9 ms·

Why 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 sh

by edw519 14y ago

Why 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 ago
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. 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 ago
  ClickFacts 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 ago
  Reddit is still not profitable. It's an amazing edifice of the Internet, but it is not profitable.
  - genwin 14y ago
    I wouldn't be surprised if that quickly changes, since the ad placeholders (center right of page) have recently become revenue-generating ads.
mrkurt 14y ago
Teams don't usually blow it away over petty issues. What they do is manage to ignore/avoid/be blind to serious issues for stretches, especially when things (on paper) seem to be going well.
- tptacek 14y ago
  That does happen. But having been in my fair share of partner disputes, banal and stupid issues blow up teams just as often. When you're on the outside looking at a team, it must seem as if the members share a purposeful determination. And they often do. But just as often, the startup effort simply becomes a new norm, inhabited by human personalities, inclined towards squabbling just like dorm roommates. Membership in a startup team can amplify drama as much as suppress it. It fuels personal squabbles with a sense of import. The best way to resolve the overwhelming majority of conflicts is to walk away and let them cool down naturally. But in a startup, it's easy to tell yourself "we have to resolve this problem right now; the fate of the company is at stake!" It's also probably the case that a lot of long-term simmering "important" issues actually started out as manageable problems that could have been dealt with, but for poor conflict handling early on; either the issue is broached and turns into a scalding fight, or fear of that fight keeps the team from addressing it early enough. You would think this would mean founders with stable marriages would have an advantage. :)
  - danielweber 14y ago
    I might view it in reverse: having been in a start-up is an advantage/practice for stable marriage.
    - rdl 14y ago
      s/stable marriage/early mission to Mars
      - tptacek 14y ago
        There's a metaphor that's going to get me hit with a couch pillow in here somewhere.
diminish 14y ago
"The reason we accepted fewer applications was that in summer 2012 we grew too fast." I am curious; from a ROI perspective, are there any limits how big each YC batch could go or put another way why is "fast" fast? Can YC grow as a partners-based organization as much as demand exist or does PG's attention draw a limit, as would occur in a star-shaped organization structure.
chubot 14y ago
"shaking my head, wondering how some of them will ever amount to sustainable businesses." pg wrote about this -- the best startups seem like bad ideas but are good ideas. They seem lame. I don't think there is any way for you to judge a startup by "reading about" it. You haven't met the founders, etc.
- 001sky 14y ago
  For the best companies, the MVP will be like the tip of an iceberg. A small, innocous thing that is visible. But will large mass/depth to the idea. Like IBM negotiaing will Bill Gates on DOS. So, yes there is something to this...most articles don't capture the founders deeper insights (if it exists), and often thats intentional (strategic disclosure).
davidw 14y ago
> sustainable businesses Given that a lot of YC seems to come from PG's own experience, which involved selling Viaweb to Yahoo, I'm not sure "long term sustainable business" is necessarily what these guys are going to shoot for. And I think that's ok too: some people are just cut out for taking a business from 0 to 80, but not managing it long term.
- danielpal 14y ago
  You think that the experience of selling 1 company (viaweb) trumps over the experience of funding over 300 companies across 7 years, 2 of which are worth at least 1 billion dollars? Thats like saying, given that Apple experience comes from building the first computer they must not know anything about mobile. YC experience comes from doing YC itself.
  - dfc 14y ago
    Apple did not build the first computer.
    - iamwil 14y ago
      pendatic. His point was that YC's expertise with advising startups comes from doing YC, not from selling Viaweb to Yahoo (it was, but only at first)--just as Apple's expertise doing the iPhone came from doing the iPhone, not from making computers (it was, but only at first). Whether Apple made the first computer or not is irrelevant to the point he was trying to make.
      - deleted 14y ago
        [deleted]
      - cmccabe 14y ago
        How is that a minor detail? The first electronic computer was built in 1946. Apple hasn't even existed for half of the time electronic computers have existed on Earth. Seriously folks, this is some dumb, dumb stuff. Even the senator who gave the infamous "tubes" speech probably knew that the Apple didn't invent computers.
mbesto 14y ago
I think it is scale. The success of YC is built on the success of their startups. Therefore, I don't see YC as a not a long term (I'm talking 20+ years) sustainable and scalable business model. Is their process reproducible? Yes. Are there deliverables reproducible? No. If YC wants to continue to grow (financially), it could possibly: 1. Diversify - Perhaps start a pure VC wing 2. Segregate - Provide specific expertise in verticals (travel, hospitality, sports, etc), horizontals (like consumer web, mobile, etc), or regions (emerging markets, global markets, etc) That being said, I can't help but think that YC employees probably struggle to understand it's ultimate financial growth strategy while at the same time realizing that in it's current state it's already an extremely valuable business and provides those involved with loads of continuous personal satisfaction both financially and psychologically. So while it may sound like I'm discrediting the organization, I'm dually jealous of the "good problems" they have.
bane 14y ago
