Hey Walker, great post. I remember you starting this while at Brown, and I also remember when FishCo was shut down. I did NOT know someone used a Pokémon card for an ID. Totally believe it though :)
As to the usefulness and worthwhileness of YC there cannot be two opinions. The affection and praise of the alumni alone would prove the point even before you consider the companies that have built out of it. And at the heart of that is what Walker points to quite clearly: candor and the clear support that can only spring from it.
There "cannot be two opinions?" Actually, there can be as many opinions as there are people (not just companies, but individual people) who have gone through the process. And they can reasonably vary, because not everyone and not every company needs YC or something like it, or can necessarily even benefit from it.
It's ridiculous to suggest that YC is a universally positive experience, just like it's ridiculous to suggest it's completely without value (based on the significant praise you refer to).
Honestly curious, is there any company you know of who has publicly stated they weren't happy they went through YC? Not saying it's conclusive either way, would just be interesting to read why.
I am really curious about this as well. I would be surprised if there is no YC alum with the opposite opinion. Even if they are wrong in their conclusion, I would be very interested to see a reasoned negative perspective on the value of YC as well to shape my personal evaluation better. It'd be awesome if a founder in that position volunteered publishing something, even if it's published anonymously.
(If anyone has a link to such a writeup, that I may have missed, please comment!)
Sorry, I just took a look at your LinkedIn Profile (love drinking Karhu in a Sauna btw...)
It doesn't appear that you've created any startups, so I'm curious how you came to the opinion that YC is Hype and not worth the value to founders, if you yourself have not been a founder (and presumably) not gone through an accelerator?
If by "better deal elsewhere" you mean access to the same high quality advice, mentorship, and support the YC community provides (as expressed in this article and the tons of others like it), the answer is no, you cannot get that elsewhere. It doesn't exist. Most people in the startup world recognise that and that is how YC got it's hype. It is unmatched in the intangibles the YC experience provides and those intangibles have proven better at building successful startups than any alternatives. But keep looking for your better deal...
You're giving up 6% of basically nothing at the moment most companies enter YC.
If all YC did was write a check for $20K and walk away, I agree, it's too much. They do more than that, and I believe they increase your chances of meaningful success by way more than the 6.4% hurdle rate, so much so that if I were to do a startup, I'd apply to YC, even though the very last thing that I need from them is the $20K check.
6% is good for the founder too. You want your investors to have a significant stake in the company so that they actually help build it, and you want to take on investors feeling like they will by definition give you a smaller piece of a larger pie. If you give them too little they wont help you at all.
Tom who just commented on this above ^ - he's GoCardless (awesome tech btw!), one of the leading startups disrupting payments/direct debit in the London scene. They've been going from strength to strength and recently raised another huge round. Definitely validation that YC works and gives value.
You can get $14K by working for a big company in Silicon Valley for a month or two.
I think the point Paul was making - which you haven't addressed at all - is that you get far more than money from going through YC, and most of the other things you get (eg. the network and brand name) can't be replicated anywhere, for any amount of money.
What you suggested is a terrible thought. Because in the early stage of a startup, some (small amount of money + great alumni network + access to a pool of notable investor) will propels the growth so much more than the equity you gave up.
"In the general case, if n is the fraction of the company you're giving up, the deal is a good one if it makes the company worth more than 1/(1 - n).
For example, suppose Y Combinator offers to fund you in return for 6% of your company. In this case, n is .06 and 1/(1 - n) is 1.064. So you should take the deal if you believe we can improve your average outcome by more than 6.4%. If we improve your outcome by 10%, you're net ahead, because the remaining .94 you hold is worth .94 x 1.1 = 1.034."
No. By saying it is a "good deal", the GP is just saying that your average outcome would be better than doing nothing. It is still theoretically possible for better deals to exist.
Edit: You aren't understanding my post; I just said that something can be a "good deal" compared to doing nothing regardless of what other options are available; i.e. YC offers a positive value proposition.
Yes, YC is a good deal in an alternative reality where YC is the only choice. However, I talked about doing YC in the real world, where other alternatives exist.
