
YC Updates and Additions - sama
http://blog.ycombinator.com/yc-updates-and-additions
======
staunch
Silicon Valley is dominated by a few big tech companies that hire tens of
thousands of employees they don't really need, in large part just to keep them
out of the hands of a competitor.

With Alphabet, Inc., Google is in the process of decentralizing itself into a
version of YC. They're essentially VCs now. At some point someone (maybe
Alphabet) is going copy the YC model effectively and scale it up to tens of
thousands of startups. It's just too damn profitable and efficient to not
become the standard way Silicon Valley works.

It would be neat if in a few years all the big tech companies are basically YC
alternatives and most people work for a small startup that actually _makes_
something.

~~~
tptacek
I don't know if there are companies that do this (I'm not saying there
aren't), but this does not match my ground-level understanding of how and why
big tech companies are hiring. The ones I'm talking to are hiring because they
are constrained on what they can build by the availability of specific kinds
of engineers in their organization.

Zero is the number of companies I've talked to who have ever mentioned
competition with other tech companies as a recruiting concern. I'm sure that's
A Thing That Happens, particularly in executive hiring, but I don't think most
companies are hoovering up developers so they can hoard them.

~~~
w1ntermute
> they are constrained on what they can build by the availability of specific
> kinds of engineers in their organization

Can you give any details/examples of what these 'specific kinds of engineers'
are?

~~~
kasey_junk
"ones that can deliver software" would be the constraint at my organization.

~~~
w1ntermute
Well, yes, that's pretty much always required, but I'm interested in hearing
more specific requirements.

------
pbreit
I'd like to see some energy spent on trying to get the hit rate higher. I'm
sorry to see the 5% or 10% hit rate become conventional wisdom in venture land
(outside of obvious moonshots). Companies going through YC have enormous
resources and I think we should hope for a higher percentage of "hits". I
know, easier said than done.

~~~
sama
There is real danger in aiming for that. The way to make the hit rate higher
is to fund safer bets, which are usually not what generate the giant returns.

I'd like to the "slugging percentage" be higher, but I think the hit rate is
perhaps already too high.

~~~
tyre
I strongly disagree.

You can keep a low hit-rate and focus on giant returns by playing the lottery,
but fortunes are built on compound interest and diversified portfolios.

Reducing the number of failures does not mean getting rid of the big winners.
It could mean focusing on large existing industries over speculative, pie-in-
the-sky trends.

Think about ZenPayroll (disclaimer: early employee there, biased.) Product-
focused payroll is not sexy, but the impact is massive and a tremendous
business opportunity. We're now building software for local governments. Not
sexy, huge market, huge impact on humans, clear path to single, double, and
home-run.

My biggest frustration with looking for founding teams chasing these
speculative bets is the sheer waste of human talent. I don't want to see
another all-star team waste their time on bitcoin and food-delivery.

There are real, serious problems with the same upside but whose "failure"
scenario may be a $25m business.

~~~
paul
ZenPayroll was far from an obvious winner when we funded it. This job is so
much easier with hindsight. If you can actually pick the winners better than
we can, there's a giant fortune awaiting you :)

~~~
tyre
I'm not saying that ZP was an obvious winner when you funded it, because you
didn't even fund it!* And that's kind of the point.

The companies that get into YC are often speculative in their ideas. Maybe it
is devaluing the idea over the execution. Maybe it is the belief that getting
in early to a growing trend is more valuable than reinventing an existing
idea.

Regardless, the result is great teams of founders who think the key to success
is a crazy idea. Sometimes crazy ideas work (AirBnB was kinda nuts at the
time) but there seems to be a heavy weight in companies funded towards those
types of investments versus the ZenPayrolls. Which tends to attract the same.

* They were Switchboard Labs at the time, doing something totally different.

~~~
pbreit
I don't think AirBnB was ever even slightly nuts. VRBO had been around forever
and couch surfing already existed.

~~~
paul
It's all easy with hindsight. It was much less obvious at the time:
[https://medium.com/@bchesky/7-rejections-7d894cbaa084](https://medium.com/@bchesky/7-rejections-7d894cbaa084)

AirBnb was almost dead when they got into YC. Nobody would fund them, and Nate
had moved to Boston to get a real job.