One thing to remember is that the goal in many cases is not to build a sustainable business, but prove that there is a market for this thing (of any size). It's not unrealistic for some of the more oddball single utility "companies" to find themselves aquired and rolled up with other strategic acquisitions, and the lot of them presented as some sort of B2B enterprise package worth far more when summed up. In other words, with VC backed companies, the thing these companies are making isn't really the product in many cases is it? It's the companies themselves. Just like a gear isn't really much, but add some springs, and a few other odds and ends and you have a watch that people will buy. But it takes a bigger picture visionary to figure out that the company that makes gears and the company that makes springs should be both acquired to make that watch company. Till then, they have to try and find their way by either spending their investment dollars till they can find that visionary, or find a market supplying micro-miniature gears to other watch making companies. The founders and investors are rewarded for taking the high risk of finding out that there is a market for micro-miniature gears after the acquisition. But until then everybody wonders why one would want to get into gear making in the first place? YC is basically in the meta-business business.
- paulsutter 14y ago
  The real goal of YC is likely to create a great productive and interesting life for the organizers. If the previous number was too hectic and they're scaling back, congratulations to them for choosing quality over volume. Paul Graham's recent essays on growth and startup ideas reflect a much deeper and more nuanced insight into the startup process than you give him credit.
danielweber 14y ago
Goals change over time. Maybe one person thinks their best exit is via the publicity of running the operation, while another person thinks their best exit is via selling the company, while another thinks the best exit is to extract profits from the company. And companies don't found themselves to be easy to break up, for the same reasons people don't set up prenups on marriages.
pg 14y ago
There have always been lots of startups working on crazy sounding ideas, since the first batch. I don't think the proportion of those has changed. (If anyone is wondering why we don't just reject all the startups with crazy sounding ideas, Airbnb was one of them.)
- xoail 14y ago
  I don't understand why Airbnb was considered as a crazy idea and I hear literally everyone refer to it as an example of crazy idea. I always thought it was a genius idea from the first time I heard about it. But the way I see things, it doesn't matter what the idea really is as long as there is a market (not too big nor too small) and the team's ability for solid execution of the idea (kick ass product, partnerships and vision).
  - salemh 14y ago
    Market is semi-legal. How do you gain traction? Network effects (that whole traction thing (re: gaming/tuning Craiglist)), liability, etc. Retrospective analysis biases "initial" perceptions post-facto.
  - paul 14y ago
    You probably heard about it post-yc. It was initially a thing for renting out airbeds (airbedandbreakfast.com)
    - bwilliams18 14y ago
      I think even that is a great idea...albeit with a much smaller market capability than what airbnb is now.
    - ntoshev 14y ago
      That's pretty much what http://www.couchsurfing.org http://www.couchsurfing.org do, but for free. Clearly there is both supply and demand for such a marketplace. Were airbnbs or YC aware of couchsurfing?
  - 14y ago
swivelmaster 14y ago
IMO, having been involved in a co-founder dispute, in hindsight the issues were not at all petty and reflected major differences in attitudes and long-term goals of the co-founders. They SEEMED petty at the time, because people, specifically young people, tend to do a poor job of identifying core causes for interpersonal disputes. One risk of investing in young founders is that this sort of thing will happen at a higher rate than if they were older, but for a number of reasons that PG has discussed at length, the pros of generally investing in younger founders trump the cons relating to emotional immaturity.
sgarg26 14y ago
What are some indicators as to whether a startup can and will survive co-founder drama? Co-founder drama is more common than not. YC has such a profound reputation and emphasis on co-founders, maybe the application should just directly ask for examples of past experience with co-founder drama and what people would do differently for the future.
larsberg 14y ago
> so many yc start-ups have co-founder issues My guess would be that it's the number of "companies in simultaneous crisis" that grew beyond control. I used to warn new managers that somewhere just above 8 employees is the point where you always have one that is going through a serious illness in the family, divorce, addiction to drugs/video games, or something else that will take up all of your attention (if you let it). Extrapolating to companies, I'd bet that the senior YC staff can handle, say, 5 companies in crisis (e.g., "co-founder issues") but growing to 10 was just too much and things started falling through the cracks. Or became unfun, since when you're handling crises you're ignoring the stars, which is a very common new manager mistake. And unfortunately you can't scale the VCs to handle more crises; you either need more time from senior YC-crew or you have to find the equivalent of a human resources department to handle those issues and just stop trying to fix them yourself.
- 001sky 14y ago
  This is an interesting consideration with expedition/adventure team size. There is a tradeoff with redundancy (someone will have a spare x) that keeps the group moving, and the increasing liklihood of somone haveing a problem at any given time. You need to minimize the latter, b/c not just its slower/more comlex, but it eliminates the redundancy (your 1 spare is now used gone, but larger group still to worry about, etc). This is often why an ideal team size is 2, not 8-10.
deleted 14y ago
[deleted]
webwright 14y ago
"I find it unimaginable that any team can work itself into such a good position and then blow it away over seemingly petty issues." Why are you calling them petty? Do you find divorce similarly unimaginable? Most co-founders know each other less well than most newlyweds and spend way more time together.
- philwelch 14y ago
  And I find it unimaginable that people divorce over petty issues as well.
- deleted 14y ago
  [deleted]
adrianhoward 14y ago
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. People going into YC with obvious dysfunctions aren't going to get a "yes". The remaining groups are those that: a) are good at managing stress and disagreement - so don't show any b) haven't yet had a major stresses that will cause problems - so don't show any Since dealing well with stress and disagreement is a learned skill I would imagine that YC's focus on younger founders may make the (a) group fairly small. Getting accepted into YC immediately puts companies into a stressful situation (moving, spending 24/7 on startup, the "this is our chance to make it" vibe, etc.) - so folk in (b) who haven't had to figure out how to deal with disagreement well are going to have problems.