But the 1/(1-n) equation is still true no matter how many alternatives you have. The only change is if you have an alternative, say 10% for 1M from some VC, then you would ask yourself after I got 1M and the help VC, would the investment from YC still help my startup grow 6.4%?
I think you are missing my assumption in my OP "in the early stage of a startup". In fact at that stage of startup, even if you have a better deal than YC, you might still want to do YC (so you would take both two deals) because even after your take the better deal, YC can still gives your startup >6.4% growth.
The following is a half-formed thought, so feel free to pick it apart.
I think there is a class of companies that really do not require outside funding. They could very feasibly bootstrap (grow from cash flow). Often this would be a superior financial result for the founders, and possibly lifestyle.
However that assumes the founders know what they're doing -- have a good business model, and know how to execute it. Sometimes they don't. They need help -- advisors, compatriots, whatever.
If you want certain "elite" advisors to help you, the only way they're going to be interested is with some equity upside. Otherwise it's just not meaningful for them, either financially or in terms of "impact".
So my suggestion is that founders should ask themselves if they really need funding, or if they really need advising, or if they actually need both. If they need both, something like YC is probably a bargain.
Hi Nawitus. I completely understand that line of thinking, and it should have been especially true for us given that we'd been running for about 1 year and had $1m in sales at the point where we joined YC.
What I can tell you is that we thought about in the same way as bringing on a co-founder or superstar employee. The value of YC isn't measured in their investment, but rather the value they bring.
Even in terms of the boost to our valuation alone from the validation, beyond everything else, YC more than paid for itself. If you look at our growth graph there's also a sharp inflection that starts shortly after we joined the program. That could be unrelated, but it's my strong belief that it was the value of the program that helped us accelerate.
Everyone seems to compare "doing YC" to "not doing YC", which is a false comparison. YC can easily be better than not doing anything, but that doesn't mean it's even close to the best alternative. You could've sold 4% of equity for x million $ and used that to grow your business, for example.
I see what you're trying to say, but money is often not the issue - it's the connections and expertise that are so valuable. In my humble, and admittedly limited, opinion the network and community and shared experience/expertise that YC brought far outweighed any million dollar investment we could have taken (and no investor would have even considered giving us millions).
We ended up raising millions (about $22M in the last year), and I don't know if it would have been possible without YC. All our investors and intros came through the network we built while in the program.
Hope that makes sense, of course this is all my opinion and you can evaluate and come to your own conclusion - I just wanted to share my experience and perspective!
You can still sell equity for cash as a YC company - many do, in fact!
As an aside, I think your numbers are a bit unrealistic. Even if you were to sell 4% for $1m, that's a $25m valuation. That's definitely higher than what most YC companies are worth prior to entering YC (and even right afterwards).
Not really, when you consider that most people are first time founders, and the experience, network, and social proof they gain is worth significantly more.
Not every YC company is going to be the next DropBox, or AirBNB, but many do go on to grow to later stage startups.
Also, if you think the only value of YC is the $14k stipend you get, then myfriend, I think that YC and other accelerators are not for you.
The best test of this would be what the customers (yc founders) think. I'm pretty sure most would happily donate 6% to YC for what they do.
If you were to think rationally, the only question is whether YC would improve your outcomes by more than 6-7%. If that's true, it should be a no-brainer.
>If you were to think rationally, the only question is whether YC would improve your outcomes by more than 6-7%. If that's true, it should be a no-brainer.
I'm questioning the tautology of what you wrote.
It is a no-brainer if you don't have other choices. If you do have choices, though, you might not be able to choose to get funded from all of them if the programs might take place at the same time. Also, while accelerators generally don't request much equity, there is a hard limit (unlikely to get hit at this stage) where you need to maintain some equity for the founders and employees.
If you have YC as a choice, there might as well not be other choices (at least in terms of "accelerators").
It therefore isn't a question of should I do YC or (some other accelerator) .. but rather should they do an accelerator period. If that's a yes (you're at the right stage for it) then I'd argue it's pretty much a no-brainer if you get in.
