Ask HN: What Happened to YC? | Hacker News Reader

Ask HN: What Happened to YC?

6 pointsO__________O31 comments

YC used to average $17,500 a startup twelve years ago. Now they’re at $500,000 a startup, which would have funded 28.5 startups using prior amount — or 7096 startups the last batch.

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  Incidentally, we also hope that this deal will encourage more founders of any age and from every demographic group and geographic location to take the leap into the startup world, apply to YC, and build their own successful startup.

This is a rare example where I see an "equity" thing like this making sense with little downside. One one hand, I think YC might be cooler if it offered less money and gave more support of other kinds. But that means that only funded or independently wealthy startups could do it, which probably doesn't achieve the fund's ostensible aims of searching for the best ideas / founders. So more money means people don't have to worry about money as much, and YC gets access to more deal flow

You have to have equity for it to matter.

At 7096 startups per batch with 2 founders per startup, that’s 28,384 founders per year with equity. Under current model of 240 startups per batch with 2 founders per startup, that’s 960 founders per year with equity.

960 vs 28,384... or 29.5x difference.

Even if they did each model every other batch, there’s literally no way using current method both batches would out preform the mixed model. Better real world data equals better performance.

Related links:

PG 12 years ago saying average was $17,500 per startup

https://m.youtube.com/watch?v=UacbJ72dluU

Last batch count was 240:

https://www.ycombinator.com/blog/meet-the-yc-summer-2022-bat...

FAQ saying current standard offer is $500,000

https://www.ycombinator.com/faq#covid

Heard in an interview that it was due to the much more competitive climate, inflated seed valuations, and an overwhelming number of applications.

Interview I recently with Michael Seibel tried to spin it as if they were looking out for founders, which to me is the opposite of what this does. True founders accept risks and value community. _________

Interview with YC’s Michael Seibel

- https://news.ycombinator.com/item?id=32988644

Michael Seibel

- https://wikipedia.org/wiki/Michael_Seibel

> True founders accept risks and value community.

That’s a no true Scotsman fallacy: https://en.wikipedia.org/wiki/No_true_Scotsman

Fair enough — but YC explicitly states a core value of being part of it is the community, especially B2B startups who frequently get their first customers from prior YC alumni companies.

Fair enough; but offering more money is going to attract more applications, isn’t it?

As is, application process to me is broken.

For example, prior to hitting submit, there’s no indication of how you’re being scored or what your score is. Sure, some might try to game the system, but ultimately it’s very hard to fake true progress and YC knows this based on experience.

In my experience, huge percentage of founders applying likely do not even understand what YC wants - and how founders without money can show they fit YC’s needs.

I think YC knows better than you do. If you think you're so smart, then you start your own incubator and see how that goes. Maybe you can get a multiple unicorn company by starting someone off with $1. That's realistic.

YC’s position clearly differs from mine. As I have already stated in the thread, there’s a YC competitor that charges $1000s to join, has 2500+ alumni over 2 years, market cap of those companies is already over 9 billion, those companies have raised over billion from top VC firm, etc. So, at least to me, it’s obvious there models that work that don’t include YC giving $500k per startup.

I also agree, if it’s important to me, I should do something more. That said, this is one of 100s of topics I have strong opinions on and actively spend some time on currently.

If you're actively spending time on hundreds of topics, you're effectively spending zero time on any topic.

Disagree; you’re welcome to spend your time however you want.

To be little more precise, all topics follow the power law, there’s massive amount of information on many topics which is easy to rapidly learn early on, but that ease of learning rapidly falls off.

Beyond that, few people do what I do, truly solo entrepreneur, enjoy what I do and there’s literally nothing I am unwilling to take on if I decided that’s how I would like to spend me time.

Meta: As for your comments, might be worth reflecting on how people are responding to your comments, if you’re engaging people is a net positive, etc.

_____________

Related Wikipedia for Power Law:

https://wikipedia.org/wiki/Power_law

Why would I care what anyone thinks?

