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YC W13 Will Be Smaller
- jcdavis 14y agoI'd be curious to know what broke. Companies in the last batch having a harder time getting funding?
- iag 14y ago+1 Pg, can you elaborate on this a bit?
- pg 14y agoThe short version is that we learned YC in its then form was O(n^2). As the batch size grew, it was hard for every partner to know exactly what each startup was doing. Especially since things often change fast at startups. To grow bigger we have to (a) make it easier for each partner to know what each startup is doing, or (b) make it unnecessary. The answer will probably be a bit of both. The symptom was not startups having trouble raising money (that seems to be working about like it usually does) but us partners always feeling confused. We were not ahead of the aircraft in the way we'd been in the past.
- eps 14y ago66 still seems a very high count to even remember all the names, leave alone keeping track of where they are.
- rdl 14y agoI think they cheat initially by remembering the company name, e.g. calling an entire team "the Airbnbs" or something, until they get to know the people individually. So it's at least 66 groups vs. 150 people. The company names or nicknames are usually also way more distinctive than the ~10 guys named John or Jack or Mike in every group.
- sushrutbidwai 14y ago(a) can be solved using technology to some extent. What you need is a tool to record what a startup is doing and why certain decisions were made.
- charlieok 14y agoSounds like you've gathered a fair amount of your own data similar to what the “Startup Genome” project is aiming at. http://techcrunch.com/2012/11/20/startup-genome-ranks-the-worlds-top-startup-ecosystems-silicon-valley-tel-aviv-l-a-lead-the-way/ http://techcrunch.com/2012/11/20/startup-genome-ranks-the-wo... This would definitely make for interesting reading if/when you choose to share details. Also, it sounds like at least part of the Y Combinator size issue is a version of Dunbar's Number, applied to business rather than social relationships. http://en.wikipedia.org/wiki/Dunbar%27s_number http://en.wikipedia.org/wiki/Dunbar%27s_number
- chubot 14y agoYeah I was just going to point out Dunbar's number. At that point you have to introduce more layers of management, rather than everyone just knowing each other.
- pg 14y agoWe wouldn't want to share everything on our list of predictors of failure, because some would stop working if applicants knew about them. Some though are things applicants could only fix by actually making their startups better, so I should probably write something about any of those I haven't already talked about.
- Eliezer 14y agoA brief bullet-point list of the ones you can talk about (both those you have and haven't written up already) which have been statistically validated at YC sounds overwhelmingly valuable. Including the Ns would be even more overwhelmingly valuable. I.e. I can calculate a Bayesian likelihood ratio and get some idea of the confidence from e.g.: * Founder has green hair: Successes 10/80 Failures 40/122 However I would much rather have the brief bullet-point list than not have the bullet point list with lovely numbers attached.
- stfu 14y agoSomehow I am afraid that this sets the stage for an endless discussion about the "hidden" ycombinator acceptance criteria. I am already looking forward to the "how I uncovered x of pg's criteria" posts. Implying that there are secret rules to "a game" make it a highly attractive subject to try to discover these.
- 1qaz2wsx3edc 14y agoSo it's not so much the batch size that matters. It's the quality of the investor. From the about page: > All venture investors supply some combination of money and help. In our case the money is by far the smaller component. In fact, many of the startups we fund don't need the money. This is intriguing, because investor as I imagine would like to spread there bets as much as possible. From an investors point of view, isn't it counter intuitive to solidify around a smaller number of start ups. Although, I agree that they should invest more time, as a path to success. Showing care for your investments seems all around wise. Just food for thought, I'm not sure if I have a point most of us don't already realize.
- tptacek 14y agoVirtually every other investor makes an order of magnitude fewer investments every year.
- andrewcooke 14y agothe O(n^2) thing sounds reasonable until i start to think about it. but then i get confused. that's some kind of cost, but my naive interpretation (number of partners scales with applicants, so total interactions is n^2) spreads that cost across O(n) partners, so the cost per partner is O(n). what am i missing? am i just being too literal, or have you identified some real process that is O(n^2) per person, or is the total cost more important than i think? or am i just being dumb? or maybe even handling O(n) per partner is too much. i guess that may be all it is. my initial reading was that O(n^2) explained why 66 and 84 were so different (when linearly, they're pretty similar).
