
How Y Combinator Started - llambda
http://ycombinator.com/start.html
======
abalashov
_So doing the winter batch in California seemed like one of those rare cases
where the self-indulgent choice and the ambitious one were the same._

There is nothing more heavenly, more sublime than that rare situation in life
in which the self-indulgent choice and the ambitious choice align. There's a
keen insight to be had there.

Unfortunately, those moments are very rare.

For instance, at least, in terms of my personal temperament and disposition, I
have found that I most enjoy life, from a "human" perspective, in places that
are terrible places to do business, and may, in fact, have very dysfunctional
local economies, high amount of corruption, etc. I'm the kind of person that
has the most fun in the colour of Greece, Italy, southern Spain, Portugal,
Argentina, etc. I can appreciate the comparative orderliness and clockwork of
Teutonic and Anglo-American civilisation, but it doesn't make me happy, and
yet I need that whole universe in order to sustain my livelihood in any
practical sense. But everything else about it doesn't make me very happy.

I wish there were some way to reconcile those two. I haven't found any place
that has an optimal intersection of cowbell on the one hand, and practicality
on the other. Maybe it exists, but I haven't found it. However, my natural
sense is that there is a inherent, perennial tension between the two.

That's why that particular phrase really got me. I wish dearly for such a
Shangri-la.

~~~
MaysonL
Berlin?

~~~
sneak
Berlin makes a lot of noise about its startup culture, but it's vanishingly
small. The winters are absolutely horrible. Also, the city is full of Germans.

(I've lived here for four years.)

------
prayag
"If we'd had enough time to do what we wanted, Y Combinator would have been in
Berkeley."

As a co-founder of Berkeley based company from YC S11 batch. Darn it! Berkeley
would have been a great place to start YC. With Berkeley campus supplying a
lot of CS students and the easy-going counter-culture that Berkeley provides
(which gels well with counter-intuitive funding strategy of YC). It would have
been great! Of course, the VCs would've to trek to Berkeley to attend demo
days but that filters out the people who aren't serious. :)

~~~
mhartl
I had the opposite reaction: "What good fortune that they didn't have enough
time!" Not that Berkeley isn't great, but it isn't in the Valley. It's hard to
imagine YC being quite as successful if it weren't right in the thick of
things.

------
tobtoh
I really enjoyed PGs post for the detailed description of the thought process
behind the creation of YC and how they took those initial steps (including
getting the funds together and deciding how to run it).

A lot of 'this is how I became successful' biographies seldom provide that
level of detail. Whilst I still find them interesting, I found PGs writing to
be more inspirational (to me anyway) because it's almost like a 'how-to'
guide.

~~~
kinleyd
I echo that sentiment. :)

~~~
kinleyd
Heck, why would anyone down vote a comment which supported a nice comment by
someone else? Go figure.

~~~
kinleyd
Now THAT down vote reflects a really vicious temperament!

~~~
lancewiggs
The downvotes are because you are not adding to the core conversation. The
community standard is that if you support a comment then up-vote it, and
that's it. Additionally if you have something to say in response then write a
comment.

~~~
kinleyd
Thanks. That's a decent explanation. :) I did read the Hacker News Guidelines
but apparently not well enough. I definitely missed this: "Resist complaining
about being downmodded. It never does any good, and it makes boring reading."
Apologies, all.

------
quasistar
'Cambridge Seed' sounds like a reality TV show about a sperm bank that only
accepts donors from elite universities ;)

Congrats to everyone who has ever applied and the YC team! You have changed
the rules of the game for the better...

------
rms
>If we'd had enough time to do what we wanted, Y Combinator would have been in
Berkeley. That was our favorite part of the Bay Area. But we didn't have time
to get a building in Berkeley.

I'm in Berkeley and quite like it here but that's also because I mostly avoid
networking events. Berkeley's startup culture is a bit weird because the city
is in some ways anti-software business. If YC were here, it would have been
enough of a political force by now to have actually shifted the epicenter of
Silicon Valley around enough for Berkeley to be taken more seriously as a
place for startups.

------
Aaronontheweb
I was a junior in college (summer of 07) and been working a disillusioning
summer job as an undergraduate CompSci researcher when I first read about
YCombinator and Justin.tv.

Knowing that there was a place out there for entrepreneurial geeks like me
helped tipped the scales for me; YCombinator plus Hacker News itself has made
me feel like I am not alone in trying to make it as a geek-entrepreneur and I
am glad for it.

YC + HackerNews has made the tech world feel like a smaller, more accessible
place for me.

------
staunch
Happy birthday YC & Co. Been a fan since it was publicly announced.

And not to take anything away from YC's effort but I find it rather amusing
that first time some good hackers take their turn at improving the VC industry
they transform it and become (arguably) the most successful investors in it.

I wish more people would try to improve the VC industry. There's at least a
few YC-level waves that could occur. AngelList the best example.

~~~
DilipJ
what I wonder is if/when YC will start to take institutional money....that's
what's going to take YC up to upper caliber of VC funds.

