The question of whether open-source producing non-profits fit into YC is still a good one. I couldn't find an info on whether they have already accepted such non-profits, but the incubator Fast Forward has:
> Intelehealth built an open-source intelligence engine for assessing primary care conditions
(Obviously, a clone itself wouldn't suffice, you'd need to start with federated identity, and....)
It didn't work out so well, mostly because a.) actually cloning Facebook is pretty hard and b.) users don't seem to want to switch to fully-open Facebook or Twitter clones.
I'm making a strong bet that people do want to switch to fully-open social clones, because it's hard for me to imagine citizens of 2024 or 2028 conducting an effective political system using today's monolithic social technology. But the current ecosystem sucks for it.
The Mozilla Foundation has a wholly owned for commercial entity, the Mozilla Corporation.
 If there was a nascent non-profit in the chain that led to Mozilla, it would be NCSA [https://en.wikipedia.org/wiki/National_Center_for_Supercompu...] where Andreesen was developing Mosaic.
Everyone has to pay for marketing, and I'll give you the part about growth.
But is this because something inherent in a nonprofit stops it from growing? Is it that there are fewer nonprofits to sample wins from? Or is that venture capital is simply not structured to consider the upside of funding anything other than a bet on a huge exit?
Thinking a bit more, big software related non-profits appear to be spin-offs from industry (Eclipse Foundation, Linux Foundation) or academia (Apache Foundation also from NCSA). In each case, the software came first as was the case with Mozilla and the funding followed because corporations found they had an interest in the software's continued development.
On the other hand, OpenAI might be a counter example where the money is coming to support research so that's a possible case where YC has funded a 'non-profit' at scale...though the model was recruitment rather than application.
If I'm trying to write open source outside the confines of traditional capitalism, the last thing I want to do is require that people's usage of it is proportional to their riches.
YC-funded companies are known to be large-scale consumers of free and open source software. They are able to leverage the competitive advantage provided by this digital infrastructure to build successful, high valuation businesses. Some of those companies have gone on to make great contributions to the Open Source community themselves.
Would YC ever consider setting up a fund for the builders and maintainers of the infrastructure that your companies depend upon?
I'm thinking Docker, GitLab, NPM are both in some ways doing both the development of their businesses, and maintaining the infrastructure and open-sourcing their code.
Are these not the sorts of examples you're thinking of? Does this require a separate fund?
On April 7, 2014, CVE-2014-0160 aka Heartbleed was publicly disclosed. At the time, 66% of websites used OpenSSL (via Netcraft). Also, OpenSSL had 1 full-time engineer, and only a few volunteers. Yearly donations were about $2,000. 17 days after Heartbleed Jim Zemlin from the Linux Foundation as well as thirteen companies stepped up to the plate and created the Core Infrastructure Initiative and pledged to donate $100,000 a year for 3 years to help prevent the next Heartbleed.
The point is this, Open Source isn't free. Docker, GitLab and other 'open-core' businesses stand on the shoulder of giants. If they raise a round of fundraising or whatever Press Release hits the wire, they get praise (which is fine, I love it). But the only time a project like the OpenSSL project gets press is when something goes wrong which I don't think is fair to them.
We can keep being reactive or we can start being proactive. I believe YC has the capital and influence to change this thinking of Open Source doesn't cost anything.
Python, Django, Postgres, PyPy, Rest Framework...
I don't want to just list out all the dependencies we're using, but I'm guessing at least a simple majority of all the page views from YC startups involve Python.
I was suggested by few YC Alums that YC will not accept a startup if the founders are not working full time on it.
Question: In my case I am working full time because it's helping me fund my startup and It's actually helping me grow it due to connection to my peers (I am M.D from India working on a Health Startup). Is this a bad sign ?
I simply do not have the resources (and enough revenue) to quit my job Yet. But I am dedicated 200 % towards my startup and the vision. And I spend most of my time (outside of work) on my startup.
That seemed to be the idea early at least. Now they're expanding and investing in larger startups who get more value from the alumni network and the face time with the YC crew. At the end of the day though, they don't want people to have the fallback plan of just letting their startup fizzle while they continue to work their day job. I don't blame them to be honest.
Like I said there's nothing wrong with your approach. If you believe you're doing the right thing and you can see the growth then you are doing it right.
