The idea that check sizes should be small so people should be forced into dire financial situations is a terrible one, and one that would absolutely hurt diversity. You're going to end up with a bunch of rich white dudes as founders (because very, very obviously the other way that people can afford to take smaller checks is if they have a lot of money in the bank).
The smaller class size issue is probably fair, but reducing check sizes as a filtering method will absolutely filter out socioeconomically disadvantaged people. Just a terrible suggestion from somebody who I would wager heavily is not unsure of where his next meal is coming from.
It also doesn't make any sense from an investment perspective. Reddit would have been one of the most successful YC companies of all time, except for that they basically had to shut down because they couldn't raise money. This happened to lots of early YC companies that could have otherwise been successful.
Had Reddit not sold for pennies on the dollar to Conde Nast, that alone would have probably paid for the extra 100k for every YC startup since.
We have a silicon valley success story in our family. His parents were telling me how he built everything up out of nothing, clearly unaware of their own contribution.
He could pour all his money into his start-up because if he'd lost every dime he could have moved back in with them. He'd have his own bedroom, bathroom, and a fresh-cooked meal every night. He could have stayed with them as long has he wanted. Very few people have that kind of soft-landing.
Yeah I noped out of this as soon as I saw it. The guy is suggesting investing in startup founders but not giving them enough to live while they get that company off the ground. What is the point of that? Completely self-defeating.
Completely agree with the point except the needless use of racial stereotyping on an economic issue.
The reality is that millions of white people come from impoverished backgrounds. And millions of Indian, Asian, and yes even Black and Latino people are from wealthy backgrounds.
Polices designed to help economic diversity will necessarily and disproportionately help certain racial minorities and that’s all for the good. If you want to actually help the world stop making it about race when it is not. And feel free to make it about race when it actually is.
IDK, in my observation as a working-class white dude, comfortable white people are less likely to start an entrepreneurial venture. Why take the risk when you have easier employment options?
There were pretty obvious, observable backgrounds/personality types that were starting businesses in my circle. Mostly SMBs like trading/retail firms, personal services, etc.
Well do to people assume that the masses are a bunch of hardscrabble foster children. Those folks exist. But the reality is that most people have families and have support systems to fall back on -- perhaps not as comfortable a fall-back as the kid where mom and dad are dentists or F500 executives, but not intolerable.
Startups aren't really businesses, so maybe they are different. Optimizing for successful venture funding cycle is a different problem.
Agree-- the idea that limited means "always" fosters resourcefulness is a gross sentiment that has long been debunked. For many folks limited means just means extra stress with no added chances of success. Maybe the founder saying this is motivated by less money, but most people aren't and this would just further limit diversity.
If you have no capital to bring, then you will have no equity either unless you provide labor for free. Labor compensated with equity is capital, since you have to pay your living expenses out of savings or loans that you are liable for. And you'll just be an employee of sorts, except with less pay and more risk. Why bother?
If you're unsure where your next meal is coming from, then you probably aren't currently a good candidate to be a founder. Maybe later you will be, but first things first: accumulate a bit of wealth. Venture capital isn't a government welfare program. You might get YC or others to pay a sort of a social tax by providing a sort of welfare, but the founders won't be owners (see above).
My understanding of it is that much of the money is supposed to be for Google and Facebook ads - something which I would never want to have to pay out of pocket for in the US market. So it's not just that the founders can pay themselves a ramen salary or better, but that there's a big early marketing budget built-in.
The other big difference on check sizes is that YC started during now documented collusion in silicon valley. Now, the check size really doesn't matter a ton to the FANG engineers looking for a sabbatical. Building a 100k cushion to fund said sabbatical is pretty easy when you're making 400k at Google.
I think there's no real way for reducing checks to have meaningful impact at this point.
I think the financial argument is an interesting one. It is true that you need to be financial stable so that you can really focus on the startup BUT on the other hand, too much money can spoil you and you could end up burning the cash without lot of trial and error which can be useful starting up.
The financial purgatory expected by angels is ridiculous and one we never subscribed to and is far too much like a parent child relationship than an adult to adult relationship. Investors who want their founders in a tonne of personal debt and living on baked beans are hurting their investment and stroking their ego.
Investors are trying to sell money, companies are selling a possibly enormous return on that money, it's a win-win and founders should be treated like the professionals they would be in industry.
