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YC has nothing to do with replacing the traditional corporation. To do that YC companies would have to have sustainable business models and actually make a prof

YC has nothing to do with replacing the traditional corporation. To do that YC companies would have to have sustainable business models and actually make a profit. How many YC companies have ever made a real profit before being bought? How is the YC model sustainable without existing large corporations like Google or Yahoo or Linkedin waiting to buy out the startups? YC is about grooming startups ready to be bought out in talent acquisitions after a period of rapid growth, not about creating sustainable businesses with viable products.

jot 15y ago
YC has the sustainable business model and does make a profit. How many teams within traditional corporations are profitable? How many new products that traditional corporations launch are profitable?
- djnliung 15y ago
  YC can't replace the traditional corporation when the traditional corporation is the customer that buys their product.
  - jot 15y ago
    The most successful (profitable) YC "products", Heroku, Dropbox and Airbnb, have very sound business models with tens of thousands of customers that are not "traditional corporations".
    - ryanisinallofus 15y ago
      Heroku was acquired and is an excellent example of YC startups being the product traditional corporations purchase.
      - runako 15y ago
        Is the fact that Heroku was acquired the rationale for calling it the 'product' purchased by 'traditional corporations'? If so, what threshold would you apply for when a company can be considered successful before it gets acquired? As companies of all sizes get acquired, aren't they all then 'product' that wasn't successful until a real company bought them?
rewind 15y ago
Did you even read the article? The "replacement" part is replacing the large internal network of connections at a company with the network of connections to YC alumni.
- paulhauggis 15y ago
  I think we can say this if any of the YC companies are still around in 10 years and profitable.
pg 15y ago
I remember people saying things like this in the first few years but it's surprising to encounter it now. If people who think we're in the business of grooming startups for HR acquisitions stopped to do the math, they'd realize we'd be acting against our own interests if we focused on that. Essentially all the returns in startup investing (for us as for any investor) come from the big successes. Whereas we often make zero from early acquisitions.
- gsharm 15y ago
  Big successes and sustainable businesses aren't necessarily the same thing. This is an important distinction because a sustainable business is a viable option for many, and "big success" isn't. And the biggest ones are going to leapfrog such schemes anyway. It's like American Idol for programmers. What you're doing is interesting, but it's questionable whether it's promoting the right values.
  - robryan 15y ago
    Seems more like the big goal is to become a big success in their own right. If that doesn't come about then either a fairly big exit or a talent acquisition is much better for all parties than calling it quits.
  - pg 15y ago
    Big successes and sustainable businesses aren't necessarily the same thing. I'm not sure what you mean by "sustainable businesses," but if you mean profitable businesses, big successes necessarily are that.
    - enjo 15y ago
      Is that true? Was Photobucket or MySpace a "big success"? They certainly sold for a lots of money, but profitable was never a strong suit was it?
      - pg 15y ago
        By big successes I mean companies big enough to go public.
justin 15y ago
The comments in this thread are painful and seem to be based on a lack of understanding of investor motivations and basic spreadsheet math. YC (and the rest of Silicon Valley)'s biggest successes are companies that make money and have real, innovative business models and products. Talent acquisitions almost always happen before companies reach this stage, and while they get a lot of attention because they are "news", they aren't where investors make the most money. Investors aren't investing in technology companies in the hopes they get acquired for $10m in Google or Facebook stock -- they are looking for large sustainable companies that generate revenue (and profits). The difference between YC and traditional investors is that YC doesn't block founders from taking talent acquisitions, which may be one reason it seems like there are more of them.

jot 15y ago

YC has the sustainable business model and does make a profit. How many teams within traditional corporations are profitable? How many new products that traditional corporations launch are profitable?

djnliung 15y ago
YC can't replace the traditional corporation when the traditional corporation is the customer that buys their product.
- jot 15y ago
  The most successful (profitable) YC "products", Heroku, Dropbox and Airbnb, have very sound business models with tens of thousands of customers that are not "traditional corporations".
  - ryanisinallofus 15y ago
    Heroku was acquired and is an excellent example of YC startups being the product traditional corporations purchase.
    - runako 15y ago
      Is the fact that Heroku was acquired the rationale for calling it the 'product' purchased by 'traditional corporations'? If so, what threshold would you apply for when a company can be considered successful before it gets acquired? As companies of all sizes get acquired, aren't they all then 'product' that wasn't successful until a real company bought them?

rewind 15y ago

Did you even read the article? The "replacement" part is replacing the large internal network of connections at a company with the network of connections to YC alumni.

paulhauggis 15y ago
I think we can say this if any of the YC companies are still around in 10 years and profitable.

pg 15y ago

I remember people saying things like this in the first few years but it's surprising to encounter it now. If people who think we're in the business of grooming startups for HR acquisitions stopped to do the math, they'd realize we'd be acting against our own interests if we focused on that. Essentially all the returns in startup investing (for us as for any investor) come from the big successes. Whereas we often make zero from early acquisitions.

gsharm 15y ago
Big successes and sustainable businesses aren't necessarily the same thing. This is an important distinction because a sustainable business is a viable option for many, and "big success" isn't. And the biggest ones are going to leapfrog such schemes anyway. It's like American Idol for programmers. What you're doing is interesting, but it's questionable whether it's promoting the right values.
- robryan 15y ago
  Seems more like the big goal is to become a big success in their own right. If that doesn't come about then either a fairly big exit or a talent acquisition is much better for all parties than calling it quits.
- pg 15y ago
  Big successes and sustainable businesses aren't necessarily the same thing. I'm not sure what you mean by "sustainable businesses," but if you mean profitable businesses, big successes necessarily are that.
  - enjo 15y ago
    Is that true? Was Photobucket or MySpace a "big success"? They certainly sold for a lots of money, but profitable was never a strong suit was it?
    - pg 15y ago
      By big successes I mean companies big enough to go public.

justin 15y ago

The comments in this thread are painful and seem to be based on a lack of understanding of investor motivations and basic spreadsheet math. YC (and the rest of Silicon Valley)'s biggest successes are companies that make money and have real, innovative business models and products. Talent acquisitions almost always happen before companies reach this stage, and while they get a lot of attention because they are "news", they aren't where investors make the most money. Investors aren't investing in technology companies in the hopes they get acquired for $10m in Google or Facebook stock -- they are looking for large sustainable companies that generate revenue (and profits). The difference between YC and traditional investors is that YC doesn't block founders from taking talent acquisitions, which may be one reason it seems like there are more of them.