
Joining a Different YC - liseman
http://blog.ycombinator.com/joining-a-different-yc
======
bbgm
To date YC has not shown a good understanding of the life sciences. It's not
just about a regulatory burden, but the premise of breaking away from
academia, of somehow finding a magic bullet and commercializing it, and
assuming that biology is somehow like software is flawed. Sure the barriers to
entry may be lower, but most science is a slog. There are very few home runs.
Next-gen sequencing was a huge breakthrough and happened very fast by life
science standards. The drivers came both from academia and industry and by all
means it worked really well and remains highly innovative.

I completely buy that a different model of funding will help and could be
successful. I just don't have a good understanding of whether there is a good
understanding of the real scientific challenges and the implications.

~~~
paul
What is your evidence for the claim that, "YC has not shown a good
understanding of the life sciences"? (and what evidence will change your
mind?)

Our biotech investments are currently all too young for something huge like an
IPO, but many are continuing to grow and prosper. For example, Ginkgo just
raised a $45M Series B: [http://techcrunch.com/2015/07/23/ginkgo-bioworks-
takes-on-zy...](http://techcrunch.com/2015/07/23/ginkgo-bioworks-takes-on-
zymergen-with-45-million-in-series-b-funding/)

~~~
bbgm
If you go ask scientists that work in the life sciences, most (at least the
ones I know) will say that there are much more fundamental problems that we
should be tackling.

Synthetic biology is super interesting, and maybe that is the right space for
YC to play in, but it's not the needle mover that the tech crowd thinks it is
going to be. Trying to understand the mechanisms of GNRH receptors and
developing lead candidates that could be potential therapies is just not as
sexy as synthetic biology. Would you fund something in that space?

But this is where my head just starts spinning

"I'm going to help our biotech startups find the partners and tools they need
to make wetware at software-like speeds."

That's not going to happen. It's not how biology works in a lot of others, and
you lose a lot of credibility when you say that. Unfortunately, a lot of
founders say that as well. I forget the name of the company, but there was a
recent algorithms startup that made it sound like they were (a) going to
change pharma with their methods, and (b) what they were doing was new and
unique. None of which was true.

YC (and others) can do a lot here, but I feel you go in without really
understanding the space or the pitfalls. A lot of biotech fails not because of
the business model, but because biology hard, the human body is unreliable and
illogical, and because our understanding of the science is flawed.

I'll get off my soapbox now :-)

~~~
paul
If you know great scientists solving important problems, please encourage them
to apply :)

That said, great research projects do not necessarily translate into great
startups. People doing fundamental research with no clear path to market
likely aren't a great fit for the program at this time.

~~~
w1ntermute
Your problem is that great (life) scientists solving important problems have
no interest in (or need for) YC. They'll just go to Noubar Afeyan, Bruce
Booth, or Bob Nelsen.

~~~
jrkelly
Mmmmm. Flagship (Noubar's shop) mostly incubates it's own companies (same with
3rd Rock) and uses VC partners as founding CEOs -- so if you are a missionary
founder it's not really a fit. In general the pharma VC ecosystem is way more
"professional executives"-minded. It's a stark contrast to tech venture
ecosystem that goes for young founder leadership. So if you are a great,
recently graduated life scientist solving important problems and want to build
your own company I'd still consider YC.

~~~
w1ntermute
I don't think that young founder-driven companies make sense in biotech. Young
founders do well in tech because business model innovation requires contrarian
thinking, which young people (who are naive and lack preconceptions) are more
likely to do. Also, software engineering can be learned at home for very
little money, on one's own, even at a very early age.

In biotech, once the technology has been developed, the innovative component
has largely been completed. And it's the top scientists that have the
institutional knowledge and non-dilutive funding to make that happen. The
reason there are so many unmet needs in healthcare isn't for lack of trying or
a lack of original thought in the top academic research labs - you can be sure
that Bob Langer isn't just trying to up his h-index.

That said, you are right that a recent graduate won't be able to found a
company in that model. That's mostly irrelevant though, since recent graduates
are rarely capable of creating scientific breakthroughs on their own.

~~~
jrkelly
Who do you think is doing the hands-on work in Bob Langer's lab that leads to
that scientific breakthrough (hint - it's not Bob). No reason that recently
graduated PhD/postdoc can't start a company built on their work. The pharma VC
ecosystem has a blind spot for these sort of founders - I'm glad YC is an
option for them.

~~~
w1ntermute
> No reason that recently graduated PhD/postdoc can't start a company built on
> their work.

