. [1] http://www.businessinsider.com/laszlo-bock-on-google-mission-statement-2015-4 http://www.businessinsider.com/laszlo-bock-on-google-mission...
bartmancuso 10y ago
Re YC Research, please consider a project looking at the challenges surrounding climate change communications. To state the obvious, the science on climate change is settled, but many people are still skeptical/resistant or in outright denial. Heated arguments and throwing around citations to journal articles really doesn't change anyone's mind. There is a deeper, nuanced communications challenge at play, and it's the exact type of thing that YC would be great at addressing. There are some very interesting ways that technology (and the creativity of the YC community) could be used to tackle this issue. Climate change may be the defining issue of the next century, and it would be a shame to be stymied by the communications challenges. I hope you'll consider it.
- nickpsecurity 10y ago
  It's not about nuance. It's just echo chambers reinforced by the media those in support or denial consume: https://en.m.wikipedia.org/wiki/Echo_chamber_(media) https://en.m.wikipedia.org/wiki/Echo_chamber_(media) Consolidation of corporate media combined with algorithms of biggest, online providers have really cemented the effect in. Past few years, esp election, had strongest effects on isolation and reinforcement I've ever seen.
angersock 10y ago
Nice writeup sama, but the history is a bit revisionist: > We are only about 30 years into the age of software, about 20 years into the age of the internet, and about 2 years into the age of artificial intelligence. Software has been around--and actively making bank!--for over 40 years. The internet has been around longer in the form of academic institutions, email, and BBS than you mention. And AI has, of course, been around at least as long as software. I appreciate you have a message to send, but maybe don't ignore the path we took to get here.
- criddell 10y ago
  When people talk about an age, it doesn't usually start with the invention of that thing. The bronze age didn't begin with the invention of bronze. The periods are subjective, fuzzy things. I think I agree with Sam's definitions although I would probably say age of machine learning rather than age of AI.
- mvp 10y ago
  Those time periods are what most tech people consider as when those technologies really took off. And therefore it makes sense to say that. If he was writing a history of computer science, I agree that it would have been inaccurate to say that.
  - angersock 10y ago
    "Most tech people" must mean people under the age of 25 without much knowledge of history.
  - nickpsecurity 10y ago
    An example to support your view might be the switch to the trend of paying to use server resources like a utility. Centralized resource managed by people other than users that ran many parties' workloads with metered CPU, RAM, etc usage. Then, the various devices access it through a standard UI instead of native apps recoded in many OS's. Quicker setup for new users than rolling their own. Increased flexibility with the virtualization. Better physical and online security due to the centralized monitoring. On the software side, people found that safety, scalability, and maintenance were important. They needed high-level languages that did things like bounds-checks or stack protection. They needed the ability to freeze and inspect errant programs instead of crash them. They needed the software interfaces to check for right data being passed. They needed to scale on multiple CPU's. They preferred their OS's to come with source code for easier fixes or extensions. Im sure you know all about those two mainframes from IBM (1963-1970's) and Burroughs (1961) that did those things. Then came to power most large business and government institutions critical apps to this day. Anyway, I hear people made incremental improvements doing similar things with x86, Linux, and vastly lower cost-per-resource. Incremental improvements on capabilities that took off in the 60's. ;)
rdtsc 10y ago
> the fact that one of their "partners" is such an obviously destructive force within society. Can you expand on the "obvious" and "destructive" force? What exactly did Thiel do that is obviously destructive to our whole society? You mean Palantir? Wasn't that there for a while?
- dang 10y ago
  We detached this comment from https://news.ycombinator.com/item?id=13662204 https://news.ycombinator.com/item?id=13662204 and marked it off-topic.
nopassrecover 10y ago