You WILL know when it's time to quit your job and commit when the time comes.
We're two founders working on products for people of color.
We have two ideas we want to work:
1) a networking type idea
2) a media and entertainment idea.
We love both these ideas deeply, we've committed most of our time to idea 1 bc we can make an MVP for it but we want to work on #2 bc it will have more promise given market trends and we like the idea more.
The problem with #2 is that it requires a lots of capital to make video content and we don't have domain expertise in film production.
As a result we're torn as to what we should write about on the YC app. Our app focuses on the 1st idea but we mention the 2nd idea plenty of times. We would love your thoughts.
Thank you Michael for taking the time to be accessible to the community.
How do you when the right time is to quit a business that just isn't working? And how do you distinguish between normal obstacles and hardship vs real signs that signal the business isn't viable?
That's basically the definition of a startup, so na matter what you do, if you can prove scalability like this, you are a startup.
The status quo is _always_ broken. Change is unceasing. Assumptions that are true today need not remain so in the future. This can happen to any product, business and their culture. Opportunities are everywhere, but we get normalized to reality pretty soon, the status quo fervently resists change, new things by virtue of being new are hard to do and fail often, and so we conveniently avoid spotting them.
Chat & Direct Messaging: Unix Talk, IRC, SMS, Jabber, XMPP, Snap, slack, etc.
Message boards: Usenet, gopher, BBS, Wiki, Blogs, Myspace, Facebook, etc.
You can literally look at almost any web technology, and it seems to be constantly reinvented, improved, and updated. It seems likely that the tools of today will necessarily evolve, at the hand of new upstarts.
Charles H. Duell, US Patent Office 1899
I personally believe we are 23 years into what Wired forecast was a 200 year boom for Internet software. Sure there have been ebbs and flows the past 23 years(I know cause I was there on the front lines) but I am not about to cast Wired's forecast as wrong.
With Trump picking Scott Gottlieb to be the next FDA commissioner, the FDA approval process is expected to get more lenient. Would you say that YC (or investors in general) would be open to take more risks with high tech startups that do not have a clinically validated product as of now?
One more question - Given that the FDA process takes a lot of time, quite a few biotech companies often get acquired or merged with bigger companies that can afford to do so, without ever having actually gotten their product out on the market. Would you say that you look at the company's potential return in that sense when you evaluate startups? I'm not entirely sure if this question makes sense, so let me know if you want me to clarify!
For example, I remember reading (sorry, no source) that YC is starting to hold events in Canada in order to welcome those who may not be able to come to the U.S. due to the current administration's executive orders. It looks like this may push startups out of the United States.
I'm hoping you can comment on this action, and other actions that might affect the startups in America and around the world, including, but not limited to actions involving education, public funding, military spending.
Would you advise someone against being a solo founder? If not, is it much harder for a solo founder to fundraise?
Startups are really fucking hard. You have to have a serious belief and commitment to build a billion dollar business (which is what YC is investing in.) If you're unsure, that's totally fine, but you need to be the first to believe in your company and get used to being the only ones who believe in your company, in order to make it through the hard times.
I have bias to disclose - I'm in the 2nd category, and my ideas and projects are probably very different, with a very different target market, than me 15 years ago (or someone else 15 years younger than me right now). I'm also not seriously pursuing anything at the moment, so this is hypothetical: Not only do I have a roof to keep over my family's head, I also (no offense intended here) probably have a higher opportunity cost as a barrier as well. All in on an idea for me has hard and soft costs that are very different from someone just starting out. It's not to say someone similar to me should expect to throw a few hours every two weeks at a project and merit serious consideration, but putting 25% of time and energy for some is a BFD that I think passes the commitment threshold in certain instances.
Whether it's YC, a startup, or your role in a mature business of any size, you must approach ideas through various lenses beyond your own. Please take this all constructively, I'm not trying to say I'm better because I'm older or anything like that - my point is that there are broader considerations that make varying degrees of commitment to an idea more similar than you'd think.
That you are smart enough not to weaken your negotiation position if you don't actually have to?
This isn't a game theory experiment. It's not unreasonable for investors to want you to be full-time invested (if you can) before putting in money. Also, some people may want to run their company until it is profitable enough that the company can pay them a full-time salary.
