PG: Would you consider funding a startup aiming to take on a massive but completely monopolized market, e.g. desktop OSes? Being one of the developers on a completely new OS, I frequently wonder about how it could be commercialized and pitted against the likes of MS, and it seems that it would be effectively untouchable from a funding perspective, with the way things are now.
I know investors like risk, but it seems like the chances of success are such that 99% of the time, you're going to be throwing your money way. Any insight here?
PG: Would you consider funding a startup aiming to take on a massive but completely monopolized market, e.g. desktop OSes?
From what I've seen I'd say that YC has a high probability of funding the sort of brave/foolish people who would try such a thing. Keep in mind that to a first approximation, YC funds teams, not startups -- PG has stated many times that one of the most important things a startup can do is be ready to throw everything out and start moving in a completely new direction.
that's sort of a vague question. some of history's biggest monopolies have been the most vulnerable to disruption (telecom, anyone?).
i don't want to speak for PG, but I think when YC considers applications they weigh risk against potential return. m$ certainly has demonstrated there is a tremendous market for desktop software (though with the onset of cloud computing, perhaps it is becoming obsolete).
I perhaps made it a bit too vague in an effort to make it applicable outside my specific case (I work on a pure-managed OS focused on desktop/mobile applications). Even though I fully believe in the project, the chances of it ever becoming the Next Big OS (TM) are slim to nil, so I'm curious if any sane investor would touch it. Obviously there's a profit to be made with it in certain niches, but I don't know if that would be big enough for anyone to fund it.
I really hope there is significantly more engagement this time. I'm not real good at explaining things the first time so a question-response type situation would give me a good chance to properly explain my self a one-time application wouldn't.
I do have a question for Paul Graham though: should I assume you guys know nothing about previous applications?
I wonder about that too, but we may not hit a limit. I think limits like Dunbar's number are consequences of hierarchical structure, and the YC founder network is completely distributed.
Dunbar's number generally applies to communities that are organized around content or ideology.
So for example, a web forum gets too large for everyone to agree on what's on topic or off topic, so it splits in two. Or a democratically run government can't agree on whether the society should be gemeinschaft or gezellschaft.
The YC network is more like a dating site than a polis, so while there may be some limiting factor I don't think it would be Dunbar's number.
The YC network is more like a dating site than a polis
Is this true? I may have a utopian view of things, but my impression is that of a community that helps each other out in order to make this new model of work succeed.
If my impression is accurate, then I can see how the society could change or break down once it gets past a certain size. Cliques, subgroups, etc. could form.
I see this support group structure as one of the main reasons to apply to YC. The money would be useful, but the support would be invaluable.
"My impression is that of a community that helps each other out in order to make this new model of work succeed."
In YC when you have a problem you generally find another startup who can help and then pair off with them to work alone, like on a dating site.
Alternatively, there other seed programs where all the startups sit around a big table and talk about each person's problems one at time. This is more like a polis, because different discussions create value for different people.
The latter exposes you to more new ideas, but it also wastes enormous amounts of time. (And a lot of these new ideas don't end up sticking because you haven't already tried yourself and failed first.) I think the YC model probably maximizes your chances of success after three months, but only if you already have a pretty good chance of succeeding. If you still have a bunch of missing skills you need to fill in, then looking into non-YC options might make more sense.
I like the effort to move the date and sync up with the other programs out there. It really feels like everyone should get together like the colleges have with application deadlines and acceptance notification back to applicants.
We're hoping this move will cause that to happen de facto. The fact that YC etc have cycles with similar, fixed dates makes it structurally like college applications, so customs should be similar. It is much worse to use exploding termsheets in that context than in something asynchronous like VC series A rounds.
In fact one of them already has something they call early admissions. I can't imagine why any startup would think it was to their advantage to limit their options that way, though, so as far as I can tell it is just a negative IQ test and thus nothing to worry about.
Hi PG, I really want to apply to YC this time. I browsed through the application but I am not sure if you will consider my case for the application: single founder and based out of India?
Yes, but the odds of being accepted are much lower. A startup is too much work for one person.
Do we have to be US citizens?
No, as long as you can get here for at least three months. We've funded many startups founded by non-citizens.
Can you get us visas?
