
YC W13 Will Be Smaller - jkopelman
http://ycombinator.com/w13smaller.html
======
edw519
_Why was 66 ok and 84 not?_

Maybe it had less to do with magnitude than direction.

I look forward to reading about yc start-ups, but increasingly find myself
shaking my head, wondering how some of them will ever amount to sustainable
businesses. I've always attributed this to the fact that yc must know a whole
lot more than me.

But pg's recent disclosure that so many yc start-ups have co-founder issues
really got me wondering. I find it unimaginable that any team can work itself
into such a good position and then blow it away over seemingly petty issues.
Is it possible that some trend other than scale is at work here?

~~~
pg
There have always been lots of startups working on crazy sounding ideas, since
the first batch. I don't think the proportion of those has changed.

(If anyone is wondering why we don't just reject all the startups with crazy
sounding ideas, Airbnb was one of them.)

~~~
xoail
I don't understand why Airbnb was considered as a crazy idea and I hear
literally everyone refer to it as an example of crazy idea. I always thought
it was a genius idea from the first time I heard about it. But the way I see
things, it doesn't matter what the idea really is as long as there is a market
(not too big nor too small) and the team's ability for solid execution of the
idea (kick ass product, partnerships and vision).

~~~
paul
You probably heard about it post-yc. It was initially a thing for renting out
airbeds (airbedandbreakfast.com)

~~~
bwilliams18
I think even that is a great idea...albeit with a much smaller market
capability than what airbnb is now.

------
jcdavis
I'd be curious to know what broke. Companies in the last batch having a harder
time getting funding?

~~~
pg
The short version is that we learned YC in its then form was O(n^2). As the
batch size grew, it was hard for every partner to know exactly what each
startup was doing. Especially since things often change fast at startups.

To grow bigger we have to (a) make it easier for each partner to know what
each startup is doing, or (b) make it unnecessary. The answer will probably be
a bit of both.

The symptom was not startups having trouble raising money (that seems to be
working about like it usually does) but us partners always feeling confused.
We were not ahead of the aircraft in the way we'd been in the past.

~~~
charlieok
Sounds like you've gathered a fair amount of your own data similar to what the
“Startup Genome” project is aiming at.

[http://techcrunch.com/2012/11/20/startup-genome-ranks-the-
wo...](http://techcrunch.com/2012/11/20/startup-genome-ranks-the-worlds-top-
startup-ecosystems-silicon-valley-tel-aviv-l-a-lead-the-way/)

This would definitely make for interesting reading if/when you choose to share
details.

Also, it sounds like at least part of the Y Combinator size issue is a version
of Dunbar's Number, applied to business rather than social relationships.

<http://en.wikipedia.org/wiki/Dunbar%27s_number>

~~~
pg
We wouldn't want to share everything on our list of predictors of failure,
because some would stop working if applicants knew about them. Some though are
things applicants could only fix by actually making their startups better, so
I should probably write something about any of those I haven't already talked
about.

~~~
Eliezer
A brief bullet-point list of the ones you can talk about (both those you have
and haven't written up already) which have been statistically validated at YC
sounds overwhelmingly valuable.

Including the Ns would be even more overwhelmingly valuable. I.e. I can
calculate a Bayesian likelihood ratio and get some idea of the confidence from
e.g.:

* Founder has green hair: Successes 10/80 Failures 40/122

However I would much rather _have_ the brief bullet-point list than _not have_
the bullet point list with lovely numbers attached.

------
ivankirigin
You mentioned looking for predictors of failure. What have you learned since
writing this essay on mistakes that kill startups?
<http://paulgraham.com/startupmistakes.html>

------
rdl
I wish there were a way you could publish the predictors of failure in a way
which wouldn't let people "game" the system unreasonably.

Actually, I think you have always published many of the predictors of failure.
<http://www.paulgraham.com/startupmistakes.html> seems like a good start, but
there are probably more specific indicators during an interview or during 3
months before Demo Day.

The ones which seem most relevant are all variants "not making something
people want" -- either not making something effectively at all, or that which
you make is a bad idea/market, or making something which is a good idea but
crap implementation. Obviously several potential causes of each.

------
tomasien
Is there any chance that there's a small "valley gold rush" effect going on,
sort of what happened in the late 90's and early 00's in SV when people saw
the valley not as an opportunity to build something awesome but rather ONLY to
get funding and get rich?

