Ignore Y Combinator at Your Own Risk

I don't think YC could, or would want to, replace college. The average age of founders that get into YC has increased slowly but steadily...it's now about 25, so folks have been out of school for maybe three years, on average. pg has said on more than one occasion that he likes founders who know what they're avoiding (corporate drudgery, primarily) by starting a company, and he's found they're better able to hold the line when things suck (which they always do to some degree during the first few months to a couple of years of a startup).

That said, I think high school kids who show an interest should be given access to resources along the lines of YC. A fellow from Tulane ran an entrepreneurship program at a high school in New Orleans a year or so ago, I think as some sort of project for school, and he raised money via a ChipIn to bring the best of the lot out to Silicon Valley to see it all in action. Several YC companies volunteered to sit down with them for a few hours and talk about the process, and make it seem human and do-able for ordinary non-genius type folks. He also lined up visits to Google and Facebook and a few other valley highlights. I'd be stunned if that didn't have a positive impact on at least a few of those kids (underprivileged kids from poor neighborhoods in this case, but I think it'd work for most kids). Maybe one or two of them have businesses of their own today. So, I think that kind of thing would be great for the economy and great for the kids...but it's not something you could do as an investment company. It would take funding that you don't expect to get back, either donated (perhaps by companies) or grants from the government, and involvement by schools. It's just not something that is going to produce a profitable portfolio...but it could certainly put the kids on the right track.

I'm at the University of Waterloo in Canada, we have something that is (conceptually) similar to your idea, but it falls flat on its face for a few reasons. First, a bit of background:

- It's a residence where entrepreneurial-minded students can apply to live. The hope is that close proximity of a bunch of smart, ambitious people will serve as a pseudo-incubator for startups.

- The residence hosts workshops and invites speakers to shed some insight on the startup process, and hooks students up with technological resources (servers, bandwidth, hardware, etc) to build their projects. The residence takes no stake in any companies.

Now, I was there for its inaugural semester, and the whole thing fails for many reasons:

- Unlike YC, which draws from a pool of talented hackers and businesspeople, the residence draws from a pool of untalented, ambitious dreamers. Of the 70 or so people selected to live there, I can count the number of capable hackers on one hand - the rest were hopelessly unable to code at any level that approaches hacker proficiency. Most people were CS or engineering majors, most people also fail at producing their own side projects. There were people who could write Java, but didn't know what MySQL was - in short, the people there were technically incompetent, and even the ones who were able, didn't have the huge breadth of skills necessary to put on many hats.

This is a problem to most, if not all colleges - the number of people who have the depth and breadth of skill necessary to run a small, lean startup simply do not exist in large enough numbers at a single college. Maybe if 10 schools gathered together they'd have enough talent between them to pull this off.

- Zero business knowledge. The vast majority of the ideas that came out of that place were your standard "build app, pray for users, show ads to them, ???, profit!" formula. There were several econ majors selected to live there, I suppose in hopes that they will provide some business knowledge. They too were clueless about business models and weren't much help at all.

I did meet a couple capable people there that I still keep in touch with, so I suppose it's not all that bad. But IMHO building an incubator during college is a waste of time, especially at the scale you're suggesting. You can't will a successful startup into existence - you need talented people, and good luck finding 20k talented college freshmen with a strong portfolio of past work and entrepreneurial drive.

I don't think that applies to the guys at the Fool, especially the Rule Breakers. David Gardner got the following he has by investing in AOL in '95, Yahoo! in '96, Amazon.com in '97, Ebay in '98 and telling the world about his picks before he bought them. He's been far ahead of the curve for a long, long time. More recently he's had a number of 5-bagger plus investments in a variety of tech fields.

He's utterly crushed the market over a long haul, done it publicly, and done it almost exclusively in technology.