Start ups have basically unlimited upside risk for investors and totally limited (to the amount of money invested) downside risk for them (and in the UK very healthy tax breaks for investing), the founders on the other hand loose years building a product that may prove worthwhile, don't make them carry years of financial pain and repercussions because they tried to grow your $5-$100K.
I think the money needs to cover your rent. It should not be enough to hire technical people to build the product - that was supposed to be the founders thing.
In that light, SF is the wrong place because the rents are so high.
People who take huge financial risks are IMO much more likely to be just kinda stupid than rationally confident & committed. It strikes me as a really dumb way of filtering for smart people.
Counterpoint: founding a startup and being financially secure isn't some inalienable right. As you point out, writing small checks will skew the population of founders, but by doing otherwise for the reasons you've brought up, you're addressing a symptom very inefficiently. It might be more effective to take an approach similar to affirmative action. I think the idea is totally valid. Pouring money into a small set of founders can have diversity implications as well, it's hard to guarantee you're distributing investment equitably if the batch size is small.
"You're going to end up with a bunch of rich white dudes as founders (because very, very obviously the other way that people can afford to take smaller checks is if they have a lot of money in the bank)."
There are many founders of various social identities who are not rich yet have managed to succeed with bootstrapping or small seed/accelerator investments because they are capable.
To assert that some people are inherently advantaged or disadvantaged as founders and/or entrepreneurs based on such factors as race and gender is the definition of prejudice.
> You're going to end up with a bunch of rich white dudes as founders
Is there any reason you included "white"? Are black people not able to be rich, or are white people more interested in tech, or are black people discriminated against by YC, or... what?
That's a great point, but I do think there is a legitimate counterpoint - that by shifting most of the risk from the founder (where $25-$100k is a lot of money) to the VC (where it ultimately is very little money) potentially eliminates a filter criteria and could create perverse incentives or lead to a scattershot approach.
"I believe in this idea so much I am willing to gamble my short-term financial future on it" is a great way to find out what people really care about.
The diversity issue is real though. As is the broader issue of wealthy people being able to take on much more risk than normal people, leading to a reinforcement cycle (winners keep winning) and a winner take all outcome.
Which, now that I think about it, pretty much describes US capitalism perfectly.
Maybe the point of economic filtering is to only accept single young men, who can devote every waking moment to their startup without any concern for dependents and such. You can get great velocity from such a pool.
Myself, with family, mortgage, etc. I would never be able to achieve that kind of velocity if I were accepted to YC.
So, even if I had incredible ideas, as people around here keep saying, and PG makes clear in his Viaweb essay, it is not about the ideas but about execution.
Thus, the economic filtering for those who are unencumbered and thus can really execute on their idea or something that YC comes up with makes a lot of sense.
They are doubling down on what works. I'd be very interested to learn if Ycombinator has diversity and inclusion as a value and if they discussed what smaller checks might mean on D&I.
It's interesting how the best incubator found that smaller checks out of the gate is beneficial, but you can raise a 30-50 million series B and founders can take a few million off the table, which is also good, so they can go long.
The solution may be wrong, but the idea is right. If people can just casually come into YC with no particular consequences for failure, that greatly reduced drive to succeed. "I'll just go back to FAMGAN after" or "I'll be able to transition from MBA grad + YC to something high paying" I don't think is great for success drive.
I've spoken to a half dozen YC founders this morning -- no one disagrees except the check size debt thing. Mostly "that is dumb" for that one.
For those who worked at startups when they were small (5–20 people), the difference between then and when they grew to be 100 or 200 people is night and day. Very real difference.
For those who haven't, think of class sizes. Do you think a uni class with 18 people in it will be the same as a survey with 200? Course not.
Three founders in my batch (early 2010s) have started companies in the past year and opted out of YC b/c of 1. batch size 2. YC doesn't mean to investors what it once did. The brand is heavily diluted.
YC is a broad based investment fund. The partners cannot handle the size of the batches or give the attention they once could. The partnership simply hasn't scaled.
Somewhat informed guess: partners don't want to give up their own returns by splitting it with more partners. Understandable -- human nature. But not good for YC as a whole.
He lost me with the whole "make founders take on massive personal debt to survive" tweet. Removing that particular stressor, particularly from people from poorer backgrounds who lack the access to that kind of credit is how we get a better sampling of ideas.