From what PG seems to be saying, it's more of an organizational problem, and
I'll take him at his word. However, I just feel like I've seen a lot of
(admittedly impressive) people applying to YC because they see it as the path
to easy VC funding and lots of press only. And maybe a resume booster. I can
see the effects of that being that it becomes harder to identify who is
earnest and who is not, especially with such impressive people throwing
themselves into the pool.

Either way, I think it's nothing but a positive to see YC continuing to
innovate and tweak.

~~~
paul
I think that there's an element of that. People who are just joining yc for
the name are there for the wrong reason.

~~~
jbooth
Considering that you guys had the same funding formula (7k for 7%, give or
take) in the funding dark ages of 2004-2005 as you have now when it's much
easier to raise money, I think everybody who takes a deal from you, as opposed
to better terms from someone else, is there at least partially for the name.

~~~
paul
Certainly the name has value, and smart founders will use that, but if that's
all they are after, then they're missing the most valuable bits (and are
therefore probably not very effective founders, and a bad investment).

------
passedover
Our company interviewed for W13 and was not accepted. Some thoughts:

If you want to make important changes that could affect a startup's interest
in accepting YC (financial terms) or make it much harder to get in (even at
the interview stage) than it has been in the past you have a duty to do so
before you hook hundreds of entrepreneurs into committing to sit with you for
10 minutes.

It was a good experience to prepare for and attend YC's interviews. However,
it took valuable time away from the most important people in our company, both
from a preparation standpoint and a distraction from execution.

Our company is based on the west coast, and the $800 in travel reimbursement
did not cover our costs to attend (we went ~$200 over and were very lean. You
upped the criteria, lowered the reward and didn't completely cover the cost to
try out. Small dollars and a few days matter a lot to a company at our stage.

It is one thing to tweak your program and make it harder to get in. It is
another to do so in secret or after you've gotten entrepreneurs' hopes,
dollars and time committed to trying.

I hung out at the YC office before and after our interview, and the
environment is not like you project:
<http://static.picwing.com/18075/e_106219_t540.jpg> It is actually pretty
ruthless, and I picked up a sense of realized power and eliteness.

As an example, YC put a really nice selection of organic-looking food right
next to entrepreneur registration table. This food was not for the
entrepreneurs, yet it was on full display. I approached this food by accident
and was actually told by a YC staff member (in a tone that suggested a silly
mistake) that there were "bits and scraps" available on the other table for
us.

That is kind of what it felt like in this process. A bounty of food that is
kept within sight, but actually quietly kept quite far out of reach. It ended
up feeling not that much different from pitching a traditional VC.

~~~
eduardordm
I never pitched a VC. I actually never met such mythical creature, maybe you
were about to touch his unicorn salad. Anyways, explanations for this:

\- they are actually giving a heads up on how most of people will treat you
or;

\- there are just too many interviews and no time to make anyone fell
comfortable.

Edit ====

Anyways, I remember in 2006 when I barely could speak english and was doing a
master degree in the US. I needed to find a part time job to help me pay for
unexpected expenses.

There was an interview at an investment firm: I felt like I was worth less
than nothing. I almost cried after leaving the building. Anyways, 20 minutes
after I left they called me and offered a position.

When we feel vulnerable anything people say to us we tend take it the wrong
way or overreact.

Good luck with your venture.

------
rdl
Potential ways to get past the 66 bottleneck: 1) Try it in the winter. I
theorize (without as much data, obviously) that "summer projects" are more
likely to be drama filled than something Jan-Mar. 2) Consider 2.5 or 3
classes. You'd still end up with 150+ companies per year. I know it would sort
of screw with the current schedule, but there could be some overlap, although
at the cost of partner happiness. Maybe have the .5 session be split over a
longer period of time, with interviews happening slightly offset from S and
demo day slightly offset from W. The longer period would be useful for certain
kinds of startups. 3) Invest in a human cloning startup. Once there are 80
clones of each partner, scaling becomes easier. This may take tens or hundreds
of years to be effective.

~~~
bsimpson
But would the defective PG clones in the early years fund too many bad
startups?

------
msrpotus
I'm curious: what did you find were the predictors of failure? Was it a matter
of focusing on problems (with the assumption that the teams with the least
problems were, on balance at least, more likely to be successful)? Or did you
find that there were certain counterintuitive factors that made a team likely
to fail, even if they seemed solid?