(/s in case you need it. If you still don't get it I am making fun of your position because it's naive and in my experience wrong. Sorry. Privilege comes in many forms and people don't tend to talk about them.)
Now if you're YC and you see 2 identical companies and one set of founders is full-time and the other set of founders are part-time, it's safe to say that the full time founders will be given preference because they are more committed, etc.
On the flip side if you had phenomenal founders/company (at an extreme think if Mark Zuckerberg started a new company and applied to YC) being part time is not a big deal.
Unfortunately for you you don't have visibility into your competition for this batch, but you can use previous batch companies as a rough guide.
We are working on building a demo-quality HW prototype, with the ETA of ~6months. That means we will not be focused on growth, but on tech development. Should we wait until we have a working system and apply to YC when we are ready to scale and grow it (this is our current thought).
We see no need for funding (at least today) to finish our HW prototype; in fact if funded I am afraid a sizeable chunk of those 120k would be spent (wasted?) on moving to SV, getting some lab access, etc. The flip side is getting help earlier to shape the end product.
Speaking of, there's a void in the VC market for funds that invest in the R&D stage like this.
I agree with you that there is a void in R&D stage VC funds.
Feel free to email me (see profile) if you'd like to go in depth re this.
Q: What are some of the top weighing attributes you're looking at for companies applying today, and how heavy (1-10 scale) would you say they count towards an acceptance decision. I'm envisioning a "credit score" for application.
This means they can join YC without a v1? But I guess you should have validated your hypothesis in any other way, right?
As I understand this is desirable, right? I wonder if there are any good successful stories of newly-acquainted, "JIT" founders? How about data that supports that being friends or colleagues equals success and greater valuations?
My instinct tells me that a previous relationship is probably a good predictor of success. But it's always good to rely on hard data to avoid any correlational fallacies.
Is there a point in applying again with the same idea? The only thing that would have changed is that my other business, listed as an accomplishment, is now 5 times as successful. (In the 350k range vs 70k.)
I was also thinking of applying with that business, but it's not really a YC kind of company. Would YC fund an e-commerce company with no particularly unique approach, just selling on 3P marketplaces, and ambitions of growing to maybe pharmapacks level (100 million in yearly revenue, around the biggest such company)?
Like a company trying to make something as disruptive as Pokemon Go, which required quick scale and reached a massive audience in a very short time.
I think if you're doing something interesting in mobile, AR or VR, YC will definitely be interested in your application as long as you can demonstrate the potential for massive growth, probably a game as service product that is free to play. I don't see them funding indie game studios or traditional console game developers that are unlikely to scale.
Do you think YC's application process is skewed towards accepting people who are great at talking?
1) Here is a massive opportunity
2) Here is the awesome founding team
3) Here is why we will be the ones to win this huge opportunity
4) Here are some proof-points (e.g. customers, product development, etc.) that back us up
YC goes out of its way (like to Vancouver!) to find the best startups in the world. If you can nail those 4 things, it doesn't matter where you're from.
As international founders (Egypt), our team is a bit worried about the whole visa situation. I heard the interviews are generally held 2 weeks after the invitation. Do you help with obtaining a visa for the interview and is 2 weeks enough time to go through the whole visa process?
With all due respect what is so special about running YC that means you deserve a sabbatical?
They are taking a sabbatical not because they deserve it but because they can afford to do so financially and have left their organization in what they feel are very capable hands.
It is actually atypical in most professions in the US (at least outside of teaching or academics) to be able to step away other than for a somewhat short vacation. And business? It moves to fast and the competition is most likely hard at work step away and someone else is there to take your place.
Hats off to them for creating an organization where they can do this but most people who are in either traditional businesses or professions (medicine, law as only two examples) can't do something like this.
Edit: Predictable downvotes. Everyone looks at this through a lens that says the commenter surely is showing disrespect or lack of knowledge for how special YC is.
Edit2: Noting that it has been edited for tone so...
When Graham turned over the public face of YC to Altman, I was like, huh? Since then, I've come to think that 'I'm going to take my money and learn to paint' is one diffs between Altman's and Graham's personalities...though in fairness Graham was well into his thirties when he made his first millions and Altman was just 29 when he became president of YC.
PG isn't "most people". He's a super successful guy, so I don't see why you are comparing him to everyone else.