We are only about 30 years into the age of software, about 20 years into the age of the internet, and about 2 years into the age of artificial intelligence Which innovations over the last 2 years most indicate a new age of artificial intelligence? I undertook some research, and noticed: 3 Months Ago: Google Translate AI had a breakthrough 5 Months Ago: Amazon/Facebook/Google/IBM/Microsoft launch an AI Partnership 1 Year Ago: AlphaGo has a big win and OpenAI is founded 2 Years Ago: Google (now Waymo) performs its first public driverless ride 3 Years Ago: Google acquires DeepMind and interest in Deep Learning takes off 6 Years Ago: IBM Watson wins Jeopardy All indications suggest increased interest and investment in AI, but from an external perspective I'm interested to know whether quantitative changes (big data, cloud infrastructure, GPU processing speed etc.) and increased interest have genuinely spurred a qualitative new era of AI free of the pattern of "AI Winters" (https://en.wikipedia.org/wiki/AI_winter https://en.wikipedia.org/wiki/AI_winter).
- hyperpallium 10y ago
  We're about 2-3 years into the latest iteration of neural networks (aka deep learning), and the first one with practical application. IBM Watson didn't use neural networks.
krishna2 10y ago
@sama : Great write up. Regarding the admission process you had mentioned on Dalton Caldwell that he took "a process that used to be stressful and deeply imperfect and improved it by a huge amount." Can you please elaborate on that?
bdrool 10y ago
Aside from a throwaway line about a possible "macroeconomic meltdown", there seems to be little attention paid to big signs of an overall negative trend in tech jobs: * "Bay Area: Tech job growth has rapidly decelerated" (from here: http://www.siliconvalley.com/2017/02/10/tech-job-growth-slows-in-bay-area/ http://www.siliconvalley.com/2017/02/10/tech-job-growth-slow...) * "Tech Jobs Took a Big Hit Last Year" (from here: http://fortune.com/2017/02/16/tech-jobs-layoffs-microsoft-intel/ http://fortune.com/2017/02/16/tech-jobs-layoffs-microsoft-in...) The first of those two articles has been submitted twice to HN with zero comments both times. The second has not been submitted at all as far as I can see. Is it possible there is a bit of a collective head-in-the-sand phenomenon going on?
- spcelzrd 10y ago
  Maybe SF is just full? At some point that city will no longer be able to support and endless parade of Python developers in skinny jeans. Also, decelerated job growth is still job growth. 3.5% growth doubles in 20 years. Not exactly panic time.
- econner 10y ago
  At the start of 2016 there was some consensus that things were cooling off. Markets were down, there were fewer seed stage investments and an all but dead tech IPO market for the first half of the year. Investors started to advise companies to lower their burn rates [https://bothsidesofthetable.com/so-what-is-the-right-level-of-burn-rate-for-a-startup-these-days-f514545e226b#.4dbbx7rxi https://bothsidesofthetable.com/so-what-is-the-right-level-o...]. Arguably the market conditions were driven by the 2015 - 2016 Chinese market turbulence [https://en.wikipedia.org/wiki/2015%E2%80%9316_Chinese_stock_market_turbulence https://en.wikipedia.org/wiki/2015%E2%80%9316_Chinese_stock_...], but who really knows. Growth has picked back up this year and I’d expect job growth to bounce back.
danenania 10y ago
Hey Sam, Here's a question for you (or other YC folks) on YC recommendations. Give that I'm planning to apply for the next cycle, would it benefit me to ask for recommendations from 7 or 8 folks who I've worked with in the past and have strong relationships with? It's not totally clear to me whether it would be kosher to ask for those or if it's something you'd rather that people do spontaneously. I'm also wondering if 7 or 8 is too many given how little time I know you have to spend on each applicant. Thanks!
nilved 10y ago
Did anyone else CTRL-F for Thiel and close the page?
- XJOKOLAT 10y ago
  +1000 downvote me, I don't care.
partisan 10y ago
I appreciate the letter. The following caught my eye, because I was sure we had all learned that the ends do not justify the means. Surely the Zenefits debacle was a lesson in ethics and not one about avoiding getting caught doing the wrong thing. > we have to work harder to find people doing a startup for the right reason: to bring an idea they’re obsessed with to life, and willing to do something unreasonable to see it happen
shreyas056 10y ago
So Sama is a 9gagger.
kriro 10y ago
Hi sama, I know you wrote that YC Research will likely not expand in the near future. If you do I think the most interesting topic would be the destruction of the journal industry and freeing information. At least in my opinion it would make a lot of sense for YC to try and free as much research as possible which entrepreneurs could build upon. I can only wonder how many more interesting startups we'd get if a random hacker in India or Ethiopia had access to the latest journals on medicine, biology etc. That would take a lot of commitment and being in active position to some powerful interests. This should be attacked from a legal, political and technological angle.