~~~
ed209
I'd be interested in this too. I'd like to know if it's in a format where you
could judge yourself/your own idea and see what score comes out.

------
buro9
Maybe it is the large batches themselves. What if, instead of a bi-annual
intake of two large batches YC moved to an always open intake with classes
starting every month. That is, to stream many small batches continuously.
Effectively running 12 academic years concurrently rather than 2.

Everything from lean manufacturing to project management has come out in
favour of the small batch size, maybe the thing to do is to work out how to
split the existing large batches into many smaller batches.

This might also help increase your learning as you would have a much tighter
feedback loop.

------
tptacek
50 is still a huge number. Airbnb's class, just 4 years back, was only 16.

~~~
sjtgraham
I expect significantly more people applied for this batch than Airbnb's batch.

------
Uhhrrr
Might this have something to do with Dunbar's Number of ~150?

<http://en.m.wikipedia.org/wiki/Dunbar%27s_number>

~~~
derrida
An idea I had to scale beyond this number might be to use a spaced repetition
system in conjunction with an email client
<https://en.wikipedia.org/wiki/Spaced_repetition>

------
sjtgraham
> We don't plan to stay at 50, or whatever exact number of startups this batch
> ends up having. We've never had a predetermined batch size; that's just the
> number we ended up with when we tightened our filters as much as we could.

Congratulations to those of you that were accepted into W13. It looks like W13
was the most difficult to get into yet.

~~~
juniorer
Did you interview? Presumably you spoke to previous interviewees. Any
difference in questions that you noticed?

~~~
sjtgraham
Yes, I did and unfortunately I didn't get in. The interview was nothing like I
expected, i.e. it was just PG and I talking about the idea. I intend to write
a few blog posts covering the different stages of the application process as
long as PG doesn't mind.

~~~
eduardordm
That would be awesome.

------
talkingquickly
It would be very interesting to hear more about what the key predictors of
failure you looked for were?

------
tlrobinson
I'm curious how you fix the post-lunch bias without overcompensating? Eat
small snacks throughout the day instead of lunch?

~~~
StavrosK
Is this from "Thinking, Fast and Slow"? If so, how do you know it's not
actually the break/rest that helps, rather than the food? I don't see any
controls in that experiment take a break of equal length but not eating, and
others who ate without a break.

~~~
ianstormtaylor
Didn't "Thinking, Fast and Slow" mention that by injecting glucose again you
got back to the initial state?

~~~
StavrosK
It might have, though I don't remember anything like that. I did look, because
I disputed the conclusion, but I might have missed it anyway.

------
blueprint
What does it mean that the interview process is "decentralized"? Seems pretty
centralized to me: only YC partners or friends of partners do the interviews,
and they even require traveling to Mountain View in general

~~~
pg
Three parallel interview tracks.

~~~
reledi
How is it determined who is on which of the three interviewer groups? If it's
static, is there a group with a higher acceptance rate than others?

~~~
pg
They're shuffled, and then afterwards we swap a few to tracks where the people
have domain expertise. E.g. most of the hardware startups got moved to our
track, because we had Trevor.

------
salimmadjd
I think 50 is even a large number. YC's real value to investors is
selectivity. As long YC maintains that brand, investors will continue to have
a YC-biased perception making it easier for these startups to raise funding.
The same selectivity makes getting into YC enticing as it validates them and
their ideas. I'm sure the reason behind the cutback has been scalability ( I
made that comment before and it made PG defensive a bit) however, the move
ensures the longevity of YC's mystique.

~~~
sgarg26
Their number sounds like it was based on the partners' personal feelings of
being able to be of service and value to their startups, their portfolio. It
seems that the aspect of YC the partners are trying to preserve is their
ability to be personally involved to some degree rather than just straight
selectivity.

------
hiddenstage
Did YC bring in less interviewees this batch than summer 2012?

~~~
pg
Slightly fewer, because we used the last 3 interview slots each day to have
another track re-interview startups we were on the fence about. That was one
of our new techniques for avoiding mistakes. IIRC there were 20 slots both
times, so we therefore invited 17/20 as many startups as last time.

~~~
hiddenstage
I assume by decreasing the amount of startups interviewed in order to re-
interview a few of the startups, you guys believe that you make more mistakes
in the interview process than in the application review process. That is kind
of surprising.

------
kellysutton
I think the math behind YC and incubators can sometimes falsely justify an
increase in the quantity of companies accepted.

