
Did Sam Altman make YC better or worse? - JumpCrisscross
https://techcrunch.com/2019/03/09/did-sam-altman-make-yc-better-or-worse/
======
subfay
This is normal, people come and go and Sam is a superb guy.

The communication about his leaving though, was subpar (to use a polite
wording) and seems just off. No strong appreciation/thanks for his time
neither from YC's LPs nor Graham. Also his next challenge sounds not like
something significant, rather like a rushed filler.

So, this feels like an overnight decision from whomever and doesn't leave a
good taste on YC either. That's just not the way to say goodbye (after five
years of being together).

However and again: this happens everyday but Sam should have had a
communication pro on his side framing the situation properly.

Sam, I wish you all the best and hope to hear from you soon again!

~~~
jamestimmins
Given that Sam has acknowledged that he spends most of his time on OpenAI
already, and this article mentions that he hasn't been involved with the
operations at YC for a while, this sounds like a case of the org chart
catching up with the existing structure.

I wouldn't be surprised if this indicates few, if any, changes other than
formally removing the CEO title. In light of that, it's possible that they
tried to downplay the public message because internally not much has changed
and it truly isn't a big deal.

This is pure speculation, of course.

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thetrumanshow
I'm just an outsider, but I was lured to HN and the idea of YC by the cult of
personality around PG long ago (we even applied for the first batch).

PG seemed like someone who didn't have all the answers, but was on a journey
to find them and he was happy to take you with him.

By contrast, my first take on Sam was that he came across as more matter-of-
fact and confident which was a slight turnoff for me. But, I think he was a
fine choice to take the helm.

I do miss the cult-of-personality days :).

~~~
omouse
Same here, there's a huge difference between YC in the early days and now.

 _the Series A program, which coaches seed-stage alums on how to nab follow-on
funding_

Pushing startups further into the hands of VCs who'll get rich whenever
they're acquired or IPO.

 _YC China, a standalone program that will be run out of Beijing once it gets
up and going_

Lots of ethical questions about this that are just never answered. Is it okay
to funnel capital into another country that is vastly different from the US in
terms of politics, market, etc.?

 _“We’ll fund a lot of people doing a lot of things that sound really dumb,
and most of the time they will be. And some of the time, it will seem like a
bad idea and be jaw-droppingly brilliant. The very best startup ideas are at
the intersection of the Venn diagram of, ‘sounds like a bad idea,’ ‘is in fact
a good idea. '”_

This particular quote from Altman just reminds me of PG's essay on why smart
people have bad ideas:
[http://www.paulgraham.com/bronze.html](http://www.paulgraham.com/bronze.html)

It just makes me see OpenAI as suspect now because they just opened a for-
profit branch? And they are keeping some of their research hidden? I mean,
where's the openness in that?

~~~
titanomachy
I don't think I'd read this essay before. Interesting quote:

"We expected the most common proposal to be for multiplayer games. We were not
far off: this was the second most common. The most common was some combination
of a blog, a calendar, a dating site, and Friendster. Maybe there is some new
killer app to be discovered here, but it seems perverse to go poking around in
this fog when there are valuable, unsolved problems lying about in the open
for anyone to see."

It sounds like a lot of people were trying to make Facebook in 2005.

~~~
thetrumanshow
Whatever fake internet points you are being awarded for this comment, its not
nearly enough. :)

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petercooper
This question comes from a position of good faith and mere curiosity, but I've
always been intrigued how Sam became prominent in YC so quickly (part time
partner to running things in 3 years)? I know he founded Loopt but that's all
I knew about him before he became a partner. Did PG just really get on well
with him and saw someone capable to help take things over? It sorta feels like
an inspirational story worth knowing more about.

(As I say, this merely comes from a position of curiosity. Sam seems to be a
very capable guy and seems to have done a good job.)

~~~
rmobin
PG holds Sam in very high regard:

"Honestly, Sam is, along with Steve Jobs, the founder I refer to most when I'm
advising startups. On questions of design, I ask "What would Steve do?" but on
questions of strategy or ambition I ask "What would Sama do?"

What I learned from meeting Sama is that the doctrine of the elect applies to
startups. It applies way less than most people think: startup investing does
not consist of trying to pick winners the way you might in a horse race. But
there are a few people with such force of will that they're going to get
whatever they want."

[http://paulgraham.com/5founders.html](http://paulgraham.com/5founders.html)

~~~
basch
"The guy I picked to run my company belong in the same sentence as Steve
Jobs." Of course you would say that while handing over the reins, to build
confidence in him, and in your choice to choose him.

Im not saying its not true, just that their is other motive.

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dpwm
> investing $150,000 in exchange for 7 percent of each company

The article makes this sound like these are unfavourable terms that come back
to bite founders. But surely at the stage YC invests these are higher-risk
startups – where 7% for 150k seems somewhat more fair.

In any case, I thought the whole thing with YC was that it invested at a stage
when VC funding wasn't typically available for things that can't be
bootstrapped – where 93% of something is a lot better than 100% of nothing.

~~~
ElBarto
"investing $150,000 in exchange for 7 percent of each company — a stake that
it can maintain throughout the company’s life it it so chooses, per its pact
with its founders."

I think the issue might be the second part as, if I understand correctly, it
means that YC is insulated against dilution without having to invest a penny
more.

Considering how many startups apply I would say that more than enough people
are happy with those terms, though.

