Ask HN: What will Y Combinator look like in 3 years?
I am curious to know what people think Ycombinator will look like in the next 3 to 5 years. I think its interesting since Ycombinator is in a number of ways pioneering new ways to scale startups.
Who knows, it might have already happened, and we just don't know about it because they're still on the flat part of the hockey stick.
There are a few glimpses of what the future holds for YC but I think most of us can agree, it's pretty damn bright
1. More startups funded. Funding likely from a VC like Sequoia, but the bottleneck here is mentorship time. Which leads to...
2. More staff. Likely successful founders from previous YC rounds. (It's already begun with Harj, Alexis, and Gary.) This would mostly be moving part-time mentors to full-time partners. Something like around 20 "YC fellows.".
3. An office in SF, probably around SoMa. I wouldn't be surprised if YC started holding some office hours there, with the additional staff from (2). (Maybe it's already happening informally.)
And a bunch of other things: Startup School 2x a year, Startup job fairs. PG could have time to write a book about YC.
This is outside the control of YC. Its a side-effect of becoming too successful.
I don't think we are too far off seeing "How to get into YC" ebooks or even discrete coaching on how to do well in YC-interviews.
Please forgive the pessimism but its my honest feeling.
They can get a %50 success rate, because they have developed a model of evaluating. As the value of getting in to YC increases, the ability to game the model does as well. Every blog post which tells you how to apply, shifts the companies accepted towards those who are able to win at that game.
Every applicant who goes in to that interview knowing it's not a presentation, but a demo followed by 10 minutes of rapid fire questions / brainstorming, has a big advantage. Every applicant who can get current or former YC founders to review their application has an advantage. Every applicant who spends time reading each and every 'applying to YC' blog post, has an advantage.
The big question is, are those advantages things which correlate with being a good startup founder. In some cases yes, in some no.
This is the real signal to noise problem that YC faces. Not that there might be 2000 startups applying each cycle, but that applicants learn how the theater works. They know the game, and are actors which present the perfect YC application. Then YC has to figure out, are these guys and gals really good at what they do, or are they telling me the story I want to hear.
That said, i bet even with the noise, YC has a better way of evaluating the potential future of startups than the 'who else invested, who's the advisors' model many angels use.
Now, given that the recent $150k situation is in effect, it means that in three years the typical YC startup will have more money and less individual attention from PG. He can continue to hire amazing folks like Harj and Paul to spread the love, but at some point there has to be a point on the graph where time and value peak.
I speculate that the peak will occur in 2011. I am hugely grateful to Paul for his contributions to my world, so I will only say that I sincerely hope he and Jessica take a really awesome vacation at some point in the near future. I'd chip in $100 for that, because I've received more value from his essays and HN than any other single source of information and networking.
However, also from the outside, it seems like YC is creating entrepreneurs that experience their first business startup in a dreamworld that doesn't exist anywhere else; a bubble if you will, but not the kind of bubble that pops and brings down an industry...more like the bubble that private school kids experience during high school that sends them into a tizzy when they breathe the free air of college.
What happens to these founders when their first startup fails and they try again in the real world without the thick black book of strategic contacts in PG's back pocket and the guaranteed $150k from Yuri and Co? Starting companies out here in the "ghetto" (where money is earned, not given) is hard.
There is a story that's sitting near the top of HN right now that says YC is like a bootcamp for founders. That's a joke, right? I'm pretty sure it's more like summer camp for founders...or maybe a gentleman's club for founders where the sexiest startups dance on stage and investors try to stick money in the g-strings of the founders.
So, getting more to the point, I'm less concerned about what Y Combinator will look like in 3 years and more concerned for the founders that fail on round one and don't have the cushion of YC's couch to sleep on while they dream up their next big idea. But YC will most likely be exactly what PG wants it to be in 3 years, just like it always has been.
At a deeper level, I think YC is at the forefront of motivating lots of people to consider founding or working at a startup as an alternative to a traditional job at an established company, and to develop the skills to be able to do so.
I expect to see some Heroku sized exits for YC companies as well. Maybe in 5 years there will finally be a YC company which goes public. In either case, I don't see YC drastically changing.
http://www.paulgraham.com/startuphubs.html
And if, as nearly everyone who knows agrees, startups are better off in Silicon Valley than Boston, then they're better off in Silicon Valley than everywhere else too.