It seems so obvious; but everybody on Web 2.0 seems to think that exit strategies mean they don't need a business plan. The bottom line is that a business is not a business if it does not make money. By that metric, almost all internet startups, even the ones funded by VCs, are just "hobbies".
Exit strategies are great. But that does not give us the excuse to ignore the basic economics of this business.
The whole economy has a huge moral hazard problem. There's a reason why John Nash won a Nobel Prize.
YC should kill all the sub-par VCs by scaling up massively and taking their billions in funding away.
We'd never compete with VCs, incidentally. It's a completely different world from ours. They invest on behalf of other people (or more often, institutions). So while they have huge resources at their command, they have to answer to their investors, and this makes them excessively conservative. We much prefer using our own money, even if it limits what we can do.
Q. Are you looking for investors? A. Not at the moment.
I always wondered why YC was reluctant to take outside investment. Now we know why :)