~~~
wjossey
I’m not a YC company founder but that’s not how I understand their terms to
work. They can follow in subsequent rounds to maintain their percentages but
they aren’t “locked in” at 7%.

—-Edit——

Yeah. They have pro rata rights to follow in their agreement.

~~~
jtbayly
So... which is it? I don't know what "pro rata rights to follow in their
agreement" means. Are they "locked in" at 7% regardless of other funding
rounds or do they have the option to buy in to future rounds to keep 7%
ownership?

~~~
wjossey
They have an option to buy to maintain their stake. They are not locked in and
get diluted like everyone else.

~~~
jtbayly
Thanks for the answer. And wow. This is the first time I've been downvoted for
asking a serious question.

~~~
wjossey
How dare you not know what pro rata means! :)

Happy to help. Be well!

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leroy_masochist
Perhaps unsurprisingly, the article doesn't really answer its own question,
it's basically "wow a lot sure has changed in the last decade, some of it good
and some of it bad".

I think if you apply standard CEO metrics to Altman he did pretty damn well.
YC has grown tremendously under his tenure and its reputation is still great,
its startups are still making money as investments, and organizations the
world over are copying one facet or another of what YC does.

~~~
ryanwaggoner
Isn’t it way too early to say? You’ll probably be proven right but isn’t
almost all of the value of YC from a handful of startups funded before Sam’s
tenure? They could have wasted every single investment dollar for the five
years and still be worth billions thanks to Dropbox, Stripe, Airbnb, etc.

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nahimn
Regardless of YC per se, I think he's made startups better. The content
produced for free for startups (StartupSchool) has been key

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sokoloff
What would you have to believe to think that Sam _didn 't_ make YC better?
What evidence do you have to think that?

During his tenure, YC got much bigger, funds many more startups per year, has
made initial seed funding much more available, and perhaps most importantly,
planted in the heads of many more people that it is _even possible_ to start a
startup.

In a very real sense, the president owns much of the success and failure
during their tenure. I'd say YC has become an increasing relevant player and
that that relevance is overwhelmingly good for hackers.

~~~
tyingq
The muted tone of the YC blog post probably fueled the speculating. No
recognition of contributions, thanks, for example. It read like a less than
happy departure.

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supermw
I could keep throwing money into my stock portfolio, did I make it better, or
worse?

The only metric that matters here is ROI.

Did YC increases its ROI and produce a higher percentage of successful
startups during Sam Altman’s time? This is the question to answer, and the one
upon which he shall be judged. Everything else is pure vanity.

~~~
ganeshkrishnan
Stocks are very different from startups. For one, if YC invests even in
something absurd like "Tinder for Potatoes", the value of the startup goes up.

You can't achieve the same effect for stocks unless you are investing millions
in low cap stocks to prop up it's values and even then short sellers will
squeeze you out.

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nodesocket
> Altman also diversified the types of founders that YC admits (though it
> could do better

And there it is, the omnipresent pushing of equality of outcome from
TechCruch.

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zitterbewegung
It takes a long time for companies to mature and allow YC to cash out so we
will wait and see. (At least from a retrurns perspective ).

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awwstn
> Certainly, it is much changed. When Altman was handed the reins, YC had just
> graduated 67 startups, all of them from the U.S

This is _definitely_ wrong. Don't know how many companies had gone through YC
by 2014, but my guess is it's nearly an order of magnitude larger than 67.

~~~
dgemm
It reads to me as 67 startups graduated _in that year_.

~~~
awwstn
ohhhhhhhhhh

my bad...although that still reads a bit unclearly to me

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skilled
I'm not a fan of these opinionated articles.

~~~
dang
We often downweight them off the front page, unless they contain unusual or
significant information. But we do that less on stories about YC because
otherwise people perceive it as censorship.

[https://hn.algolia.com/?query=by:dang%20yc%20less&sort=byDat...](https://hn.algolia.com/?query=by:dang%20yc%20less&sort=byDate&dateRange=all&type=comment&storyText=false&prefix=false&page=0)

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projectramo
YC is different.

Consider: "YC’s terms, which see it investing $150,000 in exchange for 7
percent of each company — a stake that it can maintain throughout the
company’s life it it so chooses, per its pact with its founders."

If this is true, it can afford to do different things. Picking the wrong
company does not matter. Picking the right company matters a lot. In other
words, false negatives are much worse than false positives.

With that type of structure, the more they take on the better.

Sam's philosophy -- from his talks and such, I don't know him personally --
seems to align perfectly with this reward structure. He has grown it in the
right direction.

Now, the hit rate will necessarily be lower, and that might hurt another
organization but because of their unique structure, I think it helps YC.

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sokoloff
$150K for 7% is one of the best deals available for early stage companies,
IMO. I really do agree that (for early stage companies at least), it's
basically a judgment or IQ test. If you're offered it and turn it down, you're
overwhelmingly likely making an error.

[https://news.ycombinator.com/item?id=21791](https://news.ycombinator.com/item?id=21791)
(note that it was 7% for $15K + a small amount per extra founder at the time;
at that point, it was probably still a good deal for most teams that were
applying)