417 points by sama 10y ago

"Our mission is to enable the most innovation of any company in the world in order to make the future great for everyone." I know many people will read that and roll their eyes back and believe it is just a marketing gimmick for the gullible and like most investors YC just cares about the money. The thing is that they do deeply care about founders and making things better in the world, as naive as that may sound to outsiders.

neom 10y ago
Interesting that you chose to post this proactively.
- rcar 10y ago
  Even if you know the truth behind a statement like that, it's hard to read something that earnest and not have an initial eye roll in response. As someone who doesn't know the YC team's motivations, it's nice to know that at least someone thinks that some of the earnestness is real.
  - neom 10y ago
    Maybe I'm a fool then because I would read that and take it in earnest as I read and take much of the HN community in earnest. I have a great deal of respect for YC and the HN community - I guess the point of my original post was it's a little disappointing that isn't the case.
    - adamsea 10y ago
      Maybe you just haven't watched the show "Silicon Valley" ;). It's all about "making the world a better place." ;)
      - deleted 10y ago
        [deleted]
- ridruejo 10y ago
  Whenever I talk to other founders about YC, encouraging them to apply they are often asking about "what the catch is", "yeah, yeah, but how are they really?" because they don't believe it is really like that. It has become kind of a joke the phrase "making the world a better place" but YC is one of the few places where they mean it
kukac 10y ago
Any evidence of this ?
- nicholasjbs 10y ago
  YC continues to support my company nearly seven years after our batch, even though we're still tiny and have no plans to exit (and thus will likely never give them any financial return).
- ridruejo 10y ago
  Sorry for not having mentioned this explicit (it is in my profile) but this is from first-hand experience from being a founder and having going through YC with Bitnami
  - toastednz 10y ago
    love bitnami - you guys have helped me so much on AWS!
- nathcd 10y ago
  I'm pretty sceptical that the phrase isn't a bit of marketing to some extent, but one thing (among many) that earns YC a ton of respect in my mind is YC Research. The research projects truly seem geared toward working for a better world as their first goal.
ForrestN 10y ago
It's funny you say this—the first thing I did, even before reading the article, was search for "Thiel." It's going to be hard for me to take this sort of thing seriously, this telegraphing of benevolence which is so central to YC's branding, until they address the fact that one of their "partners" is such an obviously destructive force within society. They don't even have to do anything but say goodbye, and they won't.
- sverige 10y ago
  Actually, the fact that they have not bowed to the pressure to "disavow" Peter Thiel merely for his political views in one of the things that makes me think highly of YC.
  - nilved 10y ago
    You must really love Hugo Boss and IBM as well. It's so great that they were able to ignore politics when they were making uniforms and mainframes for nazis.
    - deleted 10y ago
      [deleted]
  - ForrestN 10y ago
    Yes, that sounds much more useful to the world than, you know, not partnering with people that are happy to harm it.
- purple-again 10y ago
  While I disagree with many of Trumps beliefs and by proxy probably many of Thiels as well the fact that they refused to further the division of our country by excommunicating him for his beliefs is a huge pro in my book. The founder of Rails saying he would fire any of his employees that supported Trump was sickening and that kind of attitude will never allow us to move from bloodshed and war to one people.
  - 10y ago

icpmacdo 10y ago

"Hacker News has 3.4 million users per month and 350,000 users per day, with 4 million pageviews a day. There are just under 1 million registered accounts, with several hundred added each day. Users post around 1,000 articles and 6,000 comments to the site per day." First time I have seen those numbers, very impressive. I thought there were a lot less users.

kevinmannix 10y ago
I am sure there are many more lurkers than active participants
- deleted 10y ago
  [deleted]
- TeMPOraL 10y ago
  This is true of pretty much any Internet community, so not that surprising.
  - justinhensley 10y ago
    I think it's especially true here though due to HN's crowd sourced quality control. The rules are largely adhered to by the user base as well, and it's not just an agree/disagree button.
- minimaxir 10y ago
  https://en.wikipedia.org/wiki/1%25_rule_(Internet_culture) https://en.wikipedia.org/wiki/1%25_rule_(Internet_culture)
- fabrice_d 10y ago
  For sure, with 6,000 comments and 350,000 daily users.
nsgoetz 10y ago
Those numbers surprised me to, but I don't think they should have. I rarely meet anyone in software that doesn't know at least know about HN, if not actively read it. In fact, my sister's boyfriend is in tech even though she isn't. When I met him for the first time, my sister felt a little left out because we immediately got into a deep discussion about an article we read on here. We live across the country from each other, but reading hacker news is almost expected for both of us.

