WSJ on YC: Incubator Coaxes Start-Ups Out of Their Shells | Hacker News Reader

WSJ on YC: Incubator Coaxes Start-Ups Out of Their Shells

online.wsj.com

14 pointsTowle_5 comments

Bloggers and journalists seem intent on labelling YC an 'incubator,' despite YC's insistence to the contrary.

I wonder how much PG and the others actually dislike the term. Are they against it on technicality grounds and nothing more? Or do they mean to make a statement about what exactly YC is and does by avoiding the 'incubator' label?

from: http://ycombinator.com/faq.html

"Is Y Combinator an incubator? -- No. The defining quality of incubators seems to be that companies work out of the investor's space. We think that's a bad idea; it makes founders feel like employees."

In addition, the term 'incubator' has been around for a while and is an easily understood concept (esp to the lay person). Things like YC et. al. are not incubators as such but there hasn't been any particular term that has caught on outside the tech crowd. 'Seed Accelerator' is the term I usually use but even then it requires more exposition than 'incubator'. Given the difference is relatively minor (office space vs sort-yourself-out), I can see why people still use 'incubator'.

YC is an investor in startups. the best term for describing us would be investors. the reason this label feels strange is because we do so much more for startups than what investors have typically done. as competition for investing in the best startups continues to grow, i find it hard to believe this will still be the case five years from now. people will look back and wonder how anyone was able to invest in good startups without doing (some but not all) the kinds of things we do for them.

Harj, the point I was trying to make is why people sometimes refer to YC as an incubator. I think PG (above) is right that what people interpret to mean by 'incubator' is changing (for the better IMHO).

Responses to a couple of your points:

> the best term for describing us would be investors

This doesn't differentiate YC from Angels, VCs or even friends/family/fools (at some level). All it says is 'we put money in'. Clearly there are major differences between each category of investor so to say that 'investor' is the best description is a bit of a disservice to the package YC offers. I don't have any suggestions as to what would be better, but it's obvious to me that YC is more than just an investor.

> because we do so much more for startups than what investors have typically done

I think I understand where this is coming from but I'm pretty sure there are (or have been) some great investors who do a lot for their investee companies, on par with elements of YC. However, what YC has done, is to repeat the best elements at a scale not achieved before.

When we first started, the defining quality of incubators, as established in the 1990s, was that the startups worked out of the investors' space. Since we considered that a mistake and made a point of avoiding it, we didn't think of ourselves as an incubator. But the weird thing is that now YC is becoming more established, the meaning of the word "incubator" is changing to something closer to us.

Reply on news.ycombinator.com