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Ask PG: What successful startups has Y Combinator passed up on?
140 points by michael_fine on May 6, 2012 | hide | past | web | favorite | 16 comments

First of all, I don't think that PG will answer this question [1]:

Q: Have there been any startups you've later regretted rejecting from YCombinator?

A: Sure, several. But I can't name names because it's not for me to disclose that they applied.

However, YC keeps track of the successful companies that they initially rejected and here are some of them of them that are known to have been rejected who have gone onto raise funding etc:

- http://sendgrid.com/ (went through TechStars and have raised a series B)

- CouchOne - http://www.couchbase.com/

- AfterTheDeadline - Acquired By Automattic

- Light Sail Energy - raised money from Khosla Ventures - http://lightsailenergy.com/

- SignPost - https://www.signpost.com/ - Raised $1MM off Google Ventures

- MyFit - Raised $1MM - http://www.myfit.com/

- Storenvy although they were kicked out of YC [2]

- Mark Zuckerberg's Sister Was Also Rejected To YC [3]

[1] http://askolo.com/pg#4f6d068aa499a758250003aa

[2] http://joncrawford.com/post/20378314843/how-i-got-kicked-out...

[3] http://www.businessinsider.com/y-combinator-arielle-zuckerbe...

The problem is everyone has their own definition of successful. Is it breaking even? 20 employees? Being profitable? A $1million exit? A $1billion exit? Everyone rejected by YC wants to be that rare case.

I'd venture to say that most YC rejected companies (that would define themselves as successful) could care less about proving anything to YC. Building a company is hard and stressful and beating yourself up over something that happened in the early stage is foolish. It usually comes down to not pitching it well enough or being unlucky. A "successful" company will overcome much bigger obstacles to get to that point.

It's a two way street and sometimes the company may be happy they didn't get into YC because it opened different doors that led to success. Maybe in some cases YC could have closed some doors that were crucial.

> It usually comes down to not pitching it well enough or being unlucky.

Many companies don't even apply to YC because it's geared towards tech companies that do not require capital (and when they do eventually, it's for people, not physical resources).

I think what I would define as successful is a company that made YC wish they had invested in them at the time.

I'd speculate that YC is perfectly happy to see startups succeed, even if they weren't one of the teams that they selected. I'm skeptical they give much thought to rejecting anyone.

I'm always happy to see people succeed, especially people I fired at one point. The beautiful thing about our field is that it isn't a zero sum game.

EDIT: none of the successful people I know spend time on regret

It's not that they would be disappointed that the team succeeded, it's that they would be disappointed they didn't invest in them.

Yes, that's probably a better formulation of the question.

I wonder if YC already tracks this, maybe informally? It would be a good means of testing their own selection processes. Then again, they probably focus more on the "false positives" (YC startups that did poorly) than "false negatives" (the ones that got away).

Startup returns usually follow a power law. That means a missed good investment is potentially hundred times worse than a accepted bad investment. A single good investment like Heroku, Dropbox or Airbnb can easily outweight all other investments combined.

Obviously they don't want to accept just anyone, that doesn't work for various signal, scale, attention and effectiveness reasons. They do however accept (positive) outliers without traditional credentials, which is the opposite of what a traditional company does. A traditional company is looking for safety, VCs and YC are looking for maximum leverage (not the typical financial two-fat-tails kind, the only-upsides kind that Nassim Taleb et al. likes).

As for your question, I can't imagine a reality where they don't track that sort of thing.

Maybe YC and pg doesn't have regrets. At least not any regrets like that. I don't think I would.

If A16Z have no regrets for not following up in Instagram, same is true for YC.

I rejected joining startup as a founding member or first hire, with at least one of them becoming a billion dollar company. I have no regrets, even for a second. You can't change the past, only the future.

Browserling (http://browserling.com/) might be one.

Not to suggest they aren't successful, but what indicates they are?

I've noticed that hasn't been updated in a while... we're on FF12 now aren't we? And Chrome 18?

If you use it they have the latest version but clearly aren't updating the homepage. Also, it's Windows browsers which is not quite as much use as it might be

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