If you do not care, please stop commenting on HN, you do not understand it. For example, from the guidelines:

>> Comments should get more thoughtful and substantive

https://news.ycombinator.com/newsguidelines.html

Will keep that in mind for the next times. Keep iterating, right?

Awesome, thank you, truly appreciate it!

Actually one of the 100+ things I am currently am working on, that is how to do automated analysis of comment threads to find patterns that help high-light the best exchanges between users. If you have any suggestions, let me know.

Will do. You keep iterating too!

It's not a mystery, they explain it right here: https://www.ycombinator.com/blog/ycs-500-000-standard-deal

>> This is the type of deal that we have wanted to offer YC founders for years

As someone that cares about founders, rather see 7000 startups get $20k than 240 get $500k; obviously not my choice to make though.

Why? Not all startups are able to thrive....

If there’s material difference in quality of startups in YC now and 10 years again, I am not seeing it. If anything, they had 19,000 applications the batch.

If applications are not good enough, then problem is they’re not communicating what they need and a path to anyone proving they’re making progress. Per YC, this proof of progress is the best predictor of founder success.

Beyond that, they also claim their alumni network is their greatest asset. Obviously growing it requires quality control, but there’s no reason no to add “levels” to maintain quality within the network.

Simply put, there story neither adds up, nor fits their claims. To be it appears they have switch to competing on cash offers, which if true, is a bad signal.

They can't scale [1] to handle 7000 startups. Their model is not so fire and forget, but to babysit^H provide office hours to the founders and they to give advice. There was a recent article with one of the former presidents of YC and he said that the year ¿2012? was a problem because they had more than ¿100? startups and it was impossible for the advisors to remember all of them and give good advice on the spot. IIRC they later shardered the advisors and startups an lived happy ever after, or something like that. My guess is that the current structure can handle a few hundred startups, but not a few thousands.

Also, there is a problem with brand dilution. The #5000 startup in whatever order they are using is probably much worse than the #50, and they want to be known for having only startups that don't suck.

[1] Ar least for now.

80% of startups need the same advice, it can be scaled.

Also, one of YC’s competitors is doing just fine scaling and literally charges founders to join a cohort.

It's discussed in that article. I just found it "What I’ve learned from users" http://paulgraham.com/users.html HN discussion https://news.ycombinator.com/item?id=32911195 (519 points | 17 days ago | 332 comments)

They agree that startups need the same set of advices, and the benefit of the advisors is that they probably had seen the problem before.

But they don't need the same advice at the same time, so the advisor must understand the current problem of the startup and the general situation of the startup and give personalized advice. It's not possible to give all of them the same advice at the same time like in a class.

Aware they agree, pretty obvious in my opinion if you’ve actually worked with 1000s of startups.

As it relates to mentoring, in my opinion, really just three core parts:

- Accountability - Problem Solving - Networking/Intros

All of these are addressable using software & system, classroom training for mentors, and auditable using voice to text systems similar to how Gong.io does it for sales teams.

YC is a software company, they know it too. If they don’t change they won’t last next 10 years.

They have more money now, and $17,500 doesn't get as far as $500k in terms of burn.

my experience has been that you now need to be really well networked with YC partners or are already generating 1MM+ in revenue to have a chance at being accepted, which really should not be how YC should work.

Most recent batch notes conflict with your experience:

- 71% of the batch had zero revenue before YC

- 7% had more than $50k of monthly revenue when accepted

I do agree referrals always make a difference and they should disclose those numbers.

_____________

Related batch notes:

https://www.ycombinator.com/blog/meet-the-yc-summer-2022-bat...

right, so how many of the accepted people had deep relationships already with YC partners? vs going in cold.

Ask YC, never heard any of the partners comment on this, other than to say it’s obviously a net positive. Obviously anyone that’s done multiple batches, public knowledge founders knew someone related to YC, etc — was not going to cold.

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