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Start-ups Rejected By Y Combinator (And Investors) Flock To YC Reject

102 points by rrhoover 16y ago

Edit: title

power78 16y ago
Next they'll have news.ycreject.com!
neoveller 16y ago
A very inspiring story. It gives me a little more faith in the Valley.
shawnee_ 16y ago
But is this another sign of a bubble, particularly on the investing side? Why would angels invest in companies that are not vetted by Y Combinator? There's a very valid reason to invest in companies that aren't YC companies. The $150K burden that most of the YC W11 companies took is one reason. If a company has $150K to play with out the door, it's not exactly bootstrapping it. If a company isn't bootstrapping things, it can have deluded visions of grandeur and won't always build an efficient or sustainable product. Money can buy hype in the short-term but hype doesn't build value in the long term. In other words, YC isn't about scrappy underdogs any more. And if there is one thing the valley can always make room for, it's the scrappy underdog.
- marcomonteiro 16y ago
  I thought the article was fairly straight forward until I got to the point you quoted. It's as if the attitude is that YC picks all the great startups and non-YC companies are second-rate throw aways that are destined to fail. While I personally think YC is a great program with a lot to offer, which is why I applied, they don't have the resources to take on every group that applies. It also wouldn't be in their best interest. I was skeptical about YC Reject at first and wasn't sure about applying or looking for work and working on my startup part-time but I'm considering it more and more now.
  - jpk 16y ago
    Indeed, the YC rejection letter says basically this. (For the benefit of other readers: http://news.ycombinator.com/item?id=2422032 http://news.ycombinator.com/item?id=2422032) The problem here is that everyone is looking at acceptance/rejection as bi-implication when it's not. Getting in implies you're probably good, but getting rejected doesn't imply you're probably bad.
    - ScottBurson 16y ago
      Getting rejected doesn't in itself imply you're probably bad, but it doesn't imply you're good either. And if all an investor knows is that you're a founder or team that wants to do a startup, the odds are that you're no good. The problem is that the prior probability that you're good is already very low, not that the conditional probability that you're good given that you're rejected by YC is any lower. So the real question here is, can these people learn to first evaluate their applicants, and then support the ones they fund, anywhere near as well as YC does? I think the YC formula is not going to be anywhere near as easy to duplicate as they seem to think.
      - marcomonteiro 16y ago
        And if all an investor knows is that you're a founder or team that wants to do a startup, the odds are that you're no good. So the investor's knowledge about your project determines the founder or teams quality? YC applicants disclose more than that they want to do a startup, does that the automatically improve the odds that they're good? What specifically makes them "good" anyhow? YC Rejects would be disclosing more than they want to do a startup and in fact it's been noted that the angel would review applicants and determine who gets in. The problem is that the prior probability that you're good is already low, not that the conditional probability that you're good given that you're rejected by YC is any lower. Based on what exactly? Why is it more likely that your not good to begin with? So the real question here is, can these people learn to first evaluate their applicants, and then support the ones they fund, anywhere near as well as YC does? I think the YC formula is nit going to be anywhere near as easy to duplicate as they seem to think. It doesn't have to duplicate the YC formula in order to be successful as even YC proves that their formula doesn't automatically lead to successful startups. I do think that the YC staff and alumni network is a huge asset but that doesn't preclude others from providing valuable resources. The rest remains to be seen.
robryan 16y ago
If the quality of YC startups is improving every round that means that more and more companies YC would have previously invested in are missing out. What's to say you won't find a dropbox or heuroku out of the rejects group that would have made it into previous rounds?
- allanscu 16y ago
  It's going to come down to determination of the group, and it's hard to gauge that in an application or interview process. I'm in the process of gathering more information about groups that applied to YC/TS/500 that were rejected but eventually became successful. If you know of any, please let me know. allan@ycreject.com
  - citizenkeys 16y ago
    Sent you an email. Also added links to YC Reject and YC Reject Reject to Y Combinator Universe ( http://ycuniverse.com http://ycuniverse.com ).
citizenkeys 16y ago
I have mixed feelings about this. With YC, it's not just about the money or the weekly speakers. It's about Paul Graham's experience as a mentor and Silicon Valley connections. That said, though, there are many of us with good ideas that are asking ourselves right after YC application decisions "What now?" Similar programs that we can immediately start pursuing after being rejected from Y Combinator at least offers a back-up plan.
