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We'd funded 80 as of January. Of those, 57 are still alive. The others either merged, died, or got bought. 6 got bought (Reddit, Infogami, Textpayme, Zenter, Anywhere.fm, and Auctomatic). I think only 1 other merged. So 16 must have died.

I think 10 have so far done series A rounds, but there will probably be more of those in the future. Nearly all the rest are either funded by angels or (esp in the case of the most recent group) still raising money.

Edit: I forgot Parakey. So make that 7 got bought, and thus 15 must have died.




There is a lack of specific information as to why YC companies die. Your generalizations are extremely helpful, but is there some repository of stories as to what happened in each case?

A ping out to all companies to report on their status might be the best way to go. Then you'd hear from those still living, which is how not to die, right? :)


He's talked about this before (mostly here at News.YC and in his the "How not to die" essay, which you've alluded to).

But, I've noticed that most go back to what they were doing before because the raising of additional funds proved difficult or boring. I think the rejection process can also be really hard on folks, and very few startups get funded on their first try, so there's a lot of rejection. I believe that's the case with three of the companies that "died" from WFP07 (which are the only ones I know well enough to say anything about). One went back to contracting and building cool websites for indie rock bands and related companies, and another company sort of split off into different things...2/3 of them ended up working for other YC companies (one of which has since exited), while the third went back to writing (I think). The third company that "died" went back to school to do research, and presumably the grants needed to continue the work are easier to obtain for PhD students than investment for research-stage ideas that don't quite have a market and won't for another few years.


Context is everything. I'm looking to better understand why a company might succeed or fail - something beyond a meaningless percentage. It seems like a very useful skill.

A company that can't raise money for an idea or implementation I judge to be bad shouldn't weight down my perception of raising money on a good idea.

Thanks for the info though.

A fuller picture would also involve the personalities of the founders. Judging potential future performance from an initial meeting is invaluable. I've been thinking a lot about this in preparation to start hiring.


Usually the way startups die is that they launch something, users ignore it, investors are lukewarm, and they get demoralized and give up. Sometimes there are other forces encouraging them to give up, like the pull of school, or the push of founder conflicts.

It's normal for users not to like what you first launch with, and for investors to be lukewarm. (Investors are basically permanently lukewarm.) So the groups who give up usually are looking at about the same information as other groups who keep going and succeed. Most of the time it comes down to whether they see the glass as half full or half empty.


> 6 got bought (reddit, infogami ...

Didn't reddit "buy" infogami? Seems a little funny to count that as a sale ;-)


He's counting the combined company of Reddit + Infogami (Notabug) as both of them. Conde Nast's acquisition was for all of it, even if Aaron did get fired a couple weeks later...


even if Aaron did get fired a couple weeks later

I think he quit more than got fired, but spun it off that way for the romanticism. It's funny how being fired can be romanticized :)


No, it was a merger. The two combined to form Notabug.


Also Parakey, but maybe they're a special case


Oops, yes, forgot them.


Are any of them profitable, in the DHH sense?


Can you explain how "profitable" is different than "DHH profitable"? :-) 37s didn't invent profitability (or simplicity for that matter).


Clearly profitable was the right word, but I think he meant to ask how many companies have profitable revenue streams versus those that have money in the bank from being invested in or bought out.


What if the question was rephrased like this:

"Among the profitable startups, how many 'got the eyeballs first and monetized later' and how many went for the profit-first model?"

(latter was termed by grandpa comment as "DHH profitable")


I believe we (Virtualmin) qualify for that definition, though it'll be another few months before it's on the same order of magnitude as 37signals (we currently make thousands, they make millions...but once we've worked as long as they have we'll be doing fine). Though our end goal is a bit more ambitious than the 37signals guys (by some definition of "ambitious").


In a lot of cases, rapid growth is incompatible with NEAR-TERM profit (but not necessarily revenue). It's hard to concentrate on both. A company can generally grow faster if it takes on investors and plows any revenue back into growth...

I think most investors (YC included) are most interested in meteoric growth (or whatever path is going to lead most swiftly and reliably to a BIG liquidity event of some kind).

Going for a lifestyle business and eschewing investment rarely gets you there quickly (if at all).

I love Wufoo (and I'd certainly put them on the relatively short list of YC companies that I truly envy), but I think they are leaving some growth "on the table". I think 37s is, too. Not that there's anything wrong with that-- it's just not necessarily "investor-friendly".


Yes, a number of them are. I don't know the exact number, because we don't have this info in all cases, but I've heard from several groups that they're now profitable.


I'm pretty sure Wufoo is in the DHH/37sig sense.


What about SnipShot? $9/month for premium features.


