4 ms·

I'm definitely speaking at least a little bit out of bitterness (our team just got rejected), so with that caveat it feels like YC is becoming more like traditi

I'm definitely speaking at least a little bit out of bitterness (our team just got rejected), so with that caveat it feels like YC is becoming more like traditional VC (venture capital): - extremely low probability of success just due to volume of applications - no feedback (again, due to volume of applications, and they posted a nice blog post about this, but just stating a fact) - it seems (I don't have any factual evidence to back this up, would love to be proven wrong through factual evidence) that you need to know someone - tendency to fund those who need it the least (already-proven user traction or revenue) YC is a for-profit, private enterprise that can do whatever it wants, and it is in the business of maximizing income, so it would be foolish for the organization not to act in a self-interested way, but just calling it like I see it (and again, it'd be great if there were any stats the organization could release to disprove any of the points above, but I understand that it has no obligation to do so).

birken 12y ago
Lots of people will give you money if they think you will turn it into more money. VCs, YC, techstars, rich people, angel investors, your parents, your dentist, etc. Having dealt with many varieties of these before, they all generally share those principles: - You get a lot more 'no's than 'yes'es - They don't give you a lot of feedback when they pass - Having a previous relationship with them is helpful - The more successful you are, the more they want to give you money Unless you are starting a non-profit, this is just how it works. These people are investing, not donating to charity or your team's self-development. Get some traction and/or revenue and the game will flip around very quickly.
- AustinPythonFTW 12y ago
  I think we're making the same point here, but with a nuance. I think we both agree that: YC is becoming more like everyone else in the investing game. they want to make a lot of money. Just to clarify, it felt like YC used to be more different from others in the investing game, like they cared more, or they were willing to invest in earlier-stage startups, or they had a higher purpose, or followed the hacker ethos. but now it just feels like they're more like every other investor out there -- please note the use of the word "more". they still do great things (watsi case in point), and all of their blog posts are very respectful towards applicants. to reiterate, it just feels like they're becoming "more" like traditional VC and less like what I thought YC was or used to stand for.
  - birken 12y ago
    I'll preface this by saying I'm not a big YC apologist. I've never been through it, I've never applied, I've directly competed against lots of YC companies, yada yada. But I disagree. I've dealt with VCs before and I've read enough to understand what dealing with YC is like, and they are much more different from a traditional VC than they are alike. 1. Anybody can apply, from anywhere, and you apply online. Good luck finding an online application for a normal VC, and cold-emailing partners isn't going to get you anywhere. Oh, and if you don't live in the bay area your chances just went way down of getting a meeting or investment. 2. They give you a nice chunk of money in exchange for a really tiny amount of common stock (I think it's common stock), have really nice terms, and don't take a board seat. I'm sure for many of the companies that apply, YC could take much more equity but they don't (and it would still be worth it for the companies anyway). They are paranoid about and lose a ton of money by restricting partners investing or taking their pro-rata rights to protect the companies they don't follow on with (this is my understanding of their policies). 3. They keep increasing their class sizes in attempts to get more people going through it. They created an online class that they offered for free to everybody to encourage more people to do startups and spread the knowledge. 4. They have a means of preventing and responding to investor misbehavior by threatening to blacklist them from YC companies. This is hugely valuable for your average entrepreneur as its helps to shift the culture in a way that is better for entrepreneurs (which has happened a lot in the past few years). They aren't perfect. They don't claim to be perfect (case in point: the title of this blog post). But believe me, they are miles away from a traditional VC.
    - AustinPythonFTW 12y ago
      birken: good point. I think the wording i used was too strong (again, disclaimer that I'm still a little bitter from our team being rejected). i think they're becoming more like a traditional vc, but still miles away. in other words: i agree with your points above
