Some thoughts on my first YC Demo Day
billchambers.me
billchambers.me
It's mostly a ponzi scheme, where unprofitable companies pass their books off to non-technical investors that love hype.
> 1 slide. 1 minute pitches. 1 speaker.
This is why YC has such poor results. They're more interested in "1 slide" vs actual financials.
> Vertical AI was all over the place. Cursor for X was also prevalent.
No thought leadership at all.
No it's not. It's not even remotely comparable.
> There is a small group of companies that create the reputation on which everybody lives
Also called luck. YC investors cannot articulate what made them successful, or else they'd have better results.
Universities have decades of sustained output. They are not comparable.
> you joining some arbitrary YC startup was a bad experience
I am at a YC unicorn. We are one of YC's most successful startups.
> The average performance of a YC company is __phenomenal__
It absolutely is not. It doesn't even beat the SP500. The __vast__ majority of YC companies are unprofitable failures.
You could flip a coin and beat YC.
You thought YC was comparable to a university
> This is why LP's throw money at YC's funds
Yeah, we know hedge funds that throw money at things usually beat the SP500.
> It is very apparent after many many group office hours, which startups are likely to be in the 6% unicorn group and which are not
Group office hours and not actual revenue. Proving my point!
> However this does not preclude that the mean of YC outcomes is very very good
It absolutely does, lmao.
> If Bill Gates were in a room with me and my friends the MEAN net worth would be tens of billions of dollars, the median would be less than a $100k.
Yes, one person being successful, the rest failures would skew the results! Way to prove the point I'm making, lmao.
>> Also called luck.
Startup skill is a necessary but not sufficient condition for success. You also need luck. I doubt YC would claim otherwise.
Let's say each startup is a planet. Whoever gets hit with the most asteriods wins. Every conscious right decision and technical prowess that constitutes skill increases the size of the planet. The bigger the planet the more likely that more asteriods hit it. But space is a hig place, the largest planet is not guarenteed to have the most asteriod hits. A smaller planet could actually win. So it is with luck.
>YC investors cannot articulate what made them successful, or else they'd have better results.
Again, I doubt YC would contest this. But the power law so far has allowed them to be successful without having to guess correctly who in their pool would become the unicorn.
>You could flip a coin and beat YC
Where are you flipping this coin exactly? Are you flipping a coin in a pool containing all the startups in the world? If that's the case I'd like to see you take that bet. But if you flip a coin on Demo day, I'm sure you can beat some YC partners who additionally invest in a personal capacity.
These returns outperform the S&P. Maybe these aren’t typical, but it’s pretty far from “you could flip a coin and beat YC”
It's an odd metric to choose, which makes me believe it's one of the few positive ones.
Also, as I've said, Ponzi schemes work great for the early people. You give $50k to an unprofitable company and convince someone else to give them $1m. You get your investment back plus a little bit, and you leave someone else holding the bag of an unprofitable company.
> These returns outperform the S&P.
These very specifically chosen returns outperform the S&P :). That's why it's mostly kids that go through YC.
Maybe I'm wrong but YC mostly starts investing in pre-seed stage, where companies don't have financials.
Seems like a pretty good reason to have more information than 1 slide...
This is just some yc demo exercise
It's a threadbare article with little or no meat on the bone. So it is a little strange.
I've seen 3 point new posts up near the top before so I assumed that's what it was. 2 points top of the page is pretty aggressive tho, it might have been a near instant upvote by someone who was interested in the topic.
I have developed a typical routine to submit articles. I tend to gather interesting links during the day, and when America’s West Coast wakes up, I submit them in batches of bursts over an hour or so before I retire for the day.
This page on mobile made me laugh.
But otherwise, makes sense - get rid off all the flash and this is what demo days/etc are about
The more efficient the capital allocation is, the greater the benefit to the whole market.
The only weirdness is that these are companies led by founders with "personalities". That's a weird variable to correct for.
Collectively we are water, filling all the cracks. Marbles, exploring all the slopes and curves. The fitness gradients of the universe are all in front of us. Follow the ones that make sense and that pull at you. We're all programmed differently enough that the whole space is being sampled, even in the weird places, the well-worn yet unweildy paths, and the completely non obvious domains.
The algorithm focuses energy when certainty crystalizes.
I do have one question though-- how many YC25 companies have more than $1 million in revenue?