mbrock 10y ago

I think it's a mistake to conceive of Reddit as a place to "waste time." It's also the new platform for lots of important online communities to discuss and disseminate information.

dongslol 10y ago
It was tongue in cheek.
matt4077 10y ago
Or, alternatively, a place for mediocre minds to meet and become truly terrible, together.
shostack 10y ago
While I think it was a joke, I'll just say that Reddit has become an important professional resource for me. I have found a couple high signal-to-noise subs with senior professionals from my industry. If I have a gnarly problem, there's a good chance someone there can help me out. This is huge because there isn't really a Stack Overflow type option for these sorts of problems generally.

gregoire 10y ago

Is there a reason why this is published on Sam's blog and not on YC's blog? Oh and a remark on the letter's typography: the double spaces after periods should be single spaces.

adambmedia 10y ago
Lol. I once worked with a guy who, when asked for his input on critical emails, would meticulously comb through and delete second spaces after periods. "What did you think? Did you make any changes?" "I removed all of the double spaces after periods." :)
sama 10y ago
I had emailed this out to the YC community over the weekend. I got word from a journalist it was about to leak, and I couldn't get in touch with the person that runs the YC blog (I don't yet know how to post on the new one, but I'm sure going to figure it out now). I didn't want to wait, so I just posted it where I could. Also I happen to think documents are easier to read with double spaces after sentences. Surely there is something more important to complain about than that.
- pen2l 10y ago
  > Surely there is something more important to complain about than that. https://plus.google.com/+VicGundotra/posts/gcSStkKxXTw https://plus.google.com/+VicGundotra/posts/gcSStkKxXTw Sam, it's meant with the love of the art. I was going to make the same complaint. For those of us who work in a particular field, certain things just stick out and it feels very natural to point that out and make the world perfect in a way we are confident it can be perfect if some things are changed (I review grants, I convert double-spaces to single-spaces so much that I can spot one from a mile away and change it right away... sadly, I don't have access to change your writings :)).
  - gregoire 10y ago
    Exactly, typography is a subject that is very dear to my heart. And while I agree that it may be a personal preference, there is a side effect to using double spaces: layout engines consider single spaces the default for their line breaking algorithm, and sometimes, when using double spacing, new sentences start at a new line with a space before the first letter which, in this very case, looks weird and therefore hinders readability.

jtmarmon 10y ago

"The percentage of women who apply to YC is roughly the same as the percentage of women who get funded. The same is true for Black and Latino founders." I'm guessing what he means to say here is that if x% of the applicant pool is woman/black/latino, then x% of the accepted pool is woman/black/latino, right? The way it's phrased it sounds like every woman/black/latino who applies is accepted

mildbow 10y ago
Not to me. percentage of women who apply ~= percentage of women who get funded.
- jtmarmon 10y ago
  you're right - after rereading I realize that it's totally equivalent
- deleted 10y ago
  [deleted]
purple-again 10y ago
I'm curious if that's by design or coicidence. Generally when taking s small sample size (funded) you expect the majority to be over represented and any minorities to be under represented until the sample grows to a large enough size to eliminate the variance.

