3 ms·

Ask PG: Do you think the YC Model could scale to other industries?

8 points by neurotech1 16y ago

Do you think the YC-Model could be applied to other industries, such as providing resources and seed funding for the bealthcare or biotech industries.

jacquesm 16y ago
Aren't the costs to get to a minimum viable product in those markets much higher than in web applications / software development ?
- faramarz 16y ago
  It is and that's probably the biggest reason the model works well for internet media. It's cheap to create, test and deploy. Sometimes even traditional markets such as Healthcare could use web innovations to suite their bottom line. i.e. Health care registry, patient filing systems, etc.
  - jacquesm 16y ago
    $20K worth of investors money might get you to the point where you have the functional requirements of a health care registry or a patient filing system specc'd out, you will still have to go through all kinds of regulatory stuff, make sure that you abide by the law wrt to who has access to which bits of data and so on. By the time you have it built you're well in to the 100's of thousands of $. Just to find the expertise is going to cost a bundle.
    - neurotech1 16y ago
      For medical devices, $20k might get a small team to prototype stage. There are a few "simple" medical devices that were developed to prototype level with minimal cash. I work on EEG systems, and the prototype and related equipment costs less than $10k. From what I've read, more than a few YC-backed companies get funding soon after demo day.
      - jacquesm 16y ago
        Neat! Yes, that sort of thing I can see it work for, but it had better be very simple and not have to pass too many regulatory tests and clinical trials or you'd be talking about different quantities of cash pretty soon.
pg 16y ago
Only in industries where you could get started cheaply. It might work for bands, for example. I doubt it would work for biotech.
- johnl 16y ago
  Also quickly. Being able to have something up and running and building momentum in 3 months would be as important as cheaply.
- DilipJ 16y ago
  It would work in the direct response/infomercial market. I can't imagine that products like the Snuggie or ShamWow took a lot to develop, and they've brought in millions. I guess the YC in this field would be Telebrands, run by AJ Khubani. Biotech's problem is the length and cost associated with FDA regulation. Anytime there are political barriers in place to prevent you from selling directly to the consumer (whether it is justified or not), it's not something you can do without heavy financial support.
_delirium 16y ago
Some of my family works at biotech startups, and if their experience is at all representative, I would guess it wouldn't work in that area. The kinds of people who are best placed to start them are usually people who have access to some sort of research that has already demonstrated at least plausibility, but not yet been scaled up and commercialized. The alternative, doing blue-skies research in the startup itself, is expensive and risky, since it can take years for things to come through. The ones I know of are almost all spinoffs from academic research, where a few professors who have something that works in the lab join up with a few people from industry to work on scaling up to industrial volumes and with industrial processes: dealing with somewhat less precise and less sterilized equipment than the stuff used in a lab, getting yield rates up, automating anything that requires human babysitting, etc. They usually already have the connections they need, and aren't in a financial position where $20k would make much difference either way, so the two main YC benefits wouldn't do much in this setting.

8 points by neurotech1 16y ago

Do you think the YC-Model could be applied to other industries, such as providing resources and seed funding for the bealthcare or biotech industries.

jacquesm 16y ago

Aren't the costs to get to a minimum viable product in those markets much higher than in web applications / software development ?

faramarz 16y ago
It is and that's probably the biggest reason the model works well for internet media. It's cheap to create, test and deploy. Sometimes even traditional markets such as Healthcare could use web innovations to suite their bottom line. i.e. Health care registry, patient filing systems, etc.
- jacquesm 16y ago
  $20K worth of investors money might get you to the point where you have the functional requirements of a health care registry or a patient filing system specc'd out, you will still have to go through all kinds of regulatory stuff, make sure that you abide by the law wrt to who has access to which bits of data and so on. By the time you have it built you're well in to the 100's of thousands of $. Just to find the expertise is going to cost a bundle.
  - neurotech1 16y ago
    For medical devices, $20k might get a small team to prototype stage. There are a few "simple" medical devices that were developed to prototype level with minimal cash. I work on EEG systems, and the prototype and related equipment costs less than $10k. From what I've read, more than a few YC-backed companies get funding soon after demo day.
    - jacquesm 16y ago
      Neat! Yes, that sort of thing I can see it work for, but it had better be very simple and not have to pass too many regulatory tests and clinical trials or you'd be talking about different quantities of cash pretty soon.

pg 16y ago

Only in industries where you could get started cheaply. It might work for bands, for example. I doubt it would work for biotech.

johnl 16y ago
Also quickly. Being able to have something up and running and building momentum in 3 months would be as important as cheaply.
DilipJ 16y ago
It would work in the direct response/infomercial market. I can't imagine that products like the Snuggie or ShamWow took a lot to develop, and they've brought in millions. I guess the YC in this field would be Telebrands, run by AJ Khubani. Biotech's problem is the length and cost associated with FDA regulation. Anytime there are political barriers in place to prevent you from selling directly to the consumer (whether it is justified or not), it's not something you can do without heavy financial support.

_delirium 16y ago

Some of my family works at biotech startups, and if their experience is at all representative, I would guess it wouldn't work in that area. The kinds of people who are best placed to start them are usually people who have access to some sort of research that has already demonstrated at least plausibility, but not yet been scaled up and commercialized. The alternative, doing blue-skies research in the startup itself, is expensive and risky, since it can take years for things to come through. The ones I know of are almost all spinoffs from academic research, where a few professors who have something that works in the lab join up with a few people from industry to work on scaling up to industrial volumes and with industrial processes: dealing with somewhat less precise and less sterilized equipment than the stuff used in a lab, getting yield rates up, automating anything that requires human babysitting, etc. They usually already have the connections they need, and aren't in a financial position where $20k would make much difference either way, so the two main YC benefits wouldn't do much in this setting.