30 ms·

I agree, I am not sure there is really that much interesting in this article. I'd love to have the author re-write it looking at the distribution, rather than

by bcx 12y ago

I agree, I am not sure there is really that much interesting in this article. I'd love to have the author re-write it looking at the distribution, rather than averaging in returns for the top companies which makes up less than 1% of YC companies.

larrys 12y ago
It would be interesting (but unfortunately not practical or possible) to have two groups. Members of both groups are accepted to YC but then randomly selected as to who actually goes with YC or not. [1] Of course just knowing that you have been accepted to YC (or telling others) would no doubt skew any outcome. Just like knowing you were accepted to "a Harvard" and/or telling people you were will skew how you are perceived. That said there certainly could be a study (sans the halo effect) done of startups, as a group that applied but were rejected by YC vs. those that were accepted. Sounds like something that mattermark could potentially take on. Or maybe priceonomics in a blog post. [1] Then, years later, compare outcomes.
- paul 12y ago
  Obviously we aren't going to intentionally reject good companies in order to perform some kind of study, but we do our best to keep track the ones we reject that later become successful. There are a couple of them, but so far they are an order of magnitude smaller in both size and number than the successful companies that we did accept.
  - larrys 12y ago
    Taking the concept in a different direction: You currently have people you accept and people that you reject. You recognize that many of the people that get rejected might actually get accepted if the pool of companies you could manage could be larger. (Similar to how many people are rejected by top schools but the schools recognize that there are people that qualify but miss because of some arbitrary decision process). (After all the class size is pretty much fixed even when the applicant pool rises). So you create a third class which is, for lack of a better way to put it, "worthy runner up". Like having a silver or bronze medal. (Noting that merely even getting into the Olympics and not getting anything is worth something.) And then those rejected applicants get some of the halo of YC (which further increases the applicant pool because now it's not solely pass or fail). Plus of course further YC name branding. "While they were rejected by YC they did get a Silver medal and with that..." Anyway my intuition says that someone branded as "runner up" would do better than someone not given that status.
  - BenjaminTodd 12y ago
    I think you should seriously consider doing this. It's the best way to measure the true impact of YC on the companies it selects. Otherwise, it's hard to know to what extent you're just picking the most successful teams vs. genuinely making the teams more likely to succeed. Addition: To avoid having to completely reject people, you could take randomly select half to enter immediately, and let the other half enter in one year. Then you could measure the difference between the two groups after a year.
    - paul 12y ago
      It's not important know, and certainly not important enough to justify discarding half of our profits. It's also very difficult to get anything statistically significant out of the data when there are so few data points (there's probably only about one DropBox per batch). Btw, if it were truly just a matter of us picking the right companies, that would be even more impressive given that we reject over 97% of applicants :) That's obviously not the case though, since some of our most successful companies (such as AirBnb) wouldn't exist without YC.
      - BenjaminTodd 12y ago
        Not saying it's not impressive either way! Good point that the question is much less valuable from the perspective of YC partners. From that perspective, all that matters is that the companies perform well in the end. It matters more from the perspective of the applicants. Though even then, because the costs of joining YC are low, it's probably not a big issue for many people. Agree the success rates would be hard to compare. You'd need to have some other proxies for eventual success besides profits. Excellent point that if you can show you significantly helped the most successful couple of companies (which account for 80%+ of the value), and there were no other large successes among the people you rejected, then the job is done. You've shown YC increases the expected value of the companies you select.
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by bcx 12y ago

larrys 12y ago

It would be interesting (but unfortunately not practical or possible) to have two groups. Members of both groups are accepted to YC but then randomly selected as to who actually goes with YC or not. [1] Of course just knowing that you have been accepted to YC (or telling others) would no doubt skew any outcome. Just like knowing you were accepted to "a Harvard" and/or telling people you were will skew how you are perceived. That said there certainly could be a study (sans the halo effect) done of startups, as a group that applied but were rejected by YC vs. those that were accepted. Sounds like something that mattermark could potentially take on. Or maybe priceonomics in a blog post. [1] Then, years later, compare outcomes.

paul 12y ago
Obviously we aren't going to intentionally reject good companies in order to perform some kind of study, but we do our best to keep track the ones we reject that later become successful. There are a couple of them, but so far they are an order of magnitude smaller in both size and number than the successful companies that we did accept.
- larrys 12y ago
  Taking the concept in a different direction: You currently have people you accept and people that you reject. You recognize that many of the people that get rejected might actually get accepted if the pool of companies you could manage could be larger. (Similar to how many people are rejected by top schools but the schools recognize that there are people that qualify but miss because of some arbitrary decision process). (After all the class size is pretty much fixed even when the applicant pool rises). So you create a third class which is, for lack of a better way to put it, "worthy runner up". Like having a silver or bronze medal. (Noting that merely even getting into the Olympics and not getting anything is worth something.) And then those rejected applicants get some of the halo of YC (which further increases the applicant pool because now it's not solely pass or fail). Plus of course further YC name branding. "While they were rejected by YC they did get a Silver medal and with that..." Anyway my intuition says that someone branded as "runner up" would do better than someone not given that status.
- BenjaminTodd 12y ago
  I think you should seriously consider doing this. It's the best way to measure the true impact of YC on the companies it selects. Otherwise, it's hard to know to what extent you're just picking the most successful teams vs. genuinely making the teams more likely to succeed. Addition: To avoid having to completely reject people, you could take randomly select half to enter immediately, and let the other half enter in one year. Then you could measure the difference between the two groups after a year.
  - paul 12y ago
    It's not important know, and certainly not important enough to justify discarding half of our profits. It's also very difficult to get anything statistically significant out of the data when there are so few data points (there's probably only about one DropBox per batch). Btw, if it were truly just a matter of us picking the right companies, that would be even more impressive given that we reject over 97% of applicants :) That's obviously not the case though, since some of our most successful companies (such as AirBnb) wouldn't exist without YC.
    - BenjaminTodd 12y ago
      Not saying it's not impressive either way! Good point that the question is much less valuable from the perspective of YC partners. From that perspective, all that matters is that the companies perform well in the end. It matters more from the perspective of the applicants. Though even then, because the costs of joining YC are low, it's probably not a big issue for many people. Agree the success rates would be hard to compare. You'd need to have some other proxies for eventual success besides profits. Excellent point that if you can show you significantly helped the most successful couple of companies (which account for 80%+ of the value), and there were no other large successes among the people you rejected, then the job is done. You've shown YC increases the expected value of the companies you select.
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- deleted 12y ago
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