
How Y Combinator Solves The ‘Credentials Trap’ Problem - npguy
http://statspotting.com/the-true-genius-of-ycombinator/
======
tferris
I faced the credential trap and the biggest problem in overcoming it were my
ex-peers. When I decided to be an entrepreneur and leaving the traditional
path of gathering strong brands on my CV all my peers -- employees striving
for 'big' job titles at popular corporations -- derided me. The last sentence
of any conversation with them was a pitiful 'Good luck man!' and this made me
angry.

The best thing I could do was to stop seeing or meeting them since it crushed
me everytime and I was questioning what I was doing. Once I succeeded being an
entrepreneur and building my own brand looking back was much easier and you
know that you chose the right path and pity you ex-peers sticking on the same
crappy job titles, doing stuff nobody cares about.

YC solves that problem since it's now a huge brand and people tell you in the
first sentence that they are YC alumni but actually any angel or VC who
invests in you (or even cofounders) is gradually solving your credential trap.
Being with other entrepreneurs helps too. So you shouldn't chase the 'YC
dream' too much since it could defocus. As an entrepreneur you have to learn
to be confident without the need of external brands, anyway. Just build
something great, get traction and the rest will come by itself.

~~~
gamblor956
_YC solves that problem since it's now a huge brand and people tell you in the
first sentence that they are YC alumni but actually any angel or VC who
invests in you (or even cofounders) is gradually solving your credential
trap._

For those without the YC credentials, this description of YC is exactly the
credentials problem in a nutshell. In fact, it sounds exactly like the "old
boy's club" mentality that still pervades companies run by Ivy league
graduates. In both cases, once you've acquired the credentials your string of
success (or failures) is not meaningfully taken into account because people
are willing to accept the credentials (rather than your actual track record)
as a proxy your chance of success.

~~~
pg
The difference between the two cases is that in a startup, your customers
determine whether you're successful, and they are not in fact "willing to
accept the credentials."

The only thing being funded by YC automatically gets anyone is a first meeting
with most investors. It won't close the round for you (if only we could
promise that), and it certainly won't get you customers.

~~~
ihopngo
But the majority of YC companies close their round, right? It wouldn't make
much sense for you to leverage them into a great position, just to have them
shot down.

------
jacques_chester
YC is another credential. It's more closely related to the dreaded college
(dun dun duhhhhh) than it is to something like an MSCE.

Let's compare the US college experience with YC:

 _Admission is based on a mix of objective and subjective factors:_ [✓]

 _Temporary Poverty:_ [✓]

 _Build a network of professional contacts:_ [✓]

 _Graduate owing somebody somewhere a big chunk of your potential lifetime net
worth:_ [✓]

 _Put it on CV regardless of whether you do well:_ [✓]

(In Australia it's not as clear. For one thing, Australian admissions used to
be entirely about high school examination scores. No interviews, no essays.
Just the single number, please. Basically like every university requiring the
SAT and only the SAT.)

------
pg
I realize people aren't supposed to care about their own credentials, but
we've noticed at least one legitimate use of them: to convince third parties.
E.g. if your cofounder's parents or spouse had previously been pressuring him
to stop working with you on your crazy project, getting funded by YC can fix
that to some degree.

Though come to think of it, it may not be entirely bad if people are
influenced by their own credentials. Morale is a huge factor in a startup. If
getting some credential boosts someone's confidence, even though in principle
it shouldn't, it may make them more likely to succeed.

~~~
hef19898
Sounds reasonable. Just a personal point of view, but if I were to start a
start-up right now it kind of feels easier, or better less scarry, to do with
YC backing than without.

Not that it actually is easy but the mere fact that you have been approved to
a certain degree by someone who knows better than you boosts selfconfidence a
lot.

------
neya
Getting into YC is not easy - I had applied about two years back, and it's not
just me, a LOT of my friends had applied too, individually, either as sole
founders or as teams, so I am not making up stuff. Some teams that applied,
were composed of some of THE BEST hackers (REAL hackers, not marketers)
programmers, and the best designers, with loads of experience running start-
ups. But they never got in. Neither did I.

Atleast, I applied as a sole founder, so it's reasonable that I didn't get in.
But I was surprised (shocked) to see that even the top hackers/designers never
got in. I wondered why. And then I discovered, it was all about credentials.
None of us were product managers from Facebook/Google/etc.

Here's the thing - This article is irony at best. I want you to understand
that no matter what you do, what skills you have, YC looks into

1) Where you come from.