~~~
karamdeep
sequoia is already an investor

~~~
DilipJ
no, I meant like direct to institutions like pension funds.

why would a pension fund give money to Sequoia, and then have them give it to
YC? that's an unnecessary management fee the pension funds have to pay

~~~
nl
Because the pension funds want to invest such huge amounts of money that I
suspect Y Combinator wouldn't know what to do with it.

If a pension fund wanted to invest $250m in YC, they'd have to scale up by so
much I doubt it would work the same.

~~~
DilipJ
so are you saying there is an upper limit to entrepreneurship? I don't think
so.

I wonder if pg has written anything about this, if there is some point of
diminishing returns in the lean startup scene

~~~
vecter
I think there's an upper limit to the _quality_ of entrepreneurial mentorship
you can give, mostly as a function of (1) the mentors and (2) the mentor-
entrepreneur ratio. Right now, YC invests in roughly $20k/company * 60
companies/batch * 2 batches/year = $2.4M per year. If they were forced to
invest 50-100x that in a year, it'd be really hard to find 50-100x more
mentors on the same level as the existing ones.

------
OoTheNigerian
Very happy read.

What this says me, and hopefully you is this: "that inconsequential thing you
are staring today.. do not be so sure it is that inconsequential. Most of all
just do it"

------
zzaman
"We realized early on that what we were doing could be national in scope and
we didn't want a name that tied us to one place."

Personally I find that one of the most important reasons to think long and
hard about a name. Most startups go through many pivot points until they
finally get it right. Choosing a name that is overly representative of the
present business model can lead to team lock-in that could spell the death of
a company before it even gets going.

It seems a wiser decision is to go with a name that represents a startup's
future ambitions instead of its present circumstances.

------
callmeed
_"But the founders in the first batch turned out to be surprisingly good. And
great people too. "_

I'd love to read a "where are they now" post on the first couple batches of
founders, along with some quotes from them.

~~~
ig1
Reddit - Acquired by Conde Nast.

Kiko - Acquired by Tucows, team founded Justin.tv

Loopt - Raised 15million in Series A and B financing, at it's peak was valued
at $500m, sold for $40m to Green Dot

Simmery - Closed. Founder went back to uni.

Infogami - Merged with Reddit.

MemAmp - Never launched, one founder (Chris) joined reddit one (Zak) went back
to uni.

FireCrawl - Never launched, team founded TextPayMe and got acquired by amazon.

ClickFacts - YC stake acquired by private investors because YC wasn't a good
fit. Company still exists.

~~~
chubot
Wow, that's phenomenal. In 7 years, out of 8 companies there were 5
acquisitions (and a couple mergers). I'm sure any VC would be ecstatic to have
that kind of success rate.

Reddit is the most prominent. It's had a huge impact although from what I
understand it hasn't done extremely well financially.

~~~
larrys
"Wow, that's phenomenal."

That's quite a halo effect that has prevented you from seeing the true
"success rate".

Where are you getting 5 acquisitions from?

Reddit, Loopt basically made out.

Infogami merged with Reddit. That's essentially a save face maneuver and
doesn't exactly signal success.

Clickfacts - "YC stake acquired by private investors" doesn't sound like that
would be a win but a break even. More like "take it off our hands".

Kiko - Sold in an ebay auction for 258,000.

<http://gigaom.com/2006/09/05/tucows-bought-kiko/>

<http://tucowsinc.com/news/2006/09/why-we-bought-kikocom/>

I'd give it 2.1 out of 8.

~~~
cperciva
I don't know what Reddit sold for, but while Loopt's $40M was far down from
its earlier $500M, it's still a hell of a lot more than the ~$300k valuation
it would have had when YC invested in it.

~~~
vecter
Loopt raised $32M in funding [1], so a $40M exit is roughly scratch.

[1] <http://www.crunchbase.com/company/loopt>

------
zbruhnke
It's amazing to see the humble roots of YC and what it has grown into now. As
a person who made it through 2/3 of the previous batch I can honestly say
there is no other experience like it and solely the intelligence of the people
you are placed in the same room as week in and week out is enough for you to
be at least as ambitious as the founders of YC were. Quit your job, make the
leap, build something great.

~~~
ph0rque
I'd love to read your story on how you only made it through 2/3, and not the
whole YC session.

~~~
zbruhnke
you probably wouldn't honestly. just a simple founder dispute which lead to me
leaving, nothing too eventful there

~~~
ph0rque
_Au contraire_ , founder disputes are something very few entrepreneurs write
about, especially YC-caliber entrepreneurs; and yet anecdotally, they happen
rather frequently. I stand by my assertion that writing a blog post about it
would be good; please consider doing so, _especially_ if you have insight on
how to avoid or prevent it from happening.

------
julianb
_It's hard for people to realize now how inconsequential YC seemed at the
time. I can't blame people who didn't take us seriously, because we ourselves
didn't take that first summer program seriously in the very beginning._

I attended the "How to Start a Startup" talk in 2005. I remember going home
and reading pg's website, the whole thing, cover-to-cover. Later that year I
met Steve Wozniak at the first Startup School held in Cambridge. Woz, Chris
Sacca and pg left a lasting impression on me. I had never witnessed that level
of information density and knowledge sharing. Amazing to look back at those
humble beginnings. Always grateful for YC and the HN community.