- zissou 14y agoYou're not being dumb. You just sound similar to, say, a graduate student doing theory who hasn't been outside in a while. :)
- deleted 14y ago[deleted]
- peripitea 14y agoThe way I read it, he's referring to communication channels needed for everyone to be on the same page (see Metcalfe's law, for example: http://en.wikipedia.org/wiki/Metcalfes_law http://en.wikipedia.org/wiki/Metcalfes_law). Traditionally, with a homogeneous group of people, the count of communication channels will be O(n^2), as you can see in the images at the top of the wikipedia article, because everyone needs to talk to everyone else. In this case, it's not homogeneous; there are n startups and m partners, but if every partner needs to know what's going on with every startup, you still have O(mn) communication channels. If, for example, you assigned n/m startups to each partner, the total communication channels needed would reduce to O(m+n). I believe pg is referring to something along those lines when he says he'd like to make it unnecessary for each partner to know what each startup is doing.
- jcr 14y agoPaul, of course, it's far easier to write out a suggestion than to actually do it, and free advice on the Internet is seldom worth what you pay for it. Anyhow, my idea might help... I might be misunderstanding your "ahead of the aircraft" statement, but personally, I think it's unreasonable for you to expect YC partners to be "ahead" of the startups in a batch. In fact, if YC partners are not behind in understanding a startup, then that startup is in trouble. The startups may not have the benefit of experience possessed by the YC partners, the startup founders should always know the state of their own business and market better than the YC partners do. I believe one of the reasons why you regularly advocate being concise is due to your own personal overload problems as well as the stated problem of all YC partners not keeping up with all of all of the issues in all of the startups in a given batch. It's the classic many-to-many communication problem where the ability of partners to assist and advise startups is limited by their ability to stay informed. Even if you're never able to isolate every single metric a YC partner should know, identifying as many of these metrics as possible and having a reporting mechanism would still reduce the load on YC partners. Though its not publicly known, I'd bet you do already do something along these lines, either formally or informally. Your "growth.html" essay seems to hint in this direction. None the less, making improvements to your identification, collection, and reporting of useful metrics should still be a worthwhile investment. I sincerely doubt you would want my help implementing a startup metric collection and communication system, but I'll offer to help anyhow. It's a fascinating problem and it seems like a really fun challenge.
- donaldc 14y agoAs the batch size grew, it was hard for every partner to know exactly what each startup was doing. Especially since things often change fast at startups. You could be running up against Dunbar's number (http://en.wikipedia.org/wiki/Dunbars_number http://en.wikipedia.org/wiki/Dunbars_number) for the more social (as opposed to purely technical) aspects of what is going on at each startup. 66 startups with an average of a little more than 2 people per startup is hitting the upper limit (150) of what the human brain can handle socially. 84 startups with the same average exceeds it. In my own experience, once a company or social grouping exceeds 50 to 150 people (the more tightly bound the social group, the lower the count), things change noticeably, so I'll be watching with interest what YC does to get around this.
- pg 14y agoThat is certainly one of the hypotheses. The reason I'm skeptical is that it seems such a fashionable wall to hit that it's almost tacky. Which I admit is not a valid reason to be skeptical.
- esharef 14y agoI was part of the YC batch at 66 and felt all the partners knew a lot about our start-up and could speak to us really easily, asked for updates, etc. Felt like a small group even though it was large.
- deleted 14y ago[deleted]
- tlrobinson 14y agoI'm curious how you fix the post-lunch bias without overcompensating? Eat small snacks throughout the day instead of lunch?
- kennystone 14y agoEating isn't the problem. The problem is making decisions throughout the day. It takes willpower to say no and ask tough questions, and your willpower gets drained through the day.
- StavrosK 14y agoIs this from "Thinking, Fast and Slow"? If so, how do you know it's not actually the break/rest that helps, rather than the food? I don't see any controls in that experiment take a break of equal length but not eating, and others who ate without a break.