2) What credentials you have.

YC solves the credentials trap by looking at your credentials on behalf of the
rest. YC is not interested if you have a good idea. YC is interested if you
are a good executer of ideas. And it's a very fair metric. But, the way they
do it is scary at best - Much of the people they select are only top dogs -
(ex) product managers from Google, Facebook or someone from a well-known
company. NO, they don't select everyone this way, but for the majority of the
people they select, this is how it works. And as for the rest that they
select, the ones without credentials, its a small percentage, which means you
have to really compete hard to get in, if you're not from a well-respected
company like Google or Facebook or Twitter.

Worse is the fact that the applications are filtered by the alumnii, hence you
never know what metric they use to select people. But eventually post
selection, you notice that these people who were selected are from some hot
company like Google, Facebook etc.

Paul Graham is a great man, and I have great (enormous) respect for him. It's
because of him that this start-up industry is receiving proper attention. But,
if someone is going to tell me YC solves the credentials problem, etc. then
I'm not stupid enough to buy it. It's simply not true.

If you've watched Ratatouille, you may recall the quote:

"Anyone can cook";

Which means (What it means is what the movie's about):

"Not everyone can become an artist, but, a great artist can come from
anywhere.."

~~~
pg
There are so many mistakes here I don't know where to begin.

For example, we're actually very skeptical of people from Google, and in fact
of people who've worked at any big company for more than about 18 months.

The question I care about most on the application is the one where we ask
about something impressive the founders have achieved. Not credentials, but
something they've done.

~~~
atirip
Why are you so eager to finance J.K. Rowlings second book? The new Airbnb is
always the first book.

~~~
gruseom
This might have been about average for an HN troll if YC hadn't in fact funded
Airbnb.

~~~
jfoster
But mightn't it still be a good point? I'm not sure what the Airbnb founders
had achieved prior to Airbnb, but anyone with a substantial enough success
mightn't need to go through YC next time. For example, once the Airbnb
founders move on, would they go through YC for their next venture? They
probably wouldn't need to, right?

~~~
gruseom
That's not how I read his comment. I read it as insinuating that YC are only
eager to fund derivative companies, as opposed to, say, Airbnb – which they
did fund.

------
gamblor956
YCombinator does not solve the credentials trap, it simply replaces one
arbitrary set of credentials (i.e., test scores) with another (social hacking
skills).

That is, after all, the point of credentials--having credentials indicates a
safer risk but it does not guarantee the likelihood of success.

~~~
pg
YC is only arbitrary to the extent we are stupid, and though we certainly do
make mistakes in deciding who to fund, we have some fairly smart people
expending a lot of effort on the problem; I don't think we simply fund
whoever's best at tricking us into funding them.

~~~
_pius
_YC is only arbitrary to the extent we are stupid, and though we certainly do
make mistakes in deciding who to fund, we have some fairly smart people
expending a lot of effort on the problem; I don't think we simply fund
whoever's best at tricking us into funding them._

True, but an equivalent statement can be made by a decision maker at any other
reputable credentialing institution as well. How is this substantively
different from what an admissions officer at MIT would say?

I think the GP's point is that, for the credential obsessed, "getting into YC"
is just the "getting a Rhodes Scholarship" or "getting a Supreme Court
clerkship" for our milieu. I don't think that is an indictment of YC in the
least.

Ultimately the OP's argument boils down to the claim that YC solves the
credentials trap by ... transforming starting a startup into a credential, as
long as it's done with the YC imprimatur. Hardly a solution at all.

(Ironically, there _is_ a solid argument to be made about how your essays have
done a huge amount to legitimize the act of founding a startup and embolden
erstwhile credential seekers to take that risk, even if it doesn't come with a
name brand institution attached to it. The author fails to make that point,
though.)

