The YC Summer 2022 Batch
ycombinator.com
ycombinator.com
I would love to hear more details about this lot. A billion+ people on the planet (including most of this forum I bet) have "killer" startup ideas and swear they can successfully execute on them with some money. How exactly does YC judge their merit and fund them without as much as a working prototype? Do you look at past history of successful launches? Education/work pedigree? Personality? It's pretty wild that such founders make up almost half of the batch.
My impression is the Decision Matrix looks like.
High Low
Execution Execution
Good Maybe No
Idea
Bad Maybe No
Idea
On the other hand, there’s no external way to fix low execution.
The other thing is that it is often hard to tell good new ideas from bad new ideas in the context of startups. So idea is often a weak signal.
As the GP argued, everyone has startup ideas.
For example, someone already made the point that many of these founders who could raise on just an idea were likely on their second go around or prior FANG employees. Most founders have historically been male (not saying this is good - just matter of fact) and only 17% of engineers at Google are female (and I think it goes without saying that YC has a bias towards engineers).
So if YC has an explicit positive bias towards second time founders and FAANG employees, you could easily see what appears to be anti-female bias, but in reality is just positive indexing towards other attributes that historically skewed male. This may or may not be the case, and there probably are instances where there is implicit bias towards non-positive male-associated traits (macho attitude? unwarranted overconfidence?) but this data in isolation doesn't tell us much.
I'm not saying that diversity is bad, or that we shouldn't be looking to increase female representation in the founder community, but we should be careful with understanding cause vs correlation and maintain intellectual honesty when looking at statistics.
There are obviously some confounding factors, particularly if the batch of idea-only founders includes a large number of people with previous success in VC-backed startups or FAANG companies.
The best analysis would be to divide up the group into cohorts and compare against expected populations for the groups. (ie, if only 17% of people with FAANG experience are women, I would expect to see >= 17% of FAANG founders who got in on idea-only to be female).
Somehow, I doubt that's the case. Or they'll use the really weaselly language of % of teams with a woman on them, which is what I've seen from most of the big VC firms up to this point.
(This is a genuine guess, not a knock on YC)
51% of Stanford Undergraduates are women.
51% of Harvard Undergraduates are women. MIT is close to that ratio as well.
49% of new businesses in the US in 2021 were started by women.
48%+ all US businesses are owned by women.
You would have a point about discrimination if 50% of applicants had women but e.g. only 15% of those were accepted.
This data is not published but I highly suspect that 15% of applicants included a woman and 15% were funded.
Credit: https://twitter.com/ethicsinbricks/status/142871171687613645...
I will do everything in my power to give my children all of my financial resources when I die (and prevent the state from taking it) and ensure their comfort to the best of my ability.
Those without children cannot understand the bond between parents and children. The thought of them being destitute when I could have prevented it is painful. I will use all of my business and personal connections to help them and have zero qualms about doing so.
Do you know why so many billionaires came from rich families? Because their great grandparents helped their grandparents who helped their parents who helped them. This is not an anti-pattern, this is called good morals, a belief in family, and strong dedication to the next generation.
You should be totally free to die and donate all of your assets to the government or total strangers. I myself will give every possible penny to my children so they can thrive. I pray everyone can make that choice freely and not be coerced into a decision they didn’t want.
One of my side gigs is a small rental property development. I do it with my mom. She does administration, I fund it from my salary/do actual work when I can. So 2 generations joined forces to help the youngest one. It will take many years to finish, but the benefit is clear: my kids will leave school having rental income equal to average salary in Germany. They will able to stand their ground. I worked shitty jobs when I had no choice for 2,3 and 5€/hour and don’t wish these to anybody.
Alternatively I could buy me a small yacht and do nothing. It is also an alternative.
Hopefully property rights continue to be preserved but I worry society is trending towards taking from the productive to waste on those who squander.