Recent YC founder here. I disagree with the premise that boring ideas are inherently bad. Stripe is a B2B company that adds an API on top of existing infrastructure. Airbnb is a basic CRUD app.
I also disagree that YC is not funding interesting ideas. Our batch had quite a few. Someone was making a rapid cargo ship. Someone else was making a fully distributed cell network.
The only real copycat ideas were the ones duplicating successful startups for international markets. In my opinion these were obviously good investments.
The social climber phenomenon was real. I think anything that becomes elite will attract them. I’d say, I was impressed that half the batch did not fit this profile.
My sense was that YC actually went out of its way to fund more interesting ideas. I’m sure my startup would not have gotten in, based on our traction and backgrounds, if our idea wasn’t out-of-the-box. (We are bottomless.com, a smart coffee subscription that uses a WiFi scale to ship at the perfect time).
I’d even venture to say that there appeared to be a negative correlation between interestingness and outcome in our batch. It’s possible YC should fund more boring companies, not fewer.
The author didn't say anything about "interesting" vs. "boring" companies or ideas. He said YC should curtail funding of dev tools/SaaS startups, because the traction they appear to have is misleading. They're selling to each other, revenue moving in a circle, without demonstrating value creation outside of the sphere of similarly-situated startups. Not explicitly stated, but he's also implying it's a portfolio risk for YC.
The Bay Area has lost its' soul. I moved here to meet creative people tackling big problems and I've found it's no longer about innovation and risk. Just a big pile of uninspired B2B SaaS companies. SV has become a well oiled money making machine for these kind of companies. If you want to work hard and get rich you come here and follow the grind to get your checks, status, clout, etc...
I've found some creative people tackling big ideas, but they are exceedingly rare and largely unsupported by the community. I've met a lot more people who moved out here with big ambitions and have been railroaded down the route of conformity, which makes the most money for VC's. It leaves them without fulfillment or purpose as they grind on products they care little about. SV will continue to produce billion dollar software companies, but I doubt they will produce real innovation over the next few decades. The bay area has conspired to railroad its' potential for greatness towards profitable mediocracy.
"We wanted flying cars, instead we got 140 characters." ― Peter Thiel
I think people love to use "The Bay Area" and "Silicon Valley" and conflate that with "software startups that raise VC funding".
Silicon Valley still produced most of the internet (for better or worse) and the only new American mass production car company in my lifetime. Let's not overlook the successes while we are busy complaining about the average (especially because the VC model assumes 900+ failures for every 1-3 unicorn IPOs).
Not sure what the next few decades will bring (I'd be pleasantly surprised if the USA doesn't go through an actual revolution), but I'd wager that "real innovation" is still more likely to happen in Northern California than almost anywhere else in this country, even if the establishment VC club doesn't get disrupted.
I don't disagree, but not sure how you can make that claim given that you didn't ever experience your idealized version (which never existed after the 70s)
As someone who did yc in s09 and w19, it was very different. But, you get out what you put in, like most things. These generalized critiques are useless. B2b is thriving at yc because it’s easier and more in the wheelhouse of developers. If there were tech climbers there I didn’t meet them. There are so many people the useless are easy to avoid. We got 6 months of work done in 3 months and the bigger check vs 09 was very helpful.
Also if you look at how the US economy works, all the money is in businesses, not consumers - compare the current stock market to the unemployment numbers for example. B2B was always going to out-compete B2C in the long run.
I don't think the author is advocating that founders take on a ton of of personal debt, just that historically it was a filtering function that is now absent. I would imagine that this filter function can be replaced by something else that does not also weed out people without any safety net.
The point is valid - startups are a risk, and so if all the risk is removed, it will increase the number of people who are coming to YC for status vs. coming because they believe in their idea.
As good at interviewing as the YC partners may be, interviewing is no substitute for the harsh reality and incentives imposed by taking a great risk.
I am somewhat sympathetic to the check size argument simply because I have seen a lot of people drift from accelerator to accelerator to accelerator and mostly focus on getting to their next one. They become really good at the pitch and grant collecting, but have websites that barely work or rarely go and meet customers. There is a perverse incentive in the accelerator spot in itself being a reward.
I suppose it depends on what YC wants to optimize for. You can risk giving money to not so serious founders or risk excluding ones who want to cap their risk.
I don't get why they would want to ban dev tools and SaaS. The latter especially is a huge segment. Many enormous companies like IBM and SAP are built around those types of offerings.
