6 ms·

What's so special about Y Combinator?

99 points by martinkl 16y ago

arkitaip 16y ago
"Y Combinator takes 2–10% of your company’s equity. How do you figure out whether the value you get from YC is worth the cost?" I am surprised the figure is that low. For the incredibly amount of contacts, experience and general help you get I was expecting atleast 20-30%.
- chrismanfrank 16y ago
  YC could probably take 20-30%. I'm guessing most founders would still do it. But if you took out the top 5% of start-ups from YC, it would be a far less interesting company. So making it a no-brainer for founders is probably a good strategy.
  - btam 16y ago
    I imagine that the 2-10% figure also helps YC keep its elite status. Not as many founders would find YC worth applying to if they had to give at the minimum a fifth of the company's equity.
francoisdevlin 16y ago
A fixed point combinator (or fixpoint combinator[1] ) is a higher-order function that computes a fixed point of other functions. A fixed point of a function f is a value x such that f(x) = x. For example, 0 and 1 are fixed points of the function f(x) = x2, because 02 = 0 and 12 = 1. Whereas a fixed-point of a first-order function (a function on "simple" values such as integers) is a first-order value, a fixed point of a higher-order function f is another function p such that f(p) = p. A fixed point combinator, then, is a function g which produces such a fixed point p for any function f: p = g(f), f(p) = p or, alternatively: f(g(f)) = g(f). http://en.wikipedia.org/wiki/Fixed_point_combinator http://en.wikipedia.org/wiki/Fixed_point_combinator
- deleted 16y ago
  [deleted]
- martinkl 16y ago
  Why did you choose the name "Y Combinator?" The Y combinator is one of the coolest ideas in computer science. It's also a metaphor for what we do. It's a program that runs programs; we're a company that helps start companies. http://ycombinator.com/faq.html http://ycombinator.com/faq.html
bloodcarter 16y ago
Thanks for sharing this, Martin. I agree. But let me play a devil advocate and ask you question. Take a look at the history of the biggest startup hits like Microsoft, Google, Facebook, etc. Do you really think that investor matters in these cases? Why?
- acconrad 16y ago
  Do you think you're at that caliber of innovation? If you're at that level, you don't even have to think about YC because your product is so compelling you don't need the help.
  - generalk 16y ago
    Wrong. 1) Innovation is the wrong word: Facebook, Google, and Microsoft weren't "innovative" ideas. Social networks, search, and software were all things that people were already doing. They were successful due to a multitude of factors including talent, ability to execute, and timing. 2) Those three examples aren't YC companies, but the two more recent ones, Facebook and Google, both had to raise VC, which means convincing people that their idea is worth investing in. At no point was it obvious.
    - acconrad 16y ago
      The social network wasn't innovative - the clean, uneditable interface with a social graph was. The search engine wasn't innovative - the targetted ads was. The operating system wasn't innovative - the mass market and adoption of it was. These three companies were absolutely innovative, just not on the surface product you consume. People are missing my point; it's ridiculous to say a blanket statement like "Google, Facebook and Microsoft did it without YC, what say you, entrepreneur!" when you're evaluating them when they are already billion-dollar companies. It's the same thing as someone trolling to say "I don't have to go to college cause Bill Gates didn't!" So when you're evaluating a company that is already successful, of course they won't need the help because their products are already so compelling. Now if you say "that's not why you're getting down-voted...these products weren't born awesome, they could have used YC then" well then this argument is still flawed. Why didn't Facebook need something like YC? Well it was Feb 2004, before YC even existed. None of these companies HAD a YC to use, so it's not a comparison you can even make valid. Incubators didn't exist for MS, Google, Facebook, Apple, AOL, Netscape... Of course these people needed to hustle. But they definitely sold themselves - Microsoft was bootstrapped, and Facebook had 100,000 members in 3 months until Peter Thiel caught wind of their efforts and approached THEM. Can everyone use the help? Of course. Facebook did it without YC and could do it again without YC. 99% of entrepreneurs are not in that situation.
Duff 16y ago
I attended one of the earlier "Startup School" events a few years ago at Harvard. Unfortunately, things didn't work out for my startup concept (I ended up working for the government, of all things), but I found the meeting inspiring. Here I was, a twenty something attending a free conference, sitting a few feet away from and talk to Steve Wozniak. A few minutes later, I'm in the middle of a fascinating conversation with Chris Sacca, only to head back into the lecture hall to listen to a really impressive series of speakers with alot of passion and great ideas. Honestly, it was an amazing event, and pg managed to assemble a great group of really approachable and interesting folks on a Saturday afternoon. I found it inspiring, and while I'm not involved with them at all, it sounds like YCombinator is an institution that makes a meeting like that happen everyday.
- grinich 16y ago
  If you're still around Boston, I started a similar event at MIT called Startup Bootcamp. http://startupbootcamp.mit.edu/ http://startupbootcamp.mit.edu/ (Register at the bottom, and you'll hear about the next event this September.) All of the past talks are on YouTube: http://www.youtube.com/startupbootcamp http://www.youtube.com/startupbootcamp
  - necrecious 16y ago
    The last one had some great speakers. Really enjoyed Bob Metcalfe's talk.
giberson 16y ago