Except for the minor problem that any IP generated through their work is owned
by the university. And if the IP's valuable, it typically flows straight into
the hands of Flagship, Polaris, Third Rock, & co. The professor might have a
say in what happens to the IP, but the students and postdocs have zero
leverage with the TTO. And how could they? They are replaceable cogs in the
machine (and often in the US on a student/work visa) - Bob Langer is not.

~~~
jrkelly
I won't go down the pharma IP rathole, but I don't think this problem is
intractable. There are many inventions that aren't CRISPR where TLO is happy
to have the student who invented it run with it. Funding is a much bigger
limiter than IP in my experience.

~~~
w1ntermute
> There are many inventions that aren't CRISPR where TLO is happy to have the
> student who invented it run with it.

And my original point was that Paul Buchheit's request that "If you know great
scientists solving important problems, please encourage them to apply" was
unrealistic. YC isn't going to get the crème de la crème of scientists or
scientific innovations - they're getting what's discarded by the TTOs.

To be more precise, nobody's going to get the top scientists (they're going to
go right back to their labs) and the biotech VCs are going to get the top
innovations (for which they often have an informal licensing option with the
inventing professor before the academic research even begins). There's a
record amount of funding in biotech right now, but why spread it evenly? Might
as well just run dozens of trials in parallel for therapies derived from a
single technology.

~~~
jrkelly
You do seem to have it all figured out. I'm glad YC is running the experiment,
guess we will need to see how it plays out.

~~~
w1ntermute
I apologize if I sound overly negative, but I have expended significant time
and energy exploring this idea maze ([http://cdixon.org/2013/08/04/the-idea-
maze/](http://cdixon.org/2013/08/04/the-idea-maze/)), only to hit one dead end
after another. I left for greener pastures (software), but I wish you and the
rest of the YC biotech founders the best of luck.

~~~
jrkelly
Yeah it is a little ugly in pharma particularly. But I'll take the good luck
:) If you come through Boston happy to give you a Ginkgo tour sometime.

------
acomjean
I woek in a uniersity lab.. But I'm here less than a year.

In some ways investing in science is a good thing. But there is a big
difference between "industry" where some of our post docs go to work on for
profit medicine and the academic labs.

Why give money to a university? Well some pays for overhead you are going to
have anyway. For all its problems, the fact that a lot data is published
(pubchem and pubmed) is good for society as a whole. The for profit side
doesn't do that to the same degree.

The equipment side of things I think is where hopefully YC can help. Right now
overpriced equipment, "robots" with software that barely works (Microscopes
that use proprietary image formats....). I even saw a USB dongle for software
access of the really expensive microscope. welcome to the 90s.

~~~
jonlucc
> For all its problems, the fact that a lot data is published (pubchem and
> pubmed) is good for society as a whole. The for profit side doesn't do that
> to the same degree.

I work in a pharma lab, and I can tell you that a great deal of the work we do
relies heavily on work done by university labs to point toward the right
pathways to target.

------
eldude
I may be naive/ignorant (I do have an Electrical Engineering B.S.), but
hardware really seems like it would benefit from an experience / innovation
sharing like this. It seems like hardware is at an inflection point w.r.t.
large portions of it being backed by shareable / FOS software (e.g.,
3D-printing blueprints; hardware/software platforms like Tessel, Beaglebone,
Arduino; etc...), and adding a little fuel to the fire like this really seems
like a potentially huge payoff. Pardon the connotation, but it's like
domesticating a rare, but extremely useful wild flora, and growing it in mass
while disseminating the process so others can grow it as well. Very exciting.

Would anyone with recent hardware prototyping experience care to comment on
whether the above reflects their own experience?

~~~
tlb
It does. Hardware startups need more experience than software startups,
because there are more moving parts (contract manufacturers, component makers,
distributors, standards bodies) and because mistakes are harder to fix. It
helps a lot to have one guy (Luke) spend half his time keeping current with
everything, and half his time disseminating this to startups as they need it.

Another factor is that when dealing with big companies (like most contract
manufacturers and component vendors,) a single early-stage startup has no
leverage to negotiate good deals, but a community of startups does.

------
OopsCriticality
For biotech, I'm interested in understanding why YC would be a better choice
than the SBIR/STTR route.

~~~
sama
Money is among the least useful things YC gives. There are a lot of ways to
get money; good advice and a strong community are very hard to find.

~~~
jacquesm
Advice on how to build a scaleable web company is not universally applicable
on how to build biotech companies.

