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The other thing to keep in mind is that YC has an upper bound on the number of companies they accept. Just because a team doesn't get in doesn't mean they're ba

The other thing to keep in mind is that YC has an upper bound on the number of companies they accept. Just because a team doesn't get in doesn't mean they're bad, it just means that YC partners saw other teams they felt were even better. You can see the evidence of this by the fact that companies going through YC are getting better and better. They're better at the start of YC, and they're better at the end of YC (than previous batches). Is this a good thing or bad thing? For YC - definitely a good thing.

man_bear_pig 13y ago
It's definitely not a straight-line good thing if you think about long-term game theory. they are already hitting the limits of getting startups who shouldn't need their services... i.e. already proven traction and can probably go raise funding themselves. at some point, it's like akin to business school for techies. hbs class i'm sure gets better and better every year; nevertheless, more and more top notch business people skip hbs b/c the roi (opportunity cost) is not worth it. similarly, yc's main benefits are it's network, brand, and access to capital. if they only seek to reduce risk profile by taking premium companies that have already proven themselves, the roi to subsequent classes may not be worthwhile for that x% because top notch vc's have their own contacts and branding and yc is purely a bridge. think about pg's own statement about yc: to help companies build a prototype to get funding... at this point, i'd say it's very few exceptional guys getting in with a mere prototype. but tis the way markets evolve naturally. yc is probably going through its own product-market fit as they try to take on more groups per class, additional competitors are entering its space, and all the meanwhile trying to maximize its profit/minimize risk. the hard part is realizing that some of the biggest success to date are randomn at best b/c it was so early stage and pre-traction and the market steers toward reducing arbitrage scenario more and more everyday. would reddit or airbnb make this year's class (if airbnb didn't have that election year thing to help their application)? and if not, how many of those can they miss before someone starts raising the eyebrow?

man_bear_pig 13y ago

It's definitely not a straight-line good thing if you think about long-term game theory. they are already hitting the limits of getting startups who shouldn't need their services... i.e. already proven traction and can probably go raise funding themselves. at some point, it's like akin to business school for techies. hbs class i'm sure gets better and better every year; nevertheless, more and more top notch business people skip hbs b/c the roi (opportunity cost) is not worth it. similarly, yc's main benefits are it's network, brand, and access to capital. if they only seek to reduce risk profile by taking premium companies that have already proven themselves, the roi to subsequent classes may not be worthwhile for that x% because top notch vc's have their own contacts and branding and yc is purely a bridge. think about pg's own statement about yc: to help companies build a prototype to get funding... at this point, i'd say it's very few exceptional guys getting in with a mere prototype. but tis the way markets evolve naturally. yc is probably going through its own product-market fit as they try to take on more groups per class, additional competitors are entering its space, and all the meanwhile trying to maximize its profit/minimize risk. the hard part is realizing that some of the biggest success to date are randomn at best b/c it was so early stage and pre-traction and the market steers toward reducing arbitrage scenario more and more everyday. would reddit or airbnb make this year's class (if airbnb didn't have that election year thing to help their application)? and if not, how many of those can they miss before someone starts raising the eyebrow?