I don't feel this is a proper response to my comment. This thread had been talking about how one should take money from an accelerator if it offers a greater chance of success compared to the dilution it results in; it hasn't compared the merits of YC versus other accelerators at all. Your earlier comment mentioned how rational the decision was, but I'm saying that it isn't rational based on what was written earlier in the thread since other programs weren't taken into account at all.
That said, based on my understanding of the accelerator space, I'd probably prefer YC to other options. Some reasons you maybe would prefer something else (guessing) would be if it conflicts with an accelerator that is very domain specific, although I'm not sure if such a situation would happen that couldn't be worked around.
Couldn't agree less. What's more, is see this advertisement of YC on this news channel, and tons of people who went to YC defending YC? 6% equity for doing nothing while the best employees work like slaves and get nothing more than bread?! (I don't count introductions/connections as work - Sorry guys.) - Clearly YC seems to have figured out how to get the good startups together and milk them of 6% for doing nothing! How hard is it to figure that out - oh here is one formula - "ou're growing your revenue and sales by 10% every week for 80 weeks - awesome - give us 6%" - these companies have already proved themselves. No Steve Blank's book is not worth 6%, nor is introductions. They will come for free, just decline your YC invitations.
I love telling people the story of how some investors scoffed at Teespring on demoday -- I remember one person asking why they were even there. It shows why it's still possible to make a lot of money in this business, and that startups shouldn't be put off by a weak reception from investors.
I agree with this. People ask me all the time what I thought about my experience at YC was like. And my answer usually comes down to being with the people. When everyone around you seems to be smarter, work harder, and be more driven, you really push yourself too. But, it was also a supportive community. Everyone wanted to see everyone else succeed. Basically, it was a good support group for those days (and there were many) where you just felt down in the startup dumps.
The good news is that you don't necessarily need YC to have much of that experience. If you build a good network around you, with lots of hard-working and positive people, it helps a lot.
Is there a breakdown on YC accepted companies by product stage? How many companies were accepted that were already deployed, making money, and growing vs brand new ideas not yet developed? How many companies with significant month-over-month growth are ever rejected?
From the articles I see lately, it seems like there has been a pretty big shift at YC to help companies go from $1MM to $500MM rather than $0 to $1MM. Everything appears to be about pre-existing growth now.
Everything appears to be about pre-existing growth now.
It would be a disaster if that were true, because in this type of investing as in any other, returns are proportionate to risk. Fortunately it isn't. As I said in another thread, a quick sample of the current batch suggests half had no growth when YC accepted them.
YC does face a danger in this respect, because as it gets better known, there are an increasing number of applications from fairly established startups. To avoid that danger we make a conscious effort to fund risky outliers. E.g. the 17 year old kid from Bulgaria with zero revenues or users.
It will be interesting to see how YC continues to evolve. In the early days it seemed like it was all about early, early investing (come to San Francisco and build your product, we're betting on you as a founder) to today where 50% of the open slots are no longer even available to these types of startups since they are taken by established companies.
Seems similar to how things like the Olympics evolved. At first participants had to be amateurs but later they started letting in the professionals and the amateurs could no longer even qualify. Good to see that there is a concerted effort at YC to continue to fund the amateurs but I can only assume that will be harder and harder to justify in the future.
You shouldn't think in terms of "open slots". We accept all of the companies that seem like good bets, and we don't know how many that will be until interviews are complete. Teespring coming in with a million in revenue didn't push out some other pre-revenue startup.
The saying in traditional business could be "everyone and their uncle".
You begin to attract people who apply for what might appear to be the wrong reasons.
You run into this with physicians. You find people who truly care about medicine and helping people. But then you find people who went into medicine simply because it's a career that has prestige and pays well.
There was this dichtomy that I observed when I was at Wharton (which has an undergraduate and graduate business school).
The UG student body tended to be people who were angling to make a buck when they were 10. It was in their blood and their family upbringing.
The MBA students tended to be people who had liberal arts degrees and then decided to "get their MBA". (Caveat: This was true when I was there which was quite some time ago and it may have changed).
