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Here are my thoughts on the matter

1) I think the value of most universities (top universities) is the quality of the students they are able to attract. It turns out that becoming friends with smart and motivated people can be very very helpful. It also turns out that most skills in life are learned on the job - not in school. YC is very similar in this regard.

2) Being a participant in YC in '07 and 12 I can tell you that the value of YC increases as it gets bigger because there are more smart, motivated, and successful people to learn from and be motivated by. Also especially for b2b companies - there are a lot of potential customers - see Gusto.

3) YC has no incentive to increase in size if it can't maintain a high-quality program because top founders only want to participate in a program with other top founders. If we do something that convinces top founders to stay away - then we lose.

4) There is this strange assumption that YC had higher quality founders earlier in its life. I think that assumption is biased by the fact that it takes 10 years to build a successful company and so the breakout successes always look like they are from the distant past.

5) "a large influx of less highly-selected startups" - where is your data to back this up? There are significantly more applications to YC now than 10 years ago. The acceptance rate is significantly lower than it was before.

>3) YC has no incentive to increase in size if it can't maintain a high-quality program because top founders only want to participate in a program with other top founders. If we do something that convinces top founders to stay away - then we lose.

It says right in the post - YC's goal is mass production of startups via incubation.

I think Michael is saying "Just like it would be dumb to increase the size of a factory too quickly, it would be dumb to increase the size of our batches too quickly."

We're always looking for more ways to help more startups, sometimes within the framework of our original incubation program and sometimes without it.

If YC lives up to its potential, I suspect the startups that actually end up going through our accelerator will be just a small fraction of all the ones we've meaningfully helped out in one way or another.

Startups were supposed to make credentials matter less: http://www.paulgraham.com/credentials.html

But ycombinator itself in lots of ways turned out to be a credential network like an old school law firm. Even including early associates becoming promoted to partners, etc.

But the ycombinator application process itself at least still doesn't rely on much if any credentialism.

"When we were kids I used to annoy my sister by ordering her to do things I knew she was about to do anyway. As credentials are superseded by performance, a similar role is the best former gatekeepers can hope for. "

Maybe that is close to the role Y Combinator has ended up with as it expands. Getting a slice of startups that would be persuing the same thing with or without Y Combinator, in exchange for acting as a credential and signal to investors.

But there is a big peer-network component to it too, which is more similar to universities than to law firms. There are sort of semesters and the startups identify by "class year." Though that probably happens a bit a the bigger law firms too. Entering associates get a network out of it even if they don't go on to make partner and end up in government positions or positions at other firms.

> (since you could learn most of it just by reading or watching videos)

I think this misunderstands how most people learn -- people generally learn much more effectively by "active learning," aka actually trying to do the thing they are learning, and getting dynamic guidance alongside that active process, not canned lecture / video content.

> It's not an insurance policy at all. It's a crazy tournament. It's a zero-sum tournament. If you were the president of Harvard or Stanford and you wanted to get a lynch mob of students, alumni, and faculty to come after you, what you should say is something like this: We live in this much larger, more global world. We offer this great education to everybody. So we're going to double or triple our enrollment over the next 15 to 20 years. And people would all be furious, because the value of the degree comes from massive exclusion. And what you're really running is something like a Studio 54 night club that's got an incredibly long line outside and a very small number of people let inside. It's branded as positive sum, everybody can learn, but the reality is that it is deeply zero sum. -- Peter Thiel (former YC partner)

https://www.youtube.com/watch?v=1T-RkxC5pVU#t=4m35s

Peter Thiel doesn't work at YC - please check your facts: http://www.ycombinator.com/people/

Okay, fact updated. Doesn't change his point at all. I don't see the "goodbye peter" blog post though so not sure how anyone would know he left.

https://blog.ycombinator.com/welcome-peter/

120K for 7% at SF area is indeed not attractive, not to mention you must move there and find your own working space etc. It might be interesting for the very early stage startups and money-hungry (no-kids-yet) young founders. Yes the connections and advice are priceless but still money talks the loudest for most start-ups.

It might be interesting for the very early stage startups and money-hungry (no-kids-yet) young founders.

This is who YC funds. That's like saying it might be interesting for technology companies.

Except YC funds plenty of founders with kids.

I was 35 and had two kids when I went through YC in 2013. My cofounder was roughly the same age and also had two kids. We weren’t the oldest and we didn’t have the most kids. The idea that YC is just for 20-somethings and consumer/tech apps is a myth that may have been true early on, but is no longer based in reality.

It does help to have a low personal burn rate. If you have high expenses, it’s difficult to quit a decently well paying job to start a startup. But that doesn’t have anything to do with YC. If anything, it’s marginally easier with YC backing because at least you can slow down the personal burn.

120k for 3 months to get to demo day to raise vc.

It used to be 13-21k for 7%.

That effectively sets the average valuation at $1.7 million for every startup accepted into YC. While I'm sure there are exceptions, startups with really strong initial traction, that seems like a fairly reasonable (if not elevated) valuation.

Both my co-founder and I have kids. I would have given up 15% to do YC if I had to. The money is beside the point, but it’s enough, even in the Bay Area.

It was, hands down, the best and most important thing our company has done.

And we were profitable before YC began, so we didn’t need it.

So why is the YC/120K the most important thing your company has done even though you don't need it financially, YC somehow helps you to expand quickly?

The YC provided money is the least important benefit to doing YC. The parent very specifically notes that money wasn't the most important thing, you appear to have glossed over that.

The value of getting accepted and how that acts as a filtering mechanism to prime venture firms. The network: YC alumni, investors, executives in the industry, mentors, etc.

In other words, getting into YC will usually: enable you to raise venture capital from the best VC firms far more easily; it'll open doors that you previously likely could not open (especially for newer entrepreneurs); it'll help you with recruiting talented and experienced employees (critical to success); it's a halo, by getting accepted into it, you get to borrow reputation from what YC has built up.

We aren't this either. 2 cofounders 6 people. 1 with a kid, startup around for roughly 2.5 years before doing YC.

In a year since YC we've more than tripled the team to more than 30 people now, of which again: most have kids. Ultimately for us, the network among other things has been the best part. I would definitely do it again.

That being said, my anecdotal opinion: A weak point for YC is enterprise. If you want additional customers, there are a few big YC companies, but not many. Even then, when we did it, we found some help and still got great advice.

If you sell to startups though, it's actually a great way to get customers.

Something that hasn't really been around long enough yet, but also potential is the new vertical accelerator. Our batch was a bit too early for it, but they are trying to solve real problems these companies h ave.

> Like many universities, the value of YC to founders is mostly signalling and network. What you actually learn at YC is a minor component of the value (since you could learn most of it just by reading or watching videos)

While this sounds true to an extent, YC can provide more tailored feedback than a university generally does. Most of what one does in university is generic and can be learned through tutorials, but YC can provide custom feedback to a specific startup's situation. (And good educational programs will also focus on providing feedback on individual projects.)

I also think another factor is over the past 10 years, there has more investor money thrown at early stage startups. That just means that it harder for companies to break out. Due to that fact I am not sure accelerators even YC will provide much more advantages.