- rmobin 16y ago
  One of the important benefits of YC is that meeting every week with a group of like-minded founders forces you do some kind of work on your startup. Even if you are demoralized, you would feel pretty stupid if you didn't have anything new to show after a week.
geuis 16y ago
What concerns me about this YCReject project is that is for people who didn't even make the interview process (apologies if this isn't true, this is to the best of my knowledge). I consider the YC interview process to be a useful filter. Anyone can apply to YC and anyone can be rejected. I applied 2-3 years ago and was rejected. Last year, my cofounder and I got the interview but didn't get into the program. To me, getting the interview means that the YC folks thought there was something interesting in the proposal, but decided not to fund the company because of limited space for the round or the personalities of the founders. If YCReject was oriented at people who got the interviews but not the program, that would at least be an interesting signal. It might tell investors that these people garnered YC's interest and might be worth a second look. However, I don't see how letting everyone who's application was rejected into an alternate program provides any kind of useful filter at all.
- Retric 16y ago
  I don't think the goal is a filter at the level your thinking about. The real question is simply is are YC rejects a better pool to consider than the random ideas they are already receiving. On the upside, they are looking at a pool of people that got it together enough to apply to YC with 1 or 2 ideas, got rejected and still want to give it a go. That means they are a least willing to push back a setback and not simply spamming ideas looking for money. On the down side, some of the best people / ideas have been removed. Overall it's probably a better group of people and ideas than would apply to a less well known funding source.
  - jdunck 16y ago
    I applied and didn't get an interview. And I agree that a filter of some sort is needed for YCReject to be meaningful. I'll persist in my efforts, but that doesn't imply I will be successful. More to the point, though, I think much of the value of YC is in the network of alums and mentors they provide. Unless there is some buyin from those mentors (or others of their value) then I don't think there's much point to YCReject except as a team to cheer you through the low points.
- mindcrime 16y ago
waterside81 16y ago
For me, YC & the rest of the seed funds have seemed to light a fire under would-be entrepreneurs, which is great. It's opened up lots of doors and spurred on innovation, which is the whole point. PG & co deserve a round of applause. But I find it bizarre and a bit upsetting that YC has become the be-all, end-all (at least on HN). There were great startups before YC and there will be great ones after YC. I'd like to echo the sentiment of others who have said the following: If getting into YC (or TechStars or whatever else there is) was part of your strategy, then you're probably not going to succeed. The value they add is immense, but they are by no means king makers. Many YC companies will fail, and some will succeed and those that succeed might just as well have done so without YC.
shuri 16y ago
What would be interesting is if a random set of the unaccepted got the same opportunities as the accepted. But that's not possible... Instead what yc needs to do is accept a control group and see if there is any correlation between being chosen and eventual success. Then again...
baguasquirrel 16y ago
Does it bother anyone else that YC has become so important that it's being covered in Forbes? I appreciate the attention that the startup community has been getting these days, but I'm sure many of you likewise enjoyed the underdog status we had.
dengzhi 16y ago
it's sorta like how now Yahoo only gets all the Google-rejects
Vivtek 16y ago
But is this another sign of a bubble, particularly on the investing side? Can it be a bubble if everybody is asking whether it's a bubble? This metabubble stuff makes my head hurt.
- david927 16y ago
  Everybody asked that question in the late 90's about tech stocks, and in the 00's about Real Estate. I don't know of a time when everyone was asking "is this a bubble?" when it wasn't in fact exactly that.
deleted 16y ago
[deleted]
tlrobinson 16y ago
I thought I was joking when I posted this: http://news.ycombinator.com/item?id=2428988 http://news.ycombinator.com/item?id=2428988
abbasmehdi 16y ago
If I was pg I'd be closely monitoring these developments, this may make an even bigger mess of funding and financing as he mentioned in one of his latest essays.
kimfuh 16y ago
Someone should do an American Idol Reject show.
johnx123 16y ago
What about crowd sourced YC? (yconline or something?) We have a system ready with us.
- johnx123 16y ago
  Anybody think it's worth to launch ours as yconline ?
- maxer 16y ago
  there is on that exists http://www.seedups.com http://www.seedups.com
  - johnx123 16y ago
    It's more of kickstarter. But, ours is more like YC (crowd decides whom to get funded and funds)
ethnomusicolog 16y ago
What suprises me is why it took so long to happen: hacker community + validated model + underserved customers yields YC Reject

