4 ms·

Copying Y Combinator - Why and How

48 points by pchristensen 17y ago

jacquesm 17y ago
Copying Y combinator is pointless. For one to 'copy' it you need the people that make up Y combinator, and even if you could you'd just be diluting the soup, not contributing to it Don't copy, innovate! Besides that, the world is a lot larger than just silicon valley, if you can put together a team with 'star attractor' power for would-be founders then you may have a possibility. But without HN (which really is just the top of the feeder of the funnel leading to YC startups) you're going to have a hard time to get the same exposure and mindset in the founders of the start-ups that approach you. And HN is also a pretty good way to measure the quality of the people approaching you. You're going to have to find alternative solutions to those problems too. Without a quick 'triage' stage it is very hard to run a seed fund, by making an end run around the process YC has a distinct advantage here. Basically the HN ecosystem is what provides YC with both the start-ups and a quick way to judge the ones that are probably run by level headed people. edit: funny moderation on this reply, up/down/up/down come on moderators, if you don't agree with it that's fine with me but do me a favour and point out why you don't agree with me. I did read the article, I think it makes a good point but I really don't think 'copying' a concept that relies uniquely on a few key people is a winning model. Even in principle. Do your own thing, and do it better. So that way you don't need to think about copying.
- jedc 17y ago
  > Do your own thing, and do it better. So that way you don't need to think about copying. This is the exact point I'm trying to make in the paper. Accelerator founders need to look hard at themselves, be innovative, and create their own niche. Trying to just copy YC will simply lead to a sub-standard clone.
  - trapper 17y ago
    The idea that anyone would setup a "clone" without wanting to be better is kind of strange.
    - mseebach 17y ago
      No, that's pretty basic. "It works there and is a success, if I copy it bit by bit I'll get success without trying" Also, it oftentimes works: studivz.de blatantly ripped off Facebook (to the point where they didn't even change the name of the stylesheet files) for the German market in 2006 and was hugely successful (for exactly the same reasons Facebook was in the US). They were sold for EUR 100 mln to a publisher. Eventually, obviously, you'll have to innovate your own way, if for no other reason than that someone else copies you and does it.
    - jedc 17y ago
      A big reason why YC is cloned is to create an ecosystem in a different city. (ie, the YC for Kentucky, the YC for Seattle, etc.) They have tended to want to be the YC for that particular city/region. They then tend to compare themselves to other local startup options (which are probably pretty bad) and not to the full spectrum of startup options, which is the only way they can get the best startups world-wide.
  - jacquesm 17y ago
    Then don't call it copying. Anyway, your article is fine, it's just that it seems there is a non-existent audience. Those that are dead set on trying to copy YC will do so anyway and those that were busy on different tracks will find that it does not apply to them. It's like everything else, reuse the bits that you think are good, drop the rest and try to find good alternatives. What would be a lot more interesting - at least to me - is how YC stacks up scorewise with the rest of the incubators out there. I haven't seen much proof yet that they do structurally better in the long term.
    - ErrantX 17y ago