------
jacquesm
YC is well into 'org chart' territory by now.

~~~
sama
Yeah clarifying responsibilities is just horrible. Jumped the shark!

~~~
jacquesm
:)

I used to be able to place most or even all of you on a mental map but I
really lost track.

Keep at it, you're doing great!

How long until the 1,000th YC company?

(silly base 10 sentiment, but still it would be quite a milestone)

~~~
joshmlewis
I believe Sam tweeted they funded their 1,000th company during interviews in
November.

~~~
jacquesm
You are correct:

[https://twitter.com/sama/status/664484490060795904](https://twitter.com/sama/status/664484490060795904)

Wow. I remember the 500 mark and how long that took. I thought it would happen
in 2016, very surprised the milestone is already passed.

------
kumarski
Growing growing.... wow.

Hoping some biochemists and petroleum engineers added to the team. Would make
YC very all-encompassing.

Physics+EECS seem plentiful.

Biochem/pharma/subsea-hydrology seem to be only areas lacking in expertise.

~~~
jerf
I'm curious what a subsea-hydrology low-funding startup would do? (Honest
question.)

~~~
davidw
Sea monkeys 2.0?

------
applecore
I'm coining a new term for this: _Alphabetizing._

~~~
sama
"Integers" is probably better. 26 might not be enough for us :)

~~~
SeoxyS
You could always pull an Excel and roll over with AA AB, etc.

~~~
nostrademons
Still integers, just in base-26.

~~~
evanb
A very pythagorean stance. All is number, indeed.

------
rdl
Is "YC Core" the official name of the main YC program? I'd never heard of it
before.

~~~
katm
Yes.

------
danieltillett
Has there been anything publicly reported about what happened with the YC
Fellowship program?

~~~
kevin
We'll be making an announcement very soon about the first batch and changes
we'll be making for the future.

~~~
danieltillett
Thanks Kevin. This is a really interesting experiment and I have been very
interested to learn what you guys have learned from it.

------
YogeeKnows
This post could have been a nice visual before and after org chart.

------
jrometty
This is awesome. Where can I learn more about YCR? That's the slice of YC I'm
most excited about :)

~~~
mattkrisiloff
OpenAI is our first supported work! openai.com

~~~
jrometty
thanks!

------
jaf12duke
I've been so impressed by the ambitions of YC since sama took over, as well
the team that's been built to support it.

pg's biggest contribution to YC may be finding sama and giving him the reins.

------
auston
Congrats @paul - big fan of everything I've seen from you.

------
jayzalowitz
Minor nitpicky editorial: Perhaps put specifically what you manage as a
parenthetical around "investment programs" as it may not be clear to a lot of
people.

~~~
sama
Good point, added clarification.

------
fanf2
When I see "update" in a headline from a Silicon Valley business I wonder what
or who they are getting rid of. Or is "An update on X" just a Googlism?

------
evincarofautumn
When do you expect to have more information about YC Research? I am interested
in applying.

------
adenadel
Hi Sam, this isn't really the place for this, but I was late to the party
during your AMA a couple months ago and you weren't around when I asked my
question. I'm reposting it here in hopes that you'll see it.

A few weeks ago I submitted this article
[https://news.ycombinator.com/item?id=10213547](https://news.ycombinator.com/item?id=10213547)
about one of Peter Thiel's biotech investments and the top comment asked "How
does someone very intelligent like Peter Thiel make investment decisions in an
area where he lacks a huge amount of background knowledge?". I'm curious how
you personally and YC as a whole goes about making investments in areas where
you don't have great expertise. For example, how do you evaluate biotech
markets and the YC biotech companies? How did you evaluate your energy
investments?

~~~
sama
1) Build a network of experts you can rely on for evaluation

2) A lot of what makes a startup good or bad translates across different
domains, so even if you can't evaluate the technology yourself, you can still
evaluate other things (e.g. how well the founders communicate, how quickly
they get things done, etc.)