If you look at each class and say, "Well, last year we had 5 breakouts out of
50. Why not increase that denominator to change the numerator?"

Unfortunately when you do this too quickly, the numerator doesn't change. It
stays the same or sometimes even decreases (in my example, holds at 5).

Staying focused while growing is a very difficult thing to do.

------
brudgers
At 86 companies YC is more likely to hit up against the limits of Dubar's
number than at 66 companies (or 50) - assuming, of course, that Dunbar's
number is meaningful.

As an aside, funding to the point of creating financial carcasses in the
previous cycle could have effectively lowered the Dunbar number for that
batch.

<http://en.wikipedia.org/wiki/Dunbars_number>

------
perry5000
I think that the real story is that alternative investments (e.g. venture
capital) have really dried up. Venture capital firms across the valley are
having a very hard time raising cash. Groupon, Zynga, Pandora, and the
disappointment with Facebook's IPO have pushed away a lot of institutional
investors. I don't see capital returning anytime soon until we see some big,
successful Silicon Valley IPO stories.

(insider)

~~~
pg
Actually the thing that struck us most this last cycle was the huge number of
(often unpromising) startups that had already raised several hundred k. If
anything it seems like there is a glut of early-stage money, not a dearth.

~~~
rdl
It would be an interesting control if you re-interviewed YC companies 6, 12,
24 months out from YC, to calibrate the interviews. I guess you can just watch
the video of the interviews of the successful or unsuccessful startups.

------
deepkut
It's interesting that Josh Kopelman submitted this.

------
aneth4
I'd guess there is some correlation with time spent on HN, times of access,
comment rate, language usage, etc. HN may be one of the largest data sets on a
candidate that YC has, so as big brotherly as it sounds, I can't imagine YC
could resist analyzing it.

It might sound trivial, but it is probably a good indicator of impulse
control, attitude, and cleverness.

------
ig1
What were the predictors of failure ?

------
rikacomet
I think it was the right decision, as said, the result of going mainstream,
has started to show, if instinct of more than 1-2 partners say that its better
to slow down a bit >> rethink >> adapt then its best to do so. Slowing down
won't hurt you in any way.

Perhaps the answer is quality, due to a overshoot of no of companies funded,
the quality went down, and then it hit you guys, that 'hey! the last of many
haven't been any AirBnB or Reddit' so its better to slow down a bit, and let
the levels go up again on it.

"Excessive fishing in a lake can be best balanced by under fishing" that is
what this looks like to me.

------
namank
Give yourselves more time by adding a month to each session. Reduce the number
of sessions per year and increase the duration of each.

------
peterjancelis
Dunbar's number is the amount of social relationships an average human can
have: 150.

Maybe at 84 startups the total number of founders went above 150?

~~~
simondlr
The whole program along with the partners probably pushed it above 150. As is
the case with many groups going past 150, you'll have to start implementing
other social structures besides relying on personal relationships to keep it
going at the same pace.

Going to be interesting to see what happens, especially due to Y-Combinator
being rather a unique case in this regard.

------
nns1212
I am happy with the decision.

Having a lot of startups in every batch reduces the focus of YC partners In
these situations, even startups with a very good potential (like Airbnb &
Dropbox) won't be able to achieve much.

YC can increase the number of partners, advisors, mentors or cycles per year
(instead of diluting their time over a lot of startups).

------
senthilnayagam
YC has gone mainstream , highly competitive, but so are the egos of the
cofounders, not everybody is willing to work straight for 12-24 months for a
potential exit on the same idea

~~~
jamest
12-24?

If you're successful you'll be working for far longer than that. Even if
you're not successful good teams will continue to iterate or change ideas,
which will often take far longer than 24 months.

------
alexirobbins
What are the indicators of failure that you focused on?

------
anovikov
Just curious what kind of failure it was? They can't say 'nobody of the
accepted startups succeeded' because it's too early to tell that.

------
ishake
What's considered a failure? Startups that broke up, shut down or didn't
raise? Isn't it too early to tell for most companies?

------
Tichy
Curious: what methods are you using for your analysis? Feeding data in some
software, or just pen+paper+brain?

------
replayzero
I think smaller is always better, it would be fine to take on 10 companies and
just hot house them. I think that would be awesome.

------
kenjackson
Were the choices announced?

------
BallinBige
manage growth --- always the hardest thing for startups and those around them

------
pebb
Must be due to the Series A crunch eh?