AndrewKemendo 10y ago

Companies like Amazon, Facebook, Google, Apple, and Microsoft have powerful advantages that are still not fully understood by most founders and investors....This trend is unlikely to reverse without antitrust action, and I suggest people carefully consider its implications for startups. I think the "startup community" needs to have a serious conversation about this [2]. If we agree that machine learning is going to be a major underlying technology moving forward and that as a result, data is the new Oil [1], then the top 5 technology companies serve as the new Oil Barons. It goes further than that actually in my mind, as these firms are disrupting themselves and innovating as fast if not faster in many areas than small startups can. They are in every industry and if they can't move as fast, then they buy the talent or the whole team. Granted, a small team will always move faster, but I think that these mega corps know enough now to know that they can pivot on trends if needed. I do worry about the likelihood of a startup that could beat google, facebook, microsoft etc... with humble roots. Maybe if a "startup" came in with 100M+ in funding, but more than likely at this point those companies would be funding that startup, if only for the intelligence value. So while "we've seen this before - someone always comes out of nowhere" which gave rise to the current crop of major companies, it would have to be pretty left field at this point for a company to compete with the major players without investment from an arm of theirs. Considering Snapchat is the biggest IPO in the coming year, I don't have a lot of hope that there will be something coming through. [1]http://fortune.com/2016/07/11/data-oil-brainstorm-tech/ http://fortune.com/2016/07/11/data-oil-brainstorm-tech/ [2] https://medium.com/@andrewkemendo/the-ai-revolution-will-be-different-from-the-microprocessor-revolution-cb417d324203 https://medium.com/@andrewkemendo/the-ai-revolution-will-be-...

pyb 10y ago
Reading between the lines, wasn't Sam complaining about a trend whereby many promising startups get acquired way too early ?
- AndrewKemendo 10y ago
  I can't speak for sam but in my mind that is a big piece of it. If you don't sell, then the big companies don't get bigger. Unfortunately in that case if you do get big enough despite that, they will just target you and take a chunk of your market (Instagram Stories vs Snapchat) so that you can't dominate. Look, it's brilliant and exactly what every firm should do. The question is really, if it's a net positive to have 5 companies run everything* in consumer technology. I don't know but history seems to not like that.

derrickc 10y ago

I'd love to know the 50 companies with >$100mm valuations. Anyone know of a list or can start one? I saw this was 32 companies last year and really curious which were added.

bluekite2000 10y ago
where is the list of 32 companies?

blacksmythe 10y ago

>> funded over ... 1,470 companies >> more than 50 of our companies are worth more than $100 million each. 3.4% is a remarkable ratio.

_sentient 10y ago
Especially given that those numbers are back-loaded, with somewhere around a third of all YC companies having been funded within the last two years.
bluekite2000 10y ago
Is there a list of those 50 companies?

danvoell 10y ago

Hi sama, great letter. The only thing I would suggest for the next round is to identify some misses. What are some RFPs that you tried to solve and didn't and what are your insights on this? The two annual letters I like the most are Bill Gates and Warren Buffet. From Bill Gates, I don't mind the endless optimism since it is a foundation. From Warren Buffet, I expect the ole hoe hum, we'd be trillionaires if we had seen this trend or we were totally wrong about this ...

sama 10y ago
Thanks! Will add this in next time. Plenty of misses to write about!
- moflome 10y ago
  I you're still reading, I was glad to see you mention the international funding successes and would like to learn more about the internationalization of the YC program. Thanks!

yawgmoth 10y ago

On the HN front - I would like to see a discussion and then the implementation of measures to encourage meaningful discussion, discourage low-effort comments, but also to discourage "negative lurking". Like other users noticed, there are a lot of lurkers -- some of which downvote and move along. Because frequently I do not understand why a post has been downvoted (my own or otherwise), I am discouraged from contributing. A byproduct of both negative lurking and the fact that HN has concluded itself to be an intelligent community is that some readers, including myself, feel judged by the score next to our comments. There is someone out there reasonably asking "why do you care?" but it is also important to acknowledge that this phenomenon exists. Part of the longevity of a user's participation is the willingness of the community to accept it.

asperous 10y ago
You're not given the ability to downvote without reaching a certain karma threshold, so there are already some thoughts in place there.
- yawgmoth 10y ago
  It actually seems worse to me that people who have been around to achieve that threshold (it's 500, right?) don't have exhibit the etiquette I'm asking for. They should know better, right?
  - Schwolop 10y ago
    I'm going to respectfully disagree. Part of why I like HN is that meta-discussion of the "why did you downvote me?" and "downvoting because ..." are actively discouraged. Better to silently downvote and move on, which I do frequently for all many of reasons. This has next to no impact unless multiple readers do the same thing, at which point greying out comments serves the intended purpose of conveying that the community as a whole doesn't think the comment is valuable.
    - nickpsecurity 10y ago

deleted 10y ago

[deleted]

notatoad 10y ago

>I expect that people will talk about software as one of our secret weapons. can you give a broad overview of what software YC creates? What does it do? is it internal tracking and stats, or exclusive libraries that YC-funded companies get to use to build their products?