by edw519 14y ago

dpapathanasiou 14y ago

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. 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 ago
ClickFacts 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 ago
Reddit is still not profitable. It's an amazing edifice of the Internet, but it is not profitable.
- genwin 14y ago
  I wouldn't be surprised if that quickly changes, since the ad placeholders (center right of page) have recently become revenue-generating ads.

mrkurt 14y ago

Teams don't usually blow it away over petty issues. What they do is manage to ignore/avoid/be blind to serious issues for stretches, especially when things (on paper) seem to be going well.

tptacek 14y ago
That does happen. But having been in my fair share of partner disputes, banal and stupid issues blow up teams just as often. When you're on the outside looking at a team, it must seem as if the members share a purposeful determination. And they often do. But just as often, the startup effort simply becomes a new norm, inhabited by human personalities, inclined towards squabbling just like dorm roommates. Membership in a startup team can amplify drama as much as suppress it. It fuels personal squabbles with a sense of import. The best way to resolve the overwhelming majority of conflicts is to walk away and let them cool down naturally. But in a startup, it's easy to tell yourself "we have to resolve this problem right now; the fate of the company is at stake!" It's also probably the case that a lot of long-term simmering "important" issues actually started out as manageable problems that could have been dealt with, but for poor conflict handling early on; either the issue is broached and turns into a scalding fight, or fear of that fight keeps the team from addressing it early enough. You would think this would mean founders with stable marriages would have an advantage. :)
- danielweber 14y ago
  I might view it in reverse: having been in a start-up is an advantage/practice for stable marriage.
  - rdl 14y ago
    s/stable marriage/early mission to Mars
    - tptacek 14y ago
      There's a metaphor that's going to get me hit with a couch pillow in here somewhere.

diminish 14y ago

"The reason we accepted fewer applications was that in summer 2012 we grew too fast." I am curious; from a ROI perspective, are there any limits how big each YC batch could go or put another way why is "fast" fast? Can YC grow as a partners-based organization as much as demand exist or does PG's attention draw a limit, as would occur in a star-shaped organization structure.

chubot 14y ago

"shaking my head, wondering how some of them will ever amount to sustainable businesses." pg wrote about this -- the best startups seem like bad ideas but are good ideas. They seem lame. I don't think there is any way for you to judge a startup by "reading about" it. You haven't met the founders, etc.

