4 ms·

Definitely damaging to the YC brand. I'd like to see a postmortem on how these _blatant_ con artists got through.

by zumu 5y ago

sombremesa 5y ago
Italics on HN are made using asterisks. They should really make underscores do the same...not like those do anything else.
lvs 5y ago
Maybe the brand is a little bit hyped to begin with? I suspect there are only two companies these VCs have ever funded that are known to turn a profit. It seems like they've trained a generation of young smart people on how to get rich by losing money.
- dang 5y ago
  What a strange thing to hear. Even I can tell you that many more than "two" YC companies have become profitable, and I'm pretty removed from the business side of YC.
  - lvs 5y ago
    Which ones? There are only two public companies that currently make a profit that I'm aware of: dropbox and coinbase. I don't really pay much attention, but that's all I can think of at the moment.
    - dang 5y ago
      Well, here's one: https://www.forbes.com/sites/alexkonrad/2021/03/08/zapier-bootstraps-to-5-billion-valuation/ https://www.forbes.com/sites/alexkonrad/2021/03/08/zapier-bo.... Sorry I don't have a list for you, but HN seems to have warped my memory in strange ways. I'm sure that YC has funded at least dozens, probably hundreds of profitable companies, including many that people wouldn't remember, because they found a lucrative niche for the founders and a small team (or maybe even just the one or two founders), and opted out of the fundraising track and are happily making a good living. That's not the preferred outcome from a venture investor's point of view, of course, but YC has always supported what founders want to do. Also, Zapier's an outlier - there are others that have followed a more conventional fundraising path.
      - lvs 5y ago
        Seems like a deeply tedious topic, but it sounds like the argument is that the small number of (claimed) profitable companies have basically ignored whatever it is you tell them to do. That's a great pitch.
        deleted 5y ago
        [deleted]
        tomhoward 5y ago
        In my YC batch (I was in the same one as dang and Airbnb), the issue of revenue/profit was what the partners talked about the most. Growth too, but profitable growth. Like, it was talked about all the time in the batch. That was particularly important in our 2009 batch due to the financial crisis, but it remained important later in the good times - see PG’s post “Default Alive or Default Dead?”. Though it took us a while due to engineering challenges, our company survived and became profitable by minimizing spend and focusing on revenue/profit, just as YC advised. This notion that YC backs/encourages companies to flush money down the drain is a mistakenly applied stereotype spawned from a combination of different eras, different companies and different investors. Notably, YC has never been involved with companies like Uber, WeWork or Theranos, or any other company that SoftBank has tried to artificially pump up by pouring billions of dollars into.
        mercer 5y ago
        And yet here they are investing in something that is so obviously a scam that possibly even my grandmother would notice. It reminds me of the "but you fuck ONE goat" story: one misstep like this surely can and should have more impact than all the good steps.
        tomhoward 5y ago
        > "investing in something that is so obviously a scam" None of us has any idea what was presented in the application form and interviews, but given YC prizes its reputation above anything else, we can reasonably presume it wasn't obviously a scam.
    - nmfisher 5y ago
      I don’t think Dropbox are GAAP profitable either, I was looking at their financials a couple of weeks ago.
shrikant 5y ago
Some of us remember when YC funded InstallMonetizer and people around these parts were defending it. I doubt it'll affect the brand.
- d3nj4l 5y ago
  YC didn’t fund installmonetizer! They funded the next venture from the people behind installmonetizer, who then proceeded to say “we’re funded by YC” on their about us page.

Definitely damaging to the YC brand. I'd like to see a postmortem on how these _blatant_ con artists got through.

by zumu 5y ago

Definitely damaging to the YC brand. I'd like to see a postmortem on how these _blatant_ con artists got through.

Italics on HN are made using asterisks. They should really make underscores do the same...not like those do anything else.

lvs 5y ago

Maybe the brand is a little bit hyped to begin with? I suspect there are only two companies these VCs have ever funded that are known to turn a profit. It seems like they've trained a generation of young smart people on how to get rich by losing money.

dang 5y ago
What a strange thing to hear. Even I can tell you that many more than "two" YC companies have become profitable, and I'm pretty removed from the business side of YC.
- lvs 5y ago
  Which ones? There are only two public companies that currently make a profit that I'm aware of: dropbox and coinbase. I don't really pay much attention, but that's all I can think of at the moment.
  - dang 5y ago
    Well, here's one: https://www.forbes.com/sites/alexkonrad/2021/03/08/zapier-bootstraps-to-5-billion-valuation/ https://www.forbes.com/sites/alexkonrad/2021/03/08/zapier-bo.... Sorry I don't have a list for you, but HN seems to have warped my memory in strange ways. I'm sure that YC has funded at least dozens, probably hundreds of profitable companies, including many that people wouldn't remember, because they found a lucrative niche for the founders and a small team (or maybe even just the one or two founders), and opted out of the fundraising track and are happily making a good living. That's not the preferred outcome from a venture investor's point of view, of course, but YC has always supported what founders want to do. Also, Zapier's an outlier - there are others that have followed a more conventional fundraising path.
    - lvs 5y ago
      Seems like a deeply tedious topic, but it sounds like the argument is that the small number of (claimed) profitable companies have basically ignored whatever it is you tell them to do. That's a great pitch.
      - deleted 5y ago
        [deleted]
      - tomhoward 5y ago
        In my YC batch (I was in the same one as dang and Airbnb), the issue of revenue/profit was what the partners talked about the most. Growth too, but profitable growth. Like, it was talked about all the time in the batch. That was particularly important in our 2009 batch due to the financial crisis, but it remained important later in the good times - see PG’s post “Default Alive or Default Dead?”. Though it took us a while due to engineering challenges, our company survived and became profitable by minimizing spend and focusing on revenue/profit, just as YC advised. This notion that YC backs/encourages companies to flush money down the drain is a mistakenly applied stereotype spawned from a combination of different eras, different companies and different investors. Notably, YC has never been involved with companies like Uber, WeWork or Theranos, or any other company that SoftBank has tried to artificially pump up by pouring billions of dollars into.
        mercer 5y ago
        And yet here they are investing in something that is so obviously a scam that possibly even my grandmother would notice. It reminds me of the "but you fuck ONE goat" story: one misstep like this surely can and should have more impact than all the good steps.
        tomhoward 5y ago
        > "investing in something that is so obviously a scam" None of us has any idea what was presented in the application form and interviews, but given YC prizes its reputation above anything else, we can reasonably presume it wasn't obviously a scam.
  - nmfisher 5y ago
    I don’t think Dropbox are GAAP profitable either, I was looking at their financials a couple of weeks ago.

shrikant 5y ago

Some of us remember when YC funded InstallMonetizer and people around these parts were defending it. I doubt it'll affect the brand.

d3nj4l 5y ago
YC didn’t fund installmonetizer! They funded the next venture from the people behind installmonetizer, who then proceeded to say “we’re funded by YC” on their about us page.