It's funny, I so frequently forget that Y Combinator is not just news.ycombinator.com. Even how I word that makes me chuckle as I realize how contrary to reality it is. For me YC is simply a content aggregator that with a remarkable accuracy and consistency delivers content that I'm interested in, that I find relevant. Oh, it also is some kind of investment firm on the side I guess, or something--whatever. Ironically, it seems the core of YC--the essence that make it so valuable is the same from either Kleppmann's [an entrepreneur emphasis on YC] or my own[emphasis on news.yc] perspective. It comes down to the community of smart and intelligent people. More specifically to the openness and sharing of knowledge and idea's between those people. It seems like it could be all to easy to want to horde the secrets of one's experiences and success. To keep to themselves those secrets of wisdom to avoid competition and rivalry. Instead, we see sharing of the information--fine detailed analysis of mistakes and success to encourage and help others to achieve or avoid success and pitfalls. It's like there is a general good will intention for furthering and advancing the industry as a whole. I really like that.
nicholasjbs 16y ago
It probably sounds wishy-washy and hard to quantify, but I really think the "goodness" of the people in YC -- both the partners and the vast majority of the founders they fund -- is a hugely undervalued advantage of the program.
vegashacker 16y ago
[YC partners are] outspoken, honest, straight-to-the-point and totally bullshit-free. You can...get encouragement from them in hard times. I'm wondering if the first ever interferes with the second? E.g., if you worked hard on something and they tell you it's not good.
- pmjordan 16y ago
  Experiments often fail, no matter how hard you try. That doesn't mean there isn't anything encouraging left to say.
- martinkl 16y ago
  Honest criticism is encouraging, at least if you approach it with the right attitude. Sure, you might feel down for half an hour, but once you digest the criticism there are two possible responses: 1. "You have a point, I had a niggling feeling that my stuff wasn't good anyway, but now I have ideas on how to make it better."; or 2. "Thanks for your opinion, but you are wrong, and I'm going to prove it!" Both are motivating outcomes of honest criticism.
  - stcredzero 16y ago
    Both are motivating outcomes of honest criticism. I just pointed a few things out to a potential partner and a fellow entrepreneur. Namely, that he might have good ideas, but that he's not a programmer and it shows. Some matters of fact from our conversation: - Does not know enough to know what's hard and what's a solved problem - Does not have a colleague or advisor he can hash these things out with in close collaboration and learn from - Wastes a lot of time with underlings who just tell him "well, if you can draw it out, we can implement it" but don't try to communicate with him further So I just up and told him those things. I told him he needs an equal who understands the implementation end, and that a good working relationship with such a person would save him lots of time, prevent costly mistakes, and result in unexpected synergies. In a moment, I decided that I want to see how this fellow reacts to getting a little truth-tap to the head. Unfortunately, I was disappointed, as he immediately started to puff himself up as a defense mechanism. Oh well, I guess I'll keep on looking.
citizenkeys 16y ago
I'm still looking for more blog entries about the Y Combinator interview experience for my site: http://ycuniverse.com/interviewees.php http://ycuniverse.com/interviewees.php If anybody has links to such articles, please forward me the links.
samic 16y ago
that usually good links get lost?!
kirinkalia 16y ago
Martin, you hit on a key point that doesn't get enough attention: "When we talk to YC, no matter whether we have good news or bad news, chances are that they’ve seen the situation before, and their pattern-matching will enable them to make good predictions." YC created the accelerator model that many others are adapting/imitating. YC's experience with all kinds of situations gives it yet another advantage over its young competitors (alumni network and support being the top one IMO).
maeon3 16y ago
What makes YCombinator special is draining away. I've been reading YCombinator since when most of YCombinator's submissions got 0 to 1 or 3 comments throughout its life on the front page. The millions of reddit and digg users are spending more time on this site and I can see the influence literally increasing every month. By November 2011 the front page of YCombinator will look the same as digg looked back in 2006 and 2007. Ycombinator will have hundreds of thousands of voters, and the lulz will get more upvotes then sophisticated discussion. The only way to stop it will be to forcefully regulate it, a system like they have over at stackoverflow seems to be working. If YCombinator doesn't implement something like this. Then YCombinator will have to find a new domain name, and only tell the constructive users what it is.
- sokoloff 16y ago
  You realize that Martin's post was about the "real" YCombinator, not about the ancillary news.yc site? news.yc could be completely overrun by 4chan types and YCombinator itself would still be massively valuable to founders.
- vikramhaer 16y ago
  It's frustrating to see comments being made about the quality of conversation by people who haven't read the article they're commenting on. The points mentioned refer to the program, not hacker news.
- zacharycohn 16y ago
  Alternatively, it's educating "millions" (hundreds or low thousands is more likely if you're just looking at people who comment) of people about technology, startups, entrepreneurship, while maintaining a community of reasonably high level intelligence. If people would stop complaining all the time and just teach the newcomers (downvote and a reply explaining why this isn't the kind of behavior expected at HN) would be a lot more valuable than a bunch of "back in my day" complaining.
- Smirnoff 16y ago
  Haha. You made my day. Please click on the title. It has a link to the article. Also, the article referred to Y-Combinator as to a tech incubator and not just a news aggregator. Let me know if you need help clicking on the title link ;)
stcredzero 16y ago
One thing that hasn't been mentioned -- the philosophical underpinnings of entrepreneurship surrounding the Y Combinator organization. This is actually a big material advantage, provided there's also execution.
jordo37 16y ago
Reading articles like this makes it obvious that Y Combinator is a very special group of people (investors and starters). That being said, I'm always a little skeptical when one of many groups in a field is supposed to be superior in every single way. My question therefore would be what comes close and how close are they?