------
brudgers
One of the things that I noticed is how YC's opinion regarding patents has
evolved since its founding.

>" _If you're accepted, we'll deal with the paperwork for you. We'll
incorporate you, get you a corporate bank account, supply simple, generic
employment agreements for you to use, and so on. We can give some advice about
patents, though you don't have to deal with that in the earliest stages; you
have a year after making a discovery to file a US patent application for it._
" [<http://ycombinator.com/old/sfp.html>]

However, the best part of the story was the I'm-quitting-my-job smile.

~~~
jl
As he wrote this, PG asked me if I remembered the chronology of certain things
and it was very hard. So much is blurred together in my mind. But I remember
the night we decided to start YC and this photo.

It wasn't just happiness that I was quitting my job. I was also so excited
about this idea and the opportunity to work on something that could make a
difference in the world.

~~~
brudgers
It shows and I wasn't intending to trivialize what I know was a complex
decision. [edit] There's nothing quite like the person one loves confirming
that it truly is for better or worse.[/edit]

Congratulations on a job well done.

------
toddnessa
First, I wanted to say Happy 7th birthday to Y Combinator. So, happy birthday!
Before I even knew there was a Y Combinator, I began learning of innovative
companies such as Stripe that I could get excited about implementing in
building the platforms for my own businesses. Scribd was a helpful resource
for me while working to finish my MBA as well. After applying, I learned that
both of these companies were Y Combinator alumni. A real benefit of the
process for me has been gaining an awareness of more companies like these. Y
Combinator has helped facilitate a cooler world. Thanks for that.

------
ry0ohki
If you are interested in those early years, there is also some video footage
of that first class (and interview with PG) in Aardvarked, the Joel Spolsky
video made that same summer:
[http://www.youtube.com/watch?v=0NRL7YsXjSg&feature=playe...](http://www.youtube.com/watch?v=0NRL7YsXjSg&feature=player_detailpage#t=2941s)

------
hef19898
SOmetimes, opportunity meets preparation, or so the saying goes. When things
fall into place and fit, usualy great things emerge. And that happy smile,
even it would have been only for that moment and one summer batch, I think
most people involved it would have ben worth it. Happy birthday and continue
on like you do!

------
SeoxyS
Fantastic read. It's really interesting to hear about how Y Combinator started
much like a startup itself. Today we take YC for granted, but 7 years ago that
concept must have been extremely novel and easily dismissed. It's hard for me
to imagine the modern tech world without YC, though.

------
XionDark
Speaking of good ideas, does anyone know a good way to save/record an idea? I
always think of one at the most inopportune time and by the time I have a
chance to write it down I forget parts of it. Is there an app or service to
help me?

~~~
talkingquickly
A notebook?

No seriously get one of those tiny (1/3 A5) ones which fit in any pocket, then
all you have to do is remember a pen!

------
guynamedloren
Happy birthday YC! It's awesome that YC is as scrappy and as startup-minded as
the hackers they fund. They stick to their roots. They talk the talk _and_
walk the walk.

now pg, please put some left and right padding on those static pages =]

------
barrynolan
Interesting how YCs very first web-statement in 2005 remaines true and
current.

[http://web.archive.org/web/20050324062234/http://ycombinator...](http://web.archive.org/web/20050324062234/http://ycombinator.com/)

~~~
pg
Wow, thanks for that link. That was before we even had a logo. I should go see
if we have that file somewhere.

~~~
barrynolan
My pleasure PG.

Wayback is instructive for founders. If ever you doubt the value of what
you're doing, and fight desires to hold fire and perfect more features, the
wayback machine is a great reminder that those companies that succeeded
started somewhere less than minimal too, and executed on from there.

------
skmurphy
"Initially we didn't have what turned out to be the most important idea:
funding startups synchronously, instead of asynchronously as it had always
been done before. Or rather we had the idea, but we didn't realize its
significance. We decided very early that the first thing we'd do would be to
fund a bunch of startups over the coming summer."

I wonder what the best batch size is: each cohort seems to be larger than the
last. When does it makes sense to do three, four, or six a year as smaller
batches.

------
psycho
Thank you, Pail and co. You're doing great things not only for those who apply
and join YC-family but for the startup community all over the world. The great
thing is that you've found something that helped you to become more rich and
to help the humanity (at least its geek part :)) in some way.

------
jawr
Through the "rabbit hole" effect I read pg's start.html page.. some great
insight which has given me more confidence with my own endeavour. Thankyou.

------
chpolk
Great read, amazing to see what YC has grown to in 7 years and how it has
shaped tech startup investing.

------
pknerd
What companies emerged from first batch? Can anyone tell and their cofounders
name?

------
revorad
That's such an encouraging read.

~~~
happypeter
Yeah, the story is absolutely inspring. I will copy this in China! Money does
not go against freedom, money is part of our freedom.

------
cs702
pg: thank you for sharing this.

~~~
kinleyd
Many thanks from me too!

------
marcovaldo
Hurrah! War is Over! Upvote to the Googolth degree! To be brutally honest, it
concerns me that dissent on HN is not welcome.