~~~
sama
Advice about how to create a good startup turns out to be more generalizable
that I originally thought. The hardest problems--mostly around people--are
more similar than they seem.

~~~
jacquesm
> The hardest problems--mostly around people--are more similar than they seem.

That's a good point and reflects my own experience. But I'd be hard pressed to
generalize what I've learned in my career in IT/IT related start-ups and take
that and apply it to say a company that creates a new medicine or one that
tries to commercialize some new medical instrument. The sales avenues in that
domain are radically different from 'just' IT based start-ups and just like I
wouldn't see a bio-tech person run an IT firm the reverse probably holds true
as well, ditto for advice to such management.

I recently had a long and in-depth look at an organization that sells a lot of
physical goods on-line and even in that case there was so much domain
knowledge wrt to the retail portion of it that without a CEO with significant
knowledge in that particular field they wouldn't have stood a chance.

Anyway, you're doing pretty good so far, can't wait to see you prove me wrong
:)

------
biot

      > My job is to help our companies make hardware people
      > want faster and better than ever before. 
    

That took me a few seconds to parse correctly. So you're making "hardware
people" want faster and better _what_? Oh, it's hardware _that_ people want...

~~~
josu
>Hardware people

The PC way to refer to robots.

~~~
desdiv
Wouldn't that retroactively make meat-bag people "software people"? Love it.

~~~
dasmoth
Wetware, surely.

------
thecosas
Interested to see changes around how quickly the "regulatory and logistical
differences" can be overcome specifically in the biotech industry.

------
chris-at
Science needs to happen for the sake of science.

If you do science for the money you will soon run out of fish.

~~~
jonlucc
In the US, life science is done both for science and for money. Any non-human
research or basic research are done with funding avenues outside of
corporations. All drug discovery and the vast majority of scientific
instrumentation and tools are produced by for-profit institutions.

------
dgudkov
If YC keeps going this way one day it might become a new kind of university.

------
lexcorvus
Could someone explain the title? If this is a "different" YC, what was the
original?

~~~
roymurdock
_The YC you know created a new model for funding early stage startups. The YC
I joined is creating a new model for innovation._

If I had to guess, the original focused on software whereas the new YC will be
open to more long term, hardware-oriented companies. But it's not entirely
clear.

------
shahryc
"Why give half of the money you raise to your university when you can rent lab
space for hundreds of dollars a month?" \--- very good point!

~~~
omginternets
Respectfully, it's a terrible point.

In practice, it doesn't work this way, and universities are much, much more
than a monetary resource:

\- unrestricted access to cross-disciplinary expertise

\- access to a huge recruitment pool

\- access to SBIR/STTR grants (with far fewer strings attached as compared to
VC funding)

\- scientific/technical credibility and legitimacy

\- access to bleeding-edge equipment that cannot be purchased

While it's true that scientists often know little about entrepreneurship, this
is a prime example of VCs knowing little about science. Reasoning in terms of
cheaper lab space is penny wise and pound foolish.

~~~
shahryc
I strongly disagree with your assertion. The real question is —— all things
being equal (equivalent monetary amount, recruitment pool, legitimacy, etc.),
for a given start-up today: would it be better to join YC or a given
universities partnership program for start-ups?

I truly believe it would be better to join YC for the following reasons:

1) Capital. In terms of capital resources. YC will most likely be able to help
raise a given start-up more many than a university because the primary purpose
of YC is that, while that is not the case for universities.

2) Cross-disciplinary expertise. Granted this may be an advantage that
universities have over YC. But, it’s much easier to recruit faculty as YC
venture backed start-up than as a non-YC venture backed start-up, unless there
are contractual obligations that skew incentives towards the universities
themselves.

3) SBIR/STTR. SBIR stands for Small Business Innovation Research, while STTR
stands for Small Business Technology Transfer. They are both congressionally
mandated programs so that “….domestic small businesses can engage in R&D that
has a strong potential for technology commercialization.” Nothing precludes a
given start-up from not getting SBIR/STTR funds. In fact, an organization like
YC helps bolster the case that the technology in question can be
commercialized.

4) Scientific/technical credibility and legitimacy. Yes, YC is not a research
university, and will not bring that level of “scientific/technical”
credibility and legitimacy. But, they do offer credibility and legitimacy for
partners, users, VCS, etc. In addition, most founders that are tackling a
scientific/technical problem, usually have experience in that field, and bring
a degree of scientific/technical expertise.