99 points by martinkl 16y ago

"Y Combinator takes 2–10% of your company’s equity. How do you figure out whether the value you get from YC is worth the cost?" I am surprised the figure is that low. For the incredibly amount of contacts, experience and general help you get I was expecting atleast 20-30%.

chrismanfrank 16y ago
YC could probably take 20-30%. I'm guessing most founders would still do it. But if you took out the top 5% of start-ups from YC, it would be a far less interesting company. So making it a no-brainer for founders is probably a good strategy.
- btam 16y ago
  I imagine that the 2-10% figure also helps YC keep its elite status. Not as many founders would find YC worth applying to if they had to give at the minimum a fifth of the company's equity.

francoisdevlin 16y ago

A fixed point combinator (or fixpoint combinator[1] ) is a higher-order function that computes a fixed point of other functions. A fixed point of a function f is a value x such that f(x) = x. For example, 0 and 1 are fixed points of the function f(x) = x2, because 02 = 0 and 12 = 1. Whereas a fixed-point of a first-order function (a function on "simple" values such as integers) is a first-order value, a fixed point of a higher-order function f is another function p such that f(p) = p. A fixed point combinator, then, is a function g which produces such a fixed point p for any function f: p = g(f), f(p) = p or, alternatively: f(g(f)) = g(f). http://en.wikipedia.org/wiki/Fixed_point_combinator http://en.wikipedia.org/wiki/Fixed_point_combinator

deleted 16y ago
[deleted]
martinkl 16y ago
Why did you choose the name "Y Combinator?" The Y combinator is one of the coolest ideas in computer science. It's also a metaphor for what we do. It's a program that runs programs; we're a company that helps start companies. http://ycombinator.com/faq.html http://ycombinator.com/faq.html

bloodcarter 16y ago

Thanks for sharing this, Martin. I agree. But let me play a devil advocate and ask you question. Take a look at the history of the biggest startup hits like Microsoft, Google, Facebook, etc. Do you really think that investor matters in these cases? Why?