There's a Burning Man analogy in the Twitter comments that struck me as quite apt. In fact, it holds for everything from vacation destinations to multi-decade music acts.
People who were there at the beginning feel that something magical has slowly been corrupted by success and all the bigness issues that come with it. They aren't totally wrong. But people who get there later still find something of value, and everything is now sturdy enough to support wider participation.
Several years ago I used to read pg old articles (also Joel S, pgreenspun) without realizing who he was or know what YC was. It clicked with my nerds mindset. I had an impression that he was a champion for the underdog, nerds like me who is smart enough (but not genius), willing to work hard and live frugal. I also had the understanding that ambition to be a unicorn not necessary, it is much more important to be ramen profitable. Success will come if you work hard and persevere, but not blinded by ambition. I also thought that success did not require social capital, eg ivy league degree, FAANG connections, etc.
I filled up YC applications last year, but not sure how to answer question whether my idea is worth a billion. I will be satisfied if my SAAS business can make $5k MRR. If I have more than that, it will be a blessing.
Should YC remove questions that favors those social capital? I mean, YC can have a simple leetcode question to prove you are smart enough. Then, run a lucky draw to pick which ones selected.
As an investor, all I can say is that having gone through YC is not the signal of quality it was 7 or 8 years ago. This doesn't mean YC is doing anything wrong regarding their investment strategy. It simply means they are expecting a very skewed power law of returns.
I’m surprised no one has mentioned this PG essay, black swan farming. YC appears to have switched to exactly this strategy. Invest in a far larger set of startups, with more possibility of failure but also larger possibility of finding the rare large ones.
I went through YC in S14 as a co-founder of a hardware company. I agree that YC optimizes heavily for SaaS companies, but smaller checks would probably exacerbate this trend. Hardware companies need to not only subsist on the $120k but also develop prototypes. That's difficult enough, but it is completely impossible on $25k unless the co-founders are independently wealthy or have already raised money.
I find it disturbing that this is getting so much attention. The argument (such as it is) is utterly without merit, unsupported by anything other than the tweeter's personal opinion. It is, quite simply, a troll. And it seems to be working.
In fact, the whole cultural phenomenon of paying attention to what people tweet is deeply disturbing. Twitter is not designed to support rational argument supported by data, it's designed to be a morphine drip of novelty, a machine that dispenses mental M&Ms. People who follow twitter are like lab rats pressing a lever in exchange for a drop of sugar water. It's troubling to see this phenomenon invading HN.
One thing that made YC great was that it was started to allow the original 4 partners to learn how to be investors. The first batch wasn't intended to be profitable, it was intended to reveal what works and what doesn't. (Luckily for YC it got a lot right by accident). Sure YC could go back to small batches and small investments but they can't go back to "let's figure things out with only rough theory as a guide" because YC is no longer the startup born out of ignorance and curiosity it once was. You can't forget lessons learned and dial back your sophistication. The magic of early YC isn't lost forever but it will be refound among the next group of rich people who are willing to spend a bit to figure out if this investing thing is to their taste.
Is anyone else unimpressed with the ideas being funded? I look at Work at a Startup and it is just new web frontends on existing industries. I'm sure that makes money but holy hell is it boring.
Some are working on cool things, but the founder who has a PhD in that topic will be doing the interesting work and they are hiring for infra or interface.
One company was a great match for my skill set but the equity was so low for early hires. I get that 1% can be huge for a FB scale exit, but 180k and 1% is generally just a paycut. In this case the founders were undergrad dropouts and not SMEs. It just seems like a really inflexible ecosystem when you can't give 5%-10% to an early hire when they would be the SME and core engineer.
He says "the check sizes are too big" as if they're giving prelaunch startups $50M or something. The $125k that YC gives startups is nowhere near big enough to remove the drive/urgency to succeed.
If startups are coming into YC with a more mature product than in the early years (and it seems that way), then adjusting the focus towards fundraising actually makes sense.
Not to repeat what's been said in other comments, but to say that founders should be willing to put themselves in deep financial risk to prove their drive...that just comes from an incredibly privileged mindset.
It reminds me of the people saying that if their school is going online-only, students should instead take gap years to build something, incorrectly assuming that no one needs that student loan money for living expenses.