  - kanwisher 12y ago
    Honestly it just sounds like you were hurt that they didn't accept you. If they have thousands of people apply they have to reject the vast majority of them. I don't see how this is now following the hacker ethos. You might want to ask your self why you don't already have traction.
- ig1 12y ago
  It's far from black and white when it comes to feedback, once you're at the point where an investor is spending real time with you they're much more likely to give you feedback if they think you're able to react to that feedback effectively. For example if they think you need to prove out certain assumptions then they'll tell you those assumptions, because it's in their interest. If they think you personally as a founder are uninvestable then they're unlikely to tell you that because there's no advantage in that for anyone.
jl 12y ago
We've been doing pretty much the same things since we started in 2005: we've never given specific feedback about rejections at the application stage (it wasn't going to scale even when we only got a few hundred applications). We funded 8 startups in our first batch, which was roughly 2-3% of the total applications. We definitely fund people who have no connection to folks we already know, or Silicon Valley for that matter. And we also fund startups who are at the idea stage and have no traction (though traction does help). I'm very sorry we rejected you, but we are honestly often wrong.
- AustinPythonFTW 12y ago
  thanks for the comment. YC is definitely great about being very respectful to applicants in its process and blog posts, so don't get me wrong. I'm just wondering if there's a way for people to understand what their chances are. For example, if 0.01% of people that have lower than a 650 GMAT get into Stanford, then that would be useful information to know (for hopeful applicants). Similarly, if the "has revenue" cohort has a 15% interview rate, and the "pre-revenue" cohort has a 0.5% interview rate, that would also be really great to know. (same thing for solo vs. multiple founders, recommended vs. non-recommended, etc). I understand that YC has no obligation to provide this information, and perhaps there are very good reasons why it wouldn't provide it even if it was available. It would just be useful to know if possible.
  - ig1 12y ago
    The curve is far less uniform than you might imagine. There are going to be a few companies which are obvious superstars (great team, market, execution, traction, etc.) which will be obvious yeses. You're either in this group or your not. There are many many companies which are obviously bad: weak team, bad market, poorly thought through idea, pre-product, etc. These companies would get rejected regardless of how many companies applied. Then you have the companies in the middle. That's where the competition is. It doesn't really matter how many companies are in the previous groups, what matters is how you rank compared to the "maybes".
    - 12y ago
Fando 12y ago
I agree, I think YCombinator is great and they need to find a way to "foster" the growing community of mini start-ups who are perhaps, not yet ready for incubation, or don't need it, but are still capable of realizing their potential. This community should be free for all, in order to meet, network, collaborate, learn and keep passions burning. Focus on investment potential could be secondary to focus on start-up community growth, involvement, and learning.
- AustinPythonFTW 12y ago
  Absolutely agree with your thoughts here.
csa 12y ago
> it seems that you need to know someone Assuming this is true, this must be one of the easiest things in the world to hack. I would be very worried about any aspiring tech entrepreneur who couldn't manage to connect with a group of people who are as open and as generous with their time as many of the YC alums are. > tendency to fund those who need it the least First, I wonder if this is really true. It may look that way, but I imagine that many of the companies are in the product/market fit stage. Some may find themselves actually in the problem/solution fit stage. I imagine few are in the straight-up scaling stage. Second, from YC's perspective, I think that they should definitely have some companies in each class for which they will simply act as a multiplier -- that is, get the company to where it is going, just faster and (maybe) better. Lastly, if traction and/or revenue really are the key to acceptance, aspiring YC companies could simply use this as a parameter to consider when developing their company. IMHO, this is a case of the tail wagging the dog, but it's something to consider.