acconrad 16y ago
Do you think you're at that caliber of innovation? If you're at that level, you don't even have to think about YC because your product is so compelling you don't need the help.
- generalk 16y ago
  Wrong. 1) Innovation is the wrong word: Facebook, Google, and Microsoft weren't "innovative" ideas. Social networks, search, and software were all things that people were already doing. They were successful due to a multitude of factors including talent, ability to execute, and timing. 2) Those three examples aren't YC companies, but the two more recent ones, Facebook and Google, both had to raise VC, which means convincing people that their idea is worth investing in. At no point was it obvious.
  - acconrad 16y ago
    The social network wasn't innovative - the clean, uneditable interface with a social graph was. The search engine wasn't innovative - the targetted ads was. The operating system wasn't innovative - the mass market and adoption of it was. These three companies were absolutely innovative, just not on the surface product you consume. People are missing my point; it's ridiculous to say a blanket statement like "Google, Facebook and Microsoft did it without YC, what say you, entrepreneur!" when you're evaluating them when they are already billion-dollar companies. It's the same thing as someone trolling to say "I don't have to go to college cause Bill Gates didn't!" So when you're evaluating a company that is already successful, of course they won't need the help because their products are already so compelling. Now if you say "that's not why you're getting down-voted...these products weren't born awesome, they could have used YC then" well then this argument is still flawed. Why didn't Facebook need something like YC? Well it was Feb 2004, before YC even existed. None of these companies HAD a YC to use, so it's not a comparison you can even make valid. Incubators didn't exist for MS, Google, Facebook, Apple, AOL, Netscape... Of course these people needed to hustle. But they definitely sold themselves - Microsoft was bootstrapped, and Facebook had 100,000 members in 3 months until Peter Thiel caught wind of their efforts and approached THEM. Can everyone use the help? Of course. Facebook did it without YC and could do it again without YC. 99% of entrepreneurs are not in that situation.

Duff 16y ago

I attended one of the earlier "Startup School" events a few years ago at Harvard. Unfortunately, things didn't work out for my startup concept (I ended up working for the government, of all things), but I found the meeting inspiring. Here I was, a twenty something attending a free conference, sitting a few feet away from and talk to Steve Wozniak. A few minutes later, I'm in the middle of a fascinating conversation with Chris Sacca, only to head back into the lecture hall to listen to a really impressive series of speakers with alot of passion and great ideas. Honestly, it was an amazing event, and pg managed to assemble a great group of really approachable and interesting folks on a Saturday afternoon. I found it inspiring, and while I'm not involved with them at all, it sounds like YCombinator is an institution that makes a meeting like that happen everyday.

grinich 16y ago
If you're still around Boston, I started a similar event at MIT called Startup Bootcamp. http://startupbootcamp.mit.edu/ http://startupbootcamp.mit.edu/ (Register at the bottom, and you'll hear about the next event this September.) All of the past talks are on YouTube: http://www.youtube.com/startupbootcamp http://www.youtube.com/startupbootcamp
- necrecious 16y ago
  The last one had some great speakers. Really enjoyed Bob Metcalfe's talk.

giberson 16y ago

It's funny, I so frequently forget that Y Combinator is not just news.ycombinator.com. Even how I word that makes me chuckle as I realize how contrary to reality it is. For me YC is simply a content aggregator that with a remarkable accuracy and consistency delivers content that I'm interested in, that I find relevant. Oh, it also is some kind of investment firm on the side I guess, or something--whatever. Ironically, it seems the core of YC--the essence that make it so valuable is the same from either Kleppmann's [an entrepreneur emphasis on YC] or my own[emphasis on news.yc] perspective. It comes down to the community of smart and intelligent people. More specifically to the openness and sharing of knowledge and idea's between those people. It seems like it could be all to easy to want to horde the secrets of one's experiences and success. To keep to themselves those secrets of wisdom to avoid competition and rivalry. Instead, we see sharing of the information--fine detailed analysis of mistakes and success to encourage and help others to achieve or avoid success and pitfalls. It's like there is a general good will intention for furthering and advancing the industry as a whole. I really like that.

nicholasjbs 16y ago

It probably sounds wishy-washy and hard to quantify, but I really think the "goodness" of the people in YC -- both the partners and the vast majority of the founders they fund -- is a hugely undervalued advantage of the program.

vegashacker 16y ago

[YC partners are] outspoken, honest, straight-to-the-point and totally bullshit-free. You can...get encouragement from them in hard times. I'm wondering if the first ever interferes with the second? E.g., if you worked hard on something and they tell you it's not good.

