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Funding startups others wouldn't is perhaps the most essential part of YC. VCs didn't want Dropbox or Airbnb or Stripe without YCs stamp of approval. YC could

Funding startups others wouldn't is perhaps the most essential part of YC. VCs didn't want Dropbox or Airbnb or Stripe without YCs stamp of approval. YC could very plausible fund as many startups as there are ambitious and determined founders. Let anyone participate in the programs and then let the startups filter themselves out by failing to keep up the progressively more challenging levels of effort.

Brajeshwar 9y ago
Not as 'successful' as YC and other incubators/accelerators, but the idea of taking in as many and filtering out is what Founder Institute does. It is the "survivor" of Startups.
- deleted 9y ago
  [deleted]
orthoganol 9y ago
IMO YC depends on its branding as the exclusive, "Harvard of incubators," and if they keep funding so many startups they are going to lose that edge and create the space for a new YC. Each class is like 130 startups now, right? I keep seeing startups that duplicate other existing YC startups. I just imagine as an investor you have to be thinking "Ok, now there are 2 or 3 or 4 times as many startups as 3 years ago being pitched to me that are going to fail."
- nandorsky 9y ago
  Or the opposite - look at all this deal flow. As these startups move through the program I am sure YC is collecting tons of data in regards to how their trending. Imagine an online portal an investor could log into and within seconds have access to thousands of startups but more importantly, visibility into their metrics and traction.
  - adyus 9y ago
    You mean Mattermark?
lamby 9y ago
> let the startups filter themselves out by failing to keep up the progressively more challenging levels of effort. Doesn't this happen anyway simply by exposure to the real world? :)
- bactrian 9y ago
  Yes but it's corrupted at step one by an artificial selelection process. You want just the real world to be the filter.
xiaoma 9y ago
It seems like YC's stamp of approval often isn't enough, even without the kind of dilution you're talking about. Patrick from Stripe said something like "Everybody still thought we were crazy, but Peter Thiel was also crazy so he invested within two hours of meeting... after that it became much easier."[1] There was also an email exchange with an investor about Airbnb that PG shared where the VCs just weren't interested and the valuation was amazingly low in retrospect. There's a deep level of conservatism in nearly all tech investors and a lot of herd-like behavior. There's a huge premium for being on their social graph and for going to the same school they did (or one many of their friends did). Fundraising is one of the least meritocratic aspects of startups. Perhaps the most extreme example of this I've seen is looking at Vectr vs Figma. Vectr is about a year younger but both companies have been around for a few years and are being developed at roughly the same rate. Figma is in SF, run by a Thiel Fellow and has raised nearly 18MM[2], whereas Vectr is run in Asia by a Canadian guy with few connections and has struggled to raise anything[3]. This is insane considering there's such a clear comparison between the two companies, and the one that has raised a tiny fraction of the other has somehow managed to recruit a top-notch team, keep parity on the product and even started pulling ahead in some areas. It's also completely normal. Companies run by founders out of Stanford/Harvard/YC regularly raise boatloads of money while their competitors who sometimes eventually prevail can't raise any. Fundraising often tips the balance. There just aren't enough investors who truly believe in black swan farming. [1] Related Stripe interview: https://www.startupgrind.com/blog/from-the-vault-patrick-collison-stripe-full-startup-grind-interview-2012/ https://www.startupgrind.com/blog/from-the-vault-patrick-col... [2] Sigma https://www.crunchbase.com/organization/figma#/entity https://www.crunchbase.com/organization/figma#/entity [3] Vectr https://www.crunchbase.com/organization/vectr-4#/entity https://www.crunchbase.com/organization/vectr-4#/entity
- bushin 9y ago
  Does Vectr have vector networks, components and constraints, real-time collaboration?
  - xiaoma 9y ago
    The feature sets between the two apps are not identical but they are roughly at parity depending on what you're working on. I'm not a beta tester and can't do the real time collaboration but from their open road map it looks like it's in progress now. I'm most interested in seeing the asset marketplace open, though. https://vectr.com/roadmap https://vectr.com/roadmap Beyond the specifics of this one matchup, the trend is pretty undeniable. Pedigree is a huge advantage in fundraising and being outside of the US is a huge minus, even if the company is incorporated in the US.