102 points by rrhoover 16y ago

Edit: title

power78 16y ago

Next they'll have news.ycreject.com!

neoveller 16y ago

A very inspiring story. It gives me a little more faith in the Valley.

shawnee_ 16y ago

But is this another sign of a bubble, particularly on the investing side? Why would angels invest in companies that are not vetted by Y Combinator? There's a very valid reason to invest in companies that aren't YC companies. The $150K burden that most of the YC W11 companies took is one reason. If a company has $150K to play with out the door, it's not exactly bootstrapping it. If a company isn't bootstrapping things, it can have deluded visions of grandeur and won't always build an efficient or sustainable product. Money can buy hype in the short-term but hype doesn't build value in the long term. In other words, YC isn't about scrappy underdogs any more. And if there is one thing the valley can always make room for, it's the scrappy underdog.

marcomonteiro 16y ago
I thought the article was fairly straight forward until I got to the point you quoted. It's as if the attitude is that YC picks all the great startups and non-YC companies are second-rate throw aways that are destined to fail. While I personally think YC is a great program with a lot to offer, which is why I applied, they don't have the resources to take on every group that applies. It also wouldn't be in their best interest. I was skeptical about YC Reject at first and wasn't sure about applying or looking for work and working on my startup part-time but I'm considering it more and more now.
- jpk 16y ago
  Indeed, the YC rejection letter says basically this. (For the benefit of other readers: http://news.ycombinator.com/item?id=2422032 http://news.ycombinator.com/item?id=2422032) The problem here is that everyone is looking at acceptance/rejection as bi-implication when it's not. Getting in implies you're probably good, but getting rejected doesn't imply you're probably bad.
  - ScottBurson 16y ago
    Getting rejected doesn't in itself imply you're probably bad, but it doesn't imply you're good either. And if all an investor knows is that you're a founder or team that wants to do a startup, the odds are that you're no good. The problem is that the prior probability that you're good is already very low, not that the conditional probability that you're good given that you're rejected by YC is any lower. So the real question here is, can these people learn to first evaluate their applicants, and then support the ones they fund, anywhere near as well as YC does? I think the YC formula is not going to be anywhere near as easy to duplicate as they seem to think.
    - marcomonteiro 16y ago
      And if all an investor knows is that you're a founder or team that wants to do a startup, the odds are that you're no good. So the investor's knowledge about your project determines the founder or teams quality? YC applicants disclose more than that they want to do a startup, does that the automatically improve the odds that they're good? What specifically makes them "good" anyhow? YC Rejects would be disclosing more than they want to do a startup and in fact it's been noted that the angel would review applicants and determine who gets in. The problem is that the prior probability that you're good is already low, not that the conditional probability that you're good given that you're rejected by YC is any lower. Based on what exactly? Why is it more likely that your not good to begin with? So the real question here is, can these people learn to first evaluate their applicants, and then support the ones they fund, anywhere near as well as YC does? I think the YC formula is nit going to be anywhere near as easy to duplicate as they seem to think. It doesn't have to duplicate the YC formula in order to be successful as even YC proves that their formula doesn't automatically lead to successful startups. I do think that the YC staff and alumni network is a huge asset but that doesn't preclude others from providing valuable resources. The rest remains to be seen.

robryan 16y ago

If the quality of YC startups is improving every round that means that more and more companies YC would have previously invested in are missing out. What's to say you won't find a dropbox or heuroku out of the rejects group that would have made it into previous rounds?

allanscu 16y ago
It's going to come down to determination of the group, and it's hard to gauge that in an application or interview process. I'm in the process of gathering more information about groups that applied to YC/TS/500 that were rejected but eventually became successful. If you know of any, please let me know. allan@ycreject.com
- citizenkeys 16y ago
  Sent you an email. Also added links to YC Reject and YC Reject Reject to Y Combinator Universe ( http://ycuniverse.com http://ycuniverse.com ).

citizenkeys 16y ago

I have mixed feelings about this. With YC, it's not just about the money or the weekly speakers. It's about Paul Graham's experience as a mentor and Silicon Valley connections. That said, though, there are many of us with good ideas that are asking ourselves right after YC application decisions "What now?" Similar programs that we can immediately start pursuing after being rejected from Y Combinator at least offers a back-up plan.

