Whenever a startup we rejected seems to be succeeding, we go back and try to figure out why we rejected them. Occasionally we change the application process as a result.
We don't start from the applications though. We hear from news stories when startups are doing well, and then we go back and look at their application.
You're going to miss startups that might have succeeded if you had invested this way. You take a percentage of the companies you invest in because you make it more likely for them to succeed.
Given the funnel of startup failure, there are probably more startups that didn't succeed because you passed than startups that succeed despite your passing.
My point is that only looking at those that are successful is missing most of the data on people they should have funded. Assessing this is really hard, but they shouldn't fool themselves into thinking they have all the data.
Answering as if your question said "And does that make you want to change your application process", because the first time I read it I thought it did.
My understanding of the essays I've read is that there wouldn't be much point in it. Ideas evolve or change entirely, and more importantly people improve. If the gut feeling was no then, all you know is that something changed.
Or you missed something that was already there - IMO more likely, considering how little you can learn about someone from the application, and that the founders at least had the potential to become what they are today.
I disagree, founders and products change, and can make the difference between lifestyle and $1B. Having had multiple rejections for years from different sources (then accepted with the same idea), I know this to be true. It's less about having a "great idea" and more about having the vision and ability to execute on it - that's what needs to be proven.
Sorry if it wasn't clear. My comment was purely about the founders, not about the idea since I know they put so much more weight on the first than on the latter.
Based on a question answered by PG on Askolo, YCombinator track them[1]:
Q: Have there been any startups you've later regretted rejecting from YCombinator?
A: Sure, several. But I can't name names because it's not for me to disclose that they applied.
Additionally they also mention about contacting them on rejected applications[2]:
"If you do, we'd appreciate it if you'd send us an email telling us about it; we want to learn from our mistakes"
Here are some that are known to have been rejected by YC and have gone onto raise funding (which is not a perfect metric by any means since funding ≠ success) or have been acquired:
It would be a difficult study... How many YC companies would have failed if they had not been accepted to YC? Certainly, a number of rejected companies who later failed may have thrived under YC.
Presumably, if they were to 'make it big' he would probably hear about this through other channels without having to constantly monitor a large pool of rejected applicants.
Sure he would hear about it, but would he remember that they had applied.
Presumably, someone on the YC staff monitors the success of companies both in the program and out of the program and uses that data to improve future acceptance decisions.
He has answered this question so many times in so many places. In fact, he mentions the fact that YC tracks the companies they reject quite often -- including here on HN and in essays. Given that, I find it likely he has read the comment but find it unlikely he'd take the time to respond since it's so obviously asked by someone who isn't paying enough attention to even do ten minutes of research on their own.
what a stupid ask. why wouldn't a vc do this? Isn't this something that would be a big part of the iterative application process. I doubt the process has remained unchanged over the years. As new feature vectors of success are identified it would be a very inept investor who didn't consider how to integrate that back into their process. And PG is not an inept investor.
There really isn't any need for such hostility, especially since you are wrong. OP wanted to know if YC searched through applications looking for rejects that ended up being successful. That's a very specific question.
PG says that's not how it works. I guess you think the way YC works is stupid.
Reviewing rejected apps would be a waste of time given how many apps YC has received. Also, what does 'big' mean? I doubt a startup exists that was rejected by YC then grew to a $1B valuation--someone would probably have heard of that by now, made a big deal of it, and those of us on HN would know. But I don't doubt that YC-rejected startups have gone on to raise a few rounds of funding and/or may have even made <$100M exits.
Reviewing rejected apps would be a waste of time given how many apps YC has received
Only a small number of those will have made it big since then, though (by whatever definition). So they'd only have to look at a small amount to see if there were any indicators that they might have overlooked.
We don't start from the applications though. We hear from news stories when startups are doing well, and then we go back and look at their application.