I replied to this a couple days ago in a comment thread:
In fact, going public introduces all manner of considerations that often inherently introduce "bossiness", so this alternative seems even more logical to me! For one, public companies have to grow, grow and grow and a lot of the bad stuff about companies you point out in your essay arises from that one source. They do bad deals, they start to think very "strategically" (ignoring the human element) and so on.
It's easy to stay medium-sized if you're a consulting firm, but hard if you're a product company. As a product company you tend to either extreme: you either keep growing, or die. And if you keep growing, you'll eventually either go public or get an acquisition offer so big it's hard to turn down.
I might turn out to be wrong. This world changes fast. But there aren't a lot of 20 year old 37Signalses around.
Bezos seems to agree with me. He invested in 37Signals. He would not have done that if he didn't expect some form of exit. And in fact 37Signals probably had to say explicitly that they expected some form of exit in order to get his money.
I would modify the "grow or die" to "adapt or die" because it is really lack of adaptation that seems to kill, and lack of growth may be a manifestation of lack of adaptation. I am not sure size is actually a benefit or hindrance to adaptation (it may be neither). It is theoretically possible for a small company around in 1985 to have adapted itself successfully through waves of change. But alas the only company I can think of that has come anywhere close to adapting through waves of change is Microsoft (and even it hasn't adapted that well).
An example of botched adaptation is the Altavista search engine from Digital. I remember the time it was the most advanced search engine (at a time when Gates didn't think search even mattered). The parent company entirely missed their value.
It does look like the presence of large acquisition-minded companies means that no matter how you push the YC companies, to work toward acquisition, toward a next round of funding, or even toward small business--if they are successful someone will make them an offer.
It was interesting to hear from the people here who were taking so many different routes with their companies. Kudos.