And about him taking a sabbatical: he can do whatever the hell he wants because he can afford to. It's true that many of us can't, but that's just how life is my friend.
What makes you think they don't deserve a sabbatical?
More people in general should have longer vacations/sabbaticals in the US. The US is behind on this, and it is detrimental. The sabbatical itself has shrunk from historically being a year or more to just three weeks in some places here.
Perhaps for those that are employees of a larger type organization where there are fill in alternatives this could be a good thing. But for people that are not employees (they own the business or the success of the business has a direct impact on their financial benefits) this is not as easy as it sounds. Or for key employees of a business that have direct relationships to the customers or the product quality of the company.
Competition. And other alternatives that a customer or a client could use.
Let's say you are an attorney or a consultant. You have clients that give you business. They deal with you because a) they like your work and b) you are there when they need you. c) you have developed a rapport with them.
So now a new problem arises. They contact you but you are away on sabbatical. So what do they do? They try someone else. And maybe they never return. Really.
Or take even the person who cuts your hair. You've been going to them loyally for 10 years. Now they go away for 6 months. During that 6 months you find another person and keep using them.
I was told once that (and don't know if it's true) by a starbucks manager that when they renovate a store they never close it down entirely which would make the renov work much easier. Why? They have found that if you interrupt peoples morning patterns the store will lose business people either brake the habit or they find alternatives.
I missed where this was claimed to be "deserved"?
>It is actually atypical in most professions in the US (at least outside of teaching or academics) to be able to step away other than for a somewhat short vacations[...]but most people can't do something like this.
I'm trying to figure out how this is relevant? Would you elaborate? I don't care about disrespect, but ignorance (i.e. lack of of knowledge) and illogical claims are problematic for me. "Special"?
I missed the parent comment before it was "edited for tone," but your comment comes across with a bit of undue animosity.
Well to restate my original comment was based on the use of the word "deserve" not the re-edited version. Apparently it was thought that that wasn't well put. And it's unclear to me why I was jumped on other than the obvious reason of this being HN. To your question the relevance of stating what is typical in other professions is because the vast majority of people can't simply take a sabbatical even if they have the money to do so. It's not unusual to make a comparison and the comparison once again had to use of the word 'deserve'. So many people 'deserve' was my point. However by the nature of what they do they simply can't just go away and come back and have everything be the same. Once again this has little to do with whether they can afford to do that or not. You don't want what you have created and worked for to be damaged and often by leaving it in the hands of others (w/o your oversight) that can happen. If you were an architect that was wealthy but had a various projects in play you are not going to go away like this. If you are an attorney with multiple cases in play you are not going to go away like this. If you own a small bodega you are not going to go away like this. If you are Tim Cook you are probably not either or Marissa Mayer (a few years ago). If you are a family practice doctor ditto. That's in addition to (in some businesses or professions) losing important clients that you have worked hard for many years. Or in a small business (or even medium business) where you have clients and customers that could easily leave for a competitor if you are not there personally to clean up and address any problems.
If a startup has taken a lot of dilution before applying for YC, is YC flexible enough to not dilute the founders but come up with a structure that makes them get 7% through a secondary sale or some other tactic which makes sense for that specific situation?
I have mostly come to the conclusion that the answer is no because YC likes to do stuff in a standard way and there is no room of flexibility w.r.t that aspect of the program terms. Just wanted to confirm that though.
(Full disclosure: I applied with an Ethereum wallet one year ago and got an interview but was told that the path to market wasn't clear enough. The project was ultimately absorbed into a different incubator. )
also, how developed must a startup be to apply. should the product already be developed?
Do you really do this for every startup in YC?
If so, are your internal rankings accurate predictors of startup success?
It sounds like if you do it once, you already get a solid network, and you probably don't need the cash. So I don't really understand what made you go back there.
How would you characterize the effectiveness of the scaling that YC has done over the last few years? Meaning, the increase in partners coupled with broadening of the scope of markets, not to mention YC Research.
Too much too soon, going well as planned, could still do more...
> Recently I’ve heard a lot of investors say “There isn’t a whole lot of new stuff to do in consumer. There’s already an app for that.” With VR, there isn’t already an app for that.
> I think we are no more than two years away from an explosion of new consumer startups and I cannot wait to start funding them at YC.