      There is a 34 page thesis deliberately answering the question "How to Copy YC" (making the conclusion that he makes in the article). There is a good lot of that in there. In the Spreadsheet linked from the article there is listings of lots of funds and their startups. It makes interesting reading; much of it subjective. For example YC has funded astronomically MORE startups than many other funds. On the other hand very few have exited or obtained more funding - and a large number are completely dead (compared to other funds). Techstars has a much much lower "dead" rate and a much higher follow on funding rate. Seedcamp have the "best" success rate (in terms of follow on funding) but fund one of the fewest number of startups. All of that data though is pretty useless for actually comparing them. For example the Seedcamp follow on funding might be as a result of their manouvering of VC's towards the startups and not much to do with the viability of the product. Or the startups coming through YC might well have a tendancy to fail regularly - but the community of startup operators it creates might be huge; and the connections they all make might ensure their second or third venture DOE succeed with a nice fat exit. What Im trying to say is comparing the "success" of an incubator is probably an unbelievably tough task.
      - jedc 17y ago
        YC probably has a comparable success rate in terms of follow-on funding, but it's incredibly difficult to find the information for small angel rounds. (TechStars and Seedcamp helped me make sure my data was accurate, which helped their stats.) But thank you for the comments; putting some hard data and thinking behind this phenemenom was the whole point of my project! :)
- ErrantX 17y ago
  > if you don't agree with it that's fine with me but do me a favour and point out why Ok :) I downvoted for this: I did read the article Because the point you made is the exact point the article makes - or as I read it anyway :)
  - jacquesm 17y ago
    The article title is linkbait, the article itself could be summarized in exactly one sentence, and you didn't need to read the article to be able to do that. In dutch we call that 'kicking in an open door', I don't know what the english equivalent is. And thanks for coming out :)
deleted 17y ago
[deleted]
leelin 17y ago
Maybe MBA candidates and "seed accelerator" founders aren't so different after all! Replace the top founder reasons below: Connections to future capital: 8.51 Brand/Alumni connections: 7.83 Business support: 7.42 Product support: 7.13 Pre-money valuation: 5.25 Level of funding: 4.14 with the analogous reasons to go (or not go) to business school? Connections to finance/consulting interviews: 8.51 Branding from prestigious degree / alum network: 7.83 Learning and honing crucial soft skills: 7.42 Technical Learning in the classroom: 7.13 Opportunity cost: 5.25 Level of tuition: 4.14 Disclaimer: I have never gone to bschool.
- jedc 17y ago
  So I'm the OP and author of the paper. I figured I might get criticized for it because it was for my MBA, and there are a ton of stereotypes around MBA's. (Many for good reason, unfortunately.) But I have my degree in aerospace engineering, have designed and built solar-powered road cars, and used to operate a nuclear reactor. So don't think I don't have my fair share of geek cred. I understand the sarcasm, but would personally appreciate honest feedback on the content. Disclaimer: I have gone to bschool.
  - leelin 17y ago
    Yikes, definitely not being sarcastic here. It is an honest comparison of two transforming functions (bschool vs. seed accelerator); the preconditions and postconditions are surprisingly comparable even though the algorithms are quite different.
    - jedc 17y ago
      Yeah... sorry about that. I misunderstood what you were saying. In that case, the only issue I have is the first transformation. Instead of "connection to capital" -> "connection to finance/consulting interviews", I would instead say "connection to capital" -> "connection to more lucrative jobs". Though perhaps my opinion is colored by the fact that the consulting and finance interviews were hugely cut in the last year, and so a lot of my classmates have gotten interviews/jobs in other sectors. And those jobs are still quite lucrative.
pclark 17y ago
outcome: copying doesn't work, innovate and iterate and you'll be better. that rule applies to pretty much everything in a startups life.
- jedc 17y ago
  The only difference is that it takes much longer to iterate a program like YC... on the order of months instead of weeks. It means that more thinking is necessary before you start.
  - jacquesm 17y ago
    Compared to most other possible ventures an iteration time of months is peanuts. Some industries have iteration times of decades!