birken 12y ago

Lots of people will give you money if they think you will turn it into more money. VCs, YC, techstars, rich people, angel investors, your parents, your dentist, etc. Having dealt with many varieties of these before, they all generally share those principles: - You get a lot more 'no's than 'yes'es - They don't give you a lot of feedback when they pass - Having a previous relationship with them is helpful - The more successful you are, the more they want to give you money Unless you are starting a non-profit, this is just how it works. These people are investing, not donating to charity or your team's self-development. Get some traction and/or revenue and the game will flip around very quickly.

AustinPythonFTW 12y ago
I think we're making the same point here, but with a nuance. I think we both agree that: YC is becoming more like everyone else in the investing game. they want to make a lot of money. Just to clarify, it felt like YC used to be more different from others in the investing game, like they cared more, or they were willing to invest in earlier-stage startups, or they had a higher purpose, or followed the hacker ethos. but now it just feels like they're more like every other investor out there -- please note the use of the word "more". they still do great things (watsi case in point), and all of their blog posts are very respectful towards applicants. to reiterate, it just feels like they're becoming "more" like traditional VC and less like what I thought YC was or used to stand for.
- birken 12y ago
  I'll preface this by saying I'm not a big YC apologist. I've never been through it, I've never applied, I've directly competed against lots of YC companies, yada yada. But I disagree. I've dealt with VCs before and I've read enough to understand what dealing with YC is like, and they are much more different from a traditional VC than they are alike. 1. Anybody can apply, from anywhere, and you apply online. Good luck finding an online application for a normal VC, and cold-emailing partners isn't going to get you anywhere. Oh, and if you don't live in the bay area your chances just went way down of getting a meeting or investment. 2. They give you a nice chunk of money in exchange for a really tiny amount of common stock (I think it's common stock), have really nice terms, and don't take a board seat. I'm sure for many of the companies that apply, YC could take much more equity but they don't (and it would still be worth it for the companies anyway). They are paranoid about and lose a ton of money by restricting partners investing or taking their pro-rata rights to protect the companies they don't follow on with (this is my understanding of their policies). 3. They keep increasing their class sizes in attempts to get more people going through it. They created an online class that they offered for free to everybody to encourage more people to do startups and spread the knowledge. 4. They have a means of preventing and responding to investor misbehavior by threatening to blacklist them from YC companies. This is hugely valuable for your average entrepreneur as its helps to shift the culture in a way that is better for entrepreneurs (which has happened a lot in the past few years). They aren't perfect. They don't claim to be perfect (case in point: the title of this blog post). But believe me, they are miles away from a traditional VC.
  - AustinPythonFTW 12y ago
    birken: good point. I think the wording i used was too strong (again, disclaimer that I'm still a little bitter from our team being rejected). i think they're becoming more like a traditional vc, but still miles away. in other words: i agree with your points above
- kanwisher 12y ago
  Honestly it just sounds like you were hurt that they didn't accept you. If they have thousands of people apply they have to reject the vast majority of them. I don't see how this is now following the hacker ethos. You might want to ask your self why you don't already have traction.
ig1 12y ago
It's far from black and white when it comes to feedback, once you're at the point where an investor is spending real time with you they're much more likely to give you feedback if they think you're able to react to that feedback effectively. For example if they think you need to prove out certain assumptions then they'll tell you those assumptions, because it's in their interest. If they think you personally as a founder are uninvestable then they're unlikely to tell you that because there's no advantage in that for anyone.

jl 12y ago

We've been doing pretty much the same things since we started in 2005: we've never given specific feedback about rejections at the application stage (it wasn't going to scale even when we only got a few hundred applications). We funded 8 startups in our first batch, which was roughly 2-3% of the total applications. We definitely fund people who have no connection to folks we already know, or Silicon Valley for that matter. And we also fund startups who are at the idea stage and have no traction (though traction does help). I'm very sorry we rejected you, but we are honestly often wrong.

AustinPythonFTW 12y ago
thanks for the comment. YC is definitely great about being very respectful to applicants in its process and blog posts, so don't get me wrong. I'm just wondering if there's a way for people to understand what their chances are. For example, if 0.01% of people that have lower than a 650 GMAT get into Stanford, then that would be useful information to know (for hopeful applicants). Similarly, if the "has revenue" cohort has a 15% interview rate, and the "pre-revenue" cohort has a 0.5% interview rate, that would also be really great to know. (same thing for solo vs. multiple founders, recommended vs. non-recommended, etc). I understand that YC has no obligation to provide this information, and perhaps there are very good reasons why it wouldn't provide it even if it was available. It would just be useful to know if possible.
- ig1 12y ago
  The curve is far less uniform than you might imagine. There are going to be a few companies which are obvious superstars (great team, market, execution, traction, etc.) which will be obvious yeses. You're either in this group or your not. There are many many companies which are obviously bad: weak team, bad market, poorly thought through idea, pre-product, etc. These companies would get rejected regardless of how many companies applied. Then you have the companies in the middle. That's where the competition is. It doesn't really matter how many companies are in the previous groups, what matters is how you rank compared to the "maybes".
  - 12y ago

Fando 12y ago

I agree, I think YCombinator is great and they need to find a way to "foster" the growing community of mini start-ups who are perhaps, not yet ready for incubation, or don't need it, but are still capable of realizing their potential. This community should be free for all, in order to meet, network, collaborate, learn and keep passions burning. Focus on investment potential could be secondary to focus on start-up community growth, involvement, and learning.

AustinPythonFTW 12y ago
Absolutely agree with your thoughts here.

csa 12y ago

> it seems that you need to know someone Assuming this is true, this must be one of the easiest things in the world to hack. I would be very worried about any aspiring tech entrepreneur who couldn't manage to connect with a group of people who are as open and as generous with their time as many of the YC alums are. > tendency to fund those who need it the least First, I wonder if this is really true. It may look that way, but I imagine that many of the companies are in the product/market fit stage. Some may find themselves actually in the problem/solution fit stage. I imagine few are in the straight-up scaling stage. Second, from YC's perspective, I think that they should definitely have some companies in each class for which they will simply act as a multiplier -- that is, get the company to where it is going, just faster and (maybe) better. Lastly, if traction and/or revenue really are the key to acceptance, aspiring YC companies could simply use this as a parameter to consider when developing their company. IMHO, this is a case of the tail wagging the dog, but it's something to consider.