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Sam also just tweeted that 300 YC companies are no longer around. Amazing how much transparent they are and how great YC is at picking and training. So many rea

Sam also just tweeted that 300 YC companies are no longer around. Amazing how much transparent they are and how great YC is at picking and training. So many really crazy ideas that most would think are insane and YC is able to find the ones that make sense and help them. Seems like that's a bit less than 1/3 of all YC companies Tweet is here: https://twitter.com/sama/status/636586179970752512 https://twitter.com/sama/status/636586179970752512

codingdave 11y ago
YC filters applicants for dedicated founders who will not give up easily. It is amazing what can be accomplished by manic perseverance.
- jordigg 11y ago
  Last week I saw this from Sam. > If we don’t invest in these companies, they don’t happen… The thing about Y Combinator that’s cool is that most companies won’t happen if we don’t fund them.[1] I thought YC was always looking to fund those that would exist with or without YC. I have seen less and less "crazy bets" every batch, but I have to say there's more diversity of founders and topics (biotech, energy, farming). Companies generate revenue before DemoDay and many are startups that work for other startups. It's not a bad thing but would love to see more Airbnbs or Reddits around. Those are the ones that can generate a true impact on society and can only exist thanks to YC giving them a chance. The fellowship can be a great starting point for those. [1] http://venturebeat.com/2015/08/23/sam-altman-and-jessica-livingston-explain-y-combinators-success/ http://venturebeat.com/2015/08/23/sam-altman-and-jessica-liv...
  - sydneyliu 11y ago
    I think Sam is saying that without YC, there are some companies that may not end up succeeding or being able to raise and continue on (without YC's network, advice, speed, focus etc. to help them) The distinction is that they want to fund companies who would continue working on it even if they didn't get into YC. They are so passionate about the problem that they will try to make it succeed no matter what.
  - staunch 11y ago
    YC has said that Airbnb would have failed without their help. How could they not update their thinking? Being determined to succeed is necessary but insufficient. Every successful startup received a big helping hand early in its life. YC's business is to provide that opportunity to founders that otherwise wouldn't have it, such as Airbnb, which no other investor would back.
    - ryanSrich 11y ago
      What's more intriguing is how was YC able to see through what the other investors saw as an issue? Even to this day I'm astonished that AirBnB exists and yet YC was able to see something in them years ago.
      - staunch 11y ago
        YC also despised the idea, but invested because they liked the founders. But they also presumably liked the 600+ YC founders that failed, so you can see how much investors can really predict.
        T2_t2 11y ago
        You mean at the series A? Their original idea was really different.
        deleted 11y ago
        [deleted]
      - HelloHN 11y ago
        My understanding of the story was that YC was going to pass on Airbnb but then one of the cofounders mentioned the cereal box story and that changed PG's mind
- forgetsusername 11y ago
  >YC filters applicants for dedicated founders who will not give up easily Well, they try to filter by that quality, as would any other incubator or investor. It would make no sense to accept apathetic founders who will surrender at the first obstacle. Personally, I'm skeptical that they having any advantage in identifying such abstract traits. How would you identify it from a 15 minute interview?
exelius 11y ago
That's actually mostly in line from what I've heard heard from other VCs. After 5-7 years, you expect half of your portfolio to be either out of business completely or "walking dead" (cash flow negative without enough traction to get positive before the end of the runway). Though you do have a point; I would expect a higher failure rate from an accelerator given that they fund riskier ventures.
bkjelden 11y ago
The failure rate is probably skewed low by YCs growth rate. For example, 1/9 of the companies were in their most recent batch, and it's unlikely that any of them have gone out of business yet. Still impressive though. Any success rate over say 10-20% seems really impressive for an incubator.
- bfe 11y ago
  The breakout-success rate thus far is also skewed low by YC's growth curve. Things have still just begun.
- ghiculescu 11y ago
  Yeah. A failure rate by cohort (a "churn rate" of sorts) would be handy.
lawstudent2 11y ago
This is also rather misleading - because 300 have been shut down, 904 have been funded, which includes 107 in the last batch, which can be discounted entirely from these stats. This gives us 300/797 have shut down, or a percentage of about 38%. What I'd like to know is the value, at exit, of the companies that have exited or gone public. Because I can guarantee you that the "valuation" of $65B+ is a totally meaningless number. This includes every single company that had a huge, unsustainable up round which will almost certainly be devalued based on future financings or exits.
- pc 11y ago
  > Because I can guarantee you that the "valuation" of $65B+ is a totally meaningless number. This includes every single company that had a huge, unsustainable up round which will almost certainly be devalued based on future financings or exits. "Meaningless" is hyperbolic. How much would you pay for a share of Airbnb? More than nothing, I assume. I think one can conclude something from consummated, informed responses to this question.
  - lawstudent2 11y ago
    No - I stand by that as a literal use. Does 65B represent the actual money value that people will pay for the shares of 100% of the ~600 currently existing YC companies? Does it tell us the average value? The mean? Standard deviation? Quintile distributions? P/E? Is that number just based on valuations from funding rounds? Projections? It is literally meaningless. It is not verifiable. The standards that are used to calculate it are not explained. There is no explanation to how it relates to the companies in the portfolio. I'm a bear by nature. I think that the current batch of SaaS unicorns have an unsustainable valuation, and I think this unverified number feeds into that.
    - aj_icracked 11y ago
      Who else wants PC and Lawstudent2 to continue this debate? :) I'll bring popcorn.
    - 11y ago

codingdave 11y ago

YC filters applicants for dedicated founders who will not give up easily. It is amazing what can be accomplished by manic perseverance.