- samatman 14y agoAnecdote: I discovered when quitting nicotine that first thing in the morning and after lunch were the times when my willpower was weakest. Your mileage may vary.
- ianstormtaylor 14y agoDidn't "Thinking, Fast and Slow" mention that by injecting glucose again you got back to the initial state?
- edw519 14y agoWhy was 66 ok and 84 not? Maybe it had less to do with magnitude than direction. I look forward to reading about yc start-ups, but increasingly find myself shaking my head, wondering how some of them will ever amount to sustainable businesses. I've always attributed this to the fact that yc must know a whole lot more than me. But pg's recent disclosure that so many yc start-ups have co-founder issues really got me wondering. I find it unimaginable that any team can work itself into such a good position and then blow it away over seemingly petty issues. Is it possible that some trend other than scale is at work here?
- dpapathanasiou 14y agoI look forward to reading about yc start-ups, but increasingly find myself shaking my head, wondering how some of them will ever amount to sustainable businesses. I've always attributed this to the fact that yc must know a whole lot more than me. I was at the first startup school (in Cambridge) and I remember thinking that about reddit whereas the one I thought most promising (click fraud detection) seems to have flopped. Other than making a bet on the people, I wonder if YC also has no idea about which startups will succeed.
- psycho 14y agoClickFacts still operates, although it doesn't have such astonishing story as Reddit does. More info: http://thenextweb.com/insider/2012/08/05/y-combinators-first-batch-where-are-they-now/ http://thenextweb.com/insider/2012/08/05/y-combinators-first...
- debacle 14y agoReddit is still not profitable. It's an amazing edifice of the Internet, but it is not profitable.
- genwin 14y agoI wouldn't be surprised if that quickly changes, since the ad placeholders (center right of page) have recently become revenue-generating ads.
- talkingquickly 14y agoIt would be very interesting to hear more about what the key predictors of failure you looked for were?
- deepkut 14y agoIt's interesting that Josh Kopelman submitted this.
- rdl 14y agoI wish there were a way you could publish the predictors of failure in a way which wouldn't let people "game" the system unreasonably. Actually, I think you have always published many of the predictors of failure. http://www.paulgraham.com/startupmistakes.html http://www.paulgraham.com/startupmistakes.html seems like a good start, but there are probably more specific indicators during an interview or during 3 months before Demo Day. The ones which seem most relevant are all variants "not making something people want" -- either not making something effectively at all, or that which you make is a bad idea/market, or making something which is a good idea but crap implementation. Obviously several potential causes of each.
- deleted 14y ago[deleted]
- rdl 14y agoPotential ways to get past the 66 bottleneck: 1) Try it in the winter. I theorize (without as much data, obviously) that "summer projects" are more likely to be drama filled than something Jan-Mar. 2) Consider 2.5 or 3 classes. You'd still end up with 150+ companies per year. I know it would sort of screw with the current schedule, but there could be some overlap, although at the cost of partner happiness. Maybe have the .5 session be split over a longer period of time, with interviews happening slightly offset from S and demo day slightly offset from W. The longer period would be useful for certain kinds of startups. 3) Invest in a human cloning startup. Once there are 80 clones of each partner, scaling becomes easier. This may take tens or hundreds of years to be effective.
- bsimpson 14y agoBut would the defective PG clones in the early years fund too many bad startups?
- deleted 14y ago[deleted]
- blueprint 14y agoWhat does it mean that the interview process is "decentralized"? Seems pretty centralized to me: only YC partners or friends of partners do the interviews, and they even require traveling to Mountain View in general
- pg 14y agoThree parallel interview tracks.
- reledi 14y agoHow is it determined who is on which of the three interviewer groups? If it's static, is there a group with a higher acceptance rate than others?
- pg 14y agoThey're shuffled, and then afterwards we swap a few to tracks where the people have domain expertise. E.g. most of the hardware startups got moved to our track, because we had Trevor.
- hiddenstage 14y agoDid YC bring in less interviewees this batch than summer 2012?
- sjtgraham 14y agoThere were a lot of interviews this week. Far more people were interviewed than were accepted.
