Comment by shubhamjain | Hacker News Reader

Comment by shubhamjain | Hacker News Reader

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It surprises me how successful these companies are already. I don't think to have more than $20K MRR is any less than having a product-market fit (of a lesser scale, maybe). It's almost as if YC is not taking bets at all because the companies that are applying seem to know well what are they solving. And although it's not obvious from the article, it sounds like they scaled to that revenue pretty quick (comparatively, to say the least).

If I compare with the companies in the batch 5-6 years ago, the difference seems conspicuous. Where are the companies like Segment, AnyPerk that were struggling to find a product-market fit and presumably, were working on bad ideas? The companies who wouldn't have a good answer to what they're solving and why? There are bets, like Greo, Goosbump, which would find it hard to attain a sustainable revenue, but I think the numbers are still low.

Paul Graham used to insist that their first priority is the team, but I think they have inadvertently raised the bar. Or, it could mean that startup wisdom of building MVP, talking to users, has become mainstream to warrant the decline in the bad ideas.

It's actually pretty easy to explain.

YC has global reach and is now very well known. That increases the applicant pool and that in turn means there are more quality applications as well. Having a larger pool of quality applications means that it becomes easier to select companies before a batch is considered 'full', lower quality applications will therefore have a much smaller chance of getting selected in a given batch.

So even if YC's first priority hasn't changed at all there is still a very plausible explanation for the effect you are seeing.

I'd argue it's just much easier to get to $20k MRR than it used to be. A lot of companies barely have traction before YC and get it during YC, and $20k isn't that hard to get to.

MRR without in isolation, without churn, CAC or WoW growth is fairly meaningless. It's basically just a different way to report run rate.

You can buy 20k in MRR with your YC investment, just for a pop at demo day. Keeping up growth is another thing all together.

I think you have to remember that these TechCrunch bio's are written after their YC class. So they might have come in with $1000 MRR and have scaled up in the mean time.

Makes me wonder how many of these companies are actually offered the "standard deal" of 120k for 7%. Would love for YC to release some stats on this.

I'd be shocked if there are more than one or two (if any) that aren't offered the standard deal

Maybe, but I'd sort of have expected the "nonstandard" deals to become more common as they've gotten more into non-software startups. How far could you really go with $120k if you're building autonomous passenger aircraft?

It's still helpful for allowing founders to support themselves and focus full time for a significant period, which may be what it takes create a prototype or IP that's good enough to attract more investment.

I always ask this myself. I think like you said, startups are so mainstream now that the traction bar is higher now. But the problem is that YC also seems to be getting less prestigious. As great as these companies are, I am sorry but I don't believe that 100+ a batch is the same YC as what started a decade ago. YC is now a factor, not a family.

> I don't believe that 100+ a batch is the same YC as what started a decade ago. YC is now a factor, not a family.

You are not wrong.

The batches are of noticeably lower quality. I wont name names out of respect for the founders obviously, but you certainly have to wonder if some have been chosen solely based on their touting the latest cool tech buzzword in their application. My opinion also is that YC has moved from its earlier mandate of discovering talent to funding companies that the partners consider 'promising', where 'promising' == 'safe bet'. A lot of talented founders do not have the resources to build a company that has gained traction by the time they apply; heck a lot of talented founders not even have a viable company/idea at the time of first contact.

YC now funds companies that in another era would be considered stable, non risky investments. Could AirBnB, Reddit, Segment and DropBox (companies founded by wild youngsters with only an idea,in the case of Segment and Reddit founders a bad initial idea, and no market presence) be funded by YC today ? I'd bet not. Why? Because YC now places safe bets. You know which other institution plays it safe when giving out money ? Banks. The partners were on to something when they announced YC fellowship in 2015, it would have been a way to return to their roots and explore anew the lost idea of seeking out and funding talent, but sadly they shut it down. YC has grown big and successful and perhaps is itself ripe for disruption.

"These new batches have crazy traction compared to earlier cohorts" ... "These new batches are of noticeably lower quality"

"YC isn't taking any risk" ... "Nuclear fusion / quantum computing / _insert_moonshot_here_ is dumb and will never work"

Lol

> The batches are of noticeably lower quality.

As a company (YC), as you grow and set aside more $ (or have access to deeper pockets thank to your past success rate), you are willing to take more risk than before.

I actually think its a positive thing, especially for those who apply!

Nope. I dare say you got the logic wrong. YC is taking less risk and what risk it is taking is the 'wrong' type.

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