4 ms·

While the math here certainly works out, I don't think it's the whole truth, at least not with regards to YC. While they probably want to maximise the chances o

While the math here certainly works out, I don't think it's the whole truth, at least not with regards to YC. While they probably want to maximise the chances of betting on the next dropbox, they also fund plenty of companies that very clearly are not the next dropbox, probably because their mission is also to fund good, profitable ideas in general, and that each of these clearly-not-dropbox bets is quite cheap. So I would guess their strategy is more like 'try to fund all potential future unicorns, and fund a bunch of others that seem cool and in a way so that those don't lose money on average'. That's certainly the strategy I would have chosen!

edanm 9y ago
This is probably not true, though. Many of the people at YC have said, many times, that what they're trying to do is find the next Dropbox, and everything else doesn't matter. They pretty explicitly talk about how hard to do this is, but how their efforts should go towards that anyway. The thing is, it's hard to to tell, especially from the outside, whether a company can viably become a billion dollar company. Sure, you've seen plenty of YC companies that ended up either not going for it, or not looking like it's possible for them to end up as unicorns, but this is in some cases too late - you aren't hearing their pitch, in which they explain why they could be the next billion dollar startup. Investors who want to make money take seriously the idea that one real success is the only thing that matters.
- Drdrdrq 9y ago
  Also, in this case (and presumably others) rejection is exactly what founders needed. Judging by the write-up they were ill prepared and rejection is what forced them to take a huge step back and re-evaluate their approach. Would it happen if they were accepted or let go less harshly? Who knows.

4 ms·

While the math here certainly works out, I don't think it's the whole truth, at least not with regards to YC. While they probably want to maximise the chances o

by Grustaf 9y ago

edanm 9y ago
This is probably not true, though. Many of the people at YC have said, many times, that what they're trying to do is find the next Dropbox, and everything else doesn't matter. They pretty explicitly talk about how hard to do this is, but how their efforts should go towards that anyway. The thing is, it's hard to to tell, especially from the outside, whether a company can viably become a billion dollar company. Sure, you've seen plenty of YC companies that ended up either not going for it, or not looking like it's possible for them to end up as unicorns, but this is in some cases too late - you aren't hearing their pitch, in which they explain why they could be the next billion dollar startup. Investors who want to make money take seriously the idea that one real success is the only thing that matters.
- Drdrdrq 9y ago
  Also, in this case (and presumably others) rejection is exactly what founders needed. Judging by the write-up they were ill prepared and rejection is what forced them to take a huge step back and re-evaluate their approach. Would it happen if they were accepted or let go less harshly? Who knows.