- pg 14y agoSlightly fewer, because we used the last 3 interview slots each day to have another track re-interview startups we were on the fence about. That was one of our new techniques for avoiding mistakes. IIRC there were 20 slots both times, so we therefore invited 17/20 as many startups as last time.
- hiddenstage 14y agoI assume by decreasing the amount of startups interviewed in order to re-interview a few of the startups, you guys believe that you make more mistakes in the interview process than in the application review process. That is kind of surprising.
- pg 14y agoOops, there were 19 slots last time, so we invited 17/19 as many this time.
- namank 14y agoGive yourselves more time by adding a month to each session. Reduce the number of sessions per year and increase the duration of each.
- Uhhrrr 14y agoMight this have something to do with Dunbar's Number of ~150? http://en.m.wikipedia.org/wiki/Dunbar%27s_number http://en.m.wikipedia.org/wiki/Dunbar%27s_number
- derrida 14y agoAn idea I had to scale beyond this number might be to use a spaced repetition system in conjunction with an email client https://en.wikipedia.org/wiki/Spaced_repetition https://en.wikipedia.org/wiki/Spaced_repetition
- ig1 14y agoWhat were the predictors of failure ?
- tptacek 14y ago50 is still a huge number. Airbnb's class, just 4 years back, was only 16.
- sjtgraham 14y agoI expect significantly more people applied for this batch than Airbnb's batch.
- kellysutton 14y agoI think the math behind YC and incubators can sometimes falsely justify an increase in the quantity of companies accepted. If you look at each class and say, "Well, last year we had 5 breakouts out of 50. Why not increase that denominator to change the numerator?" Unfortunately when you do this too quickly, the numerator doesn't change. It stays the same or sometimes even decreases (in my example, holds at 5). Staying focused while growing is a very difficult thing to do.
- senthilnayagam 14y agoYC has gone mainstream , highly competitive, but so are the egos of the cofounders, not everybody is willing to work straight for 12-24 months for a potential exit on the same idea
- jamest 14y ago12-24? If you're successful you'll be working for far longer than that. Even if you're not successful good teams will continue to iterate or change ideas, which will often take far longer than 24 months.
- peterjancelis 14y agoDunbar's number is the amount of social relationships an average human can have: 150. Maybe at 84 startups the total number of founders went above 150?
- simondlr 14y agoThe whole program along with the partners probably pushed it above 150. As is the case with many groups going past 150, you'll have to start implementing other social structures besides relying on personal relationships to keep it going at the same pace. Going to be interesting to see what happens, especially due to Y-Combinator being rather a unique case in this regard.
- msrpotus 14y agoI'm curious: what did you find were the predictors of failure? Was it a matter of focusing on problems (with the assumption that the teams with the least problems were, on balance at least, more likely to be successful)? Or did you find that there were certain counterintuitive factors that made a team likely to fail, even if they seemed solid?
- ed209 14y agoI'd be interested in this too. I'd like to know if it's in a format where you could judge yourself/your own idea and see what score comes out.
- tomasien 14y agoIs there any chance that there's a small "valley gold rush" effect going on, sort of what happened in the late 90's and early 00's in SV when people saw the valley not as an opportunity to build something awesome but rather ONLY to get funding and get rich? From what PG seems to be saying, it's more of an organizational problem, and I'll take him at his word. However, I just feel like I've seen a lot of (admittedly impressive) people applying to YC because they see it as the path to easy VC funding and lots of press only. And maybe a resume booster. I can see the effects of that being that it becomes harder to identify who is earnest and who is not, especially with such impressive people throwing themselves into the pool. Either way, I think it's nothing but a positive to see YC continuing to innovate and tweak.
- paul 14y agoI think that there's an element of that. People who are just joining yc for the name are there for the wrong reason.
- jbooth 14y agoConsidering that you guys had the same funding formula (7k for 7%, give or take) in the funding dark ages of 2004-2005 as you have now when it's much easier to raise money, I think everybody who takes a deal from you, as opposed to better terms from someone else, is there at least partially for the name.