You pray everyone can make the choice freely and not be coerced into a decision they did not want. Let's pretend that your family is from the USA and has been the beneficiary of slave labor, that without slavery, your family would not have the generational wealth that it has been able to pass onto you. Do you pray for these slaves also and do you also want them to not be coerced into making money for you?
The African slaves themselves were sold to the slavers by African kings, such as in Benin, who profited from the export of their enemies.
Where do you want the self flagellation to end? Injustice has been happening since the beginning of civilization.
The network was what mattered for this, though. A former colleague (an exec at my previous job) is also a venture partner at a credible firm, who introduced me to his network of VCs and to a number of potential cofounders, including the person with whom I am now building this company. And my cofounder's own network is vast, which led to a ton of investor interest and favorable terms.
Again: he made a slide deck and used his network and we started building once we had funding. It doesn't surprise me that YC companies do likewise.
Nice.
> For the Summer 2022 batch, we received 19,000 applications from founders around the world and funded 240.
Acceptance rate of 1.26%. For context, Harvard has a 3.19% [0]
> Demo day
is on September 7th and 8th. [1]
> United States: 140 startups, India: 19 startups, United Kingdom: 11 startups, Israel: 8 startups
Interesting how the country breakup does not represent country GDPs at all. I would expect more from Germany or Japan if it were the case. But it shouldn't surprise people who are familiar with YC and tech startups in general.
Besides Michael's post, which provides some details, I think it would be interesting to hear from YC their view on the upcoming months/years of high uncertainty in geopolitical and economical terms, and how is this going to affect companies that apply for YC, and want to graduate and go build great companies.
[0]: https://www.thecrimson.com/article/2022/4/1/admissions-class...
They tend look for later stage funding (which is when you realize that the power of YC is actually the credentials. Been there!)
> Or just bootstrap, since their costs are lower, free healthcare, etc.
Germany does not have free healthcare. From the employer side, the employer is responsible for paying 7.5% of employees income. Among numerous other taxes you’ll need to pay for each employee you bring on.
I think a lot of it is probably just the language barrier for YC specifically. Not that German founders don’t speak English, but it’s a whole different ball game trying to fund a startup and hire talent in a country where prospective industry contacts and even employees will need to speak German in order to really feel at home. Not to mention a different regulatory environment. That’s not to say there aren’t accelerators focusing on Germany, because there are. But building such a network when YC is based in the US isn’t an overnight thing.
Whereas in the US/UK it’s really trivial to find support, contacts, and devs from all over the world who are willing to relocate just by nature of the fact that the local native language is one they already know.
And articles I've read say a minimum of 80 hours of effort for the application.
I've looked at it and it seems very bureaucratic. I believe there is an entire cottage industry around writing applications.
And the digital culture in general. Fax is still a king, no fertile ground for SaaS. Hardware ideas are cool, but too risky compared to any software venture.
Interesting, because on the application page for the next batch this winter it says that it will be fully remote. But maybe they didn't update it yet?
The trend continues. I still want to see an objective analysis for why so few female founders make it through the funnel. I haven't found any good stats to see if the overall % of startup founders (regardless of YC participation) is abysmal, if it's the software focus that acts as a filter, if it's the VC focus, or something else entirely.
If the top of the YC funnel is 6% female, we would be asking a different question than if it’s 18% female.
But that doesn't really help answer my bigger question, which is why is that number so low?
I did find one stat showing about 20% of US businesses with employees are female-owned, which is itself troubling and leads to more "why?".
There's probably also some genetically encoded differences on risk-averseness (another guess). FAANG is a great gig and is much more predictable and stable.
I know YC is not a governmental agency and their main goal is profit, but given all that's going on in the world, would've loved to see a substantially higher number here.
It's a lot easier to fund a hundred B2B SaaS apps and wait for a handful of them to return 1000x in 5 years.
Interesting. What’s the motivation for applying to YC when you’re already on track to make 600k annually? I know bootstrapped startups with 20k in revenue and they often have VCs knocking on their doors
Damn that's a lot of applications to review. Is there any data in terms of quality of applications? Is there a big part of spams/very low quality applications or is everything pretty serious?
