
Ask HN: Is YC turning into the next Google, Microsoft, and IBM? - uionmf
Saw some awesome companies with passionate founders rejected from admission to YC.  Wondering as YC becomes more successful, if it is leaving it&#x27;s original roots.  Or was this the actual goal of YC?<p>Could Reddit and Dropbox still be accepted with the way YC works today?  Is the days of rogue startups being accepted into YC over as its pool of more &quot;qualified&quot; applicants keep growing?
======
OmarIsmail
The other thing to keep in mind is that YC has an upper bound on the number of
companies they accept. Just because a team doesn't get in doesn't mean they're
bad, it just means that YC partners saw other teams they felt were even
better.

You can see the evidence of this by the fact that companies going through YC
are getting better and better. They're better at the start of YC, and they're
better at the end of YC (than previous batches).

Is this a good thing or bad thing? For YC - definitely a good thing.

~~~
man_bear_pig
It's definitely not a straight-line good thing if you think about long-term
game theory.

they are already hitting the limits of getting startups who shouldn't need
their services... i.e. already proven traction and can probably go raise
funding themselves.

at some point, it's like akin to business school for techies. hbs class i'm
sure gets better and better every year; nevertheless, more and more top notch
business people skip hbs b/c the roi (opportunity cost) is not worth it.

similarly, yc's main benefits are it's network, brand, and access to capital.
if they only seek to reduce risk profile by taking premium companies that have
already proven themselves, the roi to subsequent classes may not be worthwhile
for that x% because top notch vc's have their own contacts and branding and yc
is purely a bridge.

think about pg's own statement about yc: to help companies build a prototype
to get funding... at this point, i'd say it's very few exceptional guys
getting in with a mere prototype. but tis the way markets evolve naturally.

yc is probably going through its own product-market fit as they try to take on
more groups per class, additional competitors are entering its space, and all
the meanwhile trying to maximize its profit/minimize risk. the hard part is
realizing that some of the biggest success to date are randomn at best b/c it
was so early stage and pre-traction and the market steers toward reducing
arbitrage scenario more and more everyday.

would reddit or airbnb make this year's class (if airbnb didn't have that
election year thing to help their application)? and if not, how many of those
can they miss before someone starts raising the eyebrow?

------
bmelton
I can't think of a single season in which they haven't "left money on the
table" by denying one group or another that ultimately proved to be
successful. Similarly, there hasn't been a single season in which there wasn't
at least one failure.

Venture Capital is, at its very best, a gamble, and it's a gamble in which
there are a near infinite amount of variables. Product, team, market, vision,
future, government regulations, etc.

I don't really know how this would equate them to Google, Microsoft or IBM,
especially as except at a very surface level, those companies aren't really
all that alike. If the accusation is just that they're slow moving giants
incapable of innovating, I'd warn that 1) that accusation isn't fairly applied
to the references, and 2) that even if that were the case, isn't really a
critique, except where it might be applied in the context of failing to make
money.

Seeing the recent batches, it appears that the money-making focus has
definitely been more B2B than in earlier batches, but that's likely as a
result of B2B proving more profitable over the long run than it is to be
attributed to a lack of innovation. As a money-making endeavor, I'd wager that
betting for more companies to make less profit than in the hopes of finding
one Facebook amongst a bunch of flops is the more humanitarian path of funding
as well, but that's another topic altogether.

------
jmau5
Just because someone is passionate doesn't mean they will do a good job. It is
much more likely that you don't understand what makes a startup successful and
thats why you don't understand why certain companies are rejected.

~~~
seivan
I was wondering if there were any actual specific examples of 'awesome' and
'successful' companies.

------
stevenameyer
They need to keep the number of companies to a reasonable amount in order to
give the companies that do get significant value out of the program. So until
they manage to figure out a way to scale the YC program to be able to
accommodate more companies (which I'm not necessarily sure is possible) some
good companies that could have been very good fits with YC will be passed on.

They will inevitably miss some awesome companies as well as select some
companies which wont amount to much. This is just part of doing something that
is speculative. But they need to limit the number of companies in order to
actually help the ones they do accept.

YC is a good program that certainly helps a lot of companies, but by no means
is it the be all end all. There are many very successful startups that didn't
go through YC and many not very successful startups that do go through YC. So
if a company doesn't get into YC it's not the end of the world. There are
plenty of paths to success that don't go through YC.

------
mathattack
A few thoughts as an outside observer...

\- You won't know until 10 years from now. Even still, it won't be enough to
say they missed a lot of firms. Of course they will. They can't possibly have
100% market share. A sign of the them turning into a large boring behemoth is
if they miss all of them.

\- If they are too worried about missing a Dropbox, then that risk taking will
cause them to miss the next big thing.

\- As long as it's entrepreneurs making the decision on who gets into YC, they
have a big shot of taking risks. My sense is most of the YC crew is
independently wealthy, and are keeping score by "great companies" rather than
"minimizing variance of returns".

\- All this said, the amount of YC firms acquired by larger tech companies
suggest that they are filling an important niche of being the R&D investment
arm of large firms who aren't structured to chase ideas that seem too crazy.

------
davidgerard
The goal of YC is to make money. It's possible they now know a bit more about
what they're doing.

------
kangaroo5383
It's possible that because YC is now a recognized brand, it has access to
lower-risk companies - i.e. those that have pretty much everything figured
out. As such, that will increase their success because a. self-fulfilling
prophesy of more leverage in the future by being associated with YC, b. they
are already low risk to start with. IMO, they are the next Sequoia, not so
much Google/Microsoft/IMB.

Contradictory, however, is these lower risk, already figured out, companies
are not really in need of an incubator as much as some younger companies.
Anyways, I'm really interested in seeing the next batch of YC companies and
where they are going with that.

~~~
man_bear_pig
completely agree with your statement. long term zero economic profit theory
should state though as they move up the spectrum / take less risk (new
entrants in their own space will enter to fill the space they can't fill
anymore and they will have a new type of brand (e.g. fb was exclusive for
college kids and now it's to connect everyone. so naturally college kids want
something their age bracket want to use and fb is struggling to get those kids
to continue to think it's cool. but for fb it works bc they created the
industry they expand into). problem with incubators as they move up the
spectrum is do they think they're as good as the guys that have been doing it
for a long time / are they going to be perceived as threats and no longer
synergistic alliances.

