
Y Combinator Model “Too Messy” for Microsoft, Says YC Founder - jmorin007
http://www.xconomy.com/boston/2008/08/08/y-combinator-model-too-messy-for-microsoft-says-yc-founder/
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Maro
"By supporting the startups in return for some stock and a _commitment to use
Microsoft development software, product platforms, and operating systems_..."

MS on the desktop is okay, Visual Studio is in a class of its own, but using
their server-side stuff? And paying for it? What's he smoking?

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bullseye
My guess is that Graham believes Microsoft couldn't/wouldn't provide proper
incubation for an inexperienced group. They'd immediately try to impose a "big
company" mentality. As a corporation, he is probably right.

Microsoft could fund an investment group that essentially used the company's
influence to help startups externally. If that same group shielded a startup
from Microsoft's corporate influence internally, I think they could be a
powerful incubator, not to mention a phenomenal asset. Unfortunately this will
never happen.

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hooande
I think the YC model wouldn't work for a company like M$ because there is way
too much drama. Founders get into fights, startups make horrible paperwork
mistakes and ideas and markets change all the time. There is way too much
counseling and looking after required to really do a YC style investment
program with a large number of young founders.

M$ would do better to give money to a company like YCombinator and just
encourage all the startups to use microsoft products.

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axod
"...and just encourage all the startups to use microsoft products."

I can't see that happening any time soon.

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joseakle
or Microsoft should invest in YC startups.

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time_management
My relatively uninformed hunch is that, per hour of time expended, YC is not
nearly as profitable as traditional venture capital. YC probably gets a much
better nominal return-on-investment, but a more modest return-on-effort. YC
has to provide mentoring in addition to capital, which means that there's an
inherent bottleneck in the amount of business it can do.

I suspect Paul Graham is running Y Combinator not because he wants to maximize
his profits, but because he enjoys mentoring bright young entrepreneurs. So
although his return-on-effort is lower than it would be in traditional VC,
this isn't problematic, because the utility of said effort is positive, and YC
is presumably more than profitable enough.

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pg
How we'll do compared to VC funds is a hard question to answer because of the
huge variation in their performance. The median VC fund actually loses money.
I hope we do better than that.

It's true that we're not doing YC mainly for money, though. But we're not
doing it just for fun either. The main thing that drives us, I think, is that
it seems an interesting hack.