16 "must have died"...just goes to show that startups don't really die, they just fade away. The only YC startup I know of that officially ended at a specific time is Kiko; are there others?


I can't think of any others that ended suddenly. Usually death is in a series of gradual steps, starting with a long stretch without updates, continuing through founders taking jobs or going back to school, and ending with the site going dead.


pg,.. a nice graphical time line would be fun to see. i think a series of wired like info porn on the subject would be great.

[a histogram of growth rates] [a histogram of round based success] [a histogram of general margins] - burn vs. profit [an aggregate timeline of all companies] - maybe something like this http://www.nytimes.com/interactive/2008/02/23/movies/2008022...


pg doesn't actually really have that data. He doesn't sit on the board of any YC companies, and all he knows is what he's told. So, you asking YC companies directly for the data would probably be as effective as asking pg to build such a chart for you. pg has a general idea of the relative successes of YC companies because he chats with them every few weeks or months...but he's not the accountant for any of them.

And, of course, disclosing that data for private companies is probably unwise. All YC companies have competitors (if it's a good idea, somebody is already working on it or will be by the time you launch), and having the laundry aired in public is probably a bad idea. The ones who want to talk about aspects of their business, generally talk on their blogs.


i do not really want individual stats. that would be like asking the companies to reveal their secret sauce. i am curious about the trend data that YC has generated.

example: (startup life expediency) @month 0: 80 companies @month 1: 80 companies ..... @month 36: 4 companies

example: (won a series A) @month 0: 0 companies ... @month 4: ~5 companies ... @month 12: ~7 companies

a final comparative time line histogram could be made of variable percentages of YC companies vs. some measured goal so you could have histogram timelines of VC age vs. having angel funds, or YC vs. VC funds. or YC vs. liquidity, which might lead to the following example:

example:(YC age vs. liquidity) @month 0: 0 companies @month 12: 1% companies @month 24: 5% companies @month 36: 10% companies @month 48: 10% companies

graphs like these could lead to some interesting metrics about the measurable success of going through the YC process. Its a great way to study groups and to begin the comparison between group 1 and group 2 or YC vs. non YC. It should help build a case that getting into YC might improve your chance of success by say 10% or 50%. A lot of what pg talks about is how he feels that YC will improve your chance of success by more than 6%. I think at this point pg could present a fairly empirical case to prove that. I sense that many of us believe that to be true, but I have talked to some ex-startup vets here in Wisconsin who are not so convinced and others that are. I just think it would be great data to think about.


You might like the book High Tech Startup by Nessheim. It's basically a collection of statistics about startups.


"but I have talked to some ex-startup vets here in Wisconsin"

I see what you did there. Nobody lives in Wisconsin.

Seriously, though, while I'm sure such metrics would be useful to someone, I don't think pg needs to convince people that YC provides value. YC gets hundreds (possibly even thousands) of applicants for every program. If you need a chart to prove to yourself that there's value in YC, go for it.


swell, there are a number of silicon valley startup vets from the 70s retiring here. it beautiful and we think traffic means it takes 20 min to get to work, rather than 15min. i also think in milwaukee we have the best beer in the world. in madison, milwaukee, and chicago the startup communities are growing fast in web tech, but even faster in biotech. i know in the valley most of you don't see it, but here there are new hospitals going up all of the time. we have one of the first telerobotic heart surgery terminals in the world. in this area, we have GE, Abbott, and Baxter; its pretty much like having google, microsoft and yahoo in your bio-tech back door. when the baby-boomer are aging and using medical care that money will fall through this state at some point.

don't forget that we have 2 of the worlds largest financial processors, fiserv, and metavante. wisconsin is on a great path to take advantage of chicago's resources too. since 9/11 chicago has passed new york in trading value, and chicago is the 4th largest fiscal market in the world, with $460 billion in production value, where SF is 15th on that same list.

and don't forget our schools where UW Madison and UIUC take the 9th, and 6th position in CS school ranking. if only we had the risky VCs that the valley had, i suspect that many of the world largest computer companies would have stuck here in the midwest, near their alma mater.

also, do not discount our work ethic, one day we should eclipse the west coast in tech companies all together.

ps. who do you think will build the nanotech manufacturing economy too?


>So 16 must have died.

16 out of 80 is 20%, when you say "must have", does it mean once you gave them money you forgot about them, Or it simply means that 20% is acceptable?


I mean nothing more than it's the number I'm deriving rather than the one I started from.


I thought Infogami merged with reddit.


hows that for disclosure - thanks for the update keep rockin!


thanks - i think it would be helpful if someone can create a table with the status beside each company ... this can also help people who are interested in doing some kind of analysis of these startups ... 80 is pretty good number to do some valuable study.





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