Brajeshwar 9y ago

Not as 'successful' as YC and other incubators/accelerators, but the idea of taking in as many and filtering out is what Founder Institute does. It is the "survivor" of Startups.

deleted 9y ago
[deleted]

orthoganol 9y ago

IMO YC depends on its branding as the exclusive, "Harvard of incubators," and if they keep funding so many startups they are going to lose that edge and create the space for a new YC. Each class is like 130 startups now, right? I keep seeing startups that duplicate other existing YC startups. I just imagine as an investor you have to be thinking "Ok, now there are 2 or 3 or 4 times as many startups as 3 years ago being pitched to me that are going to fail."

nandorsky 9y ago
Or the opposite - look at all this deal flow. As these startups move through the program I am sure YC is collecting tons of data in regards to how their trending. Imagine an online portal an investor could log into and within seconds have access to thousands of startups but more importantly, visibility into their metrics and traction.
- adyus 9y ago
  You mean Mattermark?

lamby 9y ago

> let the startups filter themselves out by failing to keep up the progressively more challenging levels of effort. Doesn't this happen anyway simply by exposure to the real world? :)

bactrian 9y ago
Yes but it's corrupted at step one by an artificial selelection process. You want just the real world to be the filter.

xiaoma 9y ago

It seems like YC's stamp of approval often isn't enough, even without the kind of dilution you're talking about. Patrick from Stripe said something like "Everybody still thought we were crazy, but Peter Thiel was also crazy so he invested within two hours of meeting... after that it became much easier."[1] There was also an email exchange with an investor about Airbnb that PG shared where the VCs just weren't interested and the valuation was amazingly low in retrospect. There's a deep level of conservatism in nearly all tech investors and a lot of herd-like behavior. There's a huge premium for being on their social graph and for going to the same school they did (or one many of their friends did). Fundraising is one of the least meritocratic aspects of startups. Perhaps the most extreme example of this I've seen is looking at Vectr vs Figma. Vectr is about a year younger but both companies have been around for a few years and are being developed at roughly the same rate. Figma is in SF, run by a Thiel Fellow and has raised nearly 18MM[2], whereas Vectr is run in Asia by a Canadian guy with few connections and has struggled to raise anything[3]. This is insane considering there's such a clear comparison between the two companies, and the one that has raised a tiny fraction of the other has somehow managed to recruit a top-notch team, keep parity on the product and even started pulling ahead in some areas. It's also completely normal. Companies run by founders out of Stanford/Harvard/YC regularly raise boatloads of money while their competitors who sometimes eventually prevail can't raise any. Fundraising often tips the balance. There just aren't enough investors who truly believe in black swan farming. [1] Related Stripe interview: https://www.startupgrind.com/blog/from-the-vault-patrick-collison-stripe-full-startup-grind-interview-2012/ https://www.startupgrind.com/blog/from-the-vault-patrick-col... [2] Sigma https://www.crunchbase.com/organization/figma#/entity https://www.crunchbase.com/organization/figma#/entity [3] Vectr https://www.crunchbase.com/organization/vectr-4#/entity https://www.crunchbase.com/organization/vectr-4#/entity

bushin 9y ago
Does Vectr have vector networks, components and constraints, real-time collaboration?
- xiaoma 9y ago
  The feature sets between the two apps are not identical but they are roughly at parity depending on what you're working on. I'm not a beta tester and can't do the real time collaboration but from their open road map it looks like it's in progress now. I'm most interested in seeing the asset marketplace open, though. https://vectr.com/roadmap https://vectr.com/roadmap Beyond the specifics of this one matchup, the trend is pretty undeniable. Pedigree is a huge advantage in fundraising and being outside of the US is a huge minus, even if the company is incorporated in the US.