His perspective seems built around ego. It's no longer the special club he wanted it to be, it's not "hard enough" for the people he sees as "wrong" to participate. He liked YC when it was a band no one else had heard of etc. etc.
Without knowing the metrics for how YC judges the performance of its intake and their future objectives, there's no way of making sensible recommendations for how (or if) it should change.
FWIW, the vast majority of YC founders I've met have told me "It was good when I did it, but I don't know if I'd do it today. The batches are so big!"
I chalk it up to a pretty typical nostalgia. Everybody is biased towards thinking the experiences of their youth were perfect, and any change is detrimental.
The SAAS thing is real. In my own broader network, I've seen so many interesting new consumer companies not even get an interview but SAAS companies of all stripes not have a problem getting an interview. It also heavily correlates with FAANG/Stanford phenomena which then leads to a mostly white male batch.
There are so many reasons why all this is, including the fact, these applications heavily bias towards 'solving a big problem that the interviewer CAN grep', and so many of those readers and interviewers are themselves from SAAS backgrounds.
Anecdotally, within female founders, it is quite understood that if you are a female founder with a consumer startup, good luck getting an interview whereas if you are FANG employee with event hint of an idea, you get an interview!
[+] [-] awillen|5 years ago|reply
The smaller class size issue is probably fair, but reducing check sizes as a filtering method will absolutely filter out socioeconomically disadvantaged people. Just a terrible suggestion from somebody who I would wager heavily is not unsure of where his next meal is coming from.
[+] [-] Alex3917|5 years ago|reply
Had Reddit not sold for pennies on the dollar to Conde Nast, that alone would have probably paid for the extra 100k for every YC startup since.
[+] [-] doorstar|5 years ago|reply
He could pour all his money into his start-up because if he'd lost every dime he could have moved back in with them. He'd have his own bedroom, bathroom, and a fresh-cooked meal every night. He could have stayed with them as long has he wanted. Very few people have that kind of soft-landing.
[+] [-] dbbk|5 years ago|reply
[+] [-] kkolanm|5 years ago|reply
The reality is that millions of white people come from impoverished backgrounds. And millions of Indian, Asian, and yes even Black and Latino people are from wealthy backgrounds.
Polices designed to help economic diversity will necessarily and disproportionately help certain racial minorities and that’s all for the good. If you want to actually help the world stop making it about race when it is not. And feel free to make it about race when it actually is.
[+] [-] Spooky23|5 years ago|reply
There were pretty obvious, observable backgrounds/personality types that were starting businesses in my circle. Mostly SMBs like trading/retail firms, personal services, etc.
Well do to people assume that the masses are a bunch of hardscrabble foster children. Those folks exist. But the reality is that most people have families and have support systems to fall back on -- perhaps not as comfortable a fall-back as the kid where mom and dad are dentists or F500 executives, but not intolerable.
Startups aren't really businesses, so maybe they are different. Optimizing for successful venture funding cycle is a different problem.
[+] [-] gorpomon|5 years ago|reply
[+] [-] cryptonector|5 years ago|reply
If you're unsure where your next meal is coming from, then you probably aren't currently a good candidate to be a founder. Maybe later you will be, but first things first: accumulate a bit of wealth. Venture capital isn't a government welfare program. You might get YC or others to pay a sort of a social tax by providing a sort of welfare, but the founders won't be owners (see above).
[+] [-] Blake_Emigro|5 years ago|reply
[+] [-] phamilton|5 years ago|reply
I think there's no real way for reducing checks to have meaningful impact at this point.
[+] [-] codegeek|5 years ago|reply
[+] [-] simonbarker87|5 years ago|reply
Investors are trying to sell money, companies are selling a possibly enormous return on that money, it's a win-win and founders should be treated like the professionals they would be in industry.
Start ups have basically unlimited upside risk for investors and totally limited (to the amount of money invested) downside risk for them (and in the UK very healthy tax breaks for investing), the founders on the other hand loose years building a product that may prove worthwhile, don't make them carry years of financial pain and repercussions because they tried to grow your $5-$100K.
[+] [-] phkahler|5 years ago|reply
In that light, SF is the wrong place because the rents are so high.
[+] [-] bananaface|5 years ago|reply
[+] [-] foxtr0t|5 years ago|reply
[+] [-] _curious_|5 years ago|reply
There are many founders of various social identities who are not rich yet have managed to succeed with bootstrapping or small seed/accelerator investments because they are capable.