5) Bleeding-edge equipment that cannot be purchased. The cost/quality/risk
really depends on the industry. For example, contract-research organizations
(CROs) are common place for big companies and small companies throughout the
pharmaceutical industry. In this case, CROs play the function that a
university would in conducting/publishing the research.

~~~
omginternets
I see your point, and even partially agree with it, but I think you're making
a few flawed assumptions along the way. I'll try to respond point-by-point:

>all things being equal (equivalent monetary amount, recruitment pool,
legitimacy, etc.), for a given start-up today: would it be better to join YC
or a given universities partnership program for start-ups?

There are two things here, but I'd like to address the contention that all
other things are (or might be) equal. My entire argument rests on the fact
that "all other things" are _not_ equal. If all other things were equal, YC
would undoubtedly be a better deal, but they're not, so it isn't (for us, of
course).

>1) Capital

I was admittedly unclear in my previous comment, but in my own experience, the
university does not directly help with fund-raising. Rather, it grants a
legitimacy that aids in fund raising via other means (STTR, specifically, but
more on that later).

Yes, YC can help you raise much more capital than federal grants or university
funds, but this is by and large a non-issue. University partnerships grant you
access to equipment and personnel, both of which drastically ease the
financial burden, so less money ends up going much further -- I've done the
math, so please hear me on this point! :)

>2) Cross-disciplinary expertise

Respectfully (and I mean it -- it's easy to come across as a jerk on the
internet and it's not what I mean to do), this is completely back-asswards.
Establishing a partnership with a university laboratory is first and foremost
an exercise in proposing an interesting research project to interested
parties.

At the administrative level, the university turns towards its faculty to judge
the merit of the project before any serious deliberation takes place, so you
have to have a strong _professional_ relationship with a faculty member before
approaching the university. Much like VCs, scientists are weary of projects
that oversell and under-deliver, so good researchers -- the ones who
consistently publish meaningful, interesting results -- want to work with
someone they know personally or by reputation. By and large, they're
untrusting of VCs, and they will be sure to mention this to the university
administration. The result is that you'll either get someone far less
competant to sign on, or end up working with someone who's not too terribly
invested but wants the latest flux capacitor for his lab.

But all of this is really besides the point, since "access to expertise"
doesn't imply hiring or recruiting. It means you can knock on any door of any
department and ask for help on an interesting problem.

One lures researchers with interesting work, and this means you need domain-
specific knowledge, not money.

>3) SBIR/STTR

STTR explicitly requires that your startup be partnered with a nonprofit
research group, so actually something _does_ preclude a startup from getting
research funds without a university partnership (or equivalent). YC is for-
profit, and does not qualify.

Regarding SBIRs, a bit of context is needed. SBIR operates in three phases:

    
    
       - Phase 1 is for the exploration of technical merit or feasibility of the technology
       - Phase 2 is for expansion of phase 1 results, and evaluation of the *potential* for commercialization
       - Phase 3 is for moving to market.  No funds are allocated for phase 3 and, in fact, external funding is required to benefit from SBIR mentorship.
    

YC can clearly help with phases 2 and 3, but now we return to the crux of my
argument: I can get funding in phase 1 with no strings attached. YC, to my
knowledge, cannot provide this.

Moreover, SBIR/STTR are obvious examples. There are a great deal of public
research grants that are only accessible to private institutions having
partnered with a university, so again, we can get funding that ends up costing
us less.

>4) Legitimacy with respect to investors

Your point is well-taken, but a university can do this as well and, again,
with few/no strings attached. Business depts/schools love this kind of stuff.

>5) Bleeding-edge equipment

I now realize you probablycome from a pharmaceutical background. I know little
about pharmaceutical research, so you're probably right.

For the rest of us, my point stands: universities often have unique equipment
that simply isn't available on the market.

===================

In an attempt to be more constructive, here's a short, mutable list of what it
would take for me to consider YC:

1\. Very favorable terms relative to the sum of money being invested. I'm not
willing to sell 10% of the company's shares for $1 million when $100k will
ensure that those very same 10% sell for $5 million in one year.

This is especially true given that such deals almost always involve preferred
shares. It's a poor deal for me.

2\. Strong guarantees of research independence. We know more about the science
than YC does, and culturally speaking, scientists are very untrusting of
private funds in this respect. If one is not careful, private backing can
quickly degrade legitimacy. I have no reason to believe that YC doesn't
provide such guarantees, but it's important to me, so I'm mentioning it.

------
snake117
I know he emphasized biotech in the blog post, but I got the impression that
he would assist general startups that incorporate some kind of hardware in
their product. So it could be biotech or something like Anki or the Myo
armband by Thalmic.

------
OJFord
I like the cheeky "Luke Iseman upvoted this post" at the bottom

------
sixdimensional
I'd personally like to see a startup at YC trying to figure out how to spread
the YC model/ethos beyond Silicon Valley.

------
seddona
congrats Luke!

------
habitue
> Over the next decade, you’ll see some of these entrepreneurs create
> companies at YC that rival Airbnb’s social (and financial) impact.

I think this sentence is interesting. It kind of hints that they use the term
"AirBnB" internally as a short-hand way of saying "Our most successful
company". He doesn't mention AirBnB anywhere else in the post, and this
sentence expects the listener to understand the implied context.