pmjordan 16y ago
Experiments often fail, no matter how hard you try. That doesn't mean there isn't anything encouraging left to say.
martinkl 16y ago
Honest criticism is encouraging, at least if you approach it with the right attitude. Sure, you might feel down for half an hour, but once you digest the criticism there are two possible responses: 1. "You have a point, I had a niggling feeling that my stuff wasn't good anyway, but now I have ideas on how to make it better."; or 2. "Thanks for your opinion, but you are wrong, and I'm going to prove it!" Both are motivating outcomes of honest criticism.
- stcredzero 16y ago
  Both are motivating outcomes of honest criticism. I just pointed a few things out to a potential partner and a fellow entrepreneur. Namely, that he might have good ideas, but that he's not a programmer and it shows. Some matters of fact from our conversation: - Does not know enough to know what's hard and what's a solved problem - Does not have a colleague or advisor he can hash these things out with in close collaboration and learn from - Wastes a lot of time with underlings who just tell him "well, if you can draw it out, we can implement it" but don't try to communicate with him further So I just up and told him those things. I told him he needs an equal who understands the implementation end, and that a good working relationship with such a person would save him lots of time, prevent costly mistakes, and result in unexpected synergies. In a moment, I decided that I want to see how this fellow reacts to getting a little truth-tap to the head. Unfortunately, I was disappointed, as he immediately started to puff himself up as a defense mechanism. Oh well, I guess I'll keep on looking.

citizenkeys 16y ago

I'm still looking for more blog entries about the Y Combinator interview experience for my site: http://ycuniverse.com/interviewees.php http://ycuniverse.com/interviewees.php If anybody has links to such articles, please forward me the links.

samic 16y ago

that usually good links get lost?!

kirinkalia 16y ago

Martin, you hit on a key point that doesn't get enough attention: "When we talk to YC, no matter whether we have good news or bad news, chances are that they’ve seen the situation before, and their pattern-matching will enable them to make good predictions." YC created the accelerator model that many others are adapting/imitating. YC's experience with all kinds of situations gives it yet another advantage over its young competitors (alumni network and support being the top one IMO).

maeon3 16y ago

What makes YCombinator special is draining away. I've been reading YCombinator since when most of YCombinator's submissions got 0 to 1 or 3 comments throughout its life on the front page. The millions of reddit and digg users are spending more time on this site and I can see the influence literally increasing every month. By November 2011 the front page of YCombinator will look the same as digg looked back in 2006 and 2007. Ycombinator will have hundreds of thousands of voters, and the lulz will get more upvotes then sophisticated discussion. The only way to stop it will be to forcefully regulate it, a system like they have over at stackoverflow seems to be working. If YCombinator doesn't implement something like this. Then YCombinator will have to find a new domain name, and only tell the constructive users what it is.

sokoloff 16y ago
You realize that Martin's post was about the "real" YCombinator, not about the ancillary news.yc site? news.yc could be completely overrun by 4chan types and YCombinator itself would still be massively valuable to founders.
vikramhaer 16y ago
It's frustrating to see comments being made about the quality of conversation by people who haven't read the article they're commenting on. The points mentioned refer to the program, not hacker news.
zacharycohn 16y ago
Alternatively, it's educating "millions" (hundreds or low thousands is more likely if you're just looking at people who comment) of people about technology, startups, entrepreneurship, while maintaining a community of reasonably high level intelligence. If people would stop complaining all the time and just teach the newcomers (downvote and a reply explaining why this isn't the kind of behavior expected at HN) would be a lot more valuable than a bunch of "back in my day" complaining.
Smirnoff 16y ago
Haha. You made my day. Please click on the title. It has a link to the article. Also, the article referred to Y-Combinator as to a tech incubator and not just a news aggregator. Let me know if you need help clicking on the title link ;)

stcredzero 16y ago

One thing that hasn't been mentioned -- the philosophical underpinnings of entrepreneurship surrounding the Y Combinator organization. This is actually a big material advantage, provided there's also execution.

jordo37 16y ago

Reading articles like this makes it obvious that Y Combinator is a very special group of people (investors and starters). That being said, I'm always a little skeptical when one of many groups in a field is supposed to be superior in every single way. My question therefore would be what comes close and how close are they?