Thanks for the AMA
Question: Is there are more stringent criteria for accepting international founders and companies, focused on their local markets?
The reason I am asking this is because most of the companies from India in the latest batch, seem to have a lot of traction and/or significant amount of funding before being accepted into YC. Most looks like good candidates for Series A.
Vs other US based founders and startups in the current and previous batches
Feel free to reach out to me if you have India/YC questions.
Thanks for doing this!
My question is: How can we make a better environment for discovering cures/vaccines? Can we create a almost like a "YC" for research of biological sciences.
Although, I don't know much about this area, I feel there needs to be a better way to allow the most intelligent people have the resources they need to discover cures/vaccines etc, with no external barriers. Thank you.
By best I mean one which has had the most positive impact on people's life, where positive impact is some function of just two variables - the number of people affected and the intensity of that affect.
Also of these two variables which one do you weigh more and why?
What's the "big thing" 10 years from now? Ie Are smartphones still the rage and hottest "endpoint"? Did security wind up being the highest demand/pay IT career path? Etc
PS. We are raktor.org, working on telepresence participatory theatre, which we believe is the future of entertainment. Currently in VR, though whether it's VR or not is not relevant to our long term goals of being an Uber-for-theatre-performers.
For example Boom Aero focused on supersonic and another startup applies to YC with subsonic aircraft.
From what I read typically VC firms usually don't fund two companies as such example.
Q: Will you fund multiple startups working on the same idea?
A: Yes. If you fund as many companies as we do it's unavoidable you'll end up with some overlap. Even if you tried not to accept competing companies, you'd still get overlap because startups' ideas morph so much. The way we deal with it is that when two startups are working on related stuff, we don't talk to one about what the other's doing.
In practice it has not turned out to be a problem, because most big markets have room for several slightly different solutions, and it's unlikely that two startups would do precisely the same thing.
I read that a long time ago and forgotten that was there.
Where do you fall on the spectrum of looking for high probability wins vs black swan hunting? To put it another way, how high of a failure percentage would you accept so long as it maximized total cohort value?
E.g. would you accept see it as a loss if you funded the best single startup of the decade and all other YC funded companies failed? How about a 90% failture rate, but huge winners bringing a bigger return than YC has historically had? How do you balance the desire for a good hit rate vs a good total return?
Which pairings of personality type and role works better in your experience for YC applications?
How will computer science ever be taught to the general K-12 population if software engineers make $102k and teachers make $45k in the US on average? This gap seems to only be increasing too.
How should we think about developing solutions to solve the problem of affordable CS education for everyone?
Even with the best textbooks, curriculums, etc., it is probably not enough for the average teacher (definitely without a CS background) to teach CS effectively.
2. Make sure there is enough online sniping so the current one thinks it isn't worth it.
considering the 1% rule, do you think our culture of media consumption is in our nature or something we've created? is it a trend? do you think there will be more room in the future for companies that serve amateur producers? can we create more producers?
sorry for so many question marks. it's a single question- poorly formed. :)
The number one skill you can have as a solo founder is a tremendous amount of self-awareness and self-reflective ability. You're not going to have a business partner telling you when you're f_cking up, and you can't rely on really early stage investors too much for this, either (even after they've invested) because as empathetic human beings it's often better to give somebody the chance to figure it out on their own than risk alienating them. So be the person that figures it out on their own.
Aside from that, listen to the advice people give you, and take it seriously, but judge them by their motivations and actions, not necessarily the content of the advice at face value. A question from a prospective investor like, "how do you compete with [X]" isn't necessarily looking for an answer - if their action is they don't invest, it's probably more of a signal that the story you're telling them is raising red flags about [X] and you're not going to convince them today and move on. Figure out how to take [X] out of the equation in your story. (But it's good to know, for the sake of the business, how you plan on dealing with [X]. Storytelling-by-pitch is only a high level overview of a robust business strategy.) Similarly, keep in mind many active founders have motivations around self-interest of talent / IP acquisition first and foremost --- there are many, many helpful ones but at the end of the day they all have a business to grow just like you do.
Finally, with all of that in mind, trust your gut. If you believe in what you're building, and you're creating value for your customers, that's all that matters. Find believers. They're out there. Love others and accept love that others are willing to give. Listen to your believers when they speak. (Early investors, employees, etc.) They've already made actions you can trust (re: above), so their words are an order of magnitude more valuable.