~~~
pg
You answered your own question in the next sentence. If we were bad at picking
people, how could we have become the equivalent of getting a Supreme Court
clerkship in 8 years?

~~~
_pius
_"If we were bad at picking people ..."_

I'm not saying you're bad at picking people. And, for partially self-serving
reasons, I don't think MIT is bad at picking people, either.

I'm saying that your ability to pick people is orthogonal to whether or not YC
solves Chris Dixon's credential trap. The "trap" is a pathological behavior in
the seeker, not a claim that credentials are meaningless or that the people
who award them are incompetent.

Moreover, one can't arbitrarily claim that graduating from a top program in
one's field is _merely_ a credential, but completing the top accelerator
isn't. They're both valuable, but neither of them is "solving" the credential
problem.

------
zalzane
I've been personally experiencing the credentials trap pretty recently in a
manner tangential to the OP. I get hardballed to hell when it comes to
internships because I don't come from a good school and don't have a great
gpa.

It really bugs me that despite programming an order of magnitude more often
than my friends, they still have an easier time obtaining internships because
they come from a decent college or waste all their time obtaining a 3.5+ gpa.

Even loading up my resume with all of my programming projects/github is of no
aid, it's like HR doesn't give a damn about how competent of an engineer you
really are, they just hire based off of sorting all the applicants by
gpa/school.

</rant>

~~~
thisone
your friends are obviously not wasting their time keeping their grades up.

Yes, the theory/practice divide can be strong, but you really will need both.

And I say this as some one on the practice side ('I can do it!') who's working
very hard to get the theory side up to scratch ('but I can't articulate why as
well as I should!').

~~~
dopamean
I think when he says "wasting their time" he means that the time wasn't spent
becoming a better engineer. If the end goal was to get a job then, no, they
didn't waste their time. If the goal was to be the best engineer possible then
perhaps they did.

------
niggler
"I got into YC" is the equivalent of "I got into google" in the spectrum of
startups. It is a form of credential and carries all of the negative
connotations, with the added downside of opacity (at least with standardized
tests, the rules are known ahead of time)

Keep in mind that the hardest lessons of entrepreneurship are only exposed to
those who are taking the biggest risks (staking out on your own or with
friends) and are lost upon those who don't have to take a significant risk.

In many ways, you see the differences in the behaviors of VC-backed companies
versus bootstrapped companies.

~~~
codex
There is another downside to the YC credential, which is the paltry funding in
return for a huge chunk of a startup's equity. Is the program worth such a
substantial cost? YC uses its reputation and an almost cult-like glorification
of the startup to create a factory farm for newly minted college grads to toil
away in, each in their own niche. All of these startups come from the same
school, and so they work the same way, using the same ideas, shared among them
--so when the majority of these startups fail, the many graduates leave with
the same monoculture of thought, which lessens the value of their experience.

~~~
kranner
I believe the pool's antecedents and ideas are much more diverse than that. I
recommend the recent book 'The Launch Pad'
(<http://www.amazon.com/dp/1591845297>) as a good introduction to YC.

Personally, if I were in a peer group _any_ of whose members managed to
succeed, I'd be much more motivated to give it another try even if my own
effort had failed, compared to having made the effort alone.

edit: But I agree with you in another way. Hurting for the lack of such a
credential is a self-confidence issue. If you managed to hunker down and make
something on your own, you're already ahead of the unwashed masses. Surely
making a case for that is not so difficult in comparison (to the effort
itself).

~~~
codex
Thank you for this book recommendation. I have ordered it and can't wait to
read it.

------
iradik
Getting into YC does not solve the problem cdixon outlined.

Most startups still fail. Sure if you spent 3 months at YC and then left you
have credentials. What about the next 1-5 years you spent toiling away to make
your startup work with possibly nothing to show for it except experience. At a
certain point, the glow of YC fades and you will be judged on your company's
merit.

------
spennino
The problem is similarly being solved by Venture for America
(ventureforamerica.org) which gives recent college grads the opportunity to
work for startups while being able to put something prestigious/career
building on their resume.

~~~
gamblor956
VFA requires a college transcript (though an unofficial transcript is
acceptable if an official transcript is not available).
<http://ventureforamerica.org/faqs/>. Ergo, it is using credentials as a
weeding mechanism.

VFA selects the startups their fellows work for based on recommendations of
people they know. Ergo, they are using credentials as a weeding mechanism.

VFA may be doing something commendable, but it is most definitely not
eliminating the credentials problem.

EDIT: Furthermore, VFA requires a bachelor's degree (or more advanced), a 3.0
GPA or higher in college (but grad school does not count), and green card or
residency status. Unlike the factors originally discussed (pre-edit), these
are _mandatory_ requirements. All of these are standard credentials filters
for companies hiring students straight out of college.

------
bhntr3
These seem like pretty made up numbers for a blog that claims to be about
statistics:

"And that changes perceptions. 1 out of 10 people with an idea would have
pursued it in 2004. Now, maybe 3 out of 10 would."

~~~
npguy
Fixed that with a 'let us say' in the article. Thanks for pointing that out.