If you don't care so much about access to investors, but do want a community of like minded entrepreneurs I'd check out the Startup Chile program. It's not for everyone but it is 40k equity free, and everyone is working on something they are passionate about and it has a really strong community where everyone helps and listens.
Downside is no prestige and of the few investors it does attract, they tend to be low quality by SV standards.
"Downside is no prestige and of the few investors it does attract, they tend to be low quality by SV standards."
Taking you at face value (meaning I don't know the facts and I'm relying on what you are saying..) that's a huge downside.
Prestige is important. While YC is not Harvard have you even noticed how many doors going to Harvard, Wharton etc. open? That said not everyone with an open door is able to capitalize on it but I'd say it's a pretty big advantage to have.
Once again, this is based on my many years in business. I have nothing to gain from touting YC and I have been critical at times as well.
I can say unequivocally entering YC is one of the best decisions I have ever made both personally and for my business.
I'll let others debate the monetary economics of YC and just say that the YC network effect is the most under-rated aspect of YC. Both the W14 batch mates and the YC alums from past batches have been amazing in terms giving us strategic and tactical advices. This aspect of YC simply can not be ignored.
Completely agree. This line sums it up best "If I could only pitch you one reason why Y Combinator is worth it, it would be the people.". I don't know any other place in the world where you can meet such a concentrated group of amazing, brilliant individuals (and companies!)
One thing that i never see addressed concretely for me is this:
assuming I dont want to raise capital unless i really really really really have to, assuming im doing not b2c, assuming I actually am friends with a number of people who've done YC, etc etc
then why YC?
Unnuanced advocacy makes me nervous (and thats all I typically hear). Every single time in my life where I have taken unnuanced, uncaveated remarks on face value, it has blown up in my face. There are many fine businesses that have been certainly enabled by YC, and many that have not been.
Is YC suitable for businesses whose risks have been shifted to be strictly of the "can technology of this caliber actually exist?" sort, rather than "explore the business premise, do an MVP for the tech" sort? (admittedly, one challenge with sophisticated tech is educating folks about it!).
I guess I'm asking for nuance in why. If you can't give me nuance on that, why should I trust your advice on anything more complex?
[edit: to be clear, if someone convinced me, i'd totally apply to YC, just not sure if it makes sense for me]
It would be easier to answer your question if you provided more concrete examples. The only businesses I can think of that are strictly "can technology of this caliber actually exist?" are ones that likely violate the laws of thermodynamics :)
There are certainly business for which YC is not a good fit though, and we generally screen them out at the application stage. In fact, most businesses aren't a good match for YC, as we are only looking for high-growth potential startups of the sort described in http://paulgraham.com/growth.html
How do we measure growth? Its a bit opaque (at least to me) how to evaluate the growth of an early early stage organizations where paying customers would likely be in finance, biotech, and governmental/university RnD.
I agree its a bit more manageable to evaluate in b2c /b2smb / b2b cases.
I guess its also for me, I've seen so many well publicized, brilliant technologically sophisticated analytical tools startups fail over the past two years, i'm just leery of how i've seen quantitative products "grow fast" too early.
But seriously, how does one evaluate technology that (when positioned well) becomes a substrate for core product strategy for other organizations and entire technological ecosystems? This is a question I hope to know the answer to this spring :)
How many contracts do you have signed? How many customers are you contacting and what feedback are you getting? There would be ways to evaluate progress.
"If I could only pitch you one reason why Y Combinator is worth it, it would be the people."
Exactly. And along the same lines the reason that I always give for why it's good to go to a "known" grade a institution (say a top business school if that is your major) is not necessarily for the education but because of the people that surround you and raise the experience level.
In other words a higher degree of non slackers and people who are serious just like you are. Of course they exist everywhere. But there are generally more of them at the top schools. And likewise there are more of them in YC. (And if you read some of my other comments you will see that I'm not a fanboy by any means but this benefit stands out clearly to me..)
And this doesn't even have to do with whether those people became life long friends or associates or not (although that is icing on the cake for sure). It has to do with the immersive experience in being in that type of group.