To assert that some people are inherently advantaged or disadvantaged as founders and/or entrepreneurs based on such factors as race and gender is the definition of prejudice.
[+] [-] norswap|5 years ago|reply
[+] [-] jariel|5 years ago|reply
[+] [-] michelpp|5 years ago|reply
[+] [-] Thorentis|5 years ago|reply
Is there any reason you included "white"? Are black people not able to be rich, or are white people more interested in tech, or are black people discriminated against by YC, or... what?
[+] [-] santoshalper|5 years ago|reply
"I believe in this idea so much I am willing to gamble my short-term financial future on it" is a great way to find out what people really care about.
The diversity issue is real though. As is the broader issue of wealthy people being able to take on much more risk than normal people, leading to a reinforcement cycle (winners keep winning) and a winner take all outcome.
Which, now that I think about it, pretty much describes US capitalism perfectly.
[+] [-] hinkley|5 years ago|reply
Rich, young, socially connected, white, dudes. That's a full Bingo card.
[+] [-] yters|5 years ago|reply
Myself, with family, mortgage, etc. I would never be able to achieve that kind of velocity if I were accepted to YC.
So, even if I had incredible ideas, as people around here keep saying, and PG makes clear in his Viaweb essay, it is not about the ideas but about execution.
Thus, the economic filtering for those who are unencumbered and thus can really execute on their idea or something that YC comes up with makes a lot of sense.
[+] [-] oyra|5 years ago|reply
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[+] [-] mytailorisrich|5 years ago|reply
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[+] [-] relaunched|5 years ago|reply
It's interesting how the best incubator found that smaller checks out of the gate is beneficial, but you can raise a 30-50 million series B and founders can take a few million off the table, which is also good, so they can go long.
[+] [-] site-packages1|5 years ago|reply
[+] [-] panorama_love|5 years ago|reply
I've spoken to a half dozen YC founders this morning -- no one disagrees except the check size debt thing. Mostly "that is dumb" for that one.
For those who worked at startups when they were small (5–20 people), the difference between then and when they grew to be 100 or 200 people is night and day. Very real difference.
For those who haven't, think of class sizes. Do you think a uni class with 18 people in it will be the same as a survey with 200? Course not.
Three founders in my batch (early 2010s) have started companies in the past year and opted out of YC b/c of 1. batch size 2. YC doesn't mean to investors what it once did. The brand is heavily diluted.
YC is a broad based investment fund. The partners cannot handle the size of the batches or give the attention they once could. The partnership simply hasn't scaled.
Somewhat informed guess: partners don't want to give up their own returns by splitting it with more partners. Understandable -- human nature. But not good for YC as a whole.
[+] [-] kemayo|5 years ago|reply
[+] [-] seizethecheese|5 years ago|reply
I also disagree that YC is not funding interesting ideas. Our batch had quite a few. Someone was making a rapid cargo ship. Someone else was making a fully distributed cell network.
The only real copycat ideas were the ones duplicating successful startups for international markets. In my opinion these were obviously good investments.
The social climber phenomenon was real. I think anything that becomes elite will attract them. I’d say, I was impressed that half the batch did not fit this profile.
My sense was that YC actually went out of its way to fund more interesting ideas. I’m sure my startup would not have gotten in, based on our traction and backgrounds, if our idea wasn’t out-of-the-box. (We are bottomless.com, a smart coffee subscription that uses a WiFi scale to ship at the perfect time).
I’d even venture to say that there appeared to be a negative correlation between interestingness and outcome in our batch. It’s possible YC should fund more boring companies, not fewer.
[+] [-] jmwilson|5 years ago|reply
[+] [-] nbardy|5 years ago|reply
I've found some creative people tackling big ideas, but they are exceedingly rare and largely unsupported by the community. I've met a lot more people who moved out here with big ambitions and have been railroaded down the route of conformity, which makes the most money for VC's. It leaves them without fulfillment or purpose as they grind on products they care little about. SV will continue to produce billion dollar software companies, but I doubt they will produce real innovation over the next few decades. The bay area has conspired to railroad its' potential for greatness towards profitable mediocracy.
[+] [-] thephyber|5 years ago|reply
I think people love to use "The Bay Area" and "Silicon Valley" and conflate that with "software startups that raise VC funding".