- paul 14y agoCertainly the name has value, and smart founders will use that, but if that's all they are after, then they're missing the most valuable bits (and are therefore probably not very effective founders, and a bad investment).
- tomasien 14y agoThat's totally understandable, I can't even look down on doing it for the "wrong" reason if I'm being honest. Sad for me if it diminishes the likelihood that something that will actually change my life (like Codecademy did) will come around.
- Tichy 14y agoCurious: what methods are you using for your analysis? Feeding data in some software, or just pen+paper+brain?
- perry5000 14y agoI think that the real story is that alternative investments (e.g. venture capital) have really dried up. Venture capital firms across the valley are having a very hard time raising cash. Groupon, Zynga, Pandora, and the disappointment with Facebook's IPO have pushed away a lot of institutional investors. I don't see capital returning anytime soon until we see some big, successful Silicon Valley IPO stories. (insider)
- pg 14y agoActually the thing that struck us most this last cycle was the huge number of (often unpromising) startups that had already raised several hundred k. If anything it seems like there is a glut of early-stage money, not a dearth.
- rdl 14y agoIt would be an interesting control if you re-interviewed YC companies 6, 12, 24 months out from YC, to calibrate the interviews. I guess you can just watch the video of the interviews of the successful or unsuccessful startups.
- debacle 14y agoObviously in the case of an unpromising startup, you don't care, but how does that 200k+ change your perception of a potentially promising startup? You've blogged a bit about this before, but have you ever asked yourself (or the applicants) "Why are these guys even sitting in front of us?"
- ivankirigin 14y agoYou mentioned looking for predictors of failure. What have you learned since writing this essay on mistakes that kill startups? http://paulgraham.com/startupmistakes.html http://paulgraham.com/startupmistakes.html
- timrpeterson 14y agowhen meta-YC matters more than YC, shark has been jumped
- sjtgraham 14y ago> We don't plan to stay at 50, or whatever exact number of startups this batch ends up having. We've never had a predetermined batch size; that's just the number we ended up with when we tightened our filters as much as we could. Congratulations to those of you that were accepted into W13. It looks like W13 was the most difficult to get into yet.
- juniorer 14y agoDid you interview? Presumably you spoke to previous interviewees. Any difference in questions that you noticed?
- sjtgraham 14y agoYes, I did and unfortunately I didn't get in. The interview was nothing like I expected, i.e. it was just PG and I talking about the idea. I intend to write a few blog posts covering the different stages of the application process as long as PG doesn't mind.
- eduardordm 14y agoThat would be awesome.
- pebb 14y agoMust be due to the Series A crunch eh?
- rikacomet 14y agoI think it was the right decision, as said, the result of going mainstream, has started to show, if instinct of more than 1-2 partners say that its better to slow down a bit >> rethink >> adapt then its best to do so. Slowing down won't hurt you in any way. Perhaps the answer is quality, due to a overshoot of no of companies funded, the quality went down, and then it hit you guys, that 'hey! the last of many haven't been any AirBnB or Reddit' so its better to slow down a bit, and let the levels go up again on it. "Excessive fishing in a lake can be best balanced by under fishing" that is what this looks like to me.
- BallinBige 14y agomanage growth --- always the hardest thing for startups and those around them
- buro9 14y agoMaybe it is the large batches themselves. What if, instead of a bi-annual intake of two large batches YC moved to an always open intake with classes starting every month. That is, to stream many small batches continuously. Effectively running 12 academic years concurrently rather than 2. Everything from lean manufacturing to project management has come out in favour of the small batch size, maybe the thing to do is to work out how to split the existing large batches into many smaller batches. This might also help increase your learning as you would have a much tighter feedback loop.
- replayzero 14y agoI think smaller is always better, it would be fine to take on 10 companies and just hot house them. I think that would be awesome.
- salimmadjd 14y agoI think 50 is even a large number. YC's real value to investors is selectivity. As long YC maintains that brand, investors will continue to have a YC-biased perception making it easier for these startups to raise funding. The same selectivity makes getting into YC enticing as it validates them and their ideas. I'm sure the reason behind the cutback has been scalability ( I made that comment before and it made PG defensive a bit) however, the move ensures the longevity of YC's mystique.
