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Comment by e3pi | Hacker News Reader

"Graham also released some metrics on Y Combinator: it has 564 startups total. Of the 285 that have valuations, the total valuation of the companies is $11.6 billion."

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I wonder which companies are skewing that the most, anybody have a list of the top Y Combinator companies?

Obviously the average of $46 million doesn't provide a clear picture at all.

If memory serves, I believe that AirBnB and Dropbox represent about half of that.

Just taking out Dropbox and Airbnb, the average for the rest already drops quite a bit. With Dropbox at more than $4bil [1] and Airbnb at $2.5bil [2], that leaves the remaining 283 at about $5bil total, or $17.6mil each. Taking out others like Weebly would drop it further.

[1] - http://www.forbes.com/sites/quora/2013/02/07/why-is-dropbox-...

[2] - http://www.bloomberg.com/news/2012-10-19/airbnb-said-to-be-r...

So what you're saying is that if you take all of the successful companies out of an investor's portfolio, that portfolio will have a lower value.

Well I think more precisely, he's implying if you take out the few heavy hitters, then the value drops precipitously.

Or stated even more precisely, the mean and median are very different :)

No, he/she is saying that "average" is a poor metric to represent the totality of the samples. This is particularly true when you have such a high standard deviation.

By eliminating some of the biggest outliers, you're reducing the standard deviation, thus making the average metric more representative.

You'd also have to disregard the companies with very low or no value, but it seems this was already done in PG's original statement: "Of the 285 _that have_ valuations..."

Wasn't reddit sold quite cheaply, and not part of this list?

Yes, my mistake. Edited.

Measuring the "average" in any power-law distribution is mostly meaningless.

It would be interesting to know what the median valuation is. Half the startups will be above it, and half below it. This would provide additional interesting details.

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