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Hi Jared, Thank you for taking the time to write this. I appreciate the info, and while this is not meant as a criticism I am curious how you measure for succ

Hi Jared, Thank you for taking the time to write this. I appreciate the info, and while this is not meant as a criticism I am curious how you measure for success. > 4) I think the ultimate measure founders should care about - and certainly the one we do - is the success rate of YC companies on average. If we grew the YC batch and the success rate went down, that would be bad. So this is something we track extremely carefully to make sure that does not happen. And so far, it hasn't. Based on the last 1-2 years of companies, the success rate of YC companies is the highest it's ever been. If fundraising at a higher valuation is one of the components used to determine success, I wonder how much the frothier market could contribute to being misleading here? Obviously a smaller cohort wouldn't necessarily solve this and I realize we can't really control for macroeconomic factors, but I could see it skewing the data (depending on how you measure it). Of course, if success is measured simply by liquid ROI my point is moot. You guys have all the data and know way more than I do, but it seems YC has moved away from funding scrappier startups that might survive an economic setback whereas the much more growth-at-any-cost companies may not survive a hiccup in funding quite so easily. Again, this is just a thought and you have all the data, so I don't pretend to be as informed as you.

snowmaker 8y ago
I do think that's possible, and that is one of the confounding factors we spend a lot of time worrying about and trying to control for when we do the data science on this. One of the ways we do this is by licensing data about all the startups in the world and then normalizing our own data against the market overall. Getting a true apples-to-apples comparison is difficult because the world doesn't stay the same. The funding market has changed dramatically since YC started, and the companies we're funding have changed a lot too - they're much more diverse now. We've tried to control for this but you are right that when building a complicated model, you can never be 100% certain and need to stay humble about your ability to correctly control for all these factors. We won't know for sure for many years; for now all I can say is that we've looked at this from many angles and the early indicators look good.
- lifeisstillgood 8y ago
  >>> licensing data about all the startups in the world ... Can you share where you get such data? It sounds incredibly interesting on one hand and academically useful on the other?
  - lawrenceyan 8y ago
    Probably some combination of Pitchbook, Crunchbase, and other similar aggregators.

snowmaker 8y ago

I do think that's possible, and that is one of the confounding factors we spend a lot of time worrying about and trying to control for when we do the data science on this. One of the ways we do this is by licensing data about all the startups in the world and then normalizing our own data against the market overall. Getting a true apples-to-apples comparison is difficult because the world doesn't stay the same. The funding market has changed dramatically since YC started, and the companies we're funding have changed a lot too - they're much more diverse now. We've tried to control for this but you are right that when building a complicated model, you can never be 100% certain and need to stay humble about your ability to correctly control for all these factors. We won't know for sure for many years; for now all I can say is that we've looked at this from many angles and the early indicators look good.

lifeisstillgood 8y ago
>>> licensing data about all the startups in the world ... Can you share where you get such data? It sounds incredibly interesting on one hand and academically useful on the other?
- lawrenceyan 8y ago
  Probably some combination of Pitchbook, Crunchbase, and other similar aggregators.