rmobin 16y ago
One of the important benefits of YC is that meeting every week with a group of like-minded founders forces you do some kind of work on your startup. Even if you are demoralized, you would feel pretty stupid if you didn't have anything new to show after a week.

geuis 16y ago

What concerns me about this YCReject project is that is for people who didn't even make the interview process (apologies if this isn't true, this is to the best of my knowledge). I consider the YC interview process to be a useful filter. Anyone can apply to YC and anyone can be rejected. I applied 2-3 years ago and was rejected. Last year, my cofounder and I got the interview but didn't get into the program. To me, getting the interview means that the YC folks thought there was something interesting in the proposal, but decided not to fund the company because of limited space for the round or the personalities of the founders. If YCReject was oriented at people who got the interviews but not the program, that would at least be an interesting signal. It might tell investors that these people garnered YC's interest and might be worth a second look. However, I don't see how letting everyone who's application was rejected into an alternate program provides any kind of useful filter at all.

Retric 16y ago
I don't think the goal is a filter at the level your thinking about. The real question is simply is are YC rejects a better pool to consider than the random ideas they are already receiving. On the upside, they are looking at a pool of people that got it together enough to apply to YC with 1 or 2 ideas, got rejected and still want to give it a go. That means they are a least willing to push back a setback and not simply spamming ideas looking for money. On the down side, some of the best people / ideas have been removed. Overall it's probably a better group of people and ideas than would apply to a less well known funding source.
- jdunck 16y ago
  I applied and didn't get an interview. And I agree that a filter of some sort is needed for YCReject to be meaningful. I'll persist in my efforts, but that doesn't imply I will be successful. More to the point, though, I think much of the value of YC is in the network of alums and mentors they provide. Unless there is some buyin from those mentors (or others of their value) then I don't think there's much point to YCReject except as a team to cheer you through the low points.
mindcrime 16y ago

waterside81 16y ago

For me, YC & the rest of the seed funds have seemed to light a fire under would-be entrepreneurs, which is great. It's opened up lots of doors and spurred on innovation, which is the whole point. PG & co deserve a round of applause. But I find it bizarre and a bit upsetting that YC has become the be-all, end-all (at least on HN). There were great startups before YC and there will be great ones after YC. I'd like to echo the sentiment of others who have said the following: If getting into YC (or TechStars or whatever else there is) was part of your strategy, then you're probably not going to succeed. The value they add is immense, but they are by no means king makers. Many YC companies will fail, and some will succeed and those that succeed might just as well have done so without YC.

shuri 16y ago

What would be interesting is if a random set of the unaccepted got the same opportunities as the accepted. But that's not possible... Instead what yc needs to do is accept a control group and see if there is any correlation between being chosen and eventual success. Then again...

baguasquirrel 16y ago

Does it bother anyone else that YC has become so important that it's being covered in Forbes? I appreciate the attention that the startup community has been getting these days, but I'm sure many of you likewise enjoyed the underdog status we had.

dengzhi 16y ago

it's sorta like how now Yahoo only gets all the Google-rejects

Vivtek 16y ago

But is this another sign of a bubble, particularly on the investing side? Can it be a bubble if everybody is asking whether it's a bubble? This metabubble stuff makes my head hurt.

david927 16y ago
Everybody asked that question in the late 90's about tech stocks, and in the 00's about Real Estate. I don't know of a time when everyone was asking "is this a bubble?" when it wasn't in fact exactly that.

deleted 16y ago

[deleted]

tlrobinson 16y ago

I thought I was joking when I posted this: http://news.ycombinator.com/item?id=2428988 http://news.ycombinator.com/item?id=2428988

abbasmehdi 16y ago

If I was pg I'd be closely monitoring these developments, this may make an even bigger mess of funding and financing as he mentioned in one of his latest essays.

kimfuh 16y ago

Someone should do an American Idol Reject show.

johnx123 16y ago

What about crowd sourced YC? (yconline or something?) We have a system ready with us.

johnx123 16y ago
Anybody think it's worth to launch ours as yconline ?
maxer 16y ago
there is on that exists http://www.seedups.com http://www.seedups.com
- johnx123 16y ago
  It's more of kickstarter. But, ours is more like YC (crowd decides whom to get funded and funds)

ethnomusicolog 16y ago

What suprises me is why it took so long to happen: hacker community + validated model + underserved customers yields YC Reject