burkaman 10y ago
Bookface is one thing I know of: https://bookface.ycombinator.com/ https://bookface.ycombinator.com/ I think they developed it in-house.
- garry 10y ago
  I wrote it. It was needed because YC had funded larger batches and the hardest part of a community is knowing who is in it and who you can trust and ask for help.
snowmaker 10y ago
All of the above. YC's software lets us evaluate thousands of applications per year and use the data we generate to continually get better at that. We also run bookface, a private site just for YC founders. Sometimes overlooked is the importance of the software that we make accessible to everyone: Hacker News, of course, and our soon-to-launch MOOC Startup School.

Keverw 10y ago

> In future years, we also hope to explore how something like ‘financial aid’ might work for people that need a small amount of capital to help get their startup going. Sounds interesting. I always kinda hated how people fresh out of high school with zero credit can have so much money handed to them for going to school. While if they wanted to get a business loan or buy a house they would be much more scrutinized. I wonder with that money instead and right mentorship if they could come out ahead of their peers who used that money for college instead. I know some people who just go to college because they feel like they have to, and get degrees they don't even use. Imagine one spending 4 years going into debt, the other coming out a head with a real world profitable startup. One thing I always hate about school work is I feel like I'm just doing stuff for the sake of being graded or being busy. I rather spend my time creating stuff that's more real instead, learn as I go. There's a bunch of free and even paid training on-demand on the internet to fill in your skill gap.

mljoe 10y ago
Thiel's Fellowship is somewhat based on that idea, a scholarship for NOT going to college. I still think college has value, but the costs have been increasing much faster then inflation, while the value has been declining due to the systemic efficiencies of acquiring knowledge in the information age. Together these are making the value proposition worse and worse. I can't judge anyone for wanting to skip college. There is a lot more we can be doing as a society to encourage entrepreneurship. It would be nice if in the future we could let our children use 429 college savings plans for angel/seed funding instead of educational expenses. Especially if tuition becomes free in the next 10-20 years anyway.
whorleater 10y ago
> I always kinda hated how people fresh out of high school with zero credit can have so much money handed to them for going to school. While if they wanted to get a business loan or buy a house they would be much more scrutinized. That's only because you can't default out of student loans and are government backed. Which if you could default and didn't have government backing, students would never be able to get loans.
rokhayakebe 10y ago

applecore 10y ago

Minor nitpick: n^2 isn't the correct factor to describe hyperscale networks. It's much slower, probably n x log n.

optimusclimb 10y ago

> 4) Does this company have a clear and important mission? > Without this, I usually get bored. More importantly, companies that don’t have this usually have a hard time recruiting enough great people to work with them, and thus struggle to become very large. I find this one interesting. When Google started, there were many incumbent search engines. Their mission was to provide better results than what existed, i.e. improve on an existing product. Uber's "mission" was to get privileged people with smart phones and disposable income a sexy/cool ride home from the bar. Facebook was a social networking site targeted at college students...what was it's mission? To allow people to see what that cute person in their Psych class was up to this weekend? Snapchat...the clear and important mission to allow for safely sending risqué pictures? While I believe Sam's belief that they WANT to work with companies with clear important missions, that doesn't seem to be a/the deciding factor in becoming "very large", or attracting great people. If anything, it seems like the "spaghetti at the wall" approach is what happens - some startups gain momentum, and then it's the high growth trajectory that attracts a ton of talent.

dharmon 10y ago
In fairness, he does state that this is just about his boredom. At the end of the day, its up to him and the YC stakeholders to decide how much his personal boredom is worth in terms of returns and missing The Next Big Thing. The danger is in forgetting that all the big companies with lofty mission statements ("Make the world more open and connected", "Organize the world's data") did not start out that way at all. They didn't develop them until well after the point that some place like YC would be investing. In fact, there might be an inverse correlation: companies that start out with huge, inspirational missions before they even have a user / customer are more likely to end up failures. I could think of many reasons why.
shoyer 10y ago
Google's mission has been "to organize the world's information and make it universally accessible and useful" since day one [1]. You're confusing mission with strategy. [1] http://www.businessinsider.com/laszlo-bock-on-google-mission-statement-2015-4 http://www.businessinsider.com/laszlo-bock-on-google-mission...

