Why YC | Hacker News Reader

Why YC

paulgraham.com

83 pointsmqt28 comments

My first reaction upon hearing the name "Y Combinator" was dismay; oh god, the geeks are trying to be bankers now. I had a vision in my head of paul et al. blowing out their retirement, funding LispOSes and smalltalk-on-chip type projects.

P.S. RPG, PG and PG. Any other Lispers with "PG" initials out there besides Gabriel, Greenspun and Paul?

Around the time I heard about PG's `Y Combinator' I had just rediscovered the Turing fixed-point combinator while playing around with Scheme.

the number of imitators that YC quickly spawned seems to indicate that this won't just tank (even if YC does itself). It solves a real market inefficiency.

YC is in a position to manage other people's money now, tanking hasn't happened and wont for a very long time. Just look at how fast they have been able to push their startups, like FlightCaster, into the mainstream of tech industry. They have some very influential people listening to them.

My bet is on YC branching out of tech startups and perhaps getting into seeding businesses in traditional industries. I would go as far as to say that they're due for a presidential meeting; if the economy doesn't improve, they might even be called in to testify before congress (remember how easy it was for the l0pht to appear in congress?) a government appearance will put them on the spot.

It does solve a market inefficiency. To me, that highlights a different inefficiency - imagine what a couple of bright YC founders could do in the rechargeable battery market, or the solar cell market - if they only had enough money to enter industries with higher barriers to entry.

I can hold out the hope that successful founders will enter other industries with their next startup.

As it says in our FAQ, we're happy to fund companies working on stuff that's too expensive to build on just our money. The goal of YC is to build a convincing case for later stage investors. That doesn't have to be a complete, launched product.

YC is great. But I would think with all the smart people here, if the market was efficient in fields with high barriers to entry, Tesla Motors would have a few more competitors.

Tesla and the car industry is a whole other beast. I think with software and internet companies, you can have many more clever hacks for barriers that competitors have set up.

Car companies to start require many orders of magnitude of investment greater than any YC startup. Sort of puts it into a different class.

Though I've thought YC is a great idea (and implementation), it struck me as being focused on funding the creation of software, to the exclusion of hacks which are not primarily composed of code. As my joy and expertise come from being a sysadmin, this tends to exclude me (as I suspect it also excludes, perhaps by design, EEs).

I was pleased to see that the RFS series included ideas for software-hardware combos, but I was disappointed that the example was Meraki, since they're still, AFAIK, mostly software.

Although the new funding formula is a step in the right direction, it remains exclusive of ventures needing more than just the living expenses of the founders.

Specifically, I perceive a tremendous market inefficiency in RDBMS implementations, which, even at modest scale, end up costing too much for (often "hosted) hardware and/or don't perform. However, because the point is to do a better implementation of something that is otherwise costly, even the proof of concept is likely to require upwards of $15k in hardware.

Granted, it could be leased, but, if that means buying brand name, the amount financed could easily double, perhaps even triple, which would be $5k-$8k over 4 months and a subsequent excessive drain for the remaining 20, if they occur.

The $100k LoC BootUpLabs offers is almost enough to overcome their unfortunate location and incubator model, since it may well result in a complete, launched product, with no debt baggage.

Of course, this is still an order of magnitude below where VCs would come into play.

I think it solves an ego inefficiency more than a market one. If it solved a market one, we wouldn't know until well and truly after a market had been established and true scales of economy observed. So far that hasn't happened yet.

The thing that the imitators lack is Paul, his vision, and the intent that he describes in this article.

The closer of a mirror to YC an imitator gets, the further they get from the intent that makes YC possible and successful.

I also want to say this might be the first PG essay that I not only liked, but agreed with. Usually I enjoy, but disagree with him.

Well, I'm a student and I have some occasional queries which are answered pretty well here. I respect the opinion of YC community as their average geekness level is much higher than the crowd. Am not into startup or something but I still love the opinion of people here. Whenever I need to find a opinion about i go for searchyc. When I needed to buy a laptop or needed a suggestion regarding programming .. YC is always there with a wonderful solution. Plus I get to know the opinion of things happening in current scenario related with IT field. Thankyou YC :D

I would be curious to see diffs of these revisions.

Ditto - especially for this one. I'd be curious as well to know how this compares to implementation. How many YC investees would have pursued their ideas without YC? Is this a core attribute for YC to invest in an idea?

It's interesting though... of all the potential reasons that could have motivated the creation of YC (e.g. alternatively, giving promising ideas a leap forward) the is the one that was chosen. That YC could be the small nudge that pushes smart people to start new businesses and that "we can spring on the world a stream of new startups that might otherwise not have existed."

For a lot of hackers, the biggest benefit they get from YC is confidence. It happens almost instantaneously. You're no longer working on a project - you're starting a company. Advice, support network, and introductions are incredibly helpful, but they're nothing compared to confidence. If you already have it, you can certainly succeed without YC (although getting in helps). Theoretically, you can just tell yourself "I will be confident", in which case you can succeed without YC too. But for most people it doesn't work this way.

YC gives people the determination to persist against all odds - probably the most useful quality of all. It turns the fear of failure from working against you, to working for you. It's an incredible energy source. I would be very surprised if most successful YC companies did half as well without YC. Not because of the help that YC offers, but because of confidence and determination.

The YC confidence is sometimes even better than VC capital. One of my previous startups raised a round with first round capital, and I was the 4th employee there, but it didn't make us confident like YC does.

Slava, you didn't need anybody's endorsement to feel competent my friend. You're a first rate hacker, Startup or not. Good luck with rethinkdb, get industry contacts, work on the "suit" image and you should be fine. You're destined to greatness.

Haha, Slava in a suit. snort

The originals are available at http://web.archive.org/web/20060718121809/paulgraham.infogam...

In this case, the intro para just became less specific.

"We did it because it seems such a great hack."

Im not a hacker, but I understand. And Im glad that YC is here to support and develop startups like my own. And I hope to have the opportunity to work with YC in the future. My startup is just that. A company that is a tweek or "hack" on various other web ideas that have been developed and maybe even successful, but that I feel have dropped the ball on various aspects of their site's service, and business model. And with the right tweek or hack (my startup, mindUNsigned.com), can capitalize on the competition's turnover, and deliver a game winning dunk at the other end of the court.

What does that mean?

That feels like Mark V Shaney is active again.

No M v S here. All posts are written by me. No use of Markov chain technologies.

It means that I've built my startup upon the faults of the competition. My professional experience and MBA education has allowed me to very easily identify opportunity costs. My startup has tweeked the competition's "so-called" attempts, and speaks directly to their opportunities in pricing, available features, usability, user interaction and activity, fun, and site purpose.

Ha ha, with talk like that it had to be a MBA.

(smiling in agreement)

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