I appreciate the remark, that said
Speaking as a person whose gone to some of those schools.... That doesn't make me feel excited. While I learned a lot in those envs, they were toxic and homogeneous in many ways.
Also I'm deep enough in some OSS ecosystems these days that I already have the pleasure of being the (in my mind) slacker in a community of amazing technologists.
Heterogeneity and brilliant folks who are wildly different from me, who I can still communicate with, are how I thrive. Variety is good for the brain!
I'm not in any way suggesting YC isn't great for most folks. I'm pretty weird, being an general extrovert and a deep technologist in the same day is a really odd combo. Both as a help and hinderence
You can haggle over the $'s and %'s all day - but what you can't argue over is where your company stands after YC, especially in the eyes of customers & investors.
Some people have the ability to never worry about investors, but for those who don't, it is insanely helpful. And most of the shift in opinion is based on how your product is being used by customers, which is the primary focus of many YC partners.
After YC - Customers? Please talk about Investors. Customers have no regard for YC. They look at your company and your product, your value addition. Which probably you've already proved, by the time you've gotten into YC.
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[ 3.1 ms ] story [ 150 ms ] threadIf anyone thinking about YC has any follow up questions, happy to answer them here. It truly was an amazing experience for us.
Inspiring story, and I'll be in touch.
It's ridiculous to suggest that YC is a universally positive experience, just like it's ridiculous to suggest it's completely without value (based on the significant praise you refer to).
(If anyone has a link to such a writeup, that I may have missed, please comment!)
Sorry, I just took a look at your LinkedIn Profile (love drinking Karhu in a Sauna btw...)
It doesn't appear that you've created any startups, so I'm curious how you came to the opinion that YC is Hype and not worth the value to founders, if you yourself have not been a founder (and presumably) not gone through an accelerator?
> Clearly you can't review any movies because you're probably not a director?
You shouldn't review a movie, until you've watched it.
Also are we discussing movie reviews, or discussing whether YC is worth it?
If all YC did was write a check for $20K and walk away, I agree, it's too much. They do more than that, and I believe they increase your chances of meaningful success by way more than the 6.4% hurdle rate, so much so that if I were to do a startup, I'd apply to YC, even though the very last thing that I need from them is the $20K check.
My company, based in London, couldn't even secure meetings with VC funds before we got accepted to YC.
The week after we got accepted, every major VC firm in London called us.
3 years later, we've raised more than $10m in funding from Accel Partners & Balderton.
I think the point Paul was making - which you haven't addressed at all - is that you get far more than money from going through YC, and most of the other things you get (eg. the network and brand name) can't be replicated anywhere, for any amount of money.
"In the general case, if n is the fraction of the company you're giving up, the deal is a good one if it makes the company worth more than 1/(1 - n).
For example, suppose Y Combinator offers to fund you in return for 6% of your company. In this case, n is .06 and 1/(1 - n) is 1.064. So you should take the deal if you believe we can improve your average outcome by more than 6.4%. If we improve your outcome by 10%, you're net ahead, because the remaining .94 you hold is worth .94 x 1.1 = 1.034."
Source: http://paulgraham.com/equity.html
Sure, if we assume that other deals are impossible. Which is a false assumption.
Edit: You aren't understanding my post; I just said that something can be a "good deal" compared to doing nothing regardless of what other options are available; i.e. YC offers a positive value proposition.
I think you are missing my assumption in my OP "in the early stage of a startup". In fact at that stage of startup, even if you have a better deal than YC, you might still want to do YC (so you would take both two deals) because even after your take the better deal, YC can still gives your startup >6.4% growth.
I think there is a class of companies that really do not require outside funding. They could very feasibly bootstrap (grow from cash flow). Often this would be a superior financial result for the founders, and possibly lifestyle.
However that assumes the founders know what they're doing -- have a good business model, and know how to execute it. Sometimes they don't. They need help -- advisors, compatriots, whatever.