bartmancuso 10y ago

Re YC Research, please consider a project looking at the challenges surrounding climate change communications. To state the obvious, the science on climate change is settled, but many people are still skeptical/resistant or in outright denial. Heated arguments and throwing around citations to journal articles really doesn't change anyone's mind. There is a deeper, nuanced communications challenge at play, and it's the exact type of thing that YC would be great at addressing. There are some very interesting ways that technology (and the creativity of the YC community) could be used to tackle this issue. Climate change may be the defining issue of the next century, and it would be a shame to be stymied by the communications challenges. I hope you'll consider it.

nickpsecurity 10y ago
It's not about nuance. It's just echo chambers reinforced by the media those in support or denial consume: https://en.m.wikipedia.org/wiki/Echo_chamber_(media) https://en.m.wikipedia.org/wiki/Echo_chamber_(media) Consolidation of corporate media combined with algorithms of biggest, online providers have really cemented the effect in. Past few years, esp election, had strongest effects on isolation and reinforcement I've ever seen.

angersock 10y ago

Nice writeup sama, but the history is a bit revisionist: > We are only about 30 years into the age of software, about 20 years into the age of the internet, and about 2 years into the age of artificial intelligence. Software has been around--and actively making bank!--for over 40 years. The internet has been around longer in the form of academic institutions, email, and BBS than you mention. And AI has, of course, been around at least as long as software. I appreciate you have a message to send, but maybe don't ignore the path we took to get here.

criddell 10y ago
When people talk about an age, it doesn't usually start with the invention of that thing. The bronze age didn't begin with the invention of bronze. The periods are subjective, fuzzy things. I think I agree with Sam's definitions although I would probably say age of machine learning rather than age of AI.
mvp 10y ago
Those time periods are what most tech people consider as when those technologies really took off. And therefore it makes sense to say that. If he was writing a history of computer science, I agree that it would have been inaccurate to say that.
- angersock 10y ago
  "Most tech people" must mean people under the age of 25 without much knowledge of history.
- nickpsecurity 10y ago
  An example to support your view might be the switch to the trend of paying to use server resources like a utility. Centralized resource managed by people other than users that ran many parties' workloads with metered CPU, RAM, etc usage. Then, the various devices access it through a standard UI instead of native apps recoded in many OS's. Quicker setup for new users than rolling their own. Increased flexibility with the virtualization. Better physical and online security due to the centralized monitoring. On the software side, people found that safety, scalability, and maintenance were important. They needed high-level languages that did things like bounds-checks or stack protection. They needed the ability to freeze and inspect errant programs instead of crash them. They needed the software interfaces to check for right data being passed. They needed to scale on multiple CPU's. They preferred their OS's to come with source code for easier fixes or extensions. Im sure you know all about those two mainframes from IBM (1963-1970's) and Burroughs (1961) that did those things. Then came to power most large business and government institutions critical apps to this day. Anyway, I hear people made incremental improvements doing similar things with x86, Linux, and vastly lower cost-per-resource. Incremental improvements on capabilities that took off in the 60's. ;)

rdtsc 10y ago

> the fact that one of their "partners" is such an obviously destructive force within society. Can you expand on the "obvious" and "destructive" force? What exactly did Thiel do that is obviously destructive to our whole society? You mean Palantir? Wasn't that there for a while?

dang 10y ago
We detached this comment from https://news.ycombinator.com/item?id=13662204 https://news.ycombinator.com/item?id=13662204 and marked it off-topic.

nopassrecover 10y ago

We are only about 30 years into the age of software, about 20 years into the age of the internet, and about 2 years into the age of artificial intelligence Which innovations over the last 2 years most indicate a new age of artificial intelligence? I undertook some research, and noticed: 3 Months Ago: Google Translate AI had a breakthrough 5 Months Ago: Amazon/Facebook/Google/IBM/Microsoft launch an AI Partnership 1 Year Ago: AlphaGo has a big win and OpenAI is founded 2 Years Ago: Google (now Waymo) performs its first public driverless ride 3 Years Ago: Google acquires DeepMind and interest in Deep Learning takes off 6 Years Ago: IBM Watson wins Jeopardy All indications suggest increased interest and investment in AI, but from an external perspective I'm interested to know whether quantitative changes (big data, cloud infrastructure, GPU processing speed etc.) and increased interest have genuinely spurred a qualitative new era of AI free of the pattern of "AI Winters" (https://en.wikipedia.org/wiki/AI_winter https://en.wikipedia.org/wiki/AI_winter).

