Challenge to PG/YC
I think there is a very easy method to prove this and I hope PG/YC will consider this challenge to prove himself right, obviously not for the sake of proving me wrong, but proving himself and the state of the investment market right for all Founders.
Challenge:
I propose including a "mole" in the next batch of YC, someone who 1. YC did not select for an interview; 2. already has a product; 3. will not take YC funding but go through YC and will otherwise be anonymous and identified as a YC Company (I assure you endless numbers of people would go to YC without any funding, just to be identified as a YC company); and 4. will present at demo day.
The results can be measured through investors’ interest in the "mole". I will propose a hypothesis, that investor interest or actual investment will at least fall within the average of the rest of the batch. What does that mean? Well in my opinion this would prove, Founders do not have anymore power relative to investors, there is just a different gate-keeper. In fact, I would take this a step further and even suggest that YC has taken power away from Founders, where at least before investment was dictated by the market, i.e., if you create a product that the market adopts, then you can get funding to grow. Contrast that with the current power struggle where if you have a product that the market has adopted, there is less investment opportunities because investment dollars are already set aside for that next YC company that doesn't even have an idea.