Doesn't it go like this?: You're starting a company on $15-20K, so you need to get a usable app out within a few months - to get some users loving you - to rais

Doesn't it go like this?: You're starting a company on $15-20K, so you need to get a usable app out within a few months - to get some users loving you - to raise money to go after a bigger market with a 'grander app. You could simply not ship anything, go after that bigger market first... but then in addition to seeing fewer, more substantial first apps from YC companies after much longer incubations, you'd see YC's success rate plummet. Nobody's ultimate game plan is the cute web app. Thats just how you get through round one to connect with a real market and real users and iterate from there, with additional funding. In other words: complaining about a bunch of small web apps coming out of a summer incubator and then not exploding into massive companies is equivalent to complaining about a bunch of startups failing under any other model. Most do. Thats just how it is. In the case of YC, failure means you probably ship something, then fail to go much past there. Which is better than not shipping anything, or spending a year on something nobody wants before you ever ship. A high failure rate is valid criticism, but judging from how many YC companies get follow-on funding, I'd say the model works just fine. It will take a long time to find out. My question for PG is this: How long until you find out if the early YC classes are winning or losing investments? How many cells out in your excel is that day?