hyperpallium 10y ago
We're about 2-3 years into the latest iteration of neural networks (aka deep learning), and the first one with practical application. IBM Watson didn't use neural networks.

krishna2 10y ago

@sama : Great write up. Regarding the admission process you had mentioned on Dalton Caldwell that he took "a process that used to be stressful and deeply imperfect and improved it by a huge amount." Can you please elaborate on that?

bdrool 10y ago

Aside from a throwaway line about a possible "macroeconomic meltdown", there seems to be little attention paid to big signs of an overall negative trend in tech jobs: * "Bay Area: Tech job growth has rapidly decelerated" (from here: http://www.siliconvalley.com/2017/02/10/tech-job-growth-slows-in-bay-area/ http://www.siliconvalley.com/2017/02/10/tech-job-growth-slow...) * "Tech Jobs Took a Big Hit Last Year" (from here: http://fortune.com/2017/02/16/tech-jobs-layoffs-microsoft-intel/ http://fortune.com/2017/02/16/tech-jobs-layoffs-microsoft-in...) The first of those two articles has been submitted twice to HN with zero comments both times. The second has not been submitted at all as far as I can see. Is it possible there is a bit of a collective head-in-the-sand phenomenon going on?

spcelzrd 10y ago
Maybe SF is just full? At some point that city will no longer be able to support and endless parade of Python developers in skinny jeans. Also, decelerated job growth is still job growth. 3.5% growth doubles in 20 years. Not exactly panic time.
econner 10y ago
At the start of 2016 there was some consensus that things were cooling off. Markets were down, there were fewer seed stage investments and an all but dead tech IPO market for the first half of the year. Investors started to advise companies to lower their burn rates [https://bothsidesofthetable.com/so-what-is-the-right-level-of-burn-rate-for-a-startup-these-days-f514545e226b#.4dbbx7rxi https://bothsidesofthetable.com/so-what-is-the-right-level-o...]. Arguably the market conditions were driven by the 2015 - 2016 Chinese market turbulence [https://en.wikipedia.org/wiki/2015%E2%80%9316_Chinese_stock_market_turbulence https://en.wikipedia.org/wiki/2015%E2%80%9316_Chinese_stock_...], but who really knows. Growth has picked back up this year and I’d expect job growth to bounce back.

danenania 10y ago

Hey Sam, Here's a question for you (or other YC folks) on YC recommendations. Give that I'm planning to apply for the next cycle, would it benefit me to ask for recommendations from 7 or 8 folks who I've worked with in the past and have strong relationships with? It's not totally clear to me whether it would be kosher to ask for those or if it's something you'd rather that people do spontaneously. I'm also wondering if 7 or 8 is too many given how little time I know you have to spend on each applicant. Thanks!

nilved 10y ago

Did anyone else CTRL-F for Thiel and close the page?

XJOKOLAT 10y ago
+1000 downvote me, I don't care.

partisan 10y ago

I appreciate the letter. The following caught my eye, because I was sure we had all learned that the ends do not justify the means. Surely the Zenefits debacle was a lesson in ethics and not one about avoiding getting caught doing the wrong thing. > we have to work harder to find people doing a startup for the right reason: to bring an idea they’re obsessed with to life, and willing to do something unreasonable to see it happen

shreyas056 10y ago

So Sama is a 9gagger.

kriro 10y ago

Hi sama, I know you wrote that YC Research will likely not expand in the near future. If you do I think the most interesting topic would be the destruction of the journal industry and freeing information. At least in my opinion it would make a lot of sense for YC to try and free as much research as possible which entrepreneurs could build upon. I can only wonder how many more interesting startups we'd get if a random hacker in India or Ethiopia had access to the latest journals on medicine, biology etc. That would take a lot of commitment and being in active position to some powerful interests. This should be attacked from a legal, political and technological angle.