~~~
zajd
I find it odd that AirBnB is consitently pointed at as a resounding success
when, alongside Uber/Lyft/TaskRabbit/the now shutdown maid service, it simply
relies on literally breaking the law and hoping that you'll make enough money
to change the laws. Granted, AirBnB doesn't have the same "fuck the worker"
mindset as the others, but I still feel like the "sharing econony" is far from
an established sure thing. Then again, if you own stock in AirBnB I doubt it
matters at this point.

~~~
staunch
Airbnb has the "fuck the neighbors" mindset. Interesting way to think of the
inherent evilness of different companies. Google and Facebook have the "fuck
user privacy" mindset. Microsoft has a "fuck competitors up" mindset. This is
fun.

~~~
reitzensteinm
I recently went travelling and used it. An old woman opened the door to the
apartment building for me when the lock was giving me trouble, then was then
confused then concerned that she didn't recognize me.

I used it once before, in Barcelona, staying in the flat of a wonderful couple
who we got along well with and it was like visiting relatives.

This time, it felt like we were saving a buck, and the owner making a buck, by
scaring old ladies. I guess it's back to hotels and hostels.

~~~
TheAnimus
I too have had some mixed experiences. A B&B in Rome, where the host had
elegantly decorated our room, provided fresh flowers each day all whilst
respecting our privacy.

Contrasted with a flat in residential block where one of the neighbours
started shouting loudly at my girlfriend, I do not speak French (she is
fluent) and didn't have any idea if things where about to get violent.

It turns out the previous guests had been making lots of noise late at night,
being tourists we where of course staying up much later than we would
normally. It's embarrassing having someone complain about your sex noises.

Another time we simply couldn't find or contact the host. Airbnb did not help
in this matter at all. Contrasted to a friends experience on NYE when a
booking.com room turned out to not be available, he ended up in the Shangri La
hotel. It's clear AirBnB doesn't help you when things go wrong. As such I'd
never use them for an important visit, or a visit during an event.

------
netrus
Wow, the American attitude is strong with you ;). Looking forward to see what
the SN-ratio of all these strong statements is!

edit: As I am beeing downvoted:

"you'll use many of these in your home or neighborhood within the next 12
months" -> I doubt I have used "many" yc-products from the total last batch in
the past 12 months.

"Over the next year, you’ll see us introduce several features that make YC the
best place in the world for people who want to make something new. Over the
next decade, you’ll see some of these entrepreneurs create companies at YC
that rival Airbnb’s social (and financial) impact." -> That's very nice, but
it has nothing substantial to back it up!

All I want to say is: yc does not need to sell hot air.

~~~
liseman
While I have no idea how many _you specifically_ will choose to purchase, a
majority of the hardware startups in our current batch will have product for
sale via Amazon and other channels by summer 2016. This sounds strong given
the history of hardware companies, but our current batch is not comprised of
average hardware companies;)

~~~
logicallee
> a majority of the hardware startups in our current batch will have product
> for sale via Amazon and other channels by summer 2016. This sounds strong
> given the history of hardware companies...

with all due respect, it sounds weak in the history of hardware companies,
because no hardware company worth $10 billion - and there are many - had any
point in its past when it could go from a standing start to shipping product
for millions of people's homes in 12 months.

You might think this means that your companies are above-average. I disagree.
I think it means that you pass on most $10 billion plays in order to fill a
stable with people who have picked something they are ready to ship within a
few months.

More power to them, and they have real companies with real traction. But to
say it sounds strong given the history of hardware companies is to ignore both
history and the power law.

I have the utmost respect for the support YC gives to these hardware
companies, but would never apply with a historically ambitious one. This is
very unlikely to change any time soon. Still I hugely support the push toward
supporting hardware companies!

