

Y Combinator Success Leads To Copycats, Incubator Raiders - huckle
http://blogs.wsj.com/venturecapital/2011/04/25/y-combinator-success-leads-to-copycats-incubator-raiders/

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emmett
AGHHH.

"The so-called Y Combinator model, in which small amounts of money as well as
office space, mentoring and networking opportunities are sprinkled among a
dozen or more promising businesses, is gaining more attention from investors."

Y Combinator is extremely explicit about NOT giving office space to its
startups. Why does every article get this wrong? Presumably because so many
clones get it wrong too?

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vyrotek
I guess I would ask why Y Combinator doesn't provide office space. Our company
went through one of these so-called 'clones' and really appreciated the office
space. It made the mentoring and collaboration much easier.

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randall
Emmett can speak to this better than I can, but if I recall correctly, it's so
that companies can foster their own cultures without being cross bred as
directly from YC.

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drusenko
The logic when we were in YC was that office space does not foster the same
kind of scrappy culture that working out of your garage or apartment does.

Working out of an office takes away some of the urgency and gives you a more
laissez-faire approach to building the company as well as clear work/life
separation, which isn't really a good thing very early on in a company's life.

~~~
ryannielsen
Having all companies in one location also, to an extent, inhibits each company
from growing or fostering its own personal culture. At the very least, their
culture changes as a result of being in that environment.

My takeaway is that YC would rather each individual company decide with whom
and where to work – it's all in the spirit of encouraging entrepreneurs and
not forcing them down a predefined path.

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cwan
I suspect that HN is a massive advantage over other incubators that really
doesn't ever seem to get talked about. The treasure trove of data for finding
and keeping the best candidates alone... and it's not something that can be
easily copied - though how the magic can be kept alive as it grows seems to be
an open question.

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teaspoon
What data are you referring to, specifically? Anyone can lurk HN threads or
crawl user profiles for karma data.

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iamelgringo
Supply and Demand.

The issue that's being ignored by this article is that there is an explosion
of interest in technological entrepreneurship, and because of Angel List and
many other factors, a much more efficient market for early startup equity than
has ever existed.

The fact YC has thousands of applicants for only 40 slots, and the fact that
Angel List has helped get 280 companies funded in the past year means that the
YC model isn't scaling to meet the demand both on the investor side and on the
founder side.

There are holes in the market that are being filled with competing incubators,
and as with any market, I believe that competition and innovation is a good
thing.

<rant>But, "Copycats and Incubator Raiders"??? Really? Since Murdoch took oer
the WSJ, there has been a marked decrease in quality of writing.</rant>

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beagle3
> The fact YC has thousands of applicants for only 40 slots, and the fact that
> Angel List has helped get 280 companies funded in the past year means that
> the YC model isn't scaling to meet the demand both on the investor side and
> on the founder side.

The founder side "demand" isn't (at least not in the usual economic sense of
"supply and demand"). The founders _supply_ risk. YC has limited _demand_ for
risk. For all we know, out of these thousands, only 80 are going to have
positive returns. There could be millions, and still only 80 worth funding.

It only makes sense for YC to scale up if they lose out on supply for
"positive return" risk. While it is clear that there are great companies
applying to YC all the time and getting rejected, it is not at all clear that
YC can be more successful (by some metric they care about) than they are now.

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maayank
"Imitation is the sincerest form of flattery" --Charles Caleb Colton