No, sorry, we don't do that. You'll have to figure out visas for yourself. If you know people from previous YC-funded companies who came from outside the US, we suggest you ask them for advice. They understand the options better than we do.
I'm a single founder too. I guess there's not much we can do but apply and see what happens and to keep seeking a founder (of course for you I assume you also have to find a way over here). But from what I've heard (from emailing founder's coop) is that if you're a single founder you better be at least technical to enough build your idea yourself.
When I applied about a year ago at TechStars, I was a single founder. I had a meet-up with David Cohen from the TechStars and asked him on this. He told me: "It's very difficult to run the business being a single founder. You should probably keep on searching and then just email me if anything has changed".
While I do believe that successful business can be created by a single founder, I don't think that this is an issue when you're searching for someone to invest in your business. Anyway, I wish you good luck.
It would be interesting to see stats on the composition of groups that YC has funded since inception; ie, percentage of all programmer groups vs programmer/biz guy vs all biz guys, etc. Any insights PG?
I would say about half the groups have one or more non-programmers. I remember 2 that had no programmers, though I may be forgetting some.
The optimal configuration is one or two programmers plus one person who can sell really well. Best of all is when the person who can sell is also a programmer.
Just out of curiosity, how did those groups with non-programmers develop their product? Did they go out and find programmers? What did they spend most of their time doing?
One group found programmers, the other (in the current cycle) is doing something that doesn't require significant amounts of hacking, at least at this stage.
I would be especially interested in seeing percentage of single founder applicants (vs total applicants) and percentage of single founder companies accepted (vs total companies accepted).
I imagine it's not that high. If I were in PG's shoes, I would be more reluctant to fund single founder groups too for the simple reason that startup ideas go through countless iterations and it's very hard to mold an idea if you have no one to bounce ideas off of. Sure, you could get the opinions of family and friends, but they'll tell you anything because they don't have a stake in the idea.
My guess is that the percentage of single founder applicants is enormous, while the percentage of single founder accepted companies is minuscule. I just wonder how big the gap is.
@icey what makes you think it's enormous? I would think that most people who have a business idea they're confident enough to pursue have it because they've discussed it at length with someone else who's also interested in the idea.
Just a gut feeling. There's no real cost to applying, so why wouldn't a single founder apply?
Given the number of people that post about looking for a cofounder here, I'm just guessing that a lot of people don't have one, but feel that they've got a good enough idea to make a business. Some of them really will have what it takes; but I'm sure the proportion of single founders that apply is quite different that the proportion of single founders that are accepted.
PG- Will there be RFS ideas again? I'm not necessarily looking for ideas, but it is always interesting to see what you and the crew are thinking about.
Engaging with applicants before the deadline seems like a great move. From the stories from previous YCers it sounds like this sometimes happened already, but it's good to have it spelled out.
Oh, by the way Paul: the "Apply" link in the footer is still the W2010 one, which now 404s. It shouldn't stop anyone serious about applying, but... :)
PG,
Just how much of a minus would it be that both founders would have to return to college in the fall? Given they can reasonably continue to work in school.
That's interesting and surprising. What did those groups do; go out and hire a programmer, find a technical co-founder after getting funding, or did they outsource what they needed?
http://ycombinator.com/faq.html There's a list. I'm not sure if it's comprehensive. I know there's another list somewhere out there that also details the status of the companies. Can't seem to find it right now.
Don't be lazy, click through and read his post.. "Summer 2010 will be our 5th anniversary, and since we fund startups twice a year it will be the 11th group of startups we've funded. We've funded 171 companies so far..." Average of 17.1.. it is a bit higher in the recent rounds due to more qualified applicants and a larger pool of available investment funds.
Actually it's not that unreasonable a question. We tend to grow each year, and there are 27 in w2010, so the number will probably be at least that. But it's unlikely it would be over, say, 40.
The correct answer is that there is no set number. They seem to try to interview as many applicants as they can in three days and then pick the ones that work from that batch. Since PG believes that they are getting better at picking startups that will not die, my bet is that number will grow every year.
Another thought: I seriously doubt that the number of startups funded has anything to do with available capital, but rather the logistics of each startup being able to work directly with Paul.
I know investors like risk, but it seems like the chances of success are such that 99% of the time, you're going to be throwing your money way. Any insight here?