If you want certain "elite" advisors to help you, the only way they're going to be interested is with some equity upside. Otherwise it's just not meaningful for them, either financially or in terms of "impact".
So my suggestion is that founders should ask themselves if they really need funding, or if they really need advising, or if they actually need both. If they need both, something like YC is probably a bargain.
What I can tell you is that we thought about in the same way as bringing on a co-founder or superstar employee. The value of YC isn't measured in their investment, but rather the value they bring.
Even in terms of the boost to our valuation alone from the validation, beyond everything else, YC more than paid for itself. If you look at our growth graph there's also a sharp inflection that starts shortly after we joined the program. That could be unrelated, but it's my strong belief that it was the value of the program that helped us accelerate.
We ended up raising millions (about $22M in the last year), and I don't know if it would have been possible without YC. All our investors and intros came through the network we built while in the program.
Hope that makes sense, of course this is all my opinion and you can evaluate and come to your own conclusion - I just wanted to share my experience and perspective!
As an aside, I think your numbers are a bit unrealistic. Even if you were to sell 4% for $1m, that's a $25m valuation. That's definitely higher than what most YC companies are worth prior to entering YC (and even right afterwards).
Did that affect the valuation at which YC invested?
Not every YC company is going to be the next DropBox, or AirBNB, but many do go on to grow to later stage startups.
Also, if you think the only value of YC is the $14k stipend you get, then myfriend, I think that YC and other accelerators are not for you.
Full Disclosure, I'm not a YC alum.
If you were to think rationally, the only question is whether YC would improve your outcomes by more than 6-7%. If that's true, it should be a no-brainer.
I'm questioning the tautology of what you wrote.
It is a no-brainer if you don't have other choices. If you do have choices, though, you might not be able to choose to get funded from all of them if the programs might take place at the same time. Also, while accelerators generally don't request much equity, there is a hard limit (unlikely to get hit at this stage) where you need to maintain some equity for the founders and employees.
It therefore isn't a question of should I do YC or (some other accelerator) .. but rather should they do an accelerator period. If that's a yes (you're at the right stage for it) then I'd argue it's pretty much a no-brainer if you get in.
That said, based on my understanding of the accelerator space, I'd probably prefer YC to other options. Some reasons you maybe would prefer something else (guessing) would be if it conflicts with an accelerator that is very domain specific, although I'm not sure if such a situation would happen that couldn't be worked around.
I love telling people the story of how some investors scoffed at Teespring on demoday -- I remember one person asking why they were even there. It shows why it's still possible to make a lot of money in this business, and that startups shouldn't be put off by a weak reception from investors.
The good news is that you don't necessarily need YC to have much of that experience. If you build a good network around you, with lots of hard-working and positive people, it helps a lot.
From the articles I see lately, it seems like there has been a pretty big shift at YC to help companies go from $1MM to $500MM rather than $0 to $1MM. Everything appears to be about pre-existing growth now.
It would be a disaster if that were true, because in this type of investing as in any other, returns are proportionate to risk. Fortunately it isn't. As I said in another thread, a quick sample of the current batch suggests half had no growth when YC accepted them.
YC does face a danger in this respect, because as it gets better known, there are an increasing number of applications from fairly established startups. To avoid that danger we make a conscious effort to fund risky outliers. E.g. the 17 year old kid from Bulgaria with zero revenues or users.
Seems similar to how things like the Olympics evolved. At first participants had to be amateurs but later they started letting in the professionals and the amateurs could no longer even qualify. Good to see that there is a concerted effort at YC to continue to fund the amateurs but I can only assume that will be harder and harder to justify in the future.
The saying in traditional business could be "everyone and their uncle".
You begin to attract people who apply for what might appear to be the wrong reasons.
You run into this with physicians. You find people who truly care about medicine and helping people. But then you find people who went into medicine simply because it's a career that has prestige and pays well.
There was this dichtomy that I observed when I was at Wharton (which has an undergraduate and graduate business school).
The UG student body tended to be people who were angling to make a buck when they were 10. It was in their blood and their family upbringing.
