Ask YC: Will YC compete with YC?

[shayan]

The title might be a bit misleading so please read on. How would YC treat a proposed idea that is in one of the following categories:

1- direct competition with one of its current companies and/or products

2- possible future competition of one of its current companies and/or products

3- if the new proposed idea is not really in competition with any of YC's companies, but it does have some major ideas, that another YC company could take advantage from, or add in as new feature to their system?

of course, if there is already competition then your idea might not be as interesting, regardless of whether the competition is a YC company or any other company. I guess the real question is whether they review any new application without considering what they previously own and give it a fair treatment or not?

[pg]

Overlap is always a matter of degree. We deal with it by warning startups with substantial overlap about one another, and then leaving it to them to decide how secretive or open to be.

We try not to tell startups about the ideas of other startups working on related things, including applicants we turn down. (Usually this isn't an issue, because few applicants have genuinely novel ideas, but one applicant this last batch had cooked up a trick I'd really like to tell a startup from summer 2007 about.)

I was worried about funding competitors when we started YC, but it has turned out not to be a problem. In most good markets there's room for many companies, and it's unlikely that two we fund will take exactly the same route.

But even if we told everyone about everyone else's ideas, it wouldn't be as bad as you might think. Secrecy is not as important as beginning founders think, because (a) ideas are less valuable than they think, and (b) the most common form of death for startups is suicide, not being killed by competitors.

[brlewis → pg]

I'm curious as to how snipshot and splashup deal with their substantial overlap.

I notice that http://www.paulgraham.com/ has a new link for splashup, but still says "photos edited with snipshot."

[pg → brlewis]

Those two compete less than you might think. Snipshot is an easy tool for ordinary people to tweak their photos; Splashup is aiming at Photoshop.

The link says the photos are edited with Snipshot because they are edited with Snipshot. All I need for my site is something simple.

[brlewis → pg]

The link is there for the additional reason that you are still promoting Snipshot. This is good news for me, because integrating Snipshot with ourdoings.com is in my plans, and I wouldn't want them to disappear. That they recently added a Pro version seems a good sign.

[shayan → pg]

"We deal with it by warning startups with substantial overlap about one another, and then leaving it to them to decide how secretive or open to be."

In this case since the YC company is already launched, and the new applicant hasn't I would not think warning both parties about the overlaps is to the best interest of the applicant. But I guess this is for major overlaps, and the applicant would probably already know the competition and should try to offer something different and new.

"(...but one applicant this last batch had cooked up a trick I'd really like to tell a startup from summer 2007 about.)" I guess this is precisely my question 3. And my question was whether the YC company was told or is going to be told about this trick? And more generally if you have any rules and guidelines you would follow in these scenarios.

[pg → shayan]

And my question was whether the YC company was told or is going to be told about this trick?

Of course not. Wasn't that clear from my comment?

[shayan → pg]

it probably was pg, thanks, somethings you just want to double check and clarify

[falsestprophet → pg]

"...but one applicant this last batch had cooked up a trick I'd really like to tell a startup from summer 2007 about."

I wonder what did this guy did or failed to do that eclipsed his cleverness.

[pg → falsestprophet]

Nothing, actually. They were good. But there were a lot of groups that were good, and we're trying not to grow so fast that things get out of control.

[kirubakaran → pg]

If you haven't already done so, may be you can tell that person that you liked the trick. That will be a huge encouragement, I am sure.

[shayan → pg]

Ooops some discouraging words for the to-be founders!!!

[Jaggu → pg]

You generally mention that "ideas are less valuable than they think" but still I believe that to become successful - you have to have good idea. If you have bad idea but still founders are dedicated then over the time they could change that idea and they could become successful but thats longer process ( changing idea on the way is going to take long time to release the product compare to starting with right idea..) and sometime timing is also very important ...