Business newbie here. Is B2B a broad type of shovels business (gold rush)? What ratio of B2C/B2B is going to sustain the economy? (not sure what term of unit to measure here). And how about if B2B2B is a lot more than B2B2C?
So a high B2B/B2C ratio on YC (which funds scalable tech) is probably not indicative of an unsustainable economy.
Putting aside YC, generally speak B2B businesses have a higher survival rate than B2C — which is saying a lot given that sales cycles in B2B tend to be much, much longer.
All that said, in my experience, founders with less experience tend to focus on B2C because by default most people have experience buying consumer products & services, much fewer have significant experience buying business services & products. People tend to focus on what they know.
As for the B2X2Z keep it simple, find a business you’re familiar with, model the business, then model another, etc — the practice in modeling existing business will help you actually understand how to model a business. I would start with something like the Business Model Canvas, though no model is prefect:
https://en.wikipedia.org/wiki/Business_Model_Canvas
Googling “business model canvas examples” or “business model canvas [a-z]” where a-z is the first letter of a specific existing business or industry will pull up related examples.
It's significantly easier to do that in B2B versus B2C when your target customers have deeper wallets.
YC offers a big competitive advantage to B2B (especially tech B2B) through its network. YC offers a large network of potential customers and early adopters for new or growing B2B businesses. Access to the YC network makes it easier to get a B2B off the ground. Many B2B applicants to YC already have some traction and use YC to help take off. This kind of applicant is obviously attractive to YC because it is low-risk.
Also, with B2B companies, it is much easier to avoid the Achilles Heel of B2C, which is that the cost to acquire a user ends up being higher than the revenue that user generates. Even if there is decent product-market fit, consumers generally have tight budgets. With B2B, one sale can generate thousands in ARR, which makes hiring a sales team to close those deals scalable.
13% Asian, 3% Black, 6% Hispanic or Latino, 5% Middle Eastern or North African, 8% Multiracial, 15% South Asian, 29% White
— which adds up to be 79% — not 100%.
From reports they heavily weigh against them.
https://www.ycombinator.com/library/7P-does-yc-fund-solo-fou...
Founder count distribution
1 founder - 16 companies - 7%
2 founders - 154 companies - 67.5%
3 founders - 48 companies - 21%
4 founders - 7 companies - 3%
5 founders - 2 companies - 1%
6 founders - 1 company - 0.5%
I'm off by one (228 data points when website lists 227 companies in the batch) but should be "back of a napkin" accurate. Interestingly there are fewer companies with 4+ founders than total solo founders.
Curious as to what "PropTech" is exactly.
The converse selection strategy, i.e. that YC picks groups in order to have a final desired demographic balance, would seem uniquely bad judgement. I can't see them doing something as nonsensical as that.
@dang ?
Like this?
It’s time to start considering a move to a better location. The Bay Area is no longer in style, and San Francisco is a dump, and somehow way too expensive.
Texas making abortion illegal would discourage women from wanting to work there exacerbating the problem.
2) COVID has demonstrated that you can make remote work and that a sizeable percentage of employees (especially in IT sector) will only accept a remote role. Many startups simply won't have offices or headquarters at all.
3) As was pointed out by Jason Calcanis last week a lot of the people who publicly told the world they were leaving SF for Texas, Florida etc have been quietly moving back. Despite all of SF's many problems there isn't anywhere else that can replicate the critical mass of talent and network that it provides.
The SFBA is a great place to live if you have money. And as long as business continues to revolve around people who have money, the Bay Area will remain a perfectly valid place to do business.
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I don't think its even about the "tech talent" for most start-up projects, as you can certainly source this remotely to an adequate level to meet the early needs of a startup.
As long as the whales are here, it will make sense to have a fishing boat.
https://www.bloomberg.com/news/articles/2021-03-10/wall-stre...