Check out all of the bullshit “AI” companies that YC is funding.
BigTech is not “loosing ground” all of them are reporting increasing revenues and profits.
Or on a smaller scale, what's the last genuine Attlassian success?
Yet, when it comes to product innovation, the momentum is always on the side of the new players. Always has been.
Project management/work organization software? Linear. Async communication? Slack. Social Media? TikTok. One has to be curious how Zoom is doing so well, given that all the big competition actually controls the channels for setting up meetings. Self-publishing? Substack. Even with AI, everyone plays catch-up with Sam Altman, and many of the most prominent companies are newcomers.
We could go on and on.
Yes, Big Techs will survive because they have enough momentum to survive events such as the Balmer-era MS. But that doesn't mean they lead product innovation.
And it's expected. Conflicting priorities, growing bureaucracies, shareholders' expectations, old business lines (and more), all make them less flexible.
An innovative product is one where customers in aggregate are willing to pay more for it than it costs to create and run. Any idiot can sell a bunch of dollar bills for 95 cents.
Going back to the latest batch of YC companies, there value play can easily be duplicated by any company in their vertical either by throwing a few engineers on it or creating a statement of work for the consulting company I work for and I can pull together a few engineers and knock it out in a few months and they will already have customers to sell it to.
There was one recent YC company (of course one of the BS AI companies) that was a hiring a “founding full stack engineer” for $150K. It looks like they were two non technical “serial entrepreneurs” without even an MVP that YC threw money at.
You can’t imagine how many times some hair brain underfunded startup reached out to me to be a “CTO” that paid less than I made as a mid level employee at BigTech with the promise of Monopoly money “equity”.
If 90% of the companies fail or are outright fraudulent it doesn’t really matter
And I'm with you with a critical view on their all-in move toward AI. It's just what all the VCs do, and it's hard to say who's parroting who in this setup (I think that others are parroting YC, but feel free to challenge me on that).
Having said all that, I wouldn't be surprised if a couple of companies from this year's cohort made it big. If you look at YC's biggest successes year by year, you will often (but not always) find a household name.
Was there anyone who predicted these would be the greatest hits? Of course not! That's the whole point of having an investment portfolio. You can be wrong a lot of times if you secure an early investment in a unicorn every other year or so.
Also, "one recent example" of poor investment decision doesn't invalidate 2 decades of rather successful investment portfolios (as a whole, not individually).
In no way is it a YC defense. I'm very critical of the whole startup funding ecosystem, and they are a prominent player. Yet, if they were consistently stupid with their decisions, they wouldn't exist, let alone be the most desired accelerator out there.
Also, if it's that simple to copy what they do and what the companies in their portfolio do, why wouldn't Google et al. take their almost infinite funds and get the competing offers for non-BS ideas up and running in no time?
I bet that if you had an idea that could pay off thousandfold, you'd get enough eager ears to hear you out in any big tech. And still, it's the makeshift mass of startups that come through with new products.
One has to wonder why things like Shopify, Stripe, Zapier, or Figma did not come from the big tech. Each would have an ideal match. Even if you look at the AI landscape, how come Lovable made such a career? After all, they repackage the AI capabilities rented elsewhere. Somehow, with all the ingenuity of building ChatGPT, OpenAI and the rest didn't get it.
https://medium.com/@kazeemibrahim18/the-post-ipo-performance...
They're probably busting champagne if the peak valuation is instantly after IPO. That means they maximized the potential payoff.
You're right that one perspective to consider how well these companies are doing is to look at their continuous growth, and that includes post-IPO valuation.
At the same time, YC backed a couple of dozen unicorns. Including those that, despite having a valuation lower than at the time of their IPO, are still in the 10-digit range. Well, I'd be the last one to complain if I got to seed fund a company that ended up at $50B+ valuation.
Having said that, it's just a financial aspect of the argument, and it's only focused on post-IPO, whereas most YC-backed unicorns have not yet done so.
If you look at product innovation, you'll see Dropbox, Airbnb, Gitlab (save for Airbnb, all failures by your standards), Stripe, Deel, Zapier, all household names in my world. Why weren't these products developed by big techs?
You could easily point to one that would be especially interested in taking over that part of the pie.
What BigTech company would it have made sense to get into the AirBnb market?
Gitlab has never been the industry standard for hosted Git. It was always GitHub. Even then, I guess it would have made sense for Microsoft to compete better. They did have Team Foundation Services and after many name changes Azure DevOps (unrelated to Azure. It was more of a git compatible hosted version of TFS).
Also none of the BigTech companies are in payments aside from Apple Pay/Google Pay and Amazon mostly cares about internal payments.
Deel is also a company that wouldn’t have made sense for any of the large tech companies.
I know AWS has its own orchestration service and I’m assuming GCP and Azure have it also. What motivation would they have to offer a product that works outside of their cloud platform?
I wouldn’t be surprised if AWS Step Functions get more usage than Zapier (which I had never heard of before today).