Re: YC specifically, I can't be helpful there, but thought I'd jump in. I hope Michael has valuable advice about timelines and such.
I wish I had received more advice like this earlier on, and hope that's helpful for you. You'll probably hear, "find a cofounder" a heck of a lot but it's not necessary. It is extremely helpful, so always have your head on a swivel looking for the right people, just try to understand what you're getting into from the start. :)
Yes, you need to have many skills than writing software. You need to know how to cold call/email, how to cultivate relationships over many mediums, how to ask for more things that are offered, how to push for that sale, how to essentially moon-shoot and to know everything is a negotiation. Oh and work 18+ hour days as well.
There may be skills that you don't have yet. Don't worry, being an entrepreneur means that you'll gradually get better at each skill and with each attempt will get stronger until it feels second nature. Keep pushing your own boundaries.
Want to know the difference between a founder with his first company and a CEO (with his first company) at 3 years? He's just 3 years ahead of you and been through the mill and gained experience. There's nothing you can't do by yourself.
Should you get a co-founder? As someone who has gone through the carousel of missed opportunities such as:
- Starting a venture with 2 other people as a team, who through they brought in a lot of strengths and relationships, but when push came to shove, had squat to offer. It went nowhere quickly.
- Trying to start ventures where for the other person was a side hustle and for me, was the only thing going. You can't have 1 co-founder betting 100% and his time, where the other is giving 50% or less and is distracted!
- Finally, to then being a potential co-founder myself to a company that imploded after making them a monumental success (multiple millions generated - NET) in 12 months of joining and getting nothing. To then being a co-founder of another company with a parter and then getting nothing at the end!
To say things haven't gone well is an understatement. But with each step, a lot of lessons were gained. Now that knowledge and lessons are being applied to my venture and I'm making great strides.
For me personally, the only thing a co-founder could do at this point. Is dilute my share of the company to 50%. Hmmm, no thanks.
As a solo-founder, everything is done your way. You know the vision, the path to getting there, the sales pitch, the numbers, how you want to grow your company. The company should really bend to your will. I see the company as an extension of your will. If done right, the gaps that you have are either filled by 3 things:-
1) Companies that exist to fill it for you. If it doesn't work out, fire them and find one better. Your equity still stays the same.
2) Employees, hire fast and fire even faster. Again, you didn't lose any equity.
3) Contractors, have clear goals and time-schedules. Even reward with bonus for being early/on-time. Nope, no equity lost here.
As for me. I have multiple vendors which are going to fill gaps in my startup. I have contractors when the time is right and I already have potential employees when I have the funds.
I have a business plan which lays out the roadmap for the next 12 months post launch. Sure, things can change, but if you have guidance, you know when it's right to do something.
Having a co-founder(s) dilutes all of this. Now you have someone else's perspective you need to take into account. Oh that perspective conflicts with yours? Now you have to either give in or get them on board. If you give in, where are you going. Can you completely trust that what they say will work out? What does your gut tell you?
From previous experience, good luck with that and/or the outcome. I've been through plenty of mistakes where my gut was proven time and time again.
Oh and that co-founder, is he as good as you, or better? My previous co-founders were not a match to my technical skill with the skill they were bringing in. This lead to conflicts of understanding, both the vision and what technically could be possible. You know what lower smarts gets you? The co-founder coming into your realm and second-guessing you because his "friend" is now running some new stack/shiny object and you aren't.
My ethos. Don't get a co-founder, get an employee. An employee you can lead the direction and get what you want implemented. Oh and employees scale, more co-founders will just dilute equity until there's none on the table for an investor.
Btw, if you have a co-founder and it works. Great. Understand, It's not for everyone.
What are the top three things that you'd look for in a healthcare startup from India applying for YC summer batch 2017?
One factor when evaluating startups is how long it will take to get everything ready. Some can launch in a month, but some depend on breakthroughs or environment shifts that will take a decade to happen.
Is there a Goldilocks zone that lends itself to better outcomes? How far into the future is too far?
From the YC FAQs: "Half (maybe more) of the startups we fund don't need the money. And in fact the money is a only a small part of what YC does. The money we invest works more like financial aid in college: it ensures that the people who do need money can cover their living expenses while YC is happening."