Silicon Valley still produced most of the internet (for better or worse) and the only new American mass production car company in my lifetime. Let's not overlook the successes while we are busy complaining about the average (especially because the VC model assumes 900+ failures for every 1-3 unicorn IPOs).
Not sure what the next few decades will bring (I'd be pleasantly surprised if the USA doesn't go through an actual revolution), but I'd wager that "real innovation" is still more likely to happen in Northern California than almost anywhere else in this country, even if the establishment VC club doesn't get disrupted.
[+] [-] fredsters_s|5 years ago|reply
[+] [-] erik_landerholm|5 years ago|reply
[+] [-] redisman|5 years ago|reply
[+] [-] karl11|5 years ago|reply
The point is valid - startups are a risk, and so if all the risk is removed, it will increase the number of people who are coming to YC for status vs. coming because they believe in their idea.
As good at interviewing as the YC partners may be, interviewing is no substitute for the harsh reality and incentives imposed by taking a great risk.
[+] [-] MattGaiser|5 years ago|reply
I suppose it depends on what YC wants to optimize for. You can risk giving money to not so serious founders or risk excluding ones who want to cap their risk.
I don't get why they would want to ban dev tools and SaaS. The latter especially is a huge segment. Many enormous companies like IBM and SAP are built around those types of offerings.
[+] [-] GCA10|5 years ago|reply
People who were there at the beginning feel that something magical has slowly been corrupted by success and all the bigness issues that come with it. They aren't totally wrong. But people who get there later still find something of value, and everything is now sturdy enough to support wider participation.
I'm okay with seeing it both ways.
[+] [-] richajak|5 years ago|reply
I filled up YC applications last year, but not sure how to answer question whether my idea is worth a billion. I will be satisfied if my SAAS business can make $5k MRR. If I have more than that, it will be a blessing.
Should YC remove questions that favors those social capital? I mean, YC can have a simple leetcode question to prove you are smart enough. Then, run a lucky draw to pick which ones selected.
[+] [-] diego|5 years ago|reply
[+] [-] graeme|5 years ago|reply
http://paulgraham.com/swan.html
[+] [-] sobellian|5 years ago|reply
[+] [-] lisper|5 years ago|reply
In fact, the whole cultural phenomenon of paying attention to what people tweet is deeply disturbing. Twitter is not designed to support rational argument supported by data, it's designed to be a morphine drip of novelty, a machine that dispenses mental M&Ms. People who follow twitter are like lab rats pressing a lever in exchange for a drop of sugar water. It's troubling to see this phenomenon invading HN.
[+] [-] ema|5 years ago|reply
[+] [-] TACIXAT|5 years ago|reply
Some are working on cool things, but the founder who has a PhD in that topic will be doing the interesting work and they are hiring for infra or interface.
One company was a great match for my skill set but the equity was so low for early hires. I get that 1% can be huge for a FB scale exit, but 180k and 1% is generally just a paycut. In this case the founders were undergrad dropouts and not SMEs. It just seems like a really inflexible ecosystem when you can't give 5%-10% to an early hire when they would be the SME and core engineer.
[+] [-] KoftaBob|5 years ago|reply
If startups are coming into YC with a more mature product than in the early years (and it seems that way), then adjusting the focus towards fundraising actually makes sense.
Not to repeat what's been said in other comments, but to say that founders should be willing to put themselves in deep financial risk to prove their drive...that just comes from an incredibly privileged mindset.
It reminds me of the people saying that if their school is going online-only, students should instead take gap years to build something, incorrectly assuming that no one needs that student loan money for living expenses.
[+] [-] george_morgan|5 years ago|reply
Without knowing the metrics for how YC judges the performance of its intake and their future objectives, there's no way of making sensible recommendations for how (or if) it should change.
[+] [-] noahlt|5 years ago|reply
I chalk it up to a pretty typical nostalgia. Everybody is biased towards thinking the experiences of their youth were perfect, and any change is detrimental.
[+] [-] anotherfounder|5 years ago|reply
There are so many reasons why all this is, including the fact, these applications heavily bias towards 'solving a big problem that the interviewer CAN grep', and so many of those readers and interviewers are themselves from SAAS backgrounds.
Anecdotally, within female founders, it is quite understood that if you are a female founder with a consumer startup, good luck getting an interview whereas if you are FANG employee with event hint of an idea, you get an interview!