- sgarg26 14y agoTheir number sounds like it was based on the partners' personal feelings of being able to be of service and value to their startups, their portfolio. It seems that the aspect of YC the partners are trying to preserve is their ability to be personally involved to some degree rather than just straight selectivity.
- brudgers 14y agoAt 86 companies YC is more likely to hit up against the limits of Dubar's number than at 66 companies (or 50) - assuming, of course, that Dunbar's number is meaningful. As an aside, funding to the point of creating financial carcasses in the previous cycle could have effectively lowered the Dunbar number for that batch. http://en.wikipedia.org/wiki/Dunbars_number http://en.wikipedia.org/wiki/Dunbars_number
- alexirobbins 14y agoWhat are the indicators of failure that you focused on?
- deleted 14y ago[deleted]
- kenjackson 14y agoWere the choices announced?
- aneth4 14y agoI'd guess there is some correlation with time spent on HN, times of access, comment rate, language usage, etc. HN may be one of the largest data sets on a candidate that YC has, so as big brotherly as it sounds, I can't imagine YC could resist analyzing it. It might sound trivial, but it is probably a good indicator of impulse control, attitude, and cleverness.
- nns1212 14y agoI am happy with the decision. Having a lot of startups in every batch reduces the focus of YC partners In these situations, even startups with a very good potential (like Airbnb & Dropbox) won't be able to achieve much. YC can increase the number of partners, advisors, mentors or cycles per year (instead of diluting their time over a lot of startups).
- passedover 14y agoOur company interviewed for W13 and was not accepted. Some thoughts: If you want to make important changes that could affect a startup's interest in accepting YC (financial terms) or make it much harder to get in (even at the interview stage) than it has been in the past you have a duty to do so before you hook hundreds of entrepreneurs into committing to sit with you for 10 minutes. It was a good experience to prepare for and attend YC's interviews. However, it took valuable time away from the most important people in our company, both from a preparation standpoint and a distraction from execution. Our company is based on the west coast, and the $800 in travel reimbursement did not cover our costs to attend (we went ~$200 over and were very lean. You upped the criteria, lowered the reward and didn't completely cover the cost to try out. Small dollars and a few days matter a lot to a company at our stage. It is one thing to tweak your program and make it harder to get in. It is another to do so in secret or after you've gotten entrepreneurs' hopes, dollars and time committed to trying. I hung out at the YC office before and after our interview, and the environment is not like you project: http://static.picwing.com/18075/e_106219_t540.jpg http://static.picwing.com/18075/e_106219_t540.jpg It is actually pretty ruthless, and I picked up a sense of realized power and eliteness. As an example, YC put a really nice selection of organic-looking food right next to entrepreneur registration table. This food was not for the entrepreneurs, yet it was on full display. I approached this food by accident and was actually told by a YC staff member (in a tone that suggested a silly mistake) that there were "bits and scraps" available on the other table for us. That is kind of what it felt like in this process. A bounty of food that is kept within sight, but actually quietly kept quite far out of reach. It ended up feeling not that much different from pitching a traditional VC.
- eduardordm 14y agoI never pitched a VC. I actually never met such mythical creature, maybe you were about to touch his unicorn salad. Anyways, explanations for this: - they are actually giving a heads up on how most of people will treat you or; - there are just too many interviews and no time to make anyone fell comfortable. Edit ==== Anyways, I remember in 2006 when I barely could speak english and was doing a master degree in the US. I needed to find a part time job to help me pay for unexpected expenses. There was an interview at an investment firm: I felt like I was worth less than nothing. I almost cried after leaving the building. Anyways, 20 minutes after I left they called me and offered a position. When we feel vulnerable anything people say to us we tend take it the wrong way or overreact. Good luck with your venture.
- ishake 14y agoWhat's considered a failure? Startups that broke up, shut down or didn't raise? Isn't it too early to tell for most companies?
- anovikov 14y agoJust curious what kind of failure it was? They can't say 'nobody of the accepted startups succeeded' because it's too early to tell that.