48 points by pchristensen 17y ago

Copying Y combinator is pointless. For one to 'copy' it you need the people that make up Y combinator, and even if you could you'd just be diluting the soup, not contributing to it Don't copy, innovate! Besides that, the world is a lot larger than just silicon valley, if you can put together a team with 'star attractor' power for would-be founders then you may have a possibility. But without HN (which really is just the top of the feeder of the funnel leading to YC startups) you're going to have a hard time to get the same exposure and mindset in the founders of the start-ups that approach you. And HN is also a pretty good way to measure the quality of the people approaching you. You're going to have to find alternative solutions to those problems too. Without a quick 'triage' stage it is very hard to run a seed fund, by making an end run around the process YC has a distinct advantage here. Basically the HN ecosystem is what provides YC with both the start-ups and a quick way to judge the ones that are probably run by level headed people. edit: funny moderation on this reply, up/down/up/down come on moderators, if you don't agree with it that's fine with me but do me a favour and point out why you don't agree with me. I did read the article, I think it makes a good point but I really don't think 'copying' a concept that relies uniquely on a few key people is a winning model. Even in principle. Do your own thing, and do it better. So that way you don't need to think about copying.

jedc 17y ago
> Do your own thing, and do it better. So that way you don't need to think about copying. This is the exact point I'm trying to make in the paper. Accelerator founders need to look hard at themselves, be innovative, and create their own niche. Trying to just copy YC will simply lead to a sub-standard clone.
- trapper 17y ago
  The idea that anyone would setup a "clone" without wanting to be better is kind of strange.
  - mseebach 17y ago
    No, that's pretty basic. "It works there and is a success, if I copy it bit by bit I'll get success without trying" Also, it oftentimes works: studivz.de blatantly ripped off Facebook (to the point where they didn't even change the name of the stylesheet files) for the German market in 2006 and was hugely successful (for exactly the same reasons Facebook was in the US). They were sold for EUR 100 mln to a publisher. Eventually, obviously, you'll have to innovate your own way, if for no other reason than that someone else copies you and does it.
  - jedc 17y ago
    A big reason why YC is cloned is to create an ecosystem in a different city. (ie, the YC for Kentucky, the YC for Seattle, etc.) They have tended to want to be the YC for that particular city/region. They then tend to compare themselves to other local startup options (which are probably pretty bad) and not to the full spectrum of startup options, which is the only way they can get the best startups world-wide.
- jacquesm 17y ago
  Then don't call it copying. Anyway, your article is fine, it's just that it seems there is a non-existent audience. Those that are dead set on trying to copy YC will do so anyway and those that were busy on different tracks will find that it does not apply to them. It's like everything else, reuse the bits that you think are good, drop the rest and try to find good alternatives. What would be a lot more interesting - at least to me - is how YC stacks up scorewise with the rest of the incubators out there. I haven't seen much proof yet that they do structurally better in the long term.
  - ErrantX 17y ago
    There is a 34 page thesis deliberately answering the question "How to Copy YC" (making the conclusion that he makes in the article). There is a good lot of that in there. In the Spreadsheet linked from the article there is listings of lots of funds and their startups. It makes interesting reading; much of it subjective. For example YC has funded astronomically MORE startups than many other funds. On the other hand very few have exited or obtained more funding - and a large number are completely dead (compared to other funds). Techstars has a much much lower "dead" rate and a much higher follow on funding rate. Seedcamp have the "best" success rate (in terms of follow on funding) but fund one of the fewest number of startups. All of that data though is pretty useless for actually comparing them. For example the Seedcamp follow on funding might be as a result of their manouvering of VC's towards the startups and not much to do with the viability of the product. Or the startups coming through YC might well have a tendancy to fail regularly - but the community of startup operators it creates might be huge; and the connections they all make might ensure their second or third venture DOE succeed with a nice fat exit. What Im trying to say is comparing the "success" of an incubator is probably an unbelievably tough task.
    - jedc 17y ago
      YC probably has a comparable success rate in terms of follow-on funding, but it's incredibly difficult to find the information for small angel rounds. (TechStars and Seedcamp helped me make sure my data was accurate, which helped their stats.) But thank you for the comments; putting some hard data and thinking behind this phenemenom was the whole point of my project! :)
ErrantX 17y ago
> if you don't agree with it that's fine with me but do me a favour and point out why Ok :) I downvoted for this: I did read the article Because the point you made is the exact point the article makes - or as I read it anyway :)
- jacquesm 17y ago
  The article title is linkbait, the article itself could be summarized in exactly one sentence, and you didn't need to read the article to be able to do that. In dutch we call that 'kicking in an open door', I don't know what the english equivalent is. And thanks for coming out :)

deleted 17y ago

[deleted]

leelin 17y ago

Maybe MBA candidates and "seed accelerator" founders aren't so different after all! Replace the top founder reasons below: Connections to future capital: 8.51 Brand/Alumni connections: 7.83 Business support: 7.42 Product support: 7.13 Pre-money valuation: 5.25 Level of funding: 4.14 with the analogous reasons to go (or not go) to business school? Connections to finance/consulting interviews: 8.51 Branding from prestigious degree / alum network: 7.83 Learning and honing crucial soft skills: 7.42 Technical Learning in the classroom: 7.13 Opportunity cost: 5.25 Level of tuition: 4.14 Disclaimer: I have never gone to bschool.

jedc 17y ago
So I'm the OP and author of the paper. I figured I might get criticized for it because it was for my MBA, and there are a ton of stereotypes around MBA's. (Many for good reason, unfortunately.) But I have my degree in aerospace engineering, have designed and built solar-powered road cars, and used to operate a nuclear reactor. So don't think I don't have my fair share of geek cred. I understand the sarcasm, but would personally appreciate honest feedback on the content. Disclaimer: I have gone to bschool.
- leelin 17y ago
  Yikes, definitely not being sarcastic here. It is an honest comparison of two transforming functions (bschool vs. seed accelerator); the preconditions and postconditions are surprisingly comparable even though the algorithms are quite different.
  - jedc 17y ago
    Yeah... sorry about that. I misunderstood what you were saying. In that case, the only issue I have is the first transformation. Instead of "connection to capital" -> "connection to finance/consulting interviews", I would instead say "connection to capital" -> "connection to more lucrative jobs". Though perhaps my opinion is colored by the fact that the consulting and finance interviews were hugely cut in the last year, and so a lot of my classmates have gotten interviews/jobs in other sectors. And those jobs are still quite lucrative.

pclark 17y ago

outcome: copying doesn't work, innovate and iterate and you'll be better. that rule applies to pretty much everything in a startups life.

jedc 17y ago
The only difference is that it takes much longer to iterate a program like YC... on the order of months instead of weeks. It means that more thinking is necessary before you start.
- jacquesm 17y ago
  Compared to most other possible ventures an iteration time of months is peanuts. Some industries have iteration times of decades!