The MBA students tended to be people who had liberal arts degrees and then decided to "get their MBA". (Caveat: This was true when I was there which was quite some time ago and it may have changed).
Downside is no prestige and of the few investors it does attract, they tend to be low quality by SV standards.
Taking you at face value (meaning I don't know the facts and I'm relying on what you are saying..) that's a huge downside.
Prestige is important. While YC is not Harvard have you even noticed how many doors going to Harvard, Wharton etc. open? That said not everyone with an open door is able to capitalize on it but I'd say it's a pretty big advantage to have.
Once again, this is based on my many years in business. I have nothing to gain from touting YC and I have been critical at times as well.
I'll let others debate the monetary economics of YC and just say that the YC network effect is the most under-rated aspect of YC. Both the W14 batch mates and the YC alums from past batches have been amazing in terms giving us strategic and tactical advices. This aspect of YC simply can not be ignored.
assuming I dont want to raise capital unless i really really really really have to, assuming im doing not b2c, assuming I actually am friends with a number of people who've done YC, etc etc
then why YC?
Unnuanced advocacy makes me nervous (and thats all I typically hear). Every single time in my life where I have taken unnuanced, uncaveated remarks on face value, it has blown up in my face. There are many fine businesses that have been certainly enabled by YC, and many that have not been.
Is YC suitable for businesses whose risks have been shifted to be strictly of the "can technology of this caliber actually exist?" sort, rather than "explore the business premise, do an MVP for the tech" sort? (admittedly, one challenge with sophisticated tech is educating folks about it!).
I guess I'm asking for nuance in why. If you can't give me nuance on that, why should I trust your advice on anything more complex?
[edit: to be clear, if someone convinced me, i'd totally apply to YC, just not sure if it makes sense for me]
There are certainly business for which YC is not a good fit though, and we generally screen them out at the application stage. In fact, most businesses aren't a good match for YC, as we are only looking for high-growth potential startups of the sort described in http://paulgraham.com/growth.html
I agree its a bit more manageable to evaluate in b2c /b2smb / b2b cases.
I guess its also for me, I've seen so many well publicized, brilliant technologically sophisticated analytical tools startups fail over the past two years, i'm just leery of how i've seen quantitative products "grow fast" too early.
But seriously, how does one evaluate technology that (when positioned well) becomes a substrate for core product strategy for other organizations and entire technological ecosystems? This is a question I hope to know the answer to this spring :)
Also I wasn't asking about how YC stuff gets evaluated, but trying to understand what concrete specific concrete explicit reasons I should apply!
I have applied to YC in the past, but in the past I also knew nothing of business, was a younger idiot and had dumb ideas! :)
This stood out in the post:
"If I could only pitch you one reason why Y Combinator is worth it, it would be the people."
Exactly. And along the same lines the reason that I always give for why it's good to go to a "known" grade a institution (say a top business school if that is your major) is not necessarily for the education but because of the people that surround you and raise the experience level.
In other words a higher degree of non slackers and people who are serious just like you are. Of course they exist everywhere. But there are generally more of them at the top schools. And likewise there are more of them in YC. (And if you read some of my other comments you will see that I'm not a fanboy by any means but this benefit stands out clearly to me..)
And this doesn't even have to do with whether those people became life long friends or associates or not (although that is icing on the cake for sure). It has to do with the immersive experience in being in that type of group.
Also I'm deep enough in some OSS ecosystems these days that I already have the pleasure of being the (in my mind) slacker in a community of amazing technologists.
Heterogeneity and brilliant folks who are wildly different from me, who I can still communicate with, are how I thrive. Variety is good for the brain!
I'm not in any way suggesting YC isn't great for most folks. I'm pretty weird, being an general extrovert and a deep technologist in the same day is a really odd combo. Both as a help and hinderence
You can haggle over the $'s and %'s all day - but what you can't argue over is where your company stands after YC, especially in the eyes of customers & investors.
Some people have the ability to never worry about investors, but for those who don't, it is insanely helpful. And most of the shift in opinion is based on how your product is being used by customers, which is the primary focus of many YC partners.
Once again for good measure: Yes.