001sky 14y ago
For the best companies, the MVP will be like the tip of an iceberg. A small, innocous thing that is visible. But will large mass/depth to the idea. Like IBM negotiaing will Bill Gates on DOS. So, yes there is something to this...most articles don't capture the founders deeper insights (if it exists), and often thats intentional (strategic disclosure).

davidw 14y ago

> sustainable businesses Given that a lot of YC seems to come from PG's own experience, which involved selling Viaweb to Yahoo, I'm not sure "long term sustainable business" is necessarily what these guys are going to shoot for. And I think that's ok too: some people are just cut out for taking a business from 0 to 80, but not managing it long term.

danielpal 14y ago
You think that the experience of selling 1 company (viaweb) trumps over the experience of funding over 300 companies across 7 years, 2 of which are worth at least 1 billion dollars? Thats like saying, given that Apple experience comes from building the first computer they must not know anything about mobile. YC experience comes from doing YC itself.
- dfc 14y ago
  Apple did not build the first computer.
  - iamwil 14y ago
    pendatic. His point was that YC's expertise with advising startups comes from doing YC, not from selling Viaweb to Yahoo (it was, but only at first)--just as Apple's expertise doing the iPhone came from doing the iPhone, not from making computers (it was, but only at first). Whether Apple made the first computer or not is irrelevant to the point he was trying to make.
    - deleted 14y ago
      [deleted]
    - cmccabe 14y ago
      How is that a minor detail? The first electronic computer was built in 1946. Apple hasn't even existed for half of the time electronic computers have existed on Earth. Seriously folks, this is some dumb, dumb stuff. Even the senator who gave the infamous "tubes" speech probably knew that the Apple didn't invent computers.

mbesto 14y ago

I think it is scale. The success of YC is built on the success of their startups. Therefore, I don't see YC as a not a long term (I'm talking 20+ years) sustainable and scalable business model. Is their process reproducible? Yes. Are there deliverables reproducible? No. If YC wants to continue to grow (financially), it could possibly: 1. Diversify - Perhaps start a pure VC wing 2. Segregate - Provide specific expertise in verticals (travel, hospitality, sports, etc), horizontals (like consumer web, mobile, etc), or regions (emerging markets, global markets, etc) That being said, I can't help but think that YC employees probably struggle to understand it's ultimate financial growth strategy while at the same time realizing that in it's current state it's already an extremely valuable business and provides those involved with loads of continuous personal satisfaction both financially and psychologically. So while it may sound like I'm discrediting the organization, I'm dually jealous of the "good problems" they have.

bane 14y ago

One thing to remember is that the goal in many cases is not to build a sustainable business, but prove that there is a market for this thing (of any size). It's not unrealistic for some of the more oddball single utility "companies" to find themselves aquired and rolled up with other strategic acquisitions, and the lot of them presented as some sort of B2B enterprise package worth far more when summed up. In other words, with VC backed companies, the thing these companies are making isn't really the product in many cases is it? It's the companies themselves. Just like a gear isn't really much, but add some springs, and a few other odds and ends and you have a watch that people will buy. But it takes a bigger picture visionary to figure out that the company that makes gears and the company that makes springs should be both acquired to make that watch company. Till then, they have to try and find their way by either spending their investment dollars till they can find that visionary, or find a market supplying micro-miniature gears to other watch making companies. The founders and investors are rewarded for taking the high risk of finding out that there is a market for micro-miniature gears after the acquisition. But until then everybody wonders why one would want to get into gear making in the first place? YC is basically in the meta-business business.

paulsutter 14y ago
The real goal of YC is likely to create a great productive and interesting life for the organizers. If the previous number was too hectic and they're scaling back, congratulations to them for choosing quality over volume. Paul Graham's recent essays on growth and startup ideas reflect a much deeper and more nuanced insight into the startup process than you give him credit.

danielweber 14y ago

Goals change over time. Maybe one person thinks their best exit is via the publicity of running the operation, while another person thinks their best exit is via selling the company, while another thinks the best exit is to extract profits from the company. And companies don't found themselves to be easy to break up, for the same reasons people don't set up prenups on marriages.