jordigg 11y ago
Last week I saw this from Sam. > If we don’t invest in these companies, they don’t happen… The thing about Y Combinator that’s cool is that most companies won’t happen if we don’t fund them.[1] I thought YC was always looking to fund those that would exist with or without YC. I have seen less and less "crazy bets" every batch, but I have to say there's more diversity of founders and topics (biotech, energy, farming). Companies generate revenue before DemoDay and many are startups that work for other startups. It's not a bad thing but would love to see more Airbnbs or Reddits around. Those are the ones that can generate a true impact on society and can only exist thanks to YC giving them a chance. The fellowship can be a great starting point for those. [1] http://venturebeat.com/2015/08/23/sam-altman-and-jessica-livingston-explain-y-combinators-success/ http://venturebeat.com/2015/08/23/sam-altman-and-jessica-liv...
- sydneyliu 11y ago
  I think Sam is saying that without YC, there are some companies that may not end up succeeding or being able to raise and continue on (without YC's network, advice, speed, focus etc. to help them) The distinction is that they want to fund companies who would continue working on it even if they didn't get into YC. They are so passionate about the problem that they will try to make it succeed no matter what.
- staunch 11y ago
  YC has said that Airbnb would have failed without their help. How could they not update their thinking? Being determined to succeed is necessary but insufficient. Every successful startup received a big helping hand early in its life. YC's business is to provide that opportunity to founders that otherwise wouldn't have it, such as Airbnb, which no other investor would back.
  - ryanSrich 11y ago
    What's more intriguing is how was YC able to see through what the other investors saw as an issue? Even to this day I'm astonished that AirBnB exists and yet YC was able to see something in them years ago.
    - staunch 11y ago
      YC also despised the idea, but invested because they liked the founders. But they also presumably liked the 600+ YC founders that failed, so you can see how much investors can really predict.
      - T2_t2 11y ago
        You mean at the series A? Their original idea was really different.
        deleted 11y ago
        [deleted]
    - HelloHN 11y ago
      My understanding of the story was that YC was going to pass on Airbnb but then one of the cofounders mentioned the cereal box story and that changed PG's mind
forgetsusername 11y ago
>YC filters applicants for dedicated founders who will not give up easily Well, they try to filter by that quality, as would any other incubator or investor. It would make no sense to accept apathetic founders who will surrender at the first obstacle. Personally, I'm skeptical that they having any advantage in identifying such abstract traits. How would you identify it from a 15 minute interview?

exelius 11y ago

That's actually mostly in line from what I've heard heard from other VCs. After 5-7 years, you expect half of your portfolio to be either out of business completely or "walking dead" (cash flow negative without enough traction to get positive before the end of the runway). Though you do have a point; I would expect a higher failure rate from an accelerator given that they fund riskier ventures.

bkjelden 11y ago

The failure rate is probably skewed low by YCs growth rate. For example, 1/9 of the companies were in their most recent batch, and it's unlikely that any of them have gone out of business yet. Still impressive though. Any success rate over say 10-20% seems really impressive for an incubator.

bfe 11y ago
The breakout-success rate thus far is also skewed low by YC's growth curve. Things have still just begun.
ghiculescu 11y ago
Yeah. A failure rate by cohort (a "churn rate" of sorts) would be handy.

lawstudent2 11y ago

This is also rather misleading - because 300 have been shut down, 904 have been funded, which includes 107 in the last batch, which can be discounted entirely from these stats. This gives us 300/797 have shut down, or a percentage of about 38%. What I'd like to know is the value, at exit, of the companies that have exited or gone public. Because I can guarantee you that the "valuation" of $65B+ is a totally meaningless number. This includes every single company that had a huge, unsustainable up round which will almost certainly be devalued based on future financings or exits.

pc 11y ago
> Because I can guarantee you that the "valuation" of $65B+ is a totally meaningless number. This includes every single company that had a huge, unsustainable up round which will almost certainly be devalued based on future financings or exits. "Meaningless" is hyperbolic. How much would you pay for a share of Airbnb? More than nothing, I assume. I think one can conclude something from consummated, informed responses to this question.
- lawstudent2 11y ago
  No - I stand by that as a literal use. Does 65B represent the actual money value that people will pay for the shares of 100% of the ~600 currently existing YC companies? Does it tell us the average value? The mean? Standard deviation? Quintile distributions? P/E? Is that number just based on valuations from funding rounds? Projections? It is literally meaningless. It is not verifiable. The standards that are used to calculate it are not explained. There is no explanation to how it relates to the companies in the portfolio. I'm a bear by nature. I think that the current batch of SaaS unicorns have an unsustainable valuation, and I think this unverified number feeds into that.
  - aj_icracked 11y ago
    Who else wants PC and Lawstudent2 to continue this debate? :) I'll bring popcorn.
  - 11y ago