pg 14y ago

There have always been lots of startups working on crazy sounding ideas, since the first batch. I don't think the proportion of those has changed. (If anyone is wondering why we don't just reject all the startups with crazy sounding ideas, Airbnb was one of them.)

xoail 14y ago
I don't understand why Airbnb was considered as a crazy idea and I hear literally everyone refer to it as an example of crazy idea. I always thought it was a genius idea from the first time I heard about it. But the way I see things, it doesn't matter what the idea really is as long as there is a market (not too big nor too small) and the team's ability for solid execution of the idea (kick ass product, partnerships and vision).
- salemh 14y ago
  Market is semi-legal. How do you gain traction? Network effects (that whole traction thing (re: gaming/tuning Craiglist)), liability, etc. Retrospective analysis biases "initial" perceptions post-facto.
- paul 14y ago
  You probably heard about it post-yc. It was initially a thing for renting out airbeds (airbedandbreakfast.com)
  - bwilliams18 14y ago
    I think even that is a great idea...albeit with a much smaller market capability than what airbnb is now.
  - ntoshev 14y ago
    That's pretty much what http://www.couchsurfing.org http://www.couchsurfing.org do, but for free. Clearly there is both supply and demand for such a marketplace. Were airbnbs or YC aware of couchsurfing?
- 14y ago

swivelmaster 14y ago

IMO, having been involved in a co-founder dispute, in hindsight the issues were not at all petty and reflected major differences in attitudes and long-term goals of the co-founders. They SEEMED petty at the time, because people, specifically young people, tend to do a poor job of identifying core causes for interpersonal disputes. One risk of investing in young founders is that this sort of thing will happen at a higher rate than if they were older, but for a number of reasons that PG has discussed at length, the pros of generally investing in younger founders trump the cons relating to emotional immaturity.

sgarg26 14y ago

What are some indicators as to whether a startup can and will survive co-founder drama? Co-founder drama is more common than not. YC has such a profound reputation and emphasis on co-founders, maybe the application should just directly ask for examples of past experience with co-founder drama and what people would do differently for the future.

larsberg 14y ago

> so many yc start-ups have co-founder issues My guess would be that it's the number of "companies in simultaneous crisis" that grew beyond control. I used to warn new managers that somewhere just above 8 employees is the point where you always have one that is going through a serious illness in the family, divorce, addiction to drugs/video games, or something else that will take up all of your attention (if you let it). Extrapolating to companies, I'd bet that the senior YC staff can handle, say, 5 companies in crisis (e.g., "co-founder issues") but growing to 10 was just too much and things started falling through the cracks. Or became unfun, since when you're handling crises you're ignoring the stars, which is a very common new manager mistake. And unfortunately you can't scale the VCs to handle more crises; you either need more time from senior YC-crew or you have to find the equivalent of a human resources department to handle those issues and just stop trying to fix them yourself.

001sky 14y ago
This is an interesting consideration with expedition/adventure team size. There is a tradeoff with redundancy (someone will have a spare x) that keeps the group moving, and the increasing liklihood of somone haveing a problem at any given time. You need to minimize the latter, b/c not just its slower/more comlex, but it eliminates the redundancy (your 1 spare is now used gone, but larger group still to worry about, etc). This is often why an ideal team size is 2, not 8-10.

deleted 14y ago

[deleted]

webwright 14y ago

"I find it unimaginable that any team can work itself into such a good position and then blow it away over seemingly petty issues." Why are you calling them petty? Do you find divorce similarly unimaginable? Most co-founders know each other less well than most newlyweds and spend way more time together.

philwelch 14y ago
And I find it unimaginable that people divorce over petty issues as well.
deleted 14y ago
[deleted]

adrianhoward 14y ago

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. People going into YC with obvious dysfunctions aren't going to get a "yes". The remaining groups are those that: a) are good at managing stress and disagreement - so don't show any b) haven't yet had a major stresses that will cause problems - so don't show any Since dealing well with stress and disagreement is a learned skill I would imagine that YC's focus on younger founders may make the (a) group fairly small. Getting accepted into YC immediately puts companies into a stressful situation (moving, spending 24/7 on startup, the "this is our chance to make it" vibe, etc.) - so folk in (b) who haven't had to figure out how to deal with disagreement well are going to have problems.